Court File and Parties
COURT FILE NO.: CV-15-524235 DATE: 20210217 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: SUB-PRIME MORTGAGE CORPORATION and ELLE MORTGAGE CORPORATION, Plaintiffs AND: DAVID KAWEESA, JACQUELINE KAWEESA and JEREMY KAWEESA, Defendants
AND RE: DAVID KAWEESA and JACQUELINE KAWEESA, Plaintiffs by Counterclaim AND: SUB-PRIME MORTGAGE CORPORATION, ELLE MORTGAGE CORPORATION and TERRY WALMAN, Defendants to the Counterclaim
BEFORE: Stinson J.
COUNSEL: Glenn Cohen, for Sub-Prime Mortgage Corporation and Elle Mortgage Corporation Karen Sanchez, for David Kaweesa and Jacqueline Kaweesa
HEARD: at Toronto by written submissions
Supplementary Reasons for Decision
[1] On January 29, 2021, I released Reasons for Decision concerning a motion brought by the plaintiffs and the defendants to the counterclaim for judgment in accordance with minutes of settlement. In those Reasons, I granted the plaintiffs’ motion and awarded judgment in their favour as follows:
i. Payment by David and Jacqueline to Elle Mortgage Corporation and Sub-Prime Mortgage Corporation in the total amount of $2,700,000, inclusive of pre-judgment interest and costs, plus post-judgment interest at a rate of 8.5% per annum;
ii. Dismissal of the Counterclaim;
iii. Possession of the Property in favour of Elle Mortgage Corporation and Sub-Prime Mortgage Corporation, and leave to issue a writ of possession.
[2] In relation to item iii., in paragraph 31 of my Reasons, I directed that the enforcement of the writ of possession be delayed for a period of time, as follows:
In light of the current lockdown and restrictions that may have an impact on the ability of the defendants to relocate, I direct that no steps may be taken to enforce the writ of possession for a period of 90 days after the current state of emergency in Ontario formally ends.
[3] Following the release of my Reasons, I received a request from counsel for the plaintiffs to permit counsel to address the timing of, and the terms that might be imposed for, a non-enforcement period of the writ of possession. I declined the former request because the matter of timing of enforcement had been raised at the oral hearing on January 26, 2021. I did, however, agree to receive written submissions concerning potential terms that might be imposed during the period of non-enforcement. I have now received submissions from counsel for the plaintiffs and for the defendants and these Supplementary Reasons address those submissions.
[4] The plaintiffs ask that I order David and Jacqueline to comply with the following terms:
Pay to the plaintiffs $19,000 and pay to the City of Toronto in reduction of realty tax arrears $3,000, monthly on the 15th day of each month starting February.
Forthwith provide evidence that the property is insured for its full insurable value, with loss payable to Elle as first mortgagee and Sub-Prime as second mortgagee.
Forthwith permit two inspections for the purpose of appraisals of the property by appraisers retained by the Plaintiffs.
[5] In support of their request for payment terms, the plaintiffs submit that the defendants have not made a mortgage payment since 2010. The consent judgment means the $2.7 million debt load on the property increases by $19,000 each month. Additionally, the defendants have not paid realty taxes or water charges for at least a decade, obligations that have nothing to do with the dispute with the plaintiffs. These arrears become a priority lien, increasing at about $3,000 per month. Allowing the debt load to increase prejudices the plaintiffs’ security.
[6] In support of their request for proof of insurance, the plaintiffs submit that the standard charge terms that form part of the mortgage require the mortgagor to insure the property with loss payable to the mortgagee. Non-insurance of the property is default under the mortgage. Absence of insurance represents non-compensable prejudice to the plaintiffs’ security.
[7] In support of their request for appraisals, the plaintiffs submit that the occupancy indulgence granted to the defendants should not be used to prevent the plaintiffs from preparing for enforcement of the judgment by way of the sale of the property.
[8] The defendants submit that the plaintiffs should not be granted any of the relief requested. The judgment that was granted on January 29, 2021, included all the relief that the plaintiffs had requested and were entitled to under the settlement. Any additional terms would be substantive relief over and above the relief obtained in the judgment. They submit that the only condition that should be imposed during the 90-day stay is that the plaintiffs not interfere with the defendants’ continued efforts to obtain financing to pay off the judgment.
[9] My jurisdiction to impose terms when granting an order is found in rule 1.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides as follows:
1.05 When making an order under these rules the court may impose such terms and give such directions as are just.
[10] When I directed that the enforcement of the writ of possession be suspended for a period of 90 days, I was exercising my discretion under that provision. I considered it just in the circumstances of the pandemic to defer, for a fixed period of time, the potential for the defendants to be forced to relocate. When I made that direction, the plaintiffs had not had an opportunity to address the potential for prejudice to their position arising from the delay in their ability to enforce the judgment to which the defendants had consented.
[11] Having now considered the parties’ submissions on this topic, I agree with the plaintiffs’ position that their security should not be further prejudiced during this period of delay. However, that does not equate to imposing all the terms they have requested.
[12] I have concluded that the plaintiffs’ position can be protected adequately by imposing the following terms as a condition of the stay:
the defendants shall pay to the City of Toronto in reduction of realty tax arrears $3,000, monthly on the 15th day of each month starting February 15, 2021; and
the defendants shall forthwith provide evidence to plaintiffs’ counsel that the property is insured for its full insurable value, with loss payable to Elle as first mortgagee and Sub-Prime as second mortgagee.
[13] No further terms need be imposed to protect the plaintiffs’ security or to balance the parties’ interests, in my view.
[14] Counsel for the plaintiffs also requested clarification of the stay of the enforcement of the writ of possession. To the extent that clarification is required, I note as follows: Subsequent to the release of my Reasons, the state of emergency in Ontario was allowed to terminate at 11:59 p.m. on February 9, 2021, although stay-at-home orders with exceptions remained in some areas of the province, including the City of Toronto. This means that my order suspending the enforcement of the writ of possession extends to May 11, 2021, such that it would not become enforceable until May 12, 2021.
[15] Additionally, I further note that, pursuant to O.Reg.13/21 made under the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9, residential evictions are currently prohibited in areas that are still the subject of stay-at-home orders, including Toronto. The running of the 90 day stay under my order is not affected by that prohibition.
[16] Lastly, I note that, despite the stay-at-home orders, certain activities are permitted, including the following: making arrangements to purchase or sell a residence or to begin or end a residential lease, and moving residences: See O. Reg. 11/21, Schedule 1, s. 1(1) paras 21 and 22. In light of that exemption, no modification to my stay is required to achieve its purposes.
Stinson J. Date: February 17, 2021