Court File and Parties
Court File No.: C-841-14, C-842-14 and C-843-14 Date: 2021-07-15 Superior Court of Justice - Ontario
Re: Stirling Fisher and Michele Neumayer, Plaintiffs And: William Soroka, Defendant
Before: Mr. Justice M.R. Gibson
Counsel: Steven Gadbois, Counsel for the Plaintiffs David Steele and Thomas Sanderson, Counsel for the Defendant
Heard: May 17, 2021
Endorsement
Overview
1The motions before the Court in this matter relate to three foreclosure actions brought by Stirling Fisher ("Fisher") and other related Plaintiffs against William Soroka ("Soroka") in respect of properties in Kitchener, Ontario. Soroka was personally served with the claims as of September 11, 2014. Soroka did not defend the claims or convert them into judicial sales. The Plaintiff obtained default judgment as of December 15, 2014 in action 843-14, December 18, 2014 in action 841-14, and December 25, 2014 in action 842-14. On April 20, 2018, the judgments were registered on title.
2The moving party Defendant Soroka seeks: an Order setting aside the foreclosure judgments and setting aside the noting in default of Soroka; an Order vacating registration of the judgments in the Land Registry Office for Waterloo against title to the subject properties, and restoring registration of the relevant Charges; a declaration that the above relief shall not affect any party's right or ability to recover land transfer tax paid in respect of the reversed transfers; and an Order granting leave to Soroka to respond to the Statement of Claim within 20 days.
3The Plaintiff Fisher opposes the motions.
Issues
4The Issues before the Court on these motions are thus:
(i) Whether the Court should exercise its discretionary, equitable jurisdiction to set aside the foreclosure and give Soroka an opportunity to redeem the Fisher mortgages; and,
(ii) Whether the Court should exercise its discretion under Rule 19.08 of the Rules of Civil Procedure to set aside the default foreclosure judgments.
The Law concerning setting aside foreclosures
5The Court has a broad jurisdiction to set aside a default judgment and grant relief against foreclosure wherever the equities in the mortgagor's favour outweigh all that are against him or her. The factors guiding the exercise of discretion in this regard were set out in Winters v. Hunking, 2017 ONCA 909 at paras. 12-14:
(i) Whether the motion to set aside was made with reasonable promptness;
(ii) Whether there is a reasonable prospect of payment at once or within a short period of time;
(iii) Whether the applicant has been active in endeavouring to raise the money necessary;
(iv) Whether the applicant has a substantial interest in the property or the property has some special intrinsic value to him or her; and
(v) Where the property has been sold after foreclosure [note: not applicable in the present case], whether the rights of the purchaser will be unduly prejudiced.
6A furthermore all-encompassing factor is whether the balance of equities justifies re-opening the foreclosure or whether special circumstances favour that result. Motions seeking to reopen foreclosure orders generally depend on their own particular facts.
7Rule 19.08 of the Rules of Civil Procedure provides that a judgment against a defendant who has been noted in default that is signed by the registrar or granted by the court on motion under Rule 19.04 may be set aside or varied by the court on such terms as are just.
8On a motion to set aside a default judgment, the Court considers five major factors: Intact Insurance Co. v. Kisel, 2015 ONCA 205 at paras. 12 and 14; Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 at paras. 47-51:
(i) Whether the motion was brought promptly after the defendant learned of the default judgment;
(ii) Whether the defendant has a plausible excuse or explanation for the default;
(iii) Whether the defendant has an arguable defence on the merits;
(iv) The potential prejudice to the defendant should the motion be dismissed, and the potential prejudice to the plaintiff should the motion be allowed; and
(v) The effect of any order the court might make on the overall integrity of the administration of justice.
9The above factors are not rigid rules. Rather, the Court must decide whether, in the particular circumstances of the case, it is just to relieve a defendant from the consequences of the default.
Analysis
10Soroka's submission is that he had an agreement with Fisher whereby Fisher would not proceed with the actions, either obtaining or registering the judgments. He didn't have to make the mortgage payments as Fisher was going to "float him" until he decided to stop, and that Fisher could "pull the plug" or call the mortgages at any time.
11Soroka has not satisfied me that the equities in his favour outweigh all that are against him.
12There are significant credibility problems with Soroka's version of events. He has been represented by four different lawyers in this saga (Starr, Farhood, Gulati and Grechi) prior to his present counsel Mr. Steele, all of whom apparently, according to his version, declined to fully inform Soroka of what they were doing on his behalf. This does not make sense. There is no evidence of any complaints against any of these counsel being made by Soroka to the Law Society of Ontario, or of his having taken any action against them.
13The motion to set aside has not been made with reasonable promptness. Soroka was personally served with the claims as of September 11, 2014. He retained David Starr, who was provided with a written offer of an extension to pay off the mortgages in exchange for irrevocable consents to judgment as of October 8, 2014, to which he never responded. Soroka claims that Starr failed to advise him of the offer. Soroka further claims that he didn't defend because of a deal that Starr made with Fisher on his behalf. Soroka claims that he wasn't told by Starr to put it in writing and was unfamiliar with litigation. This is difficult to believe. Soroka was President of the Kitchener Landlord Society and has acted on his own before the Residential Tenancy Tribunal at least 30 times, and in the Small Claims Court 12 times. He had two litigation matters in the Superior Court of Justice in the years immediately before 2014 with two different litigation lawyers acting for him. None of the four lawyers he retained in respect of the present matter ever referred to any agreement between the parties, or sought to have any such agreement put in writing.
14Soroka admits being aware of the judgments as of February 2016. He retained another lawyer, Wayne Farhood, as of February 2016, who was told by Plaintiff's counsel that he would have to bring a motion if he wanted the judgments set aside.
15The plaintiff wrote to another lawyer, Mr. Gulati, who advised that he acted for the Defendant as of March 3, 2016, demanding payment and advising that he would register the foreclosure judgments if not paid by March 17, 2016. Soroka claims Gulati failed to advise him of the written demand. The Plaintiff wrote to Starr as of March 18, 2016, repeating the Plaintiff's demand, and enclosing the demand to Gulati. Soroka claims Starr failed to advise him of the demand letters. Soroka also claims that Starr failed to advise him of other correspondence.
16Soroka did not bring a motion until November 21, 2019 (first return date of the motion), over five years after being personally served with all of the Statements of Claim (September 11, 2014), over five years after the first demand letter from the Plaintiff to Starr (October 8, 2014), almost five years after the judgments were issued (December 2014), at least three and a half years after he admits being aware of them, over three years after the next two demand letters (Gulati March 3, 2016, Starr March 18, 2016), two and half years after the August 2016 demand letter to Starr, and one and a half years after admittedly being aware of the registrations of the judgments.
17Soroka's assertion of a verbal deal with Fisher is not credible. At least four lawyers wrote to the Plaintiff's lawyer on behalf of Soroka, some of them several times, none of whom asserted any deal or tried to reduce it to writing.
18Soroka does not have has a plausible excuse or explanation for the delay.
19He does not have an arguable defence on the merits.
20Soroka's submissions on this motion are not credible. I agree with the assertion of Plaintiff's counsel that the gist of Soroka's motion is that while the properties had little or no equity as of October 2014, and he would have received little to nothing if the properties were sold by judicial sale, he now wants the court to give him the properties back, with their present value and equity, at 2014 prices. This would amount to a substantial windfall for Soroka. Balancing the potential prejudice to the defendant should the motion be dismissed, with the potential prejudice to the plaintiff should the motion be allowed, Sororka has failed to satisfy me that the equities weigh in his favour. The overall integrity of the administration of justice would not be enhanced in granting the motion.
21The Defendant's motions are dismissed.
Order
22The Court Orders that: The Defendant William Soroka's motions in all three actions, C-841-14, C-842-14, and C-843-14, are dismissed.
Costs
23The parties are encouraged to agree upon appropriate costs. If the parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs) by email to my judicial assistant, Mona Goodwin at mona.goodwin@ontario.ca. The Plaintiff may have 14 days from the release of this decision to provide his submissions, with a copy to the Defendant; the Defendant a further 14 days to respond; and the Plaintiff a further 7 days for a reply, if any. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves. If I have not received any response or reply submissions within the specified timeframes after the Plaintiff's initial submissions, I will consider that the parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.
M. R. Gibson, J.
Date: July 15, 2021