COURT FILE NO.: CV-19-00002956-0000

DATE: 2021 07 16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MALHOTRA HOLDINGS INC. v. KRISH KUMAR VADIVALE

BEFORE: Kumaranayake J.

HEARD: July 6, 2021 and July 12, 2021 by videoconference

COUNSEL: A. Sidhu, for the Non-parties/moving parties

J. Chahal, for the Plaintiff/responding party

J. Laplante, for the Defendant/responding party

E N D O R S E M E N T

OVERVIEW

1Counsel for the non-parties, Divya Jegasundaram and Rupasundar Jegasundaram (hereinafter collectively referred to as the “Jegasundarams”), requested permission to bring this motion on an urgent basis. This letter (dated July 1, 2021) and the Jegasundarams’ motion record (also dated July 1, 2021) was filed pursuant to the Notice to the Profession for the Central West Region, dated September 25, 2020 and amended December 31, 2020.

2This urgent request was brought to my attention on July 2, 2021. After review of the letter filed, I directed that the Jegasundarams’ motion be added to the regular motions list of July 6, 2021 and that counsel for the Jegasundarams notify counsel for the other parties and provide the other counsel with a copy of my Endorsement dated July 2, 2021 .

3By their Notice of Motion, dated July 1, 2021, the Jegasundarams requested a stay of the enforcement of the Writ of Possession and Notice to Vacate, dated June 25, 2021, with respect to the real property municipally known as 15 Matagami Street, Brampton, Ontario. The Jegasundarams have resided at the property since 2015. They were served with a Notice to Vacate that required them to vacate the property by July 7, 2021 at 8:30 a.m. In making their request, the Jegasundarams relied upon a Divisional Court Order dated June 8, 2021 made by Penny J. that granted a stay of an eviction that was granted by the Landlord and Tenant Board. The stay of eviction was until July 30, 2021, provided that the Jegasundarams met certain conditions. The details of Penny J.’s order shall be reviewed below.

4Following argument of the motion on July 6, 2021, the matter was adjourned to July 12, 2021 to permit all counsel the opportunity to file authorities on the issue of conflicting orders as between the Divisional Court and the Superior Court of Justice. Further, I ordered that pending further Order, the enforcement of the Writ of Possession and Notice to Vacate, dated June 25, 2021 was stayed. Argument of the motion was completed on July 12, 2021 and I reserved my decision.

5For the reasons that follow, I dismiss the Jegasundarams’ motion and terminate my order of July 6, 2021.

BACKGROUND

6There is a long history of litigation relating to this property. The litigation relates to five different proceedings in three different forums: the Superior Court of Justice (SCJ), the Landlord and Tenant Board (LTB), and the Divisional Court. In order to put this motion in context, it is necessary to review the history and summarize the legal proceedings.

7In general, the history of the various legal proceedings is not disputed.

8The five proceedings are:

1. SCJ Court file number CV-000019-2956-0000 is an action in which the Malhotra Holdings Inc. is the named plaintiff and Krish Vadivale is the named defendant. I will refer to it as the mortgage action.

2. LTB File Number: HOL-06038-19 is an application in which Malhotra Holdings Inc. is the named landlord and Divya Jegasundaram and Rupasundar (aka Sandy) Jegasundaram are the named Tenants. I shall refer to this as LTB #1.

3. LTB File Number: HOL-06197-10 is an application in which Malhotra Holdings Inc. is the named landlord and Divya Jegasundaram and Rupasundar (aka Sandy) Jegasundaram are the named Tenants. I shall refer to this as LTB #2.

4. SCJ Court File Number CV-20-00000026-0000 is an action in which the Jegasundarams are the named plaintiffs and Krish Vadivale is the named defendant. I shall refer to this as the ownership action.

5. Divisional Court File Number: 210/20 is an appeal in which the Jegasundarams are the appellants and Malhotra Holdings Inc. is the Respondent. The appeal relates to a decision made in LTB #1 and LTB #2.

9The circumstances that lead to these various proceedings can be summarized as follows.

10The Jegasundarams and Krish Vadivale (“Mr. Vadivale”) are related. He and Ms. Jegasundaram are cousins.

11In April 2015, Ms. Jegasundaram entered into an agreement of purchase and sale to buy 15 Matagami Street, Brampton, Ontario (“the property”). There is no dispute that the property was ultimately purchased and that Mr. Vadivale is registered on title as the sole owner.

12There is no dispute that the Jegasundarams have occupied the property since it was purchased in July 2015 and that they have been the only occupants.

13The Jegasundarams and Mr. Vadivale entered into a residential tenancy agreement. According that that agreement, the Jegasundarams pay $1,500 per month to rent this house.

14The Jegasundarams maintain that there was an agreement between them and Mr. Vadivale that they were the true owners of the property. They assert that the reason that the property was purchased in Mr. Vadivale’s name is because Ms. Jegasundaram was unable to secure financing in her name. Mr. Vadivale disputes the Jegasundarams’ claim that they are the true owners of the property. The ownership interests of the property is the subject of the ownership action. The ownership interests of the Jegasundarams and Mr. Vadivale is not an issue to be resolved on the motion before me.

15The Jegasundarams maintain in all five proceedings that they are not tenants, but that they are the beneficial owners of the property.

16There are three mortgages on the property and Mr. Vadivale is the mortgagor on all three mortgages, but there is a different mortgagee on each mortgage. The details of mortgages are:

1. the mortgagee is Computer Share Trust Company of Canada. The mortgage is in the amount of $723,456.00 and registered on July 13, 2015 (Instrument number PR2746257). This mortgage was later transferred to Street Capital Bank of Canada (Instrument number dated October 2, 2017) (“first mortgage”).

2. the mortgagee is Malhotra Holdings Inc. (“Malhotra”) The mortgage is in the amount of $168,000 and registered on January 10, 2017 (Instrument number PR3059802) (“second mortgage” or “Malhotra mortgage”).

3. the mortgagee is 2448822 Ontario Inc. The mortgage is in the amount of $27,500.00 and registered on November 17, 2017 (Instrument number PR3238364). The amount of the mortgage was increased to $65,783.76 by amendment and Notice dated May 1, 2018 (Instrument number PR3317783) (“third mortgage”).

17Mr. Vadivale has defaulted on the Malhotra mortgage. He has also defaulted on the third mortgage. Mr. Vadivale continues to make payments on the first mortgage and the first mortgage is in good standing.

18In October 2018, Mr. Vadivale consented to Malhotra taking possession of the property.

19There is no dispute that when Malhotra took possession of the property, it became the landlord of the property as it was a mortgagee in possession.

20In 2019, Malhotra filed two applications. It requested that the tenancy of the Jegasundarams be terminated and that they be evicted from the property.

21As outlined below, Malhotra was successful at the LTB. The LTB provided a redemption period by which enforcement of the eviction was would not proceed prior to August 16, 2020 provided certain conditions were met.

22The Jegasundarams brought an appeal of the LTB order to the Divisional Court. On June 8, 2021, the Jegasundarams appeal was quashed at the Divisional Court, but enforcement of the eviction was stayed until July 30, 2021 provided certain conditions were fulfilled.

The mortgage action

23The litigation history of the mortgage action is not disputed.

24Mr. Vadivale defaulted on the mortgage.

25On August 8, 2018, Malhotra issued a Notice of Sale with respect to the property.

26By email, dated September 18, 2018, Mr. Vadivale provided the Jegasundarams with a copy of the Notice of Sale.

27On or about October 13, 2018, Mr. Vadivale handed over possession of the property to the second mortgagee, Malhotra. At the time, Malhotra was exercising its right to a power of sale on the property. It took possession of the property through a consent agreement, dated October 13, 2018.

28As a result of Mr. Vadivale defaulting on the mortgage, Malhotra commenced the mortgage action. The Statement of Claim was issued on July 15, 2019. Although served with the Statement of Claim, Mr. Vadivale did not deliver a Statement of Defence.

29Malhotra proceeded by way of default proceedings against Mr. Vadivale. On October 25, 2019, Malhotra was granted Judgment. The terms of the Judgment required that Mr. Vadivale deliver immediate possession of the property and that he pay $231,025.56 and costs of the action, which were fixed at $1,969.00. Post-judgment interest was fixed at 11 percent.

30A Notice Demanding Possession dated December 10, 2019 was served by letter on Mr. Vadivale and all occupants/tenants of the Property, together with a copy of the Judgment.

31On February 7, 2020, an occupancy inspection of the property was carried out and Malhotra was provided a report on or about February 26, 2020.

32On October 29, 2020, Malhotra obtained an order granting it leave to issue a Writ of Possession against the property.

33On February 25, 2021, a Writ of Possession was issued.

34On or about March 9, 2021, counsel for Malhotra filed an Eviction Information Requirements form with the sheriff’s office to enforce the eviction pursuant to the Writ of Possession. The information provided on that form clearly indicates that there were tenants of the mortgagor occupying this property and that there were four people (including two children) living at the premises.

35The Jegasundarams received a Notice to Vacate, dated June 25, 2021, that required that they vacate the property by July 7, 2021 at 8:30 a.m. The affidavit of Mr. Jegasundaram does not state when the Jegasundarams received this Notice.

36The motion before me to cancel the eviction has been brought within this mortgage action.

The ownership action

37This action was started by the Jegasundarams by a Statement of Claim issued on January 3, 2020. The ownership action is also at the SCJ in Brampton. In the ownership action, the Jegasundarams claim to have an equitable interest in the property and seek a variety of relief including a declaration that they possess a 100 percent equitable interest in the property; in the alternative, damages in the amount of $1,400,000; a certificate of pending litigation; an estoppel order barring Mr. Vadivale and his agents, named as Malhotra, from filing for eviction of the Jegasundarams from the property until the action is fully resolved, pre and post-judgment interest, punitive and exemplary damages in the amount of $100,000; and costs of the action.

38Mr. Vadivale has defended this action and has filed a Statement of Defence and Counterclaim, dated February 5, 2020. Mr. Vadivale claims that he is the registered and beneficial owner of the property and that the Jegasundarams reside in the property under a lease-to-own agreement. The Jegasundarams did not respond to the Counterclaim and in March 2020, they were noted in default.

39No discoveries or examinations have taken place in the ownership action.

40On May 26, 2021, the Jegasundarams filed an urgent motion seeking that pending adjudication of the ownership action, title to the property be changed to their names to permit them to refinance the property and bring the Malhotra mortgage back to good standing. They also requested that their noting in default in Counterclaim be set aside and that a Certificate of Pending Litigation be issued and registered against the property.

41The motion was heard by Dennison J. on June 4, 2021. Mr. Vadivale opposed all of the relief requested by the Jegasundarams.

42On June 23, 2021, Dennison J. released her Endorsement. She provided her detailed reasons and, save and except for one exception, all of the relief requested by the Jegasundarams was dismissed (see Jegasundaram v. Vadivale, 2021 ONSC 4505).

43To summarize, Dennison J. found that

(a) It was not an appropriate case to grant an Interlocutory Order that title be vested to the Jegasundarams. They did not meet the test for injunctive relief as set out in RJR-MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311. Although the Jegasundarams and Mr. Vadivale agreed that there was a serious question to be tried, Dennison J. was not satisfied that the Jegasundarams had demonstrated irreparable harm. Further, she found that the balance of convenience favoured Mr. Vadivale and not the Jegasundarams. (paras. 63 to 85).

(b) It was not just or equitable to grant a Certificate of Pending Litigation as she found that the Jegasundarams’ claim could be adequately addressed by another form of security (para. 89).

(c) The Jegasundarams’ motion was a collateral attack on the order made by the LTB (para. 100). The order made by the LTB is reviewed below.

44Dennison J. ordered that the noting in default of the Jegasundarams in the Counterclaim be set aside. She also ordered that if the property was sold then the net proceeds of sale shall remain in trust pending the determination of the action, unless the parties agreed otherwise. She also ordered that within 30 days of her Endorsement, the parties agree upon a timetable for the matter.

45The Order of Dennison J. has not been appealed.

46As of the date of argument of the motion before me, the Jegasundarams had not filed a Statement of Defence to the Counterclaim.

47Malhotra is not a party to the ownership action and did not participate in the motion heard by Dennison J.

The LTB Applications

48LTB #1 was an application initiated by Malhotra in 2019. The grounds of the application were non-payment of rent by the Jegasundarams.

49LTB #2 was an application initiated by Malhotra in 2019. The grounds of the application were persistent late payment of rent by the Jegasundarams.

50Both LTB #1 and LTB #2 were heard together on February 25, 2020. By his decision, dated August 4, 2020, LTB Member Randy Aulbrook:

a) Found that there was a landlord/tenant relationship between Malhotra and the Jegasundarams.

b) Ordered that the tenancy be terminated on the basis of non-payment of rent.

c) Ordered enforcement of the eviction subject to certain conditions. To avoid enforcement of the eviction, the Jegasundarams had to pay $24,182.82 Malhotra (or to the LTB in trust) by August 15, 2020.

51The evidence of Mr. Jegasundaram was that the LTB decision was released on August 6, 2020.

The Divisional Court

52By a Notice of Appeal, dated August 16, 2020, the Jegasundarams commenced an appeal of the LTB decision.

53Malhotra brought a motion to quash the appeal. There were three adjournments granted at the request of the Jegasundarams.

54In a Case Management Endorsement, dated April 30, 2021, Corbett J. ordered that the Jegasundarams make three payments to Malhotra, each payment in the amount of $1,500 and payable by May 7, 2021, May 14, 2021 and June 1, 2021.

55Corbett J. fixed the date of June 4, 2021 for Malhotra’s motion to quash the appeal. That date was peremptory to the Jegasundarams.

56It is clear from a review of Corbett J.’s Endorsement, dated April 30, 2021, that he was aware that Malhotra was a mortgagee in possession and that the ownership action was before the SCJ as evident from Corbett J.’s articulation of the issue on the motion to quash the appeal:

The decision before this court is from the Landlord and Tenant Board, evicting the appellant at the request of the mortgagee in possession, the respondent, which holds a second mortgage and is entitled to be paid on that mortgage or to enforce its security.

….is the appeal so devoid of merit that it should be quashed [?] If not, then what schedule should be put in place to bring the appeal before a panel of this court for a decision on the merits[?] In the underlying list, there is a dispute between competing claimants over ownership of the underlying property. Either the appellant is a tenant in the property, entitled to the protection of the Residential Tenancy Act (in which case the Board's order is necessary for the respondent to obtain vacant possession to sell the property to realize upon its security) or the appellant is an owner and not a tenant, and the respondent is entitled to vacant possession pursuant to its rights under the mortgage. The appellant argues that it has not received notice of the exercise of power of sale, and thus that the respondent is not currently entitled to exercise its power of sale rights. Those are matters to be pursued in the Superior Court, not in this court. Further, from a practical point of view, the respondent's rights to enforce its security have priority over the competing claims to the fee simple between the appellant and the registered owner of the property, and the respondent does not have to await litigation between the competing claimants to the fee simple to exercise its security.

57Corbett J. also observed that

What is clear is that the respondent advanced a mortgage, the mortgage is registered on title, the mortgage is in default, and the respondent is entitled to enforce its security to obtain payment of what it is owed. That situation has continued to exist for a very long time. If the respondent’s motion to quash is not successful then the appeal itself needs to be perfected and heard in a reasonable period of time. Thirty days is more than enough time for the appellant to place before the court the basis on which he says the appeal has some merit and his plan for bring the appeal on in a reasonable period of time for a decision on the merits.

58The motion to quash the Jegasundarams’ appeal was heard by Penny J. on June 4, 2021. The motion was successful and the appeal was quashed (see Jegasundaram v. Malhotra Holdings Inc., 2021 ONSC 4144). The appeal had not been perfected, despite the notice of appeal being served on August 16, 2020. The Jegasundarams filed no responding material for the motion to quash. At paras. 10 to 13, Penny J. outlined his findings on the motion to quash:

[10] The notice of appeal, on its face, discloses no error of law. Although denial of natural justice, if proved, could qualify as an error of law, the record before me is devoid of any particulars which could possibly rise to the level of a legal error. The claim that the appellants were owners, not tenants, is conclusory in nature and, again, is, without more, incapable of constituting a legal error. In any event, the essence of the LTB decision involves the interpretation of the purported rent to own agreement. It is clear since Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633, para. 50, that the interpretation of an agreement is a question of mixed fact and law. No appeal lies from the LTB on a question of mixed fact and law.

[11] Further, there has been no satisfactory explanation of the delay in perfecting the appeal or the lengthy period of non-payment of rent. The appellants say they were concerned that, if they paid “rent” it would undermine their claim against Vadivale for ownership of the property. I cannot accept that argument. In the face of the respondent’s claims and the LTB decision, the appellants could easily have (and should have) paid to the respondent the rent owing for occupation of the property without in any way prejudicing their civil claims against Vadivale based on their alleged purchase reserve payments.

[12] In any event, as Corbett J. noted in his April 30 endorsement, the appellants have actually more rights to remain in the premises as tenants that they would as “owners”. In mortgage enforcement proceedings, the lender is prima facie entitled to vacant possession as against the owner of the property on which the mortgage is registered. That is not the case when the mortgagee becomes a landlord and the occupant is a tenant.

[13] The appellants claim to have arranged financing to “buy out” the respondent’s mortgage but cannot close the deal because they do not have clear title. That may be so, but the appellant’s dispute with Vadivale is no excuse for their failure to meet their obligations to the respondent under their tenancy arrangement. If they can arrange hundreds of thousands in potential financing, why can they not raise $30,000 to fulfill their obligations to the respondent?

59Penny J. also ordered a conditional stay of the eviction that was ordered by the LTB. The terms of that stay are set out at paras. 16 to 18 of his decision:

[16] … enforcement of the LTB’s order is stayed until July 30 subject to the condition that the July monthly rent is paid promptly on or before July 1. Failure to make this payment will end this temporary stay immediately without further order of the Court, subject only to filing with the Divisional Court Registrar, to my attention, an affidavit of non-compliance.

[17] If, by July 30, full payment of all arrears of rent to July 30, 2021, as calculated by the order of the LTB, together with costs ordered by the LTB and this Court, is not made, the temporary stay will come to an end, again without further order of the Court, subject only to filing with the Divisional Court Registrar, to my attention, an affidavit of non-compliance.

[18] In the event the required payments outlined above are not made in full, the enforcement measures ordered by the LTB shall come into full force and effect.

60There is no dispute that the payment that was due on July 1, 2021 has been made.

POSITION OF THE PARTIES

61The Jegasundarams submit that LTB has exclusive jurisdiction to order an eviction from the property. They submit that the order granting Malhotra leave to issue a Writ of Possession should never have been granted. In argument on July 6, 2021, it appeared that Jegasundarams were seeking a stay of enforcement of the Notice to Vacate only until July 30, 2021. However, in argument on July 12, 2021, their counsel indicated that the Jegasundarams were seeking an indefinite stay. Further, on July 12, 2021, counsel for the Jegasundarams requested additional relief that the order granting leave for the issuance of the Writ of Possession be set aside.

62Malhotra and Mr. Vadivale have a joint position on this motion. They oppose the relief sought on several grounds. First, they submit that the Jegasundarams have no standing to bring this motion. Second, they submit that the request to set aside the order granting Malhotra leave for the Writ of Possession to be issued is not properly before the Court. Third, they submit that the Jegasundarams have not met their onus to demonstrate that a stay of the enforcement of the Writ of Possession and Notice to Vacate should be granted. They argue that the Jegasundarams are repeating the arguments made before Dennison J.

ISSUES

63In my view, it is necessary to determine the following questions:

i) Do the Jegasundarams have standing to bring this motion?

ii) Should the Jegasundarams’ request to set aside the order that granted leave to issue the Writ of Possession be granted?

iii) Have the Jegasundarams met their onus to demonstrate that they are entitled to a stay of the enforcement of the Writ of Possession and Notice to Vacate and if so, should the stay be indefinite?

64If the answer to the first question is No, then it is not necessary to answer the third question.

DISCUSSION

65All counsel candidly advised that they were unable to find an authority with the same facts as the circumstances this case.

i) STANDING

66The motion brought by the Jegasundarams has been brought in the mortgage action. In their Notice of Motion, the Jegasundarams rely on Rules 21.01(3)(a) and 21.01(3)(c) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, and request that the following orders be made:

a) An order granting the Jegasundarams leave to bring this motion on an

urgent basis;

b) If necessary, an order abridging time for service and/or filing of this Notice of Motion, Affidavit(s), Motion Record, Factums and Books of Authorities;

c) An Order that the enforcement of the Writ of Possession and Notice to Vacate, dated June 25, 2021, with respect to the real property municipally known as 15 Matagami Street, Brampton, Ontario and more legally described as in Schedule "A" (hereinafter referred to as the "Property") is hereby stayed;

d) The costs of this Motion on a full indemnity basis against the Plaintiff; and

e) Such further and other Relief as to this Honourable Court may deem just.

67Neither the moving parties nor the responding parties to this motion filed a factum for the July 6, 2021 appearance. Factums are required pursuant to Rule 21.03. This issue was raised by counsel for Mr. Vadivale on July 6, 2021. Given that all counsel had very little time to prepare their materials, I permitted the motion to proceed. However, as noted above, argument of the motion continued on July 12, 2021. On July 9, 2021, the moving parties filed their factum and the responding parties filed their joint factum.

68In the factum filed on behalf of the Jegasundarams, the following relief was requested:

a) an order setting aside the Order of Justice Kumaranayake, dated October 29, 2020;

b) an order staying and/or terminating the eviction for the Property;

c) an order staying and/or terminating the Writ of Possession; and

d) costs of this motion.

69Malhotra and Mr. Vadivale submit that the Jegasundarams cannot rely on either Rule 21.01(3)(a) or 21.01(3)(c), as they have no standing to rely on either of those rules. This argument is clearly set out in Malhotra and Mr. Vadivale’s joint factum. However, counsel for the Jegasundarams did not address this issue in his oral submissions.

70From a review of the factum filed on behalf of the Jegasundarams, it appears that Rule 21 has not been read correctly. Paras. 16 and 17 of their factum state:

16. Rule 21.01(3)(a) of the Rules of Civil Procedure which states:

a party may move before a judge to have an action stayed or dismissed on the ground that the court has no jurisdiction over the subject matter of the action

17. Rule 21.01(3)(c) of the Rules of Civil Procedure which states:

a party may move before a judge to have an action stayed or dismissed on the ground that another proceeding is pending in Ontario or another jurisdiction between the same parties in respect to the same subject matter.

71Rule 21 provides for the determination of an issue before trial. It sets out when the rule is available and to whom the rule is available. Rule 21.01(1) is available to any party:

WHERE AVAILABLE

To Any Party on a Question of Law

21.01 (1) A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,

and the judge may make an order or grant judgment accordingly.

(2) No evidence is admissible on a motion,

(a) under clause (1) (a), except with leave of a judge or on consent of the parties;

(b) under clause (1) (b)

72The Jegasundarams do not move under Rule 21.01(1) for this motion.

73Rule 21.01(3) specifically provides that Rule 21.01(3) is available to a defendant. Rules 21.01(3)(a) and 21.01(3)(c) state:

To Defendant

(3) A defendant may move before a judge to have an action stayed or dismissed on the ground that,

Jurisdiction

(a) the court has no jurisdiction over the subject matter of the action;

Another Proceeding Pending

(c) another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter; or

74Counsel for the Jegasundarams did not address the standing issue on either day of argument. I have not been provided with any authority to support the position that the Jegasundarams, as non-parties to the mortgage action, may move under either of these subrules to seek the relief sought in their Notice of Motion or their factum.

75I agree with Malhotra and Mr. Vadivale that the Jegasundarams are not entitled to rely on either of these Rules for three reasons.

76First, from a plain reading, only a defendant to an action is entitled to rely on Rule 21.01(3). It is not disputed that the Jegasundarams are not parties to the mortgage action. The parties to the mortgage action are Malhotra as the plaintiff and Mr. Vadivale as the defendant.

77Second, Rule 21.01(3)(a) cannot assist the Jegasundarams as the mortgage action was properly brought in the SCJ. Having obtained judgment against Mr. Vadivale, Malhotra was entitled to pursue enforcement of the judgment, which included seeking leave to issue a Writ of Possession, which is in the SCJ’s jurisdiction to grant.

78Third, Rule 21.01(3)(c) also cannot assist the Jegasundarams, as there is not another proceeding that is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter.

79The mortgage action is between Malhotra and Mr. Vadivale and arose as a result of Mr. Vadivale’s default on the Malhotra mortgage. The Jegasundarams are not parties to that action, and based on the record before me, they have never moved to be added as a party to that action. The action itself has been adjudicated and resulted in Malhotra obtaining default judgment against Mr. Vadivale. The action is no longer pending. Based on the record before me, Mr. Vadivale has not moved to set aside the default judgment or brought an appeal. He supports Malhotra’s efforts to sell the property as he remains liable to Malhotra for its costs of enforcement of the mortgage.

80The ownership action is between the Jegasundarams and Mr. Vadivale. The subject matter of that action is the competing claims as to who is the true owner of the property. Malhotra is not a party to the ownership action and has no interest in the outcome of the ownership action. The ownership of the property can only be determined by the SCJ.

81With respect to the two LTB applications and the subsequent appeal to the Divisional Court, the parties are Malhotra and the Jegasundarams. Mr. Vadivale is not a party to either the LTB applications or the appeal. The subject matter of those proceedings is the termination of the Jegasundarams’ tenancy for non-payment of rent. Ownership of the property cannot be determined by the LTB or the Divisional Court.

82Based on the record before me, I do not find that that the Jegasundarams can rely on either Rule 21.01(3)(a) or 21.01(3)(c) to bring this motion.

83Therefore, I find that the Jegasundarams do not have standing to bring this motion and accordingly, their motion must be dismissed.

84It is necessary, however, to address the request to set aside the order granting leave for the Writ of Possession to be issued.

ii) REQUEST TO SET ASIDE ORDER GRANTING LEAVE FOR A WRIT OF POSSESSION TO BE ISSUED

85On October 29, 2020, Malhotra obtained an order for leave to issue the Writ of Possession (“Writ Order”). The Writ Order was granted in the court file for the mortgage action. By pure coincidence, I granted the Writ Order, but that coincidence is not relevant to the request to set aside the Writ Order.

86Counsel for the Jegasundarams took the position that the Notice to Vacate should be set aside and that the Writ Order should never have been granted. In support of his position, it was submitted that once Mr. Vadivale gave possession of the property to Malhotra, Malhotra was a mortgagee in possession and became the landlord. He argued that the LTB has exclusive jurisdiction to terminate the tenancy; the Order of Penny J. stayed the eviction until July 30, 2021; and that the SCJ had no jurisdiction. In support of his argument, he relied on the following authorities: 981673 Ontario Limited v. Jessome 1994 7349 (ON SC), [1994] O.J. No. 3039 (Gen. Div.), at page 7; Fraser et al. v. Beach et al., 2005 14309 (ON CA), [2005] O.J. No. 1722 (C.A.), at paras. 14 and 15; Brydges v. Johnson et al., 2016 4942 (ON SCSM), at page 2; Ramnarace v. Home Trust Company et al., 2014 ONSC 3289, at para. 56; TST-0075-18-RV (Re), 2019 134430 (ON LTB); and Warraich v. Choudhry, 2018 ONSC 1275 (Div. Court), at paras. 15 and 16. I have reviewed these authorities.

87In argument, counsel for the Jegasundarams acknowledged that the Jegasundarams would have no standing to appeal the Writ Order, as they were not parties to the mortgage action or parties to the mortgage contract between Malhotra and Mr. Vadivale. However, he also submitted that there was no error in law to appeal. He submitted, therefore, that the correct mechanism to address what he considered to be the improper Writ Order was to have it set aside. But he acknowledged that no motion to set aside the Writ Order has ever been brought (other than through the motion that is now before me).

88Malhotra did not dispute that, as a mortgagee in possession, it was the landlord for the property. Malhotra and Mr. Vadivale did not dispute that the LTB has exclusive jurisdiction to terminate a residential tenancy. They did not dispute that if the Jegasundarams fulfilled the conditions set out by Penny J., then the eviction ordered by the LTB would not be carried out.

89It was submitted by Malhotra and Mr. Vadivale that because the relief sought by the Jegasundarams was not pleaded in their Notice of Motion, the request to set aside the Writ Order was not properly before the Court.

90In their joint submissions, they also made persuasive arguments and distinguished the authorities that are relied on by the Jegasundarams. First, it was argued that in those cases, all of the tenants were true tenants. However, in the case before me, Malhotra and Mr. Vadivale submit that the Jegasundarams maintain that they are not tenants but are owners, despite that the LTB has found that they are tenants. In the motion before me, I am not determining whether the Jegasundarams are tenants or owners of the property, as that is outside of the scope of this motion. I note, however, that in their materials, the Jegasundarams have made it clear that they disagree with the finding that they are tenants and maintain that they are owners of the property.

91In Fraser, the subject property was a rooming house. The landlord applied to the LTB to evict the occupants of the rooming house. The landlord wanted to renovate the property. The landlord was not successful at the LTB because it did not show that it had all of the necessary permits for the renovation work. A group of neighbours then applied to and obtained an order from the SCJ to evict the occupants of the rooming house. On appeal, the Court of Appeal held that the SCJ did not have jurisdiction to make an order requiring the occupants to vacate the premises. In the case before me, Malhotra obtained relief from the LTB. There was no issue relating to enforcement of default judgment in Fraser.

92In Brydges, the plaintiffs brought a Small Claims Court action to recover rent not paid by the defendants (tenants) for the period of time between the date of an eviction order that had been made by the LTB (November 13, 2008) and the date that the tenants actually were evicted by the Sheriff (February 5, 2010). Deputy Judge Klerertas held that the decision of the Divisional Court in Kipiniak v. Dubiel, 2014 ONSC 1344, was binding and that the Small Claims Court had jurisdiction to hear a claim for arrears in rent after the tenants had vacated the property.

93In Ramnarace, the property was owned by the children of the applicant. The applicant lived at the property, as did his children. The children defaulted on the mortgage and the mortgagee took steps to issue a Notice of Sale and a Statement of Claim. The mortgagee ultimately brought a motion for summary judgment that was successful. The mortgagee was granted possession of the property and leave to issue a Writ of Possession. The children served a Notice of Appeal. The appeal was ultimately dismissed for delay.

94The day before the scheduled eviction, the applicant and his children brought a motion and requested a stay of the eviction. Their request was dismissed and the eviction proceeded.

95Following the eviction, the applicant applied to the SCJ to assert the rights of a tenant to remain on the property. The applicant asserted that there had been a wrongful eviction. This case is distinguishable from the case before me. First, in Ramnarace, there were no proceedings before the LTB. In the case before me, there were proceedings before the LTB.

96Second, in Ramnarace, there were conflicting statements as to who occupied the property. The applicant stated that asserted that his children did not reside at the premises. However, Donahue J. found that the premises were a shared occupation and therefore, she found that the Residential Tenancies Act did not apply (see para. 84). In the case before me, it was disclosed to the Sheriff that the occupants of the property were tenants of the mortgagee and they were the only occupants.

97In TST-0075-18-RV (Re), the tenant brought an application for review before the LTB. The owners of the property resided in the main portion of the premises and the tenant rented and resided in the basement. The owners defaulted on the mortgage. The mortgagee ultimately obtained an order that a Writ of Possession be issued. The Writ of Possession was enforced and the owners and tenants were locked out of the premises. This case is distinguishable, as the mortgagee took the position that the Writ of Possession terminated the tenancy. Malhotra does not take that position. Malhotra brought proceedings before the LTB and obtained the order to terminate the tenancy and the eviction. Second, in TST-0075-18-RV (Re), the mortgagee had not disclosed that there was a tenant residing in the premises. Malhotra disclosed that the Jegasundarams are tenants of the mortgagee and that they reside in the premises. Finally, in TST-0075-18-RV (Re), the tenant was not asserting that they were not the tenants. The tenant sought and obtained protection from the LTB.

98In Warraich, the landlord brought an application to terminate the lease. The tenant’s representative requested an adjournment of the hearing. The adjournment was denied and the LTB granted the relief requested. The tenant appealed the LTB decision to the Divisional Court. One of the grounds of appeal was that the tenant had a claim for partial ownership of the property and submitted that the entire dispute, including the request to terminate the tenancy, should be heard by the SCJ. The Divisional Court held that that the LTB had jurisdiction to hear the eviction proceedings; that it was in the LTB’s exclusive jurisdiction to determine whether there was a landlord and tenant relationship; and that determination of the ownership interests in the property was in the jurisdiction of the SCJ.

99In Warraich, the ownership dispute was between the landlord and the tenant. In the case before me, the dispute in ownership interests is between the Jegasundarams and Mr. Vadivale, who is not the landlord. In Warraich, there was no stay of the eviction. In the case before me, by operation of Penny J.’s order, the enforcement of the eviction has been stayed until July 30, 2021, provided that the Jegasundarams fulfill the conditions set out in his Order.

100Malhotra and Mr. Vadivale rely on Grantmyre v. Bank of Nova Scotia, 2019 ONSC 2741. I find that of all the authorities that I have been referred to by all counsel, this is the most helpful. As set out in paras. 115 to 117, a judge hearing a request to set aside an order for the issuance of a Writ of Possession, is not sitting in appeal and that any request to challenge that order must be properly brought:

[115] In these circumstances, it is not open to this court on the motion before me – and clearly I am not sitting as an appellate judge – to make any review or determination with respect to the merits of the order of Lococo J. dated June 1, 2018, granting the writ of possession. Generally speaking, a decision of another court ought not to be reviewed or varied by another court except by way of an available appeal route or other proper procedural context. Any attempt outside of that context to litigate, challenge, or question the underlying merits of a decision would, at first blush, constitute an impermissible collateral attack on the decision.

[116] The rule against collateral attack of a judicial decision was explained by Abella J. for the majority of the Supreme Court of Canada in British Columbia (Workers’ Compensation Board) v. Figliola in the following terms:

The rule against collateral attack similarly attempts to protect the fairness and integrity of the justice system by preventing duplicative proceedings. It prevents a party from using an institutional detour to attack the validity of an order by seeking a different result from a different forum, rather than through the designated appellate or judicial review route: see Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585 (S.C.C.), and Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629 (S.C.C.).[37]

[117] The issues raised collaterally by the applicants in Mr. Grantmyre’s final submissions on the instant motion have already been determined by courts of competent jurisdiction. Default judgment was obtained by reason of Ms. Giesbrecht’s default under the Mortgage. A writ of possession was granted in accordance with the Rules of Civil Procedure. The proper route by which to challenge the outcome of those proceedings would have been either an appeal or a motion to set aside the default judgment and/or order of Lococo J. of June 1, 2018. The applicants pursued neither route. It is now not open to them to seek to mount a collateral attack against those orders by way of this motion [Emphasis added].

101I decline to grant the Jegasundarams’ request to set aside the Writ Order for the following reasons.

102First, I agree with counsel for Malhotra and Mr. Vadivale that this request is not properly before me. This relief was not set out in the Jegasundarams’ Notice of Motion. This request was formally requested for the first time in the factum filed on behalf of the Jegasundarams. As outlined above, this factum was served and filed on July 9, 2021.

103By way of explanation, Mr. Sidhu stated that as a result of the submissions made by all counsel on July 6, 2021, he thought it would be appropriate to include this relief in his factum, as it could fall under para. (e) of the Notice of Motion. Para. (e) of the Notice of Motion is the generic catchall request “Such further and other Relief as to [sic] this Honourable Court may deem just.”

104Mr. Sidhu acknowledged that prior to continued argument on July 12, 2021, he had not discussed with counsel for Malhotra and Mr. Vadivale that he would be seeking this additional relief. Mr. Sidhu readily acknowledged that this is problematic.

105As this relief was not set out in the Notice of Motion and counsel for Malhotra and Mr. Vadivale had no prior notice that this request would be made on July 12, 2021, their joint responding materials and joint factum could not have addressed this request. I accept that they learned of this request once they received the factum served on behalf of the Jegasundarams, which was after their joint factum had been prepared.

106Second, the Jegasundarams are not parties to the mortgage action in which the Writ Order was granted. They have not requested that they be added as parties (either by way of a notice of motion or oral motion).

107Third, in my view, the request to set aside the Writ Order is substantive relief and it is not in the interests of justice that it fall into the generic catchall relief requested. Without prior notice to the responding parties to this motion, it would simply be unfair to Malhotra and Mr. Vadivale to permit that request to be advanced in the context of this motion. While I could infer that the Jegasundarams were content to rely on their motion materials, as filed, in support of their request to set aside the Writ Order, I cannot assume that Malhotra and Mr. Vadivale would be content to do so. I would expect that one or both could have additional evidence to file, as well as additional authorities that they would want to present to the Court for consideration.

108At minimum, I would expect that the Jegasundarams would also have to provide authorities to address the following questions: as non-parties, are they entitled to seek that relief or must they be first be added as parties? Should any request to set aside the Writ Order also include a request to set aside the default judgment? How would they meet the test to set aside the Writ Order and possibly the default judgment?

109I also note that the materials that were filed by Malhotra in support of its request for the Writ Order are not before me as those materials do not form part of the record for the motion that is before me.

110In these circumstances, I find that the Jegasundarams’ request to set aside the Writ Order is not properly before me and I decline to grant that relief.

iii) HAVE THEY MET THEIR ONUS FOR A STAY?

111Given that I have found that the Jegasundarams do not have standing to bring this motion, I have determined that it is not necessary for this issue to be considered.

CONCLUSION

112Therefore, the motion is dismissed and my order of July 6, 2021 is terminated. Malhotra and Mr. Vadivale are the successful parties and are presumptively entitled to costs. I would strongly encourage counsel to resolve the issue of costs. If costs cannot be resolved, the Order below provides directions for the service and filing of written submissions.

113I would also strongly encourage that the Jegasundarams and Mr. Vadivale to take the necessary steps to move the ownership action along in a timely fashion. Regardless of whose position prevails, they will both lose as they each continue to incur costs.

ORDER

114For the reasons outlined above, the following Order shall issue:

1. The motion brought by the non-parties Divya Jegasundaram and Rupasundar Jegasundaram is dismissed (Notice of Motion dated July 1, 2021).

2. The Order of Kumaranayake J., dated July 6, 2021, is terminated.

3. If counsel cannot resolve the issue of costs for this motion, then costs shall be determined in writing according to the following directions:

a. By August 13, 2021, the Plaintiff Malhotra Holdings Inc. and the Defendant Krish Vadivale shall serve and then file their respective written costs submissions (no more than 5 pages each, double-spaced and in 12-point font).

b. By September 3, 2021, the non-parties Divya Jegasundaram and Rupasundar Jegasundaram, shall serve and then file their responding written costs submissions (no more than 7 pages, double-spaced and in 12-point font).

c. There shall be no reply submissions unless requested by the Court.

d. The page limits above do not include bills of costs, relevant offers to settle (if any), and authorities.

e. Written submissions shall be filed by email to my judicial assistant at the following email address:

sherry.mchady@ontario.ca.

Kumaranayake J.