Court File and Parties

COURT FILE NO.: CV-20-00636406-000

DATE: 20211112

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: LIBERTAS FINANCIAL MANAGEMENT INC. Plaintiff

AND: kai li, Defendant

BEFORE: S.F. Dunphy J.

COUNSEL: Darryl Singer and Nadia Condotta for the Plaintiff

Defendant noted in default

READ at Toronto: November 12, 2021

REASONS FOR DECISION

[1] The plaintiff moved for default judgment in writing. The statement of claim was personally served on the defendant and the defendant has been noted in default.

[2] Judgment against a defendant noted in default cannot be granted beyond the parameters of the claim and the facts pleaded in the Statement of Claim. If the statement of claim fails to state the facts necessary to support the judgment sought, then judgment cannot be granted on that claim and the motion for judgment must be dismissed. This is such a case.

[3] The statement of claim seeks possession of an identified property, payment of $313,544.95, pre and post-judgment interest at 12% per year and costs on a substantial indemnity basis.

[4] The claim pleads that defendant was the registered owner of the subject property and that an individual identified as “Khan” entered into a mortgage that was registered on the subject property on April 15, 2019, subject to identified Standard Charge Terms. It is also pleaded that the mortgage was subsequently assigned to the plaintiff. There is no pleading that the registered owner of the property granted the subject mortgage nor is there any pleading that any amount of money was actually advanced under the mortgage (or when). A mortgage can of course be security for a debt that may be larger or smaller than the amount of the security granted.

[5] The statement of claim contains a breakdown of the $313,544.95 claimed. The breakdown states without reference to any agreement or pleaded facts that the plaintiff “is entitled to liquidated Judgment” for the following amounts:

a. Principal balance owing: $270,000.00

b. Statement Fee $ 100.00

c. Discharge Fee $ 400.00

d. Interest to Date $ 10,740.82

e. Renewal Fee $ 14,850.00

f. Enforcement Penalty $ 8,250.00

g. NSF Fees $ 1,200.00

h. Legal Fees for Transfer of Charge $ 559.22

i. Legal Fees for Discharge $ 664.91

j. Legal Fees for Litigation $ 6,780.00

TOTAL $313,544.95

Per Die of $88.77 from February 15, 2020

[6] The statement of claim pleads no facts to support any of the amounts claimed. The principal amount claimed - $270,000 – is pleaded as arising under a mortgage entered into by an individual named Khan pleads no contractual nexus between the plaintiff and the defendant whatsoever. As noted earlier, there is no fact pleaded of an actual advance – a bare “the plaintiff is entitled to judgment in the following amounts” pleading is no pleading at all if facts supporting that bald assertion have not first been pleaded.

[7] The affidavit filed in support of the motion for summary judgment failed to attach any contractual document of the defendant with the plaintiff or its predecessor in title. Instead of the Letter of Commitment supposed to be attached as Exhibit “A”, some completely different document was attached appearing to be between the Diamond and Diamond law firm and the plaintiff dating from January 2020 (almost one year after the pleaded mortgage). The standard charge terms pleaded and attached to the affidavit contain no justification for any of the various fees and penalties claimed. While legal fees for enforcement are referenced in those standard charge terms, no evidence of the amount of legal fees actually incurred or the reasonableness of those charges was provided. Nothing in the motion material provides a foundation for any of the fees or other amounts claimed beyond a summary and unsigned fee outline. One of the fees is described as a “penalty” which raises obvious enforceability issues. Another fee is pleaded as “renewal fee” but no renewal is pleaded nor was any basis for the fee claimed.

[8] In summary, both the statement of claim and the motion are fatally flawed. The flaws in this case are not minor.

[9] The motion for judgment is dismissed.

S.F. Dunphy J.

Date: November 12, 2021