Court File and Parties

COURT FILE NO: CV-22-681466

DATE: 20220831

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GARY GREG VILLANUEVA Applicant

AND: JESUSA GLORIA, EDISON MERCADO and JESSA CAMILLE GLORIA Respondents

BEFORE: VELLA J.

COUNSEL: Julia A. Toso, for the Applicant Jesusa Gloria, Self-represented Respondent Jessa Camille Gloria, Self-represented Respondent

HEARD: August 29, 2022

Endorsement

[1] This matter was heard today by videoconference pursuant to the endorsement of Vermette J. who designated this matter as urgent and fixed a strict timetable leading to today’s hearing.

[2] I delivered my ruling at the hearing, with brief reasons to follow. These are the reasons.

[3] At the CPC held before Vermette J. held on July 26, 2022, Her Honour held that this is an urgent matter and fixed a one hour hearing returnable today. Vermette J. also established a timetable for the exchange of materials. The endorsement was served along with the application record, Notice of Application, factum and book of authorities on each of the respondents. No response or materials filed by any of the parties, including notably Ms. Jesusa Gloria who has a 97% interest in the subject property as a tenant in common. Mr. Villanueva has a 1% interest, Ms. Jessa Gloria has a 1% interest, and the late Mr. Mercado had the remaining 1% interest, all as tenants in common as established by the evidence.

[4] The applicant, Mr. Villanueva, seeks a reference to an associate judge and an order for sale under the Partition Act, RSO 1990, of the house known municipally as known as 22 Fountainbleu in the City of Toronto.

[5] Based on the evidence before me, Ms. Jesusa Gloria entered into an agreement of purchase and sale in July of 2021. However, she was unable to secure the requisite financing required to complete the purchase and so asked Mr. Villanueva, and her daughter, Ms. Jessa Gloria, and her daughter’s late husband, Edison Mercado, to co-sign a mortgage with the Canadian Imperial Bank of Commerce, in exchange of a 1% interest in the property on a tenants in common basis. However, it was agreed that the 1% interest was notional and based on Ms. Jesusa Gloria’s commitment to obtain alternative financing promptly or, if not able, then to promptly sell the house.

[6] This occurred about 13 months ago. Ms. Jesusa Gloria has neither secured alternative financing nor attempted to sell the house.

[7] Now Mr. Villanueva’s own financial circumstances have been severely compromised as a result of Ms. Jesusa Gloria’s failure to deliver on her end of the agreement. This has led to the present application.

[8] Ms. Jesusa Gloria does not dispute the fact of this agreement, and states that she too wants either the subject property sold or an opportunity to obtain alternative financing to relieve Mr. Villanueva and her daughter and late son in law of their financial obligations to the CIBC under the mortgage. However, she says she requires more time to either put the house up for sale or obtain alternative financing. Her position at the outset of this application is that it should be denied so as to give her a little more time to arrange to put her house up for sale or alternatively arrange alternative financing.

[9] Ms. Jessa Gloria does not oppose this application. I am advised that prior to his recent sudden death last month, Ms. Jessa Gloria’s late husband, Mr. Mercado, also did not oppose the relief sought and they did not file any notices of appearance.

[10] Under the Partition Act, R.S.O. 1990 all tenants in common have a right to bring an application for partition or sale of a property located in Ontario (s. 2 and 3(1)).

[11] There is a presumptive statutory right for tenants in common to compel either a partition or a sale under the Partition Act (Greenbanktree Power Corp v. Coinamatic Canada Inc., 2004 CanLII 48652 (ONCA); Gartree Investments Ltd. v. Cartree Enterprise Ltd., 2002 CanLII 49640 (ONSC)

[12] I am satisfied on the evidence that this property is not suitable for a partition given the circumstances leading to the creation of the tenants in common and the acknowledgement that the respective 1% interest in title was intended to be short term and notional (see Fellows v. Lunkenhiemer, 1998 CareswellOnt 4622).

[13] In my view the proposed sale is more advantageous to the parties interested than the proposal offered by Ms. Jesusa Gloria which is to wait and let her try to sell or refinance the property. No concrete steps have been taken by Ms. Jesusa Gloria to put the house up for sale or to obtain replacement financing despite the fact that over one year has now passed since she made that commitment to the other tenants in common, including Mr. Villanueva.

[14] Rule 54.01 provides that a reference under any other rule, in this case r. 66, may be directed to an associate judge. R. 54.02(2)(b) provides that a reference can be made to an issue relating to the conduct of a sale.

[15] I raised as a preliminary matter with Ms. Toso the fact that since the application was commenced, Mr. Mercado had deceased. Therefore the application as against the late Mr. Mercado is automatically stayed subject to an order to continue and a concurrent order amending the title of proceedings to reflect the Estate of Mr. Mercado as a respondent which I would entertain in these urgent circumstances.

[16] The matter was held down as Ms. Jessa Gloria was prepared to swear the requisite affidavit. I explained this process to Ms. Jesusa Gloria.

[17] I directed that the requisite notice of motion and affidavit of Ms. Jessa Gloria be delivered to Ms. Jesusa Gloria by email and uploaded to Caselines, and that we would reconvene at 3:45 p.m.

[18] When we resumed, Ms. Jesusa Gloria requested an adjournment so that she could retain legal counsel.

[19] Ms. Toso resisted the adjournment on the basis that it is a stall tactic. Ms. Gloria was forewarned by Vermette J. in Her Honour’s endorsement that she should obtain legal counsel. Ms. Jesusa Gloria confirmed that she has consulted with a lawyer but has not retained one. This lawyer is apparently on vacation, however, no evidence or communication from this lawyer was presented advising that they had been consulted.

[20] More to the point, in my view, the prejudice that will be suffered by Mr. Villanueva should the adjournment be granted - namely, that a proceeding by his mortgagee has initiated to foreclose on his family home and his inability to obtain re-financing due to his position as a co-mortgagor on the subject property - cannot be compensated in costs. Ms. Jesusa Gloria had notice of this application and the strict timetable imposed by Vermette J. She did not file any notice of appearance nor seek an adjournment until at the conclusion of this application. Therefore, this late requested adjournment is denied.

[21] I reviewed the affidavit of Jessa Gloria sworn and filed today in support of her motion to have the proceeding continued as against the Estate of Edison Mercado and to be appointed litigation administrator for purposes of these proceedings (made in response to my raising of this issue). To her affidavit she attached an email sent by her late husband on their joint behalf to their previous real estate lawyer who acted on the purchase of dated April 2, 2022. The lawyer, Ms. Laman Meshadiyeva, attended today as a “friend of the court” to observe and facilitated delivery of Ms. Jessa Gloria’s affidavit. This email stated that they wish to be removed from title as soon as possible due to the significant financial stress it was causing and in particular with the refinancing of their own property – much like Mr. Villanueva’s situation which is also mentioned in this email. Mr. Mercado died suddenly on July 10, 2022 without a will.

[22] I am satisfied on the evidence that this matter is urgent. Mr. Villanueva is a co-mortgagor for the 1 plus million dollar mortgage registered against the subject property held by the CIBC. This was supposed to have been a short term arrangement to enable Ms. Jesusa Gloria to obtain alternative financing and to then promptly remove Mr. Villanueva (and Ms. Jessa Gloria and the late Mr. Mercado) from mortgage and title in order to save her from breaching her agreement of purchase and sale regarding the subject property. Ms. Jessa Gloria does not oppose the relief sought by Mr. Villanueva in his notice of application. The mortgage was registered in or around July 2021 – over one year ago. Mr. Villanueva’s own family home is now at risk as a result of his ongoing position as a mortgagor of the 22 Fountainbleu property. Ms. Jesusa Gloria does not dispute this fact. She stated that she wants Mr. Villanueva released from the CIBC mortgage and title as soon as possible. The respondents had notice and were aware of their right to file materials. As stated earlier, Ms. Jesusa Gloria opposes but has not filed any evidence or response.

[23] I am granting the order continuing the application as against the Estate of Edison Mercado and appointing Ms. Jessa Camille Gloria as the litigation administrator pursuant to r. 9.02, nunc pro tunc. I am also granting an order amending the title of proceedings to replace “Edison Mercado” with the “Jessa Camille Gloria as litigation administrator of the Estate of Edison Mercado”, also nunc pro tunc.

[24] For the reasons stated above, I am also granting the relief in the Notice of Application directing the sale of this property under the Partition Act and directing a reference to an associate judge for purposes of overseeing the sale. Any sale proceeds must be paid into court, subject to further order of the court. A draft judgment consistent with Form 66A is to be provided to the parties and then to me for review in Word. This judgment should also reflect my order continuing the application as against the Estate of Edison Mercado and amending the title of proceedings accordingly. The order is to be provided by email to my judicial assistant, Maria Kolliopoulos.

[25] I have reserved the matter of costs of today’s proceeding. Ms. Toso is to deliver her cost outline and brief submissions, on behalf of Mr. Villanueva, to the parties, and the upload them to Caselines and deliver same to my judicial assistant, with all parties copied.

[26] Any responding costs submissions replying to Mr. Villanueva’s request for costs to be made payable in his favour must also be delivered to me in care of my judicial assistant, Maria Kolliopoulos, and copied to each other within 10 days from receipt of Ms. Toso’s submissions.

Justice S. Vella

Date: August 31, 2022