COURT FILE NO.: CV-19-68258
DATE: 20220124
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TT5 Inc.
Plaintiff
AND
Maryam Furney and Alex Furney also known as Aiden Fitzgerald Furney and Mary Mamleka Adhami
Defendants
BEFORE: JUSTICE L. SHEARD
COUNSEL: Nicholas Ajram, agent for Steve Chan, lawyers for the plaintiff
Karan Khak and Shayan Kamalie, lawyers for the defendants, Maryam Furney and Alex Furney, also known as Aiden Fitzgerald Furney
No one appearing for the defendant, Mary Mamleka Adhami.
HEARD: In Hamilton, VIA ZOOM videoconference, January 21, 2022
REASONS FOR DECISION ON MOTION
Overview
[1] The defendants, Maryam Furney and Alex Furney, also known as Aiden Fitzgerald Furney, (collectively the “Furneys”) brought this motion for an interlocutory injunction enjoining the plainitff, TT5 Inc., from enforcing the order of Braid J. made, on consent, on November 9, 2021 (the “Consent Order”)
[2] Briefly, the Furneys assert that the Consent Order was made by their then counsel, without their consent or instructions. For that reason, the Furneys assert that the Consent Order ought to be set aside and ought not to be enforced until the Furneys’ motion to set the Consent Order aside has been heard.
[3] At the conclusion of submissions, I dismissed the Furneys’ motion, and fixed costs, with reasons to follow. These are the reasons.
Evidence on the Motion
[4] Maryam Furney is the registered owner of 1728 York Road, Niagara-on-the-Lake, Ontario, L0S 1J0 (the “Property”) and the mortgagor under a mortgage registered as Instrument Number NR313568, transferred to TT5 which transfer was registered as Instrument Number NR452744 (the “Mortgage”). Alex Furney is the guarantor of the Mortgage. The third defendant, Mary Mamleka Adhami, is the tenant of the Property (the “Tenant”).
[5] TT5 issued a Notice of Sale Under Mortgage on April 18, 2018. By statement of claim dated February 1, 2019 TT5 sued the defendants seeking immediate possession of the Property, payment of $474,535.51 due under the Mortgage as of February 1, 2019, together with pre-judgment and post-judgment interest at the rate of 12.50% per annum.
[6] TT5’s claim against the Tenant was for an order requiring her to pay rent directly to TT5, to co-operate in the showing of the Property, and for costs.
[7] The Furneys and the Tenant defended the claim and counter-claimed in pleadings served April 10, 2019. Among other things, in the statement of defence, Maryam Furney states that she has the funds to bring the mortgage up-to-date but was prevented from doing so by TT5.
[8] TT5 moved for summary judgment on the Mortgage. The motion was originally returnable on March 12, 2020. At that time, all three defendants were represented by counsel, Jonathan Rosenstein, but had not delivered responding materials. TT5’s motion was adjourned for a long motion to the week of June 5, 2020. COVID-19 prevented the motion from being heard in 2020.
[9] TT5’s motion was brought before Krawchenko J. on August 6, 2021. On that date, the defendants had retained new counsel, Richard Watson, who advised that he had been recently retained and was not able to proceed on that date. The motion was adjourned to the week of September 1, 2021, peremptory upon the defendants, who were to have filed their responding materials in advance of the hearing date.
[10] The Furneys included a copy of TT5’s motion record on its motion for summary judgment in their materials filed in support of this motion. The Furneys did not include copies of their materials filed in response to TT5’s motion for summary judgment.
[11] In submissions, counsel for TT5 advised the court that he was TT5’s counsel on the summary judgment motion and that, to the best of his knowledge, while the defendants may have served responding materials, they did not file a responding motion record or factum with the court. As a result, it was expected that TT5’s motion for summary judgment would proceed on the basis of TT5’s materials only.
The Consent Order
[12] On November 9, 2021, the parties appeared before Braid J. on the return of TT5’s motion for summary judgment. Mr. Watson appeared on behalf of the defendants and Mr. Ajram appeared on behalf of TT5.
[13] The motion was not argued as the parties advised Braid J. that they had reached a resolution whereby a consent order would issue. On that basis, Braid J. made the Consent Order.
[14] The Consent Order fixed the amount payable by the defendants to TT5, in full satisfaction of the amounts TT5 claimed to be owing claimed under the Mortgage, including principal and arrears, legal costs and related charges.
[15] The amount payable under the Consent Order was $600,000, together with simple interest on that amount at 12.5% per annum, amounting to $205.48 per day, payable from November 9, 2021 to the date of payment, which was to be no later than January 14, 2022. If payment was made in accordance with the Consent Order, TT5 agreed to discharge the Mortgage or to transfer it to a lender as directed by the defendants. Within two business days of a request, the Consent Order required TT5 to provide the defendants with a payout statement reflecting the amounts set out in the Consent Order.
[16] If payment was not made by the defendants by January 14, 2022, the Consent Order provided that TT5 would be permitted to obtain a judgment without notice to the defendants (the “Judgment”). The Judgment granted TT5 the right to a Writ of Possession of the Property, enforceable against all the defendants including the defendant, Mary Mamleka Adhami, the Tenant. In addition, the Judgment terminated Adhami’s tenancy or the tenancy of anybody then in possession of the Property and contained terms waiving any notice requirements under the Residential Tenancies Act.
[17] On January 19, 2021, counsel for the Furneys emailed a Notice of Motion and supporting affidavits to TT5’s litigation counsel. The motion was returnable on Friday, January 21, 2022 on an urgent basis and sought an interim interrogatory injunction restraining TT5 from taking any steps to enforce the Consent Order pending the determination of the defendants’ motion to set aside the Consent Order.
[18] Included in the affidavit evidence put forth by the Furneys are various emails apparently sent in November 2021 to their then lawyer and others, in which the Furneys accuse their own lawyer of acting without their instructions or authorization and accuse him, TT5’s lawyer, and others, of lying. In a number of these emails, the Furneys state that they withdraw their consent to the Consent Order.
[19] Despite their protestations about the validity of the Consent Order and their alleged desire to withdraw their consent to it, the Furneys have not brought a motion to set aside the Consent Order.
[20] On and after November 9, 2021, the Furneys did not make payment in accordance with the Consent Order, nor did they make any payment at all toward the Mortgage. In their motion materials of this motion, the Furneys included TT5’s supporting affidavit on its motion for summary judgment. TT5’s affidavit states, in part, that TT5 served a Notice of Sale under Mortgage on April 11, 2018, in which TT5 claimed $400,195.80, the amount then owing for principal, interest, taxes etc. TT5’s affidavit also states that the Mortgage remained in default and that no payments had been made toward the interest owing on the Mortgage.
[21] The Furneys have not provided this court with any materials they may have served in response to TT5’s motion for summary judgment. On this motion, the Furneys’ counsel advises that he has no firsthand knowledge of any such responding materials, and that his clients report that they cannot find their responding materials.
[22] Mr. Ajram, litigation counsel for TT5, advised this court that he was also litigation counsel for TT5 on its motion for summary judgment and that he appeared before Braid J. on November 9, 2021. Mr. Ajram advised this court that to the best of his knowledge, information, and belief, as of November 9, 2021, the defendants had filed no materials in response to TT5’s motion for summary judgment.
[23] Mr. Ajram also advised this court that Braid J. was ready to hear TT5’s motion, which did not proceed at the scheduled time, because the parties were engaged in settlement negotiations, which culminated in the Consent Order.
[24] The defendants did not make the payments contemplated by the Consent Order and TT5 took steps to obtain the Judgment.
The Furneys’ Motion for an Interlocutory Order
[25] The Furneys’ motion was brought on an “urgent” basis, and on that basis was permitted to be added to the regular motions list of Friday, January 21, 2022. It was clear that this motion would take longer than one hour and should have been scheduled for a long motion.
[26] The moving parties’ timing in bringing the motion created a situation whereby if an adjournment was granted without terms, the purpose for the injunction would be defeated: TT5 would proceed to take possession of the Property and to exercise the other rights given to it under the Judgment. If the adjournment were granted with terms, the Furneys would, in essence, have obtained their injunction without having established that they could meet the requisite test.
[27] Despite the extremely short notice given to him to respond to the Furneys’ motion, counsel for TT5 delivered a responding record, factum and brief of authorities. These were received by the court at approximately 4:15 a.m. on January 21, 2022. TT5 counsel advised the court that his client was prepared to have him argue the motion on the record submitted. The motion proceeded on that basis. The hearing began in late morning and took all afternoon to be heard.
Grounds for the Motion
[28] The Furneys’ motion is brought under r. 40.01 and 45.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. R. 40.01 states:
An interlocutory injunction or mandatory order under section 101 or 102 of the Courts of Justice Act may be obtained on motion to a judge by a party to a pending or intended proceeding
[29] S. 101(1) of the Courts of Justice Act, R.S.O. 1990 c. C.43 states:
In the Superior Court of Justice, an interlocutory injunction or mandatory order may be granted or a receiver or receiver and manager may be appointed by an in order where it appears to a judge of the court to be just or convenient to do so.
[30] The Furneys’ factum sets out the test they submit should be applied in this case, as taken from RJR – McDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1S. C. R. 311. Set out below is taken from the Furneys’ factum:
- Generally, the test to be applied in a motion seeking an interlocutory injunction is set out in the well-known decision of RJR -- MacDonald Inc. v. Canada (Attorney General):
First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits [at p. 334].
- The first branch of the test is a low threshold. As the Supreme Court of Canada stated In RJR -- MacDonald Inc. v. Canada (Attorney General):
Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and third tests, even if of the opinion that the plaintiff is unlikely to succeed at trial [at 337-338].
- The three prongs are not watertight compartments – all factors can be considered together to assess their collective impact, with the strength of one factor offsetting the weakness of anotherBoehringer Ingelheim (Canada) Ltd. v. Pharmacia Canada Inc., [2001 CanLII 28351 (ON SC)](https://www.canlii.org/en/on/onsc/doc/2001/2001canlii28351/2001canlii28351.html), at para. [69]. The fundamental question for the judge hearing an injunction is whether it is just and equitable in all the circumstances of the case for the court to grant the injunction 1960529 Ontario Inc. v. 2077570 Ontario Inc., [2017 ONSC 5254](https://www.canlii.org/en/on/onsc/doc/2017/2017onsc5254/2017onsc5254.html) at para. [23]
[31] TT5 submits that the RJR test was clarified by the Supreme Court of Canada in R. v. CBC 2018 SCC 5, 2018 S.C.C. 5. At para. 31 of its factum, TT5 submits that the three-part test to be applied is as follows:
- The Defendants plead that this is a low threshold. However, the Supreme Court of Canada has clarified the test in RJR-Macdonald in R v. CBC, 2018 SCC 5, wherein the Court held that an applicant must meet the following test:
a) New Test 1: The applicant must demonstrate a strong prima facie case that it will succeed at trial. This entails showing a strong likelihood on the law and the evidence presented that, at trial, the applicant will be ultimately successful in proving the allegations set out in the originating notice;
b) Test 2: The applicant must demonstrate that irreparable harm will result in the relief is not granted; and,
c) Test 3: The applicant must show that the balance of convenience favours granting the injunction.
[32] Both parties submit that the court must first be satisfied that the application is neither vexatious nor frivolous before proceeding to consider the second and third tests.
[33] In oral argument, TT5 raised a preliminary submission that the Furneys’ motion was not properly brought under r. 40.01 as there is no proceeding: by order of Braid J, the action was completed; there is no longer a “pending or intended proceeding”. TT5 submits that the relief being sought by the Furneys ought to have been brought in the context of a motion to set aside the Consent Order.
[34] There is merit to those submissions. As noted above, while they allege that the Consent Order was made without authority or instructions, the Furneys have not brought a motion to set aside the Consent Order, which was made months ago. Also, without having brought a motion to set aside the Consent Order and, instead bringing this motion, on extremely short notice and at a time when TT5 is in a position to give effect to the Consent Order, supports the submissions made by TT5 that the Furneys are simply trying to delay the enforcement of the Consent Order and that this motion is both vexatious and frivolous. Those submissions are further supported by the evidence on this motion - much of it put forth by the Furneys - that contradicts their assertions that they had no input into the Consent Order and that it was made without their authorization or consent.
Have the moving parties met the first part of the applicable test?
[35] Based on the evidence put forth on this motion, I am not satisfied that the Furneys have established that their case is arguable, raises a serious issue to be tried, and is not frivolous or vexatious.(Cytrynbaum v. Look Communications Inc., 2013 ONCA 455, at para. 54)
[36] The email correspondence set forth in the parties’ motion records contradict the Furneys’ assertions that they had no input into the Consent Order. For example, Exhibit “H” to the affidavit of Maryam Furney contains emails that pre-date the Consent Order among Maryam Furney, her counsel, Richard Watson, and TT5 counsel, Steve Chan in which the Furneys ask that certain terms be included in Consent Order. These terms are found in the Consent Order.
[37] In her email to Richard Watson of November 8, 2021 – the night before TT5’s summary judgment motion is to be heard, Maryam Furney writes to Mr. Watson stating that she is “forced to accept this last-minute offer”. This email is copied to Alex Furney (whose email is identified as iabtd@gmail.com), who claims on this motion that he did not authorize his spouse, Maryam Furney, to give instructions to Mr. Watson.
[38] After the Consent Order was issued, in emails sent by Maryam Furney to Mr. Watson and others, she raises no allegation that the Consent Order was made without her authority or consent. Instead, Maryam Furney alleges that TT5 had failed to deliver the payout statement, as it was required to do pursuant to the Consent Order. For example, her allegation is absent in her emails to Richard Watson, and Steve Chan and others of November 10, 2021 in which Maryam Furney asks TT5 to comply with the Consent Order by sending the payout statement to Mr. Watson (the lawyer she now alleges acted improperly and without her authorization). In a later email of the same date, Maryam Furney alleges that TT5 is delaying providing the payout statement and that the defendants now wish to “withdraw our consent as the opposition are in breach of the court order.” (sic)
[39] Similarly, in her email sent directly to the Hamilton Trial Co-Ordinator, and copied to Mr. Watson and counsel for TT5, Maryam Furney makes no allegation that the Consent Order was improperly made, but, again, complains that TT5 is in breach of it: Maryam Furney’s email asserts that the defendants “were assured and guaranteed the payout statement of $600,000 with the per diem ready for our lawyer by the opposition and as part of our consent to court on November 9, 2021… We were supposed to receive the payout statement along with the honourable judge’s endorsement from the opposition yesterday on November 9, 2021 as part of our condition of consent to court. Mr. Watson our lawyer assured us that without the payout statement from the opposition they will be in breach of the court order.”
[40] In her email of November 12, 2021 sent to Richard Watson, and copied to counsel for TT5, Ms. Furney states: “the consent to judgment is withdrawn, as they failed to provide the payout statement as agreed on Nov 9th, 2021.”
[41] Counsel for TT5 did send the payout statement to Mr. Watson on November 10, 2021, well within the timeframe contemplated by the Consent Order. Receipt of the payout statement was confirmed by Mr. Watson in his email of November 15, 2021 to TT5’s litigation counsel. Mr. Watson’s email reads, in part: “Of course the payout statement was emailed to my office on that date, with the second one later in the day.… Maryam knows this.”
[42] These and other emails contained in the motion records put forth by the Furneys and TT5 on this motion, seriously undermine the Furneys’ assertions on this motion.
[43] The evidence on this motion shows that:
(1) the Mortgage has been in default for many years;
(2) TT5 has been attempting to enforce the Mortgage since at least 2018;
(3) TT5’s motion for summary judgment was originally returnable in March 2020 and adjourned to September 2021, where it was placed on a running motions list;
(4) the defendants in this action could not show that they delivered responding any materials on TT5’s motion for summary judgment;
(5) TT5’s motion for summary judgment was set to proceed on November 9, 2021 before Braid J., on the basis of materials filed by TT5;
(6) on the eve of TT5’s motion for summary judgment, the defendants engaged in settlement negotiations with TT5. Although they were represented by their lawyer, Richard Watson, the defendants, through Maryam Furney (the sole mortgagor), had direct input into the terms of the Consent Order;
(7) in reliance upon the Consent Order, TT5 did not proceed with its summary judgment motion and, as per the submissions of Mr. Ajram made on this motion, which I accept, TT5 compromised its claim so as to reach a resolution and the Consent Order;
(8) TT5 has complied with its obligations under the Consent Order;
(9) the defendants did not make payment to TT5 as contemplated by the Consent Order nor, in fact, any payment at all;
(10) the defendants have not brought a motion to set aside the Consent Order;
(11) as of January 14, 2022, TT5 was entitled to, and did, take steps to obtain the Judgment; and
(12) on January 19, 2022, the defendants served this motion, returnable on January 21, 2022.
[44] Based on the foregoing, I conclude that the Furneys have not met the first part of the RJR test to show a serious issue to be tried or the more stringent test set out in R. v. CBC to show that they have a prima facie case.
Have the moving parties demonstrated that irreparable harm will result in the relief is not granted?
[45] The Furneys submit that if the judgment is enforced, they suffer harm because they (or one or more of them ) would lose their possessory rights to the Property; if TT5 takes possession of the Property, they will lose their rights under sections 2(3) and 23(1)(b) of the Mortgages Act, R.S.O. 1990, chap. M.40. That argument was not strongly advanced in oral submissions. However, there is no evidence on this motion that the defendants, or any of them, have made any payment toward the monies due and owing under the Mortgage. To the contrary, the evidence is overwhelming that the Mortgage has been in default since at least 2018, if not earlier, and remains in default.
[46] TT5 submits that the default under the Mortgage is the reason for the defendants to lose their rights under the Mortgages Act. I agree.
[47] TT5 also submits that if the defendants succeed in proving that their lawyer acted without authority or instruction, the defendants would have available remedies against their lawyer.
[48] TT5 also submits that the Furneys, who are the moving parties on this motion - the Tenant not having appeared - do not live in the Property. This is an investment property for them, not their home.
[49] Counsel for the Furneys asked this court to consider the rights of the Tenant when determining whether to grant the relief sought on this motion. As the Tenant has not participated in this motion, that request cannot be accommodated. However, TT5 asks the court to note that the Tenant was represented by Mr. Watson when the Consent Order was made. TT5 submits that the rights of the Tenant were considered when the Consent Order was made, as evidenced by the paragraphs in the Consent Order that address the tenancy.
[50] Counsel for TT5 submitted that it is TT5, not the defendants, who needs the protection of this court. If the injunction being sought were to be granted, TT5 would be prevented from enforcing the Consent Order, obtained in good faith, properly negotiated between counsel, and made by a judge in open court, following legal submissions made by counsel for the parties.
[51] TT5 also asks the court to consider events that took place after the Mortgage was transferred to TT5, and the conduct of the Furneys after TT5 had served its Notice of Sale and issued a claim against the defendants, as evidenced by the parcel register for the Property, a copy of which was included by the Furneys in their materials on this motion.
[52] The Parcel Register shows that after the Mortgage was transferred to TT5, the Minister of National Revenue registered two liens against the Property with a total face amount of $243,551. Counsel for TT5 submits that the government liens rank in priority to the Mortgage. TT5 submits that the greater the delay suffered by TT5 in realizing upon its security under the Mortgage, the greater the risk that TT5 will not recover full payment of the amount owing pursuant to the Consent Order or, the higher amount that TT5 asserts it could have claimed had it proceeded with the motion for summary judgment and fully enforced the terms of the Mortgage.
[53] In oral submissions, counsel for TT5 also asked the court to consider that in July 2021, Maryam Furney granted a new mortgage against the Property in the principal amount of $700,000 but did not use any of those funds to pay down the Mortgage.
[54] I am not satisfied that the Furneys have shown that they will suffer irreparable harm if the injunction is not granted. Quite the opposite, the Consent Order represents a compromise of the amounts that TT5 could otherwise seek to claim under the Mortgage, that is in default. Separately, if the Furneys can show that their lawyer caused them to enter into the settlement, embodied in the Consent Order, that was prejudicial to their financial interests in the Property, there is no reason to believe that they will be unable to pursue a claim against their prior lawyer.
Have the moving parties shown that the balance of convenience favours granting the injunction?
[55] I accept the submissions of counsel for both sides, that if the moving parties have not satisfied the second part, I need not proceed to consider the third part of the three-part RJR test.
[56] However, the record before me shows that TT5 has been attempting to enforce its rights as mortgagee since at least 2018. TT5 brought a motion for summary judgment originally returnable in March 2020 - just before the interruption of the operation of the Courts, caused by COVID 19. The motion could not proceed in August 2021 because the defendants were not ready and had not yet filed materials. For that reason, the matter was marked peremptory upon the defendants when it was ordered to be placed on the September 2021 long motions list.
[57] Based on the record before me, I cannot conclude that the balance of convenience warrants restraining TT5 from moving to exercise its legal rights arising from the Consent Order made by Braid J. based on the submissions of legal counsel.
Conclusion
[58] For the reasons set out above, the motion was dismissed with costs fixed at $5,650.00 and payable forthwith by the Furneys to TT5.
Justice L. Sheard
Date: January 24, 2022
DATE: 20220124
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TT5 Inc.
Plaintiff
- and –
Maryam Furney and Alex Furney also known as Aiden Fitzgerald Furney and Mary Mamleka Adhami
Defendants
REASONS FOR DECISION ON MOTION
Released: January 24, 2022