Court File and Parties
COURT FILE NO.: CV-22-00688354 DATE: 20230607
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jochen Angermeyer, Plaintiff AND: Rachel Judith Stedman, Defendant
BEFORE: Justice Papageorgiou
COUNSEL: S. David Hwang, for the Plaintiff
READ: June 7, 2023
Endorsement
1The plaintiff, Jochen Angermeyer (the “Plaintiff”), brings a motion without notice for a Certificate of Pending Litigation (“CPL”) against the property municipally known as 3406-99 Broadway Avenue, Toronto; PIN: 76898-1316 (the “Property”).
2Although the general rule is that service of motions must be given pursuant to r. 37 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 42 specifically provides that a motion for a CPL may be made without notice.
3For the reasons that follow, I am dismissing the motion.
The test for a CPL
4The test for granting leave to register a CPL is well established in the relevant jurisprudence. It requires the determination of whether there is a triable issue in respect of the moving party’s claim to an interest in the property: 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003, at para. 21; Pacione v. Pacione, 2019 ONSC 813, at para. 20.
5The threshold on a CPL motion is met where the moving party provides sufficient evidence establishing that a claim to an interest in the property “could” succeed. In 2254069 Ontario Inc., at para. 26, Petersen J. held that there may be a triable issue even where the moving party’s evidence appears weak.
6At para. 30, Petersen J. also set out that even where there is a reasonable claim for an interest in land, a court may still refuse the CPL on any ground that a court considers just and as such the court is required to assess the equities of granting this form of relief.
7At para. 31, Petersen J. notes as follows:
A distillation of the case law and review of s.103(6) of the Courts of Justice Act establish that the following are relevant factors for consideration on a contested Motion for leave to issue a CPL: (i) whether the land in question is unique, (ii) whether there is an alternative claim for damages, (iii) the ease or difficulty of calculating damages, (iv) whether damages would be a satisfactory remedy, (v) the presence or absence of a willing purchaser, (vi) the balance of convenience, or potential harm to each party, if the CPL is or is not granted, (vii) whether the CPL appears to be for an improper purpose, (viii) whether the interests of the party seeking the CPL can be adequately protected by another form of security and (ix) whether the moving party has prosecuted the proceeding with reasonable diligence. This is not an exhaustive list.
Has the plaintiff demonstrated a triable issue as to whether he is entitled to an interest in land?
8The Plaintiff claims a constructive trust, a resulting trust and an equitable lien.
9With respect to the claim for a constructive trust, the caselaw establishes that there are three requirements; (i) an enrichment; (ii) a corresponding deprivation; and (iii) the absence of a juristic reason for the enrichment: Kerr v. Baranow, 2011 SCC 10, [2011]1 S.C.R. 269, at para. 38.
10The Plaintiff says in or around May 2015, he and the Defendant entered into the following oral agreement:
a. I would invest $29,200.00 (“Principal”) towards the down payment of the Property; b. Rachel would take title to the Property and make payments towards the mortgage; c. Once Rachel’s monetary contributions equalled my investment, both parties would equally benefit from the appreciated value of the Property accrued since the pre-construction purchase; d. The determination of the present value of the Property would be achieved by either: i. Selling the Property; or ii. Having the Property appraised by a qualified property appraisal firm.
11The parties then executed a loan agreement on January 4, 2016 (the “Loan Agreement”).
12I note that although the Plaintiff claims that he and the Defendant were in a common law relationship until 2017, the Loan Agreement executed in 2016 sets out that each of them reside at different addresses. I find it concerning that the Plaintiff made the assertion that they were in a common law relationship in the circumstances, and in my view, it was to buttress his claim to a constructive or resulting trust. The cases where these remedies are granted often involve marital or common law relationships where there are ongoing family law proceedings.
13However, there is no evidence of any family law proceeding.
14As well, the Loan Agreement does not set out any of the Plaintiff’s evidence as to the oral agreement, nor does it provide the Plaintiff with any property interest. Instead, it provides as follows:
In consideration of the Lender loaning certain monies (the “Loan”) to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfill the promises and conditions set out in the Agreement:
Loan Amount & Interest
- The Lender promises to loan $29,500.00 CAD to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable and calculated based on 50 % the appreciated value of the condo purchased at 3405-99 Broadway Ave, which is estimated at a rate of 2 % per annum. The appreciated value is calculated from the date of the condo purchase to the date of repayment.
15Further, the remedy upon default does not provide that the Plaintiff has any recourse to the Property. Paragraph 3 provides as follows:
- Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and interest due under this Agreement at that time to be immediately due and payable.
16There is also an entire agreement clause which provides as follows:
- This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.
17There is an alleged Addendum to the Loan Agreement dated April 8, 2017 (the “Addendum”), which the plaintiff says is a forgery. This is a very serious allegation, if true. The Addendum provides as follows:
- The Contract is amended as follows: Point 1 of the Contract is hereby amended by deleting in its entirety and is replaced with the following: “The Lender promises to loan $29,200.00 to the Borrower and the Borrower promises to repay this principal with an additional 2% per annum interest rate to the Lender.
18The Plaintiff has provided a report (not a sworn affidavit) from a handwriting analyst in support of his position.
19The loan was due on July 1, 2022, and the Defendant has not yet repaid the loan. I note that she offered to pay the loan with only 2 per cent interest per year, which the Plaintiff would not accept.
20In this case, there is a benefit and a deprivation, but in my view, there is arguably a juristic reason, which is the Loan Agreement whereby the parties specifically addressed their respective rights and did not set out any interest in land in favour of the Plaintiff.
21I view the Plaintiff’s claim to a constructive trust extremely weak given the fact that the parties documented their agreement by way of a Loan Agreement which made no reference to the Plaintiff having an interest in land, defines the parties as “Borrower” and “Lender”, provides that the Plaintiff’s remedy in the event of default is to declare the loan payable, and includes an entire agreement clause.
22Added to this are my concerns about the Plaintiff’s allegation that the parties were in a common law relationship when it appears they were not even living together based upon their addresses in the 2016 Loan Agreement.
23Nevertheless, given the low threshold set out in the caselaw, the Plaintiff’s oral evidence, where he references a mutual “investment” in the Property, is sufficient to establish a triable issue.
24I need not consider whether the Plaintiff has established a triable issue in respect of resulting trust or equitable lien in the circumstances.
Other factors
25First, the Plaintiff has not prosecuted his claim for a CPL with reasonable diligence. He served the Statement of Claim where he sought a CPL on the Defendant on October 6, 2022, the Defendant retained counsel and filed both a Notice of Intent to Defend on November 4, 2022 as well as a Statement of Defence and Counterclaim on December 5, 2022. The Plaintiff did not bring this ex parte motion until May 17, 2023.
26There is no explanation for the delay.
27Second, not only is there an alternate claim for damages, but it also appears to be the primary claim and the Plaintiff’s preferred method of recovery. It is the first claim in the prayer for relief in the Statement of Claim, and if granted, there would be no basis for a property remedy as this would result in double recovery.
28Indeed, the only correspondence before me demonstrates that what the Plaintiff really wants is repayment of the loan and not an interest in the Property. So does the Plaintiff’s affidavit where he writes:
- I maintain my position that [the Defendant’s] obligation owing as a debtor under the extended Loan Agreement is clear and unequivocal, and that [the Defendant] is in default to repay the Loan.
- I verily believe that there is a high probability that the Plaintiff will recover judgment in the within action.
- I believe that the balance of convenience favours issuing a Certificate of Pending Litigation to ensure that no further steps are taken to disperse the funds from the sale or deplete the equity in the Property or further make [the Defendant’s] asset more difficult to realize upon in light of her clear default on a debt obligation.
29This is essentially a debt collection proceeding and the Plaintiff’s motion, in my view, is an attempt to obtain prejudgment execution or secure his claim which is not the purpose of a CPL.
30Furthermore, there is no evidence that this is necessary on the record before me.
31There are a series of text messages between the parties regarding the repayment of the loan, but no suggestion that the Defendant will take any steps to defeat any interest which the Plaintiff alleges.
32In fact, the communications demonstrate that the Defendant does not wish to sell the Property and considers that it would be a foolish financial move. On May 21, 2021, she wrote:
But if I had to sell I would have to fork out an additional $72k on top of my $30k half deposit that I have already put in and that would have to be deducted to determine the true profit to split 50/50.
33While it would be concerning if the Addendum with respect to the loan was found to be a forgery, there is no evidence that the Defendant has taken any concerning steps with respect to the Property such as list it for sale or that it is the Addendum that has caused the Plaintiff concern in this respect; he has known about the Addendum since May 11, 2022 and still did not bring this motion until May 17, 2023.
34The calculation of the Plaintiff’s damages is not difficult and damages would be a satisfactory remedy.
35As well, there is no evidence that the Property is unique. The Plaintiff has no intended use for the Property and there is no evidence of serious prejudice to his interests if the CPL is not granted. This case is different from cases where parties seeking a CPL claim an interest in land which is uniquely suited to a particular purpose. The transaction in question is a commercial transaction where the Plaintiff sought to earn profit. The only value to the Plaintiff, on this record, is that of being security for the repayment of his loan, which he asserts is based upon the increase in the value of the Property.
36In all the circumstances I am not prepared to grant a CPL on the Property. As was the result in 2254069 Ontario Inc., I conclude that it would not be just to grant the Plaintiff leave to register a CPL.
37The Plaintiff specifically referred to 2254069 Ontario Inc. in his factum; it is hard to understand how he could have thought he would succeed in this motion given his apparent reliance on and understanding of this precedent.
38I add that although r. 42 permits these motions to be brought ex parte, there is always concern with ex parte motions which in some cases may be a form of bullying. Notice is a fundamental tenet of our justice system; in my view it must be devastating for anyone to learn that a Court has made a binding Court Order against them without even hearing their side. Courts should always carefully consider the need for any motion to proceed on an ex parte basis.
39The motion is dismissed and the Plaintiff shall serve this endorsement on the Defendant forthwith.
Justice Papageorgiou Date: June 7, 2023