Court File and Parties

COURT FILE NO.: CV-23-00707349-0000 DATE: 2023-10-24

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LAWRENCE ARTHUR RABUKA Plaintiff

– and –

2799953 ONTARIO INC. dba CANADA’S CHOICE CAPITAL, 1000300202 ONTARIO INC dba ALTERNATIVE FINANCE GROUP, ANAS AYYOUB, DANIELLE SHANNON HARRISON, HARRISON LEGAL PROFESSIONAL CORPORATION, KEYSER MASON BALL LLP, THE MORTGAGE MAVEN INC., and JOEL SIMON KELMAN Defendants

Counsel: Greg Weedon and Patrick Smith, for the Plaintiff

HEARD: October 23, 2023

Papageorgiou J.

Overview

[1] The Plaintiff, Lawrence Arthur Rabuka (“Mr. Rabuka”) claims that he is the victim of an elaborate door-to-door HVAC, renovation, and financing scheme. He says that he was induced to enter into several transactions which resulted in several mortgages and notice of security interests (“NOSIs”) being registered on title to his property municipally known as 24 Innismore Crescent, Toronto, ON M1R 1C7 (the “Property”). Mr. Rabuka was targeted during COVID19 when he was most vulnerable and isolated.

[2] These NOSI’s total $234,726.

[3] Mr. Rabuka has had to sell the Property as a result of mortgage enforcement proceedings, which remains a live issue in these proceedings and parallel enforcement proceedings. The closing date is November 1, 2023 (the “Sale Transaction”).

[4] Mr. Rabuka brought an urgent motion to remove the NOSIs because the Sale Transaction cannot close with them on title.

[5] He seeks an Order that these registrations be removed from title, on the basis that when the Sale Transaction closes, sufficient funds will be held in trust to satisfy these NOSI’s if they are found to be valid.

[6] He also seeks an Order that the holders of the NOSI’s provide proof of their registered security interests and that if they do not do so within 15 days of demand for same, Mr. Rabuka can move without notice to have the held back funds released to him.

[7] Finally, he seeks an Order validating service and that his daughter be appointed as his litigation guardian.

Issues

• Has service been effected on the NOSI registrants and/or has notice of this motion come to their attention?

• Does the Court have jurisdiction and are their grounds to Order that the NOSI’s be removed upon Mr. Rabuka’s undertaking that he will hold sufficient funds in trust to satisfy these NOSI’s?

• Is there a basis to order that the registrants of the NOSI’s provide proof of their security interest within 15 days?

• Should Cheryl Aspiotis be appointed Litigation Guardian for Mr. Rabuka?

Decision

[8] For the reasons that follow I am granting the Orders sought.

Analysis

Issue 1: Has service been effected on the NOSI registrants?

[9] The registrants of the NOSI’s are 1000300202 ONTARIO INC dba ALTERNATIVE FINANCE GROUP (“AFG”) and 2799953 ONTARIO INC. (d/b/a Canada’s Choice Capital) (“CCC”).

[10] AFG and CCC are financing companies under investigation by the Ontario Provincial Police and are defendants in over thirty active litigation proceedings involving senior abuse and mortgage fraud.

[11] Mr. Rabuka sent demand letters to CCC by post and courier to its registered business address at 3250 Bloor Street West, 600, Toronto, Ontario, Canada, M8X 2X9 as well as by email to info@canadaschoicecapital.ca. He also made requests on the lawyer who registered CCC’s NOSI’s in September 2022, Mr. Yassavoli-Sani, by email and phone. Mr. Yassavoli-Sani confirmed that he directed the requests and motion materials to his client although he was not retained to process a discharge or provide the underlying agreements.

[12] Mr. Rabuka also served the Notice of Motion and Motion Record (in draft) on CCC via mail to its registered business address and by email to the address above on October 18, 2023. He also served CCC by courier to its registered business address on October 20, 2023, with the finalized motion record and zoom coordinates for a case conference on October 20, 2023 as well as the zoom hearing on October 23, 2023.

[13] I am satisfied that this Motion has come to CCC’s attention.

[14] If required, I am validating service of this motion pursuant to r. 16.04(1) and Ordering that all further court documents may be served on CCC by mail to its registered business address above and by email to info@canadaschoicecapital.ca.

[15] Mr. Rabuka sent demand letters demanding discharge statements and any underlying security agreements to AFG by post and courier to its registered address at 711 Yonge St., Suite 1000, 10th Floor, Toronto. He also sent them by email to its email address info@alternativefinacegroup.ca. He also made requests of the lawyer who registered the NOSI’s in March 2023, Mr. Bialkowsky, by email and phone. Mr. Bialkowsky confirmed that although he was not retained, he forwarded the requests and motion to his client.

[16] He also served the Notice of Motion and Motion Record in draft via mail to the registered address and via email on October 18, 2023. Finally, he served the completed Motion record and zoom coordinates for the case conference on October 20, 2023 and this hearing, also to the registered address and via email.

[17] I am satisfied this Motion has come to AFG’s attention.

[18] If required, I am validating service of this motion pursuant to r. 16.04(1) on AFG and Ordering that all further court documents may be served on AFG by mail to its registered business address to 711 Yonge St, Suite 1000, 10th Floor, Toronto, Ontario, Canada, M2N6K8, and email to info@alternativefinancegroup.ca.

[19] Mr. Anas Ayyoub, the sole director and officer of both CCC and AFG has similarly been served at the address he has given as his residence, on the articles of incorporation for AFG, 711 Yonge St. Suite 1000.

[20] I am satisfied that this Motion has come to his attention.

[21] If required, I am validating service of this motion pursuant to r. 16.04(1) and Ordering that all further court documents may be served on Anas Ayyoub by mail to 711 Yonge St, Suite 1000, 10th Floor, Toronto, Ontario, Canada, M2N6K8, and email to info@alternativefinancegroup.ca.

Issue 2: Does the Court have jurisdiction and are there grounds to Order that the NOSI’s be removed upon Mr. Rabuka’s undertaking that he will hold sufficient funds in trust to satisfy these NOSI’s?

[22] Section 56(5) of the Personal Property and Security Act (“PPSA”) gives a court authority to discharge a security interest upon payment into court of the amount secured.

[23] CCC and AFG have declined to defend the Action and have declined to respond in kind to the herein Motion.

[24] Further, their interests will be sufficiently protected by the Order that sufficient funds be held back to satisfy their security interests, if they can prove they indeed exist.

[25] I am satisfied that an Order that these funds be held in trust by Mr. Rabuka’s solicitor is comparable to payment into court and that there are grounds to grant the Order requested.

Issue 3: Is there a basis to order that the registrants of the NOSI’s provide proof of their security interest within 15 days, failing which Mr. Rabuka may move without notice for the release of the funds held in trust?

[26] Sections 10, 18(1) and 56(2) of the PPSA give the Court authority to Order the production of underlying security agreements.

[27] Mr. Rabuka has already made several attempts to request the production of the alleged security agreements from the NOSI Defendants. Mr. Rabuka’s counsel requested these on September 5, October 6, October 12, and October 18, 2023. There has been no response.

[28] I am ordering that the NOSI Defendants provide a copy of the underlying security agreements within 15 days.

[29] In State Bank of India (Canada) v. Trutzchler GmbH & Co. KG, 1997 CanLII 14520, the Court of Appeal held that a security agreement was enforceable only if the debtor had signed a security agreement containing a description of the collateral.

[30] In Astral Communications v. 825536 Ontario Inc. (Trustee of), 2000 CanLII 4939, the Court of Appeal held that the absence of a signature on the credit application resulted in no attachment taking place, the result being, the Court of Appeal held that the creditor was not a secured creditor under the Act.

[31] If the NOSI Defendants do not produce these security agreements within 15 days, in particular given their failure to respond to this proceeding at all, I am satisfied that the only reasonable inference is that the underlying security agreements do not exist. Thus, there is no basis to continue to hold the funds in trust in respect of these non-existent security interests and Mr. Rabuka may move without notice, by way of motion in writing for the release of such funds.

[32] I add that if these Defendants have a claim against Mr. Rabuka, release of such funds would not affect that claim.

[33] As this matter is returning before me on November 20, 2023 to be spoken to, Mr. Rabuka may bring this motion for release of the monies held in trust directly to me at that time.

Issue 4: Should Cheryl Aspiotis be appointed Litigation Guardian for Mr. Rabuka?

[34] Finally, I am appointing Cheryl Aspiotis as Mr. Rabuka’s litigation guardian. Mr. Rabuka is 82 and living in a long-term care facility. He has cognitive impairment and requires the assistance of his daughter Ms. Aspiotis for day-to-day tasks.

Papageorgiou J.

Released: October 24, 2023