COURT FILE NO.: CV-20-00084120-0000; CV-21-00088157-0000

DATE: 2023/12/06

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Tommasina Montemurro Applicant

– and –

Marcello Vallati, the Estate of Marcello Vallati, and Elvira Vallati in her Jane or John Doe In Their Capacity As Estate Trustee for the Estate of Marcello Vallati Respondents

Andrew D. Ferguson, for the Applicant

Jason Dutrizac and Chris Shorey for the Respondent

AND BETWEEN:

Elvira Vallati in her capacity as Estate Trustee for the Estate of Marcello Vallati Applicant

– and –

Tommasina Montemurro, Rosario Montemurro and Carmina Montemurro, also known as Carmen Montemurro Respondents

Jason Dutrizac and Chris Shorey, for the Applicant Martin Z. Black, for the Respondents

HEARD: December 15, 2022; February 09, 2023, in Ottawa

Justice H. J. Williams

ENDORSEMENT

[1] There are two applications before me.

[2] In court file no. CV-20-84120, Tommasina Montemurro seeks: (1) a declaration that a mortgage registered against two Ottawa properties is void and does not affect the properties; and (2) an order requiring either the estate of Marcello Vallati or the land registrar to discharge the mortgage.

[3] In court file no. CV-21-88157, the Estate of Marcello Vallati seeks: (1) a declaration that Tommasina Montemurro holds title to the two properties in trust for her parents, Rosario Montemurro and Carmina Montemurro; and (2) a declaration that a charge registered against the properties is a valid and enforceable charge affecting the properties.

[4] Elvira Vallati is Marcello’s widow and the trustee of his estate.[^1]

[5] Carmina is Marcello’s sister.

[6] Marcello owned a construction company and had real estate and other investments. He died on October 24, 2018.

[7] The two properties at issue are 4278 Greenbank Road and 1540 Prince of Wales Drive. Both are registered in Tommasina’s name.

[8] Tommasina says she purchased both properties herself, without her parents’ assistance. She says she purchased the Greenbank property for $120,000 in July 2000. She was 20 years old at the time. Tommasina says she purchased the Prince of Wales property for $275,000 in May 2008.

[9] The Greenbank property is vacant land. Rosario maintains vegetable gardens on the property. There is a house at 1540 Prince of Wales. Rosario and Carmina live in the house. Tommasina says her parents pay her $650/month in rent. Tommasina says the rent is paid in cash.

[10] In October 2010, Marcello told his lawyer that Rosario and Carmina had removed 689 $1,000 bills that belonged to him from a safe he kept at his mother’s house.

[11] Marcello told his lawyer that Rosario and Carmina had admitted that they had taken the money.

[12] On April 4, 2011, Marcello’s lawyer’s law firm[^2] registered a mortgage in the principal amount of $689,000 against the Greenbank and the Prince of Wales properties.

[13] The interest rate on the mortgage was 5 per cent per annum. Payments and the balance due were “on demand.”

[14] The mortgage named Tommasina as the chargor and Marcello as the chargee.

[15] The mortgage stated that it had been submitted by Marcello’s lawyer’s firm, that it had been signed by a lawyer with the firm who was acting for the chargor and that the lawyer had the authority to sign and register the document on behalf of the chargor.

[16] Tommasina says she knew nothing about the mortgage until about four or five months after it was registered. She says she only learned about the mortgage while attempting to finance the purchase of a condominium. She says she met with a lawyer at this time.

[17] The record includes an acknowledgment and direction dated April 2011, purportedly signed by Tommasina. The signature on the document is witnessed. The document is directed to Marcello’s lawyer’s firm. It states that it is in respect of “Montemurro mortgage to Vallati”. It refers to the two properties. The document authorizes the law firm to register documents required to close the transaction and says that the nature and effect of the documents had been fully explained.

[18] Tommasina denies that she signed the acknowledgment and direction. She says she did not see it until her lawyer showed it to her in 2020.

[19] Rosario says the signature on the acknowledgment and direction is not that of Tommasina. He says he does not recognize the signature. He says he cannot identify the signature of the witness.

[20] Tommasina says she believes Marcello may have had access to copies of her passport and driver’s licence in early 2011. She does not explain why she made this observation. There were no other references to Tommasina’s identification in the record.

[21] Marcello’s lawyer says his law firm never acted for Tommasina. He says the mortgage documents were given to Tommasina and that the acknowledgement and direction was returned to his office with Tommasina’s signature on it. He says Tommasina was referred for independent legal advice.

[22] Marcello’s lawyer says he had at one time believed that a lawyer at his firm had witnessed Tommasina’s signature but that he was mistaken.

[23] Tommasina agrees that Marcello’s lawyer’s firm did not represent her.

[24] Marcello’s lawyer says that, as far as he knows, none of the Montemurros disputed the debt or the registration of the mortgage until 2020, when steps were taken on behalf of Marcello’s estate, to sell the two properties under power of sale.

[25] Carmina denies that she and Rosario lent or gave Tommasina money to buy the two properties. She also denies that Tommasina is holding either of the properties for their benefit.

[26] Carmina says she knew there was a safe in her mother’s house but that she and Rosario did not have access to it and did not know the combination required to unlock it.

[27] Carmina says she did not remove money from the safe. She also denied that she had admitted having done so.

[28] Carmina says that “in the 7-plus years before his death”, Marcello never mentioned anything to her about a mortgage or other security and never demanded payment from Rosario or her.

[29] Rosario swore an affidavit in which he said that he had reviewed Carmina’s and Tommasina’s affidavits and that to the extent that he has knowledge, he agreed with their statements.

[30] Rosario and Carmina have had their share of financial problems. They went bankrupt in 1996 and again in 2006. Their trustee from the more recent bankruptcy has been discharged but they have not. They have been involved in numerous lawsuits over the years. They lost their house to a power of sale. There are outstanding restitution orders against them. Carmina has a criminal record for fraud and obstruction of justice.

Disposition

[31] Although the parties agreed to proceed by way of applications, rather than an action, the estate’s counsel acknowledged that the court may conclude that a trial is required.

[32] While the parties have the prima facie right to choose their originating process by way of application if authorized by the Rules or a statute, the court maintains the right to convert the application into an action for good reason. (Przysuski v. City Optical Holdings Inc., 2013 ONSC 5709, at para. 12.)

[33] Under Rule 38.10(1)(b) of Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the hearing of an application, the presiding judge may order that the whole application or any issue proceed to trial and give such directions as are just.

[34] Rule 38.10(3) provides that where a trial of an issue in the application is directed, the order directing the trial may provide that the proceeding be treated as an action in respect of the issue to be tried, subject to any directions in the order, and shall provide that the application be adjourned to be disposed of by the trial judge.

[35] Firestone J. in Przysuski, paras. 5 to 10, and Kimmel J. in GF Machining Solutions LLC v. Technicut Tool Inc., 2019 ONSC 2259, at para. 30, listed general principles to be considered when determining whether to convert an application in an action. They included the following:

• Whether the issues to be determined go beyond the interpretation of a document; • Whether the judge is able to make a proper determination of the issues on the application record (and do not think that it would be expeditious or efficient to require that the record be supplemented given the nature of the issues that will need to be determined); • When issues of credibility are involved • When material facts are in dispute. • When expert evidence may be required.

[36] On January 1, 2019, Rule 14.05(3)(h) was amended so that it stated that a proceeding may be brought by application in respect of “any matter where it is unlikely that there will be any material facts in dispute requiring a trial” instead of simply “any matter where it is unlikely that there will be any materials facts in dispute.”

[37] I have attempted to resolve the parties’ issues based on the record they have presented but I find myself unable to make a proper determination about the validity of the mortgage. I cannot reconcile the evidence.

[38] Material facts surrounding the execution of the April 2011 mortgage are in dispute. The determination of whether the mortgage was validly executed will necessarily involve findings of credibility of the witnesses, including the parties.

[39] The validity of the mortgage is central to both applications: Tommasina is asking me to declare that the mortgage is void and unenforceeable; the estate is asking me to declare that the mortgage is a valid charge against the two properties. Other issues to be decided may turn on this issue.

[40] Whether Tommasina knew about the mortgage before it was registered, whether Tommasina authorized the mortgage and, if Tina did not authorize the mortgage, who gave Marcello’s lawyer’s firm acknowledgment to sign and register the mortgage on behalf of the chargor are all, in my view, issues requiring a trial.

[41] The identity of the person who signed the acknowledgment and direction is an issue which may require expert evidence. During the hearing, one of the estate’s lawyers mused that this may be the case.

[42] The applications shall be adjourned. The issues I have identified shall proceed to trial.

[43] Counsel shall contact trial coordination to schedule a 60-minute case conference with me to discuss appropriate directions, including, if required, clarification of the issues, the parties’ anticipated evidence, whether productions and/or oral examinations are required, expert evidence, a timetable for pre-trial steps, the duration of the trial and, ideally, also its date.

Released: December 6, 2023

COURT FILE NO.: CV-20-00084120-0000; CV-21-00088157-0000 DATE: 2023/12/06

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Tommasina Montemurro Applicant

– and –

Marcello Vallati, the Estate of Marcello Vallati, and Jane or John Doe In Their Capacity As Estate Trustee for the Estate of Marcello Vallati Respondents

AND BETWEEN:

Elvira Vallati in her capacity as Estate Trustee for the Estate of Marcello Vallati Applicant

– and –

Tommasina Montemurro, Rosario Montemurro and Carmina Montemurro, also known as Carmen Montemurro Respondents

ENDORSEMENT

Williams J.

Released: December 6, 2023

[^1]: Because the parties share surnames, I will refer to them using their first names. I mean no disrespect. [^2]: The law firm that represented Marcello in 2011 is not the law firm that now represents his estate.