COURT FILE NO.: CV-23-0155
DATE: 2023 12 06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
2439656 ONTARIO
Amandeep Sidhu, for the Plaintiff
Plaintiff (Moving Party)
- and -
JASWINDER SINGH
Self-represented
Defendant (Responding Party)
HEARD: November 20, 2023
REASONS FOR JUDGMENT
MANDHANE J.
INTRODUCTION
[1] The plaintiff, 2439656 Ontario Inc., (“243”) alleges that the defendant, Jaswinder Singh, breached a mortgage contract in relation to a residential property at 5 Bassett Crescent in Brampton, Ontario (“the property”). 243 filed its Statement of Claim on July 21, 2023 and Mr. Singh filed his Statement of Defence on July 31, 2023. The Notice of Sale was given on August 1, 2023.
[2] The loan was for $233,180 and required monthly interest-only payments, with the balance due on May 4, 2023 (“the second mortgage”). On the maturity date, Mr. Singh failed to pay out the balance due and defaulted on the mortgage.
[3] 243 moves for summary judgment in accordance with paragraph 1 of its Statement of Claim and, if necessary, for an order nunc pro tunc permitting the Statement of Claim to be issued and served after the Notice of Sale. 243 asks for damages in the amount of $240,432, which it says is the amount due the second mortgage and as of the date of their claim.[^1] 243 also seeks to possess the mortgaged property.
[4] Mr. Singh was self-represented. He admits that he is liable for interest at 3.99% per annum based on the second mortgage. While Mr. Singh disputes any liability for the “commitment fee” of $59,800 on the basis of unconscionability. I need not address this issue because 243 has not made a claim for this amount in its Statement of Claim. In any event, Mr. Singh says that there are factual issues in dispute that require a trial.
OVERVIEW
[5] The parties entered into the second mortgage agreement on May 4, 2022. The associated “Mortgage Loan Commitment” document states that 243 “has approved a 2nd mortgage loan to you which shall be secured by Charge on the property located at 5 Bassett Cres, Brampton, Ontario L6X 5G2 and collateral third mortgage on 98 Templehill Road, Brampton, Ontario L6R 3R6.” The Templehill property is Mr. Singh’s primary residence which he shares with his wife. 243 has brought a separate proceeding against his wife in relation to a second mortgage on the Templehill property: see 2439656 v. Sadana, 2023 ONSC 6881.
[6] Ms. Kulwant Kang, who swore an affidavit on behalf of 243, says that the essential terms of the second mortgage:
a. The principle was $233,180[^2]
b. The interest rate was 3.99% per annum.
c. The “Commitment Fee” was $59,800.
d. Repayment was through monthly “interest only” payments of $775.32.
e. The full principal was due on May 4, 2023.
[7] The property already had a mortgage registered on title for $1,424,000 in favour of Computershare Trust Company of Canada as of March 30, 2022 (“first mortgage”). The second mortgage was registered on title on May 6, 2022. The associated “Registered Mortgage Instrument” notes the principal as $223,180, the interest rate as 3.99%, the monthly payments as $775.32, and the last payment being due May 4, 2023.
[8] Mr. Singh made all the interest payments owed under the second mortgage but was unable to pay off the principal when it came due on May 4, 2023. Mr. Singh defaulted on the second mortgage.
[9] In its Statement of Claim, 243 seeks the following damages pursuant to the second mortgage:
Item
Amount
Principal balance
$223,180
Missed payments from May 5, 023 to July 21, 2023
$1,962.73
Mortgage Statement Fee
$ 734.50
Mortgage Discharge Fee
$ 1,130
Legal Fees & Disbursement for Discharge of Mortgage
$ 1,017
Discharge Registration Fee
$ 82.00
TOTAL
$238,106
[10] Mr. Singh admits liability for pre- and post-judgment interest at 3.99%, but disputes liability for any of the other fees.
ISSUES
[11] Is this an appropriate case for summary judgment?
[12] What damages are owing?
SHORT CONCLUSION
[13] This is an appropriate case for summary judgment because there are no relevant factual issues in dispute.
[14] Mr. Singh shall pay damages and costs equal to $245,143. He is not liable for the mortgage discharge fees claimed by 243.
Is this an appropriate case for summary judgment?
[15] Rule 20.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that a plaintiff may move for summary judgment based on affidavit material, while the defendant must set out in affidavit materials or other evidence the specific facts that show that there is a genuine issue for trial. I may draw adverse inferences from the failure of a party to provide evidence of any person having personal knowledge of contested facts: Rule 20.02(1).
[16] In determining whether there is a “genuine issue requiring a trial”, I can weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference available from the evidence: Rule 20.04(2.1). If the only genuine issue is the amount to which the moving party is entitled, I may order a trial of that issue or grant judgment with a reference to determine the amount: Rule 20.04(3). Where the only genuine issue is a question of law, I may determine the question and grant judgment accordingly: Rule 20.04(4).
[17] 243 says that this is an appropriate case for summary judgment because it is a claim based on the existence of a clear and enforceable contract. They say that they have put their best foot forward and seek judgment in accordance with their Statement of Claim. Mr. Singh says that this is not an appropriate case for summary judgment because there are material facts in dispute, namely, whether a mortgage broker was involved in the transaction.
[18] I am able to decide this issue using my enhanced powers. On a balance of probabilities, I am not convinced that the second mortgage was referred to 243 by a mortgage broker named Nupur Bhugra. First, Mr. Singh has no recollection of dealing with anyone named Ms. Bhugra. Second, I am prepared to draw an adverse inference against 243 because it did not proffer an affidavit from Ms. Bhugra herself or any documents referencing and agreement between 243 and Ms. Bhugra in relation to her compensation.
[19] Overall, I find that there are no genuine issues requiring a trial. It would be disproportionate to order a trial in these circumstances.
What damages are owing under the second mortage?
[20] Mr. Singh admits some liability under the second mortgage. Mr. Singh says that 243 is not entitled to any damages in relation to claimed mortgage discharge fees.
Are the discharge fees recoverable?
[21] 243 says that the original mortgage contract clearly contemplated and incorporated various fees that Mr. Singh was required to pay upon maturity. These fees were included in the “Schedule of Additional Provisions,” which was initialled by both parties. Clause 38 states as follows:
- Upon the balance due date of the principal and interest secured hereunder or any renewal thereof, the Mortgagor shall be deemed to have requested the Mortgagee's solicitor to prepare the discharge documents for this charge and shall pay the following fees to the Mortgagee's solicitor ONLY:
Discharge Fee - $1,000.00 plus HST per property
Mortgage Statement Fee - $650.00 plus HST
Legal Fees to Discharge Mortgage - $900.00 Plus HST per property.
Discharge Registration Fee - $78.79 per property
[22] Beyond the terms of the second mortgage itself, 243 has not provided any evidence regarding how it estimated the fees it now claims. In its supplementary factum it states, “the rationale for this entry is that the Mortgagee will need to retain and pay for a real estate solicitor to discharge the subject mortgage at some point in time. The said real estate solicitor will charge the Mortgagee a fee for their services. This amount is covered by paragraph 38 of the Mortgage Commitment.” As was the case in BMMB Investments Ltd., v. Naimian, 2020 ONSC 7999, 30 RPR (6th) 324, at para. 33, the plaintiff has not sought or obtained a mortgage discharge as of yet and it is not clear that discharge will ever be required because 243 is seeking possession of the property for the purposes of sale. The test at common law is whether the fees are a genuine pre-estimate of damages incurred by the lender, There is no evidence that these fees are genuine and I would not allow 243 to recover them.
[23] In summary, pursuant to the terms of the second mortgage, the Defendant shall pay the Plaintiff $235,143 in damages, which includes the principal of $233,180 and $1,962.73 in missed interest payments.
cOSTS
[24] 243 asks for full-indemnity costs in the amount of $16,646.40. These costs appear reasonable given the seniority of counsel, and the need to file a responding record and factum. However, given 243s mixed success on the motion, I would award partial indemnity costs in the amount of $10,000, all inclusive. This motion could have been avoided if 243 had abandoned its claim under s. 17 of the Mortgages Act sooner, and if it had not sought damages for discharge fees that it was unlikely to incur.
Final Order
[25] 243 is hereby granted leave nunc pro tunc to serve the Notice of Sale prior to the Statement of Claim.
[26] Mr. Singh shall pay 243 a total of $245,143 within 30 days.
[27] If Mr. Singh does not pay the amount due within 30 days, he shall be liable for post-judgment interest at a rate of 3.99% from the date of my final order onwards.
[28] If Mr. Singh does not pay the amount due within 30 days, 243 shall be granted leave to proceed with its motion to take possession of the property, which shall be scheduled as a regular motion (59 minutes). I am not seized.
Mandhane J.
Released: December 6, 2023
COURT FILE NO.: CV-23-0155
DATE: 2023 12 06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
2439656 ONTARIO
Plaintiff
- and -
JASWINDER SINGH
Defendant
REASONS FOR SUMMARY JUDGMENT
Mandhane J.
Released: December 6, 2023
[^1]: In its submission before me, 243 abandoned its claim for $2,325.96 “due in accordance with section 17 of the Mortgages Act.”
[^2]: There was an error in Ms. Kang’s affidavit in relation to the principal owing under the loan, however both parties agree that the principal was $233,180.