COURT FILE NO.: CV-21-00672993-0000

DATE: 20230209

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2137070 Ontario Inc, Arye Lankar, Lina Balian, Shawn Gabriel, Elena Keimakh, and 2380376 Ontario Ltd., Plaintiffs

AND:

Alex Furney and Maryam Furney, Defendants

BEFORE: Dineen J.

COUNSEL: Daniel Campoli, Katrina Paray, and Jordan B. Sobel, for the Plaintiffs

Rolf Piehler, for the Defendants

HEARD: January 30, 2023

ENDORSEMENT

[1] The plaintiffs are a syndicate who acquired a second mortgage secured against the defendants’ property at 27 Suncrest Drive in Toronto. They move to strike the statement of defence and for an order granting summary judgment. For the following reasons the motion is granted.

[2] In June, 2021, the defendants entered into a mortgage agreements with the plaintiffs under which the plaintiffs advanced a sum of $1,096,626.23 to the original second mortgagee. The mortgage agreement provides that the plaintiffs would lend $1.2 million with interest and assorted fees set at the rate of 12.75% annually with monthly interest payments of $12,750 of which the first two months were pre-paid.

[3] It is undisputed that the defendants entered into this agreement and have subsequently not made any payments to the plaintiffs and are in default under the agreement.

[4] The defendants had a pre-existing mortgage and, on January 23, 2023, Chalmers J. of this Court issued a consent judgment of $1,842,828.91 in favour of the holder of the first mortgage.

[5] The defendants filed a statement of defence and counterclaim on April 27, 2022, at a time when they were self-represented. Their pleadings are rambling, unfocused, and extremely difficult to understand. As best I can determine, the position of the defendants is that agents of the plaintiffs engaged in unparticularized fraudulent and improper behaviour during the negotiations around this mortgage, and that the amount the plaintiffs should owe in damages for this conduct exceeds the amount owing under the mortgage. The defendants have at times during the course of these proceedings suggested that they would seek to amend the pleadings, but they have never actually done so.

[6] At the outset of the hearing, new counsel for the defendants appeared seeking an adjournment. He did so on two bases. First, he submitted that in view of the consent judgment on the first mortgage issued on January 23, the property in question was likely to soon be sold and that the plaintiffs would be paid out from the proceeds, rendering this action moot. Second, he pointed to correspondence apparently received by Mr. Furney from other subsequent mortgagees on the property suggesting that they might wish to seek to intervene in this action to protect their own interests. I understand that some such mortgagees have ongoing litigation against the parties to this action.

[7] I was not satisfied that these were proper bases to delay the resolution of this action. I do not see how determining the plaintiffs’ rights under this mortgage will affect the ability of any other mortgagees to pursue their own claims, nor did I think it appropriate to delay this action further in the hope of a rapid sale of the property that could satisfy the plaintiffs’ claims.

[8] The applicable test on a motion for summary judgment is well-known. The moving party must demonstrate that there is no genuine issue that would require a trial. As Karakatsanis J. stated in Hryniak v. Mauldin 2014 SCC 7 at paragraph 49:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[9] I am satisfied that there is no genuine issue for trial in this matter and that the plaintiffs are entitled to judgment. The evidence establishes that the defendants are liable under the terms of the mortgage. This is not even disputed to the extent that I can interpret the pleadings and materials filed by the defendant. The argument advanced by counsel for the defendant was that the liability was offset by the defendants’ claims against the plaintiffs.

[10] I grant the plaintiff’s motion to strike the statement of defence and counterclaim, as in my view it discloses no reasonable defence and no reasonable cause of action. To the extent that the defendants allege some sort of misconduct by some of the plaintiffs, the allegations in the statement of defence and counterclaim are so unparticularized and poorly-explained that I cannot discern their nature or any factual basis for them.

[11] I understand that the defendants may have filed independent statements of claim against some of the plaintiffs that may overlap with the allegations made in their pleadings in this action, to the extent that those can even be identified. For clarity, I am not finally determining the defendants’ right to advance those claims with adequate pleadings.

[12] I do not accept the submission of defence counsel that this amounts to an unwarranted partial summary judgment of the issues between the parties. In my view, the plaintiffs’ claim appears straightforwardly severable from any other causes of action with no risk of inconsistent verdicts. As I read the statement of defence, the position of the defendants is simply that their damages should be set off against the amount they admittedly owe the plaintiffs. The defendants can pursue any causes of action they may have if so advised.

[13] The plaintiffs withdrew their request for the relief set out at paragraphs 2, 3, 4, and 10 of the notice of motion at the hearing. When invited to make submissions on the decision of Myers J. in BMMB Investments Limited v. Naimian 2020 ONSC 7999, they also withdrew their claim for a three-month interest penalty and legal fees distinct from the costs sought.

[14] The plaintiffs will receive their costs on a full indemnity basis as provided for by the mortgage agreement in the amounts set out in the filed bills of costs.

Dineen J.

Date: February 9, 2023