DATE: 2024 07 02
SUPERIOR COURT OF JUSTICE – ONTARIO
7755 Hurontario Street, Brampton ON L6W 4T6
RE
AHMAD, RANA REHAN - plaintiff
AND:
MEHTA, Manesh, and BANSAL, Monu, and GREWAL, Rupinder - defendant
BEFORE:
Justice D.E. Harris
COUNSEL:
For the plaintiff – Self Represented AHMAD, Rana Rehan E-mail: rehanahmad085@gmail.com
For the plaintiff – Self Represented HUSSAIN, Wasia E-mail: wasiahussain@hotmail.com
CENTURY, LOUIS for the defendant(s) - MEHTA, Manesh, and BANSAL, Monu E-mail: lcentury@goldblattpartners.com
KATZ, Jordan for the defendant, applicant GREWAL, Rupinder E-mail: jkatz@agbllp.com
HEARD:
April 3, 2024 in person
ENDORSEMENT
[1] The plaintiffs, borrowers on a mortgage transaction, have sued their lawyers and the defendant’s lawyer as well. Against their lawyers they seek reimbursement for registration and discharge fees and costs as well as $15,000 for “causing a stressful environment.”
[2] The plaintiff’s allegations against the opposing lawyer acting for the lender in the mortgage transaction, the applicant Rupinder Grewal, are that Ms. Grewal acted “dishonestly and unfaithfully” in referring to the mortgage as a second mortgage when it was only supposed to be a loan agreement; registering the mortgage in the amount of $126,746.48 when the amount borrowed was $100,000; and that along with the other defendants “jointly created a very stressful environment” in threatening to sell the plaintiff’s property through power of sale.
[3] Ms. Grewal moves under Rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Regulation 194 to strike the amended statement of claim against her without leave to amend. The test to be applied is whether it is “plain and obvious” that the claim has no chance of success: R v Imperial Tobacco Canada Ltd, 2011 SCC 42, [2011] SCJ No. 42 at paras. 17-19; Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959. In adjudging this issue, the facts pleaded cannot generally be gainsaid. Moreover, a generous reading is appropriate before a litigant can be deprived of their day in court.
[4] It is common ground that a lawyer owes no duty of care to clients of opposing counsel: Diamond Contracting Ltd. v. MacDearmid, 2006 CanLII 24444 (ON CA), para. 3; 9383859 Canada Ltd. v. Saeed, 2020 ONSC 4883 at para. 29; Heydary Hamilton PC v. Dil Muhammad, et al., 2013 ONSC 4938 at para 25. In this case, the respondent was acting for the lender; the borrower plaintiffs had their own lawyers. It was the obligation of the borrowers’ lawyers to protect their clients and competently steer them through the process. The applicant had obligations to her client, the lender, but in the normal course, no duty was owed to the borrowers.
[5] That in my view, effectively disposes of this matter. The applicant presumably did her job for her client, the lender. She owed no obligation to the borrowers and in any case, did nothing even faintly inappropriate with reference to their interests. There is nothing in the statement of claim in the negotiation, execution or enforcement of the mortgage which could generate a cause of action against the applicant. The statement of claim as against her should be struck.
[6] Examining the specific allegations against the applicant made in the statement of claim, only confirms that there is no reasonable cause of action apparent. The background as set out in the statement of claim is that the respondents had purchased a property and were short $126,746.48. They received some funds from one source and ultimately required only $100,000. It is stated that they were in a “stressful situation” as they had anticipated funds from the sale of another property but there was a delay. They arranged for a loan from a Ms. Varinder Kaur. They were unable to pay it back on maturity.
[7] There are a host of allegations against their own lawyers made by the respondents as summarized above. Against the applicant, it is stated that she registered the loan as a mortgage, unbeknownst to them, and in the amount of $126,746.48 instead of $100,000. Furthermore, it is claimed:
The defendants jointly created a very stressful environment by refusing to listen and threatening to sell the plaintiffs property through power of sale. Ms. Rupinder refused to reply to emails sent to her by the plaintiffs.
Ms. Rupinder lied to CIBC by providing false information, thus negatively affecting the relationship of the plaintiffs with their bank.
In order to get a second mortgage from another party and save their family home, the plaintiffs paid Ms. Rupinder the amount she demanded in her payout statement.
(Emphasis added)
[8] The assertion in paragraph 28 of the statement of claim that the applicant refused to reply to emails is directly contradicted by paragraph 22 which says that the plaintiffs would regularly communicate with the applicant by email. In any case, the applicant had no legal responsibility to reply to the plaintiffs.
[9] In so far as it is implicitly suggested that the applicant was in league with the plaintiff’s lawyers in creating a stressful environment, collusion or conspiracy is not pled nor is there any factual basis for it in the statement of claim.
[10] There is no obligation to accept as true bald unsupported allegations such as the unadorned allegation here that the applicant lied to CIBC: Trillium Power Wind Corporation v Ontario (Natural Resources), 2013 ONCA 683 at para 31. This allegation cannot ground a cause of action.
[11] Evidence is inadmissible on a motion to strike: R. 21.01(2)(b). However, documents referred to in the statement of claim and forming an integral part of the claim are not considered evidence and can be relied upon: McCreight v. Canada (Attorney General), 2013 ONCA 483 at paras. 31-37; Web Offset Publications Ltd. v. Vickery, (1999) 1999 CanLII 4462 (ON CA), 43 O.R. (3d) 802 (Ont. C.A.) at para. 3.
[12] I have reviewed the mortgage agreement signed by both respondents which is clearly incorporated by reference into the statement of claim. The loan agreement is referred throughout as a mortgage document. It is entitled “Private Mortgage Commitment”, the “security address” is the respondents’ home property and it is express that this address serves as security for the loan. There can be no reasonable mistake that this is anything other than a mortgage agreement. As a result, any cause of action arising based on a lack of understanding could only be against the respondents’ own lawyers, not against the applicant. Nothing the applicant did or failed to do as lawyer for the lender can lead to a reasonable cause of action against her at the instance of the respondents.
[13] Similarly, the shortfall complained about by the respondents and for which the applicant is blamed, is fully explained by the mortgage commitment document. The mortgage debt is indeed for $126,746.48, not $100,000 as they claim. Again, this has nothing to do with the applicant’s conduct.
[14] Furthermore, the applicant demanding a payout as alleged in paragraph 30 was clearly pursuant to the mortgage agreement and was part of her obligation to her lender client. This is confirmed by documents in the respondent’s motion record which, in my view, are incorporated by reference. First, there is a letter from the applicant to the respondents’ lawyers three weeks before the date of maturity which clarifies that although the mortgage is registered for $126,746.48, the lender was already in receipt of $26,746.48 and therefore the debt was in fact $100,000. This letter is acknowledged in paragraph 24 of the statement of claim. The demand letter from the applicant after the mortgage went into arrears is also in the respondents’ record and reveals nothing untoward. No reasonable cause of action could arise from this.
[15] For these reasons, the claim against the applicant will be struck out. There should be no leave given to amend. There is apparent no reasonable cause of action against the applicant nor is there any hint of one that could possibly be resurrected from the averments in the statement of claim.
[16] In my view, this is a case for substantial indemnity. The claims against the applicant were bordering on an abuse of process. Costs will be paid within 30 days to the applicant in the amount of $6,000 all inclusive.
D.E. Harris J
RELEASED: July 3, 2024
DATE: 2024 07 02
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: AHMAD, RANA REHAN - plaintiff
AND:
MEHTA, Manesh, and BANSAL, Monu, and GREWAL, Rupinder - defendants
BEFORE: D. E. Harris J.
ENDORSEMENT
D. E. Harris J.
DATE: July 2, 2024