Court File and Parties

COURT FILE NO.: CV-24-00724182-0000 DATE: 20240729 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PEI-CHUN LIAO and CHIEN MING LEE, Applicants – and – SHAN-CHEN LIAO, Respondent

BEFORE: Justice E.M. Morgan

COUNSEL: Rahul Gandotra, for the Applicants

HEARD: July 29, 2024

MOTION TO Discharge MORTGAGE

[1] The Applicants own a property at 2310 Lakeshore Drive, Toronto (the “Property”). They acquired it free and clear of any mortgages or other encumbrances in 1997.

[2] On March 3, 2024, the Applicants entered into an Agreement of Purchase and Sale to sell the Property (the “APS”). The sale is scheduled to close on August 12, 2024.

[3] On April 30, 2024, the Respondent’s counsel sent a demand letter to the Applicants in respect of a loan agreement dated March 31, 2005. Upon investigation, the Applicants discovered that the Respondent, who is the sister of one of the Applicants, registered a mortgage in the amount of $250,000, at 0% interest and maturing on December 20, 2007, as instrument no. AT70457 on title to the Property (the “Mortgage”).

[4] The Applicants deny that the Mortgage is valid or that any funds were advanced under the Mortgage.

[5] Despite repeated requests by the Applicants, the Respondent has failed to produce any evidence supporting the registration of the Mortgage or showing that funds were advanced to the Applicants under the Mortgage.

[6] The parties have reached a settlement in which the Applicants agreed to hold funds from the sale of the Property in trust pending determination of the Mortgage amount. Subsequently, by email dated July 11, 2024, the Respondent, communicating through her counsel, waived her claim under the Mortgage and agreed to discharge the Mortgage from title to the Property without the need for funds to be held in trust.

[7] Despite the parties’ agreement, the Respondent has refused to sign an Authorization and Direction authorizing discharge of the Mortgage. The continued registration of the Mortgage will make it impossible for the Applicants to close the sale under the APS and will cause them considerable harm.

[8] The Applicants seek immediate discharge of the Mortgage.

[9] Counsel for the Applicants was unable to confirm the court hearing date with counsel for the Respondent as counsel for the Respondent has advised that they were not retained to appear at the present hearing. The Respondent has filed no materials in response to the Application and has not appeared at the hearing despite being served with the Application Record last week when this matter was set down by the Urgent Motions office.

[10] The Applicants’ evidence is therefore uncontested. In any case, it is difficult to imagine what the Respondent’s defense to this Application might be. She was represented by legal counsel and she agreed to a settlement in which the Mortgage was to be discharged from the Property title. She then refused, without explanation, to sign the authorization that would have allowed the discharge to be done. All of that is well documented in the record.

[11] There will be a judgment to go discharging the Mortgage, as submitted by Applicants’ counsel.

[12] The Applicants seek costs of the Application on a substantial indemnity or, alternatively, a partial indemnity basis. Although the Respondent has put the Applicants to the time and effort of a court Application instead of carrying through with the settlement, this is a matter that is more suited to partial than substantial indemnity costs. The record and supporting materials were prepared efficiently by Applicants’ counsel, and the lack of response from the Respondent meant that the Applicants were not put to any more expense than was necessary.

[13] The Applicants’ partial indemnity fees, disbursements, and HST come to a total of $6,480.54. That is a reasonable amount of costs under the circumstances.

[14] Rounding the figure off for convenience, the Respondent shall pay the Applicants costs in the all-inclusive amount of $6,400.

Date: July 29, 2024 Morgan J.