COURT FILE NO.: CV-19-3052

DATE: 20240213

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Harsha Rathod Plaintiff (Moving Party)

AND:

Christian Chukwuedozie Chijindu, Nkiruka Chijindu also know as Nkiruka Ochei, Joy Chijindu, Ijeoma Chijindu, The Chijindu Law Firm, Autopoietic Telemetric Solutions Ltd., RVL Masonry Ltd., 2153801 Ontario ltd. Cob as The Leon Group, Meridian Corp., Great Northern Insulation Contracting Ltd., Obuba Law Firm and Peter Obuba Kalu Defendants (Responding Parties)

BEFORE: Justice Susan J. Woodley

COUNSEL: Amandeep Sidhu Counsel, for the Plaintiff (Moving Party) Harsha Rathod Brian Belmont, Counsel for the Defendant Bluekat Capital Corp. Jia Wang, Counsel for the Defendant Ijeoma Chindu Christian Chijindu, unrepresented Joy Chijindu, unrepresented Adriana Carnevale, Counsel for the Defendant RVL Masonry Ltd and 2153801 Ontario Ltd. Simon Bieber, Counsel for the Defendants Peter Obuba Kalu and Obuba Law Firm

HEARD: June 22, 2023, and August 3, 2023

REASONS FOR DECISION

I. OVERVIEW

1. This motion for summary judgment and distribution of sale proceeds paid into court came before me for hearing in June and August of 2023.

2. The motion was commenced by the Plaintiff Harsha Rathod (“Rathod”) and the Defendant Bluekat Capital Corp. (“Bluekat”) as against the Defendants Christian Chukwedozie Chijindu (“Christian”), Joy Chijindu (“Joy”), and Ijeoma Chijindu (“Ijeoma”), collectively seek payment out of court on account of five mortgages formerly registered against two properties municipally known as 740 West Shore Blvd., Pickering, Ontario (“the West Shore property”) and 6210 Solina Road, Clarington, Ontario (the “Solina Road property”), sold by power of sale.

Funds Paid into Court and Available for Distribution

3. The funds paid into Court available to satisfy the claims of the creditors, including Rathod and Bluekat, are as follows:

a. The sum of $1,498,717.83, held in court from the sale of the West Shore property; and

b. The sum of $54,107.94, held in court from the sale of the Solina Road property.

The Parties and Their Claims to the Funds Paid into Court

4. The parties seeking payment from the funds paid into Court are Rathod and Bluekat as Mortgagees, RVL and Leon as execution creditors, and Christian, Joy and Ijeoma, as owners of the West Shore and Solina Road properties.

5. As the funds paid into court may not be sufficient to satisfy the claims: the court must determine the amounts owed to each claimant; and the priority to be applied to the claimant’s payment.

Rathod

6. The Plaintiff Rathod is an individual and a former friend and client of the Defendant Christian. Rathod seeks payment of the following amounts with respect to the following transactions:

a. The sum of $357,506.84 (to December 9, 2022, plus 9% interest to date of payment) relating to a $250,000 loan secured by a mortgage registered against the West Shore property on March 9, 2017, as instrument # DR1574472; and

b. The sum of $286,005.47 (to December 9, 2022, plus 9% interest to date of payment) relating to a $200,000 loan secured by a $1,000,000 (LOC) mortgage, registered against title to the West Shore property on April 27, 2017, as instrument #DR1588263; and

c. The sum of $30,017.82 (to December 9, 2022, plus 9% interest to date of payment) paid by Rathod to correct deficiencies prior to the sale of the West Shore property; and

d. The sum of $286,005.47 (to December 9, 2022, plus 9% interest to date of payment) relating to a $200,000 loan secured by a mortgage registered against the Solina Road property on September 12, 2016, as instrument #DR1515362; and

e. The sum of $87,607.84 on account of legal fees, disbursements, and HST expended to secure and execute payment of the mortgages.

Bluekat

7. The Defendant Bluekat is a corporation whose widowed principal is a former friend and client of the Defendant Christian. Bluekat seeks payment of the following amounts with respect to the following transactions:

a. The sum of $158,543.53 (to June 22, 2023, plus 15% interest to date of payment) relating to a $84,084.09 loan secured by a mortgage registered against the West Shore property on July 11, 2017, as instrument #DR1614827; and

b. The sum of $120,423.05 (to June 22, 2023, plus 15% interest to date of payment) relating to a $68,478.64 loan secured by a mortgage registered against the West Shore property on October 27, 2017, as instrument #DR1651010; and

c. The sum of $184,467.16 ($146,411.59 + $38,055.57) for legal fees, HST, and disbursement expended to secure and execute payment owed on the mortgages PLUS a further amount for attendance to argue the motion on June 22, 2023, and August 3, 2023.

RVL and Leon

8. The Defendants RVL and Leon are (former) execution creditors who received payout on the sale of the Solina Road property. RVL and Leon seek payment on account of their costs incurred in this action fixed at $35,208.29, payable from the Solina Road proceeds, in priority to Rathod.

The Defendant Owners: Christian, Joy, and Ijeoma

9. The Defendant Christian is one of the former owners of the Solina Road property, which he owned together with his spouse, the Defendant Joy. Christian is also a former lawyer who at all relevant times acted as the lawyer for himself (Christian), Joy, YDB Investments Corp., Ijeoma, Bluekat, and Rathod (excepting Rathod’s September 12, 2016, mortgage) on all mortgage transactions in issue. Christian is now disbarred.

10. The Defendant Joy is the spouse of Christian and one of the former owners of both the Solina Road property and the West Shore property. Joy was a co-owner of the Solina Road property with Christian and a co-owner of the West Shore property with her sister-in-law, the Defendant Ijeoma.

11. The Defendant Ijeoma is Christian’s sister and one of the former co-owners of the West Shore property with her sister-in-law Joy. Ijeoma is also an officer and director of YDB Investments Corp, which granted (fraudulent) mortgages on both the West Shore property and the Solina Road property.

12. The Defendant Owners: Christian, Joy, and/or Ijeoma separately and/or collectively seek the following relief:

a. a declaration that no interest accrues on Rathod’s March 9, 2017, mortgage and/or either of Bluekat’s mortgages following the sale of the West Shore property on July 7, 2022, as there is no dispute that these mortgages are valid, and should have been paid out on July 7, 2022; and

b. a declaration that Rathod’s April 27, 2017, $1,000,000 mortgage registered against the West Shore property securing a $200,000 advance was invalid ab initio; was validly discharged on March 6, 2019; and that no funds are owing thereunder; and

c. a declaration that Rathod has no right to obtain payment from the West Shore property funds for the estimated $232,000 deficit owing following payment of Rathod’s September 12, 2016, mortgage from the Solina Road proceeds; and

d. a declaration that no Standard Charge Terms apply to Bluekat’s mortgages and as such Bluekat is disentitled from claiming their costs and additional charges which would otherwise be payable on a complete indemnity basis; and

e. an order that Rathod and Bluekat submit to an assessment to determine the costs and additional charges claimed under Rathod and Bluekat’s mortgages; and

f. an order that this court make no determination of the costs and additional charges claimed and payable under Rathod or Bluekat’s mortgages within the context of this motion for summary judgment; and

g. an order that the surplus funds remaining on hand in the West Shore property fund following payment to Rathod, Bluekat, and/or RVL/Leon, be paid out and/or released to the former owners Joy and Ijeoma, as they may direct.

II. THE ISSUES

Availability of Summary Judgment

13. The issues to be determined related to Rathod, Bluekat, and Ijeoma, relative to the availability of summary judgment is whether Christian and Joy and/or Joy and Ijeoma have presented a genuine issue for trial relating to any of the mortgages granted to Rathod and/or Bluekat such that summary judgment is not appropriate?

Assessment of Costs and Additional Charges

14. If summary judgment is available, are Rathod and Bluekat are entitled to have all costs and additional charges incurred with respect to the enforcement of the mortgages be assessed within this summary judgment motion or, should such costs and additional charges be assessed by a further reference pursuant to the Mortgages Act?

15. If the costs and additional charges are to be assessed within this summary judgment motion, are Bluekat’s mortgages subject to Standard Charge Terms?

16. If the costs and additional charges are to be assessed within this summary judgment motion, has Rathod and/or Bluekat provided sufficient evidence to allow for payment of their costs as claimed? If so, what amount is due to them?

Rathod’s Mortgages

17. If summary judgment is available, the issues to be determined are as follows:

i. Is Rathod entitled to payment out of Court from the funds held on the sale of the West Shore property with respect to:

1. Rathod’s March 9, 2017, $250,000, mortgage granted by Joy and Ijeoma against the West Shore property? If so, in what amount and in what priority?

2. Rathod’s April 27, 2017, $1,000,000 mortgage securing a $200,000 advance, granted by Joy and Ijeoma against the West Shore property which was subsequently discharged by Christian on March 6, 2019? If so, in what amount and in what priority?

3. Any deficit owing under Rathod’s September 12, 2016, $200,000 mortgage granted by Joy and Christian against the Solina Road property that Rathod claims was to be cross registered by Christian against the West Shore property? If so, in what amount and in what priority?

ii. Is Rathod entitled to payment out of Court from the funds held on the sale of the Solina Road property with respect to Rathod’s September 12, 2016, $200,000 mortgage granted by Christian and Joy against the Solina Road property? If so, in what amount and in what priority?

Bluekat’s Mortgages

18. If summary judgment is available, the issues to be determined are as follows:

i. Is Bluekat entitled to payment out of Court from the funds held on the sale of the West Shore property with respect to:

1. Bluekat’s July 11, 2017, $84,084, mortgage, granted by Joy and Ijeoma against the West Shore property? If so, in what amount and in what priority?

2. Bluekat’s October 27, 2017, $61,278 mortgage, granted by Joy and Ijeoma against the West Shore property? If so, in what amount and in what priority?

III. THE FACTS

The Properties, the Mortgages, and the Related Legal Proceedings

The West Shore Property

19. On or about August 19, 2016, Joy and Ijeoma purchased the real property identified as the West Shore property.

20. To facilitate the purchase of the West Shore property, Joy and Ijeoma granted a (first) mortgage to the Royal Bank of Canada (“RBC”) on closing being August 19, 2016, which was registered against title to the West Shore property.

21. On March 9, 2017, Joy and Ijeoma granted a (second) mortgage to Rathod in the amount of $250,000 which was prepared and registered by Christian against the West Shore property (“Rathod’s March 9, 2017, $250,000 mortgage”) subject to Standard Charge Terms 2000033.

22. Pursuant to the terms of the March 9, 2017, mortgage, payments were “interest only” with the principal amount, amongst other amounts, to be paid in full upon maturity. Rathod’s mortgage is in default. The capital plus interest at the rate of 9% per annum is owing from March 3, 2018, plus additional charges. Rathod’s mortgage is in default.

23. On April 27, 2017, Joy and Ijeoma granted a (third) mortgage to Rathod in the amount of $1,000,000.00 which operated as a line of credit with $200,000 advanced. This mortgage was prepared and registered by Christian against title to the West Shore property (“Rathod’s April 27, 2017, $1,000,000 mortgage”) subject to Standard Charge Terms 2000033.

24. Pursuant to the terms of the April 27, 2017, mortgage, payments were “interest only” with the principal amount, amongst other amounts, to be paid in full upon maturity. The capital plus interest at the rate of 9% per annum is owing from March 3, 2018, plus additional charges as per the Standard Charge Terms. Rathod’s mortgage is in default.

25. Although Rathod understood that this $1,000,000 Mortgage as drafted by Christian was limited to $200,000, Christian drafted and registered the mortgage to operate as a line of credit.

26. Prior to registration of Rathod’s April 27, 2017, $1,000,000 Mortgage, Christian communicated by email with Rathod and stated, “I will register the $200,000 on West Shore as we agreed tomorrow”.

27. The following day, being April 27, 2017, at 7:29 am, Christian wrote an email to Rathod that stated, “I will be registering the mortgage on West Shore as we discussed today. I could not do it yesterday as I was having some connectivity issues. It should be fixed today”.

28. Also on April 27, 2017, at 10:44 a.m., Christian wrote a further email to Rathod that stated, “The attached is the Collateral Charge. I registered $1,000,000.00 to cover prior and future advances. Just in case. Thank you for understanding.”

29. According to Rathod, whose evidence I accept and prefer to that of any of Christian, Joy, or Ijeoma – although Rathod expected the mortgage to reflect the $200,000 advance - when Christian advised her that he intentionally registered the Mortgage as a $1,000,000 Mortgage, Rathod did not (as claimed by Christian) seek to discharge the mortgage and instead trusted that her security interest was protected.

30. Rathod provided evidence that Christian advised that he had also registered the mortgage against the Solina Road property for cross collateralization, but later discovered that this statement was false. As discussed below, Christian’s failure to cross-register this mortgage against the Solina Road property has no affect on Rathod’s ability to be paid the full amount due and owing under the terms of the April 27, 2017, mortgage from the West Shore proceeds paid into court. This is especially true given that the Solina Road property was grossly over-mortgaged with limited equity to satisfy any creditors’ claims.

31. On June 21, 2017, Joy and Ijeoma granted a (fourth) mortgage to YDB Investment Corp., which company is owned solely by Ijeoma, in the amount of $790,000.00. This mortgage was prepared and registered by Christian against title to the West Shore property and as discussed below was subsequently determined by Justice Speyer on October 25, 2019, to be fraudulent and ordered deleted from title to the West Shore property (“YDB mortgage”).

32. On July 11, 2017, Joy and Ijeoma granted a (fifth) mortgage (which became a fourth mortgage due to Justice Speyer’s Order dated October 25, 2019) to Bluekat in the amount of $84,084.00 which Christian registered against the West Shore property (“Bluekat’s July 11, 2017, $84,084 mortgage”). The interest rate attached to this mortgage was 15% due and owing on the capital from the date of registration. No payments on account of principal or interest have ever been made towards this mortgage which is in default.

33. On September 22, 2017, a construction lien was registered against the West Shore property by Great Northern Insulation Contracting Ltd. but was not perfected and subsequently discharged and/or expunged at the request of Rathod.

34. On October 27, 2017, Joy and Ijeoma granted a (sixth) mortgage (which became a fifth mortgage due to Justice Speyer’s Order dated October 25, 2019) to Bluekat in the amount of $61,278.00 which Christian prepared and registered against title to the West Shore property (Bluekat’s October 27, 2017, $61,278.00 mortgage”). Bluekat’s mortgage is in default.

35. On March 6, 2019, without making any payment or providing any consideration to Rathod, and without notice to Rathod, and without Rathod’s authority, Christian prepared and registered a discharge of Rathod’s April 27, 2017, $1,000,000 mortgage. Christian did not advise Rathod either prior to or following that he discharged this mortgage.

36. Rathod’s evidence, which I accept, is that Christian never advised her that he discharged the mortgage, that she was never provided with any consideration for any discharge, and she never provided Christian with any authority to prepare and/or register a discharge.

37. Christian’s evidence, which I reject, is that the $1,000,000 Mortgage was registered in error; that no loan agreement or commitment existed; and as a result, the mortgage was invalid and discharged to “clear title”.

38. Christian’s further evidence, which I also reject, is that Rathod provided him with instructions to discharge the mortgage immediately upon being notified that it was registered for $1,000,000 versus the discussed $200,000 amount.

39. Rathod seeks a declaration that the March 6, 2019, discharge was fraudulent and a declaration reinstating the mortgage as of April 27, 2017, and seeks payment of the $200,000 capital advanced together with interest at 9% from March 3, 2018, plus additional charges as per the Standard Charge Terms.

40. On July 30, 2019, Joy delivered a letter to Bluekat which acknowledged therein that Joy, Ijeoma, and Christian, owed Rathod the sum of “$781,000 plus”, which sum equates to the total of all three mortgage loans made by Rathod to Christian, and/or Joy, and/or Ijeoma, totalling $650,000 plus interest.

41. On October 25, 2019, Bluekat brought an application seeking a declaration that the YDB mortgage registered against the West Shore property was fraudulent and should be deleted from title. As referenced above, Justice Speyer granted Bluekat’s application and found as a fact that the mortgage granted on June 6, 2021, to YDB was fraudulent and expunged the same from title.

42. On November 25, 2019, Christian was subject to a disciplinary hearing by the Law Society of Ontario with the result that Christian’s licence to practice law was revoked on May 11, 2020. Christian appealed to the LSO Appeal Division, which appeal was dismissed on December 18, 2020. Christian appealed the LSO Appeal Division decision to the Division Court, and the appeal was dismissed. On May 12, 2022, Christian sought leave from the Supreme Court of Canada to appeal the Divisional Court’s decision, and the Supreme Court denied leave to appeal such that the decision to revoke Christian’s licence to practice law is a final decision.

43. On January 20, 2020, Justice Boswell granted Rathod leave to register a Certificate of Pending Litigation against the West Shore property.

44. In March of 2020, Rathod sought to bring the within summary judgment motion but due to court closures caused by the worldwide pandemic, the motion did not proceed until December 9, 2021. On that date, Joy and Christian sought and obtained an adjournment which was granted to April 5, 2022.

45. On June 6, 2021, pending the hearing of Rathod’s summary judgment motion, Christian prepared and registered a mortgage against title to the West Shore property in the amount of $790,000. The mortgage was granted in favour of YDB. Ijeoma is the sole owner and director of YDB is Ijeoma, Christian’s sister who was also one of the (then) registered owners of the property. As later determined by Justice Speyer on October 25, 2019, no funds were advanced with respect to the YDB mortgage, which was a “sham” and “fraudulent”.

46. Rathod’s motion for summary judgment which was adjourned to April 5, 2022, at the request of Christian and Joy, was heard on that date by Justice Leibovich.

47. For Reasons for Decision released on April 12, 2022, Justice Leibovich granted Rathod partial summary judgment and authorized Rathod to take the following actions:

a. sell the West Shore property;

b. pay off and discharge the RBC mortgage;

c. pay off any tax arrears;

d. pay any real estate commissions; and

e. pay the balance of the proceeds into court to the credit of this action.

48. Justice Leibovich’s judgment was appealed by Christian, Joy, and Ijeoma; however, the appeal was dismissed for delay, and an award of $5,000 was made against the Defendants, which remains outstanding.

49. On May 19, 2022, Joy brought a motion, in-writing and without notice, seeking a temporary stay of the eviction order granted with respect to the West Shore property which eviction was scheduled to proceed on May 24, 2022. Justice Verner reviewed the materials and granted the relief sought by Joy.

50. Following release of Justice Verner’s decision, Joy’s motion materials were served on Rathod and Bluekat who jointly wrote to Justice Verner seeking an urgent telephone conference that was scheduled for May 27, 2022.

51. On May 27, 2022, Justice Verner made certain orders including an Order that specifically prohibited Joy and Ijeoma (who were at the time the registered owners of the West Shore property) from entering into any Agreement of Purchase and Sale to sell the West Shore property, without leave of the court.

52. On June 6, 2022, ten (10) days following Justice Verner’s order, Joy and Ijeoma entered into an Agreement of Purchase and Sale to sell the West Shore property without leave of the court and without the consent of Rathod and Bluekat in direct breach of Justice Verner’s Order.

53. On June 13, 2022, Joy brought an urgent motion seeking, inter alia, to vacate the CPL registered against the West Shore property as order by Justice Boswell on January 20, 2020.

54. Joy’s motion to vacate the CPL was dismissed by Justice Smith who, at the request of Rathod and Bluekat made an Order invalidating the June 6, 2022 Agreement of Purchase and Sale and directing Rathod to sell the property and on sale of the West Shore property to pay and discharge the RBC mortgage; any tax arrears; and any real estate commissions due, with the balance being paid into Court, as per Justice Leibovich’s Order.

55. On June 15, 2022, Rathod, who was empowered to sell the West Shore property, entered into a “new” Agreement of Purchase and Sale with the purchaser found by Joy and Ijeoma, Selim Hostut. The June 15, 2022, agreement was on the same terms and conditions as reached with Joy and Ijeoma on June 6, 2022.

56. On June 23, 2022, Mr. Hostut’s real estate solicitor provided a “Compliance Letter” from the City of Pickering’s City Development Department which advised that various permits for the West Shore property remained open and required immediate attention and work to provide compliance and close the permits prior to the sale of the property.

57. Rathod deposed that she spent considerable time and effort and expended funds totaling $28,932.31 to close the permits to bring the West Shore property into compliance to permit the sale of the West Shore property.

58. On August 10, 2022, Justice Smith released his costs decision and ordered Joy and Ijeoma to “forthwith” pay the sum of $16,282.17 to Rathod and the sum of $3,649.89 to Bluekat on account of the costs of the motion heard before him. No amounts have been paid to Rathod or Bluekat by Ijeoma or Joy on account of this costs order.

59. Rathod finalized the sale of the West Shore property pursuant to the Orders of Justice Leibovich and Justice Smith, and after payment of the directed amounts, paid the balance of the proceeds totaling $1,498,717.83, into Court to the credit of this action.

60. Save and except for RBC, all creditors’ balances, both secured and unsecured, remain outstanding and unsatisfied, with respect to the West Shore property.

The Solina Road Property

61. On July 4, 2012, Christian and Joy (described on the transfer as Nkiruka Ochei) purchased real property identified as the Solina Road property.

62. On June 6, 2016, the Solina Road property was transferred from Christian and Joy (aka Nkiruka Ochei) to Christian and Nkruka Chijindu (aka Joy).

63. On June 6, 2016, Christian and Joy granted a mortgage to Meridian in the amount of $925,000.

64. On September 12, 2016, without notice to Meridian, Christian and Joy granted a (second) mortgage to Rathod in the amount of $200,000, subject to Standard Charge Terms 200033. Rathod claims that this mortgage was to be secured and cross-registered against title to the West Shore property, but it was not.

65. By their Statement of Defence, the Defendants, Christian, Joy, and Ijeoma, concede that Christian agreed to provide Rathod with a “collateral mortgage of $200,000” on the West Shore property but claim that this fact is “irrelevant” because Christian “had no legal right to effectuate that agreement …as he is not the owner of the West Shore property”. For reasons that follow, I find that Christian, Joy, and Ijeoma, colluded and acted together with respect to all aspects of the real property transactions for their sole benefit and to the detriment of their creditors. I also and otherwise find that Christian, was authorized to make such agreements as the lawyer for Joy and Ijeoma, and as such I find that Rathod loaned the $200,000 mortgage on the understanding and condition that Christian would cross-register the mortgage against the West Shore property - but did not.

66. Pursuant to the terms of the September 12, 2016, mortgage, payments were “interest only” with the principal amount, amongst other amounts, to be paid in full upon maturity. The capital plus interest at the rate of 9% per annum is owing from March 8, 2018, plus additional charges. Rathod’s mortgage is in default.

67. The Defendants Obuba Law Firm and Peter Obuba Kalu acted on behalf of Rathod with respect to the registration of this mortgage. As agreed, no findings are made with respect to the issues concerning these Defendants, including whether the said Defendants obtained instructions to cross-register the said mortgage against the West Shore property.

68. On September 15, 2016, without notice to Meridian or Rathod, title to the Solina Road property was transferred by Christian, acting as the sole lawyer, from Christian and Joy (as Nkiruka) to SHM Mortgage Investment Corp. (owned by Joy) (99.98%) and to Christian and Joy (as Nkiruka) (0.01% each).

69. On September 22, 2016, Christian prepared and registered a mortgage granted by Christian and Joy to YDB (Ijeoma’s company) in the amount of $3,000,000. No funds were advanced on account of this mortgage and Christian conceded that the mortgage was registered to defeat the claims of creditors. Like the YDB mortgage registered against the West Shore property, this YBD mortgage registered against the Solina Road property was also fraudulent.

70. On January 6, 2017, Meridian sent a demand letter to Christian and Joy, which read, inter alia, as follows: “…Due to recent issues that have come to light… we are filing a claim with the Law Society of Upper Canada and … demand is made for the balance of the principle…”. As at the date of Meridian’s demand, being January 6, 2017, the total owed to Meridian was $932,853.25.

71. On April 24, 2017, Meridian served a Notice of Sale under the Mortgage.

72. On April 27, 2017, following receipt of the Notice of Sale, Christian returned title to the property into the names of Christian and Joy (as Nkiruka).

73. Also on April 27, 2017, Joy and Ijeoma granted a mortgage to Rathod in the amount of $1,000,000 registered against the West Shore property which Rathod claims was to be cross registered against the Solina Road property.

74. On June 15, 2017, Meridian issued a Statement of Claim seeking full payment of principal and interest under the mortgage, possession, a writ of possession and costs.

75. On September 20, 2018, Meridian sought summary judgment on their mortgage action relating to the Solina Road property which was argued before me.

76. On September 27, 2018, I released a judgment granting Meridian’s Motion for Summary Judgment as follows:

a. summary judgment against Christian and Joy in the amount of $846,694.20 due under the mortgage with interest from June 12, 2017; and

b. summary judgment against Christian and Joy in the amount of $74,971.31 due under a line of credit dated May 24, 2016 with prejudgment andpost judgment interest from June 12, 2017; and

c. summary judgment for possession of the Solina Road property; and

d. a writ of possession against the property; and

e. Costs.

77. The September 27, 2018, Judgment, was appealed by Christian and Joy, which was granted in part restricted to the award of pre-judgment interest (which was conceded). Otherwise, the appeal was dismissed with costs, reported as Meridian v. Chijindu, 2019 ONCA 425.

78. On June 26, 2020, the Solina Road property was sold by Meridian under power of sale.

79. On November 16, 2020, Justice Salmers ordered that the sale proceeds from the Solina Road property be paid into Court by Meridian.

80. Meridian paid all funds due to them by the September 27, 2018, Judgment, paid all expenses’ incident to the sale and paid the amounts owing to the execution creditors: RVL ($18,392.65); and the Loen Group ($39,294.35).

81. Following payment of the above noted items, Meridian paid the surplus funds from the sale of the Solina Road property into court, totaling $54,107.94. These funds, together with any interest earned thereon, remain held to the credit of this action.

IV. THE LAW AND ANALYSIS

RVL Leon’s Claim for Costs

82. RVL and Leon claim entitlement to their legal costs for the within proceeding on a complete indemnity basis in the amount of $35,208.29 to be paid from the proceeds held in Court following the sale of the Solina Road property. RVL and Leon claim payment of their legal fees in priority to any payment being made under Rathod’s mortgage.

83. Determination of this issue can be made in reference to the Rules of Civil Procedure, and more particularly Rules 60.16 to 60.19.

84. Pursuant to Rule 60.16 (2) and (3), where a writ has been filed and the order underlying the writ has been satisfied in full, the creditor is required to withdraw the writ failing which the debtor may seek withdrawal.

85. Pursuant to Rule 60.19, a party who is entitled to enforce a writ is entitled to the costs of the following steps on a partial indemnity scale, unless the court on motion orders otherwise: (i) an examination in aid of execution; (ii) the issuing, filing, enforcement, and renewal of a writ of execution and notice of garnishment; and (iii) any other procedure authorized by these rules for enforcing the order.

86. Unlike mortgagees who are entitled to receive their costs on a complete indemnity basis for enforcement of their mortgage, the costs payable to an execution creditor are fixed by court within the terms of the order obtained to issue the writ and/or determined by reference to Rule 60.19.

87. Further, the costs incurred by an execution creditor to enforce the order are specifically limited and restricted by Rule 60.19 of the Rules of Civil Procedure.

88. In the present case, the underlying orders that established RVL and Leon’s right to obtain writs, could have included an award on account of costs to obtain the order. If any such costs were awarded by the underlying order, they would have been added to the writ. However, any costs incurred and/or sought by RVL and Leon with respect to the within proceeding are specifically limited by Rule 60.19, unless the court orders otherwise.

89. Pursuant to Rule 60.19, RVL and Leon are not entitled to further costs, “unless the court orders otherwise” and I decline to so order as their attendance was unnecessary, and the orders underlying their executions were satisfied in full on sale of the Solina Road property.

90. As a result, RVL and Leon’s claim for costs is dismissed. Christian and Joy’s claim for costs against RVL and Leon is similarly dismissed.

Availability of Summary Judgment to the Within Proceeding

91. Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, outlines when a court may grant summary judgment.

92. In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada stated that the amendments to Rule 20 was to improve access to justice. The reforms that resulted changed the test for summary judgment from whether a case presents “a genuine issue for trial” to whether there is a “genuine issue requiring a trial” (at para. 43).

93. The powers contained in Rule 20 allow motion judges to weigh evidence, evaluate credibility, draw reasonable inferences, and call oral evidence. These powers expand the number of cases in which there will be no genuine issue requiring a trial, thereby establishing that a trial is not the default procedure and eliminating the presumption of substantial indemnity costs against a party that brings an unsuccessful motion for summary judgment.

94. Karakatsanis J., writing for the court, laid out the test to apply when determining whether a summary judgment motion may be granted, at para. 66:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable, and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.

95. In determining whether there is a genuine issue requiring a trial, the Court of Appeal for Ontario’s decision in Hryniak suggested that “summary judgment would most often be appropriate when cases were document driven, with few witnesses and limited contentious factual issues, or when the record could be supplemented by oral evidence on discrete points” (at para. 48).

96. The SCC affirmed that the ONCA’s suggestions are helpful observations but should not be taken as delineating firm categories of cases where summary judgment should and should not apply; summary judgment may be appropriate in a complex case, with a voluminous record if there is no genuine issue requiring a trial.

97. At para. 49, of Hyrniak the SCC explained that a case where there is no genuine issue requiring a trial will be “a 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.”

98. When summary judgment allows the judge to find the necessary facts and resolve the dispute, proceeding to trial is generally not proportionate, timely, or cost effective. Alternatively, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute.

99. The focus is not what kind of evidence could be adduced at trial, but rather whether a trial is required. The evidence simply must be such that I am confident that I can fairly resolve the dispute fairly and justly.

100. In the present case, the evidence filed by the parties establishes that this is an appropriate case for summary judgment, and I am confident that I can fairly and justly resolve the dispute, on the record filed.

Onus on Motion

101. The onus is on the moving party to establish a prima facie case that there is no genuine issue requiring a trial. The onus then shifts to the responding party to show that there is a genuine issue requiring a trial. The responding party must put their best foot forward and cannot simply advise that further or better evidence may be available at trial.

102. In the circumstances of this case, I find that the evidence submitted by Rathod and Bluekat is overwhelming and sufficiently detailed and determinative to allow the court to make all necessary findings of fact and to apply the law to the facts such that summary judgment is an appropriate remedy.

103. Based on the facts before me I find that summary judgment is a proportionate, more expeditious, and less expensive means to achieve a just result.

Assessment of the Evidence, the Credibility of the Parties, and the Reliability of their Evidence

104. The facts relating to the within motion for summary judgment and the credibility and reliability of Christian, Joy, and Ijeoma, in the present proceeding, have been considered and assessed on numerous occasions by numerous judges.

105. The following is a brief review of some, but not all, attendances before the Court relating to the Solina Road and the West Shore properties involving the Chijindu Defendants, Christian, Joy, and Ijeoma:

a. RVL v. Chijindu, 2014 ONSC 7153: This is a decision of Justice Glass arising from a construction lien claim filed against the title to the Solina Road property. Justice Glass found that Christian and Joy (represented by Christian) by their actions were “clouding the issues with one natural interpretation to follow”. Justice Glass found that the action by the Defendants … is without merit and will be dismissed” and granted judgment in favour of RVL;

b. RVL v. Chijindu, 2016 ONSC 5810: This is the appeal of Justice Glass’ decision heard by the Divisional Court, who dismissed the appeal with costs, noting: “It ill lies in the mouths of the owners to assert that this lien action should have been brought in Small Claims Court”;

c. Autopoietic Telemetric Solutions Ltd. v. Chijindu, 2016 ONSC 5907: This is a decision of Justice Lederman regarding a retainer dispute between Christian and a former client who became an execution creditor associated with the Solina Road property. Justice Lederman held “having regard to the fiduciary nature that exists between a solicitor and client, it was unconscionable for the Respondent (Christian) to take the position…there is justification for an award of costs on an elevated scale”. Justice Lederman ordered substantial indemnity costs against Christian;

d. Chijindu and Ochei v. 2153801 Ont. Ltd (The Leon Group), 2017 ONSC 638: This is an appeal of the unreported decision of Justice Glass dated December 10, 2014, made after a six-day construction lien trial relating to the Solina Road property wherein Christian and Joy argued that they did not know that the Loen Group operated as a numbered company and as such were not entitled to register a construction lien against the Solina Road property. Justice Glass found that the Christian and Joy “knew the numbered company and the Loen Group were one and the same”. The Divisional Court agreed with Justice Glass’ findings and dismissed the appeal, with costs against Christian and Joy;

e. Meridian Credit Union v. Chijindu, 2018 ONSC 5538: This is a decision rendered by me referred to earlier in these reasons relating to the Solina Road property. Meridian sought summary judgment and sale for breach of contract which was granted. In the decision I found that Christian acting personally as the lawyer for himself, and his spouse registered a subsequent transfer of the property without the knowledge or consent of Meridian which was a “serious and flagrant breach of the Standard Charge Terms” and that Christian and Joy “continue to remain in flagrant default”.

f. Meridian Credit Union v. Chijindu, 2019 ONCA 425: This is the appeal of my decision, which was allowed to the extent of a concession relating to prejudgment interest on a line of credit, but otherwise dismissed with costs ordered against Christian and Joy;

g. Bluekat Capital Corp. v. YDB Investments Corp., Ijeoma Chijindu, Joy Chijindu, and Christian Chijindu, 2019 ONSC 6218: This is the October 25, 2019, decision of Justice Speyer relating to these exact same parties and the exact same property (West Shore). Justice Speyer’s decision relates to Bluekat’s application to declare the Ijeoma’s YDB mortgage that Christian registered against the West Shore property (owned by Joy and Ijeoma) to be fraudulent, void, and expunged from title. Justice Speyer granted Bluekat’s relief, and ordered Ijeoma’s YDB mortgage to be expunged from title as being fraudulent and null and void. Justice Speyer noted that the Chijindu Defendants (Joy and Ijeoma) had “unsuccessfully applied to this court to have the Bluekat mortgages set aside” but that application was dismissed. Justice Speyer also noted that Ijeoma had previously attempted to sell the West Shore property by a notice of sale issued by YDB (Ijeoma’s company) based on a fraudulent mortgage. Justice Speyer prohibited the sale by Ijeoma and declared Ijeoma’s YDB mortgage to be fraudulent and expunged it from the title. In her reasons for decision, Justice Speyer found Christian to be mendacious, argumentative, evasive, and noted that his evidence “shifted as the unsatisfactory nature of his answers became apparent”. Justice Speyer also found the evidence provided by Joy and Ijeoma “not credible”. In conclusion Justice Speyer determined on “convincing evidence that the non-arms length transactions between Mr. Chijindu, his wife, his sister, and the corporations controlled by them …were organized by them to benefit themselves at the expense of Bluekat or any other creditor they convinced to lend them money secured by a worthless mortgage, by misrepresenting encumbrances on the grossly over-mortgaged property”. Bluekat was entirely successful and received a costs award (that remains unpaid).

h. Bluekat Capital Corp. v. YDB Investments Corp., Ijeoma Chijindu, Joy Chijindu, and Christian Chijindu, 2020 ONSC 3572: This is a decision of Justice Bale relating to a motion brought by Christian, Joy, and Ijeoma to stay the order of Justice Speyer pending appeal. The decision details the events that occurred following Justice Speyer’s order including repeated statements by Christian that they were withdrawing the appeal but then did not. Justice Bale held “while I do not condone Mr. Chijindu’s conduct, I agree that the motion has not been abandoned. There is a difference between saying you intend to abandon a motion … and actually abandoning it”. Costs were reserved to the stay application (which was never argued as the appeal was dismissed for delay).

i. Rathod v. Chijindu et al, 2022 ONSC 2282: This is a decision by Justice Leibovich relating to the within action and Rathod’s prior motion for partial summary judgment regarding Rathod’s $250,000 mortgage registered against the West Shore property. Justice Leibovich granted Rathod’s motion and ordered the sale of the West Shore property as requested by Rathod;

j. Rathod v. Chijindu et al, May 19, 2022: This is an Endorsement by Justice Verner, in the within proceeding, relating to a without notice, urgent motion brought by Joy to stay the eviction order for the West Shore property. Justice Verner granted the motion brought without notice and without service of any materials on either Rathod or Bluekat.

k. Rathod v. Chijindu et al. May 27, 2022: This is a further Endorsement and Order by Justice Verner following service of Joy’s ex parte motion materials upon Rathod and Bluekat. The stay of the eviction order had already lapsed and Justice Verner by this Endorsement granted an Order prohibiting the Chijindu Defendants from interfering in any way with Rathod’s power to sell the West Shore property pursuant to Justice Leibovich’s Order dated April 12, 2022, and provided that any agreement of purchase and sale obtained by the Chijindu Defendants must be approved by motion to the court before it is entered into by Joy or Ijeoma.

l. Rathod v. Chijindu et al. June 13, 2022: This is an Endorsement of Justice Smith in the within action relating to a motion brought by Joy to discharge the CPL (granted by Boswell, J. on January 20, 2020), and for approval of an agreement of purchase and sale by Joy and Ijeoma on June 6, 2022, entered into in direct breach of the Order of Justice Verner dated May 27, 2022. After reviewing the history of the proceeding, Justice Smith refused the relief sought by Joy and allowed Rathod to continue and/or assume and/or pursue the sale of the West Shore property.

m. Rathod v. Chijindu et al., 2022 ONSC 4629: This is Justice Smith’s Cost Endorsement relating to the June 13, 2022, motion. By this endorsement Justice Smith found as follows: “A review of the affidavit material filed by the plaintiff in this matter leaves the reader gobsmacked by the series of deceptive, sham, and outright fraudulent actions engaged in by one or all of the defendants through the history of their ownership of the subject property…I found the language used in the defendant/moving parties’ written costs submissions to be insulting, inappropriate, and offensive. I also found it surprising, as the defendant/moving parties certainly did not conduct themselves in like fashion at the hearing of the motion. In any event I choose not to consider written submissions that contain such language…It is clear to me the defendants deliberately entered into the APS, which eventually necessitated the subject motion, fully aware of, but blithely indifferent to, the terms of that order…the general circumstances in which this motion came before the court, and the nature of the defendant/moving parties’ costs submissions are deserving of censure…While the defendants/moving parties’ costs submissions … are over the line, their submissions in response to Bluekat’s costs submissions are beyond the pale. They include an assortment of accusations, aspersions, and insults direct at Mr. Belmont, as well as allegations of fraud, fraudulent conduct, chicanery, and other such terms most of which are libelous in nature…the defendants’ costs submissions are an affront to Mr. Belmont’s dignity…and to the dignity of this court.” Justice Smith ordered that Joy and Ijeoma pay Rathod costs of $16,282.17 inclusive and Bluekat costs of $3,649.90, forthwith. These costs remain unpaid and outstanding.

n. Rathod v. Chijindu et al. August 24, 2022: This is an Endorsement by Justice Leibovich that relates to a motion in writing brought to strike or stay a new proceeding commenced by Ijeoma and Joy on July 26, 2022, seeking for an Assessment of Accounts outside of this proceeding and to vary Justice Leibovich’s April 12, 2022, Judgment. Notwithstanding that Joy and Ijeoma advised such an order was “not necessary as they have filed a Notice of Discontinuance” Justice Leibovich granted the relief requested by Rathod.

o. Rathod v. Chijindu et al. September 13, 2022: This is an Endorsement made by Justice Leibovich that relates to an Order made in this proceeding on August 4, 2022, by Justice De Sa ordering the proceeds of sale of the West Shore property be paid into court. Justice Leibovich corrected a small mathematical error in the August 4, 2022, Order, required the funds from the sale of the West Shore property be paid into court and confirmed the terms of his August 24, 2022, endorsement by Court Order.

p. Rathod v. Chijindu et al. June 22, 2023: This is my Endorsement made at the conclusion of the first day of argument on the within Motion for Summary Judgment that directed the parties to re-attend on August 3, 2023, to address an issue raised by Christian for the first time during oral argument (claiming that no Standard Charge Terms applied to the Bluekat mortgages). This endorsement also provided an order for an additional “stay” of the assessment of costs obtained by the Chijindu Defendants as despite and in the face of Justice Leibovich’s Orders, the Chijindu Defendants sought to proceed with the assessment process, outside of the within summary judgment motion.

106. As is readily apparent, there is a common theme that runs through the above noted endorsements and orders, which cannot be overlooked or understated. The Chijindu Defendants, Christian, Joy, and Ijeoma, both collectively and separately, have consistently provided untruthful, unreliable, and unsubstantiated evidence to the Court to further their own interests and are not credible witnesses.

107. This Court has repeatedly found that Chijindu Defendants, Christian, Joy, and Ijeoma, lack credibility and the evidence presented by them is not reliable.

108. Justice Speyer specifically found Christian, Joy, and Ijeoma, registered a “sham” mortgage on the title to the West Shore property as “a tool that was employed to perpetrate” a fraud.

109. Of crucial importance is the fact that Justice Speyer’s careful and thorough review and assessment of the evidence and the credibility of the witnesses, was not from a “similar” case, but from this “exact” case.

110. This same statement is true of Justice Smith’s review and assessment of the evidence and the credibility of Joy. and Ijeoma. Justice Smith’s careful and thorough review and assessment of the evidence and the credibility of the witnesses – was also not from a “similar” case, but from this “exact” case.

111. The sentiments expressed by Justice Speyer and Justice Smith regarding the credibility of the witnesses, and the reliability of their evidence, echoes my own independent assessment.

112. The following excerpt from Justice Speyer’s October 25, 2019, Reasons for Decision, are repeated by me as being entirely accurate and applicable to the within motion for summary judgment:

[30] The foregoing review of evidence, and my assessment of the credibility of the witnesses, compels me to find as a fact, that the YDB mortgage registered on title by Mr. Chijindu was indeed a sham.

[31] First the sole officer and director of YBD, Ijeoma Chijindu, an owner of the property, and thus one of the purported borrowers under the YDB mortgage, and sister of Mr. Chijindu, chose not to appear for the hearing of the application. I infer that she could not provide evidence that YDB provided any funds to her and/or Joy Chijindu. I infer that she could not provide any documentary evidence to support the existence of the YBD mortgage.

[36] I am satisfied, based on convincing evidence, that the non-arm’s length transaction between Mr. Chijindu, his wife, his sister, and the corporation controlled by them that resulted in the registration of the YBD mortgage, were organized by them to benefit themselves at the expense of Bluekat and other creditors they convinced to lend them money secured by a worthless mortgage, by misrepresenting the extent of the encumbrances on the grossly over-mortgaged property. The evidence convincingly establishes that Mr. Chijindu falsely represented to the applicant that the first Bluekat mortgage was a second mortgage, that he knew that his representation to the applicant was false because he registered the mortgages, that the false representation caused Bluekat to advance funds to the respondents, and that the respondents’ actions resulted in a loss to Bluekat. I find that the YBD mortgage, undocumented except as to registration, was a sham, and a tool that was employed to perpetrate this fraud.

113. Justice Speyer’s findings are strikingly similar if not identical to my own independent assessment of the evidence, the credibility of the parties in the present case, and the reliability of their evidence.

114. While each case must be determined on its own merits, and each Justice must make their own individual and independent assessment of the evidence, when I consider the findings of Justice Glass, Justice Speyer, Justice Smith, Justice Leibovich, and Justice Verner, both individually and collectively, and in comparison to my own independent findings, I find that Rathod and Bluekat overwhelmingly proved on the basis of the record, that Christian, Ijeoma, and Joy, are not credible witnesses in this proceeding, have not provided reliable evidence, and further they have colluded with one another with the shared and common intent to defraud their mutual creditors, including Rathod and Bluekat, for their personal benefit.

115. I specifically find that the evidence submitted by the Chijindu Defendants, Christian, Joy, and Ijeoma, jointly and severally, to be entirely untrustworthy and unreliable, such that it would be unsafe to rely upon any evidence presented by them, that is not corroborated by independent evidence, or the evidence of Rathod or Bluekat.

116. For the foregoing reasons, unless I have noted an error in the evidence of Rathod or Bluekat, having considered the whole of the evidence and compared and contrasted it with the independent corroborative evidence filed in this proceeding, to the extent that there is any inconsistency or difference between any of the evidence submitted by Rathod or Bluekat versus any of Christian, Joy, or Ijeoma, in every instance I prefer and accept the evidence of Rathod and/or Bluekat.

Reinstatement of Rathod’s $1,000,000 Mortgage Registered on August 27, 2017 - Securing a $200,000 Advance – Subsequently Discharged by Christian

117. Having reviewed the evidence relating to this issue, and having considered the arguments of the parties, I accept Rathod’s evidence that Christian acted unilaterally and without authority in registering a discharge of Rathod’s $1,000,000 Mortgage from title to the West Shore property.

118. I reject the evidence submitted by Ijeoma, that she did not approve the above noted mortgage, did not receive any funds advanced therefrom and did not grant authority to Christian to register the mortgage against title to the West Shore property, as disingenuous.

119. I find that Christian’s argument that “no loan agreement and/or commitment exists with respect to the $1,000,00 mortgage” and the mortgage is invalid, to be without merit:

i. First, to the extent that there is any inconsistency between the evidence of Rathod and that of Christian, Joy, and/or Ijeoma, I accept and prefer Rathod’s evidence in all respects.

ii. Second, Christian was the sole lawyer responsible for the drafting the loan agreement and/or mortgage commitment and for safeguarding the legal file relating to the transaction. Christian refused and neglected to produce a copy of the file to Rathod when requested and cannot rely upon his own negligence and/or fraudulent act to defeat Rathod’s claim.

iii. Third, Rathod provided uncontradicted evidence that she advanced $200,000 in furtherance of this mortgage. I reject Christian and Ijeoma’ s evidence that the money acknowledged as advanced was not advanced on this mortgage.

iv. Fourth, the evidence established that the mortgage was discharged without any consideration, without notice, and without authority.

120. The registration of the discharge by Christian constituted a fraudulent act.

121. In those cases where mortgages are fraudulently discharged, the court has inherent jurisdiction to reinstate the mortgage as if it has never been discharged. See Tiao v. Leone et al. 2016 ONSC 3015 and Citizens Bank v. Pastore 2005 CanLII 63799 (ONSC).

122. Where a discharge is affected by a “fraudulent instrument”, the registration of the fraudulent discharge is void and the principle of indefeasibility acts to reinstate the mortgage to the same place and priority that it occupied prior to the fraudulent discharge.

123. Where a mortgage is found to be fraudulently discharged, sections 78(4), (4.1) and (4.2) of the Land Titles Act provides for the reinstatement of the mortgage without loss of priority while s. 57(13) of the Land Titles Act authorizes the court to direct the rectification of the register if the court is satisfied on the basis of the evidence that a fraudulent instrument has been registered. See Tiao, supra.

124. For the purposes of distribution, Rathod’s $1,000,000 Mortgage that secured Rathod’s $200,000 advance, will be treated as if it had not been discharged but remained registered on April 27, 2017, with all accompanying rights relating to the priority of registration attach to the said mortgage.

The Courts Ability to Determine the Amounts Due Under the Mortgages

125. Where there are concerns about the amount claimed to discharge a mortgage, Rule 14.05(3)(e) of the Rules of Civil Procedure provides that an applicant may seek a judicial determination of all disputed items and provide evidence in support of its position. The judge will then determine the amount owing.

126. A mortgage is a contract, and any fee or charge must be rooted in either an actual expense or something provided for in the mortgage. Charges provided for in the mortgage must be genuine pre-estimates of their losses.

127. With respect to administrative costs, while a mortgagee is generally entitled to be indemnified for costs incurred to respond to default, the costs must be reasonable and properly incurred. There must be some evidentiary basis to determine the costs were incurred at the amounts claimed. Absent proof, costs are subsumed in the ordinary course of the mortgagee’s business.

128. In BMMB Investments Limited v. Naimian, 2020 ONSC 7999, at para. 36, Myers J. held that there must be evidence supporting all amounts the lender seeks to pass on to its borrower and where no evidence is adduced to support any of the costs for which it claims reimbursement, none is allowed.

129. In P.A.R.C.E.L. Inc. v. Acquaviva, 2015 ONCA 331 at para. 96, Cronk, J.A., found that absence evidence that the charges reflect real costs legitimately incurred for the debt recovery, administrative charges merely impose an additional penalty or fine.

130. The facts of the current case, as documented through the detailed, extensive, and careful filings of Rathod and Bluekat, provide a rich evidentiary basis to determine the costs incurred and the amounts claimed and due under the various mortgages. The court is well placed to determine all issues raised on this motion for summary judgment and there is no necessity for a separate assessment.

Ability of this Court to Determine and/or to Fix Costs of Enforcement

131. The Superior Court of Justice has the authority to determine the legal costs claimed by Rathod and Bluekat pursuant to the Standard Charge Terms in accordance with the inherent jurisdiction and discretion of the Superior Court Justice to determine costs.

132. The Rules of Civil Procedure, and in particular Rule 14.05(3)( e), supplement the Court’s inherent jurisdiction. Rule 14.05(3)( e) provides that a proceeding may be brought by application where the relief claimed is the declaration of an interest in or charge on land, including the settling of the priority of interests or charges.

133. This issue has previously been considered by me in 2642322 v. Rexell Developments Inc., 2023 ONSC 1979, (“Rexell”), where in reference to Rule 14.05(3)( e), I determined that the terms “legal fees” includes the “settling charges”. In Rexell I also concluded that it served the interests of justice that the settling of charges including the determination of all legal fees for the enforcement of the mortgage(s), would be determined as part of the application.

134. In the present case, the evidence established that Rathod and Bluekat advanced the mortgage funds in good faith and despite a multitude of court proceedings and attendances – the mortgages remain in default without payment of any kind to either Rathod and/or Bluekat.

135. Considering these facts, it would be a complete miscarriage of justice to require Rathod and Bluekat to attend a separate assessment before a further judicial officer to determine the issue of the legal fees when this issue can be determined by me in this proceeding.

136. A similar conclusion was reached in the case of C.M.T. Financial Corporation v. McGee, 2015 ONSC 3595, when at para. 68 the court held:

“[68] Deferring the costs to an assessment would be contrary to the spirit of Hyrniak and would be a waste of judicial resources as well as the resources of the parties.”

137. I confirm that the term “settling charges” as found in rule 14.05(3)( e) includes legal fees incurred in the enforcement of the mortgage and incurred in the proceeding generally. I further confirm that such fees shall be fixed and determined by me in the interests of justice as part of the within motion for summary judgment.

138. I reject the argument contained in Joy’s factum that the Superior Court lacks jurisdiction to determine the legal costs of a mortgagee on application or motion for summary judgment.

139. As discussed in Rexell, section 43(4) of the Mortgages Act is permissive and not mandatory, and none of the Mortgages Act, the Courts of Justice Act, or the Solicitor’s Act, or any other legislation, operates to oust the inherent jurisdiction of this Court.

Applicability of Standard Charge Terms 200033 to Bluekat’s Mortgages

140. During oral argument Christian claimed that Bluekat’s mortgages were not subject to any Standard Charge Terms with the result that Bluekat was not entitled to seek any costs or charges expended in securing and enforcing Bluekat’s mortgages, including legal costs.

141. Christian argued that Bluekat was to provide the “Lender’s Standard Mortgage Charge Terms” to the borrowers (Joy and Ijeoma) following registration and did not. As such, Christian argued that Bluekat is prohibited from seeking costs on a complete indemnity basis as provided for by the standard charge terms.

142. Bluekat argued that Christian’s submissions in this regard were “ridiculous” and without merit. I agree.

143. Christian acted as the sole lawyer for both the lender Bluekat and the borrowers Joy and Ijeoma. Christian prepared all mortgage documents including the Mortgage Commitment Letter that governed both mortgages which specifically states thereon that the “Lender’s Standard Mortgage Terms would apply”. Christian is also the lawyer who prepared Bluekat’s mortgages and failed to insert the number for the Standard Charge Terms on the face of Bluekat’s mortgages. Having failed to properly complete the mortgage documents, Christian is not entitled to rely upon his own negligence and/or intentional fraudulent act to exclude the application of standard charge terms.

144. In all prior dealings with Bluekat, Christian had utilized Standard Charge Terms 2000033, which are the same standard charge terms applied by Christian and inserted into Rathod’s mortgages. I find as a fact that Bluekat’s mortgages as prepared by Christian were subject to the Lender’s Standard Mortgage Charge Terms, and that those charge terms were “200033”.

145. The failure of Bluekat’s mortgages to specifically recite that the “Standard Charge Terms” were “2000033” is of no consequence. The doctrine of contra proferentem relieves Bluekat from any responsibility under this suggested interpretation. See: Unique A T Holding Corp v. Bryson & Associates Insurance Brokers Ltd., 2000 CarswellOnt 4233 (S.C.J.).

Review of the Costs and Additional Expenses Sought

Interest Due on the Mortgages

146. The Defendants argued that Rathod and/or Bluekat are not entitled to receipt of interest on their mortgages after July 7, 2022, for the following reasons:

a. Rathod’s $250,000 mortgage was never disputed and should have been discharged on July 7, 2022;

b. Bluekat’s mortgages were never disputed and should have been discharged on July 7, 2022; and

c. Rathod’s $1,000,000 mortgage (securing the $200,000 advance) was never granted by Ijeoma on the West Shore property and is invalid and unenforceable against her interest in the West Shore proceeds.

147. There is no evidence that any agreement existed that would have allowed any of Rathod’s or Bluekat’s mortgages to be paid out and discharged on July 7, 2022. If that were true, Bluekat would already have received the bulk of the funds due to them, Rathod would have received a large portion of the funds due to her, and argument on the motion before me would have been limited in scope immensely.

148. As for the argument that Rathod’s $1,000,000 mortgage (securing the $200,000 advance) was never granted or registered on the West Shore property and is not a valid mortgage, I reject this argument for the reasons set out above.

149. I find that interest has and will continue to accrue on Rathod’s and Bluekat’s mortgages, until such mortgages are satisfied.

Lenders’ Fees and Pre-Paid Interest

150. The Defendants, and in particular, Ijeoma, argue that the lender fees and pre-paid interest attached to Bluekat’s mortgages should be deducted from the principal amount owing as these amounts were not “advanced”.

151. I disagree. As noted by the Divisional Court in Chijindu v. Prudential Property Management Inc. 2016 ONSC 986, the document that deals with the quantum of the lender’s administrative fee is the mortgage commitment letter. In the present case there was one mortgage commitment letter that applied to both of Bluekat’s mortgages.

152. The commitment letter that governs Bluekat’s mortgages is dated July 11, 2017 and provides “The loan is to be advanced in TWO PART (sic). First part of $125,000 to be advanced on March 1, 2017. Second part, when construction of new house on 740 West shore Blvd. is going on…” The loan amount is $84,084.09. This amount reflects the amount of the first advance. The Lender fee was recorded as $7,777.78. with a mortgage term of 6 months at 15% per annum (interest only). Interest of $6,306.31 is recorded as being paid in advance to be “recapitalized for the period and not due till the end of the term”.

153. At page three of the Commitment Letter, the following statement immediately precedes Ijeoma and Joy’s signatures: “We hereby irrevocably authorize and direct the Lender’s solicitor to deduct from the principal amount of this loan or any advance thereof, the Lender’s Fees, the Broker’s Fees, the interest adjustments, the interest payments and any other fees, expenses, or charges in connection with this matter”.

154. As noted by Justice C. Browne, in her trial decision reported as Chijindu v. Prudential Property Management Inc., 2014 ONSC 4759, (which decision was upheld by the Divisional Court as noted above):

“A Lender's Administrative Fee is standard in the mortgage business … for purposes of the loan and for arranging the loan through a lender. While the applicant submits that the Commitment Letter must be interpreted in light of subsequent documents, including the Charge/Mortgage registered on title and the Draw Down Request, I do not agree. The governing document is the Mortgage Commitment Letter …It is based on that document that interpretation of the contract occurs”.

155. In the present case, the mortgage commitment between Bluekat and Joy and Ijeoma provided that the lender’s fee and pre-paid interest is to be deducted from the advance. As such, the fee and interest clearly form part of the funds advance and attracts interest in accordance with the terms of the Commitment Letter to the date of repayment.

Expenses Incurred to Close Permits Prior to the Sale of West Shore

156. Rathod was granted authority to sell the West Shore property by power of sale and was required to ensure that all permits were closed to allow the sale to proceed.

157. Rathod provided proof that she expended the sum of $28,932.31 in disbursements to permit the sale of the West Shore property.

158. Rathod provided ample evidence to support repayment of the disbursements and as per the standard charge terms is entitled to repayment with interest calculated at 9% in accordance with the terms of the mortgage.

159. The total amount owing to Rathod for the expenses is $30,017.82 to December 9, 2022, with interest thereon to date of payment at 9%.

Indemnification for Legal Costs

160. A mortgagee is entitled to indemnification for the costs incurred to preserve, protect, and defend the security under its mortgage, including steps taken to respond to default by the mortgagor. See We Care Funding Limited Partnership v. LDI Lakeside Developments Inc. et al, 2021 ONSC 7466, at para. 66; and 2642322 v. Rexell Developments Inc., 2023 ONSC 1979, at para. 24.

161. Rathod and Bluekat as Mortgagees are entitled to full recovery of their legal costs “topped up” to full recovery over and above any costs previously made in their favour, subject to any order to the contrary, of which there is none. See 620637 Ontario Ltd. v. Axton, [1997] O.J. No. 3637, at paras 14, 16 – 19, 21 – 22, and 24; and 131843 Canada Inc. v. Double “R” (Toronto) Ltd. (1992), 11 C.P.C. (3D) 190 (Ont. Gen. Div.).

Rathod’s Legal Expenses

162. With respect to Rathod’s claim for legal fees incurred for the enforcement of the mortgage securities, pursuant to my endorsement dated June 22, 2023, Rathod’s counsel filed lengthy submissions detailing the legal fees sought by this in this proceeding incurred for the enforcement of the mortgage securities.

163. Pursuant to paragraph 8 of the standard charge terms Rathod is entitled to payment of legal fees on a complete indemnity basis.

164. Rathod seeks payment of her legal fees on a complete indemnity basis totaling $87,607.74. Rathod estimates that the bulk of the legal fees rendered relate to the West Shore property.

165. I have reviewed the accounts provided by Rathod and the ledgers filed in support thereof. I have considered the accounts in view of the various court documents filed in the record relating to this proceeding. Having reviewed the accounts, I find the legal fees sought by Rathod to be incredibly reasonable, necessarily incurred, and they are approved by me without deduction.

166. I award Rathod payment of her legal fees and disbursements, including HST, payable from the West Shore property fixed at $87,000.0 and payment of her legal fees payable from the Solina Road property fixed at $607.74. This award of legal fees includes all previous costs awards, none of which have been paid.

167. I note that Rathod’s request for legal fees and disbursements is limited to May 2023, and do not include fees and disbursements incurred for the period May 2023 onward. Rathod’s fees and disbursements for the period May 2023 onward shall be determined by me following written submissions.

Bluekat’s Legal Expenses

168. With respect to Bluekat’s claim for legal fees incurred for the enforcement of the mortgage securities, I have reviewed the accounts provided by Bluekat that are cross-referenced to steps taken by Bluekat to preserve, defend, and protect the security under its two mortgages and have also reviewed the various court documents filed in the record relating to this proceeding. Having reviewed the invoices and cross-referenced such invoices to the steps taken by Bluekat, I find the legal fees to be reasonably incurred, necessary, and they are approved by me without deduction.

169. I award Bluekat payment of its legal fees and disbursements, including HST, payable from the West Shore property fund fixed at $184,467.16. This award of legal fees includes all previous costs awards, none of which have been paid.

170. I note that Bluekat’s legal fees are calculated as of June 22, 2023, and do not include fees incurred for argument of the within summary judgment motion on June 22, 2023, or counsel’s re-attendance on August 3, 2023. Bluekat’s further fees relating to argument of the within motion shall be determined by me following written submissions.

PART V – ORDER

171. For the foregoing reasons, Rathod and Bluekat’s Motion for Summary Judgment is granted as detailed herein. Any relief sought by any other party is dealt with as detailed herein.

172. This Court Orders that the following amounts be paid to Rathod and Bluekat as indicated below, said payments to be made from the proceeds of sale of the West Shore property and/or the Solina Road property, in the priority as indicated below:

173. With respect to Rathod’s mortgages, judgment of all amounts owing thereunder is granted in favour of Rathod in accordance with Rathod’s Mortgage Discharge Statements, as follows:

a. With respect to Rathod’s $250,000 mortgage registered on March 9, 2017, against the West Shore property, judgment of all amounts owing thereunder is granted in favour of Rathod totaling $357,506.84 plus interest from December 10, 2022 (to be paid from the proceeds held for the West Shore property as priority #1).

b. With respect to Rathod’s $1,000,000 mortgage which secured Rathod’s $200,000 advance, registered on April 27, 2017, against the West Shore property, and fraudulently discharged on March 6, 2019, the said mortgage is reinstated to the date of the original registration date of April 27, 2017, and judgment of all amounts owing thereunder is granted in favour of Rathod totaling $286,005.47, plus interest calculated from December 10, 2022 (to be paid from the proceeds held for the West Shore property as priority #2).

c. With respect to Rathod’s expenses relating to the sale of the West Shore property, judgment is granted in favour of Rathod totaling $30,017.82, plus interest at 9% calculated from December 10, 2022, to date of payment) (to be paid from the proceeds of the West Shore property as priority #1 as per the Standard Charge Terms attached to Rathod’s March 9, 2017, $250,000 mortgage).

d. With respect to Rathod’s legal fees and disbursements relating to the enforcement of the West Shore property mortgages, judgment is granted in favour of Rathod totaling $87,000.00, inclusive, which sum includes all prior costs orders (to be paid from the proceeds of the West Shore property as priority #1 as per the Standard Charge Terms attached to Rathod’s March 9, 2017, $250,000 mortgage);

e. With respect to Rathod’s $200,000 mortgage registered on September 12, 2016, against the Solina Road property, agreed to have been cross-registered against the West Shore property, judgment of all amounts owing thereunder is granted in favour of Rathod totaling $286,005.47, plus interest calculated from December 10, 2022 (to be paid from the Solina Road property as priority #1 with the balance owing to be paid from the West Shore property as a judgment creditor attached to Joy Chijindu, priority to be granted as at the date of this Order as priority #6 after the costs of the within motion have been determined and paid).

f. With respect to Rathod’s legal fees and disbursements relating to the enforcement of the Solina Road property mortgage, judgment is granted in favour of Rathod totaling $607.74, inclusive, (to be paid from the proceeds of the West Shore property as a judgment debtor attached to Joy Chijindu, priority to be granted as at the date of this Order as priority #6 after the costs of the within motion have been determined and paid); and

2. With respect to Bluekat’s mortgages judgment of all amounts owing thereunder is granted in favour of Bluekat in accordance with Bluekat’s Mortgage Discharge Statements, as follows:

a. Mortgage #1: registered July 11, 2017: Total amount due as of June 22, 2023: $158,543.53 with a per diem rate of $37.15 to date of payment (to be paid from the proceeds held for the West Shore property as priority #3);

b. Mortgage #2 registered on October 27, 2017: Total amount due as of June 22, 2023: $120,423.05 with a per diem rate of $28.14 to date of payment (to be paid from the proceeds held for the West Shore property as priority #4); and

c. With respect to Bluekat’s legal fees and disbursements relating to the enforcement of the West Shore property mortgages, judgment is granted in favour of Bluekat totaling $184,467.16, inclusive, which sum includes all prior costs orders (to be paid from the proceeds of the West Shore property as priority #3 as per the Standard Charge Terms deemed to apply to Bluekat’s July 11, 2017, mortgage).

3. With respect to all other creditors, my review indicates that the one creditor that remains unpaid is Vista Credit, who is owed $4,773.35. Vista shall be paid the amount outstanding from the proceeds of sale of the West Shore property as priority #5 to be paid after the costs relating to this summary judgment motion have been determined and paid to Rathod (as priority #1) and to Bluekat (as priority #3).

4. In the event there are any funds left in the West Shore property fund after payment of all amounts due and owing to Rathod, Bluekat, and Vista, (including costs not yet determined) such funds shall be released to the former owners, Joy Chijindu, and Ijeoma Chijindu, as they may in writing direct.

5. As for costs relating to this summary judgment motion:

a. Rathod shall be entitled to her costs for the summary judgment motion from May 2023 onwards, not already sought, to be paid on a complete indemnity basis, and may serve and file her costs submissions, within 10 days of today’s date, limited to 2 pages, with a Bill of Costs attached. Any response shall be served and filed within 20 days of today’s date, limited to 2 pages (which costs shall be paid from the West Shore property funds as priority #1 as per the Standard Charge Terms attached to Rathod’s $250,000 West Shore property mortgage); and

b. Bluekat shall be entitled to its costs on a complete indemnity basis, for attendances on June 22, 2023, and August 3, 2023, not already sought, and may serve and file its costs submissions, within 10 days of today’s date, limited to 2 pages, with a Bill of Costs attached. Any response shall be served and filed within 20 days of today’s date, limited to 2 pages (which costs shall be paid from the West Shore property funds as priority #3 as per the Standard Charge Terms deemed to apply to Bluekat’s July 11, 2017, mortgage).

6. Rathod and Bluekat may take out the Order with the consent and approval of Rathod and Bluekat and without the necessity of obtaining the consent or approval of any of Christian, Joy, or Ijeoma, or any other Defendant.

Justice Susan J. Woodley

Released: February 13, 2024