Court File and Parties

Court File No.: BK-31-3260019 Date: 2025-10-10

Superior Court of Justice - Ontario

Re: In the Matter of the Consumer Proposal of Edward George Wallerstein

Before: Associate Justice Rappos

Counsel:

• Sara Mosadeq and Francesa Sgambelluri, for Reman Ciabarri
• Jenniffer Kidd, representative of the OSB
• Neil Williams, licensed paralegal appearing on behalf of Edward Wallerstein

Heard: October 9, 2025 (via videoconference)

Reasons for Decision

Introduction

[1] Edward Wallerstein is a joint owner of real property municipally known as 90 Fisherville Road, Suite 207, Toronto. Reman Ciabarri made a secured loan to the owners of the Property and has a charge over the Property.

[2] The loan was not repaid, so Mr. Ciabarri started an action for payment of the debt, possession of the Property, and leave to issue a writ of possession. This relief was granted in the Judgment of Justice Merritt dated May 8, 2025. There was no appeal of the Judgment.

[3] A writ of possession was issued on July 21, 2025, which directed the Sheriff to take possession of the Property. Mr. Ciabarri sent a notice to vacate to the owners. The writ was to be enforced by the Sheriff on August 21, 2025.

[4] Mr. Wallerstein sought an urgent stay of the eviction. In an Endorsement dated August 14, 2025, Justice Centa denied Mr. Wallerstein's request for a stay.

[5] The next day on August 15, 2025, Mr. Wallerstein filed a consumer proposal under the Bankruptcy and Insolvency Act ("BIA"). The consumer proposal provides that Mr. Wallerstein would refinance and payout the existing mortgage owed to Mr. Ciabarri.

[6] The Sheriff declined to proceed with the eviction due to the stay of proceedings contained in the BIA.

[7] Mr. Ciabarri brings a motion for an order declaring that the stay of proceedings does not prevent him, as a secured creditor, from taking steps to evict the owners of the Property, which includes Mr. Wallerstein. In the alternative, Mr. Ciabarri seeks an order lifting the stay to permit him to proceed with the eviction.

Request for an Adjournment

[8] The motion was originally before me on September 22, 2025. Mr. Wallerstein was not in attendance, on the basis that he was not consulted about the hearing date, and because of commitments related to the start of a religious holiday that evening.

[9] I granted Mr. Wallerstein an adjournment of the hearing to today's date. As set out in my Endorsement:

"Mr. Wallerstein had 2 weeks' notice of today's hearing. He now has an additional 17 days to retain legal counsel if he wishes. Given the history of this matter, I agree that this motion needs to proceed on October 9, 2025. As a result, the hearing on October 9, 2025 is peremptory on Mr. Wallerstein."

[10] Mr. Wallerstein was not in attendance at today's hearing. He has filed no materials with the Court for this motion, notwithstanding that he was served with the motion record by e-mail on September 9, 2025.

[11] Mr. Wallerstein did not have counsel in court today on his behalf. Mr. Williams, a licensed paralegal that works with Mr. Wallerstein, asked for an adjournment. The reason given was that Mr. Wallerstein was apparently rushed to the hospital that morning to receive an MRI or other scan. Mr. Williams had no further submissions on behalf of Mr. Wallerstein.

[12] While I have permitted Mr. Williams to speak to his matter twice on Mr. Wallerstein's behalf, it is not clear to me that he has standing to do so as a licensed paralegal. The Bankruptcy Court is part of the Superior Court of Justice. I was unable to find any reference on the Law Society of Ontario's website to paralegals having standing to appear in the Superior Court of Justice (other than Small Claims Court).

[13] Even if I permit Mr. Williams to make submissions to the Court, and take his submissions at face value, I am not prepared to grant his request for a further adjournment of this hearing.

[14] Whether to grant or refuse a request for an adjournment is a discretionary decision. In declining to grant an adjournment, a judge may rely on a range of factors, including a lack of compliance with prior court orders, previous adjournments that have been granted, previous peremptory hearing dates, the desirability of having the matter decided and a finding that an applicant is seeking to manipulate the system by 'orchestrating delay'. Denying an adjournment solely because a hearing has been designated peremptory may not be appropriate.

[15] I do not believe an adjournment would be a fair or reasonable result. This hearing date was made peremptory on Mr. Wallerstein. Mr. Wallerstein has had a month to respond to the motion and has taken no steps whatsoever to file any evidence, cross-examine Mr. Ciabarri, or file written submissions in response to the motion. I believe that there is a strong need to have this matter dealt with today, as the record shows that the owners have made no payments on the loan since July 2023, Mr. Ciabarri has been attempting to exercise his legal rights to enforce on the Property since July 2025, only to have that enforcement delayed by a last minute unsuccessful attempt to stay the execution that was dismissed by Justice Centa, an immediate filing of a consumer proposal after the stay was refused, and a prior adjournment request.

[16] While I have sympathy for Mr. Wallerstein and whatever health issues he may be experiencing today, he took no steps prior to today to actively respond to this motion, and I believe any further delay would unfairly prejudice Mr. Ciabarri.

Stay of Proceedings and Secured Creditors

[17] Mr. Wallerstein has filed a consumer proposal with his administrator. Subsection 69.2(1) of the BIA provides on the filing of a consumer proposal, no creditor has any remedy against the debtor or the debtor's property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy until (a) the consumer proposal or the amended consumer proposal, as the case may be, has been withdrawn, refused, annulled or deemed annulled, or the administrator has been discharged.

[18] This section is subject to subsection 69.2(4), which provides that the filing of a consumer proposal does not prevent a secured creditor from realizing or otherwise dealing with his security in the same manner as he would have been entitled to realize or deal with it if this section had not been passed, unless the court orders otherwise.

[19] Mr. Ciabarri asks for a declaration that, as he is a secured creditor with a charge over the Property, he is exempt from the operation of the stay of proceedings and is entitled to exercise his rights as a secured creditor without the need for a lifting of the stay.

[20] I do not accept this argument. Based on the record before me, I accept that, as Mr. Ciabarri registered a charge on the Property on December 9, 2021, he is a secured creditor for the purposes of the BIA. However, the key issue here is whether the steps that Mr. Ciabarri wishes to take constitute "realizing or otherwise dealing with his security".

[21] Mr. Ciabarri has cited no case law that sets how the phrase "realizing or otherwise dealing with his security" has been interpreted by the court.

[22] In determining the meaning of a statutory provision, the court is to consider the words used in the legislation in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the statute, the object of the statute, and the intention of Parliament.

[23] In my view, the steps Mr. Ciabarri wishes to continue to take do not constitute steps in realizing his security. He is not attempting to complete a sale of the Property by way of power of sale under the Mortgages Act. He is not attempting to exercise any right he may have to enforce on the property under the terms of the charge or related documents.

[24] Mr. Ciabarri wishes to take steps to enforce on the Judgment he obtained, by having the Sheriff, an officer of the Court, enforce the order for possession. As set out in subsection 141(1) of the Courts of Justice Act, orders of a court arising out of a civil proceeding and enforceable in Ontario are directed to a sheriff for enforcement.

[25] While I understand that obtaining vacant possession of the Property is a necessary step to allow Mr. Ciabarri to attempt to sell the Property by way of power of sale under the terms of his charge and the Mortgages Act, I do not believe that this changes the true nature of what Mr. Ciabarri wishes to do at this stage, which is to enforce on a term of an order of the Court issued in a proceeding where he obtained judgment for payment of debt and order for possession of the Property.

[26] As a result, I dismiss the request made by Mr. Ciabarri for a declaration that the stay of proceedings in subsection 69.2(1) of the BIA does not apply to his request for the Sheriff to evict the owners of the Property in accordance with the terms of the Judgment.

Lifting of the Stay of Proceedings

[27] Section 69.4 of the BIA provides that the Court may lift the stay of proceeding at the request of a creditor where the Court is satisfied that: (a) the creditor or person is likely to be materially prejudiced by the continued operation of those sections; or (b) it is equitable on other grounds to make such a declaration.

[28] On a lift stay motion, the role of the Court is to ensure that there are sound reasons, consistent with the scheme of the BIA, to relieve against the automatic stay. The Court maintains a wide discretion to lift the stay based on the particular facts of the case.

[29] Material prejudice arises when the bankruptcy/insolvency would treat a creditor unfairly, differently or in some way worse than other creditors. Material prejudice can arise from the size of the debt and the expected loss.

[30] Based on my review of the record, I am satisfied that Mr. Ciabarri would be materially prejudiced if the stay was not lifted to allow for the eviction process to be completed. Mr. Ciabarri has received no payments from the owners of the Property since July 2023, and it appears that the second mortgage on the Property is also in default. Mr. Wallerstein's statement of affairs shows $8,000 owing to the City of Toronto for taxes, which may impact the amount that Mr. Ciabarri is able to recover on his secured loan if he cannot proceed with enforcement. If the stay is not lifted, Mr. Ciabarri will likely have difficulty in enforcing on his security, since the owners will remain in possession of the Property.

[31] Additionally, the situation faced by Mr. Ciabarri is similar to that faced by a landlord who has an eviction order from the Landlord and Tenant Board and is faced with a stay of proceeding from a tenant's insolvency filing. This Court has consistently found that a landlord was materially prejudiced by a stay and lifted the stay of proceeding to allow for a landlord to continue with an eviction as provided for in an order of the Landlord and Tenant Board.

[32] As I have found that Mr. Ciabarri will be materially prejudiced by the continuation of the stay, I do not need to consider whether it is equitable on other grounds to lift the stay.

Disposition

[33] For the reasons set out above, I dismiss Mr. Ciabarri's request for a declaration that he is exempt from the stay of proceedings, but find that he would be materially prejudiced by a continuation of the stay and hereby lift the stay to allow him to continue with the eviction process.

[34] Order to go as electronically amended and signed by me.

Associate Justice Rappos

Date: October 10, 2025