2013 ONSC 691, 2013 ONSC 691

CITATION : Royal Bank of Canada v Rose, 2013 ONSC 691 COURT FILE NO.: 12-36895 DATE: February 4, 2013 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Royal Bank of Canada Plaintiff and David Foster Rose Defendants Linda Rose BEFORE: The Honourable Mr. Justice Robert Nightingale COUNSEL: James A. Riewald, for the Plaintiff Paul E. Trenker, for the Defendants HEARD: January 17, 2013 E N D O R S E M E N T [ 1 ] The Plaintiff Bank brings this motion for

summary judgment under Rule 20 against the Defendants in respect of an alleged default on its mortgage on their jointly held property in North Bay, a line of credit and a visa credit account. [ 2 ] Rule 20 of the Ontario Rules of Civil Procedure provides that a Plaintiff may after the delivery of a Statement of Claim and Statement of Defence move with supporting affidavit material or other evidence for

summary judgment on all or part of the claim in the Statement of Claim. The Defendants in response to the Plaintiff’s affidavit material or other evidence supporting motion for

summary judgment may not rest solely on the allegations or denials in their Statement of Defence but must set out in affidavit material or other evidence specific facts showing that there is a genuine issue requiring a trial. The Court shall grant

summary judgment if the Court is satisfied there is no genuine issue requiring a trial with respect to the defence. In determining whether there is a genuine issue requiring a trial, the Court shall consider the evidence submitted by the parties and the Court can weigh the evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence. [ 3 ] The Plaintiff’s affidavit evidence and supporting documents to that affidavit clearly confirmed that the mortgage was secured against the Defendants’ house and registered on November 6, 2008 and was payable in bi-weekly installments of principle and interest

of $354.39 until November 4, 2013 at which time the balance of the mortgage loan was payable. The Homeline Plan Agreement provided that on default, the mortgage loan would at the Plaintiff’s option became payable which agreement was signed by the Defendants on October 24, 2008.

The Defendants admitted that in their Statement of Defence. [ 4 ] The Plaintiff’s affidavit and supporting materials also confirmed that it had extended a Royal Credit Line to the Defendants also pursuant to the Homeline Plan Agreement and that upon default, the entire balance of the Royal Credit Line together with interest would at the Plaintiff’s option become due and payable.

The Defendants again admitted the details of the Royal Credit Line and Homeline Plan Agreement in their Statement of Defence but plead they had no or incomplete knowledge of the Homeline Plan Agreement that upon default, the entire balance of the Royal Credit Line at the option of the Plaintiff becoming due and payable.

The Defendants did not deny that it did and the document confirms that it did. [ 5 ] Lastly, the Plaintiff’s affidavit and supporting documents confirm that the Defendants were indebted to the Plaintiff pursuant to a Visa Credit Card in favour of the Plaintiff and that upon demand, the entire balance of the Visa Credit Card would at the Plaintiff’s option become due and payable.

The Defendants again did not deny that in their Statement of Defence but simply plead that they had no or incomplete knowledge with respect to that credit card agreement. [ 6 ] The Plaintiff’s evidence was clear and uncontradicted that the total amount outstanding on the three debts as of November 2, 2012 together with interest thereon to date of the hearing of the motion on January 17, 2013 was as follows:

a) Mortgage Loan $100,672.94

b) Royal Credit Line $ 42,448.83

c) Visa Credit Card $ 1,861.39 [ 7 ] The Plaintiff’s affidavit also confirmed that the Plaintiff would be entitled to possession of the mortgaged property under the mortgage in the event of default. [ 8 ] The issue being disputed by the Defendants is whether there was a default under the mortgage which would allow the Plaintiff Bank to demand payment of the outstanding indebtedness under each of the three aforementioned debts. [ 9 ] The clear evidence from the Plaintiff is that it was notified by the Corporation of the City of North Bay that a tax arrears certificate had been registered against the Defendants’ property for property taxes.

The Defendants admitted in their affidavit that they also received notice of that from the City in May 2012. The Plaintiff then sent a letter to the Defendants dated June 8, 2012 asking the Defendants to immediately pay the arrears of property taxes failing which it would do so to protect its interests and avoid a tax sale of the property by the City.

The Defendants swore that in or about June 2012 they never heard anything from the Plaintiff regarding the property tax arrears but that was clearly not the case based on the Plaintiff’s letter of June 8, 2012 addressed to the Defendant David Rose. [ 10 ] The clear inference from the affidavits of the parties is that these arrears of taxes of almost $15,000 were not paid by the Defendants despite the demand by the Plaintiff.

As a result, the Plaintiff’s lawyers sent a letter to the Defendants of August 17, 2012 wherein the Defendants were advised that the Plaintiff had paid the tax arrears of $14,957.30 and that there were additional mortgage arrears of $800.62 and $553.38 in legal fees for total outstanding arrears of $16,311.30.

The Plaintiff demanded payment of the total arrears and advised the Defendants that pursuant to the terms of the Homeline Plan Agreement that on default in payment of any portion of the money thereby outstanding, the original mortgage loan at the Plaintiff’s option became payable and the Bank could terminate the Homeline Plan Agreement.

The Plaintiff also demanded payment of the Visa account. [ 11 ] The terms of the Plaintiff’s mortgage with the Defendants as indicated in its affidavit contained the usual term that the Defendants were required to pay all property taxes on the mortgage property as they fell due and if they did not, the Plaintiff could pay those unpaid property taxes whereupon the Defendants were required to pay it the amount it paid when asked.

The mortgage further stated that a default occurs under the mortgage if the Defendants did not keep any of their promises under the mortgage loan and if they did not, the outstanding amount under the mortgage would become immediately due and payable if the Plaintiff chose. [ 12 ] The Defendants’ Statement of Defence was very brief and simply stated that they denied the allegations pertaining to the issue of default contained in the Statement of Claim and that without limiting the generality of the foregoing , they denied that they were in default of any obligation to the Plaintiff.

They also denied that notice of default or demand had been provided to them with respect to any alleged default as of the issuance of the Statement of Claim.

In particular, there were no allegations or facts provided regarding their not understanding the mortgage documents they signed in 2008 or of any misrepresentation by the Bank with respect to their entering into the mortgage agreement nor were there any allegations of non est factum or that the mortgage agreement should be rectified to reflect a different agreement than what was signed. [ 13 ] The affidavit of the Defendants disputing the Plaintiff’s claim for

summary judgment simply consisted of bald allegations and lacked specific details and provided no supporting documents or other evidence. [ 14 ] The affidavit simply suggested that the Defendants had a mortgage with the Plaintiff Bank since 1992 which was renewed from time to time thereafter with the last renewal being in 2008.

The Defendants stated that in all times prior to 2008, their periodic mortgage payments to the Plaintiff included a component on account of the real property taxes; hence the Plaintiff bank paid the property taxes from the mortgage payments received. [ 15 ] The Defendants said that when they last renewed their mortgage in 2008, they attended at the Royal Bank office on Main Street West in North Bay and dealt with a bank representative there as they had done at all times in the past. They did not mention who that bank representative was.

They then said that they understood that their property taxes would continue to be paid from the mortgage

payment installments, they sought no change in that arrangement and they were advised of no change of this arrangement. They thencontinued to pay their mortgage assuming that the Plaintiff was paying their property taxes. [16] The Defendants admitted receiving a Notice of Tax Arrears from the City of North Bay in May 2012 which they now understoodreferred to arrears of $14,957.30. Their affidavit ,again without any supporting documents, simply went on to say the following: 10. On receipt of that notice, I attended at City Hall in North Bay to make enquiries as to the issue.

I advised the city staff thatpayments on this account were to have been made by the Royal Bank. I was told by the City staff that they would look into this issueand advise in due course. 11. In or about June of 2012, not hearing anything further from the City of North Bay (and never having heard anything from theRoyal Bank) I re-attended at City Hall and again spoke to the staff. I was advised that there were, in fact, no arrears. 12. I heard nothing from the Royal Bank concerning this issue until receipt of the Demand letter, dated August 17, 2012 (Exhibit“B”/Tab B, Affidavit of Jodi K. Zimmerman).

As of that date, all payments due the Royal Bank from my wife and myself were in goodstanding. 13. On receipt of the Demand letter, I attempted to contact the Royal Bank to determine the standing of my account, by way oftelephone using an 800 number of the Bank. I was advised by the representative that she was unable to find our account. 14.

Subsequent to receipt of the August 17th Demand letter, the Royal Bank has ceased taking periodic payment due the Royal Bankfrom our chequing account, notwithstanding that there were funds in that account to cover all payments. [17] The affidavit evidence discloses no more than mere bald allegations of the Defendants that are lacking any detail of the type ofevidence that would be expected in their defence.

In particular, the allegation that they never heard anything from the Royal Bank in orabout June 2012 about the property tax arrears was simply not true given the Plaintiff’s letter to them of June 8, 2012. [18] They furthermore suggested an attempt to contact the Plaintiff Bank “by way of telephone using an 800 number of the bank” and were told their account couldn’t be located which makes no logical sense when they had earlier in their affidavit confirmed thatthey renewed that mortgage at the Royal Bank office on Main Street West in North Bay and dealt with a bank representative there.

Onewould have thought that the Defendants would have actually attended at the North Bay branch office of the Bank to try to resolve thematter or at least find out from that branch what was happening regarding the property tax issue but there was no evidence of that. [19] The Defendants furthermore produced no supporting documents whatsoever to confirm they in fact had the money in their bankaccounts to cover their mortgage payments up to and since August 17, 2012. [20] They also produced no documents whatsoever to suggest that their mortgage payment to the Plaintiff Bank as of October 2008was to include the payment of the property taxes as it supposedly had been in the past including any mortgage documents previous to thatyear.

The documents they actually signed in October 2008 at the Plaintiff’s bank clearly confirmed that the mortgage was for payment ofprinciple and interest only, not including property taxes.

Again, the Defendants didn’t even plead any potential defences of rectification,non est factum, mistake, misrepresentation or other relevant defences in their Statement of Defence. [21] The clear inference from the Defendant’s affidavit that they never even attempted to go back to the Plaintiff’s branch in NorthBay to discuss the entire matter even though they still reside there and obviously have had the name of the Plaintiff’s representative whooriginally dealt with them regarding the mortgage documents strains the credibility of the Defendants, to say the least.

A logicalinference from their affidavit material suggests that the real reason for the Defendants not reimbursing the Plaintiff for the property taxarrears that it had paid is because they simply didn’t have the money to do so.

Defendants’ Counsel during his submissions candidly andfrankly conceded that the Defendants don’t have the funds to pay those arrears owing to the Plaintiff. [22] In my view, this is a case that involves a defence that is shown to be without merit and secondly, one in which the trial process isnot required in the interest of justice as contemplated by Rule 20. [23] This case is not complex and the record is not voluminous and the motion raised only one narrow issue.

Given the nature of thePlaintiff’s evidence, the Defendants are required and the Court is entitled to assume that they have advanced their best case and putforward all of the evidence on which they rely to make their case. The Defendants have the burden when resisting the motion forsummary judgment to “lead trump or risk losing”; Combined Air Mechanical Services Inc v Flesch

(2011) O.J. No. 5413; Byfield v TheToronto-Dominion Bank et al

(2012) ONSC 49 . The Defendants have simply failed to meet the evidentiary burden required onthem to establish a defence that is shown to have merit. [24] In addition, based on a full appreciation of all the evidence and issues provided and the record before me, there is no need for thePlaintiff being required to proceed to trial to establish its claims against the Defendants given that I am able to make all of the dispositivefindings by way of

summary judgment at this stage. Combined Air Mechanical Services v Flesch, supra; Hauwlay et al v Pennington etal

(2012) ONSC 595 . In particular default under the mortgage occurred when the Defendants failed to pay the Plaintiff for theproperty tax arrears which were clearly the obligation of the Defendants in addition to their paying the monthly payments of principle

and interest. [ 25 ] The Plaintiff is entitled to judgment against the Defendants in the amount of (a)$100,672.94 regarding the mortgage loan as of January 17, 2013 together with post judgment interest thereon at the rate of 2.65% per year from January 17, 2013; (b) $42,448.83 regarding the Royal Credit Line loan as of January 17, 2013 together with post judgment interest thereon at the rate of 3% per year from January 17, 2013; (c) $1,861.39 regarding the Visa Credit Card debt as of January 17, 2013, together with post judgment interest thereon at the rate of 19.99% per year from January 17, 2013. [ 26 ] The Plaintiff is also entitled to an Order for possession of the lands and premises referred to in paragraph 1(

c) of the Notice of Motion together with an Order granting the Plaintiff leave to issue a Writ of Possession with respect to the said premises. [ 27 ] With respect to costs, the parties mortgage loan documents confirm the obligation of the Defendants to pay the Plaintiff’s legal fees and expenses to enforce the terms of the mortgage and obtain possession of the premises on a “solicitor and his own client” basis.

The Plaintiffs are accordingly entitled to their costs on a substantial indemnity basis and if the parties cannot agree on the quantum of those costs, the Plaintiff can provide brief written submissions on its costs of no more than two pages plus their Bill of Costs and supporting dockets within 7 days of this Order with the Defendants to provide their written response within 5 days after that. ___________________________ The Honourable Mr. Justice R. Nightingale DATE: February 4, 2013 COURT FILE NO.: 12-36895 DATE: February 4, 2013

SUPERIOR COURT OF JUSTICE - ONTARIO RE: Royal Bank of Canada and David Foster Rose Linda Rose BEFORE: Mr. Justice R. Nightingale COUNSEL: James A. Riewald, for the Plaintiff Paul E. Trenker, for the Defendants ENDORSEMENT The Honourable Mr. Justice R. Nightingale DATE: February 4, 2013