



COURT OF APPEAL FOR ONTARIO

CITATION: Toronto-Dominion Bank v. Hagey, 2016 ONCA 270

DATE: 20160414

DOCKET: M46265 (C61842)

van Rensburg J.A. (In Chambers)

BETWEEN

The Toronto-Dominion Bank

Plaintiff (Respondent)

and

Betty
    Hagey also known as Betty Mae Hagey,

Kevin Hagey also known as
    Kevin Scott Hagey

Defendants (Appellants)

Allan Rouben, for the appellants

Eric Golden, for the respondent

Heard: April 5, 2016

ENDORSEMENT

[1]

This is a motion for a stay pending appeal under rule 63.02(1)(b) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. The judgment under
    appeal was made in a summary judgment motion by Gordon R.S.J. He granted the
    Banks motion to rectify two mortgages that are registered against adjacent
    properties owned by the appellants. The first property, which consists of 97
    acres, contains their home. This property is registered in the Registry system
    (the Registry Part). The second, a parcel of 100 acres, is vacant, and is
    registered in Land Titles (the Land Titles Part).

[2]

In January 2011, the appellants borrowed $269,250 from the Bank. The Bank
    took as security for the loan a mortgage over each of the two parcels of land,
    and mortgage documents were executed and registered. The terms of the mortgages
    are identical. The mortgages, however, breach s. 50(3)(b) of the
Planning
    Act
, R.S.O. 1990, c. P.13. The breach is a result of the mortgages not
    being registered simultaneously, and not having the Land Titles mortgage
    reference the Registry Part and the Registry mortgage reference the Land Titles
    Part. The Bank moved for summary judgment to rectify the mortgages to accord
    with the parties intention.

[3]

The motion judge concluded that the common intention of the parties was
    that both parcels were mortgaged as security for the Banks loan to the
    appellants. He set out Mr. Hageys explanation for why the mortgage was to
    attach only to the Registry Part (at para. 17), and his reasons for rejecting
    this explanation and for concluding that there was in fact a common intention
    to mortgage both properties (at paras. 21 to 26). This was a finding of fact
    that was open to the judge on the evidence. Indeed, the available evidence overwhelmingly
    supported that conclusion.

[4]

The test for a stay has three parts. The appellants must establish that
    (a) there is a serious question to be determined in the appeal; (b) they would
    suffer irreparable harm if the stay is refused; and (c) the balance of convenience
    favours the granting of the stay:
Circuit World Corp. v. Lesperance
(1997), 33 O.R. (3d) 674 (C.A.), at 676 -677.

[5]

The appellants do not meet the test for a stay.

[6]

First, I see little merit in their appeal. The appellants assert that
    rectification was not available in this case because this was a situation where
    the
Planning Act
was violated when the mortgages were registered on
    different days. The application judge stated at para. 5: the mortgages were
    not registered simultaneously, nor did they contain terms cross-referencing one
    another to indicate that they were, in effect, a single mortgage being
    registered separately under the Land Registry and Land Titles systems. The
    judgment he granted amends each mortgage to refer to the other, and to state
    that it is the intention of the chargor to charge the lands simultaneously. The
    judgment declares that the two mortgages collectively comprise, and have always
    comprised, a single charge of the whole of both parts together. The motion
    judge did not, as argued by the appellants, alter the dates of registration of
    the mortgages. He ordered rectification of the mortgage documents, so that it
    was clear that both parts were mortgaged to the Bank as part of a single
    transaction. The motion judge applied settled principles in granting the
    rectification requested. He ordered rectification of the documents that was
    consistent with the mutual intention of the parties.

[7]

The motion judge made a finding of fact with respect to the parties shared
    intention. He rejected the contrary evidence of Mr. Hagey, which was not
    corroborated by any evidence of his wife in response to the Banks motion.
    Importantly, the motion judge relied on documents the appellants themselves had
    executed, which indicated their intention to mortgage the entire 197 acres as
    security. The decision of a judge ordering rectification, made on proper
    principles, is entitled to deference:
McLean v. McLean
, 2013 ONCA 788,
    118 O.R. (3d) 217, at para. 44.

[8]

There is no merit to the appellants argument that relief ought to have
    been denied because the Bank neglected to notice the violation of the
Planning
    Act
when it originally sought enforcement of the mortgages. The record
    indicates that the mistake occurred through an oversight  the loan was provided
    by the Bank to refinance a loan with another financial institution. This is not
    a case where one party knew or ought to have known of the others mistake and
    sought to take advantage of it. It would be inequitable to refuse rectification
    where the appellants had the benefit of the Bank loan and the parties shared
    intention was that both parcels would stand as security for the loan.

[9]

The appellants counsel also asserts that the summary judgment motion was
    premature in the absence of documentary discovery. I disagree. The record was
    such that the motion judge could make the necessary findings of fact to
    determine the rectification remedy.

[10]

Second,
    the appellants have not established irreparable harm. The appellants counsel
    argues that without a stay their ability to pursue the appeal will be thwarted (relying
    on
Re Regal Constellation Hotel Ltd.
, (2004), 71 O.R. (3d) 355 (C.A.)).
    That case involved the appeal of a vesting order that, in the absence of a
    stay, effected a conveyance of property. The appeal was quashed. Here, it is
    the power of sale proceedings, that have been commenced, and will continue as a
    result of the rectification of the mortgages, that may well result in the
    transfer of the subject properties before the appeal is heard. The right to
    appeal however will not be lost; rather the question is whether the appellants
    would suffer irreparable harm (harm that cannot be compensated for in money).

[11]

While
    the loss of their home might well occasion irreparable harm, the unfortunate
    reality is that the appellants are bankrupt. Even if they were successful in
    their appeal, the properties would vest in their trustee, and only their
    unsecured creditors (of which the Bank would represent 68%) would stand to
    gain. The trustee has not taken any position in the litigation. The appellants
    assert that, if they were successful in the appeal, they would be able to
    negotiate with the trustee to buy back their properties. On the basis of the
    evidence before the court concerning the appellants debts and incomes and the
    value of the properties and their other assets, the prospect of the appellants
    ending up with the properties is entirely speculative and doubtful.

[12]

The
    motion for a stay pending appeal is accordingly dismissed. Costs to the
    respondents. If the parties are unable to agree on the amount, they may provide
    written submissions to the court, limited to five pages each side, within 15
    days.

K. van Rensburg J.A.


