



COURT OF APPEAL FOR ONTARIO

CITATION: 7084421 Canada Ltd. v. Vinczer,
    2020 ONCA 829

DATE:  20201217

DOCKET: M51970 (C68637)

Brown J.A.
    (Motion Judge)

BETWEEN

7084421
    Canada Ltd.

Plaintiff

(Respondent/Moving
    Party)

and

Attila Vinczer, Peter Vinczer, and Katalin Vinczer

Defendants

(Appellants/Responding
    Parties)

Gerald
    Anthony, acting in person and on behalf of
the moving
    party,
7084421 Canada Ltd.

Attila Vinczer, acting in person

Heard: in writing

REASONS
    FOR DECISION

OVERVIEW

[1]

The respondent, 7084421 Canada Ltd. (the
    Plaintiff), moves for various orders designed to move this appeal along and
    allow the Plaintiff to take possession of two mortgaged properties, 330 Premier
    Place, Newmarket and 462 Lake Drive South, Keswick (the Properties), which
    are owned by the appellants, Attila Vinczer and Peter Vinczer. I shall refer to
    Attila and Peter, together with Katalin Vinczer, who guaranteed the mortgages,
    as the Defendants.

THE MORTGAGE ENFORCEMENT ACTION

[2]

The essentials of the action underlying this
    appeal were summarized by Boswell J. at paras. 2, 3, 10 and 11 of his January
    15, 2020 reasons (2020 ONSC 217):

The plaintiff loaned the sum of $1,023,448.66
    to the defendants on July 31, 2017 on the strength of a blanket first mortgage
    over two properties: 462 Lake Drive South, Keswick and 330 Premier Place,
    Newmarket.

The mortgage, as registered, was in the amount
    of $1,033,157 which was the amount originally negotiated. A slightly lower
    figure was actually advanced. The term was six months. The mortgage provided
    for interest to be paid the rate of 12% which worked out to monthly payments of
    $10,331.57. The interest was fully pre-paid, meaning six months worth of
    interest payments were deducted from the funds actually advanced to the
    defendants.



[The mortgage] was not repaid. It went into
    default in early 2018. The plaintiff sued for payment and possession of the
    mortgaged premises in August 2018. The defendants failed to serve and file a
    Statement of Defence.

Default judgment was signed by the registrar
    of the court on November 9, 2018 for payment of a little over $1.2 million as
    well as possession of the mortgaged properties.

[3]

The Defendants motion to set aside the default judgment
    was brought sometime in the first part of 2019 but not heard by Boswell J. until
    November 2019. The Plaintiff was represented by counsel. Attila Vinczer
    appeared in person and argued the motion on behalf of all the Defendants. Peter
    and Katalin, Attilas elderly parents, did not appear.

[4]

In para. 7 of his reasons, Boswell J. described
    the positions of the parties on the motion before him:

The manner in which the motions proceeded was
    not a model of clarity. Though the defendants formally sought an order setting
    aside the default judgment,
it became apparent during
    argument that what both sides really wanted was for the court to decide the
    issues between them in a summary fashion and to, if necessary, vary the default
    judgment accordingly
. [Emphasis added.]

[5]

Boswell J. found that: (i) the explanation for
    the Defendants default was weak; (ii) the Defendants did not provide a
    satisfactory explanation about why it took them three months to do anything
    about the default judgment; and (iii) for the most part, the Defendants have
    not raised an arguable defence: at paras. 40, 42 and 43. He explained his
    conclusion on whether the Defendants had demonstrated an arguable defence, at
    paras. 50 and 51:

Canadian common law respects private ordering.
    That is a fancy way of saying that our law generally respects and enforces
    agreements reached between competent parties. Parties are free to enter good
    deals and bad deals. The deal entered into between the plaintiff and the
    defendants is bad for the defendants. In fact, it is downright ugly. Mr.
    Vinczer knows that and is trying his best to find a way around some of its
    worst features. But the fact is, the defendants were desperate at the time they
    borrowed from the plaintiff. And that desperation led them to enter a mortgage
    deal that bought them some time but at immense cost.

Mr. Vinczers arguments otherwise focused on
    two elements of the balance claimed by the plaintiff: the imposition of three
    months bonus interest and a management fee in excess of $50,000. I find that
    there are arguable defences to both, grounded in the terms of the contract
    itself and in the law of unconscionability.

[6]

After weighing the appropriate factors, Boswell
    J. concluded that he should not set aside the default judgment stating, at
    para. 55:

On balance, I am not persuaded that the
    default judgment should be wholly set aside.  My conclusion is based on the
    following summary of the prevailing circumstances:

(a)     The defendants offered a weak explanation for not defending
    the plaintiffs claim;

(b)     The defendants failed to act expeditiously to set aside the
    default judgment once it came to their attention;

(c)     While the defendants have arguable defences to some of the
    fees charged after default, these fees represent only a small fraction of the
    amount outstanding;

(d)     The mortgage has been in default for almost two years. The
    parties are agreed that the court is able to determine any live issues between
    them on the current evidentiary record and the court was invited to do so.

In my view, it is in the interests of justice
    to accept the parties invitation to resolve the live issues and to otherwise
    leave the judgment, amended as appropriate, in place.

[7]

Boswell J. then proceeded to determine the live
    issues between the parties. He found, at paras. 62 and 63:

The original principal amount is conceded. 
    The correct principal outstanding is $1,023,448.66.

In terms of the other two disputed issues, I
    find that the plaintiff is not entitled to the three months bonus interest,
    but is entitled to the management fees as charged.

[8]

In the result, by order dated January 15, 2020
    (the Boswell Order), Boswell J. refused to set aside the default judgment but
    varied its amount stating, at paras. 81 and 82:

In summary, for the reasons expressed, I am
    not prepared to set aside the default judgment. I am prepared to vary it, again
    for the reasons expressed. I find the following amounts outstanding on the
    mortgage:

(a)     Principal                                       
    $1,023,448.66

(b)     Accrued
    interest to January 15,

2020 (714 days @12%)                     240,244.06

(c)     Management Fees
51,172.43


Total
                   $1,314,865.15

The plaintiff is entitled, therefore, to judgment
    in the amount of $1,314,865.15 and to possession of the mortgaged premises. The
    judgment will continue to accrue interest at 12% per annum.

THE APPEAL OF THE BOSWELL JUDGMENT TO THE
    DIVISIONAL COURT

[9]

The Defendants thereupon appealed the Boswell
    Judgment to the wrong court. On February 6, 2020 they filed a notice of appeal
    to the Divisional Court. I do not understand why the Divisional Court accepted
    the appeal. The judgment under appeal was for over $1.3 million, vastly in
    excess of the jurisdiction of the Divisional Court:
Courts of Justice Act
,
    R.S.O. 1990, c. C.43, s. 19(1.2).

[10]

In her August 14, 2020 reasons (2020 ONSC 4853),
    to which I shall come shortly, J. Speyer J. stated: The procedural irregularities
    surrounding this motion are numerous, likely because the appellants are
    self-represented, but also because it appears from the materials filed that the
    court has contributed to the state of affairs that caused the appellants to
    bring this motion. For, upon accepting the notice of appeal, the Registrar of
    the Divisional Court in Oshawa issued, on requisition by the Defendants, two
    certificates of stay: the first dated February 6, 2020, and a slightly amended
    one dated February 10, 2020 (collectively the Certificate). The Certificate
    certified that the Boswell Order had been stayed by delivery of the notice of
    appeal. The Certificate, apparently prepared by Attila Vinczer, contained a
    major omission; it did not state, as required by r. 63.03(5), whether the stay was
    under r. 63.01(1) (the automatic stay of an order for the payment of money) or
    by order under r. 63.02(1).

[11]

The automatic stay rule did not apply to the
    Boswell Order because it was, in its essence, an order that refused to set
    aside a default judgment: r. 63.01(2). Accordingly, to obtain a stay of the
    Boswell Order, the Defendants were required to obtain an order from a judge: r.
    63.01(2) and 63.02(1). They had not obtained such an order. Consequently, the
    Registrar should not have issued the Certificate; it was a mistake to do so.

[12]

Notwithstanding the Certificate, the sheriffs
    office in Newmarket sought to enforce the Boswell Order by evicting the
    Defendants from the mortgaged Premises.

THE DEFENDANTS
EX PARTE
MOTION
    BEFORE J. SPEYER J.

[13]

Attila Vinczer brought an
ex parte
motion in writing before J. Speyer J. to stay the eviction, who granted an
    order dated August 14, 2020 (the Speyer Order). I would observe,
    parenthetically, that I do not understand why the motion judge entertained an
ex
    parte
motion in the circumstances. The Plaintiff loaned the Defendants a
    significant amount of money, had taken security, was faced with a default, and
    sought possession of the secured Properties. The Plaintiff was entitled to be
    heard on Mr. Vinczers motion.

[14]

In any event, the motion judge concluded that
    the Defendants appeal of the Boswell Order was in the wrong court. Pursuant to
CJA
s. 110, the motion judge transferred the appeal to this court and
    directed the Defendants to serve and file an amended notice of appeal to this
    court by August 21, 2020. The Defendants did not do so until September.

[15]

Second, the motion judge concluded that she need
    not entertain the Defendants request for an interim stay order of the Boswell Order
    because the Certificate is an order of the Superior Court, and it is binding
    until and unless it is set aside: at para. 15. With respect, that is not the
    case. The Certificate is not an order. If a r. 63.03(4) certificate is issued
    where the stay is under r. 63.01(1), the automatic stay rule, then the
    certificate simply certifies the fact that the order under appeal is subject to
    the automatic stay rule.

[16]

However, in the present case the Boswell Order
    is, in essence, an order refusing to set aside a default judgment. For such an
    order, a stay first requires an order of a judge under r. 63.02(1) which, if
    given, would permit the Registrar to certify that such an order had been made. The
    Defendants never sought a stay order from a judge. The Certificate should not
    have been issued without such an order. Consequently, the Certificate is of no
    effect.

THE APPEAL

[17]

The Defendants appeal has been transferred to
    this court and a file opened for the appeal: C68637.

[18]

The Defendants notice of appeal contains approximately
    60 grounds of appeal. None take issue with the simple reality that the
    Defendants owe the Plaintiff at least the amount of the funds advanced,
    approximately $1 million. Most relate to the Defendants dispute about the
    precise repayment amount due under the mortgages which, of course, grows with
    every passing day. Ground 54 identifies the true magnitude of the dispute:

The court erred in law by failing to address
    and recognize the triable issues being beyond merely fees that are not
    insignificant, but over $80,000.00. A substantial amount.

[19]

I have read the affidavits filed by Gerald
    Anthony and Attila Vinczer on this motion. Based on that review, Boswell J.s
    observation that the mortgage deal was bad for the Defendants who were trying
    to find a way around some of its worst features captures the essence of the
    position laid out by Mr. Vinzcer in his affidavit. Mr. Vinczer admits that the
    Plaintiff advanced mortgage funds but takes issue with several mortgage terms
    that increased the discharge amount.

[20]

In his affidavit, Mr. Vinczer identifies some of
    the repayment charges in the mortgages with which he takes issue. He characterizes
    the mortgages as frauds. He also paints himself as a victim of fraud by the
    Plaintiff. At the same time, Mr. Vinczer offers no plan about how or when the
    Defendants will repay any part of the amounts they concede were loaned to them
    by the Plaintiff.

[21]

I will now consider the specific relief
    requested by the Plaintiff on this motion.

THE RELIEF SOUGHT ON THIS MOTION

Representation of the parties

[22]

Mr. Anthony, the president and sole shareholder
    of the Plaintiff, seeks leave under r. 15.01(2) to represent the corporation.
    He is a former paralegal. His materials are focused. I am satisfied he has the
    ability to represent the corporation on this appeal and I so order.

[23]

The Plaintiff also seeks an order that Peter and
    Katalin Vinczer be represented or be removed from the appeal. I will not make
    such an order. They are parties to the default judgment and are named
    appellants.

[24]

However, it appears that Attila Vinczer is
    preparing and filing all the Defendants materials. To ensure that Peter and
    Katalin Vinczer are aware of these proceedings,
I order
    that Attila, Peter, and Katalin Vinczer each sign the factum the Defendants
    will file on the appeal.

Review of the Speyer Order

[25]

The Plaintiff seeks an order extending the time
    for serving a motion for a panel review of the Speyer Order. As J. Speyer J.
    was sitting as a judge of the Divisional Court, any such motion would have to
    be brought before a panel of the Divisional Court, not this court:
CJA
,
    s. 21(5). I cannot grant such an order.

Security for costs

[26]

The Plaintiffs notice of motion seeks an order
    for security for costs. The Plaintiff is, in essence, self-represented, so its
    recoverable costs of the appeal would be low. In any event, the Plaintiffs
    materials do not contain a bill of costs so there is no basis on which I could
    order security for costs.

Dismissal of the appeal

[27]

The Plaintiffs seek an order dismissing the
    appeal. Quite apart from the issue of my jurisdiction as a single judge to make
    such an order, I think the more appropriate approach is to fix a date for the
    perfection of the appeal.

[28]

This is an appeal from a final order of a motion
    judge. Any required transcripts are ready. The Defendants initiated their
    appeal, albeit in the wrong court, in early February but still have not
    perfected it. That is unacceptable. Even making allowance for the suspension of
    filing deadlines enacted in response to he pandemic, the Defendants conduct
    has all the hallmarks of stall tactics. Accordingly, I order the Defendants to
    perfect this appeal on or before January 15, 2021. If they do not do so, then I
    order that the Defendants are barred from bringing any further motion in this
    court without leave of a judge, and it will be open to the Plaintiff to move in
    writing before a panel for the dismissal of the appeal.

Setting aside the Certificate

[29]

The Plaintiff seeks an order setting aside the
    Certificate. He is entitled to that order. As explained above, the Registrar
    should not have issued the Certificate because the Defendants had appealed to
    the wrong court and a stay of the Boswell Order required an order of a judge. I
    set aside the Certificate.

[30]

If the Defendants wish to seek a stay of the
    Boswell Order pending appeal, they must bring the appropriate motion under r.
    63.02(1). If the Defendants bring such a motion, no doubt the judge of this
    court will review the Defendants evidence to see whether they disclose (i) why
    they are not repaying the significant sum of money they concede the Plaintiff
    lent to them, and (ii) the details of their current financial situation so that
    the court can assess their explanation for not repaying
any
of the monies advanced.

Writ of Possession

[31]

The Plaintiff seeks writs of possession for 330
    Premier Place, Newmarket and 462 Lake Drive South, Keswick. Para. 2 of the default
    judgment ordered that vacant possession of the two properties is hereby
    granted to the Plaintiff forthwith. The Boswell Order did not set aside para.
    2 of the default judgment, which remains in operation; no order has stayed its
    operation pending the appeal.

[32]

However, a court may grant leave to issue a writ
    of possession only where it is satisfied that all persons in actual possession
    of any part of the land have received sufficient notice of the proceeding in
    which the order was obtained to have enabled them to apply to the court for
    relief: r. 60.10(2). The order is the order entitling a party to
    possession: r. 60.10(1). The order entitling the Plaintiff to possession arose
    from a proceeding in the Superior Court of Justice. There is nothing in the
    record on this motion regarding proof of service to persons in actual
    possession of the Properties in the proceeding from which the default judgment
    and Boswell Order arose. Consequently, I cannot grant a writ of possession. The
    Plaintiff must seek such writs from the Superior Court of Justice.

DISPOSITION

[33]

By way of summary, I grant the Plaintiffs
    motion in part and make the following orders:

(i)

Gerald Anthony, the president and sole
    shareholder of the Plaintiff, may represent the corporate Plaintiff on this
    appeal;

(ii)

Attila, Peter, and Katalin Vinczer must each
    sign the Defendants factum;

(iii)

The Defendants must perfect this appeal on or
    before January 15, 2021. If they do not, then I order that the Defendants are
    barred from bringing any motion in this court without leave of a judge, and it
    will be open to the Plaintiff to move in writing before a panel for the
    dismissal of the appeal; and

(iv)

The Certificate is set aside.

[34]

I decline to grant the other relief requested in
    the notice of motion.

[35]

The Plaintiff is entitled to its costs of the
    motion from the Defendants, which I fix in the amount of $500, payable by the
    Defendants by December 31, 2020.

David Brown J.A.


