



COURT OF APPEAL FOR ONTARIO

CITATION: Krates Keswick Inc. v. Crate, 2017 ONCA 915

DATE: 20171127

DOCKET: C63431

Sharpe, van Rensburg and Brown JJ.A.

BETWEEN

Krates Keswick Inc.

Plaintiff (Respondent)

and

Steven Crate, Gregory Crate and Lynn Joanne Marko

Defendants (Appellants)

Gregory Sidlofsky, for the appellant

Mark Dunn and Kirby Cohen, for the respondent

Heard and released orally: November 23, 2017

On appeal from the order of Justice Glenn A. Hainey of
    the Superior Court of Justice, dated January 23, 2017.

REASONS FOR DECISION

[1]

The respondent
, Krates Keswick Inc., purchased and took
    assignments of three loans made to the appellants and some Crate family
    companies, which went into receivership. Loan 1 was guaranteed by the
    appellants. Loan 2 was made to the appellants as borrowers; it was not secured.
    Loan 3 was guaranteed by the appellant, Marko. The guarantors provided
    collateral security for their guarantees, which included mortgages on 210
    Wynhurst and the Marko Lands. The Respondent sought and obtained Judgment
    against the appellants on the loans. The motion judge also granted the
    respondent possession of the Marko Lands. The motion judge dismissed the
    appellants counterclaim and refused to stay the enforcement of the Judgment.
    The appellants appeal.

[2]

We see no error in the motion judge granting Judgment
    in the amounts specified for Loans 1, 2 and 3. Nor do we see any error in the
    Judgment granting possession of the Marko Lands to KKI and dismissing the
    counterclaim.

[3]

However, in respect of the motion judges
    refusal to stay the enforcement of the Judgment concerning the amounts of Loans
    1, 2 and 3, important facts concerning the lands that stand as security for
    Loans 1 and 3 have emerged in two recent decisions of Myers J.  This
    information was not before the motion judge.

[4]

By reasons dated November 17, 2017 Myers J.
    vested in the respondent title to 210 Wynhurst, one of the properties that
    stands as security for Loan 1. He also valued that land at $1.09 million and
    allocated 50% of the remaining Receivers fees to that land. There is no
    dispute that the resulting net value of 210 Wynhurst will reduce the amount
    outstanding under Loan 1.

[5]

By reasons dated October 17, 2017 Myers J. held
    that beneficial title to the Marko Lands was held by the appellants on
    resulting trust for one of their family companies and, as a result of the receivership
    proceedings, is now held on resulting trust for the respondent. The parties
    disagree as to whether the appellants will be able to establish any credit
    against the amount of Judgment in respect of Loans 1 and 3 for the value of the
    Marko Lands. A further proceeding is required to determine that issue.

[6]

Given this new information, we conclude that it
    would be just and reasonable to stay the enforcement of paras. 1 and 3 of the
    Judgment relating to the secured Loans 1 and 3 until it is determined what, if
    any, reduction in the amounts payable under the Judgment the appellants may be
    entitled to by reason of the value of the Marko Lands. Consequently, we would
    stay the enforcement of paras. 1 and 3 of the Judgment until such determination
    has been made. Since Loan 2 was unsecured, we would not interfere with the
    motion judges refusal to grant a stay of enforcement of the amount of that
    loan, as set out in para. 2 of the Judgment.

[7]

There shall be no costs of the appeal. We see no
    basis to interfere with the costs of the motion below.

Robert
    J. Sharpe J.A.
K. van Rensburg J.A.
David Brown J.A.


