



COURT OF APPEAL FOR ONTARIO

CITATION: Royal Canadian Mortgage Investment
    Corporation v. 1835923 Ontario Ltd., 2020 ONCA 55

DATE: 20200128

DOCKET: C66207

Hoy A.C.J.O., Doherty J.A. and
    Marrocco A.C.J. (
ad hoc
)

BETWEEN

Royal
    Canadian Mortgage Investment Corporation

Plaintiff (Respondent)

and

1835923 Ontario Ltd. and Dudett
    A. Kumar

Defendants (Appellants)

No one appearing for the appellants

George Corsianos, for the respondent

Heard and released orally: January 16, 2020

On appeal from the judgment of Justice Gisele
    M. Miller of the Superior Court of Justice, dated October 30, 2018.

REASONS FOR DECISION

[1]

The appellants, 1835923 Ontario Limited (183)
    and Dudett A. Kumar, appeal the judgment of the motion judge in the respondent
    Royal Canadian Mortgage Investment Corporations mortgage enforcement action.
    The motion judge ordered the appellants to, among other things, pay the
    respondent $626,719.59 on account of principal money, fees and interest to
    October 30, 2018 under the mortgage and deliver possession of the mortgaged rental
    property to the respondent.

[2]

On January 13, 2020, the President of this panel
    denied the appellant 183s request for an adjournment of this appeal and
    ordered that if on January 16, 2020 (the date the appeal was scheduled to be
    heard) Mr. Surinder Kumar or an agent did not appear for 183, and Mrs. Dudett Kumar
    did not appear, the panel would hear the appeal relying on the written
    materials that had been filed by the parties. To ensure that the respondent was
    not perceived as having an advantage over the appellants, counsel for the
    respondent would not be provided with an opportunity to make oral submissions.
    Counsel for the respondent was agreeable to this. The order ensured that the
    matter would be considered on its merits by the full panel.

[3]

This morning, Mr. Kumar sent a letter to this
    court again asking for an adjournment. No one attended for 183 and Mrs. Kumar
    did not attend.

[4]

The history of delay in this matter is set out
    in the reasons for denying the adjournment request on January 13, 2020:
Royal
    Canadian Mortgage Investment Corporation v. 1835923 Ontario Ltd.
, 2020
    ONCA 45. We will not repeat it.

[5]

We have considered the further request for an
    adjournment and see no reason to depart from the order of January 13, 2020.

[6]

Accordingly, we considered the merits of the
    appeal relying on the written materials filed by the parties without oral
    submissions from counsel for the respondent.

[7]

The appellant 183 arranged a second mortgage on
    the property with the respondent. Mrs. Kumar guaranteed this mortgage. The
    first mortgage on the property had matured before 183 arranged the second
    mortgage and had not been paid. The respondents evidence on the summary
    judgment motion was that the respondent was unaware that the first mortgage had
    matured and was in default when 183 requested the second mortgage. Mr. Kumars
    evidence on the summary judgment motion was that he was unaware the first
    mortgage was in default and that the appellants continued to make payments
    under the first mortgage after securing the second mortgage. While Mr. Kumar made
    a bald allegation in a supplementary affidavit that the respondents were aware that
    the first mortgage had matured prior to arranging the second mortgage, there is
    nothing in the record to substantiate this. Indeed, it would appear to be
    inconsistent with Mr. Kumars own assertion that he thought the first mortgage
    had been renewed when he arranged the second mortgage.

[8]

Default under a prior charge constituted a
    default under the second mortgage. The respondent paid out the first mortgage
    and commenced power of sale proceedings.

[9]

On appeal, the appellants argue that the second
    mortgage was
void ab initio
because: (1) the respondent acted in a
    predatory manner by entering into the second mortgage knowing that the property
    was already under power of sale proceedings initiated by the first mortgagee
    and planning to take possession of the property; (2) in the alternative, the
    respondent failed to conduct due diligence and confirm that the first mortgage
    was in good standing before permitting the appellants to enter into the second
    mortgage; and (3) in the further alternative, because the first mortgage had
    matured before the second mortgage was issued, the appellant 183 was in default
    as soon as it granted the second mortgage.

[10]

There is no merit to these arguments. It was the
    appellants responsibility and not the respondents obligation to ensure that
    the first mortgage had been renewed and was in good standing.

[11]

Accordingly, the appeal is dismissed.

[12]

After orally releasing these reasons for
    dismissing the appeal, we permitted the respondent to make brief oral
    submissions as to costs. In accordance with the mortgage, the respondent is
    entitled to costs of the appeal in the amount of in the amount of $6,825.

Alexandra
    Hoy A.C.J.O.

Doherty
    J.A.

Marrocco
    A.C.J.S.C. (
ad hoc
)


