



COURT OF APPEAL FOR ONTARIO

CITATION: Eisen v. 2293398 Ontario Inc.,
2021 ONCA 537

DATE: 20210722

DOCKET: M52654 (C69310)

Thorburn J.A. (Motions Judge)

BETWEEN

Melvyn
Eisen



Plaintiff

(Respondent/Responding Party)

and

2293398 Ontario Inc.

Defendant

(Appellant/Moving Party)

S. David Hwang, for the moving party,
2293398 Ontario Inc.

James A. Riewald, for the responding
party, Melvyn Eisen

Heard: July 19, 2021 by videoconference

ENDORSEMENT

[1]

The respondent, Mr. Eisen, is the chargee on a
property registered to the appellant and moving party, 2293398 Ontario Inc. Ms.
Maggiacomo is the companys principal.

[2]

The appellant brings an urgent motion for an
order:

1.

Staying the decision of Justice Edward J. Koke
(the motion judge), dated March 15, 2021, in which he refused to set aside
the default judgment signed by the local registrar on January 21, 2021, pending
appeal;

2.

Staying the writ for possession, dated March 17,
2021, and enforcement of the order to vacate the premises, dated July 13, 2021,
pending appeal; and,

3.

Allowing the appellant to repossess the property
pending appeal.

[3]

Since the appellants principal has been evicted
and is living elsewhere, there is no basis to stay the writ of possession or
notice to vacate as the issue is moot: the writ has been executed and the
notice to vacate enforced.

[4]

The only remaining issue is the request for an
order for repossession of the property.

Brief chronology

[5]

A brief chronology of the steps taken prior to
the appellants eviction from the property is set out below:

·

In 2012, the appellant corporation charged the
property in question for two years and secured the sum of $1.6 million with interest
payable at the rate of 8.5% per annum. Ms. Maggiacomo was the sole director of
the corporation at the time, but the charge was signed by her common-law
spouse, Mr. Haines, who has since passed away. The funds advanced by Mr. Eisen
went to pay and discharge existing mortgages registered on the property. The
charge was periodically extended.

·

By April 2019, significant municipal tax arrears
had accumulated against the property. Mr. Eisen entered into an agreement with
Ms. Maggiacomo and her son to pay those taxes in return for making ongoing
monthly payments toward the tax arrears. There was also an agreement to extend
the charge for one year from May 15, 2019 to May 15, 2020. The tax for arrears
were paid and several payments were made by the appellant in accordance with
the agreement.

·

On May 15, 2020, the
charge matured but principal, interest, and expenses had not been paid. The
respondent claimed that the charge was in default by January 15, 2020 and
continues to be in default.

·

The respondent sent the
appellant a notice of sale and, on November 13, 2020, the respondent served the
appellant with a statement of claim for possession. Shortly thereafter, the
appellant served a notice of intent to defend. No statement of defence was
served.

·

On January 15, 2021,
the respondents counsel requested a defence and advised that he would be
seeking immediate possession. No statement of defence was filed.

·

On January 21, 2021,
default judgment was obtained. The default judgment was served on the appellant
on February 3, 2021.

·

On February 8, 2021,
the respondent filed a motion for leave to issue a writ of possession.

·

On February 10, 2021,
the appellant advised that it would be moving to set aside the default
judgment.

·

On March 2, 2021, the
respondent was granted leave to issue a writ of possession on the property. The
order was sent to the appellant on March 4, 2021, but counsel was advised that
no steps would be taken to enforce it until the motion to set aside the default
judgment was heard on March 10, 2021.

·

On March 15, 2021, the
motion to set aside the default judgment was dismissed.

·

Thereafter, the
appellant took no steps to set aside the writ of possession.

·

On April 20, 2021, the
appellant filed a Notice of Appeal of Koke J.s decision refusing to set aside
the default judgment.

·

The appellant was
evicted from the property on July 13, 2021.

The motion judges reasons

[6]

The motion judge refused to set aside the
default judgment as he was not satisfied the appellant had a plausible
explanation for the default or an arguable defence on the merits, noting that
the respondent did not receive any communication from the appellants counsel
until 26 days after requesting that the defence be filed immediately.

[7]

He also held that setting aside the default
judgment would result in significant prejudice to the respondent. He noted that:

As of the oral argument of this motion, the
[respondent] had still not received confirmation that [insurance, municipal
taxed, and hydro] accounts were in good standing.

Quite clearly, a failure to maintain these
accounts would place the [respondents] security in jeopardy. A day without
essential services such as hydro could expose the property to considerable risk
of damage.

Although I sympathize with the desire of the
[appellant] corporation to refinance its building and operations, I am not
convinced that it is fair to the [respondent] to permit the corporation to do
so while continuing to place the [respondent]s security at risk.

[8]

He concluded that:

The defendant corporation does not dispute the
fact that the principal amount of the mortgage has been outstanding since May
15, 2020. Neither does it dispute the fact that it has failed to respond to
requests concerning the tax, insurance and hydro accounts. It has not put forth
an arguable defence to the claim and in the circumstances, it is my view that a
decision dismissing this motion will uphold the overall integrity of the
administration of justice. For the above reasons, I am dismissing the
defendant's motion to set aside the judgment.

Arguments and conclusion

[9]

The overarching consideration in whether to
grant a stay or interlocutory injunction pending appeal is the interests of
justice:
Zafar v. Saiyid
, 2017 ONCA 919, at para. 18;
Circuit
World Corp. v. Lesperance
, 33 O.R. (3d) 674, at para. 8. The court
considers three factors: (i) a preliminary assessment must be made of the
merits of the case to ensure there is a serious question to be tried; (ii) it
must be determined whether the applicant would suffer irreparable harm if the
application were refused; and (iii) an assessment of the balance of convenience
must be made as to which of the parties would suffer greater harm from the
granting or refusal of the remedy pending a decision on the merits: see
M
& M Homes Inc. v. 2088556 Ontario Inc.
, 2020 ONCA 134, 51 C.P.C. (8th)
253, at para. 29;

RJR-MacDonald
Inc. v. Canada (Attorney General)
, [1994] 1
S.C.R. 311, at p. 334. These factors are not watertight compartments and the
strength of one factor may compensate for weakness of another:
Zafar
, at para. 18.

[10]

The appellant claims irreparable harm would
result if an order for repossession pending appeal is not granted, the
appellants rights could be so severely affected that the appeal will be moot.

[11]

In addition to this litigation, the parties are
involved in several other matters before the courts. Ms. Maggiacomo claims she
is concerned that private and confidential information related to various
ongoing litigation has been removed and destroyed. She also claims that:

Unless immediate relief is obtained by the
court, allowing me to access the Property to ensure the integrity of financial
information, confidential information and other important assets, my interests
will be irreparably harmed and evidence relating to the underlying action
subject to appeal another ongoing litigation may be destroyed.

I have important documents concerning the
ownership of the Property, email communications between the deceased [i.e. Mr.
Haines] and his counsel, personal and corporate financial records, and letters
to my counsel. There are other documents I have been able to retrieve since the
start of litigation through my family's own investigations and calling old
acquaintances.

I also have computers and hard drives that
were left on at the time there is information on those computers that are
sensitive as well as emails between myself and counsel.

[12]

While I am sympathetic to Ms. Maggiacomos
concern about losing her personal effects and documents, the appellant has not
sought an order for return of her personal property.

[13]

In her affidavit, Ms. Maggiacomo asserts that
this was her primary residence and her son was at the premises when the
eviction notice was enforced. Ms. Maggiacomo offered no information about
her current residence or circumstances or any information about the possible
sale of the property. I am therefore not satisfied that, on the evidence before
me, the appellant has demonstrated irreparable harm.

[14]

Secondly, with regard to the merits of the
appeal, Ms. Maggiacomo claims the motion judge erred in finding there was no
arguable defence on the merits when he refused to set aside the default
judgment.

[15]

Koke J., in his reasons, states that [the
appellant] does not challenge the validity of the mortgage. In any event, I
expect that any defect in the execution of the original charge was likely
remedied when Ms. Maggiacomo signed the renewal of the mortgage in 2019.

[16]

Ms. Maggiacomo asserts that she was unaware of alleged
defects with the charge when she signed the renewal forms in April 2019. In
particular, she says she was unaware that Mr. Haines was an undischarged
bankrupt when he initially charged the property on the corporations behalf. On
the motion, counsel informed the court that Ms. Maggiacomo believes that she
did not sign the 2019 renewal form and that her signature was a forgery. This
argument does not appear to have been put before Koke J. and there is no
affidavit evidence in the record to this effect.

[17]

In my view, although it is a low threshold, the
appellants case on the merits is not strong.

[18]

Lastly, the balance of convenience favours the
respondent. The respondent is at risk of losing his security as there is a long
history of arrears.

[19]

Taken together, I am not persuaded that it is in
the interests of justice to order that Ms. Maggiacomo take repossession of the
property.

[20]

For these reasons, the motion is dismissed.

J.A.
Thorburn J.A.


