Maletta and Dawson v. Thiessen et al., (1996) 90 O.A.C. 1 (DC)

• Judge: McMurtry, C.J.O.C., Steele and MacFarland, JJ.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: March 19, 1996
• Jurisdiction: Ontario
• Citations: (1996), 90 O.A.C. 1 (DC)

Maletta v. Thiessen (1996), 90 O.A.C. 1 (DC)

MLB headnote and full text

Careylee Maletta and Teresa Irene Dawson (respondents/plaintiffs) v. Robert Thiessen, 1082570 Ontario Limited, David L. King Investments Ltd., David L. King, L. Mark King Investments Ltd., L. Mark King, Kathe Holmes King, Ronald J. Kitchen, Gary G. Kitchen, Alastair H. Simeson and Faye M. McFarlane, carrying on business in partnership under the firm name and style of Kitchen, Kitchen, Simeson & McFarlane (appellants/defendants)

(515/95)

Indexed As: Maletta and Dawson v. Thiessen et al.

Ontario Court of Justice

General Division

Divisional Court

McMurtry, C.J.O.C., Steele and MacFarland, JJ.

March 19, 1996.

Summary:

The plaintiffs mortgaged developed and undeveloped lands. The mortgages matured and the plaintiffs were unable to obtain funds to pay off the mortgage. The mort­gagees exercised their power of sale. The plaintiffs wished partial discharges of the mortgages, claiming they could sell lots and obtain sufficient funds to discharge the mortgage on the undeveloped lands and 50% of the mortgage on the developed lands. The mortgagees rejected the request and sold the mortgaged lands. The plaintiffs never offered to redeem. The plaintiffs sued for an order setting aside the mortgage sales as fraudu­lent, claimed a right to redeem and sought damages for improvident sale and fraud. The plaintiffs were granted a Certificate of Pend­ing Litigation against the mortgaged lands. The mortgagees appealed the granting of the Certificate.

The Ontario Divisional Court allowed the appeal and set aside the decision granting a Certificate of Pending Litigation. The court stated that in a mortgage redemption case it was essential that the mortgagors show a connection between the alleged fraud and the inability to redeem. No such connection was established.

Actions - Topic 5023

Lis pendens - Certificate of lis pendens - When available - Mortgagors sued the mortgagees to set aside the sale of mort­gaged lands (developed and undeveloped), claiming fraud - The mortgagors obtained a Certificate of Pending Litigation - They claimed the right to a partial discharge of the mortgages, to permit the sale of por­tions of the lands to produce sufficient funds to discharge the mortgage on the undeveloped lands and 50% of the mort­gage of the developed lands - The Ontario Divisional Court held that where no fraud was alleged there was no right to a Certif­icate without offering to redeem - A qual­ified or partial offer to redeem was insuf­ficient - If fraud was established, the right to redeem was revived - However, the alleged fraud must be connected to the mortgagors' inability to redeem - Here, the mortgagors' inability to redeem was admit­tedly due to market conditions, not the alleged fraud - Accordingly, a Certificate of Pending Litigation should not have been issued.

Mortgages - Topic 4612

Redemption of mortgage - Requirement of exercise of right - [See Actions - Topic 5023 ].

Real Property - Topic 7845

Title - Registration of instruments - Lis pendens - Authority to file - [See Actions - Topic 5023 ].

Cases Noticed:

Cordoba Developments Inc. et al. v. Montreal Trust Co. et al. (1981), 20 C.P.C. 96 (Ont. H.C.), refd to. [para. 6].

Jeffreys v. Dickson (1866), 1 Ch. App. 183, refd to. [para. 6].

Toronto-Dominion Bank v. Pallett Devel­opments Ltd.; Pallet Developments Ltd. v. Toronto-Dominion Bank and Babel Investment Ltd. (1984), 3 O.A.C. 161; 47 O.R.(2d) 251 (Div. Ct.), refd to. [para. 7].

Mission Construction Ltd. v. Steel Invest­ments Ltd. (1973), 33 D.L.R. 286 (Ont. H.C.), refd to. [para. 9].

Wright (Hal) Motor Sales Ltd. v. Indus­trial Development Bank (1975), 8 O.R. (2d) 76 (Dist. Ct.), refd to. [para. 9].

Bank of Montreal v. Ewing et al. (1982), 35 O.R.(2d) 225 (Div. Ct.), refd to. [para. 12].

Counsel:

William Andrews, Q.C., for the appellants, Robert Thiessen and 1082570 Ontario Ltd.;

Alan S. Price, for the respondents;

D.J.D. Sims, Q.C., for David L. King Investments Ltd., David L. King, L. Mark King Investments Ltd., L. Mark King and Kathe Holmes King, inter­venors.

This appeal was heard on January 23, 1996, before McMurtry, C.J.O.C., Steele and MacFarland, JJ., of the Ontario Divisional Court.

The judgment of the Ontario Divisional Court was delivered by Steele, J., and re­leased on March 19, 1996.