COURT OF APPEAL FOR ONTARIO

CITATION: Hayer v. Bertasiene, 2023 ONCA 302

DATE: 20230502

DOCKET: COA-22-CV-0038

Doherty, Zarnett and Sossin JJ.A.

BETWEEN

Jagmohan Hayer and Balvinder Hayer

Plaintiffs (Respondents)

and

Lina Bertasiene

Defendant (Appellant)

AND BETWEEN

Lina Bertasiene

Plaintiff by Counterclaim (Appellant)

and

Jagmohan Hayer, Balvinder Hayer, Laman Meshadiyeva, Laman Meshadiyeva Professional Corporation, Oksana Ilioukevitch, Vadym Kvyetko and Svitlana Kvyetko

Defendants by Counterclaim (Respondents)

AND BETWEEN

Oksana Ilioukevitch and Vladimir Ilioukevitch

Plaintiffs (Respondents)

and

Lina Bertasiene and Singaras Bertasius

Defendants (Appellants)

AND BETWEEN

Vadym Kvyetko and Svitlana Kvyetko

Plaintiffs (Respondents)

and

Lina Bertasiene and Singaras Bertasius

Defendants (Appellants)

Terry Corsianos, for the appellants

Harinder Dhaliwal, for the respondents Jagmohan Hayer and Balvinder Hayer

Evelyn Perez Youssoufian, for the respondents Oksana Ilioukevitch and Vladimir Ilioukevitch

Alfred Schorr, for the respondents Vadym Kvyetko and Svitlana Kvyetko

Heard: April 20, 2023

On appeal from the judgments of Justice Catriona Verner of the Superior Court of Justice, dated July 28, 2022.

REASONS FOR DECISION

[1]          The respondents (the Hayers, the Ilioukevitchs, and the Kvyetkos) each sued in separate actions to enforce certain mortgages. The appellant Lina Bertasiene was alleged to be the mortgagor under each mortgage; her son, the appellant Singaras Bertasius was also alleged to be a mortgagor under a mortgage in favour of the Ilioukevitchs.

[2]          The motion judge heard, together, summary judgment motions brought by the respondents in each action, and granted the judgments sought. For ease of reference, and referring to the mortgages by the original principal amounts as the parties did before us, the relief she granted, and from which the appellants appeal, can be summarized as follows:

(a)         In the Hayers’ action, Mr. Hayer recovered judgment against Ms. Bertasiene for payment of the amount due on a $2.78 million mortgage, both of the Hayers recovered judgment against Ms. Bertasiene for payment of the amount due under a $711,000 mortgage, and Ms. Bertasiene was ordered to deliver possession of the mortgaged property at 15 Glenview Heights Lane, King City, to the Hayers.[1]

(b)         In the Kvyetkos’ action, the Kvyetkos recovered judgment against Ms. Bertasiene for payment of the amounts due under a $750,000 registered mortgage and a $800,000 unregistered mortgage, and Ms. Bertasiene was ordered to deliver possession of the Glenview Heights property to them subject to the prior rights of the Hayers.

(c)          In the Ilioukevitchs’ action, the Ilioukevitchs recovered judgment against Ms. Bertasiene and Mr. Bertasius for payment of the amount due under mortgages securing a $400,000 debt. Ms. Bertasiene was ordered to deliver possession of the Glenview Heights property to the Ilioukevitchs subject to the prior rights of the Hayers and Kvyetkos, and Mr. Bertasius was ordered to deliver possession of Apartment 7, 133 Torresdale Avenue, Willowdale to the Ilioukevitchs.

The Appeal in the Hayers’ Action

[3]          Ms. Bertasiene advanced two main arguments regarding the judgment in the Hayers’ action. We did not call on counsel for the Hayers to respond to either.

[4]          With respect to the $2.78 million mortgage, Ms. Bertasiene does not challenge the motion judge’s findings that she signed the relevant documents, that the funds were advanced, and that she did not make the payments required by the mortgage. Although no such argument or request was made in the court below, she asks that we allow her to amend her pleadings to allege that the interest rate on this mortgage exceeded 60% and was thus a criminal rate proscribed by s. 347 of the Criminal Code, and that we return the matter to the Superior Court to litigate that issue.

[5]          The stated rate in the mortgage is 12%. Ms. Bertasiene points to deductions from the original advance for fees and pre-paid interest, and submits that if they are characterized as interest the effective rate of interest on the mortgage would arguably increase. But Ms. Bertasiene does not argue in this court that the effective rate of interest would increase to more than 60%. Instead, she submits that actuarial evidence would have to be obtained to explore the issue.

[6]          Counsel for Ms. Bertasiene (who was not counsel before the motion judge) recognized the reluctance of an appellate court to entertain a new issue on appeal. However, this is not a case of a party asking for an appeal to be decided on a basis not argued below. Here, Ms. Bertasiene is asking that we set aside a judgment against her on the basis of an argument she does not ask us to decide but wishes an opportunity to pursue − an argument that is of uncertain merit even on her own submission. In making this request, the court was provided with no evidence about why the argument was not previously advanced. The request is that we simply allow a “do-over”. The interests of finality in litigation preclude that approach.

[7]          As to the $711,000 mortgage, Ms. Bertasiene does not contest the motion judge’s findings that she signed a mortgage commitment to borrow this amount, that the amount was advanced to her, and that she has not made the payments this loan required. She asserts, however, that any authorization she signed to register the mortgage was “spent” by the time the mortgage was registered.

[8]          The motion judge found that the mortgage was either validly registered or the circumstances gave rise to a valid equitable mortgage. We see no reversible error in these findings which are entitled to deference. In any event, Ms. Bertasiene concedes that, even if we accepted her arguments, she would owe the amounts the motion judge awarded as an unsecured debt. No change to the amount she has been ordered to pay would result from accepting her arguments. Nor would there be a change to the order for possession since it was properly made as a result of the default under the $2.78 million mortgage.

[9]          The appeal from the judgment in the Hayers’ action is dismissed.

The Appeal in the Kvyetkos’ Action

[10]       With respect to the judgment in the Kvyetkos’ action, Ms. Bertasiene contests the motion judge’s conclusions about the two mortgages in an interrelated way. She argues that the $800,000 mortgage was registered, contrary to the motion judge’s finding. And she says that the motion judge failed to appreciate that the $800,000 mortgage was discharged, meaning it was fully paid. The payments that were made to the Kvyetkos after the discharge should not have been credited to the $800,000 mortgage, but to the $750,000 mortgage (which she concedes is valid). In other words, no amount should have been awarded under the $800,000 mortgage, and a reduced amount should have been awarded under the $750,000 mortgage.

[11]       We see no merit in the complaint that the motion judge referred to the $800,000 mortgage as unregistered. As the motion judge noted, it was Ms. Bertasiene’s position that the mortgage was unregistered.

[12]       We also see no error in the motion judge’s finding that:

Bertasiene admits that she signed a commitment for the $800,000 mortgage with the Kvyetkos and that the money was advanced as agreed upon. She further admits that she has not made payments on this mortgage in accordance with the terms of the agreement. The fact that the mortgage was not registered does not impact the fact that she received a loan, the fact that she agreed in writing to terms of the repayment of that loan and the fact that the parties intended for the loan to be registered.

[13]       It appears that the $800,000 advanced by the Kvyetkos was to pay off other lenders who held a registered mortgage. But it is clear that the interests of those lenders were separate from the Kvyetkos, and that Ms. Bertasiene agreed, in writing, that: “Even though [funds advanced by the Kvyetkos] shall be paid to the existing lenders as per their payout statement, the undersigned fully understand that they shall be responsible for paying the principal sum of $800,000.00 together with applicable interest … to the Kvyetkos”. In other words, when the mortgage security of the other lenders was discharged the $800,000 owing to the Kvyetkos was not considered to have been paid.

[14]       Accordingly, we see no error in the motion judge’s findings about the $800,000 mortgage. Ms. Bertasiene’s argument about a reduced amount being owed under the $750,000 mortgage was dependent on our acceptance of Ms. Bertasiene’s position about the $800,000 mortgage; therefore, those arguments must be rejected as well.

[15]       Ms. Bertasiene makes a further argument about the Kvyetkos’ recovery of $200,000 on the sale of a property she owned on Avenue Road in Newmarket. She says that mortgage was fraudulent, and therefore the payment should be credited to the $800,000 and the $750,000 Kvyetko mortgage loans.

[16]       The motion judge found that the evidence did not support the claim that the $200,000 mortgage was fraudulent. She referred to an authorization and direction to register the mortgage against the Avenue Road property, which was from the files of Ms. Bertasiene’s lawyer. The direction bore Ms. Bertasiene’s signature, which she did not dispute. The documentary record is consistent with Ms. Bertasiene having knowledge of her indebtedness for the $200,000 and the fact that it was being paid out of the sale proceeds of the Avenue Road property.

[17]       The appeal from the judgment in the Kvyetkos’ action is dismissed.

The Appeal in the Ilioukevitchs’ Action

[18]       The $400,000 Ilioukevitch mortgage loan was secured by charges registered on December 31, 2020 against two properties − the Glenview Heights property owned by Ms. Bertasiene, and a property on Torresdale Avenue registered in the name of her son, Mr. Bertasius. The motion judge held:

Finally, with respect to the $400,000 mortgage, Bertasiene acknowledges that (i) she received $360,000 cash from the Ilioukevitchs; (ii) that the debt increased to $393,486.28 by December 2020; (iii) that she has personal knowledge that both she and her son signed the necessary documents to commit to a $400,000 mortgage on both the Glenview Heights property and the Torresdale property; and (iv) that payments have not been made in accordance with the mortgage agreement.

[19]       Ms. Bertasiene does not challenge the judgment against her on the $400,000 mortgage. However, Mr. Bertasius challenges the appropriateness of summary judgment against him. In the affidavit he filed in opposition to the summary judgment motion, he stated that he never put up his Torresdale property as collateral, did not sign a collateral mortgage, and the signature on the mortgage documents that purported to be his was “an obvious attempt to replicate his signature.” Ms. Bertasiene also swore an affidavit in which she stated that she was advised by Mr. Bertasius and believed that he did not sign the mortgage. As counsel said in argument before us, the appellants’ position is that Mr. Bertasius was the victim of mortgage fraud. He says in light of this evidence a trial was required.

[20]       However, this argument overlooks that Ms. Bertasiene was cross-examined after the affidavits referred to were delivered. On the cross-examination she was asked about documents she sent to a lawyer by email on December 31, 2020, including an “Acknowledgment” from Ms. Bertasiene and Mr. Bertasius, that indicated it pertained to “Vladimir and Oksana Ilioukevitch’s Mortgage Loan to Bertasiene/Bertasius” and identified the Glenview Heights and Torresdale properties. Ms. Bertasiene identified Mr. Bertasius’ signature and testified that both she and Mr. Bertasius signed at her home on “December 31, [2020]”. She also confirmed that she had sent the mortgage documents, as well as Mr. Bertasius’ property tax documents, ID, and her ID, on December 31, 2020 to the lawyer who was acting on “the closing of [her] and [Mr. Bertasius’] mortgage”. There was no re-examination on these points.

[21]       Ms. Bertasiene and Mr. Bertasius were represented by the same counsel at the summary judgment motion hearing. They continue to be jointly represented. Ms. Bertasiene identified her own signature and that of Mr. Bertasius on the mortgage-related documents. There was also evidence that she had sent documents, including Mr. Bertasius’ ID and property tax information, to the lawyer in order to proceed with the loan transaction from which she benefitted. The motion judge was entitled to prefer her evidence given on cross-examination over her earlier affidavit evidence about advice from Mr. Bertasius that he did not sign.

[22]       We were not taken to anything in the record that suggests that there was any challenge before the motion judge, on behalf of Mr. Bertasius, to the credibility or reliability of his mother’s cross-examination evidence. As noted, they were represented by the same counsel. In those circumstances, the motion judge was entitled to accept Ms. Bertasiene’s cross-examination evidence as indicative of the lack of a genuine issue requiring a trial about whether Mr. Bertasius had signed.

[23]       Mr. Bertasius sought leave to file fresh evidence − a report of a handwriting expert. We reject the request. The report of the handwriting expert is not sworn in these proceedings. Even if it were, there is no explanation as to why the evidence was not available for the summary judgment motion through the exercise of due diligence.

[24]       The motion for leave to file fresh evidence and the appeal from the judgment in the Ilioukevitch action are dismissed.

Costs

[25]       Costs of the appeal regarding the judgment in favour of the Hayers are awarded to the Hayers in the amount of $14,700 inclusive of disbursements and applicable taxes. If the parties are unable to agree on costs of the appeals relating to the Kvyetko and Ilioukevitch judgments, they may make written submissions not exceeding three pages each. The submissions of the Kvyetkos and Ilioukevitchs shall be delivered within ten days of the release of these reasons; those of the appellants shall be delivered within ten days thereafter.

“Doherty J.A.”

“B. Zarnett J.A.”

“L. Sossin J.A.”