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APPLICATIONS AND MOTIONS - Application for directions

Thursday, February 18, 2021 @ 6:11 AM  

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Appeal by 050 Ontario Inc. from a final determination of rights made on a motion for advice and directions in receivership proceedings of Money Gate. The order declared that the 254 Mortgage in favour of Money Gate was valid and enforceable and that funds realized from the sale of the property against which the mortgage had been registered were to be paid to Money Gate’s receiver for distribution. The 254 Mortgage was a second mortgage granted by 254, a company in which the appellant was a 50 per cent shareholder, as security for a loan that, prior to its receivership, Money Gate had made to 254. Upon the sale of the property secured by the mortgage, the sale proceeds were available in excess of what was required to be paid to the first mortgagee. Money Gate receiver’s position was that the sale proceeds were an asset of Money Gate and should be available for distribution to those with proper claims against Money Gate’s assets. The appellant argued that the 254 Mortgage was invalid as the appellant did not consent to the granting of that mortgage and its consent was required. The motion judge found that the validity of the mortgage could be determined in a summary fashion and found that the mortgage was valid. The appellant argued that the motion judge was not entitled to decide the matter summarily, and that her decision was legally flawed, made based on factual findings that were unavailable on a paper record, and improperly granted what was, in effect, partial summary judgment.

HELD: Appeal dismissed. The motion judge did not err in deciding that this matter could be dealt with summarily, by borrowing from the approach applied on motions for summary judgment, an approach designed to ensure that a case was disposed of without a trial only where to do so would result in its fair and just determination. The factual findings the motion judge made were available on the record and her rejection of the appellant’s argument of invalidity based on an unfulfilled condition of consent was free of legal error. The Money Gate receiver’s position that the 254 Mortgage was valid, and the Sale Proceeds should be available for distribution was firmly rooted in uncontested facts.

Ontario (Securities Commission) v. Money Gate Mortgage Investment Corp., [2020] O.J. No. 5549, Ontario Court of Appeal, J.C. MacPherson, B. Zarnett and M. Jamal JJ.A., December 16, 2020. Digest No. TLD-February152021006