Executive Summary: Key Legal and Evidentiary Issues

• Limitation period dispute over whether the Real Property Limitations Act’s ten-year period or the general two-year Limitations Act, 2002 applies to the mortgage debt claim
• Contested standing of the plaintiff due to a 2014 assignment of the mortgage to her son and an alleged 2021 reassignment back to her supported only by a brief note
• Unresolved factual questions about whether the plaintiff’s son received payments on the mortgage while he held the assignment and what amount, if any, remains owing
• Defendant’s attempt to avoid personal liability by characterizing himself as a mere trustee or prête-nom for Skylark Holdings Limited and others, and the legal irrelevance of that status as against the mortgagee
• Appropriateness of summary judgment given significant credibility and evidentiary gaps around the assignment/reassignment and payment history
• Use of the court’s enhanced summary judgment powers to order viva voce evidence before the same judge on narrow factual issues instead of granting either party’s motion outright

Facts of the case

Larissa Mikhailova advanced funds under a third mortgage in the principal amount of $100,000, bearing interest at 10% per year, granted by the defendant, Milenko Dabic (also known as Michael Dabic), to Merk Investment Ltd. and Janodee Investments Ltd. The mortgage was registered on title and ranked behind a first and second mortgage. Merk and Janodee later transferred this third mortgage to Ms. Mikhailova on July 17, 2024. Although the transaction was structured with intermediaries, Mr. Dabic appeared on title as the owner and was the chargor under the mortgage. He later asserted that he acted only as a trustee or prête-nom for Skylark Holdings Limited and individuals associated with it, including Stan Cash and Michael Slattery.
Payments under the third mortgage ceased in or around October 2014. In May 2016, the property was sold under a power of sale initiated by the first mortgagee. The first mortgage was paid in full from the sale proceeds; the second mortgage was only partially satisfied, and nothing was paid toward the third mortgage, leaving the third-mortgage debt apparently outstanding.
Parallel to these events, Ms. Mikhailova commenced separate litigation in January 2016 against her mortgage broker, Skylark Holdings Limited, as well as Stan Cash and Michael Slattery, alleging misrepresentation. That action resulted in a judgment issued by Justice Copeland on September 18, 2018, in the amount of $839,596.42. She recovered $500,000 in partial satisfaction of that judgment. Her lawyer, Mr. Turton, allocated the recovered funds across several mortgages that had been implicated in the misrepresentation claim, and after that allocation, he maintained that the third-mortgage debt now at issue remained unsatisfied.
The procedural history of the mortgage itself is complicated by assignments between family members. On December 3, 2014, Ms. Mikhailova assigned the mortgage to her son, Alexandre. Acting on that assignment, Alexandre commenced his own proceedings against Mr. Dabic in 2016, but those proceedings were ultimately discontinued. As part of her evidence in the present action, Ms. Mikhailova produced a short written note, allegedly signed by Alexandre, stating that he reassigned the mortgage back to her in 2021, prior to the issuance of the current Statement of Claim in August 2021.
This purported reassignment became central to the dispute. The defendant challenged both the authenticity and sufficiency of this note. He questioned why Alexandre had not provided an affidavit confirming the reassignment and addressing whether he had received any payments on the mortgage between 2014 and 2021. During cross-examination, further inconsistencies surfaced, including suggestions by Ms. Mikhailova that she may never have assigned the mortgage to her son in 2014, notwithstanding the documentary record of an assignment and his discontinued action.
No insurance policy was in play in this litigation, and there were no policy terms or contractual clauses comparable to insurance wordings discussed. The core contractual instrument was the third mortgage itself—a traditional real property security—and the dispute centred on the existence and enforceability of the underlying debt, the effect of assignments, and the operation of statutory limitation periods rather than the interpretation of insurance or similar policy provisions.

Procedural posture and motions for summary judgment

In the present case before the Ontario Superior Court of Justice, both parties moved for summary judgment under Rule 20 of the Rules of Civil Procedure. The plaintiff sought summary judgment for payment of the $100,000 principal plus 10% annual interest under the third mortgage, contending there was no genuine issue requiring a trial. The defendant, for his part, brought a cross-motion for summary judgment to dismiss the action, relying on several grounds: that he was a mere trustee and not personally liable; that the action was statute-barred; that the plaintiff lacked standing because of the earlier assignment to her son; and that, at minimum, the case turned on material credibility issues unsuitable for resolution on a paper record.
The court began by reviewing the law governing summary judgment. It set out the test under Rule 20.04(2)(a), which requires the court to grant summary judgment where there is no genuine issue requiring a trial with respect to a claim or defence. It then canvassed Rule 20.04(2.1), which empowers the judge to weigh evidence, evaluate credibility, and draw reasonable inferences in the course of determining whether a genuine issue for trial exists. Key Supreme Court of Canada authority, particularly Hryniak v. Mauldin, provided the analytical framework: summary judgment is appropriate where the motion record permits a fair and just determination on the merits and where resolving the dispute in this manner is proportionate, more expeditious, and less expensive than proceeding to full trial.
The court referred to a series of Ontario Court of Appeal and Superior Court decisions refining the use of these enhanced powers and emphasizing the need for caution where credibility plays a central role. Authorities such as Moffitt v. TD Canada Trust, Ang v. Lin, Joshi v. Chada, and others were invoked to underscore that summary judgment is not appropriate where key issues turn on contested credibility that cannot reliably be resolved on a written record alone, and where the motion materials do not give the judge adequate confidence that the dispute can be fairly resolved without hearing live evidence.

Trusteeship and personal liability

One of the defendant’s principal arguments was that he acted solely as a trustee or prête-nom for the broker entities and individuals behind the transaction—namely Skylark Holdings Limited, Stan Cash, and Michael Slattery—and therefore should not be personally liable for any shortfall on the mortgage debt. He further suggested that the plaintiff had long understood his trustee status and had never sought payment from him directly until commencing this action.
The court rejected trusteeship as a defence to the claim by the mortgagee. It held that the defendant was the registered owner of the property and the chargor under the mortgage instrument. As such, his obligations to the mortgagee arose from the covenant in the mortgage he personally signed. Any internal arrangement whereby he acted on behalf of other parties, or any dispute over who ultimately ought to bear the economic consequences of the debt, was an issue between him and his alleged principals. That dispute was already being addressed in his third-party proceedings, where he had added Skylark Holdings Limited and others. For the purposes of the present action, though, his alleged trusteeship was not relevant to the plaintiff’s ability to sue him on the mortgage covenant.

Limitation period and statutory framework

The defendant also argued that the claim was out of time. He asserted that the mortgage was extinguished when the property was sold under power of sale on May 20, 2016 and maintained that any claim thereafter was subject to the general two-year limitation period in the Limitations Act, 2002. On that theory, the Statement of Claim issued in August 2021 would be statute-barred.
The plaintiff responded that the applicable limitations regime was the Real Property Limitations Act (RPLA), which prescribes a ten-year limitation period for certain claims connected to land, including claims arising from mortgages. The court accepted the plaintiff’s position. Relying on the Ontario Court of Appeal’s guidance in decisions such as The Equitable Trust Company v. Marsig and 1250140 Ontario Inc. v. Bader, the judge confirmed that claims arising from mortgages, including deficiency claims brought after a power-of-sale transaction under a higher-ranking mortgage, fall under the RPLA’s ten-year limitation period rather than the general two-year period.
Applied to the facts, the default occurred in November 2014, and the Statement of Claim was issued on August 23, 2021. This placed the claim within ten years of default. The court therefore concluded that the plaintiff’s action was not statute-barred and could proceed. On the limitations question, the plaintiff prevailed.

Standing, assignment, and evidentiary gaps

The most complex and decisive issues concerned standing and the chain of assignment of the mortgage. The defendant challenged whether the plaintiff was, at the relevant time, the proper party to sue on the mortgage. This challenge rested on two key factual contentions: first, that the mortgage had been assigned to Alexandre in 2014; and second, that the alleged reassignment to the plaintiff in 2021 was inadequately proven.
The plaintiff’s evidence of reassignment consisted mainly of a short, informal note she said was signed by her son. The defendant questioned the reliability of this document and the absence of an affidavit from Alexandre confirming both the reassignment and the payment history during his period of ownership. He further pointed to inconsistencies in Ms. Mikhailova’s evidence, including suggestions in cross-examination that she may not have assigned the mortgage to Alexandre at all, despite earlier documentation and litigation by him in his own name.
The court held that these matters raised significant unresolved factual questions that could not be satisfactorily resolved on the written record. Two issues were particularly important: first, whether the assignment to and reassignment from Alexandre were validly made and presently conferred standing on Ms. Mikhailova to sue as mortgagee; and, second, whether Alexandre had received any payments toward the mortgage while he held it, which would affect the calculation of any outstanding debt.
On this evidentiary record, the court concluded that the plaintiff had not met her burden to show that there was no genuine issue requiring a trial respecting her current status as holder of the mortgage and the amount, if any, outstanding under it. The lack of an affidavit from Alexandre, the contradictions in the plaintiff’s testimony, and the unanswered questions about payments received during Alexandre’s ownership of the mortgage all pointed to the need for live testimony and a more complete evidentiary record.

Use of enhanced powers and order for viva voce evidence

While the court declined to grant summary judgment to either party, it did exercise its enhanced powers under Rule 20.04(2.2) to chart a procedural path that would narrow the issues and avoid a full conventional trial on all matters. Rather than sending the case back into the ordinary trial queue, the judge ordered that the parties appear before her to adduce viva voce evidence limited to the key factual questions regarding the mortgage’s assignment history and the quantum of the outstanding debt.
Specifically, the court directed that both the plaintiff and her son, Alexandre, provide oral evidence in front of the same judge to address:

• the establishment and validity of the initial assignment from the plaintiff to Alexandre and the later reassignment back to the plaintiff
• whether Alexandre received any payments on the mortgage during the period he held the assignment
• the precise amounts still owing under the mortgage, if any, after accounting for all payments and allocations, including funds recovered in the misrepresentation action
  The court also set a timeline for next steps in case management. If the plaintiff wished to pursue the matter further, her counsel was required, before a specified deadline, to coordinate with the defendant and contact the judge’s assistant to obtain a date for a case conference to organize the hearing of viva voce evidence.

Outcome and status of the case

In the overall result, the motions judge reached a carefully balanced outcome. The defendant’s argument that he bore no personal responsibility because he was merely a trustee or prête-nom for others was rejected as irrelevant to the plaintiff’s ability to sue him on the covenant in the mortgage. Likewise, his limitations defence failed: the court held that the ten-year limitation period under the Real Property Limitations Act applied and that the claim was brought in time. On these issues, the plaintiff was successful.
However, the plaintiff did not obtain the summary judgment she sought. The court found that she had not discharged her burden of proving that there was no genuine issue requiring a trial on critical questions of standing and quantum. In particular, the court needed fuller and more reliable evidence about the 2014 assignment of the mortgage to Alexandre, the alleged 2021 reassignment back to her, and any payments that may have been made to Alexandre during his period of ownership. Because these questions could not fairly be decided on the affidavits and transcripts alone, the court ordered a focused hearing with viva voce evidence from the plaintiff and her son.
As a result, neither party emerged as the outright “successful party” in the sense of obtaining a final judgment on liability or a monetary award. The defendant’s motion for summary dismissal was dismissed, and the plaintiff’s motion for summary judgment on the mortgage debt was also denied. The case remains in progress, to be determined after live evidence is heard on the outstanding factual issues. At this interlocutory stage, the court did not order any damages, did not fix any monetary award, and did not specify any final amount for costs or for the mortgage debt itself. Accordingly, the total amount ordered in favour of any party in these decisions cannot be determined, because no final award of damages or costs has yet been made.