Security interests, which operate similarly to liens, are used as financial collateral by lenders. In this case, they were used to secure the value of the companies’ heating, ventilation, and air conditioning units. They’re a common practice found within the home equipment rental industry, but usually, the interests equal the approximate amount of the equipment.
In a statement of defence filed on behalf of Krimker, all allegations made against the CEO are denied. It notes that, as a corporate officer, he is a legally separate entity from the companies and that his role does not see him involved in “day-to-day operations." The consumers' claim, however, alleges Krimker was the “directing mind” of the operation, allowing him to “incorporate multiple companies through which he acts to evade liability," and is therefore jointly liable.
If the claim is certified, and successful its subsequent the trial phase, existing interests would be taken off consumers' titles and members of the class would be awarded a collective $5 million in damages.In the spring of 2015, a salesperson from one of Krimker’s companies came to Donev’s “modest bungalow" in Etobicoke, Ont., offering him a deal on a new air conditioner, insisting that the model would help him “save a significant sum” on his hydro bill, the statement of claim reads.
On July 15, Simply Green Home Services registered a $7,269 security interest on his home title, “without his information or knowledge,” the documents read. According to the claim, the companies “commonly and uniformly” included a clause in the agreement’s fine print giving the supplier the right to register a security interest against the homeowner and on titles to their houses and to pass off the agreement to any person at any time, “without the [homeowners] consent or notice to them,” the document alleges. Contracts provided by consumers of Krimker's company to CTV News Toronto featured both of these clauses.
Seddigh explained that consumers often only became aware of these interests in the process of selling or remortgaging their homes.