Peter Gorham

The defendant mortgagor defaulted on a second mortgage and brought a motion to set aside the mortgage, arguing it was an unconscionable transaction and charged a criminal rate of interest.

The plaintiff mortgagee brought a cross-motion for summary judgment to enforce the mortgage and power of sale.

The court dismissed the mortgagor's claims regarding unconscionability and criminal interest, finding the legal fees for enforcement did not count towards the interest rate calculation.

However, the court found that several administrative fees and an 'interest bonus' charged by the mortgagee were impermissible penalties under section 8 of the Interest Act.

The court ordered the mortgagor to pay $110,000 into court to discharge the mortgage, failing which the mortgagee would be granted summary judgment.

The appellant appealed the dismissal of a motion to certify a class proceeding against the respondent bank.

The proposed class action alleged that the respondent received interest on cash advances at a criminal rate, in violation of s. 347(1)(b) of the Criminal Code, and sought restitutionary, declaratory, and injunctive relief.

The Divisional Court dismissed the appeal, upholding the motions judge's findings that the restitutionary claims did not raise common issues and that a class proceeding was not the preferable procedure for resolving the claims for declaratory and injunctive relief.