G. Cohen

The mortgagor plaintiffs sought interlocutory injunctive relief to prevent enforcement of a default judgment and mortgage remedies relating to a third mortgage on their residential property.

Rather than bringing a motion within the original mortgage enforcement action to set aside or stay the judgment, the plaintiffs commenced a separate proceeding seeking to enjoin execution.

The court held that the relief sought constituted an impermissible collateral attack on an existing judgment and raised issues of res judicata, cause of action estoppel, and issue estoppel.

The court further found that none of the plaintiffs’ alleged triable issues—including alleged improper tender, deficiencies in the notice of sale, licensing concerns under mortgage broker legislation, and disputes over legal fees—established a serious issue to be tried under the interlocutory injunction test.

The motion for injunctive relief was therefore dismissed.

In a Bankruptcy and Insolvency Act s. 38 fraudulent conveyance action, the defendants sought to amend their statements of defence and to introduce a counterclaim alleging abuse of process, malicious prosecution, and intimidation.

The plaintiffs opposed the amendments and moved to strike several pleadings, particularly those raising a limitation period defence.

The court held that earlier Rule 21 proceedings had finally determined the limitations issue as a question of law, meaning the defendants were barred by res judicata from re‑pleading or reframing the defence.

The court also found that the proposed counterclaim was unrelated to the trustee’s cause of action pursued under s. 38 and constituted a collateral attack on the order granting leave to commence the proceeding.

Limited amendments were permitted, but most proposed amendments were refused and several pleaded paragraphs were struck.