John Wallace

The defendant mortgagor defaulted on her mortgage and the plaintiff mortgagee obtained default judgment and a writ of possession.

The mortgagor subsequently sought to refinance and challenged the amounts claimed by the mortgagee in its discharge statement, arguing that the default judgment estopped the mortgagee from claiming additional fees and that the fees were unreasonable or offended the Interest Act.

The court held that the default judgment did not merge the mortgage covenants, allowing the mortgagee to claim additional fees.

However, the court reduced several administrative and legal fees, disallowed a three-month termination bonus, and fixed the total amount required to discharge the mortgage at $376,661.51.

The moving party sought an interlocutory injunction restraining the mortgagee respondents from listing a mortgaged property for sale following default and disputed redemption amounts.

Applying the RJR-MacDonald framework, the court held that no irreparable harm was established because the accounting issues could be addressed after sale and compensated in damages, and the property was not shown to be unique.

The court further held that the balance of convenience favoured the mortgagees, given admitted arrears, tax liens, evidence that the property was vacant and in disrepair, and the mortgagees' contractual enforcement rights.

The motion was dismissed, with costs payable to the respondents, though the court granted leave to bring an urgent application concerning payment into court to discharge the mortgage.