The plaintiff mortgagor sought summary judgment against the defendant second mortgagee regarding disputed charges included in a discharge statement.
The mortgagee had charged a $42,000 default maturity fee, increased the interest rate from 12% to 18% upon default, and levied $4,000 in administrative fees for payments made to the first mortgagee.
The court found that the default maturity fee and interest rate increase violated section 8 of the Interest Act as prohibited penalties.
The court also found no contractual basis for the administrative fees.
Summary judgment was granted in favour of the plaintiff for the overpaid amount of $53,457.10 plus costs.
