Court of Appeal for Ontario

Date: 2025-03-24
Docket: COA-24-CV-1034
Coram: Zarnett, Sossin and Copeland JJ.A.

Between

Dalpha Technologies Inc.
Applicant (Respondent)

and

Judith Lorraine Farrage and Edmund Farrage
Respondents (Appellants)

John Jeyaratnam and Justin Perry-Daiter, for the appellant
David Brooker, for the respondent

Heard and released orally: March 20, 2025

On appeal from the judgment of Justice Lisa Brownstone of the Superior Court of Justice dated September 9, 2024, with reasons reported at 2024 ONSC 4926.

Reasons for Decision

[1] The appellant held a mortgage on three properties in Kitchener, Ontario. In 2007, after the respondent failed to make required payments, the appellant obtained default judgment for payment. She also took possession of the properties and began collecting rents. She continued to do so until 2017, when she sold the properties under power of sale.

[2] The respondent sought an accounting – something a mortgagee in possession is required to give. The respondent ultimately asserted that what was recovered by the appellant from renting the properties and their sale exceeded what was owing under the mortgage and the default judgment.

[3] The application judge considered expert evidence of forensic accountants hired by both parties. She noted that their work was hampered by the failure of the appellant to have kept or to have produced appropriate records. The application judge accepted the calculations of the respondent’s expert, Ms. Lynch, subject to the requirement that she revise them to take into account a property tax payment of $95,728 made by the appellant. In the result, the application judge gave judgment ordering the appellant to pay the respondent $994,765 reflecting the appellant’s recovery from the properties in excess of the mortgage debt and interest.

[4] The appellant argues that Ms. Lynch made errors in the calculation of interest owing under the mortgage and default judgment and about the commencement date for its calculation, and that those errors are carried forward into the application judge’s judgment, tainting it with the same errors.

[5] In our view, the process engaged in by the application judge, which involved the consideration of complex calculations and the opinions of experts in connection with them, had features akin to an assessment of damages. A trial judge’s assessment of damages is entitled to considerable deference, and will not be interfered with on appeal “absent an error of principle or law, a misapprehension of evidence, a showing that there was no evidence on which the trial judge could have reached his or her conclusion, a failure to consider relevant factors or consideration of irrelevant factors, or a palpably incorrect or wholly erroneous assessment of damages” (internal citations omitted): SFC Litigation Trust v. Chan, 2019 ONCA 525, at para. 112.

[6] The appellant has not shown that the application judge committed any errors of the type that would justify appellate intervention. The application judge expressly considered the calculation of interest and the manner in which receipts by the appellant should be applied against interest. It was open to her to accept Ms. Lynch’s approach.

[7] Although the appellant argues that the calculations had to consider both interest under the mortgage and interest under the default judgment, it has not been shown that Ms. Lynch failed to do this. Ms. Lynch expressly calculated additional interest as a result of the default judgment and took it into account in determining the amount the appellant had received in excess of what she was owed, including for interest. Given this, and the absence of any alternative calculation presented by the appellant on the appeal showing that what it asserts to be the correct approach would yield a materially different result, no palpable and overriding error has been shown. We therefore also reject the argument of the appellant that the application judge’s determination was inconsistent with the default judgment or, as the appellant puts it, was an impermissible “collateral attack” on it.

[8] A ground of appeal was raised in the appellant’s factum concerning whether the appellant’s payment of taxes had been reflected properly and in the right amount. That ground of appeal was withdrawn during oral argument.

[9] The appeal is therefore dismissed. Costs of the appeal are payable by the appellant to the respondent in the agreed upon amount of $7,500, inclusive of disbursements and applicable taxes.

“B. Zarnett J.A.”
“L. Sossin J.A.”
“J. Copeland J.A.”