Court of Appeal for Ontario

Date: 2025-04-09
Docket: COA-24-CV-0852
Coram: L.B. Roberts, Gary Trotter, J. George JJ.A.

Between:
Rume Ezomo
Plaintiff (Respondent)

and

Dorinda Nana Afriyie and Adusei Kwame
Defendants (Appellants)

James Dunphy, for the appellant
Mikesh H. Patel, for the respondent

Heard: April 2, 2025

On appeal from the order of Justice Chris de Sa of the Superior Court of Justice, dated July 19, 2024.

Reasons for Decision

Introduction

[1] The appellant appeals the dismissal of her motion to set aside the default judgment and the writ of possession in this mortgage action.

Background

[2] Pursuant to a loan agreement dated July 14, 2022, the appellant borrowed $100,000 from the respondent. The agreement stipulated that the appellant undertook to pay back $100,000 by August 31, 2022. If the appellant refused or was unable to repay the loan by that date, the agreement provided that the loan would then be registered as a second mortgage against the property. The appellant failed to repay the loan by August 31, 2022. On September 2, 2022, the respondent registered the loan as a second mortgage on title to the appellant’s property. The registered charge stipulated that the mortgage matured on September 15, 2022. The appellant has never made any payments under the second mortgage.

[3] The respondent commenced power of sale proceedings and the appellant was served with a notice of sale in September 2022. In January 2023, the respondent commenced the underlying proceeding. The statement of claim was served on the appellant on January 10, 2023. The appellant did not respond and was noted in default on February 8, 2023. The respondent obtained a writ of possession and took possession of the appellant’s property.

[4] The appellant has also defaulted on the first and third mortgages on the title to the property. She has attempted at least twice, without success, to sell the property without notice to the respondent.

Grounds of Appeal

[5] The appellant argues that the motion judge erred by:

1. failing to address in his reasons all the criteria for setting aside a default judgment;
2. applying a higher standard in assessing the merits of the defence and finally determining the defence; and, relatedly,
3. misapprehending the evidence.
   She submits that the default judgment and writ of possession should therefore be set aside.

[6] At the conclusion of the appellant’s submissions, we dismissed the appeal with reasons to follow. These are our reasons.

Analysis

[7] We are not persuaded that there is any basis for appellate intervention.

[8] As the appellant fairly acknowledges, the motion judge correctly adverted to the following criteria from Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, 119 O.R. (3d) 561, at paras. 48-49, in determining whether to set aside the default judgment:

• (a) whether the motion was brought promptly after the defendant learned of the default judgment;
• (b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules;
• (c) whether the facts establish that the defendant has an arguable defence on the merits;
• (d) the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and
• (e) the effect of any order the motion judge may make on the overall integrity of the administration of justice.

[9] These are not water-tight criteria. The overarching consideration is whether the interests of justice warrants setting aside the default judgment: Mountain View Farms Ltd., at paras. 47, 50.

[10] The appellant submits that while alluding to the above factors, the motion judge failed to provide reasons with respect to factors (a) and (b) and did not consider the potential prejudice to the appellant if the motion were dismissed under (d).

[11] We do not accept that the motion judge failed to consider the above factors. He clearly set them out and indicated by way of a separately headed section that he was applying them to the facts of this case. At their core, the appellant’s arguments challenge the sufficiency of the motion judge’s reasons. While it would have been clearer had the motion judge explicitly responded to each of the Mountain View Farms Ltd. factors, he was not obliged to follow a formula. When read in the context of this record, the reasons explain what the motion judge decided and why he decided as he did. They do not foreclose meaningful appellate review.

[12] With respect to factor (a), the motion judge did not accept the appellant’s evidence that she only became aware of the statement of claim in February 2024. He found that she knew about the default under the mortgage as early as September 2022 when she was served with the notice of sale and subsequently with the statement of claim on January 10, 2023. He also noted that she had contacted the process server in July 2023 and advised that she and her immediate family were no longer living at the property. Although he did not specifically say that he rejected her explanation of ill health as an excuse for failing to respond under factor (b), his rejection of her evidence on this point is implicit from his rejection of the appellant’s alleged unawareness of the claim that depended on the evidence of ill-health. It was open to him to reject the appellant’s evidence and prefer the respondent’s evidence on these points. In our view, the appellant did not meet the criteria under factors (a) and (b).

[13] Nor do we agree that the motion judge failed to take into account the question of prejudice which is related to the consideration of the effect of dismissing or allowing the motion on the overall integrity of the administration of justice. While he did not specifically use the word “prejudice”, it is clear from his weighing of the facts that he was assessing it. As the motion judge found, the appellant has failed, without proper excuse, to repay any of the monies that have been clearly owing to the respondent for almost three years. The appellant was properly served with all requisite notices under the mortgage and the statement of claim. The motion judge accepted the process server’s evidence that by July 2023, the appellant and her immediate family no longer lived at the property. Her actions of further encumbering the property and defaulting under the other mortgages serve to reduce the equity available to the respondent to recover the monies paid to the appellant almost three years ago. The equities clearly favour the respondent and, as the motion judge concluded, “setting aside the default judgment in this case would have a negative effect on the overall integrity of the administration of justice.”

[14] As for the motion judge’s assessment of the merits of the appellant’s defence for the purpose of factor (c), he did not apply a higher standard or finally determine the defence. He found that the appellant did not have “a triable or arguable defence” that the loan was not repayable until the property was sold and that the charge was irregularly filed and deficient. He based his assessment on his interpretation of the loan agreement between the parties and found, correctly in our view, that under the loan agreement, the appellant agreed to repay the loan by August 31, 2022, failing which she agreed that a charge would be registered against her property. This does not represent a misapprehension of the appellant’s evidence but a rejection of her position that her interpretation of the loan agreement gave rise to an arguable issue.

[15] We see no basis for appellate intervention.

Disposition

[16] The appeal is dismissed. The respondent is entitled to her appeal costs from the appellant on a partial indemnity basis in the all-inclusive amount of $3,500.

“L.B. Roberts J.A.”
“Gary Trotter J.A.”
“J. George J.A.”