Court of Appeal for Ontario

Date: 2025-07-11
Docket: M56067 (COA-25-CV-0714)
Judge: David M. Paciocco

Between:
1396929 Ontario Inc.
Plaintiff (Respondent/Responding Party)

and

Lucia Valladares, Walter Valladares, and Leonides Valladares
Defendants (Appellants/Moving Parties)

Lucia Valladares, Walter Valladares and Leonides Valladares, acting in person
Mohsen Seddigh, appearing as amicus curiae, Pro Bono Ontario
Balpreet S. Lailna, for the responding party

Heard: July 2, 2025

Endorsement

Background

[1] The moving parties, Lucia Valladares and her son, Walter Valladares, borrowed money secured by mortgage from the responding party, 1396929 Ontario Inc. (“139 Inc.”). This mortgage is the second mortgage on the residential home that they own. Although there is an ongoing dispute about some of the payments, the judge below found that the mortgage fell into default both because of missed payments and the applicant’s default on the first mortgage.

On May 29, 2025, 139 Inc. obtained summary judgment against the moving parties in a standard mortgage enforcement action. The judge also granted 139 Inc. leave to issue a writ of possession. A writ of possession was issued on June 9, 2025, and a Notice to Vacate was served on the moving parties on June 13, 2025.

On June 17, 2025, the moving parties filed a Notice of Appeal of the judgment of May 29, 2025. On June 18, 2025, they brought an urgent motion in this court to stay the eviction “order” issued against them. On June 19, 2025, Gomery J.A. granted an interim stay of the May 29, 2025 judgment pending the stay motion. The motion for a stay pending appeal is now before me.

Technical Objection and Relief Sought

[2] 139 Inc. raised a highly technical objection to this motion, claiming that it is cast as a motion for a stay of the eviction notice, and not as a stay of the summary judgment. The moving parties are unrepresented. No one is under any misunderstanding as to the relief they seek, which is to prevent enforcement of the judgment below pending their appeal. I will therefore entertain the motion on that basis. For the reasons that follow, I grant the motion and stay the judgment below pending the appeal.

Test for Stay Pending Appeal

[3] In order to obtain the order they seek, the moving parties must show that, in all of the circumstances, it is in the interests of justice to stay the judgment of May 29, 2025 pending the appeal, including by demonstrating that: (1) based on a preliminary assessment there is a serious question to be tried; (2) refusing the stay would cause them irreparable harm; and (3) they would suffer greater harm if the stay is denied than 139 Inc. would suffer if the stay is granted: BTR Global Opportunity Trading Company Limited, 2011 ONCA 620, 283 O.A.C. 321, at para. 16; Carvalho Estate v. Verma, 2024 ONCA 222, 170 O.R. (3d) 781, at para. 4.

Grounds of Appeal

[4] The moving parties have identified three grounds of appeal in their Notice of Appeal. I agree with 139 Inc. that none of these issues raise a serious question to be tried.

[5] The first ground challenges the motion judge’s decision, made in an earlier related motion, to refuse to add Lucia Valladares’ daughter, Cristabel Valladares, as a party defendant to the action. It is clear on the evidence that Cristabel played an important role in arranging the mortgage between 139 Inc., and her mother and brother. The moving parties claim that she is, in fact, the trust beneficiary of the property, and that the motion judge erred by not adding her as a party. I am not persuaded that this ground of appeal raises a serious question to be tried. Even if she is the trust beneficiary, this would not give her standing to become a party defendant to the action. The moving parties, as the legal owners of the property, hold the legal right to defend the action. Her rights as a trust beneficiary are against them, not against 139 Inc. More importantly, even if she is a trust beneficiary, that does not affect the rights that 139 Inc. would have on default by the legal owners.

[6] The remaining two grounds of appeal identified in the Notice of Appeal are also without merit because they allege breaches of the Charter, which, as matter of trite law, does not apply to contractual relationships between private parties. Neither of these grounds of appeal raise a serious question to be tried.

New Ground Raised by Amicus Curiae

[7] However, the moving parties were ably assisted before me by Mr. Mohsen Seddigh, the volunteer counsel from Pro Bono Ontario, and he has raised a serious question to be tried. Although this ground was not raised expressly in their Notice of Appeal, he asked me to bear in mind that the moving parties were unrepresented below and in the preparation of their appeal. He submits that they should not be held strictly to the manner they framed their grounds of appeal. He advised me that they intend to secure legal assistance and seek to amend their ground of appeal to include additional grounds of appeal.

[8] The proposed ground of appeal that does raise a serious question to be tried is whether the motion judge erred in concluding that this was an appropriate case for summary judgment. In their affidavit evidence, albeit filed in reply, Lucia and Cristabel provided evidence about a conflict of interest that the mortgage broker and mortgagee were allegedly under and about tactics allegedly used by the mortgagee to get the mortgage document signed. They also alleged that the lawyer who purportedly gave the moving parties independent legal advice was not independent. The motion judge did not address this evidence directly. She said that self-serving affidavit evidence is not sufficient to create triable issues and then found that the moving parties had not “adduced any evidence to suggest fraud, illegality or undue influence on the part of the plaintiff.” She also relied heavily on the signed certificate of independent legal advice without addressing the affidavit evidence that: (a) the moving parties did not speak the same language as the lawyer who purportedly gave them independent legal advice; and (b) the moving parties signed the second mortgage without the assistance of an interpreter to translate the document. In my view, there is therefore a serious question to be tried as to whether there was a genuine issue requiring a trial that made the summary judgment process unavailable, particularly given that the moving parties were unrepresented.

Irreparable Harm

[9] I am also satisfied that denying a stay pending appeal to permit this issue to be raised could cause the moving parties irreparable harm. 139 Inc. relies on the decision of Brown J.A. in Starkman v. Home Trust Company, 2015 ONCA 436, at paras. 17-18, to the contrary. 139 Inc. argues that this decision supports the proposition that the prospect of losing a home because of the execution of a writ of possession is not irreparable harm, given that it is the result of the promise given to the mortgagee that they could do so in the event of default. The holding in Starkman is not that broad. Justice Brown cautioned that each case must be assessed in the context of its specific facts: Starkman, at para. 17. The issues in this case challenge the validity of the mortgage. It is not an appropriate case for concluding that a term in what may be an invalid mortgage undermines the claim to irreparable harm.

Balance of Convenience

[10] The balance of convenience also rests with the moving parties. The loss to them should they succeed on the appeal without enforcement being stayed pending appeal is significant. In contrast, the potential loss to 139 Inc. is speculative as it is based on current prognostications about the value of the home in a fluctuating market. Circumstances may change by the time the appeal is heard, and if the mortgage is upheld, they will have an action on the covenant against the mortgagors, and a further action against the guarantor, for any interest that accumulates.

Conditional Stay

[11] I am therefore persuaded that it is in the interests of justice to stay the summary motion judgment pending its appeal, but only conditionally. The order of May 29, 2025 is stayed until July 25, 2025. If by that date the moving parties have amended their grounds of appeal to include the ground raised before me, that the motion judge erred in finding that there was no genuine issue requiring a trial, the stay will be extended pending the appeal.

Costs

[12] No order of costs will be made.

“David M. Paciocco”