R. Glass

The third mortgagee brought a motion to set aside part of a Reference Report that had added the plaintiff's costs to the mortgage debt, effectively reducing the surplus funds from the power of sale to zero.

The moving party sought payment of the surplus funds and relief from previous costs orders.

The court dismissed the motion, finding that the Reference Report had been automatically confirmed 15 days after its release, and the motion to oppose confirmation was brought months out of time.

Furthermore, the court held there were no grounds under Rule 59.06 to vary the previous orders, and no error in principle or excess of jurisdiction in the referee's findings.

Following a reference to determine the amount owing under a second mortgage and the sale of the property, the court determined the costs of the proceeding.

The second mortgagee was awarded $20,000 in partial indemnity costs against the mortgagors and the third mortgagee, exhausting the remaining surplus funds.

The court also awarded substantial indemnity costs against the third mortgagee for unnecessarily causing the second mortgagee and a former counsel to prepare for a costs hearing on claims that were abandoned at the last minute.

The court declined to determine the validity of the third mortgage as no surplus funds remained.