Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1000101702 ONTARIO INC., Plaintiff
AND:
LISA BIHUN AND SONIA BIHUN, Defendants
BEFORE: Paul B. Schabas J.
COUNSEL: Jordan David Sobel, for the Plaintiff
Matthew Stroh and Angela Yu, Defendant
HEARD: March 30, 2026
ENDORSEMENT
[1]
Overview
This is a motion by the defendants brought pursuant to Rule 19.08 of the Rules of Civil Procedure to set aside the noting in default and default judgment obtained against them in this proceeding.
[2]
Legal Principles
The factors to be considered on a motion to set aside a default judgment are set out in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 at paras. 48 – 49:
(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.
3However, as the Court of Appeal stated at paras. 50 – 51 of Mountain View Farms:
These factors are not to be treated as rigid rules; the court must consider the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of his or her default.
For instance, the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside the default judgment, even if the other factors are unsatisfied in whole or in part. In showing a defence on the merits, the defendant need not show that the defence will inevitably succeed. The defendant must show that his or her defence has an air of reality.
4Further, “the Court’s ultimate task on a motion to set aside a default judgment is to determine whether the interests of justice favour granting the order”: Mountain View Farms at para. 47. Or, put another way, the court must “decide whether, in the particular circumstances of the case, it is just to relieve a defendant from the consequences of default”: Intact Insurance Company v. Kisel, 2015 ONCA 205 at para. 14; see also Amex Bank of Canada v. DaCosta, 2026 ONCA 181.
[5]
Background
The default judgment in this case relates to a mortgage default. The plaintiff was a mortgagee of a property owned by the defendants, registered in May 2023. The mortgage was for $600,000 at an interest rate of 10.99%. The plaintiffs fell into default and the plaintiff began enforcement proceedings in December 2023. The defendants did not defend the action, were noted in default, and the plaintiff obtained default judgment in February 2024.
6There is evidence that the defendants were aware of the default judgment at that time. However, they remained in the house and were not evicted by the enforcement of a writ of possession until January 2025. The defendants brought this motion in July 2025.
7The plaintiff submits that the Mountain View Farms factors favour dismissal. It is argued, among other things, that the motion was not brought promptly after the defendants learned of the judgment, that they have failed to provide a plausible explanation for their delay, and that the defendants have not shown an arguable defence. In particular, counsel for the plaintiff submits this is a simple action on a mortgage which the defendants signed after receiving independent legal advice.
8I agree that the motion was not brought promptly after the defendants learned of the default judgment. However, I do not agree that the defendants have not provided a plausible explanation or that they have not shown an arguable defence.
[9]
Analysis
The defendants submit that they are victims of a fraudulent scheme to which the plaintiff, its principals, the lawyers used by the defendants, and others, are all linked. In my view, the evidence provides support for this submission, which both explains the delay in bringing this motion and provides an arguable defence, or at the very least a defence that has an air of reality to it.
10The mortgage, which is the subject of this action, was entered into in May 2023, with the assistance of Sam Kamra (“Kamra”), who is the brother of the sole director of the plaintiff, Bilal Abdallah (“Abdallah”). Kamra is a real estate agent, but not a mortgage broker. The mortgage was to be used, in part, to pay off Notices of Security Interests (“NOSIs”) and to discharge a mortgage registered on the property when the defendants’ father was still alive and the owner of the house. Those earlier NOSIs and the mortgage were registered as a result of a fraudulent scheme purporting to provide HVAC and other services to elderly and vulnerable homeowners. These fraudulent actions were committed by entities controlled by Austin Acheson (“Acheson”), who is the subject of fraud charges laid by the Ontario Provincial Police.
11Following the death of their father, Acheson continued to demand funds for supposed renovations from the defendants, who are sisters. The defendants needed more funds and were introduced by one of Acheson’s associates to Kamra, who they thought was a mortgage broker. The lawyer who advised them, Seun Olowolafe (“Olowolafe”), had been introduced to the defendants by Acheson. The defendants submit that Kamra is the directing mind of the plaintiff. Through Karma, the defendants entered into the mortgage in May 2023, which matured one year later, in May 2024. However, the result of the refinancing of the property in May 2023 was that the defendants received only $1,100. As a result, they could not afford the mortgage payments.
12It is the defendants’ evidence that in 2023 and 2024, Kamra made frequent demands for payment and threats towards them. Kamra then advised them to get a second mortgage from the plaintiff, even though the plaintiff had already obtained a default judgment on the first mortgage and had obtained, on May 1, 2024, leave to have the Local Registrar issue a Writ of Possession for the property.
13In June 2024, the plaintiff registered a second mortgage on the property for $150,000 at an interest rate of 29.99% - very high rate. The defendants say they did not sign any documents relating to this mortgage and there is evidence suggesting their signatures were forged on the registered mortgage. When cross-examined on this motion, Abdallah refused to answer any questions about this second mortgage.
14Nor did Abdallah respond to any questions regarding the flow of funds from the sale of the property, which apparently occurred in February 2025 for a purchase price of $1.1 million to 15441111 Canada Inc. Although the plaintiff claims the purchase was enabled by a vendor-take-back mortgage, no details of the funding arrangements, or whether the purchaser provided any funds to the plaintiff, have been disclosed. The principal of the purchaser, Kelvin Castro (“Castro”), was summoned to be examined on this motion, but did not present himself.
15I draw adverse inferences from Abdallah’s refusals and from Castro’s failure to appear.
16Even when the defendants were evicted, in January 2025, Kamra purported to help and control them by initially providing them with accommodation in a dilapidated basement apartment where he was paying a nominal rent. Kamra told them not to involve the police or to speak to anyone about their situation.
17It was only in 2025 that the defendants believed that they had been defrauded by Kamra, the plaintiff and potentially others, retained counsel and brought this motion.
18The defendants issued, but have not yet served, a Statement of Claim, against the plaintiff, Kamra, Abdallah, Castro, Olowolafe and others, asserting, among other things, breach of fiduciary duty, conspiracy, conversion, deceit, and unjust enrichment against them. These are also claims that will form part of the contemplated defence and counterclaim in this action.
19Accordingly, weighing all of the factors set out in Mountain View Farms, I find that the default judgment should be set aside. While the defendants did not move promptly to set the judgment aside, their failure to do so is linked to the defences they wish to raise – that they were vulnerable and victims of fraudulent activity by the plaintiff and others, which they did not appreciate until at least early 2025.
20The Court is seeing many fraudulent schemes similar to the one presented here. The defendants have presented more general evidence about the nature of these schemes and their prevalence from a law clerk with extensive experience of such schemes. All of this supports the raising of an arguable defence.
21Additionally, in these circumstances, there would be great prejudice to the defendants if they could not defend the action. The prejudice to the plaintiff is only that they will be required to prove their case. Further, as the plaintiff’s counsel emphasized in argument, if the default judgment is set aside and the plaintiff is successful at trial, the defendants will be liable for much greater damages and for other expenses as set out in the mortgage.
22Finally, allowing a judgment of this kind to stand in the absence of an assessment of the merits, where there are grounds to suspect fraud, may have a detrimental impact on the overall integrity of the administration of justice. Courts exist to protect citizens against wrongdoing and must uphold the rule of law. This accords with my “ultimate task” on this type of motion, as the Court of Appeal has said that I must “determine whether the interests of justice favour granting the order” setting aside the default judgment. Here the interests of justice favour the defendants.
[23]
Disposition
The noting in default and the default judgment are set aside. The defendants shall have 30 days from the date of these Reasons to file a statement of defence.
[24]
Costs
In accordance with the agreement of the parties, the plaintiff shall pay the defendants’ costs of this motion fixed in the amount of $8,0000, including HST and disbursements.
Schabas J.
Date: March 31, 2026