In the context of a complex fraud action, the court previously ordered the sale of a mortgaged property.
The First Mortgagees subsequently brought a motion seeking payment of three months' interest out of the sale proceeds.
The court dismissed the motion, finding it was barred by issue estoppel and constituted a collateral attack on the prior sale order, as the First Mortgagees failed to attend the prior hearing or produce relevant documents.
Furthermore, the court held that the claimed interest amounted to an unenforceable penalty under the Interest Act and granted relief from forfeiture under the Courts of Justice Act.
Costs were awarded to the plaintiffs on a substantial indemnity basis.
