Executive Summary: Key Legal and Evidentiary Issues

• Foreclosure was pursued due to breach of mortgage terms prohibiting unauthorized financial encumbrances.

• Registered judgments in favor of the strata corporation were found to constitute default under the mortgage.

• The mortgagors argued the judgments were void due to alleged fraud, but this was rejected as a collateral attack.

• The court confirmed that all judgments had been reviewed and upheld at every appellate level, including the Supreme Court of Canada.

• A requisition under the Unclaimed Property Act regarding funds in court did not affect the enforceability of the judgments.

• An order nisi was granted with redemption terms including an interest rate of 7.29% based on the updated statement of account.

Facts and outcome of the case

This case involves a foreclosure proceeding initiated by Home Equity Mortgage Corporation against Mohd Ali Hirji and Parin Mohamedali Hirji Lalani, mortgagors of a strata property governed by The Owners, Strata Plan VR 44. The petition for foreclosure was filed in January 2020, but delayed due to extensive, overlapping litigation between the respondents and the strata corporation.

The underlying dispute began in 2007, when the mortgagors sued their strata for over $1 billion in damages, alleging failure to maintain and repair certain elements of the property. That case was dismissed in 2015 and led to significant cost awards against the mortgagors. A second action filed in 2019 was also struck as an abuse of process, and the court barred the mortgagors from launching further legal proceedings against the strata without leave or full payment of prior cost awards.

In the current foreclosure matter, the court found that two strata judgments and an underlying strata lien were registered against the property without the consent of the mortgagee, in violation of the mortgage’s covenants. The mortgagors, representing themselves, argued that the underlying judgments were void due to fraud. However, the court declined to consider this argument, labeling it an impermissible collateral attack, noting the judgments had been upheld at every level of court including the Supreme Court of Canada.

The court rejected the defense and found that default had occurred. An order nisi was granted on the standard six-month redemption period. The court accepted the mortgagee’s updated interest rate of 7.29%, supported by affidavit evidence. The hearing and judgment were both delivered on May 1, 2025, by Associate Judge Robertson. While no new cost or damage awards were issued in this decision, the earlier strata litigation had resulted in special costs of $919,549.26 registered on title, contributing to the mortgage default.