Executive Summary: Key Legal and Evidentiary Issues

• Appropriateness of summary judgment in a straightforward mortgage default case.

• Validity of the plaintiff’s entitlement to principal, interest, and certain additional charges under the mortgage agreement.

• Application of section 8 of the Interest Act to disallow certain penalties and fees claimed by the plaintiff.

• Adequacy of notice and legal demand for payment served on the defendant.

• Defendant’s request for an extended grace period to pay out the mortgage and the court’s response.

• Assessment and reduction of legal costs and additional charges claimed by the plaintiff.

Background and facts of the case

TMSSD Inc. v. Ojeikere, 2025 ONSC 5245, concerns a dispute arising from a second mortgage agreement between TMSSD Inc. (the plaintiff) and Atinuke Taibat Ojeikere (the defendant) regarding a property in Mississauga, Ontario. On January 10, 2025, TMSSD Inc. advanced $120,000 to Ms. Ojeikere, secured by an interest-only second mortgage with a six-month term expiring July 8, 2025, at a 12% interest rate. The defendant received independent legal advice before entering the agreement. As the maturity date approached, the plaintiff’s counsel notified the defendant in writing that the mortgage would not be renewed and demanded full payment upon maturity.

The mortgage was not paid out by the due date, resulting in default. Subsequently, the plaintiff initiated legal proceedings, seeking repayment of the $120,000 principal, possession of the property, interest at 12% per annum, and costs on a substantial indemnity basis. In her defense, Ms. Ojeikere argued that she had not received a legal demand, challenged the addition of $8,695.05 in costs, questioned the outstanding principal, and requested a 120-day grace period to pay out the mortgage.

Legal issues and policy terms

The central issue was whether there was a genuine issue requiring a trial or if summary judgment was appropriate. The court reviewed the requirements for summary judgment under Rule 20 of the Rules of Civil Procedure and relevant case law, emphasizing that the moving party must show there is no genuine issue for trial, after which the onus shifts to the responding party to present specific facts showing a trial is necessary.

The court found that all relevant evidence was before it and that the summary judgment process was suitable. The plaintiff established a prima facie case: the mortgage matured, payment was not made, and the debt remained outstanding. The defendant’s arguments were found insufficient to raise a genuine issue for trial. The court determined that the plaintiff had properly served a legal demand and that the principal remained unpaid.

A significant legal discussion centered on section 8 of the Interest Act, which prohibits lenders from imposing fines, penalties, or increased interest rates on arrears beyond the rate agreed for principal not in arrears. The court analyzed the additional charges claimed by the plaintiff, referencing both the mortgage’s standard charge terms and statutory protections. The court allowed only those charges that reflected legitimate costs (such as the $565 mortgage discharge statement fee) and disallowed penalties or fees not supported by evidence or that constituted improper penalties under the Interest Act.

Outcome and costs

The court granted summary judgment to the plaintiff, ordering repayment of the $120,000 principal, interest at 12% per annum, and the $565 discharge statement fee. The plaintiff’s claim to other additional charges was largely denied as they were not proven to be legitimate costs or were found to be penalties prohibited by law. The defendant’s request for a 120-day grace period was addressed by the plaintiff’s concession to delay execution on possession until December 1, 2025, which the defendant ultimately rejected while seeking further relief, but the court found no basis for further extension.

Regarding costs, the court reviewed the plaintiff’s bill of costs and found the claimed amount of $9,915.58 to be fair, reasonable, and proportional, noting that the plaintiff claimed costs on a substantial indemnity basis rather than the higher solicitor and client scale permitted by the mortgage.

In conclusion, the court ordered judgment in favor of TMSSD Inc. for the $120,000 principal, interest at 12% per annum, $565 for the mortgage discharge statement, and $9,915.58 in costs. The defendant’s arguments did not warrant a trial, and the plaintiff was the successful party, with the total amount awarded clearly specified in the order.