Executive Summary: Key Legal and Evidentiary Issues

• The enforceability of mortgage terms following repeated defaults by the mortgagor.

• The legal effect of the Canadian Mortgage Charter as a non-binding policy statement.

• Whether the mortgagor was entitled to further relief or payment arrangements not stipulated in the mortgage agreement.

• The sufficiency of evidence provided by the mortgagor to contest the lender’s claim for possession.

• The appropriateness of granting a stay of eviction pending appeal.

• The calculation and awarding of costs following the dismissal of the motion.

Facts of the case

Jean-Bernard Bitchoka owned a property in Gloucester, Ontario, which was subject to a mortgage registered in March 2022 in favor of Equitable Bank for $610,000 at an annual interest rate of 3.94%. The mortgage was renewed in November 2022 for 60 months at a higher interest rate of 6.19%, and then further modified in December 2022 to a 12-month term at 6.89%. Bitchoka defaulted on his payments as of September 1, 2023, and the default continued despite multiple opportunities to cure it. Equitable Bank issued a demand for payment and, after the default persisted, served a notice of sale under the mortgage, which expired in January 2024.

In February 2024, Equitable Bank agreed to forbear from enforcing its power of sale if Bitchoka made specific payments according to a detailed schedule. Bitchoka failed to comply with these terms, though the bank offered a modification to the payment schedule. Despite this, Bitchoka again defaulted. Equitable Bank then sought summary judgment for possession of the property and payment of the outstanding amounts.

Arguments and policy terms at issue

At the summary judgment motion, Bitchoka argued that Equitable Bank’s enforcement actions were contrary to the Canadian Mortgage Charter, a federal policy statement outlining mortgage relief options. However, Bitchoka acknowledged that the Charter does not have the force of law. He also proposed to make monthly payments of $3,000 until he could refinance or sell the property at a price he deemed acceptable, but provided no evidence of efforts to refinance or sell, nor was there any support for this proposal in the standard mortgage terms.

The court considered the terms of the mortgage (“la Charge”) and the forbearance agreement, both of which set out the lender’s rights in the event of default. The judge found that the Charter could not override the contractual terms and that Bitchoka had failed to meet his payment obligations despite multiple accommodations.

Summary judgment and subsequent developments

The motion judge granted summary judgment to Equitable Bank, finding no genuine issue requiring a trial. The judge allowed Bitchoka additional time to sell or refinance the property and ordered him to pay $25,000 in costs. After the judgment, Bitchoka made only three payments of $3,000, and the property’s tax account fell into arrears, prompting Equitable Bank to pay the outstanding taxes.

Motion for stay pending appeal

Facing imminent eviction, Bitchoka brought a motion before the Ontario Court of Appeal to stay the enforcement of the possession order pending his appeal. The court considered whether there was a serious issue to be tried, whether Bitchoka would suffer irreparable harm if the stay was denied, and where the balance of convenience lay. The court found that there was no serious issue for appeal, as Bitchoka admitted his default and the mortgage terms clearly entitled Equitable Bank to possession and payment. The court also noted that Bitchoka had not provided evidence of efforts to secure alternative housing or mitigate harm.

Ruling and outcome

The Ontario Court of Appeal dismissed Bitchoka’s motion for a stay of eviction, finding no serious question to be tried and no evidence of irreparable harm. The court awarded substantial indemnity costs of $12,522.32 to Equitable Bank for the motion. As a result, Equitable Bank remained entitled to possession of the property, and Bitchoka’s request for further relief was denied. The total monetary awards in favor of Equitable Bank included $25,000 in costs from the summary judgment and $12,522.32 for the motion, with no further relief granted to Bitchoka.