Executive Summary: Key Legal and Evidentiary Issues

• Mortgage authorization and registration validity was challenged through forgery and fraud allegations, which the trial judge rejected based on the appellant's signatures on statements of adjustments

• Registration of multiple mortgages against four properties securing a single loan did not constitute fraudulent conduct or entitlement to additional recovery

• Discharge statement requirements under the Mortgages Act, R.S.O. 1990, c. M.40 were satisfied, with at least two statements provided to the appellant

• Interpretation of the parties' arrangement governing partial discharges was determined by the trial judge based on the contractual terms agreed to by both parties

• Exercise of power of sale by the mortgagee preserved the right to claim any deficiency remaining after accounting for sale proceeds, distinct from a foreclosure election

• Chattels claimed to be sold were not properly advanced as legal claims due to lack of counterclaim, failure to provide evidence of value, and opportunity for removal before sale

The mortgage loan dispute and its resolution

Background and loan arrangement

The case of 7084421 Canada Ltd. v. Cory Shane Savary involved a dispute over a substantial loan secured by multiple mortgages. The respondent company, 7084421 Canada Ltd., advanced funds to the appellant, Cory Shane Savary, under a loan agreement. The loan was secured by mortgages registered against four separate properties. The respondent relied on the appellant's signatures appearing on statements of adjustments for various mortgage advances as evidence that the required funds had been advanced to him.

Trial proceedings and factual findings

Following a five-day trial before Justice Mary E. Vallee of the Superior Court of Justice, the trial judge made comprehensive findings of fact that favored the respondent company. The trial judge accepted the evidence that the respondent had advanced the sums it claimed, relying substantially on documentation signed by the appellant. Critically, she rejected all of the appellant's defenses, each of which challenged the validity and propriety of the respondent's conduct. The appellant had contended that his signature had been forged on documents authorizing the mortgage registration and that the mortgages themselves were fraudulent. However, the trial judge found his evidence unconvincing and determined that the mortgages were properly authorized and legitimate.

Mortgage registration and fraud allegations

The appellant also objected to the registration of mortgages against four separate properties for what he claimed was a single loan obligation. He argued this practice was fraudulent and that the respondent was seeking additional recovery through inflated claims. The trial judge rejected this contention, finding that registering multiple mortgages for a single loan was not improper and did not demonstrate fraudulent intent. The respondent was not seeking any additional recovery or inflated amount by virtue of the multiple mortgage registrations; rather, the mortgages simply represented different security interests for the same underlying debt.

Discharge statements and Mortgages Act compliance

Under the Mortgages Act, mortgagees are required to provide discharge statements to mortgagors upon request and under certain circumstances. The appellant claimed that the respondent had failed to provide the mandatory statement of amounts owing as required by section 22(2) of the Mortgages Act. Additionally, he asserted that the respondent had failed to grant partial discharges as required. The trial judge accepted evidence that at least two discharge statements, as contemplated by the Mortgages Act, had been provided to the appellant. The court identified and interpreted the terms of the parties' arrangement that governed partial discharges, ultimately finding that the respondent had complied with its obligations in this regard.

Property sales and power of sale remedies

After the loan fell into arrears, the respondent sent a Notice of Sale to the appellant on March 8, 2017. The action for payment was subsequently commenced on June 14, 2017, which was after the time for payment specified in the notice had lapsed and therefore in compliance with section 42(1) of the Mortgages Act. The appellant argued that by taking steps to sell the mortgaged properties after commencing the action, the respondent had forfeited its right to pursue an action for payment of the debt. This argument reflected a misunderstanding of mortgage law. The trial judge and the appellate court clarified that the exercise of a power of sale is fundamentally different from a foreclosure. While foreclosure constitutes an election by the mortgagee to forego payment of the debt, a power of sale involves no such election. The exercise of a power of sale preserves the mortgagee's right to claim for any deficiency that remains owing after the proceeds from the sale are accounted for. The respondent had properly exercised its power of sale and remained entitled to pursue recovery of any outstanding balance.

Chattels and personal property claims

The appellant also claimed that the respondent had unlawfully sold his personal property (chattels) that were located on the mortgaged properties. The trial judge refused to give effect to this claim for several reasons: the appellant had been afforded an opportunity to remove any chattels before the properties were sold, he had failed to file a counterclaim for the chattels as required by the rules of court, and he had presented no evidence establishing the value of the alleged chattels. Without a properly pleaded claim and supporting evidence, the trial judge appropriately declined to award relief for this allegation.

Appeal and final outcome

On appeal to the Court of Appeal for Ontario, the appellant sought to have the trial judgment set aside and requested additional remedies, including restoration of ownership of the mortgaged properties that had been sold. The Court of Appeal, in a decision reported as 2025 ONCA 808, upheld the trial judge's decision in all material respects. The appellate court noted that the key findings were primarily factual in nature and that the appellant had failed to identify any palpable and overriding error that would justify appellate interference. Additionally, the court observed that the appellant's failure to provide trial transcripts, as required by the rules of court, prevented thorough appellate review of certain factual findings. Ultimately, the Court of Appeal dismissed the appeal without costs. The successful party, 7084421 Canada Ltd., was granted a judgment requiring the appellant to pay a total of $520,096.35, representing the amount due under the loan after accounting for the proceeds generated from the sale of the mortgaged properties.