Executive Summary: Key Legal and Evidentiary Issues

• Validity of substituted service of the Statement of Claim on an adult household member under Rule 16.03(5) and the resulting finding that the defendants were properly served despite their denial of actual notice.
• Credibility concerns arising from the defendant Dhaliwal’s sworn claim of ignorance of the litigation, later contradicted by the August 25, 2025 Forbearance and Standstill Agreement and her own supplementary affidavit.
• Absence of any substantive defence to mortgage default, given the admitted non-payment of interest and the full principal falling due, with financial hardship treated as insufficient in law to resist enforcement.
• Application of the RJR-MacDonald test for a stay, including the finding that there was no serious issue to be tried and that eviction-related harm is compensable in damages, and therefore not irreparable.
• Weighing of the balance of convenience in favour of the mortgagee, emphasizing the validity of the security and the lack of any compelling countervailing equities from the defaulting mortgagors.
• Broader judicial concern about a trend of last-minute urgent stay motions by defaulting mortgagors seeking to delay eviction without payment toward long-overdue mortgage debts.

Background and facts of the mortgage dispute

The case arises from a private mortgage arrangement involving a loan advanced by the plaintiff mortgagee, Prabhjot Kaur, to the defendants, Prahbpreet Kaur Dhaliwal and Daranbir Singh. On February 2, 2024, the defendant Singh advanced $340,000 to the defendant Dhaliwal, and this loan was secured by a mortgage in favour of the plaintiff. The defendant Singh guaranteed the mortgage. The mortgage was registered against two properties, including the defendants’ residence at 10 Stewart Crescent, Thornton, Ontario, which became the focal property for the subsequent eviction proceedings. The terms of the mortgage required the defendants to make monthly interest payments of $3,400, with the full principal amount falling due and payable on February 2, 2025. From the date of advance, the defendants made no interest payments at all on the loan. When the full amount came due in February 2025, it also remained unpaid, placing the mortgage squarely in default.

Procedural history and service of the claim

As a result of the ongoing default, the plaintiff commenced an action to enforce the mortgage. A Statement of Claim was issued and served on June 28, 2024. Service was effected at the residence, with the process server leaving the Statement of Claim in a sealed envelope with an elderly woman who identified herself as the mother of the defendant Karanbir Singh and as an adult member of the same household, and then mailing another copy to the same address the following day. The defendants later argued that they had never been personally served with the Statement of Claim, the Notice of Sale, the Notice to Vacate, or any other enforcement-related document. In her initial affidavit, the defendant Dhaliwal swore that she had no knowledge of any enforcement proceedings prior to November 2025. The court rejected this evidence as lacking credibility, noting that her mother, who was approximately 70 years old, had accepted service and that a formal affidavit of service confirmed compliance with the Rules of Civil Procedure. The credibility problem was compounded when it emerged that on August 25, 2025, Dhaliwal and Singh had entered into a Forbearance and Standstill Agreement with the plaintiff. That agreement directly referenced the litigation and the mortgage enforcement. When this inconsistency was raised, Dhaliwal filed a supplementary affidavit on November 27, 2025, “correcting” her earlier evidence and acknowledging that August 25, 2025 was in fact the date when she first became aware of the litigation. The judge found that, contrary to the defendants’ position, the Statement of Claim was properly served pursuant to Rule 16.01 together with the alternative to personal service set out in Rule 16.03(5). Service at the residence on an adult household member, followed by mailing a copy to the same address, was fully compliant, and the Statement of Claim was therefore validly served even if the defendants later claimed a lack of actual knowledge.

Mortgage terms, default, and the forbearance arrangement

The critical contractual features of the mortgage were the monthly interest obligation of $3,400 and the balloon payment of the full principal on February 2, 2025. No interest payments were ever made after advance, and the principal went unpaid at maturity. The Forbearance and Standstill Agreement of August 25, 2025 was significant, both legally and evidentially. Substantively, it showed that the parties attempted to manage or temporarily defer enforcement while the defendants remained in default. Evidentially, it directly undercut Dhaliwal’s original claim that she only learned of any enforcement in November 2025. The mortgage itself did not involve insurance policy wording or specialized coverage clauses; instead, it was a typical credit and security arrangement. Among its important terms was a costs clause allowing for full indemnity costs in favour of the mortgagee. That provision came into play when the court later fixed costs on the stay motion and expressly recognized the plaintiff’s contractual entitlement, while still exercising discretion to moderate the quantum.

The urgent stay motion and the RJR-MacDonald test

The litigation reached a critical stage when the defendants faced an imminent eviction from their residence following a default judgment, a writ of possession, and the issuance of an eviction notice. The defendants brought an urgent motion seeking a stay of the eviction. The matter first came before the court on November 25, 2025, when the defendants requested urgent relief. The judge agreed that the issue was urgent but directed that it proceed on notice. The fully argued motion was then heard on November 28, 2025. On the stay motion, the defendants advanced the central argument that they had never been properly served with the Statement of Claim and therefore had been denied natural justice. They argued that this alleged absence of service and notice supported a stay of the eviction. The judge disagreed, finding that service had been properly effected and that there had been no breach of natural justice. Furthermore, when pressed in oral argument to identify a substantive defence to the plaintiff’s claim, defence counsel candidly acknowledged that the mortgage was in default and that interest payments, apart from sums paid under the Forbearance Agreement, remained outstanding. No viable defence was presented, beyond references to the defendants’ difficult financial circumstances. The court applied the well-known three-part RJR-MacDonald test for interlocutory relief, as confirmed and contextualized by subsequent Supreme Court authority such as Google Inc. v. Equustek Solutions Inc. For the “serious issue to be tried” branch, the court held that there was no evidence of any legal defence to the default, and economic hardship alone could not create a justiciable controversy capable of justifying a stay. On irreparable harm, the court relied on recent Ontario Court of Appeal decisions, including National Bank of Canada v. Guibord and KLN Holdings Inc. v. Grant, to emphasize that while eviction from a matrimonial home may cause significant hardship, it does not constitute irreparable harm in law because any resulting loss is compensable in damages if the mortgagor later succeeds. For the balance of convenience, the court recognized the defendants’ difficult economic circumstances but concluded that the plaintiff held valid security, remained unpaid, and should not be prevented from enforcing that security absent some compelling legal reason. No such reason was shown, given the continued default and lack of any substantive defence on the merits.

Judicial commentary on last-minute urgent motions

Beyond the immediate dispute, the judge used the reasons to comment on a broader pattern emerging in the Central East Region. There has been a noticeable rise in urgent motions brought at the last possible moment, often after default judgments, writs of possession, and eviction notices have already issued. In these cases, debtors frequently seek emergency relief from eviction without having made meaningful efforts to address long-outstanding mortgage debts. The court stressed that eviction from a family home is a remedy of last resort, but it remains an available remedy when debts remain unpaid for months or even years and no serious steps are taken to reduce the arrears. The judge observed that failing to pay anything toward a long-overdue debt while asking for equitable relief can appear to be “gaming the system”—waiting until the brink of eviction and then expecting the court to intervene. In the court’s view, equitable relief such as a stay requires “clean hands”, which in this context means full, frank disclosure and at least some good-faith attempt to pay down the debt while the litigation is ongoing. None of those equitable considerations were present in this case.

Outcome, costs, and successful party

Ultimately, the court dismissed the defendants’ motion for a stay of the eviction notice, leaving the default judgment, writ of possession, and eviction process in place. The judge concluded that the defendants had been properly served, had no defence on the merits, had not demonstrated irreparable harm in the legal sense, and could not show that the balance of convenience favoured them. On costs, the court noted that the mortgage entitled the plaintiff to full indemnity costs but exercised its discretion to fix costs at $8,500 on an all-inclusive basis, payable within 30 days. In overall terms, the plaintiff, Prabhjot Kaur, was the successful party on the stay motion, and the total quantified monetary amount specifically ordered in this decision in her favour was $8,500 in costs.