Executive Summary: Key Legal and Evidentiary Issues

• Enforcement of a private first-rank hypothec on a Beaconsfield residence through forced surrender (délaissement forcé) and taking in payment (prise en paiement) after prolonged non-payment of mortgage instalments.
• Subrogation of CIBC by Soltron in a 2015 refinancing and 2018 renewal, with very high contractual interest (14% then 25% per year with anatocism) driving the debt to over 1.8 million dollars.
• Repeated motions to postpone for medical reasons and to recuse the trial judge, together with leave-to-appeal attempts, were rejected by the Court of Appeal as having no reasonable chance of success.
• A motion to reopen the debates based on a disputed cash payment of 7,500 $ and alleged false testimony was dismissed because the evidence was not new, could have been presented at trial, and would not affect the outcome.
• Defences alleging illegality of contracts of adhesion, a “Ponzi scheme,” usurious interest, and breaches of the Consumer Protection Act were held to be without factual or legal foundation in the context of this first-rank hypothecary loan.
• The pattern of last-minute recusation and postponement motions was found abusive, though no separate monetary sanction was imposed beyond Soltron’s hypothecary recovery, contractual interest and costs.

Factual background and lending relationship

The case concerns the enforcement of a hypothecary loan secured on a residential property in Beaconsfield, Quebec, owned and occupied by Mark Anthony Ciarallo. In 2003 he contracted a hypothecary loan of 276,500 $ with CIBC Mortgage Services Inc., bearing compound interest at 17% per year, on a lot in Beaconsfield where his residence is located. Over time his relationship with CIBC deteriorated, and by 2015 he was in conflict with the bank. Seeking a solution, he turned to Soltron Financial Services LP, a private lender that also acts as a mortgage lender. After negotiations whose conduct and outcome he did not seriously challenge, the parties recorded their agreement on 26 August 2015. Soltron agreed to subrogate CIBC by paying 204,003.16 $ to discharge the CIBC mortgage and to settle other debts of Mr. Ciarallo. In return Soltron took a hypothec over the Beaconsfield property, became subrogated to CIBC’s rights under article 1651 C.c.Q., and the borrower assumed additional obligations. The refinanced loan bore interest at 14% per year for the first 24 months, increasing to 25% per year from the 25th month onward, with compounding of interest. Initially the borrower made his monthly hypothecary payments, but these became increasingly irregular. By late 2017 he ceased making payments entirely. On 20 August 2018 Soltron issued and published a first pre-notice of hypothecary exercise. The parties negotiated again and on 7 December 2018 agreed to cure the arrears and renew the loan, conditional on new payments to be made by Mr. Ciarallo. As part of this arrangement Soltron also paid 26,661.44 $ in unpaid municipal and school taxes. On 18 December 2018 the borrower made his last payment of 9,700 $; thereafter no further instalments were paid. On 25 June 2019 Soltron registered a pre-notice of taking in payment, formally initiating proceedings in the Superior Court (500-17-110510-198) for forced surrender (délaissement forcé) and taking in payment (prise en paiement) of the residence. From 2018 onward, Mr. Ciarallo continued to occupy the property without making any mortgage payments, while interest at the high contractual rate continued to accrue.

Procedural history and appellate decisions

The litigation became procedurally complex and drawn out. The trial in the Superior Court was eventually set for three days in December 2024 before the Honourable Justice Lukasz Granosik. On the first day of the scheduled trial, the defendant moved again for a postponement, invoking medical reasons. The judge refused this application from the bench. The next morning, Mr. Ciarallo filed a motion to recuse the judge; that application was also dismissed on the same day. He then sought leave from the Court of Appeal to appeal the refusal of recusation and requested another postponement. In the decision Ciarallo c. Soltron Financial Services, 2025 QCCA 315, Justice Harvie of the Court of Appeal refused both the postponement and leave to appeal. The Court noted that the borrower had already obtained numerous postponements for health reasons, that on or about 21 February 2025 he had been informed any further postponement requests had to be made by written motion, and that his physician’s note merely indicated that he could not work or practise his profession until 31 March 2025. Having listened to him plead by audio with vigour, coherence and preparation, the Court held that he was clearly capable of arguing for 15 minutes to support his written motion for leave filed on 27 December 2024. The proposed appeal of the recusation ruling was found not to meet the stringent criteria for leave: the Superior Court’s reasons properly stated and applied the law on recusation, and there was no basis to overcome the strong presumption of judicial impartiality. The Court of Appeal concluded the projected appeal had no chance of success and was not in the interests of justice. The file returned to the Superior Court for further hearings in June 2025. Once again, the borrower sought a postponement on medical grounds and renewed his attempt to recuse the trial judge. An evidentiary hearing was held on 16, 18 and 19 June 2025. Due to the time consumed by hearing the evidence, the court arranged for written argument on recusation and on the merits, with judgment on both issues to be rendered together. Immediately after the close of evidence, and after failing to secure a postponement or immediate recusation, the borrower again attempted to obtain leave to appeal the trial judge’s interlocutory decisions. In Ciarallo c. Soltron Financial Service, 2025 QCCA 1180, Justice Kalichman of the Court of Appeal dismissed these efforts. As to the “Motion to Postpone for Medical Reasons” presented on the first trial day, the Court emphasized that the lengthy motion (192 paragraphs) and its 129 pages of exhibits were served outside the prescribed time limits, despite at least one medical note indicating as early as 6 May 2025 that grounds to seek postponement existed. The trial judge’s refusal to hear the late motion on admissibility grounds, while still granting a partial postponement to allow the borrower to attend a funeral and commencing trial in the afternoon, was held to be a reasonable exercise of discretion. As to recusation, the Court of Appeal underlined that the judge had not dismissed the application at that stage; he had ordered written submissions and indicated that he would decide recusation at the same time as the merits. There was therefore no dismissal to appeal, and no reviewable error was apparent. The leave applications were rejected as having no reasonable prospect of success.

Written submissions, extensions and late filings

Following the Court of Appeal’s interventions, the Superior Court moved to fix a schedule for written argument on the merits. Opposing counsel attempted to agree deadlines with Mr. Ciarallo by email, and the court also sent proposals and reminders, but received no response. In these circumstances, the court set dates ex parte: 7 November 2025 for the defendant’s submissions and 21 November 2025 for Soltron’s reply. Upon being notified of these dates, the borrower immediately requested an extension to 25 November 2025, again citing medical reasons. The extension was opposed by Soltron but ultimately granted, on a peremptory basis. The court expressly directed him to use any necessary means—dictation, assistance from another person and so on—to ensure he could file his argument on or before the extended date. Soltron filed its written argument on time. On 25 November 2025, however, instead of a conventional brief, the borrower sent five emails to the court. These attached several new procedural documents and exhibits. In these materials he presented somewhat confusing arguments on the merits, requested reopening of the debates based on a 7,500 $ payment he alleged to have made in 2015 at a location different from the one mentioned by Soltron’s representative in testimony, announced an intention to seek a contempt citation against that representative for alleged false evidence, and asked for one more extension of time for his written submissions (including on reopening), until 16 December 2025, once more for medical reasons. There followed sustained email exchanges. The borrower often sent the same email multiple times, frequently at night, occasionally with minor changes, and often with photographs attached (for example of parts of his body) along with prescriptions and pharmacy receipts, as he had done throughout the file. His written argument on reopening the debates was eventually filed on 2 December 2025. Soltron responded on 16 December 2025. The borrower sought leave to reply, which was granted with a deadline of 9 January 2026. On that date he requested yet another extension on the basis of varied health problems, which Soltron strongly opposed. The court nevertheless authorized him to serve his reply by 13 January 2026 as an “ultimate” date. Despite that indulgence, he sought another extension, which was refused. Due to a power outage at his residence, however, the court permitted him to file his reply by 14 January at 9:00 a.m. On 14 January 2026 he sent several emails mixing submissions on the merits with arguments about reopening the debates. The court accepted these documents and informed the parties that the matter was now under advisement. That same day, the borrower sent two further emails challenging the court’s decision to take the case under advisement as procedurally improper under “law, natural justice and the constitution,” once again appending photographs and medical documentation.

Contempt application and motion to reopen the debates

The judgment then deals with Mr. Ciarallo’s attempt to have Soltron’s representative cited for contempt of court, on the basis that his testimony about the 7,500 $ payment was allegedly false. The court held this application inadmissible because the borrower failed to comply with the procedural requirements in the Code of Civil Procedure and the form prescribed by a 28 February 2017 Superior Court directive. Even if properly framed, the request was plainly unfounded on the prima facie standard that governs initiation of contempt proceedings. The motion to reopen the debates under article 323 C.p.c. was considered in light of established case law, including Symons General Insurance Co. c. Rochon and Simard c. Fabrique de la paroisse Notre-Dame du Royaume. Those authorities require the applicant to demonstrate that the proposed new evidence was unknown at the time of trial, could not have been discovered with due diligence, and could have a determinative influence on the outcome. All three criteria must be evaluated together in the interests of justice, balancing the goal of a complete evidentiary record against the need to avoid endless litigation. Applying these principles, the court concluded that the borrower’s proposed evidence did not meet the test. The materials relating to the alleged 7,500 $ payment were available during the trial; indeed, he effectively acknowledged as much in his own explanations. He did not allege, let alone show, that it was impossible, despite diligence, to know of and present this material earlier. On the merits, the question of where the payment was made was irrelevant to the issues in dispute, including his argument that the contract was a contract of adhesion. The existence of a 7,500 $ payment was already known and had been referenced in his inscription for trial of 13 February 2020. The court noted that even if reopening were granted and the borrower succeeded in proving the payment exactly as he alleged, this would have no impact on the outcome, particularly on the lender’s right to enforce its hypothecary recourse in light of the size of the outstanding debt and long-standing default. For that reason the determinative-effect criterion was also not satisfied. The judge therefore dismissed the motion to reopen the debates, adding that an oral hearing would not change the result, since even taking his allegations as proven, the legal conclusions on the merits would remain unchanged.

Further extension requests and the state of the record

Regarding the borrower’s request for a further extension of time to submit written arguments, the court examined the nature and quality of the documents he had already filed. It found that he had repeatedly demonstrated the ability to prepare multi-page typed documents, with references to authorities and exhibits and proper service to all relevant recipients. Although his communications frequently mixed facts, legal submissions and information about his health, a careful reader could extract and follow his arguments on each aspect of the case, including the merits. There was thus no basis to conclude that he was incapable of producing written submissions. Given that deadlines had already been declared peremptory and then extended, and bearing in mind that this was a relatively straightforward hypothecary action begun in 2019 in which the borrower had lived for years in the mortgaged house without paying, the court refused any additional extensions. Nonetheless it confirmed that all his arguments—both procedural and substantive—would be reviewed and analysed.

Assessment of the debt and evaluation of defences

On the substance of Soltron’s hypothecary claim, the court reviewed the financial history. In 2015, under the refinancing agreement, Soltron disbursed 204,003.16 $ to discharge the CIBC mortgage and other debts of Mr. Ciarallo. In December 2018 it paid 26,661.44 $ for outstanding municipal and school taxes. The loan terms set interest at 14% per year for 24 months, then 25% per year thereafter. The accepted evidence showed that between 2015 and trial in 2025 the borrower had paid Soltron a total of 40,927.20 $. By the date of trial on 17 June 2025, the outstanding debt—including principal and accumulated interest—stood at 1,803,959.07 $. The municipal assessment of the property as of 1 July 2021 was 1,706,700 $, and the debt had continued to increase. Mr. Ciarallo contended that he had actually paid as much as 176,000 $, partly through cash payments for which receipts had supposedly disappeared. The court found his evidence of cash payments and missing receipts not preponderant and declined to displace Soltron’s accounting. It added that even if it accepted the higher figure he claimed, he would still be in serious default and the debt would remain very large. In his defence and an intended reconventional demand (mentioned for 300,000 $ in his inscription but not found as a formal pleading), the borrower argued that the contracts at issue were illegal contracts of adhesion, described the arrangement as a “Ponzi scheme,” denounced the interest as usurious, and asserted violations of the Consumer Protection Act, seeking annulment and damages as well as challenging the validity of the notices of taking in payment. The court rejected these arguments. Contracts of adhesion are recognized and regulated by the Civil Code and are not inherently unlawful. His assertion that interest amounted to almost 900% of the capital misconceived the contractual terms and ignored how interest compounding lawfully operates over a long period of non-payment. As for consumer law, he did not identify any specific provision of the Consumer Protection Act or explain how it applied. In any event, first-rank hypothecary loans of this nature are generally outside the Act’s ambit. The court also found no procedural irregularity in Soltron’s hypothecary notices or pre-notice of taking in payment.

Hypothecary remedies: forced surrender and taking in payment

Having rejected the substantive defences, the court turned to the statutory framework for hypothecary enforcement. Under article 2765 C.c.Q., forced surrender can be ordered where the court finds (1) the existence of the claim; (2) the debtor’s default; (3) the debtor’s refusal to surrender voluntarily; and (4) the absence of a valid cause of opposition. The judge held that all four conditions were clearly met. There was a valid hypothecary claim, a substantial and prolonged default, a refusal to surrender the property, and no credible defence. The borrower had also requested, under article 2779 C.c.Q., that the court compel Soltron to abandon taking in payment and instead pursue a sale under judicial authority. That article allows a debtor who has paid more than half of the obligation secured by the hypothec (including both principal and interest) to require the creditor to proceed by judicial sale. The court observed that even on the borrower’s own figures he had not paid half of the total secured obligation. Consequently he could not insist on a judicial sale instead of taking in payment. Soltron’s remedy of taking in payment was therefore available. Exercising its discretion, the court ordered taking in payment but extended the period for Mr. Ciarallo to surrender the property. While Soltron sought a seven-day period, the judge granted 60 days from service of the judgment, noting that this was the borrower’s long-term residence and that a longer timeframe was appropriate to allow him to arrange his personal affairs. The judgment further ordered that, failing voluntary surrender within 60 days, the borrower and all other occupants be expelled. It declared that the judgment constituted Soltron’s title of ownership to the property, retroactive to 25 June 2019, the date when the pre-notice of exercise had been registered, and ordered that the judgment be registered in the land registry and other appropriate registers.

Abuse of procedure and relief sought by Soltron

Soltron also applied for sanctions for abuse of procedure under article 51 C.p.c., initially seeking 10,000 $ in damages, later increasing this claim to 15,000 $ and then 30,000 $ in light of continuing urgent and last-minute applications filed by the borrower. It pointed to repeated postponement motions made at the last moment, often supported by voluminous materials filed on the eve of hearings; multiple motions to recuse the judge; attempts to appeal interlocutory decisions; and a motion to transfer the case to another district, all of which were unsuccessful and all of which, in Soltron’s view, had delayed a straightforward hypothecary action and caused unnecessary expense. The court acknowledged that the bar for a finding of abuse of procedure is high, but concluded that it was met in relation to certain aspects of the borrower’s conduct. The recusation motions were based on untenable and reckless grounds. The numerous postponement requests, especially those made at the last moment based on information and documents available long beforehand, fell within the notion of abusive tactics under article 342 C.p.c., which targets manoeuvres that uselessly delay proceedings. However, in evaluating the appropriate remedy, the court also considered the overall commercial outcome of the case. Soltron stood to receive a valuable immovable through taking in payment, together with substantial contractual interest. The judge noted that this already constituted a very advantageous operation from Soltron’s perspective. No specific evidence was presented to quantify additional losses or wasted professional fees beyond what might be expected in the conduct of the main claim. In that context the court found it neither necessary nor useful to add a monetary award for abuse. It therefore granted the abuse-of-procedure claim in principle but declined to award a separate sum of damages.

Final orders, successful party and amount awarded

In its dispositive section, the Superior Court declared the citation for contempt inadmissible, dismissed the motion to reopen the debates, rejected the request for a further extension of time, and dismissed the motion for recusation for want of argument. It then granted Soltron’s re-amended application for forced surrender and taking in payment. The court declared that, as of 17 June 2025, the defendant owed Soltron the sum of 1,803,959.07 $, bearing interest at 25% per annum from that date. It held that the Beaconsfield property was hypothecated in favour of Soltron for that amount and interest, found the borrower in default of his obligations and of curing the defaults set out in the 25 June 2019 pre-notice and subsequent defaults, and recorded his refusal to surrender the property voluntarily. The judgment ordered him to surrender the hypothecated property to Soltron within 60 days of service, failing which he and any other occupants would be expelled. It declared that the judgment constitutes Soltron’s title of ownership, retroactive to 25 June 2019, and ordered the necessary entries in the land registry and other registers. The court allowed the application for abuse of procedure but expressly declined to impose any monetary condemnation beyond the taking in payment already ordered. Finally, it awarded costs of justice against the defendant. When the Superior Court judgment is read together with the Court of Appeal decisions in 2025 QCCA 315 and 2025 QCCA 1180, the overall picture is consistent: the appellate courts upheld the trial judge’s management of postponement and recusation issues and refused to entertain interlocutory appeals that lacked merit; the Superior Court enforced Soltron’s hypothecary rights, rejected all substantive and procedural defences, and found but did not monetarily sanction abuse of procedure. The successful party is Soltron Financial Services LP, which obtained recognition of a debt of 1,803,959.07 $ with interest at 25% per year from 17 June 2025, together with taking in payment of the mortgaged property and an award of costs against Mr. Ciarallo. The judgment does not specify any exact amount for costs, nor does it grant any separate quantified damages for abuse of procedure, so those additional monetary components cannot be determined from the decision.