Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether a mortgagee must disclose its appraisal of mortgaged property to the mortgagors during a sale process.
• The court confirmed the mortgagee’s legal duty of good faith and to take reasonable steps to obtain fair market value, but found no legal or contractual duty to share the appraisal.
• Defendants’ request for mandatory injunctive-style relief was narrowed to a single disclosure remedy, which the court declined to grant.
• Wider implications were identified around potential obligations to disclose other sale-related documents and the impact on realtor–client confidentiality.
• The court reaffirmed that mortgagees do not owe a fiduciary duty to mortgagors and declined to “create new law” on a short motion.
• Costs were awarded to the bank on a substantial indemnity basis, supported by Standard Charge Terms clauses 2.8.2 and 2.8.3, with payment time extended due to the defendants’ financial hardship.

Facts of the case

The case arises from enforcement proceedings brought by the Bank of Montreal (BMO) against the defendants, Navnit Jain and Juvy Cirujales Jain, in relation to mortgaged real property. Following earlier steps that led to judgment and a writ of possession in favour of the bank, the plaintiff proceeded to sell the mortgaged property under its enforcement powers. The sale process began in the summer preceding the motion and had, by the time of the hearing, become protracted, causing concern for the defendants. They remained interested in ensuring that the property would be sold for fair market value and that the sale process would not be improvident. Against this background, the defendants brought a motion dated October 21, 2025, initially framed as a request for mandatory injunctive relief to control aspects of the bank’s ongoing sale process. Over time and during argument, however, the scope of the motion narrowed significantly, leaving only one core issue in dispute: whether the bank was obliged to disclose the appraisal it had obtained for the property.

Defendants’ motion and narrowing of relief

The motion as originally framed sought a broader range of relief aimed at regulating or restraining the bank’s conduct in relation to the sale. By the time of the hearing, defence counsel expressly abandoned the other forms of relief requested. What remained was a focused request that the plaintiff be compelled to disclose its appraisal of the mortgaged property. Defence counsel emphasized that disclosure of this appraisal would be enough to address the defendants’ main concern, which was the possibility of an improvident sale at undervalue. The defendants’ position was that having access to the appraisal was essential to allow them to monitor whether the mortgagee was discharging its duty to obtain a fair market price. They did not, however, point the court to any contractual term, statutory provision, or binding authority that created a positive obligation on the bank to share the appraisal. Indeed, defence counsel expressly acknowledged the absence of any such authority, and the motion proceeded on the basis of general equitable and fairness concerns rather than a clear legal right to disclosure.

Court’s analysis of the duty of good faith and disclosure of appraisal

The court began by recognizing that a mortgagee, in exercising its power of sale or selling property after judgment and writ of possession, has a legal duty to act in good faith and to take all reasonable steps to sell the property at fair market value. Lenders are generally expected to obtain independent appraisals in order to satisfy this duty in a commercially reasonable way. The judge observed that, as a matter of good practice, it would be wise for the mortgagee to share the appraisal with the mortgagors, as doing so could reduce suspicion and help avoid further litigation over an alleged improvident sale. However, the court drew a clear line between “good practice” and “legal obligation.” The judge stated that he was aware of no authority—contractual, jurisprudential, or legislative—that required a mortgagee to disclose its appraisal to the mortgagor, and defence counsel had candidly conceded that there was none. The court noted that mortgagors who are concerned about value commonly obtain their own independent appraisals to hold the mortgagee to its legal duty to strive for fair market value. In this case, to order disclosure of the bank’s appraisal would not be the application of existing law but rather the creation of a new positive obligation. The judge found that such a development in legal doctrine was not appropriate to undertake on a short, 20-minute argued motion.

Broader policy concerns and reluctance to create new law

In declining to make the order, the court highlighted broader implications that could follow from imposing a duty to disclose the appraisal. If a mortgagee were required to share its appraisal, similar arguments could be made that it must disclose other documents generated in the course of a sale, such as letters of opinion on value, correspondence between the lender and the realtor, and marketing materials designed to assist in the sale. The judge also raised policy concerns about realtor–client confidentiality and the need to balance that confidentiality against the mortgagee’s duty to act in good faith and seek fair market value. Further, the court stressed that mortgagees are not generally considered to owe a fiduciary duty to their mortgagors. Imposing a disclosure obligation of the type sought might be seen as a step toward eroding that well-accepted principle and blurring the line between a commercial lender–borrower relationship and a fiduciary one. Given these wider doctrinal and policy questions, the judge considered this case and this short motion to be an unsuitable vehicle for making new law or significantly expanding mortgagee disclosure obligations. Instead, the court concluded that the existing legal framework—where mortgagors may obtain their own appraisals and challenge an improvident sale after the fact if warranted—remains sufficient to protect the defendants’ interests.

Consideration of policy terms and costs

Although the main issue concerned disclosure of the appraisal, the endorsement also touched on the contractual cost-recovery provisions. The plaintiff sought its costs of the motion in the amount of $5,751.40, and the court reviewed the request in light of the mortgage contract’s Standard Charge Terms. Clauses 2.8.2 and 2.8.3 of those Standard Charge Terms appeared to support an award of costs on a substantial indemnity basis in favour of the mortgagee, reflecting the parties’ contractual allocation of risk and expense in enforcement proceedings. The judge found nothing unreasonable about the hourly rates charged or the time spent by counsel for the plaintiff. The Standard Charge Terms thus played a role in confirming the appropriate scale of costs and bolstering the bank’s claim to substantial indemnity costs on this motion. At the same time, the court took notice of the defendants’ financial difficulties. While costs are normally payable within 30 days, the judge exercised discretion to extend the time for payment to 120 calendar days, noting that fairness in the circumstances favoured some accommodation to the struggling defendants without depriving the successful party of its contractual and procedural entitlement to costs.

Outcome and implications of the decision

In the result, the court dismissed the defendants’ motion for disclosure of the bank’s appraisal and declined to impose a new legal obligation on mortgagees to share such documents with mortgagors during the sale process. The judge emphasized that, although the sale had been slow and the defendants were understandably worried, they had surrendered none of their rights relating to the adequacy of the sale price or to challenge an improvident sale if one were later alleged. Their interests would continue to be protected by the existing legal duty of the mortgagee to act in good faith and take reasonable steps to obtain fair market value. The successful party on the motion was the plaintiff, Bank of Montreal, which obtained an order dismissing the motion and an award of its costs. The court ordered costs in favour of the bank in the total amount of $5,751.40, payable by the defendants within 120 days, thereby quantifying the monetary consequence of the unsuccessful motion while recognizing the defendants’ financial hardship in setting an extended payment period.