Executive Summary: Key Legal and Evidentiary Issues

• Mortgage enforcement rights following Byrd’s default and the validity of the consent judgment granting possession to Stockey
• Attempt by Byrd to relitigate default and possession issues already determined in prior proceedings, raising abuse of process and finality concerns
• Adequacy of Byrd’s pleadings alleging negligence, reckless misrepresentation, breach of agreement, breach of fiduciary duty and unauthorized disclosure, and whether any material facts support those causes of action
• Impact of earlier decisions by Macfarlane J., Miller J.A., and the Court of Appeal on whether there remains any genuine issue for trial
• Application of Rules 20.04(2), 21.01(3)(d) and 25.11 regarding summary dismissal of actions that disclose no reasonable cause of action and are frivolous or vexatious
• Whether Byrd’s litigation conduct warranted a vexatious litigant declaration and how the court balanced procedural safeguards under r. 2.2 against the evidentiary record

Facts of the case
Darryl Byrd owned a residential property in Windsor, Ontario that was subject to a first mortgage registered in 2019 in the amount of $176,000. A second mortgage in the principal sum of $210,000 was later advanced to Byrd by the defendant, Robert Stockey, on September 8, 2022. When the first mortgage fell due on October 1, 2022, Byrd did not have the funds to pay it out. To protect his position as second mortgagee, Stockey paid off the first mortgage and a transfer of charge of that first mortgage was registered in his favour on November 15, 2022. Byrd then fell into default, having made no mortgage payments since October 2022. A notice of sale under the mortgages was issued on November 22, 2022, and on January 11, 2023 a statement of claim was issued seeking possession of the property. Byrd was served and defended the action. There is no insurance policy or other policy wording at issue in this decision; the relevant instruments are the mortgages themselves and the resulting enforcement proceedings, but specific contractual clauses are not reproduced or interpreted in detail.

Procedural history
In April 2023, while represented by counsel, Byrd brought a motion for summary judgment in the mortgage enforcement proceeding. That motion resulted in a consent judgment for possession in favour of Stockey. The judgment also stayed enforcement to give Byrd time to sell the property and discharge the mortgage, and it included a costs award of $5,000 against Byrd. A writ of possession issued on June 16, 2023. Byrd then sought to set aside the consent judgment, alleging his lawyer had acted without instructions and that he had not known of the consent judgment until July 2023. On September 12, 2023, Justice Macfarlane dismissed Byrd’s motion to set aside the consent judgment. Byrd then moved before the Court of Appeal for a stay of execution of the writ of possession pending appeal; on October 3, 2023, Miller J.A. dismissed the stay motion and awarded $2,500 in costs to Stockey. Byrd’s appeal from Macfarlane J.’s order was later heard and dismissed by the Court of Appeal on May 15, 2024, with an additional costs award of $3,000 in favour of Stockey. Meanwhile, on May 9, 2024, Byrd commenced this new action against Stockey, claiming $2 million in damages for negligence, reckless misrepresentations, breach of agreement, breach of fiduciary duty and unauthorized disclosure of confidential information. He also sought a certificate of pending litigation and an order declaring the notice of sale null and void. In October 2024, Stockey delivered a defence relying heavily on the consent judgment and the earlier appellate rulings. In December 2024 he brought the present motion—framed as a summary judgment/strike motion—seeking to dismiss the action as meritless, frivolous and vexatious, to have Byrd declared a vexatious litigant, and alternatively to obtain security for costs. Byrd continued to live in the property and, by the time of the March 2026 hearing, had not made any mortgage payments since October 2022.

Issues before the court
Justice Horvat was asked to decide whether Byrd’s new action disclosed any reasonable cause of action or triable issue, or whether it was frivolous, vexatious and an abuse of process given the prior consent judgment and appellate decisions. The court considered whether the matter should be dismissed under Rule 21.01(3)(d) for failure to disclose a reasonable cause of action, under Rule 20.04(2) on the basis that there was no genuine issue requiring a trial, or struck under Rule 25.11 as an abuse of process. The judge also had to address Stockey’s request to declare Byrd a vexatious litigant and his request for security for costs. Embedded in these procedural questions was a substantive issue: was Byrd attempting to re-open and relitigate the question of whether he was in default under the mortgage, a question already decided against him in the earlier possession proceedings and on appeal.

Court’s analysis and reasoning
Justice Horvat held that the essence of Byrd’s new lawsuit was to obtain a determination that he was not in default on the mortgages at the time the consent judgment was granted. Although the statement of claim listed multiple causes of action—negligence, reckless misrepresentations, breach of agreement, breach of fiduciary duty and unauthorized disclosure of confidential information—the court found that the pleaded facts did not set out the necessary elements or material facts to support these claims. Instead, they sought to undermine the default finding and thereby reopen the mortgage enforcement process. The court placed significant weight on the earlier judicial determinations. Miller J.A. had already concluded, in refusing the stay, that there were no serious issues to be tried and that Byrd had adduced no evidence to support his assertion that the mortgage was not in default, despite clear evidence that payments stopped in October 2022 and the mortgage became due and payable. The Court of Appeal subsequently confirmed that Rule 37.14—relief from orders made without notice or in the absence of a party—did not apply because Byrd had been represented at the consent hearing and, further, that there was no basis to reopen the mortgage enforcement proceedings. Justice Horvat held that the issues, facts and parties in the new action were the same as those in the prior mortgage default proceeding and its appeals, and that those matters had already been finally adjudicated. Allowing Byrd to proceed would amount to giving him “another kick at the can” on questions already resolved. On that basis, the action was found to be frivolous, lacking legal merit, disclosing no reasonable cause of action, and constituting an abuse of process. The judge also noted that Byrd claimed to have commenced a separate proceeding against his former lawyer regarding the consent judgment; if Byrd believed his lawyer acted without instructions, that professional negligence action, not this one, was the appropriate vehicle for his grievance. Given the dismissal of the action, the court found it unnecessary to consider security for costs. On the vexatious litigant request, Justice Horvat declined to make such a declaration, pointing out that the procedures under Rule 2.2 had not been followed, and in any event the evidentiary record did not justify the extraordinary step of branding Byrd a vexatious litigant.

Outcome and significance
Justice Horvat granted Stockey’s motion, dismissed Byrd’s action in its entirety, and awarded costs of $2,500 payable by Byrd to Stockey within 30 days. The ruling reinforces the principle that litigants cannot use fresh civil claims to revisit mortgage default findings and possession orders that have already been decided, particularly where those decisions rest on consent and have been tested in the appellate courts. It also illustrates the utility of Rules 20.04(2), 21.01(3)(d) and 25.11 in shutting down proceedings that disclose no reasonable cause of action and are brought to relitigate settled issues. While the court was prepared to dismiss the claim and award costs, it declined on this record to declare Byrd a vexatious litigant, emphasizing both procedural safeguards and the need for a sufficient evidentiary foundation before imposing that label. Across the enforcement proceeding, the stay motion, the appeal, and this motion, the successful party is consistently the defendant, Robert Stockey, and the total amount of costs ordered in his favour against Byrd is $13,000, composed of $5,000 on the consent judgment, $2,500 on the stay motion, $3,000 on the appeal, and $2,500 in this decision.