Executive Summary: Key Legal and Evidentiary Issues

• Scope of mortgagee’s entitlement to solicitor-client costs and the evidentiary proof required for both fees and disbursements in foreclosure proceedings
• Proper use and meaning of the “benchmark” or “standard” foreclosure fee, and whether it can operate as a fixed tariff without proof of actual legal costs
• Criteria for awarding additional solicitor-client fees for “non-standard” foreclosure steps such as substituted service and applications to amend an order nisi
• Adequacy and detail of evidence supporting claimed legal fees, including generic invoices and lack of time records, and how this affects assessment of costs
• Correct interest rate to be applied between the order nisi and final judgment, and the interaction between contractual mortgage interest and statutory post-judgment interest
• Ability of the Court to correct an earlier order nisi and grant a deficiency judgment against both mortgagors where the statement of claim and mortgage obligations support joint personal liability

Facts of the loan and mortgage

The Toronto-Dominion Bank (TD Bank) extended a loan to Elizabeth and Darren Stefaniszyn, secured by a collateral mortgage in the principal amount of $120,000 granted on June 19, 2015 over a residential property owned by Elizabeth Stefaniszyn in Saskatchewan. The loan was secured by a registered collateral mortgage against the surface parcel described in the judgment, and both defendants were parties to the collateral mortgage agreement. The mortgagors fell into default by failing to make their monthly mortgage payments after July 7, 2022, prompting TD Bank to begin enforcement proceedings under provincial land contracts legislation.

Procedural history of the foreclosure

TD Bank first obtained leave to commence an action under s. 6 of The Land Contracts (Actions) Act, 2018, after an adjournment to ensure proper service on Elizabeth Stefaniszyn. Once leave was granted on March 28, 2023, TD Bank issued its Statement of Claim on April 3, 2023, claiming the outstanding mortgage amount as at March 31, 2023 of $106,744.13, interest at 2.44% per annum, judicial sale of the mortgaged premises, and costs of the action on a solicitor-client basis, excluding pre-leave costs. The defendants were noted in default on August 30, 2023, after failing to defend. TD Bank then moved for an Order Nisi for Sale by Real Estate Listing. Its first without-notice application was denied because the bank sought to appoint a selling officer from its own law firm, and the Court was not satisfied that appointing a non-independent selling officer was appropriate. TD Bank corrected this by filing a revised Order Nisi naming a selling officer from another law firm, which the Court granted on September 8, 2023, setting a 180-day listing period and an upset price of $80,000. At that stage, the Order Nisi granted judgment against Darren but not Elizabeth, even though both had signed the collateral mortgage.

Efforts to serve and amend the order nisi

Service difficulties gave rise to several additional applications. Between September and November 2023, a process server made multiple unsuccessful attempts to personally serve the Order Nisi on Elizabeth Stefaniszyn, leading TD Bank to obtain an order for substituted service in December 2023. Later, when market response to the listing proved weak, TD Bank applied to amend the Order Nisi to reduce the upset price to $60,000 and extend the listing period by another 180 days. That application, initially adjourned at Darren’s request, was granted in November 2024. TD Bank also obtained a further substituted service order in February 2025 in relation to Darren. Finally, after an acceptable offer was secured, TD Bank applied for and obtained an Order Confirming Sale in March 2025 at a sale price of $82,000.

Sale of the property and deficiency

The Court accepted and approved a number of expenses tied to the sale process. Real estate commissions totaled $3,640.80, property management fees $14,461.06, selling officer fees $1,000, tax arrears $3,351.42, and the vendor’s share of unpaid taxes $74.91. These properly vouched expenses were deducted from the $82,000 sale price, leaving net sale proceeds of $59,472.53. Against an outstanding mortgage debt of $109,790.70 as of September 5, 2023, this resulted in a deficiency of $50,318.17 still owed under the mortgage after the sale was accounted for. The statement of claim had sought a deficiency judgment against both defendants, and both were served with the application for deficiency judgment. The judge held that because the Order Nisi was not a final judgment, the Court retained authority to correct the earlier omission and grant a deficiency judgment against both mortgagors based on their joint obligations under the collateral mortgage.

Mortgage and costs clauses at issue

The mortgage contract contained a broad costs clause obliging the mortgagors to pay TD Bank the costs of any sale or foreclosure proceedings, expressly including “all lawyers’ fees and disbursements … on a full indemnity basis.” Notwithstanding this “full indemnity” wording, the Court reaffirmed established Saskatchewan practice that solicitor-client or solicitor-and-client costs awarded in foreclosure are typically less than the actual amounts billed between lawyer and bank. Because the mortgagor has no control over the mortgagee’s legal spending, contractual language obliging the mortgagor to pay “all” costs does not entitle the lender to automatic recovery of every dollar in its legal bill from the borrower. The Court also reiterated that under the King’s Bench Rules, solicitor-client costs must be assessed by the Court, and awards are guided by a benchmark or standard foreclosure fee used as a reference point rather than as a strictly fixed tariff.

Evidence of legal fees and disbursements

TD Bank supported its costs application with the affidavit of a foreclosure paralegal who summarized the steps taken, from drafting the claim and order nisi materials to administering the sale, preparing substituted service applications, varying the order nisi, applying to confirm the sale, and seeking assessment of costs. However, the law firm’s invoice showed only a lump-sum fee of $8,500.00 without any breakdown of time, tasks, or timekeepers. The court criticized this approach as overly generic and noted that the firm no longer actively recorded time on foreclosure files, relying instead on “standardized tariffs.” The judge found that this practice, when paired with a bare invoice and imprecise affidavit descriptions, did not provide the detailed evidence normally expected in solicitor-client cost assessments, particularly when asking the Court to award the full benchmark amount. The Court further noted that the disbursements listed on the invoice (such as process servers, bailiffs, and appraisers) were not backed up by the underlying invoices from those third-party providers. Under the rules, non-court disbursements must be established by affidavit and “properly vouched for,” and the Court refused to accept a simple listing of these amounts in the law firm’s own invoice as sufficient proof.

Clarification of the benchmark fee and non-standard applications

A central issue in the decision was how to interpret prior cases on the benchmark foreclosure fee, especially Home Trust Company v Haughian. Mortgage lenders had begun treating the benchmark as a standardized tariff that could be claimed without regard to the actual legal work performed or the actual fee charged. The judge rejected this, explaining that Haughian merely updated the benchmark amount (from $5,000 to $5,500) to reflect inflation but did not create an automatic tariff. The Court reaffirmed that the benchmark is a reference point that informs the exercise of discretion; judges do not automatically apply it in every case. Depending on the simplicity or complexity of a particular foreclosure, the reasonable solicitor-client amount may be lower than the benchmark, and in any event, an award should never exceed the actual bill to the client. The Court also examined how previous decisions had approached additional fees for “non-standard” steps, such as substituted service, applications for immediate possession, or amendments to reduce the upset price and extend listing periods. Some cases had allowed about $1,000 per additional application when supported by circumstances showing extra work or complications. Here, the judge declined to treat $1,000 per application as an automatic fixed add-on and instead assessed proportionality: the substituted service applications were common and relatively simple, while the application to vary the order nisi, supported by evidence of low offers and required repairs, justified an additional fee. The result was $1,000 allowed for the amendment to the Order Nisi and a combined $1,500 for both substituted service applications, for a total of $2,500 in extra fees.

Interest rate and calculation of the deficiency judgment

On interest, TD Bank argued that the 5% post-judgment rate from The Enforcement of Money Judgments Regulations should apply from the date of the Order Nisi to the date of the Order Confirming Sale. The Court rejected this on the basis that an order nisi is not a final judgment. Until final judgment, the contractual mortgage interest rate of 2.44% per annum continued to govern. The Order Nisi itself had specified 2.44% as the applicable rate on the judgment against Darren from August 13, 2023. The judge therefore held that interest on the deficiency from August 13, 2023 to the date of the final decision must be calculated at 2.44% per year, not 5%. TD Bank was granted leave to prepare and file a revised draft order and judgment with the correct interest calculation for the Court’s approval, reflecting this lower rate.

Outcome and monetary award

Ultimately, the Court assessed TD Bank’s post-leave solicitor-client fees at $7,000 in total, comprised of $4,500 for the main foreclosure work (reduced from the $5,500 benchmark because the proceeding was straightforward and evidence of work done was thin) plus $2,500 for the three additional applications (two substituted service orders and one amendment to the order nisi). The Court also approved the sale-related expenses that had already been netted off the sale proceeds and confirmed that the deficiency remaining after applying the $59,472.53 net sale proceeds against the $109,790.70 mortgage debt was $50,318.17. Interest on that deficiency is to run at the contractual rate of 2.44% per annum from August 13, 2023 to the date of final judgment. TD Bank is the successful party, securing a deficiency judgment against both Elizabeth and Darren Stefaniszyn for the deficiency of $50,318.17 plus interest at 2.44% per year, along with $7,000 in post-leave solicitor-client fees, with additional disbursements still to be proven and assessed so that the exact final total monetary recovery cannot yet be precisely determined.