Executive Summary: Key Legal and Evidentiary Issues

• Ana Maritza Reina Flores appealed a summary judgment ordering her to pay $119,256.09 for an outstanding mortgage balance, plus $23,350.78 in costs, and granting immediate vacant possession of the mortgaged property to CIBC Mortgages Inc.
   
• Central to the appeal was whether the summary judgment motion was procedurally valid given that the formal notice of motion had not been filed prior to the hearing.
   
• CIBC had no contractual obligation to renew the mortgage when it matured in December 2023, and the mortgage contained no term requiring renewal.
   
• Costs entitlement was governed by article 10.3 of the mortgage agreement, which entitled CIBC to costs on a substantial indemnity basis.
   
• The appellant's factum cited cases that the Court found to be either hallucinated or misrepresentative of the legal principles they purported to support, raising concerns about AI-generated legal materials.
   
• All five grounds of appeal were dismissed, as the Court found no procedural unfairness, no error in the summary judgment test applied, and no evidentiary deficiency in the mortgage documentation.

Facts of the case

On December 12, 2007, Ana Maritza Reina Flores executed a five-year mortgage secured against her home in favour of CIBC Mortgages Inc., borrowing $112,909.87. The mortgage was renewed periodically over the years, with the last renewal commencing on June 23, 2023 and becoming due on December 15, 2023. Prior to maturity, Flores had failed to make all required payments. When the mortgage became due, CIBC was not prepared to renew it as it had done previously.

After the mortgage matured, Flores forwarded funds to CIBC, which were not accepted. CIBC's counsel held the funds in trust and returned them to her. Flores forwarded the funds a second time, after which CIBC's counsel brought the money to court. The respondent filed its statement of claim on January 2, 2024. At the first pre-trial conference held on April 3, 2025, the judge granted CIBC leave to file a summary judgment motion and set deadlines for affidavit evidence and a hearing date. At the second pre-trial conference on July 15, 2025, the judge made further orders regarding the filing of affidavits and noted that the parties disagreed about the amount owing under the mortgage. On September 2, 2025, the hearing date for the motion, the judge noted that the notice of motion for summary judgment had not been filed. The respondent's counsel believed it had been, but the judge allowed the matter to proceed and ordered the respondent to file the notice of motion, which was filed on September 4, 2025.

Policy and legislative provisions at issue

A key contractual provision was article 10.3 of the mortgage agreement, which entitled CIBC to costs on a "substantial indemnity" basis. The summary judgment judge accepted CIBC's itemized bill of costs, finding the amount fair, reasonable, fully disclosed, and justified in the circumstances, particularly noting that Flores had appeared to decline the opportunity to compromise with CIBC as she had been encouraged to do. The Court also considered rule 2.01(1) of the Manitoba King's Bench Rules, Man Reg 553/88, which provides that failure to comply with the Rules does not render a proceeding or a step or a document a nullity, and that proceedings may only be set aside where necessary in the interests of justice.

Reasoning and analysis

The Court reviewed the summary judgment decision on a deferential standard, noting that such decisions are discretionary and should only be set aside if there is a material error on law or facts, or if the decision is so clearly wrong as to be unjust. Questions of mixed fact and law are reviewable on the standard of palpable and overriding error, as established in Dakota Ojibway Child and Family Services et al v MBH, 2019 MBCA 91 at para 36.

On the first two grounds of appeal — that there was no jurisdiction due to the unfiled notice of motion and that the proceedings were procedurally unfair — the Court found that Flores had ample notice of the summary judgment motion, had received disclosure of relevant documents, and was aware of the arguments to be advanced. The irregularity consisted only of the respondent not filing the written notice of motion until after the motion was argued and decided. The judge considered the written motion filed nunc pro tunc and signed the judgment. Relying on Cement Accents Manitoba Inc et al v Wagner Construction et al, 2023 MBCA 59, the Court confirmed that rule 2 empowers the Court to dispense with compliance with any rule where necessary in the interests of justice. No procedural unfairness was demonstrated, nor was the decision to proceed unjust.

On grounds three through five, the Court found no reversible error. The judge did not err in applying the summary judgment test. Flores's arguments reflected her continued insistence that she was not in default and her dispute about the amount owing, as well as her refusal to accept that the mortgage contained no obligation on CIBC to renew it. The Court also noted that the materials filed by Flores in the appeal appeared to be generated by artificial intelligence "gone awry," with cases cited in her factum either hallucinated or misrepresenting the legal concepts they were said to support. The Court observed that the respondent spent needless time and energy attempting to verify the cases cited, and stated that arguments based on non-existent or irrelevant case law are unacceptable.

Ruling and overall outcome

The Court of Appeal dismissed the appeal and upheld the summary judgment in favour of CIBC Mortgages Inc. in the sum of $119,256.09 for the outstanding mortgage, plus $23,350.78 in costs, with interest accruing at a rate of 9.75 per cent per annum until payment in full, together with an order of immediate vacant possession of the mortgaged property. Costs of the appeal were granted on a substantial indemnity basis as provided for under article 10.3 of the mortgage agreement, though the specific amount of appeal costs was not stated in the decision.