Executive Summary: Key Legal and Evidentiary Issues

• Bertrand Bouchard applied to rectify the parcel register for his Hamilton property by discharging a charge he alleges was fraudulently registered.
   
• Flex Home Loans and Michael Yosher moved under Rule 21 to strike or dismiss the application against them.
   
• Central to the motion was whether Rule 21.01(1)(a) and (b) apply to proceedings commenced by application rather than action.
   
• A further issue was whether the Notice of Application disclosed a cause of action for civil fraud against the moving parties.
   
• The moving parties also argued the claim was statute-barred under the Limitations Act, 2002.
   
• Evidentiary limits under Rule 21.01(2)(b) restricted the court to considering only the Notice of Application, not accompanying affidavit evidence.
   

Facts of the case

Bertrand Bouchard brought an application seeking to have the parcel register or abstract index for his property at 86 Kensington Avenue North, Hamilton, Ontario, rectified to discharge and delete a charge registered against it. He alleged the charge was fraudulently registered by 2748204 Ontario Inc. o/a Flex Home Loans and its principal, Michael Yosher, and later transferred to Rakesh Gupta. According to the grounds set out in the Notice of Application, two unknown individuals arrived unsolicited at Mr. Bouchard's home on October 26, 2020, conducted an inspection, and advised him that work needed to be done; one appeared to be a salesperson and the other was understood to represent Flex Home Loans. During the visit, one of the individuals placed a call to an unknown person and had Mr. Bouchard repeat a statement he does not recall. Mr. Bouchard does not recall signing any documents, and states none were explained to him, he had no opportunity to review them or obtain independent legal advice, and no copies were ever provided. He did not request work on his property or financing from Flex Home Loans. Following the visit, monthly withdrawals of $9.99 began from his bank account in favour of Flex Home Loans, increasing to $399.99 in March 2022; upon realizing the increase, he sought legal advice and arranged a stop payment. Mr. Bouchard later learned a charge in the amount of $30,999.85 had been registered against his property on October 26, 2020, the same date as the unsolicited visit, and that the charge was transferred from Flex Home Loans to Rakesh Gupta on December 18, 2020. On July 21, 2025, he received a Notice of Sale from Mr. Gupta indicating that $80,711.29 was required to bring the mortgage into good standing by August 25, 2025, failing which the property would be sold under power of sale. The application followed. Flex Home Loans and Mr. Yosher, in turn, brought this motion under Rule 21 to dismiss the application against them and, if necessary, for leave to deliver affidavit evidence.

Policy and legislative provisions at issue

The moving parties relied on Rules 14.09, 21.01(1)(a), 21.01(1)(b), 37, 38, and 39 of the Rules of Civil Procedure, together with section 4 of the Limitations Act, 2002. Rule 21.01(1)(a) permits a party to move for determination, before trial, of a question of law raised by a pleading in an action, where doing so may dispose of all or part of the action or substantially shorten the trial or save costs. Rule 21.01(1)(b) permits a motion to strike a pleading that discloses no reasonable cause of action or defence. Rule 21.01(2) provides that no evidence is admissible on a motion under either clause, except with leave or consent under clause (1)(a). Rule 14.09 provides that an originating process that is not a pleading may be struck out or amended in the same manner as a pleading. The court also considered Rule 1.04(1) and (2), which direct that the rules be liberally construed to secure a just, expeditious, and inexpensive determination of proceedings, and that unprovided-for matters be resolved by analogy to the existing rules. The moving parties additionally raised the Real Property Limitations Act, R.S.O. 1990, c. L.15, and referenced ongoing proceedings by the Financial Services Regulatory Authority of Ontario alleging that Flex Home Loans carried on business as an unlicensed mortgage lender contrary to the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29.

Reasoning and analysis

Justice Antoniani first addressed whether Rule 21 could be invoked at all in a proceeding commenced by Notice of Application rather than by action. Drawing on Rule 14.09 and the Court of Appeal's reasoning in Tanudjaja v. Attorney General (Canada) (Application), 2013 ONSC 5410, aff'd 2014 ONCA 852, the court held that Rule 21.01(1)(b) can apply to applications because Rule 14.09 permits an originating process that is not a pleading to be struck in the same manner as a pleading. By contrast, relying on McLeod v. Castlepoint Development Corporation (1997), 31 O.R. (3d) 737, the court held that Rule 21.01(1)(a) refers only to pleadings in an action and has no application to proceedings by application, since Rule 14.09 addresses striking or amending a pleading, not determining a question of law within an action. On the merits of the Rule 21.01(1)(b) branch, the court accepted, for the purpose of the motion, all facts alleged by Mr. Bouchard as true and considered only the Notice of Application itself, since affidavit evidence is inadmissible on such a motion. The court found that the application disclosed a cause of action in civil fraud against Flex Home Loans, given the allegation that the charge was registered without any known lawful basis, and against Mr. Yosher as principal, on the basis that he could be personally liable if he actively and knowingly participated in a fraud perpetrated by the corporation. The court reasoned that if the charge had been obtained through fraud, Flex Home Loans would have had no lawful interest to transfer to Mr. Gupta. On the limitations branch, the court found that even if Rule 21.01(1)(a) had applied to applications, the question of which limitation period governed was one of mixed law and fact, not law alone, given the almost complete absence of documentation or evidence about the nature of the relationship between Mr. Bouchard and the moving parties, and could not be resolved on a Rule 21 motion.

Ruling and overall outcome

Justice Antoniani dismissed the moving parties' motion. The branch of the motion brought under Rule 21.01(1)(a) was dismissed as improperly brought in the context of an application and, in any event, as unsuitable for determination on a motion given the mixed factual and legal nature of the limitations issue. The branch brought under Rule 21.01(1)(b) was also dismissed, the court finding that the Notice of Application discloses a cause of action for civil fraud against Flex Home Loans and Mr. Yosher. Mr. Bouchard was the successful party on the motion. The court did not order any specific monetary amount in these reasons; the parties were directed to attempt to agree on costs, with a schedule set for costs submissions in the absence of agreement, and no quantum was determined at this stage. The parties remain bound by a pre-existing timetable dated December 2, 2025, which begins running from the distribution of these reasons.