Executive Summary: Key Legal and Evidentiary Issues

• Paradigm Quest Inc. sought to strike the statements of defence filed by two mortgagors in a mortgage foreclosure action.
   
• Both defendants admitted the essential elements of the foreclosure claim while disputing Paradigm's entitlement to solicitor-client costs.
   
• Section 2 of The Limitation of Civil Rights Act was raised as a defence against Paradigm's costs claim, since the mortgage was a purchase money mortgage.
   
• Ricki-Jo Steffen's bankruptcy filing was pleaded as a basis for a stay of proceedings under the Bankruptcy and Insolvency Act.
   
• Justice Bergbusch found that neither the LCRA nor the bankruptcy stay provided a reasonable defence because Paradigm was not seeking personal judgment against the defendants.
   
• The court ordered the statements of defence struck and left the assessment of Paradigm's costs to be determined later in the foreclosure proceeding.
   

Facts of the case

In April 2022, Ricki-Jo Steffen and Dayle Flora Steffen purchased a residential property at 30 Kendrick Place, Regina, Saskatchewan, financing the purchase through a mortgage dated April 19, 2022, in favour of Computershare Trust Company of Canada c/o Paradigm Quest Inc. Title to the property and the mortgage were both registered on April 27, 2022. The mortgage was renewed on June 19, 2023, at a fixed interest rate [the judgment elsewhere states the rate conversion occurred "on June 6, 2023" — source inconsistency], with a term expiring July 1, 2028. The monthly payment was $1,945.45, and the last such payment was made on June 1, 2025. Leave to commence foreclosure proceedings was granted on February 12, 2026, and Paradigm issued a statement of claim on February 25, 2026, indicating arrears of $15,563.60 as of February 4, 2026, and a total balance owing of $321,779.21 as of that date. An appraisal dated November 17, 2025, estimated the property's fair market value at $300,000. Dayle filed a statement of defence on March 10, 2026, and Ricki-Jo filed hers on March 12, 2026. Paradigm then applied under Rule 7-9 of The King's Bench Rules to strike both defences on the grounds that they disclosed no reasonable defence, were scandalous, frivolous, or vexatious, and constituted an abuse of process.

Policy and legislative provisions at issue

Paragraph 9.6 of the mortgage entitles Paradigm to recover its costs of enforcing the mortgage "on demand," with such costs forming part of the indebtedness and bearing interest; "Costs" is defined in the mortgage to include legal fees and disbursements on a full solicitor-client or substantial indemnity basis. Both defendants disputed liability for these solicitor-client costs by invoking section 2 of The Limitation of Civil Rights Act, which restricts a mortgagee's recovery on a purchase money mortgage to the mortgaged land itself and bars any action on the personal covenant to pay. Ricki-Jo additionally pleaded her bankruptcy — stated in the judgment as having occurred on June 28, 2025, in one part of the decision and July 28, 2025, in another [source inconsistency] — raising the stay of proceedings under section 69.3 of the Bankruptcy and Insolvency Act. Rule 7-9 of The King's Bench Rules, which permits the court to strike a pleading that discloses no reasonable claim or defence, is scandalous, frivolous, or vexatious, or is otherwise an abuse of process, governed Paradigm's application.

Reasoning and analysis

Justice Bergbusch observed that both defences, expressly or impliedly, admitted every element Paradigm needed to prove: that the parties entered into the mortgage, that the property was subject to it, and that the defendants had defaulted. Turning to the costs issue, the judge explained that section 2 of the LCRA only restricts a mortgagee from obtaining personal judgment against a mortgagor; because Paradigm was not seeking personal judgment — a necessary feature of a purchase money mortgage foreclosure — the provision offered no defence to the foreclosure action itself. The judge nonetheless clarified that this protection would still shield the defendants from personal liability for any shortfall if the property sold for less than the amount owing. Similarly, the judge held that the bankruptcy stay under the BIA would only be relevant to a claim for personal judgment, which Paradigm was not pursuing against Ricki-Jo; her bankrupt status therefore was not a defence to the foreclosure. Because both defences failed to raise any answer to the foreclosure claim, the judge concluded it was unnecessary to consider Paradigm's alternative grounds for striking the pleadings as scandalous, frivolous, vexatious, or an abuse of process.

Ruling and overall outcome

Justice Bergbusch ordered that the statements of defence filed by Dayle Flora Steffen and Ricki-Jo Steffen be struck in their entirety, finding neither disclosed a reasonable defence to Paradigm Quest Inc.'s foreclosure action. No specific monetary amount was awarded to Paradigm at this stage; rather, the judge left the assessment of Paradigm's costs on this application to the discretion of the judge who will ultimately assess costs at the conclusion of the foreclosure proceeding.