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A mortgagor has been in default for months. The mortgage lender has acted in good faith and accepted at face value the borrower's explanations and plans to either bring the mortgage back into good standing or find alternate financing. But then nothing actually happens. Eventually the lender realizes that enforcement by way of power of sale or foreclosure is necessary. The mortgage agreement appears to provide the lender with every enforcement right imaginable, so enforcement should be quick and easy, right? In most cases, no.
Ontario remains a jurisdiction that allows for private enforcement of mortgages, where court proceedings are not necessary in every case. But for residential mortgages, private enforcement is limited to circumstances involving vacant properties, or where the borrowers or their tenants agree to leave voluntarily (this is almost never the case).
In most other cases, the mortgage lender will need a writ of possession, which directs the local enforcement office to (legally) evict the individuals in possession of the property. Since the only way to obtain such a writ is with a judgment for possession in hand, mortgage lenders almost always have to engage with the Ontario civil court system – which can sometimes seem like the modern-day equivalent of the Courts of Chancery described by Charles Dickens in Bleak House, with cases that span human lifetimes. Delays in agreeing to timetables. Delays in getting to court to impose timetables. Delays in scheduling cross-examinations. Limited court availability for hearings. All can add months and months to the process.
In the best case scenario, a statement of claim is issued and served on the borrower, the borrower accepts that they cannot save the property and does not defend, and default judgment for possession is obtained in little over a month. More commonly, the borrower defends the claim, knowing that that relatively inexpensive step virtually guarantees 3-12 months of time (or more, depending on which court is involved) before the lender has its judgment. This is true even when the defence has no merit at all.
The fastest route for a lender once a claim to enforce a mortgage is defended is to bring a motion for summary judgment. Summary judgment is available when the court agrees there are no issues that require a full trial to resolve. When a defence is filed simply to buy time, summary judgment is likely appropriate. However, getting such a motion scheduled takes time, and usually only moves at a reasonable pace if the lawyer for the borrower co-operates in scheduling matters, which is often the opposite of what their client is instructing them to do.
From recent experience, the following steps can help overcome delay tactics:
- Serve a complete motion record for summary judgment as soon as possible after the statement of defence is received.
- Insist on a reasonable timetable, to be endorsed by court order. If the opposing lawyer is unresponsive, schedule a case conference, civil practice court attendance, or whatever other court appearance the local court practice direction provides for, to ask the court to impose a timetable on the parties.
- Stick to the timetable. Even if the other side ignores deadlines, the only way to convince a court that delay should not be condoned is by meeting every deadline required of the moving party (the mortgage lender).
- Obtain the earliest motion date available, but do not underestimate how much time will be required to argue the summary judgment motion. Judges will adjourn cases where the lawyer has tried to squeeze a long motion into a short motion time slot because short motion dates were available earlier.
- Oppose adjournment requests except for truly valid reasons. It is not rude or in bad faith to ask for proof of whatever excuse has been put forward by the borrower to seek an adjournment.
- Be ready to argue the motion when the hearing date arrives.
Even following all these steps, getting a judgment for possession often ends up taking well over six months. While mortgage enforcement is intended to be efficient, the civil court system's (noble) aim of providing procedural rights to ensure fairness to all means that a certain amount of delay is unavoidable. Minimizing that court-related delay is one of the most important tasks of a lawyer acting for mortgage lenders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
