Mary Dom v. Sara Kloos

(Ontario) (Civil) (By Leave)




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Mortgages – Laches – Validity of mortgage – Master concluding applicant’s mortgage was fraudulent conveyance and fraudulent preference and rejecting her defence based on laches – Whether the Court of Appeal for Ontario erred in failing to give effect to the “acquiescence” branch of laches – Whether Ontario courts have improperly required that the defendants in order to establish the defence of laches must establish both delay amounting to acquiescence and prejudice despite pronouncements of this Court.

The applicant’s son granted to the applicant a second mortgage on his residential property, allegedly in return for money she had advanced to him over the years. The applicant’s son also borrowed significant sums of money from the respondent and granted her mortgages on the same property. The respondent’s mortgage stood in third place on title, subordinate to a first mortgage to a bank and the applicant’s mortgage. The applicant’s son did not make any payment to the respondent on her mortgage.

The respondent sued the applicant’s son for possession and judgment with respect to the mortgage and obtained a default judgment against him. The property subject to the mortgage was sold soon after the judgment. To permit the sale, a judge of the Superior Court ordered a discharge of the two mortgages and payment of the funds in dispute into court, and referred the determination of mortgage validity to a master.

Lower Court Rulings

November 21, 2014
Ontario Superior Court of Justice

Motion dismissed
February 24, 2016
Court of Appeal for Ontario

C59757, 2016 ONCA 149
Appeal dismissed