Background
In October 2021, Fisgard Capital Corporation (“Fisgard”) provided Wadie Narouz with a one-year mortgage loan of $495,000 at an interest rate of 6.99%. Before advancing the funds, Fisgard deducted amounts for legal fees and mortgage broker fees. When the loan was renewed for a second year, the interest rate increased to 9.24%. Mr. Narouz defaulted on several payments in 2023, prompting Fisgard to issue multiple notices and ultimately a notice of sale in August 2023. Although Mr. Narouz made a partial payment, it was insufficient to cover all arrears, legal fees, and other charges imposed by Fisgard.
Before the expiry of the notice of sale, Mr. Narouz commenced an action seeking a reduction of the interest and fees charged by Fisgard. Fisgard counterclaimed for, among other relief, vacant possession of the property. In his defence to the counterclaim, Mr. Narouz alleged that Fisgard had a duty to advise him to obtain mortgage disability insurance. The motion judge, Justice Karen Jensen of the Superior Court of Justice, dismissed Mr. Narouz’s claim for reduced interest and fees and granted Fisgard’s request that Mr. Narouz vacate the property (2025 ONSC 1600).
The Court’s Holding
The Court of Appeal for Ontario—comprising Justices Lois B. Roberts, Lise G. Favreau, and Jill M. Copeland—dismissed Mr. Narouz’s appeal. The court emphasized that its role was not to re-try the issues but to determine whether the motion judge committed palpable and overriding errors of fact or mixed fact and law, or errors of law. The court found no such errors.
The court rejected Mr. Narouz’s argument that the matter was unsuitable for summary judgment, noting that the parties had agreed at the hearing that the issues could be decided summarily and that the motion judge had independently determined she could decide the issues by way of summary judgment. The court observed that the summary judgment process is particularly apt for resolving mortgage questions where there are rarely complex and contested factual issues, as in this case.
Regarding the merits, the court upheld the motion judge’s conclusions that the notice of sale was valid, that legal and other fees were lawful, and that the 9.24% interest rate was not exorbitant. The court noted that Mr. Narouz’s partial payment was made after the notice of sale was served. The court also found no error in the motion judge’s conclusion that there was no evidence of fraud or collusion. Specifically, the court stated that there was no evidence supporting Mr. Narouz’s allegation that his mortgage broker was dishonest, that he had not named the broker as a defendant, and that Fisgard, as lender, was not responsible for the broker’s actions (para. 10).
The court further upheld the motion judge’s conclusion that Fisgard had no duty to advise Mr. Narouz to obtain mortgage disability insurance. The court noted that the motion judge’s finding that Mr. Narouz would not have been eligible for such insurance because he was already receiving disability benefits when he applied for the loan was supported by the record (para. 11). Finally, the court found no merit in Mr. Narouz’s argument regarding additional documents he attempted to file after the summary judgment hearing, as he had not brought a motion to introduce fresh evidence on appeal.
Key Takeaways
- The court upheld the motion judge’s case-specific finding that the lender had no duty to advise this borrower to obtain mortgage disability insurance, noting that the borrower was already receiving disability benefits when he applied for the loan (para. 11).
- The court confirmed that the summary judgment process is particularly appropriate for mortgage enforcement matters where complex factual disputes are rare.
- The court dismissed the appeal and awarded Fisgard costs of $23,065.22, all inclusive (paras. 14-15).
Why It Matters
The court dismissed the appeal and awarded Fisgard costs of $23,065.22, all inclusive. The court did not explain the costs award as a general warning about re-arguing appeals or connect it to the appellant’s self-represented status.
In this case, the court stated that there was no evidence supporting Mr. Narouz’s allegation that his mortgage broker was dishonest, that he had not named the broker as a defendant, and that Fisgard, as lender, was not responsible for the broker’s actions (para. 10).