That pushback mattered. The fund’s claimed payout, as of October 31, 2024, tacked a default price of $1,500, a three-month penalty of $2,547.45, a demand-letter cost of $1,500 and a number of other smaller assertion, discharge, processing and insurance-related charges onto the excellent stability and curiosity owed. Justice Callaghan discovered a lot of these fees opposite to part 8 of the Curiosity Act, which bars mortgagees from levying fines, penalties or greater rates of interest on arrears secured in opposition to actual property, no matter how the cost is labelled. When questioned on the fees, counsel for the fund agreed to withdraw them, a concession the court docket known as correct – however not a primary for this lender. The ruling notes the identical fund made close to an identical concessions in a 2023 Ontario choice involving a distinct borrower, including that this sample is “a typical prevalence seen too typically by the court docket.”
With the improper fees stripped out, the court docket set the quantity owing at $103,714.59, plus prejudgment curiosity of $17,429.20 to July 3, 2026, and persevering with curiosity after that date on the contractual 9.99 per cent price. The fund was additionally awarded a writ of possession over the property.
Justice Callaghan denied the fund’s request for prices, regardless that its mortgage phrases offered a contractual proper to them. Prices stay discretionary no matter contract, the court docket famous, and advancing unjustified fees with none factual basis is the type of conduct courts ought to discourage. The decide added that the price declare itself was not giant relative to the debt owed, however that denying it would assist curb the follow going ahead.
For wealth advisors and fund managers who place shopper capital in personal mortgage funds for yield, the ruling is a reminder that price and assortment practices sit inside the identical compliance perimeter as funding efficiency – and that repeat missteps on fundamental lending legislation can floor in court docket data tied to the fund’s title.