Case Overview:
- Mortgage Default: The Soods defaulted on a $3.6 million mortgage from Celernus, leading to a legal action to recover the owed amount.
- Counterclaim: The Soods counterclaimed for $5 million, alleging breach of contract and dishonest contractual performance.
- Properties: Involved properties included luxury and residential properties in Tobermory and Loretto, Ontario.
- Mortgage Details: The 2022 Mortgage was $5 million for developing a luxury property. Celernus authorized $600,000 in draws under the mortgage.
Court's Decision:
- Injunction Request: The Soods sought an interim injunction to prevent Celernus from selling the properties until their counterclaim was resolved. The court denied this request.
- Reasoning:
- No Serious Issue to Be Tried: The Soods did not dispute the mortgage's validity; their issues were delaying Celernus' recovery efforts.
- No Irreparable Harm: Any harm could be compensated with damages.
- Balance of Convenience: Upholding lenders' contractual rights was crucial. Delaying the sale would harm Celernus' ability to reinvest funds and erode property equity.
- Interim Extension: The court extended the interim injunction for 60 days to allow the Soods additional time to secure financing.
- Costs: The court ordered costs of $38,000 inclusive of HST.
Legal Principles:
- RJR-MacDonald Test: Used to determine if an injunction should be granted.
- Case References: Starkman v. Home Trust Co., Canadian Western Trust Company v. 1324789 Ontario Inc.
The motion for an interim injunction was dismissed, with a brief extension provided for arranging financing??.
