Statement of Claim:

A written or printed statement by the plaintiff in an action in the "...High Court", showing the facts on which "he" relies to support his claim against the defendant, and the relief which he claims. It is delivered to the defendant or his solicitor. The delivery of the statement of claim is usually the next step after appearance, and is the commencement of the pleadings.*

Default is a failure to fulfill obligations set out in the mortgage agreement. The vast majority of mortgagors remain in possession of their properties and fulfill covenants without serious problems. Fortunately, legal actions by mortgagees are relativley few.

The most common default is failure to make payments. However, other possibilities exist. A mortgagor can default if any covenenat is not satisfied such as the obligation to pay taxes, the requirement to insure, or the stipulation to pay condo common expenses.

The Quit claim deed can quickly resolve mortgage default issues. This approach may be appropriate if no practical solution exists for the mortgagor to keep the property and the mortgagee agrees to provide him or her with a general release. The mortgagee then takes title to the property and the matter is at an end.

When in default, the mortgagee will often rely on an acceleration clause in which the full mortgage amount becomes due and payable upon default. Otherwise, in an action on the covenant, the mortgagee can only sue for interest arrears, as the implied covenents are limited to that specific action.

Practitioners should note that the Mortgages Act provides that if a mortgage has not matured and the default is resolved, including all costs paid to the mortgagee, the mortgagor is relieved from the default and does not have to pay the balance as stated in the acceleration clause.

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