Pucci v. Kotsovolos, (1999) 93 O.T.C. 157 (GD)

• Judge: C. Campbell, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: February 23, 1999
• Jurisdiction: Ontario
• Citations: (1999), 93 O.T.C. 157 (GD)

Pucci v. Kotsovolos (1999), 93 O.T.C. 157 (GD)

MLB headnote and full text

Temp. Cite: [1999] O.T.C. TBEd. MR.147

Francesco Pucci and Giovanni Pucci (applicants) v. Aspasia Kotsovolos (respondent)

(Court File No. 98-CV-160099)

Indexed As: Pucci v. Kotsovolos

Ontario Court of Justice

General Division

C. Campbell, J.

March 9, 1999 and May 14, 1999.

Summary:

Mortgagors extended their mortgage twice. The original mortgage contained a prepayment clause. The two extension agreements did not include the prepayment clause. The mortgagors' payments were late and they did not provide post-dated cheques as required. The mortgagors asserted that the mortgage was open, allowing them to prepay the whole or any amount at any time without notice or bonus. The mortgagee asserted that the mortgagors only had the privilege of prepayment "when not in default". The mortgagors asserted that the late payments were occasioned by the refusal of the mortgagee to deliver a notice of discharge in circumstances where the mortgagee knew that the mortgagors were seeking to sell the property and deliver a discharge on closing.

The Ontario Court (General Division) held that the mortgagee was entitled to enforce a prepayment penalty. The court stated that an Ontario Court of Appeal decision, Cloval Developments Inc. v. Koledin and Koledin, appeared to be conclusive that the mortgagors were not entitled to any right of prepayment. Even if the prepayment privilege existed, the mortgagors could not take advantage of prepayment because they were in default.

Mortgages - Topic 2983

Payment of mortgage - Prepayment - Loss of right or privilege - See paragraphs 1 to 20.

Mortgages - Topic 2986

Payment of mortgage - Prepayment - Penalty - See paragraphs 1 to 20.

Mortgages - Topic 3004

Payment of mortgage - Default - What constitutes - See paragraphs 1 to 20.

Cases Noticed:

Cloval Developments Inc. v. Koledin and Koledin (1984), 1 O.A.C. 368; 44 O.R.(2d) 261 (C.A.), consd. [para. 12].

Petrillo v. Nelson (1980), 29 O.R.(2d) 791 (C.A.), refd to. [para. 14].

Hongkong Bank of Canada v. Wheeler Holdings Ltd., [1993] 1 S.C.R. 167; 148 N.R. 1; 135 A.R. 83; 33 W.A.C. 83, refd to. [para. 15].

Franceschina v. Guaranty Trust Co. of Canada (1984), 48 O.R.(2d) 62 (Dist. Ct.), refd to. [para. 16].

Counsel:

John Lo Faso, for the applicant;

Effie Prattas, for the respondent.

This motion was heard on February 23, 1999, by C. Campbell, J., of the Ontario Court (General Division), who delivered the following decisions on March 9, 1999 and May 14, 1999.