The recent Court of Appeal decision in Eyelet Investment Corp v. Zhou, 2026 ONCA 453 provides a useful reminder to parties to failed real estate transactions as to the importance of being able to prove reasonable efforts to mitigate damages.

In this case, the Defendant agreed to buy a home in a development built by the Plaintiff.  The transaction was to close on September 28, 2017.  On September 11, 2017, the Defendant advised the Plaintiff that the Defendant was terminating the Agreement of Purchase and Sale.  This was a breach of their contract.  The purchase price for the property had been $1,680,000.  Months after the breach, the Plaintiff sold the property for $1,300,000 or about $380,000 less.  The Plaintiff then sued for that difference less the amount of the deposit.  The claim was dismissed on a motion for summary judgment on the basis that the Plaintiff had failed to mitigate its damages. 

The Court of Appeal dismissed the appeal.

Ordinarily when assessing damages for breach of contract, the basic principle of putting the injured party in the position it would have been in had the contract been performed is honoured by assessing damages on the date that the contract was to be performed, ie. the closing date of the transaction.  However, it is open to a court to choose a different date if appropriate.

In real estate transactions where purchasers fail to close, the vendor takes reasonable steps to sell the property, and there is nothing improvident about the sale, the Court will usually assess damages on the difference between the contract price and the resale price as opposed to the value of the date of the breach.  However, where the property is resold for less than its appraised value and the vendor is unable to demonstrate reasonable steps having been taken in the resale process, it is open to the judge to assess damages as at the date of the breach.

In this case, the case was disposed of at a motion for summary judgment.  The Plaintiff’s evidence was put forward by affidavit together with a cross-examination transcript.  In this case, it appeared that there was virtually no evidence of reasonable efforts to mitigate.  The Plaintiff, engaged in the sale of multiple properties in this new development, appears to have failed to keep records of any marketing strategies, email blasts or other outreach efforts to sell the property.  While the Plaintiff had a marketing strategy with respect to entirety of the development, it had no specific strategy for the re-sale of this particular property following the breach.  The motion judge concluded that had it developed such a strategy, it might have been able to sell the property for a price approximating its fair market value at the time of the breach rather than 6 months later, by which time the value had dropped.

Because of the lack of records, the motion judge drew the negative inference that there had in fact been a delay in marketing the property and a failure to market it properly.

The motion judge was particularly concerned with the fact that the Plaintiff had failed to list the property on MLS.  The Plaintiff’s position was that it did not want to flood the market with homes which had been the subject of failed agreements, and maintained that it should have the discretion to decide which house to put forward on the market at which time.

It is easy to understand why a vendor attempting to sell homes in a residential development would have a concern about trying to sell one particular property due to a failed transaction in priority to others.  Nevertheless, the Court is not going to be interested in a developer’s overall business strategy.  A purchaser, even one in breach, is entitled to expect reasonable mitigation efforts with respect to the specific property in issue.

In this case, both parties led evidence of the property’s value as of September 11, 2017.  As it happens, even the Plaintiff’s valuation fixed that number at an amount which, after the forfeiture of the deposit, resulted in no damages.  In view of the Plaintiff’s failure to mitigate, that ended the matter.

This case would be of particular interest to developers and builders in a down market, but it would also be of interest to any vendor faced with a defaulting purchaser. It points out the importance not only of making reasonable efforts to mitigate damages but also the need to document those efforts carefully and thoroughly.

I typically use my blog to talk about Court of Appeal cases, not to tell war stories.  That is because I find the cases that I talk about to be interesting, and people find my war stories to be anything but. 

But this time, I am going to tell a war story.  I am going to do so because I find it both topical and frightening.  And hopefully you will find it interesting.

I participated as counsel in an arbitration hearing last November.  I was assisted by one of our very capable associates and we involved other lawyers with the specific area expertise that was required for the particular subject matter of the arbitration.  Our opponent was a sole practitioner who markets himself as an expert in the use of artificial intelligence.  A month after the arbitration was concluded, he published his own blog post bragging about how he, with the use of AI, had been able to take on a firm with far greater resources (he didn’t bother mentioning that he had lost the case, quite miserably). 

We had realized during the hearing that he was using AI to create daily transcripts for himself.  It never occurred to us that he had been doing considerably more than that.

The case started with a long and rambling Notice of Arbitration from our opponent.  It meandered through page after page, eventually getting to the point.  I thought nothing more of it beside the fact that opposing counsel was simply the type of person who takes a long time to get to the point.

Now that I look back on it, it is clear that this and all of the other paper he subsequently generated was long, meandering, and sometimes completely meaningless.  His document requests went on for pages and pages.  He brought several motions prior to the ultimate hearing, papered in much the same style.  His cross-examinations of our witnesses were lengthy, repetitive, and ultimately unsuccessful.  Following the conclusion of the evidence, the arbitrator requested written closing submissions and his somehow managed to emphasize his weakest points and little else.

Following the release of the Award (in my favour), he chose to submit a list of questions to the arbitrator under section 40 of the Arbitration Act, which entitles a party to inquire of the arbitrator as to certain aspects of an award.  His request document, once again, went on for pages and posed almost 100 questions.  Several days later he delivered a supplementary list of questions.

The Award is not subject to appeal on any basis, so he has now served a Notice of Application to set the award aside under section 46 of the Arbitration Act, complaining of unfair treatment.  Yet again, the Notice of Application goes on.  And on.  And on.  And the listed grounds for the Application look an awful lot like grounds for an appeal.

At the risk of appearing obtuse, I must admit that it never occurred to me until I read his blog post a few days ago that this entire exercise, on his side, seems to me to have involved nothing more than figuring out the right prompts to put into his AI app in order to generate the various documents.  I don’t know that he actually authored anything himself, at all.  And what’s worse, I am not at all certain that he spent any time reviewing the AI product before using it or submitting it.

We use AI in our office.  It’s called Harvey.  It really is very good.  I use it to edit work that I originate.  It helps me with grammar and it helps streamline language.  I use it to summarize transcripts. I use it for all kinds of tasks.  However I do not use it to create documents from scratch.

What I learned in the course of this arbitration, however, is a valuable and important lesson.  We are all aware of all those cases in which lawyers have used AI for legal research and ended up handing the court citations to cases which don’t exist.  And we all know that the penalties for doing that are extreme.  But there are no penalties for handing the court a bunch of AI-produced garbage. 

As I said, this particular lawyer uses the fact that he makes such comprehensive use of AI as a marketing tool.  Presumably, his point is that he can compete with larger firms having far greater resources, and that he can do so at a much lower cost.  What the unsuspecting public may not appreciate is that, as the saying goes, you get what you pay for. 

Worse yet, his indiscriminate use of computer-generated junk, at least in this case, increased our client’s expense considerably.  While he was in front of his computer clicking on icons, the result of his efforts was that our client was compelled to fund our review of the material and our preparation of appropriate responses.  The fact that almost all of the documents to which we had to respond were off target did not mean that we could simply ignore them. 

So the lessons learned from all of this, at least for me, are quite simple.  Firstly, do not use AI to create documents from scratch.  Just don’t do it.  Your AI app wants to make you happy.  It will spew out all kinds of nonsense for that purpose. 

Secondly, whatever you use AI for, read it, edit it, and read it again.  There is a real risk that it will be far too long and at least partially off topic.

Simply having your computer spit out a document and handing it to a judge is a disservice to the court, to opposing counsel, and ultimately to your client.  Your bill to the client might be lower but your client’s chances of success will probably be reduced as well.

In Block Developments Inc. v Brewers Retail Inc., 2026 ONCA 431, the Court of Appeal dealt with an interesting claim arising out of two failed real estate transactions between Block as purchaser as Brewers Retail Inc. as vendor.  The properties had been marketed by Brewers as excellent development opportunities, and Block was a developer intending to develop the properties as a mixed-use condominium project.  A portion of the project would then be leased back to Brewers.

The agreements of purchase and sale were signed in June 2015.  Brewers terminated them in November of that year and sold them to another developer one month later.

Block sued Brewers and obtained an award at trial of over $15,000,000 plus interest.  The trial judge rejected Brewers’ argument that Block had mitigated its damages.

The case is interesting for a number of reasons, including the assessment of damages when a property involved is being purchased for future development.  The issue to be focused on in this note is that of mitigation of damages.

The Court considered that Block is a real estate development company that is a part of a corporate group that is affiliated and related companies.  Before and after the subject transactions, Block and its group were pursuing a business model of aggressive growth, with strong financial backing.

Following the date of breach, a number of Block’s affiliates purchased other development properties elsewhere as part of an active program to expand the group’s portfolio.  In all, following the breach, members of the group made offers on 73 properties and acquired 6 of them.  Brewers’ argument was that these purchases should be considered as mitigating, so that the profits ultimately earned on them would offset the loss of potential profits from the properties Block was to have purchased from Brewers.

Block’s argument was that none of these other sites replaced the subject property.  The group would have acquired all of them anyway.

The trial judge agreed with Block and declined to reduce its damages due to mitigation.

On appeal, Brewers shifted its position and submitted that even if Block’s damages had been properly calculated, they should be reduced because Block had failed to mitigate those damages.  Again, Brewers’ argument was based on the fact that Block’s affiliates had purchased other development properties.  To Brewers, these were replacement properties which could have been purchased by Block just as easily.  Had Block made the purchases, its losses would have been mitigated. 

The Court of Appeal disagreed, based on the connection between these subsequent purchases and the failed transactions, or lack thereof.  The Court found that with the resources available to Block and to its group of companies, these subsequent purchases would have been made (whether by affiliate companies or by Block itself) even if Brewers had closed its deals with Brewers.  There simply was no connection between the failed transactions and the subsequent purchases.

As the Court of Appeal pointed out, a Plaintiff only has a duty to mitigate losses “consequent on the breach”.  Block had no financial constraints and there was no causal connection between Brewers’ breach and Block’s financial ability to make purchases.  The breaches did not change Block’s financial position or impact the group’s decision-making process.  There was no evidence that Block strategically avoided profitable transactions by steering other transactions to its affiliates so as to maximize its own damages claim.  The other purchases were independent transactions and as such, being unrelated to the Defendant’s breach, they were irrelevant to Block’s losses.

In the recent Court of Appeal decision in Zeppa v. Rea, 2026 ONCA 338, the Court makes a number of interesting observations concerning protection that may be afforded to people filing police complaints.

The Plaintiff, Mr. Zeppa, was the principal of a development company.  The Defendant, Ms. Rea, was a city councillor.  Mr. Zeppa proposed to develop a parcel of land located in Ms. Rea’s ward into a subdivision.  She opposed the development, which was ultimately approved.

Ms. Rea’s opposition to the proposal, which appears to have continued over some period of time, apparently led to a considerable amount of acrimony between them.  Shortly after Ms. Rea was re-elected to City Council, the parties unexpectedly ran into each other at a bar where Ms. Rea was celebrating her re-election.  This resulted in an unpleasant exchange between the two.  

While there was a factual dispute in the court record as to exactly what was said, Ms. Rea concluded that Mr. Zeppa had threatened her and she reported it to the York Regional Police.  The officers who took her statement advised her that the conduct of which she complained did not meet the legal test for uttering threats, and declined to proceed. 

Mr. Zeppa subsequently became aware of the report and sued Ms. Rea for damages for defamation.  He alleged that she had defamed him by reporting the incident at the bar to the police and making “false and slanderous statements” in the process. 

Ms. Rea brought a motion under Ontario’s anti-SLAPP legislation for an Order dismissing the claim.

Her initial dismissal motion was unsuccessful.  The motion judge determined that the subject matter of the dispute was private in nature and did not constitute a matter of public interest.  In a decision rendered in 2023, the Court of Appeal allowed Mr. Zeppa’s appeal from that ruling.  It ruled that on the contrary, “there is an obvious public interest in members of the public feeling free to report conduct which is of concern to the police…The fact that the police determined that the actions complained of did not rise to the level of criminal threatening does not change the public interest in ensuring that such concerns are reported to the police and reviewed by them”.  The Court made it clear and in determining if an expression involves a matter of public interest, the analysis will not be limited to a review of the substance of the expression itself.  The context must be considered as well. 

As the motion judge had not reviewed the other tests involved in an Anti-SLAPP motion, the Court of Appeal sent the matter back to motions court to be dealt with by a different judge. 

The second motion judge granted the motion and dismissed Mr. Zeppa’s action under the anti- SLAPP legislation.  The matter was appealed once again and the Court of Appeal dismissed the appeal.

In the words of the Court of Appeal, the action was hopeless.  The Court pointed out that this was not a case where someone’s reputation is smeared by false accusations that are later publicized.  The matter was reported to the police.  The police investigated, concluded that the necessary legal test for the offence of uttering threats had not been met, and closed the investigation.

Mr. Zeppa argued that the mere fact that a complaint had been made to the police could, without more, constitute defamation.  The Court disagreed, and went on to indicate that “there is a strong public policy reason not to discourage parties from reporting to police what they believe to be criminal acts, even if it turns out that they are mistaken…. The public interest in protecting this expression is very strong, and the appellant did not meet his onus of establishing that he was harmed in any way exceeding minor inconvenience and embarrassment”.

This sentiment closely aligns with the ruling of the Court of Appeal on the first occasion at which it dealt with this matter.  It would appear that there is very strong sentiment in favour of permitting people to file police reports when they believe that there is a basis for complaint. 

The definition of defamation does not exclude statements made to police officers.  In theory at least, a defamatory statement made to any one or more individuals, regardless of their occupation or the context within which the statement is being made, has the potential to be defamatory.  It is at least arguable that Mr. Zeppa’s submission that a complaint to the police without more can constitute defamation is quite correct.  While clearly there is a solid public policy reason to ensure that people feel safe in making legitimate complaints to the police without fear of a lawsuit arising out of it, surely there ought to be no such protection for people who file complaints knowing both that they may have no merit, and that they may give rise to a considerable amount of stress and anxiety for the person about whom the complaint is being made – even if the police decline to proceed.

It is unfortunate that this issue came up for consideration in the context of an anti-SLAPP motion, which itself includes a number of technical issues for consideration.  Hopefully the point can be clarified at some future date in the course of a trial as opposed to such a motion.

The Ontario Court of Appeal decision in Bank of Montreal v. Makhija, 2026 ONCA 221 contains a useful summary of the law of civil fraud and fraudulent misrepresentation.  It is also remarkable as being a rare case in which a bank, armed with all the usual apparently ironclad contractual provisions in its favour, managed to lose a claim against a borrower’s principal.  It may also be reflective of an instance in which a borrower’s principal who is himself duped by fraudsters attracts enough sympathy from the Court to get out from under what would otherwise appear to be a very disadvantageous legal position.

In this case, the Defendant applied for a loan from the Bank for his company in 2019.  He signed two (2) limited personal guarantees.  The loan was made in 2019 and went into default in 2020.  The Bank obtained default judgment against the company for the full amount of the debt and against the Defendant for the portion that had been guaranteed.

The action was undefended.

After obtaining the judgment, the Bank found out that the Defendant’s Personal Financial Statement provided in support of the company’s loan application contained false information.  In particular, it suggested that the Defendant was the owner of a certain property when in fact he was not.  The Bank then sued the Defendant for the entire amount of the loan claiming that he had fraudulently misrepresented his net worth in his Personal Financial Statement, and that misrepresentation had induced the Bank to make the loan.  The Bank also alleged that the Defendant had falsely represented that the purpose of the loan would be to finance the startup of a printing business when in fact that printing business did not exist. 

The Bank proceeded by application.  In his Affidavit in response, the Defendant claimed that he himself had been duped.  He claimed that while he was working at a mattress store, a co-worker had introduced him to two fraudsters who had convinced him to apply for financing for a printing business that they would set up and manage.  In return, he would be entitled to a share of the profits of the business. 

Most significantly, he denied that he had either prepared or signed the Personal Financial Statement.  He did sign the loan application because he believed that the printing business would be going ahead based on his interactions with the fraudsters.  The loan was made, the fraudsters absconded with the money, and the Defendant was left with nothing.

The application judge dismissed the Bank’s claim after satisfying himself that the Defendant had not prepared or signed the Personal Financial Statement, and that he had reasonably believed that the other information that he had provided for the Bank was truthful at the time he gave it.  Most significantly, the application judge determined that the only information that the Bank had relied on to make the loan was the information in the Personal Financial Statement which apparently contained the forged signature of the Defendant.

The Bank appealed to the Court of Appeal. 

In order to establish a civil fraud, a plaintiff must prove a false representation made by the Defendant, that the Defendant either knew of the falsehood of the representation or was reckless as to its truth or falsity, that the false representation caused the plaintiff to act, and that the plaintiff’s actions resulted in a loss.

The issue in this appeal was whether or not the application judge failed to consider whether the Defendant had been reckless.

The Court determined that the Defendant had not been reckless with respect to the loan application document that he had signed, and that he had believed the information in it to be true.  He had met with the fraudsters several times where they had shown him their plans for the printing business.  He was told and believed that a lease had been signed.  He had every reason to be believe that the information in his loan application was truthful and that the financing was being sought for a legitimate purpose.

The Bank argued that the application judge should have considered whether or not fraud could be inferred on the whole of the circumstances.  The problem with this argument was that it was clear that the Bank had only relied on the information in the Personal Financial Statement, which the Defendant had never seen and had not signed.  Therefore, even if it could have been determined that the Defendant had been reckless in believing what he had been told by the fraudsters about a business to be started up using the loan proceeds,  and then repeating that information to the Bank, none of this matter because the Bank didn’t rely on it in making the decision to advance the funds.  That decision was based only on what turned out to be false misrepresentations in the Personal Financial Statement, which were not representations that had been made by the Defendant.

This is a somewhat unusual case.  Ordinarily one would not expect a Bank, in providing the Court with its explanation as to the basis for its decision to make the loan, to frame its reasoning quite so narrowly.  Indeed, one would ordinarily expect that a Bank would consider not only the information in the Personal Financial Statement of the borrowing company’s principal but also the big picture around the reason for the loan.  However, it does not seem to be the way that the Bank’s evidence was presented and both the application in the Court of Appeal seemed to have construed the evidence as to the Bank’s reliance in an exceedingly narrow manner.  In the result, as between a Bank that was unable to collect the full amount of its loan after default on the one hand, and a Defendant who had been duped by fraudsters on the other hand, the Bank ended up taking the hit.

Most Ontarians fortunate enough to own cottage property, and particularly property fronting on water, will be familiar with the desirability of reasonable cooperation with their neighbours.  After all, cottage owners typically look at their recreational properties as sources of stress relief.  However, sometimes the spirit of neighborliness is misinterpreted and disputes begin.  In my experience, these disputes can often be laden with emotion and, therefore, hard fought.  So much for stress relief!

In the Court of Appeal decision in Kubiniec v. Dy, the Court dealt with an appeal from a judgment after a five-day trial in a case between neighbouring cottage owners on Lake Erie.

The parties owned lands next to each other.  Both parties’ lands included waterfront access, but the plaintiff’s waterfront was rocky and marshy and lacked a sand beach.  For that reason, the plaintiff’s access to the lake from his property was less convenient.

As a result, from about 1970, the plaintiff and his family had accessed the lake using a footpath and other land area on the defendants’ property, for the purpose of swimming and boating and, according to the plaintiff, to enjoy his cottage property generally.  The plaintiff claimed to have done so continuously until 2016 without any specific permission from the defendants.  The plaintiff insisted that this use was necessary for his better enjoyment of his own property and, in fact, the plaintiff tendered an evidence that he had maintained the area on the defendants’ property which he was using. 

In 2016, the defendants put a stop to it and even called the police to try to get the plaintiff charged with trespassing.  This led to the commencement of this lawsuit in 2017 in which the plaintiff asked the Court to order, among other things, that he had a prescriptive easement over that part of the defendants’ property that he and his family had been using for decades.  The plaintiff argued that the defendant had acquiesced to the plaintiff’s use of the lands for a period of at least 20 years, as required by the law on the subject, and that the easements were necessary to the plaintiff for the reasonable use of his own property. 

These arguments were all dismissed by the trial judge. 

To establish a prescriptive easement, the plaintiff must show that for a period of 20 years he has demonstrated use as of right that is open and without permission.  He must establish that the defendant must have known about that use and acquiesced to it. The entire 20-year period must have been completed prior to the conversion of the property in issue into the Land Titles system.

In this case, the trial judge concluded that the plaintiff’s use was with the tacit permission of the defendants’ predecessors-in-title as an act of good neighbourliness consistent with the local community culture and a long-standing tradition.  The trial judge specifically stated “I failed to see how such permissive use in these circumstances can lead to a proprietary right”.  Lack of objection, in other words, will not always amount to acquiescence.

In terms of necessity, whether an easement is reasonably necessary will depend on the nature of the property and the purpose of the easement.  A purpose that consists of recreation or amusement is not going to suffice and convenience is not the test.  In this case, the plaintiff’s property was not landlocked and while his own access to the lake was less convenient, he still had some access.  He could also use another route not involving the defendants’ property that would only add a few minutes to the process.

The Court of Appeal accepted all of these findings of fact, as it inevitably will do. The Court of Appeal has stated, many times, that it will not readily interfere with a judge’s findings of fact except in rare instances.

Accordingly, the appeal was dismissed.

I have been involved a number of cottage property disputes of this nature.  These cases are always completely fact specific but in my experience it is fair to say that if the Court concludes that a party is being a good neighbour, that party is almost certainly not going to be punished for it.

The recent Court of Appeal decision in Winona Park Towns Ltd. and Alleghe Mortgage Fund Ltd. provides a useful judicial assessment of the current state of the duty of good faith as it applies to mortgage lenders.

In this case, Alleghe Mortgage Fund Ltd. loaned $2 million to Winona Park Towns Ltd. for a seven month term with interest at 12% per annum for the first 6 months and 18% thereafter.  Winona provided security in the form of a second mortgage on land being developed by Winona.

The loan was intended to cover some of the development costs, and about $1.76 million of the $2 million was paid directly to the City of Toronto to cover the cost of building permits.

Winona signed a document at the outset authorizing Alleghe to cancel the building permits and having the money that had been paid to the City refunded to Alleghe, presumably in the event of default.

The mortgage agreement also included a term allowing Alleghe to pay out any encumbrance on title and add the amount paid to the encumbrancer to the principal owing under its loan.

Three months after the loan was made, Winona breached the agreement by missing an interest payment.  Alleghe delivered a Notice of Sale and started a lawsuit against Winona.  Winona asserted a counterclaim.

As Alleghe had the right to pay out any encumbrancers, it elected to pay about $6.2 million to the 1^st mortgagee to discharge the first mortgage on the property.

The matter went before the Court by way of summary judgment.  The motion judge granted summary judgment to Alleghe in the amount of the original loan, the amount paid to the 1^st mortgagee, and interest at 18% per year.

Winona appealed to the Court of Appeal.  Winona’s argument was that Alleghe had breached its duty of good faith by failing to exercise its right to cancel the application for building permits and require the City to return the funds paid to it for those permits, amounting to all but about $250,000 of the original loan.  Winona’s argument was that had Alleghe done so, Winona would have been in a position to pay the relatively nominal balance owing under the mortgage to Alleghe and solve the problem.  Instead, Alleghe chose to pay out over three times the amount of the original loan to the 1^st mortgagee which increased the amount of the debt exponentially, thereby ending up with an enormous judgment bearing interest at a high rate.

The Court of Appeal dismissed the appeal.  It declined to interfere with the conclusion of the motion judge that the lender was not under any duty of good faith in the performance of its contractual duties to act in a manner that was in the best interest of the borrower, rather than pursuing what it reasonably believed to be its own best interest.  In this case, if Alleghe concluded that it made the most sense to sell the property with building permits attached, it was at liberty to do so.

The Court of Appeal observed that while Alleghe could have obtained partial repayment by cancelling the building permits, that cancellation would have reduced the value of the property, thereby putting at risk its prospects of obtaining repayment of the balance of its loan from a sale under power of sale.

This is a remarkable conclusion given that on the evidence before the Court, the property had substantial value and this was apparently Alleghe’s belief given that it had been attempting to sell it for at least $8.5 million.  While this type of valuation might well put Alleghe at risk in terms of recovering the balance under its own loan together with the amount paid out to the 1^st mortgagee, one could easily conclude that the value of the property would have been more than enough to cover the approximately $250,000 that would have remained owing had Alleghe cancelled the building permits.

In any event, and notwithstanding these points, the Court of Appeal determined that the motion judge had every right to conclude that Alleghe’s conduct in exercising its rights did not demonstrate bad faith and given that there was evidence upon which that conclusion could be reached, the Court of Appeal declined to interfere with it.

This is a case in which, on a business basis, it would be easily to sympathize with Winona’s position.  Without a doubt, it would have been reasonable for Alleghe to cancel the permits and reduce the amount outstanding by substantial margin.  Nevertheless, it made the business decision not to do so.  That decision was open to it under the documentation and that ended the matter.  The fact that other lenders might have acted differently in these circumstances is simply not relevant.  This is an important consideration for borrowers to bear in mind.