In mortgagee possession cases where the borrower raises an arguable unconscionability defence, a stay pending appeal may be granted on condition that the principal loan sum is paid into court, reflecting the equitable requirement that a party seeking to set aside a transaction must do equity. The concept of 'situational disadvantage' arising from desperate financial need may support an arguable unconscionability defence, particularly where the lender is alleged to have taken advantage of the borrower's predicament through the interest rates demanded. However, the fact that the borrower received a substantive benefit from the loan (such as avoiding foreclosure) is a significant factor weighing against the defence and in favour of imposing conditions on any stay.
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