Executive Summary: Key Legal and Evidentiary Issues

• Dispute involved a mortgage default and resulting shortfall after the defendant failed to make mortgage payments beginning in November 2023.

• Plaintiff’s entitlement to interest at 12.99% per year and full indemnity costs was based on the mortgage documents signed by the parties.

• Defendant’s evidence was not in sworn affidavit form and included an appraisal that could not be cross-examined.

• Allegation by the defendant of intentional value depression in the sale process was unsupported by any proof.

• Reasonableness of the plaintiff’s expenses in the sale process was challenged but found to be adequately documented and not unreasonable.

• Summary judgment was granted as the defendant did not contest the default or provide reliable evidence to dispute the plaintiff’s claims.

Facts and outcome

Background and facts of the case
The defendant, Sedrick Samuel Sleugh, owned a four-unit apartment building at 149 Gainsborough Road, Toronto. He had a first mortgage of about $1.5 million entered into in or about December 2022, which was acquired by Home Trust in November 2023. Sleugh acknowledged that the monthly payment on this mortgage was about $8,500 and that it went into default. He also entered into a second mortgage with the plaintiff, Olympia Trust Company, for $180,000 in February 2023, with a maturity date of March 1, 2024.

After receiving a Notice of Sale under Charge from Home Trust, Olympia Trust made payments of $61,666.15 and $12,735.43 on Sleugh’s behalf to Home Trust in January and March 2024. Olympia Trust initiated this action, originally for possession, in December 2023. Olympia Trust later obtained possession and proceeded under Power of Sale. The property was listed for sale on January 22, 2024, initially at $2.579 million. The price was reduced several times until April 2024, when an offer was made at $1.999 million, leading to a final sale at $1.935 million on June 21, 2024.

During the sale process, Olympia Trust incurred various expenses for upkeep and maintenance through a property management company. The breakdown of disbursements and sale proceeds was detailed in a statement attached as Exhibit F to the Supplementary Affidavit of the plaintiff’s agent, Howard Ivany, sworn July 29, 2024.

Evidentiary and procedural issues
The defendant did not prepare and file his evidence in the required form of sworn affidavits with exhibits, despite being advised of this issue during case conferences. To assist the defendant, counsel for the plaintiff had the defendant attest to various documents during cross-examination. The court considered these documents on that basis. The defendant submitted a 13-page appraisal dated March 14, 2024, by David Wender, assessing the property at $2.4 million, but this was not in affidavit or expert report form and could not be cross-examined. The court did not prefer this evidence over the actual listing and sale of the property. The defendant also raised the possibility of an intentional effort to depress the property’s value but provided no proof.

Discussion of policy terms and clauses at issue
The plaintiff claimed interest at 12.99% per year from June 21, 2024, and costs on a full indemnity basis, relying on terms in the mortgage documents agreed to and signed by the parties. The court accepted these terms as the basis for the amounts claimed.

Court’s analysis and outcome
The parties did not dispute that the matter was appropriate for summary judgment. The defendant did not contest the failure to make the required mortgage payments or the necessity of selling the property. The sale did not cover the total amount owed on the mortgages and expenses. The court found that the expenses incurred by the plaintiff were adequately documented and not unreasonable. No evidence was provided as to why the default occurred or regarding the rental income from the property.

The court granted judgment in favor of Olympia Trust Company against Sedrick Samuel Sleugh in the amount of $118,325.92, plus prejudgment interest at 12.99% per year from June 21, 2024, calculated to $18,884.88 as of the date of judgment. Costs were fixed at $27,814.12, inclusive of partial indemnity fees, disbursements, and HST. The court found the hourly rate and fees reasonable, and the amount claimed for costs was accepted as appropriate.

Olympia Trust Company was the successful party, with judgment awarded for the shortfall, interest, and costs in the specified amounts.