Executive Summary: Key Legal and Evidentiary Issues

• Trumencas Ltd., Grace Morlet, and Amanda Stanley moved for summary judgment to enforce a second mortgage registered against two properties owned by 2684544 Ontario Inc.
• Central to the dispute was whether an oral agreement had been reached to extend the repayment period or defer payment until the properties were sold.
• Mr. Ganni's affidavit evidence was found to be vague, uncorroborated, and lacking in the essential details required to establish an enforceable oral contract.
• No meeting of the minds was established, as there was no evidence of offer, acceptance, consideration, or certainty of terms regarding any alleged amendment to the mortgage.
• Post-default conduct of the parties supported the plaintiffs' position that they were insisting on payment compliance, not agreeing to forbear enforcement.
• Agreements of purchase and sale filed by the defendants related to different properties and a different corporate entity, undermining the defendants' position.

Facts of the case

The plaintiffs — Trumencas Ltd., Grace Morlet, and Amanda Stanley — advanced a loan of $350,000.00 to 2684544 Ontario Inc. ("268"), a corporation whose sole officer is Sarmad Ganni (also known as Sammy Ganni). The loan was secured by a second mortgage registered on October 19, 2023, as Instrument No. BC462622, against two properties municipally known as 339 St. Paul Avenue and 341 St. Paul Avenue (the "Properties"). The Properties had been acquired by 268 as part of four abutting parcels intended for development into a mixed-use high-rise building with residential lots and ground-floor commercial space. Mr. Ganni agreed to act as guarantor under the second mortgage. On or about October 19, 2024, 268 paid a renewal fee to extend the second mortgage for a further one-year term, with the maturity date extended to November 19, 2025. In or about mid-December 2024, the defendants defaulted under the terms of the first mortgage registered against the Properties, triggering a corresponding default under the second mortgage. Despite repeated communications from A. Menéndez — an officer of Trumencas Ltd. — demanding updates and continued payments, the defendants made no further payments after December 19, 2024. The plaintiffs commenced the within action on February 21, 2025, and issued a Notice of Sale with respect to the second mortgage on March 7, 2025.

Mortgage terms at issue

The second mortgage set out several key obligations. Monthly payments of $4,080.42 were required commencing November 19, 2023. Interest accrued at a rate of 13.99% per year. The mortgage was subject to Standard Charge Terms 200033, which also governed the basis for costs recovery on a full indemnity (solicitor-and-client) basis. The original maturity date was October 19, 2024, later extended to November 19, 2025 pursuant to the October 2024 Renewal. A default under the first mortgage was treated as an act of default under the second mortgage. The defendants admitted all of these terms in Mr. Ganni's responding affidavit.

Reasoning and analysis

Justice MacNeil applied the summary judgment principles established under Rule 20.04(2)(a) of the Rules of Civil Procedure, which directs that judgment shall be granted where there is no genuine issue requiring a trial. Relying on the framework set out in Pastink et al. v. 1190393 Ontario Limited et al., 2023 ONSC 6037, the court confirmed that the moving party bears the burden of showing there is no genuine issue for trial, after which the burden shifts to the responding party to demonstrate that its defence has a real chance of success.

The defendants argued that an oral agreement had been reached to extend repayment or defer payment to the proceeds of a property sale, raising issues of credibility that, they contended, required a trial. The court rejected this position. Mr. Ganni's affidavit was found to be critically vague: it did not identify when or where the alleged discussions occurred, who specifically made the agreement on behalf of the plaintiffs, or what terms — including the amount of additional time or a sale timeline — were actually discussed. The court found it commercially implausible that a mortgagee would agree to forgo enforcement without any specific terms being established. Further, no corroborating evidence was offered, and the email exchange between the parties revealed that the plaintiffs were consistently pressing for payment, not agreeing to forbear.

The court distinguished the cases cited by the defendants. In Shelanu Inc. v. Print Three Franchising Corp., 2003 CanLII 52151 (ON CA), the existence of the oral agreement had actually been conceded by the appellant on appeal; no such concession existed here. In Allen v. Succession Capital, 2011 ONSC 3300, the plaintiff had itself acknowledged that the written agreement did not capture all agreed terms and the record was "replete with competing affidavits" — circumstances not present in this case. The court also noted that agreements of purchase and sale filed by the defendants related to 120 St. George Street and 353 St. Paul Avenue, which are different properties than the Properties, and that the named seller was 2607315 Ontario Inc. — a different corporation from the defendant 268 — further undermining the defendants' case.

Ruling and overall outcome

The court found no genuine issue requiring a trial and granted summary judgment in favour of the plaintiffs. The court concluded that the second mortgage was a valid and enforceable contract, that the defendants had breached its terms, and that no oral agreement had been reached to amend the loan or the second mortgage. Judgment was entered against the defendants in the sum of $422,337.01, being the amount due and owing under the second mortgage as of July 25, 2025. The defendants were further ordered to pay prejudgment interest of $32,866.82 at the per diem rate of $151.46 from March 7, 2025 to October 10, 2025, plus continuing interest to the date of payment at 13.99% per annum, as well as postjudgment interest at the same rate. The plaintiffs were also granted possession of the Properties and leave to immediately issue a writ of possession. Costs were awarded to the plaintiffs on a full indemnity basis in the amount of $21,568.95, payable by the defendants within 30 days, in accordance with the Standard Charge Terms 200033.