TORONTO – Mortgage default cases have become more common in Ontario and, in yet another example, the Ontario Superior Court of Justice has recently ordered a Toronto man to pay more than $165,000 to a mortgage lender following a default that led to the forced sale of his four-unit apartment building1. The decision, released on September 12, 2025, grants summary judgment to Olympia Trust Company, the second mortgagee, for the financial shortfall that remained after the property at 149 Gainsborough Road was sold.
The case centered on Sedrick Samuel Sleugh, the owner of the apartment building for many years, who found himself in financial difficulty in late 2023. Court documents show that Mr. Sleugh had two mortgages registered against his property. The first, for approximately $1.5 million, was initially entered into in December 2022 and was later acquired by Home Trust in November 2023. The second mortgage, for $180,000, was with the plaintiff, Olympia Trust Company, and was established in February 2023 with a maturity date of March 1, 2024.
The legal proceedings were set in motion when Mr. Sleugh defaulted on his first mortgage payments beginning in November 2023. In his submissions to the court, Mr. Sleugh acknowledged that his monthly payments on this mortgage were about $8,500 and had fallen into arrears. The default triggered a series of actions by the lenders to protect their financial interests.
In response to the missed payments, Home Trust, as the first mortgagee, issued a Notice of Sale under Charge, a formal step indicating its intent to sell the property to recover the outstanding debt. This action prompted Olympia Trust, as the second mortgagee, to intervene. To prevent the first mortgagee from foreclosing and potentially wiping out its own security, Olympia Trust made two substantial payments to Home Trust on behalf of Mr. Sleugh. Court records detail a payment of $61,666.15 in January 2024, followed by another payment of $12,735.43 in March 2024, to cover the outstanding arrears on the first mortgage.
Contemporaneously, Olympia Trust had initiated its own legal action against Mr. Sleugh in December 2023, originally seeking possession of the property. After successfully obtaining possession, Olympia Trust proceeded with a power of sale, a contractual right under the mortgage agreement that allows a lender to sell a mortgaged property upon default.
The property was officially listed for sale on January 22, 2024, with an initial asking price of $2.579 million. However, the real estate market did not respond as hoped. The court heard that despite the listing, no offers were received. This lack of interest forced the lender to implement a series of price reductions over the following months in an effort to attract a buyer. By April 2024, the asking price had been lowered to $1.999 million. This revised price succeeded in generating an offer to purchase, which led to negotiations and ultimately a binding Agreement of Purchase of Sale for $1.935 million, executed on April 5, 2024. The sale of the property officially closed on June 21, 2024.
During the period it held possession of the building, Olympia Trust retained a property management company to handle upkeep and maintenance, incurring various expenses in the process. This was a different approach from Mr. Sleugh, who had previously managed the maintenance largely on his own. The proceeds from the sale were applied first to the outstanding first mortgage, then to the costs associated with the sale, and finally to the second mortgage held by Olympia Trust. After all these obligations were met, there was a significant shortfall. Olympia Trust claimed this amount was $118,325.92.
Mr. Sleugh, who represented himself in court, opposed the lender’s motion for summary judgment. He raised several arguments challenging the amount being claimed. One of his central contentions was that the property had been sold for less than its true value. To support this, he presented a 13-page appraisal report dated March 14, 2024, prepared by David Wender, which assessed the property’s value at $2.4 million.
However, the court noted significant procedural issues with how this evidence was presented. Mr. Sleugh had not filed his evidence in the form of sworn affidavits with exhibits, which is the standard requirement. In an endorsement from an earlier case conference on October 4, 2024, Justice Callaghan had specifically advised Mr. Sleugh of this problem. In an effort to be fair to the self-represented defendant, the court was permitted to consider his documents because Olympia Trust’s counsel had Mr. Sleugh attest to their authenticity under oath during a cross-examination.
Despite this accommodation, Justice G. Dow, the presiding judge, gave the appraisal little weight. He noted that because the evidence was not in a proper affidavit or an expert’s report, the appraiser could not be cross-examined. He found that the real-world evidence of the property being listed on the open market for months, requiring multiple price reductions before a sale could be negotiated, was more persuasive proof of its value than the appraisal.
Mr. Sleugh also submitted the possibility of an “intentional effort by those involved in the sale of the property to depress its value.” Justice Dow stated that this serious allegation was made without any supporting proof. Counsel for Olympia Trust argued that such an action would be illogical and contrary to the lender’s own financial interest, as depressing the sale price would only increase the shortfall it was trying to recover.
In his analysis, Justice Dow determined that the matter was appropriate for a summary judgment, as the key facts were not in dispute. He explained to Mr. Sleugh that the legal and financial consequences all stemmed from the initial failure to make the required mortgage payments. The court found no reliable evidence to suggest that Olympia Trust had acted unreasonably in the sale process or that the expenses it incurred were excessive. Justice Dow stated that his review of the documented expenses showed they were adequately supported and not unreasonable.
Ultimately, the court granted judgment in favour of Olympia Trust Company. The final order required Mr. Sleugh to pay the full shortfall of $118,325.92. In addition, the court awarded prejudgment interest at the contractual rate of 12.99% per year, commencing from the sale closing date of June 21, 2024. Justice Dow calculated the interest accumulated over the 449 days to the date of his decision to be $18,884.88.
The final component of the judgment was the determination of legal costs. Olympia Trust submitted a Costs Outline claiming $27,814.12, inclusive of fees, disbursements, and HST. Mr. Sleugh argued this amount was excessive. Justice Dow reviewed the file, noting that the litigation involved at least three case conferences and a 41-page transcript of Mr. Sleugh’s cross-examination. He found the hourly rate of $450 for Olympia Trust’s senior counsel, who was called to the bar in 2007, to be reasonable. The judge also noted that while the mortgage terms allowed for “full indemnity” costs, the lender’s claim was based on a lower “partial indemnity” scale for its fees, amounting to $23,025.50. Concluding that the claim was justified, Justice Dow fixed the costs payable by Mr. Sleugh at $27,814.12.
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