Reasons for Judgment

Court File No.: CV-23-326-00
Date: 2025-06-30
Ontario Superior Court of Justice

Between:
Pushpinder Dhanoa, Plaintiff
– and –
Bharati Ramnarine, Defendant

Appearances:
Amrita Mann, for the plaintiff
Granville Cadogan, for the defendant

Heard: May 13-14, 2025

Released: June 30, 2025

Justice: Ranjan K. Agarwal

I. Introduction

[1] This action is for enforcement of a mortgage loan. The plaintiff, Pushpinder Dhanoa, loaned $650,000 to the defendant, Bharati Ramnarine, in 2021. Ramnarine defaulted on the mortgage in December 2022. She’s made no payments since then.

[2] Ramnarine’s defence is that the mortgage agent who brokered the transaction misrepresented his role and the terms of the mortgage to her, such that the mortgage contract is void. Ramnarine submits that she should only be liable for the loan principal. She also counterclaims for damages she allegedly suffered.

[3] I disagree with Ramnarine. There was no misrepresentation. And Ramnarine hasn’t proven her counterclaim. As a result, I order and adjudge that Ramnarine shall pay $807,809.06 to Dhanoa. I also order that Ramnarine shall deliver possession of the property to Dhanoa.

II. Background

A. Facts

[4] Dhanoa is a private lender. Satinder Gill, a family friend, facilitates mortgage transactions for Dhanoa through his mortgage brokerage, Verico Mortgage Brokers of Canada Inc.

[5] In November 2021, Ramnarine contacted Verico about getting a mortgage. She was renting a house at 235 Fleetwood Crescent, in Brampton, under a “Rent to Own” agreement. She paid $4,973 per month, but had an option to buy the house. Ramnarine and the landlord had agreed on a purchase price of $617,000. A portion of the rent was set aside as credit towards the down payment. The lease expired in May 2024.

[6] Ramnarine was concerned that she would lose the home. She had recently finished a consumer proposal, and the option would be void if she ever defaulted on the lease. Importantly, the agreed-upon purchase price was less than the house’s market value.

[7] Through Mr. Gill, Dhanoa and Ramnarine entered into a mortgage contract for an interest-only loan. The principal was $650,000, with an annual interest rate of 9 percent. The term of the loan was 12 months. The payment term was “interest only, monthly; of $4,875.00 PLUS $500.00 For Property Tax Total payment of $5,375.00.” Dhanoa, who is elderly and lives part-time in California, authorized Mr. Gill to sign the contract on her behalf.

[8] In April 2022, Ramnarine sold the house for $900,000. The sale wasn’t completed.

[9] Ramnarine defaulted on the mortgage in December 2022. Her cheque for the last monthly payment bounced, and she never repaid the principal. As of the trial, the total unpaid principal and interest was over $800,000.

[10] One of the issues for trial was Mr. Gill’s role. Early in the proceeding, Dhanoa argued that Mr. Gill was representing only her, and Ramnarine argued that Mr. Gill was either representing only her, or both of them. At trial, Mr. Gill acknowledged that he intended to act as a representative of both Dhanoa and Ramnarine, without “preference to the interests of either.” As a result, I find that he was representing both parties.

B. Litigation History

[11] Dhanoa started this action in January 2023. Ramnarine defended the action, and counterclaimed for breach of contract.

[12] In July 2024, Dhanoa moved for summary judgment on all of the claim. I dismissed the motion because there were genuine issues requiring a trial. I also provided directions regarding the trial.

[13] For the trial, Mr. Gill and Ramnarine adduced evidence by affidavit. They were cross-examined. Each party made oral argument.

C. Law

[14] Usually, the lender has no duty of care to the borrower. See Bank of Nova Scotia v. Villafuerte, para 20. That said, where the agent acts in the course of his employment, a principal may be held liable for the agent’s fraud or misrepresentation, even if the principal was unaware of the acts. See jjBarnicke Ltd. v. Commercial Union Assurance Co. of Canada, para 10; Villafuerte, at para 21.

[15] If the contract was induced by a misrepresentation, it’s void. See jjBarnicke, at para 10; Tran v. Chung, 2016 ONCA 378, para 62.

[16] Mortgage brokerages and agents are governed by the Mortgage Brokerages, Lenders and Administrators Act, 2006, SO 2006, c 29. Under the MBLAA, mortgage brokerages have certain disclosure obligations. See MBLAA, s 23(1), 24. The Act establishes the requirements for licensing, including standards of practice for both brokerages and agents. The standards of practice require brokerages to disclose whether the brokerage is acting for the lender, the borrower, or both. See Mortgage Brokerages: Standards of Practice, O Reg 188/08, s 18(1).

III. Analysis and Disposition

[17] There’s no dispute that Dhanoa, as the mortgagee, can take possession of the property upon notice and default, and she’s entitled to damages for breach of contract. See Saved by Technology Inc. v. Thomas, para 9, aff’d.

[18] Ramnarine’s defence is that the mortgage contract should be voided because (a) Mr. Gill didn’t disclose to her that he was also representing Dhanoa; (b) Mr. Gill misrepresented the nature of the loan; and (c) Mr. Gill was in a conflict of interest because he preferred Dhanoa’s interests over hers. She submits that this court should order an equitable mortgage that requires Dhanoa only to repay the principal.

[19] Ramnarine also counterclaims for breach of contract. As I discuss below, Ramnarine’s counterclaim is devoid of particulars. She also didn’t press the counterclaim at trial.

A. Issue #1: Did Mr. Gill Fail to Disclose the Dual Representation?

[20] Ramnarine’s position is that Mr. Gill never told her that he was also representing Dhanoa. She says he never even mentioned Dhanoa. The borrower disclosure statement, which is required by the MBLAA, s 23, states: “The Brokerage is representing The Borrower, not the Lender in this transaction.” As a result, she says she thought Mr. Gill was only representing her. Further, she believed that Mr. Gill was the lender, because he signed the mortgage contract as the “Lender”.

[21] There’s no dispute that Mr. Gill’s paperwork was shoddy. On first glance, Ramnarine’s position isn’t unreasonable. The disclosure statement states that Mr. Gill is representing her, not the lender. And when they met to sign the mortgage contract, Mr. Gill signed the agreement as the lender.

[22] But the rest of the evidence shows that Ramnarine knew that Mr. Gill wasn’t the lender. First, the mortgage contract, on the first page, states that it is “FROM: PUSHPINDER DHANOA”. Second, the documents sent between the parties’ lawyers state that Dhanoa is the lender. Even if Ramnarine didn’t see the cover letters, she signed the directions and acknowledgements, all of which were between her and Dhanoa. Third, the Chargee on the Charge/Mortgage is Dhanoa. Fourth, Ramnarine provided 12 post-dated cheques for the interest payments, all of which were payable to Dhanoa.

[23] Further, I prefer Mr. Gill’s evidence to Ramnarine’s evidence. Mr. Gill’s oral evidence is that he explained to Ramnarine who the lender was for home insurance purposes. He says he didn’t mislead her into believing that he was the lender or only representing her. Though his business practices are questionable, that doesn’t detract from his honesty. He admitted making mistakes. He had a good recollection of the events. His oral evidence accorded with the documentary evidence.

[24] In contrast, I don’t find Ramnarine to be a credible witness. The factors relevant to assessing credibility include: (a) honesty; (b) an interest in the outcome of the proceedings; (c) accuracy and completeness of observations; (d) circumstances of the observations; (e) memory; (f) availability of other sources of information; (g) inherent reasonableness of the testimony; (h) internal consistency, and consistency with other evidence; and (i) demeanour. See D Watt & J Makepeace, Watt’s Manual of Criminal Jury Instructions 2024 (Toronto: Thomson Reuters, 2024) at Final 14; R. v. King, 2025 ONSC 2448, para 15.

[25] Ramnarine wasn’t honest. There are several examples. First, Ramnarine’s evidence was that Mr. Gill engaged Minhas Lawyers PC to represent her. In cross-examination, she testified that she never communicated with Minhas’s office, and didn’t meet anyone from Minhas’s office until the closing date. But Mr. Gill produced several text messages between Sonia Aggarwal, an articling student at Minhas Lawyers, and Ramnarine from mid-November 2021, showing that they were in active communication about the mortgage.

[26] Second, at trial, Ramnarine testified that she got legal advice before entering into the rent-to-own agreement. She said that she met the agent and a lawyer at Tim Hortons. But, on discovery, she said she didn’t meet with a lawyer before signing that agreement.

[27] Third, Ramnarine testified that she couldn’t remember if she was in litigation around a subsequent real estate transaction. At discovery, her lawyer answered, on her behalf, that there was such litigation. Ramnarine never repudiated, contradicted, or qualified this answer. See Rules of Civil Procedure, r 31.08.

[28] As a result, I find that Mr. Gill disclosed to Ramnarine that Dhanoa was the lender. Based on all of this evidence, I’m also satisfied that Ramnarine understood that Mr. Gill was representing both her and Dhanoa, even though the disclosure statement said otherwise. Mr. Gill’s brokerage made a mistake on the form. But Ramnarine would’ve surmised that Mr. Gill was representing Dhanoa, given that Dhanoa was the lender, she wasn’t at the meeting when they signed the mortgage contract, and Mr. Gill signed on her behalf. I accept Mr. Gill’s evidence that he didn’t misrepresent his role in the transaction or his relationship with Dhanoa.

B. Issue #2: Did Mr. Gill Misrepresent the Loan?

[29] Ramnarine’s evidence is that she expressly told Mr. Gill that she needed a loan option that “would be more advantageous than the current rent-to-own agreement including reduction of the monthly mortgage payments while maintaining the monthly credits.” She says, in response, he promised “a better mortgage arrangement that will allow [her] to own the property faster through larger monthly payments towards on the mortgage.”

[30] In support of her argument, Ramnarine points to the disclosure statement: “The principal amount of the First mortgage $650,000.00 will be repayable in Monthly installments of $4,875.00 to be paid on the ____, only interest, starting on January 01, 2022” (emphasis in original). It’s unclear what this term means: on one hand, it suggests that the monthly payments would go to the principal and, on the other hand, that it’s an interest-only mortgage.

[31] Mr. Gill denies promising a “better mortgage arrangement”. He says that Ramnarine’s objective was to transfer the house from rent-to-own to her own name. She was self-employed and recently finished a consumer proposal, so she was at risk of defaulting on the lease.

[32] Ultimately, the mortgage contract was for an interest-only mortgage. There’s no dispute that Ramnarine’s total monthly payments were higher than under the rent-to-own agreement, and she was making no payments towards the principal.

[33] This issue is resolved on Ramnarine’s own evidence. At examinations, she testified that:

• it was a private loan
• Mr. Gill told her the principal amount of $650,000 and a 9 percent interest rate
• she understood that payment wouldn’t be applied to the principal
• at the end, she’d have to pay back $650,000

[34] Again, Mr. Gill’s paperwork was shoddy, but the disclosure statement doesn’t form part of the mortgage contract. To the extent that the disclosure statement is unclear, the mortgage contract makes clear the terms of the loan. And Ramnarine’s evidence shows that she understood these terms. It makes sense that Ramnarine was prepared to agree to this type of loan, even with higher payments and no principal payments. She bought the house for $617,000 in December, and it was valued at $900,000 five months later. I infer that Ramnarine knew or suspected that she could flip the house for a substantial profit. As a result, her main objective was to buy the house at the agreed-upon price as soon as possible, regardless of the cost of the loan.

[35] As a result, I find that Mr. Gill didn’t make any misrepresentations to Ramnarine.

C. Issue #3: Was Mr. Gill in a Conflict of Interest?

[36] Ramnarine argues that Mr. Gill preferred Dhanoa’s interests over hers. Dhanoa only wanted an interest-only loan. But Ramnarine says she asked Mr. Gill for a traditional mortgage, with principal and interest payments.

[37] First, for the reasons discussed above, I find that even if Ramnarine initially asked for a traditional mortgage, she understood that she was entering into an interest-only loan. The negotiations took almost two months. She had legal counsel. Other than her oral evidence that she initially asked for a traditional mortgage, there’s no other evidence that she repeated this request. All of the paperwork that she signed was for an interest-only loan.

[38] Second, the conflict issue is irrelevant to this trial. Ramnarine didn’t plead breach of fiduciary duty. The relationship of a mortgage agent with their client is not per se a fiduciary relationship. See Rescon Financial Corp. v. New Era Development (2011) Inc., 2018 ONSC 259, para 107, aff’d 2018 ONCA 530.

[39] Further, Ramnarine hasn’t cited any cases where a conflict of interest between a mortgage agent and their client leads to the mortgage being voided.

D. Issue #4: Did Dhanoa Breach the Mortgage Contract?

[40] Ramnarine’s counterclaim sounds in breach of contract. At trial, Ramnarine didn’t point to any breach of the mortgage contract by Dhanoa. Her counterclaim reads like a negligence claim but that’s not the cause of action she’s pleaded. In any event, she led no evidence about her damages. Further, she hasn’t cited any authority for the proposition that Dhanoa is liable for Mr. Gill’s alleged negligence. And, finally, Ramnarine hasn’t proven that Mr. Gill was negligent.

E. Issue #5: What Are Dhanoa’s Damages?

[41] I have no trouble finding that Ramnarine is liable for the principal amount of the loan ($650,000), unpaid interest from December 2022 ($3,205.48), and 9 percent interest from the default to the date of judgment ($173.46 per day). Dhanoa also concedes that the $5,500 in property taxes she collected should be credited to Ramnarine.

[42] My issue is with the other charges that Dhanoa is claiming: mortgage statement fees, default letter fees, admin fees, file maintenance fees, etc. Dhanoa made no submissions about these fees. Dhanoa has the obligation to adduce evidence that shows that these charges reflect real costs legitimately incurred by Dhanoa for recovery of this debt. See Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., 2024 ONCA 42, para 35.

[43] As a result, I order and adjudge that Ramnarine pay to Dhanoa the sum of $805,901 [$650,000 + $3,205.48 + ($173.46 x 923 days) less $5,500]. This judgment bears interest at the rate of 9 percent per year.

IV. Conclusion

[44] For almost three years now, Ramnarine has been living in the house without making mortgage payments or paying rent. Though Mr. Gill’s paperwork was, at times, unclear, Ramnarine’s evidence shows that she knew what she was getting into. She agreed to borrow $650,000, and make monthly interest-only payments. She fully benefited from owning rather than renting the house, which had grown significantly in value. But, having defaulted on the mortgage, Dhanoa is entitled to possession and to be paid for her losses.

[45] The parties will engage in meaningful discussions and negotiations respecting the costs of this trial. If they can’t resolve costs, any party seeking costs will serve, file, and upload to Case Center costs submissions (1,500 words), any relevant offers to settle, and their bill of costs by July 7, 2025, 4pm. The other party’s responding submissions (1,500 words) will be served, filed, and uploaded to Case Center by July 14, 2025, 4pm.

Agarwal J
Released: June 30, 2025