CITATION: Kandasamy v. Koneswarampillai, 2026 ONSC 4476
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
VIJIRAJ KANDASAMY
Plaintiff
– and –
ANNARATNAKAILAY KONESWARAMPILLAI
Defendant
Gathyayini Manoharan, for the Plaintiff
Gerald Matlofsky, for the Defendant
HEARD: June 11, 2026
Papageorgiou J.
Reasons for decision
Overview
[1] The defendant, Annaratnakailay Koneswarampillai (the “Mortgagee”), granted the plaintiff, Vijiraj Kandasamy (the “Mortgagor”), a mortgage over 100 Burrows Hall Blvd, Scarborough (the “Property”).
[2] The Mortgagor defaulted. The Mortgagee sued and obtained default judgment and an order for possession. Then the Mortgagee delivered a Notice to Vacate.
[3] The Mortgagor brings an urgent interlocutory motion for an order to set aside the Notice to Vacate the defendant’s home as well as a motion to set aside the default judgment.
[4] While the Mortgagor agrees that she consented to the mortgage and acknowledges that the Mortgagee delivered the funds and that she received them, she alleges that the mortgage funds were used to pay out other mortgages that were part of a money laundering scheme that she was unaware of. She says that as such, the mortgage is unenforceable as against her.
[5] I note that the Notice of Motion did not request, as relief, that the default judgement be set aside, but the parties indicated that they had agreed that both motions were before me.
[6] I also note that both parties fully argued this issue.
[7] I address the motion to set aside the default judgment first because if that motion fails, then there is no basis to restrain the enforcement of the mortgage, because there can be no serious issue to be tried.
Decision
[8] For the reasons that follow, I dismiss the motion to set aside the default judgment motion.
[9] Given that the motion to set aside the default judgment fails, there is no proceeding in which the Plaintiff can bring her injunction motion. Nor can she satisfy the test for an injunction since she cannot establish a serious issue to be tried.
Issue
[10] Should the default judgment be set aside?
Analysis
The Test to Set Aside a Default Judgment
[11] On a motion to set aside a default judgement, the court considers the following factors:
a) whether the facts establish at least an arguable defence;
b) whether there is a plausible excuse or explanation for the defendant's default;
c) whether the motion to set aside the judgment was brought promptly;
d) the potential prejudice to the defendant should the motion be dismissed, and the potential prejudice to the plaintiff should the motion be allowed; and
e) the effect of any order the court might make on the overall integrity of the administration of justice.
See Capital Direct Lending Corp v. Ghorbani, 2019 ONSC 3750 at para. 20; In Intact Insurance Company v. Kisel, 2015 ONCA 205, 125 O.R. (3d) 365 at para. 14, the Court indicated that the factors are not rigid rules. Rather the court must decide whether in the particular circumstances of the case it would be just to relieve a defendant from the consequences of default.
a) Arguable Defence on the Merits?
The Mortgagor’s Position
[12] I conclude that the Plaintiff has not established an arguable defence.
[13] The Mortgagor has filed a proposed Statement of Defence and provided an affidavit where she set out evidence in support of her defence.
[14] The Mortgagor purchased the Property on August 20, 2010 for $240,000. There was initially a mortgage given by Home Trust which was then replaced by a CIBC first mortgage. There is still a first mortgage in favour of CIBC on the title. There is no complaint about it in this proceeding.
[15] The Mortgagor had been living with her pastor, John Abraham (“Abraham”), since 2015. He had been the pastor of her church since 2000. She trusted him and believed him to be a person of great integrity and devotion.
[16] In or around 2019, Abraham told her that there was a church building for purchase and asked to borrow funds by way of a loan secured on her home. He said he had assets in India and that he would be getting $1,000,000 from the sale of property there and could pay her back.
[17] The Mortgagor agreed to advance him funds and did so over time successively by way of second mortgages to private lenders which then appear to have been refinanced or replaced with other second mortgages each year.
[18] The Mortgagor says that in August 2022 she and Abraham agreed that Abraham would repay her the loans in monthly interest payments of $2,500. He made the payments in September, October, November, and December 2022, but then stopped making any further payments. Then, she says the loan was agreed to be due in January 2023, but they extended it to April 2023. However, he never made any further payments after December 2022. Then, on March 30, 2026, Abraham told her that he could not make any payment on the mortgage. This was the last time she heard from him. His whereabouts are currently unknown.
[19] The Mortgagor says that at the time the Mortgagee entered into the mortgage, there were gross irregularities in previous mortgages, and other red flags or badges of fraud that should have put the Mortgagee on notice of circumstances that indicated the Property was being used for money laundering by previous mortgagees. These red flags, she submits, were either known to the Mortgagee or to his broker or lawyer such that knowledge of them should be imputed to the Mortgagee.
[20] The Mortgagor pleads that despite the red flags or badges of fraud; the Mortgagee did not contact her or the person acting as her lawyer to make inquiries. As such, he was wilfully blind. She also alleges that the duty of good faith performance compelled the Mortgagee or his representatives to make such inquiries in respect of the irregular circumstances or to withdraw from the transaction.
[21] The Mortgagor says that because the current mortgage paid out mortgages that she says were placed on the Property for the purpose of money laundering, the current mortgage is illegal and unenforceable because requiring her to pay it would require her to participate in money laundering.
[22] The Mortgagor says this while also conceding that she does not claim that the current Mortgagee was involved in money laundering. In any event, there is no evidence before me to suggest anything of the sort.
[23] The Mortgagor says that the loss should lie with the Mortgagee because he was best able to identify the irregularities with the loan and mortgage and chose not to.
[24] In argument, the Mortgagor’s counsel also said that he wanted to amend the draft Statement of Defence to plead unconscionability because the Mortgagor did not receive independent legal advice.
[25] The evidence set out does not raise a reasonable case that past mortgages involved money laundering. Furthermore, there is nothing in the materials that shows that the Mortgagee should have been aware of any alleged money laundering, or was wilfully blind to it, even if it had been occurring.
[26] There certainly may have been a fraud perpetrated against the Mortgagor by Abraham, but there is no reason why the Mortgagee should have been concerned about Abraham. The Mortgagor was represented by a lawyer. The documents signed by the Mortgagor showed that Abraham was her spouse. The Mortgagor’s lawyer also made this representation in various documents. It was not the Mortgagee’s responsibility to look behind what the Mortgagor and the Mortgagor’s own lawyer was representing to him.
[27] For that matter, each time the Mortgagor entered into a mortgage, she had a lawyer. If her own lawyer was not ferreting out alleged money laundering, when they had much more information as well as a duty to the Mortgagor, it is unclear how or why the Mortgagee would have done so.
[28] In Ferrell v. Kavanaugh, 2020 ONSC 8154, 27 R.P.R. (6th) 119, a mortgagor similarly argued that there were badges of fraud because of anomalies and that the lender should have made further inquiries. The court rejected this position and indicated that a lender’s lawyer is entitled to rely on documentation and information received from the borrower’s lawyer: Ferrell v. Kavanaugh, at paras. 204 and 208.
[29] I note here that the Mortgagor has indicated in her first affidavit that she did not know who arranged for her lawyer on the current mortgage and believed it was either Abraham or the Mortgagee. There is absolutely no evidence showing that the Mortgagee had any hand in selecting her lawyer. There is no evidence the Mortgagee attended any meetings with her lawyer. There are no written communications that show this. Further, the Mortgagor admits in paragraph 58 of her affidavit that it was Abraham who arranged a meeting at this lawyer’s office on August 26, 2022 to sign the mortgage documents. She admits that Abraham was the one who was always present at meetings with the lawyer and that she believed that this lawyer was acting for her benefit. She says that at the meeting the lawyer acted like she knew Abraham personally and treated him as if he was a client. Then, in her reply affidavit she specifically conceded that she did not know who arranged for her lawyer to act for her on the transaction.
[30] If the Mortgagor wanted to establish a triable issue that the Mortgagee is the one who arranged for her lawyer for the transaction, it was incumbent on her to obtain better evidence, for example, from that lawyer or by way of cross examination. Given that she says she does not know who arranged the lawyer, and that it could have been Abraham, she did not establish any triable issue on these allegations.
[31] Overall, the collection of allegedly concerning facts and circumstances raised by the Mortgagor are nothing more than sound and fury that do not signify the point she wishes to make, which is that the Mortgagee is somehow legally responsible for an alleged fraud perpetrated in the past on her by Abraham or in respect to past mortgagees who lent her money for the alleged purpose of money laundering.
[32] Furthermore, even if I accepted that there is sufficient evidence of a fraud by Abraham, and that the past mortgagees had engaged in money laundering, this would still have been the case even if the Mortgagee had not agreed to refinance the last two mortgages.
[33] Therefore, nothing the Mortgagee did caused the Mortgagor’s losses. For that reason alone, the Mortgagor does not have a reasonable defence as against the Mortgagee’s enforcement of the mortgage, which she knowingly entered into.
[34] Below is a more detailed analysis of the issues raised by the Mortgagor.
Alleged Red Flags Related to Past Mortgages.
[35] The prior mortgages that ultimately led to the current mortgage upon which the Mortgagee obtained default judgment were as follows:
Date
Name of Mortgagee
Discharge Date
August 19, 2019
Safer Arer
August 25, 2020
October 1, 2019
Safer Arer and Gupta Siddant jointly
September 4, 2020
August 25, 2020
Kalyani Prabkaran
January 7, 2021
January 7, 2021
2767977 Ontario Inc.
January 21, 2022.
January 21, 2022
Senthilnathan Selvamarkandu
September 1, 2022
February 15, 2022
Kalyani Prabahran
August 31, 2022
August 31, 2022
Vijaraj Kandasmy
This is the mortgage that is the subject of this proceeding.
[36] The Mortgagor argues there were badges of fraud or red flags related to past mortgages:
- The Mortgagor submits that the number of prior mortgages and refinancings should have raised concerns. Here the Mortgagor references the LSO Red Flags for Fraud in Real Estate Transactions.
I note that the LSO Guidelines address the situation where there are transfers of a property where the ownership is changing hands, not the refinancing of property successively. The Mortgagor did not direct the court in argument to any caselaw, or LSO guidelines related to successive refinancings that suggests that this raises any red flags.
The Mortgagee said that he was not aware of the number of prior mortgages and even if he was, it would not have affected his decision to invest. He points out that each time a mortgage was refinanced, it was discharged. I see nothing concerning about a property being refinanced four times over approximately four years.
- The Mortgagor points out that the same lawyer, Sanka Wijeratne of Sanka Law Professional Corporation, acted for Senthilnathan and Kalyani, as well as Safer Azer and Gupta Siddant, prior mortgagees, on the prior mortgages.
There is no evidence that the Mortgagee knew or could have known this, and it is also unclear why this is a badge of fraud.
- The Mortgagor’s evidence is that after each remortgaging the prior mortgages were discharged, and that Abraham received a certain amount of the new mortgage proceeds.
It is unclear how the Mortgagee would have known this since the moneys would have been disbursed to the Mortgagor’s lawyer. As well, the Mortgagor clearly knew money was not disbursed to her. It is unclear how she can complain about something that she herself knew about and argue that this raised a red flag when neither she nor her own lawyer appeared to consider it or to do anything about it.
- Kalyani granted a mortgage on August 25, 2020. Although he was paid out on January 7, 2021, he again participated in a refinancing on February 15, 2022. The Mortgagor submits this should have raised concerns.
I see nothing concerning about a private lender being involved twice on the same property without more.
- The January 21, 2022 Senthilnathan mortgage and the February 15, 2022 Kalyani mortgage had one-year terms. However, the funds advanced by the Mortgagee to refinance these mortgages were advanced before these terms were up. As a result, the Mortgagor had to pay penalties in the amount of $1,621.77 on the Kalyani mortgage and $16,291.68 on the Senthilnathan mortgage. Although the terms of these mortgages were not on the parcel register, the Mortgagor argues that the Mortgagee should have downloaded the Senthilnathan and Kalyani mortgages, reviewed them, seen that they were being refinanced before the term end, and speculated that the Mortgagor had to pay penalties because of this. This should have then caused the Mortgagee concerns. He should have asked questions or made further inquiries.
In my view, a lender is not required to download all past mortgages and review their terms. Again, the Mortgagor had her own counsel. If there were concerns related to this, it is her own lawyer who should have recognized it, downloaded past mortgages, and reviewed them. If the Mortgagor’s own lawyer didn’t consider this, one can hardly criticize the Mortgagee or his lawyer for failing to do this.
- She also complains that she did not receive the $17,837.65 from the proceeds of this mortgage which her lawyer’s letter said would be paid to her.
It is unclear how the Mortgagee could have known this or why he bore any responsibility for the Mortgagor’s own lawyer not paying her funds that she was entitled to.
Alleged Mortgage Commitment Red Flags
[37] The mortgage commitment between the Mortgagor and Mortgagee was signed by Abraham even though he was not registered on title. It shows him as a consenting spouse and also shows the Mortgagor as the only borrower. The Mortgagor denies that he was her spouse. As well, there are other documents signed by Abraham related to the mortgage even though he did not own the Property including the request for funds, an acknowledgement of the receipt of standard charge terms, and the direction re disbursements.
[38] However, there is no evidence that the Mortgagee had information about the Mortgagor’s marital situation. He never met her or had any dealings with her or Abraham. It is unclear why the Mortgagee should have suspected that something was amiss by virtue of the fact that the Mortgagor signed a document that showed Abraham to be her spouse. After all, she signed the very document that set this out. Furthermore, the Mortgagor’s own lawyer submitted documentation that also reflected Abraham being the Mortgagor’s spouse, as will be seen below. The Mortgagee was entitled to rely on information given to him by the Mortgagor’s lawyer.
[39] I add that the Mortgagor admitted that Abraham lived with her since 2015. I also note that there are numerous other mortgages which were registered on title to this Property in the past where Abraham is similarly noted to be the Mortgagor’s spouse on the registered mortgages, including the mortgage to the CIBC entered into in 2014. The 2022 Kalyani mortgage also shows that the Mortgagor had a spouse, although it does not specify Abraham. If the Mortgagee was expected to download the prior mortgages to examine them, he would have downloaded these as well and seen that on other occasions and in respect of advances made by other lenders Abraham was also noted as the Mortgagor’s spouse.
[40] In addition, the Mortgagor’s own lawyer on the mortgage, which is the subject of this transaction, Karthika Thirukeswaran, provided a declaration where she swore that she had met with the Mortgagor and her spouse Abraham and that she verified their identity as per two notarial copies of identification.
[41] Therefore, the fact that Abraham signed as a consenting spouse or that he signed the mortgage documents would not have been a red flag to the Mortgagee.
[42] The Mortgagor also complains that the Mortgage Commitment said that the existing mortgage in favour of Senthilnathan would be reduced to $175,000. Instead, it was completely paid off and discharged when the funds were advanced.
[43] It is unclear what is concerning about this or why this should have caused the Mortgagee any concerns. I also note here that the Mortgagor has not included all the pages of the Mortgage Commitment.
[44] The January 21, 2022 mortgage in favour of Senthilnathan showed a face value of $425,000. However, when it was ultimately discharged, the discharge statement shows that the amount of principal outstanding was in the amount of $250,000. With the various interest payments due and the interest penalty, the total amount of $271,998.57 was paid to discharge this mortgage.
[45] The fact that the face amount was much higher than the amount required to discharge it is not concerning. There is a difference between the amount of a loan that is outstanding and the face value of a mortgage. In that regard, when a mortgage is taken out as security for a loan, there is always a face amount. Then, as payments are made the principle reduces such that the amount of principal outstanding also reduces over time, but the face value of the mortgage registered remains the same as it was when registered. It is also the case that sometimes a mortgagor prepays a mortgage’s principal.
[46] There is no evidence that the Mortgagee had any information on the details of the arrangement between the Mortgagor and prior lenders, how much was advanced or how much had been repaid over time. There is no case law or expert evidence before me suggesting that a Mortgagee refinancing a property has any obligation to download and review all the prior mortgages to consider what amount was lent and then seek information as to the amount paid back to verify the amount outstanding. Again, a mortgagee is entitled to rely on the information provided by the mortgagor’s lawyer about what the current outstanding amount on a mortgage is.
[47] The discharge statement for the Kalyani mortgage shows that the principal outstanding was $49,900 when discharged and with various interest payments due and the interest penalty, the total amount due was $53,588.57.
[48] The total of the amount required to discharge the Senthilnathan and Kalyani mortgages was $271,998.57 plus $53,588.57, which equals $325,587.14. The Mortgagor submits, the total advanced by the Mortgagee was only $294,000 and would have been insufficient to refinance both of these mortgages and that this is suspicious.
[49] However, the Mortgage Commitment did not specify that the mortgage being given by the Mortgagee would be sufficient to discharge both mortgages. Rather, it specified the amount of funds that would be advanced and that prior mortgages had to be discharged. Even if the Mortgagee had noticed the discrepancies in the numbers, the Mortgagor had her own lawyer looking after her interests. The Mortgagor could very well have contributed other funds to discharge the mortgages if the amount advanced was insufficient to discharge both. It was not the Mortgagee’s responsibility to make inquiries about where the Mortgagor was getting funds to discharge both mortgages.
[50] The Mortgagee also cites another alleged red flag being the reporting letter which indicates that $273,439.13 of the mortgage from the Mortgagee was advanced to discharge the Senthilnathan mortgage which is not the same as the amount on the mortgage discharge statement which shows the number to be $271,998.57. The reporting letter also leaves blank the amount of funds that were advanced under the new second mortgage to discharge the Kalyani mortgage.
[51] It is unclear why these numbers are different, but I note that the Mortgagee would not have seen the reporting letter and the fact that different numbers were noted. The Mortgagee’s concern was that he was advancing funds and that he was receiving a registered mortgage.
[52] Again, it is unclear what about any of this is a red flag and how it suggests that the prior mortgages involved money laundering.
[53] While there are some anomalies in the numbers, the Mortgagee was entitled to rely on the figures provided to him by the Mortgagor’s own lawyer as per Ferrell v. Kavanaugh.
Alleged Requisition Letter Red Flags
[54] The Mortgagor also complains that she did not receive the requisition letter sent by the Mortgagee’s lawyer to the Mortgagor’s lawyer.
[55] It is unclear how the Mortgagee would have known about this or how it was the Mortgagee’s responsibility to ensure that the Mortgagor’s lawyer sent her the requisition letter.
Alleged Certificate of Independent Legal Advice Red Flags
[56] The Mortgagor complains that she did not receive independent legal advice and that anyone, including the Mortgagee, should have seen this.
[57] The Mortgagor has this issue backwards. The Mortgagor was the owner of the Property. She had a lawyer on record who represented her and this is what the Mortgagee would have understood. The Mortgage Commitment, signed by the Mortgagor and Abraham, indicated that he was her spouse. In Ontario, irrespective of who is the registered owner of a property, a spouse must consent where there is a transaction affecting a matrimonial home.
[58] In line with that understanding, in the letter from the Mortgagee’s lawyers to the Mortgagor’s lawyers dated August 26, 2022, they requested a certificate of independent legal representation from the Mortgagor’s spouse, and identification and acknowledgement of independent legal representation together with two certified copies of ID to be attached. It specified that one must be photo and no health cards or credit cards would suffice for this purpose.
[59] The Mortgagor’s lawyer then provided to the Mortgagor a waiver. It provided as follows:
I, Kandhiraj ABRAHAM, the undersigned, hereby acknowledge that with respect to the above noted mortgage transaction, my Solicitor is acting on behalf of Annaratnakailay KONESWARAMPILLAI, the chargor and myself, as a consenting spouse. I understand that my lawyer has requested that I obtain Independent Legal Advice in this matter. My Solicitor has explained, and I confirm that I fully understand my actions in signing as a consenting spouse under the Mortgage, Standard Charge Terms 200033 and related mortgage loan documentation (hereinafter collectively referred to as the "Mortgage documentation") and hereby acknowledge receipt of copies of same. I further understand and agree with the manner in which the mortgage proceeds will be disbursed. Notwithstanding the foregoing, I hereby waive my right to obtain Independent Legal Advice and have signed the Mortgage documentation freely and without influence.
[60] The Mortgagor also argues that the Mortgagee, upon seeing this should have been concerned that Abraham was exercising influence over the Mortgagor.
[61] It is unclear how the Mortgagee could have ever come up with that concern. Again, the Mortgagor’s own lawyer represented her interests. If that lawyer could not see this to be the case, it is unclear how the Mortgagee could have suspected this.
[62] She also says that even though she met with a lawyer with Abraham to execute the mortgage documents, the lawyer who she thought was representing her did not discuss the detail of the loan or mortgage or ensure that she understood what she was signing. She complains that this lawyer failed to check title to the residence to see if Abraham was a co-owner, failed to suggest that she enter into a loan with Abraham, failed to suggest that Abraham provide her with security for her loan, failed to ask why Abraham was at the meeting, failed to conduct any inquiry into the transaction, failed to verify that she was married to Abraham, and failed to ask her if she was signing it of her own free will.
[63] Again, it is unclear how the Mortgagee is responsible for something a lawyer representing the Mortgagor did or did not do.
[64] I note as well that there is a Certificate of Independent Legal Advice signed by the Mortgagor’s lawyer which specifically states that she examined the Mortgagor, who acknowledged and declared that she fully understood the nature and effect of the documents and that she executed them of her own free will voluntarily and without fear, threat or compulsion. The Certificate specifically provides that the Mortgagor acknowledged that she retained this lawyer to act for her.
Alleged Red Flag Based upon the Mortgagee’s Alleged Rush to enter into the Mortgage
[65] The Mortgagor also complains that the Mortgagee rushed to enter into the mortgage and that this also constitutes a suspicious circumstance.
[66] I disagree.
[67] The Mortgagee says that in the summer of 2022 he was looking for investment opportunities. He had never lent any funds before. He spoke to a mortgage broker, Jude Gnanendran (“Jude”), who told him he would advise the Mortgagee if any suitable opportunities arose. In August 2022, Jude reached out to him and told him he had a potential opportunity. He would be granted a second mortgage in exchange for a loan of $300,000. The mortgage was then granted on August 31, 2022.
[68] He was advised that the market value was $750,000 and there was a first mortgage in the amount of $180,316.57. He was comfortable with the loan to value ratio.
[69] When cross examined, the Mortgagee made it clear that he was not in a rush. Rather, he was simply providing funds based upon the Mortgagor’s request.
[70] In any event, it is unclear why entering into a mortgage within a one-month period is suspicious. Again, to the Mortgagee’s own knowledge the Mortgagor had her own lawyer who was looking after her interests.
Alleged Red Flag Relating to Jude’s Knowledge that Abraham was a Fraudster
[71] The Mortgagee’s daughter filed an affidavit where she swears that after she learned about what had happened, she spoke with the mortgage broker Jude on March 27, 2026 to better understand the details of what had occurred. He said that he would assist them to try to refinance the property. When the daughter raised concerns about the fact that Abraham had not paid back the loan, and asked about Abraham, Jude advised that he was aware that Abraham had been engaged in other fraudulent activity. In particular, he identified another woman who Abraham had taken money from.
[72] The Mortgagor argues that as Jude was the Mortgagee’s broker, this knowledge is then fixed upon the Mortgagee as an agent’s knowledge is imputed to the principal.
[73] However, the affidavit does not say that Jude advised her that he knew that Abraham was a fraudster at the time he arranged the mortgage. When I pointed this out to the Mortgagor’s counsel, he agreed that this was not clear from the affidavit.
[74] Indeed, it makes little sense that Jude would have made such an admission at the very time that he was seeking to help the Mortgagor. It was the Mortgagor’s obligation to show there was a reasonable defence. Filing this kind of unclear evidence on what Jude said or meant is insufficient. The failure to provide clear evidence on this point constitutes a failure by the Mortgagor to put her best foot forward.
Alleged Flag Related to the Mortgagor not receiving documents from her own lawyer
[75] There is a complaint that the Mortgagor did not receive the enclosures in the reporting letter from her own lawyer. Again, the Mortgagee would not have known about this.
Alleged Money Laundering by Past Mortgagees
[76] The Mortgagor references Scott v. Golden Oaks Enterprises Inc., 2024 SCC 32, 2024 SCC 32 (CanLII), 497 D.L.R. (4th) 1 at para. 108, which holds that a contract may be unenforceable because of illegality if it is contrary to statute or void at common law on the grounds of public policy.
[77] As noted, I disagree that the Mortgagor has established a triable issue that past mortgages represented money laundering. The collection of facts set out above does not raise that concern. And she has not even alleged that the current Mortgagee was participating in money laundering, let alone established a triable issue in that regard.
[78] Even if she had established a triable issue that past mortgages may have constituted money laundering, at most it would be the past mortgages that were illegal and unenforceable. There is no basis to conclude that the Mortgagor should be relieved of a debt she incurred to the Mortgagee in the circumstances of this case, even if past mortgages were illegal. She was the one who had possession of far more facts than the Mortgagee about what had occurred and she had her very own counsel throughout all of these past mortgages. As well, as noted above, nothing the Mortgagee did caused the loss or the illegality that the Mortgagor allegedly faced.
Conclusion on the Arguable Defence on the Merits
[79] Not even the combination of all the factors set out above raise a triable issue or show that the Mortgagee could somehow be responsible for the Mortgagor’s alleged loss. The only triable issue of fraud is with respect to Abraham, and the Mortgagee had no involvement in this nor could it have known about it. I do not find any triable issue with respect to the allegation that prior mortgages were money laundering schemes.
[80] The Mortgagor admits she entered into all of these mortgages. She admits she received the funds. She admits that she did not ask any questions about the documents she was signing. She admits that she never told her lawyer that she was loaning money to Abraham with the mortgage proceeds. The root problem is that the Mortgagor advanced funds to Abraham and signed documents without taking care as to their content. She was at the least careless and in the best position to avoid fraud if any occurred. She cannot hold the Mortgagee responsible for her own carelessness: Isaacs v. RBC, 2010 ONSC 3527, 189 A.C.W.S. (3d) 1005, at para. 37.
b) Plausible Excuse or Explanation for the Defendant's Default?
[81] There is no plausible explanation for why the Mortgagor defaulted, in this case, by not defending, and significant reason to doubt her evidence that she never received any of the multiple communications about this claim until after the Mortgagee had obtained default judgment.
[82] One or two instances might be believable, but it is not believable that she did not receive any of these communications.
[83] In or around September 2023, the Mortgagee received an email from the Mortgagor’s previous lawyer who forwarded an email directly from the Mortgagor which advised as follows:
I regret in the first place not being able to bring in the overdue mortgage payments. Sir, I have made arrangements to get the required amount from back home as my property has been sold and the money is ready. I have not been working since March and I had defaulted on the mortgage Payments. They have also sent the money but I haven't received it here till now. That is the reason why I am writing this mail. The moment I receive it I shall bring it to you immediately. I humbly request you to understand the situation. and consider this case compassionately and allow me 2-3 days to bring the mortgage in good standing, otherwise, I will be put into a lot of hardships. I submit my heartfelt apologies for not informing you about the third mortgage.
[84] If this was from the Mortgagor, it means that the Mortgagor knew she was in default at that time and was taking responsibility. The Mortgagor denies having sent this email to her lawyer or having asked her lawyer to send this to the Mortgagee. She says she could not have written the email because she is not very literate in English and is not familiar with the words used. She says that Abraham had access to her email account and implies that he must have sent it. I do not find this believable, particularly given all of her assertions of not having received any of the communications relating to the action against her which are set out below. As well, her affidavits do not have the jurat showing that her affidavit had to be translated to her which is inconsistent with her evidence that she is not very literate in English.
[85] An affidavit of service sworn November 22, 2023 shows that the Mortgagor was personally served with the Statement of Claim on November 19, 2023 while she was living with her son for a time at 50 Watson Street, and that the process server was able to identify her by means of a verbal admission.
[86] The Mortgagor denies receiving the Statement of Claim at this time. She says that she recalls the exact date the process server allegedly served her very well because her father had passed away in India on November 15, 2023 and she had friends over to share memories and grief that day. What the Mortgagor’s evidence shows is that she was home on that day. And as noted, the affidavit of service from the process server was that he identified her by means of a verbal admission. The Mortgagor could have sought to cross-examine the process server on this affidavit of service by way of a r. 39.03 examination, but failed to do so.
[87] On December 27, 2023, the Mortgagee’s lawyer then sent a follow up letter by regular mail to the Mortgagor advising that a Statement of Defence was required by January 15, 2024, failing which they would note her in default.
[88] There is no plausible explanation as to why she did not receive this letter in the circumstances, given her admission that she was indeed residing at the address where the letter was sent at that time.
[89] Then, in 2024, the Mortgagee wrote the tenant living in the Property at the time and had them pay the rental money they had been paying the Mortgagor directly to the Mortgagee for a year. When cross-examined, the Mortgagor agreed that she did not receive the rent for a year. This would have put her on inquiry as to why the tenant was not paying her. It is not believable that she did not receive the rent being paid to the Mortgagee and she did not ask the tenants about it or know that the Mortgagee was moving on the defaulted mortgage.
[90] At the end of 2024 the tenant moved out of the Property and the Mortgagor moved back in. The Mortgagee had still not noted her in default as of that time. On April 10, 2025, the Mortgagee wrote a letter to the Mortgagor telling her that she had to file a defence by April 30, 2025, and that if she did not, then they would note her in default. This was sent to the Property, where the Mortgagor was living.
[91] There is no persuasive explanation as to why, as she claims, she did not receive this letter.
[92] After the Mortgagor was noted in default, she was not entitled to notice of any motion. However, the practice in Ontario is that the motion record for default judgment is still sent to a defendant.
[93] Justice Schabas’ order dated November 27, 2025 required the motion record to be served. On December 5, 2025 the Mortgagee’s lawyer mailed the motion record to the Mortgagor. However, this was not valid service as the affidavit of service does not indicate that an Acknowledgement of Receipt card was ever sent or received which is a requirement for service by mail under r. 16.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[94] Then on December 18, 2025, the Mortgagee sent a letter attaching its factum. Again, this was not proper service.
[95] If there had been any plausible defence, then this failure to properly serve the motion record would be relevant and fatal to the Mortgagee’s position.
[96] However, no purpose would be served by setting aside a default judgment on this basis when there is no plausible defence.
c) Was the Motion to Set Aside the Judgment Brought Promptly?
[97] On February 18, 2026, Justice Pollak granted default judgment.
[98] On February 20, 2026, the Mortgagee wrote to the Mortgagor enclosing the default judgment and requesting that the Mortgagor vacate by March 2, 2026.
[99] On April 15, 2026, the parties attended CPC court. The Mortgagor said that she only received the motion materials on March 11, 2026. This is curious as the motion materials were mailed in December 2025. At that time, she sought a date for an injunction to prevent her eviction.
[100] Given that the default judgment was only obtained on February 18, 2026 and she took steps before the court on April 15, 2026, in my view, there was no significant delay in her bringing a motion to set it aside once the default judgment was made, as there is no significant evidence of any delay.
d) Is There Potential Prejudice to the Defendant Should the Motion be Dismissed, and Potential Prejudice to the Plaintiff Should the Motion be Allowed?
[101] If the Mortgagor had a defence on the merits, then there certainly would be prejudice to not allow her to defend. However, I do not find that she has provided a reasonable defence on the merits. Therefore, the only prejudice to the Mortgagor is being bound by a mortgage that she entered into voluntarily. She may still sue Abraham or the other lenders if she believes that they ensnared her into a money laundering scheme.
[102] The prejudice to the Mortgagee is that he borrowed money to lend funds to the Mortgagor and has now been paying that loan without receiving any payments on the mortgage.
[103] There are currently three mortgages on title including a CIBC mortgage, his mortgage, and a mortgage in favour of Moudgill Financial Inc. As well, the Mortgagee has received notice that the common element fees are in default.
[104] His mortgage is in second place and the longer this matter is outstanding and not determined, the greater the debt to him grows and the more likelihood there is that the equity in the Property will be insufficient to pay him out.
e) What is the Effect of any Order the Court Might Make on the Overall Integrity of the Administration of Justice?
[105] Given all of the discrepancies in the Mortgagor’s evidence as to not having received letters and materials clearly sent to her, as well as the spurious nature of the issues raised as against the Mortgagee, I conclude that the Mortgagor is simply seeking to hold the Mortgagee responsible for a problem that was not of his making.
[106] Given all the circumstances, failing to permit the Mortgagee to exercise his rights would negatively impact the administration of justice.
Conclusion
[107] As a result of my findings above, the default judgment is not set aside.
[108] Given that there is a judgment against the Mortgagor, which she has failed to show grounds to set aside, there is no basis for an injunction to stay enforcement steps.
[109] There cannot possibly be a serious issue to be tried in the circumstances. I have also addressed the irreparable harm and balance of convenience. That is, any injunction would irreparably harm the Mortgagee who would be forestalled on his enforcement ability while the Mortgagee fails to pay the mortgage and while he has to continue to pay the loan that he took out. The only harm to the Mortgagor is being bound by a mortgage she admits she entered into and the consequences of her failure to continue to pay it.
[110] The defendant submitted a bill of costs claiming $30,667.04 inclusive of disbursements of $1,733.39 and HST on a partial indemnity basis.
[111] The plaintiff’s bill of costs is comparable at $27,679.92 also inclusive of costs and disbursements.
[112] Therefore, given that the plaintiff’s costs are lower than the plaintiffs they are within the reasonable contemplation of the defendant. The hours and rates charges were reasonable as well.
[113] In my view, the defendant raised a host of implausible arguments that unduly complicated this matter.
[114] I award the plaintiff his costs in full at $27,679.92 payable within 30 days.
Papageorgiou J.
Released: August 6, 2026
CITATION: Kandasamy v. Koneswarampillai, 2026 ONSC 4476
COURT FILE NO.: CV-23-00709399-0000
DATE: 20260806
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
VIJIRAJ KANDASAMY
Plaintiff
– and –
ANNARATNAKAILAY KONESWARAMPILLAI
Defendan
REASONS FOR Decision
Papageorgiou J
Released: August 6, 2026