Simran Law: FCT's evidence, before the respondents were heard

The only evidence of payment that FCT Insurance Company Ltd. says either lawyer gave it is a wire report. It shows $421,367.06 of sale proceeds leaving one respondent law firm's trust account on September 22, 2026 for the other firm's trust account, on the purchase of a residential property on Pagebrook Crescent in Stoney Creek, Ontario, where RBC's discharge statement of September 18 asked $644,833.95 to pay out its mortgage. FCT calls the $223,466.89 difference, "before per diem interest," the "Pagebrook Shortfall." The only explanation offered, its chief underwriter deposes in an affidavit sworn October 14, "is a VTB [vendor-take-back] mortgage that is not registered on title and is not reflected in any document provided to FCT," per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 6, 11–12, 34(f), 35(c), 36.

That affidavit and two others, sworn on October 15 and affirmed on October 16, are the evidence the court read before Justice Dunphy, on October 19, appointed Grant Thornton Limited receiver of the assets of Simran Law Professional Corporation and JP Mann Law Firm Professional Corporation and investigator of 25 listed transactions, on FCT's application under s. 101 of the Courts of Justice Act brought without notice to the respondents, per the Receivership Order, Oct. 19, 2026, recitals and paras. 1–2. The respondents are the two firms and the two lawyers who are their sole directors and officers; on each of the transactions in FCT's application, one lawyer acted for the purchaser and the other for the vendor, per the Notice of Application, Oct. 15, 2026, paras. 4–5. What follows is FCT's evidence, including what the two lawyers told FCT; the respondents had not been heard when the order was made, and no responding material from them is in the record. The order, and the endorsement in which the judge held that "The applicant has established a strong prima facie case of serious breaches of trust," were reported here on October 22 and 24, per the Endorsement of Justice Dunphy, Oct. 19, 2026, para. 5.

A wire, a discharge statement and an undertaking

FCT, a title insurer, traces its case to three purchases that its director of national underwriting identified on or about September 29 — on Pagebrook Crescent, on Blossomfield Crescent in Cambridge and on Relton Circle in Brampton — where FCT had insured the lender and no discharge of the prior mortgage had been registered. RBC, which held the prior mortgages on the first two, confirmed on October 1 that the funds had not been received, the chief underwriter's affidavit says. On Relton Circle, it says, a private charge was discharged on August 13 while the Bank of Montreal's charge remained unpaid, per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 3, 6–7, 34(g).

On October 2, the purchasers' lawyer sent FCT documents for one of the three: the vendors' lawyer's undertaking of September 21 to discharge the RBC mortgage on Pagebrook Crescent, which recorded a completion date of September 16; RBC's discharge statement; and the wire report. "Neither the October 2, 2026 email nor the attachment explain the Pagebrook Shortfall," the chief underwriter deposes, per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 11–12.

The VTB came up on October 6, in a Microsoft Teams meeting of about 29 minutes that FCT recorded, having said beforehand that it would. Pressed about the shortfall, the affidavit says, the purchasers' lawyer "advised for the first time that there was a vendor-take-back ('VTB') mortgage in place," per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 15, 18, 21. In the transcript, an exhibit to the affidavit, the lawyer says: "So majority of these deals, right, there were VTBs involved in this, so that's what I was advised by the mortgage brokers, that there are VTBs involved in this, so the seller lawyer, the seller will give a VTB to the purchaser." The chief underwriter answered that the VTBs were not registered on title and that "A VTB, they're not advancing funds." Asked "where is the missing money coming from to pay out that mortgage?" the lawyer replied: "Well, I cannot comment on that. That's the vendor's lawyer's responsibility, right, so she has to come up with that money," per the FCT underwriter's affidavit, Oct. 14, 2026, Ex. "N", pp. 13–14. FCT's evidence is that no VTB is registered on any of the 25 transactions, per the FCT underwriter's affidavit, Oct. 14, 2026, para. 34(f).

The day before, the purchasers' lawyer had sent FCT a "Synopsis" of each of the three files. As the affidavit summarizes them, each was a private agreement of purchase and sale drafted by a different realtor paid a fee the purchaser and vendor shared, and the parties, in the synopses' words, "entered into the private agreement with the help of the agent to save the real estate commission." Lender instructions on the three are recorded as received on September 16, July 20 and July 28 respectively, "in each case after the stated closing date," the affidavit says. Each synopsis says: "No identifiable risk factors that could warrant a red flag were found," per the FCT underwriter's affidavit, Oct. 14, 2026, para. 17 and Ex. "M".

The purchasers' lawyer's account

That lawyer's side is in the record in the lawyer's own words, as FCT exhibited them. On October 1: "in all the real estate transactions it is the vendor lawyer who has to payout and get the mortgage discharged not the purchaser lawyer." The chief underwriter's reply that afternoon said: "We appreciate that you acted for the purchaser on this transaction and recognize that responsibility for paying out the existing mortgage rests with the vendor's solicitor," per the FCT underwriter's affidavit, Oct. 14, 2026, Exs. "F" and "G".

After FCT refused to insure the firm's transactions, the lawyer wrote on October 2 that "only my small firm has been made a victim." A letter of October 5 said: "It is crucial to clarify that our firm acts primarily as an administrative agent/ordering entity submitting title insurance orders on behalf of primary lender law firms." The letter says the lawyer has practised real estate since 2008 and "closed more than 7000 deals without a single claim," and that clients had said "these private mortgages are for short period from 2-6 months" while they sought mortgages from the banks, per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 14, 16 and Exs. "J", "L".

At the October 6 meeting, the lawyer said: "I have her undertaking to pay off these mortgages, right. And if tomorrow something happens then I have my right to enforce that undertaking by filing an application in court." And later: "I cannot comment on if she's holding through funds on or whether she's paying them off or she's not paying them off." Told that FCT would not do business with the firm, the lawyer said the policies had been ordered on behalf of other law firms and that "this means I'm being made a scapegoat," per the FCT underwriter's affidavit, Oct. 14, 2026, Ex. "N", pp. 8–9, 22–23.

What the vendors' lawyer said

On October 1, the chief underwriter deposes on a colleague's information, the vendors' lawyer "expressed surprise that the Prior Mortgagees had not been paid out." Returning the call, the affidavit says, the lawyer explained that the Pagebrook charge was unpaid because the prior owner had attended an RBC branch to pay $50,000 directly toward it, and RBC could not find evidence of the payment. On October 2, the chief underwriter says, the lawyer told FCT by telephone that there were funds in the trust account to pay out the RBC charge. FCT's written request that day for discharge and wire confirmations and an explanation had not been answered when the affidavit was sworn, the chief underwriter deposes, per the FCT underwriter's affidavit, Oct. 14, 2026, paras. 24–28.