Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns enforcement of a $2,750,000 mortgage (with 15% compounded interest and fees) over a campground property, and the lender’s claim for $4,047,856.37 and possession.
• Defendants raise equitable and procedural defences (estoppel, waiver, limitations, no loss) while resisting the lender’s summary judgment motion without having conducted traditional discoveries.
• A contested factual issue arises over an aborted $12,500,000 / $16,500,000 joint sale involving the Campground Property and the neighbouring Mohawk Inn Property, and whether the lender’s president wrongfully interfered with that transaction.
• Defendants seek to examine four non-parties (two Mohawk owners, a realtor, and a Pride Group executive) under Rule 31.10 to bolster their opposition to summary judgment, despite having already completed cross-examinations on the summary judgment motion.
• The court holds that non-party discovery requires proper service on the proposed witnesses and that the cumulative test under Rule 31.10 is not met, particularly because no examinations for discovery of the parties have yet occurred.
• Use of Rule 31.10 is found to be an abuse of process in this context, as the intended use of the evidence is for a Rule 20 summary judgment motion, which should instead be governed by Rules 39.02 and 39.03, leading to dismissal of the defendants’ motion and reservation of costs.

Background and mortgage enforcement context

The case arises out of a mortgage enforcement action brought by Celernus Investment Partners Inc. (“Celernus”) against 2348587 Ontario Inc. and its principals, Shawn and Bridget Saulnier. Celernus advanced a principal sum of $2,750,000, secured by a charge over a campground property (the “Campground Property”). The mortgage provided for interest at 15% per annum, compounded, along with charges and fees. Celernus alleges that the defendants defaulted under the mortgage and claims a total of $4,047,856.37, together with possession of the Campground Property. The corporate defendant owns the Campground Property, and the individual defendants gave personal guarantees.

Pleadings and defences to enforcement

The action was commenced on August 31, 2023. In their Statement of Defence, the defendants put in issue Celernus’s entitlement to the full amount claimed and to possession. They plead several substantive defences: an estoppel defence (in effect alleging Celernus is precluded from strict enforcement of its rights), a waiver defence (alleging Celernus waived strict performance or enforcement), a limitations defence (contending the claim, or parts of it, may be out of time), and a position that Celernus has not actually suffered damages. Celernus delivered a Reply in December 2023 and maintained its mortgage enforcement claim.

Summary judgment motion and procedural posture

Instead of proceeding through the usual discovery route, the parties moved directly to summary judgment. In October 2024, Celernus served its motion record for summary judgment. The defendants delivered a responding record in January 2025, and Celernus followed with a supplemental motion record later that month. Cross-examinations on the summary judgment motion were held in May 2025, and undertakings were answered in June and July 2025. At a triage appearance in January 2026, the summary judgment motion was set down for a four-hour hearing on June 1, 2026. Separately, the defendants’ present motion—seeking leave to examine four non-parties—was booked for March 4, 2026, and is the subject of this endorsement.

Proposed joint sale and alleged interference

A significant factual thread in the defendants’ narrative involves an aborted sale of the Campground Property that, they say, would have generated enough funds to pay out Celernus in full. According to Shawn Saulnier, he was approached by realtor Matthew Vettese, acting for Pride Group, which was interested in purchasing the Campground Property for $12,500,000. Pride Group’s offer was contingent on also acquiring the neighbouring Mohawk Inn Property, on which the Mohawk Inn and Conference Centre sits. The Mohawk Inn belonged to owners associated with individuals named Sherk and his partner, Sean Rogister. Saulnier says he contacted Gord Martin, the president of Celernus, about the potential deal. Martin allegedly indicated he was on good terms with Sherk and Rogister and would explore whether they would sell the Mohawk Inn Property and at what price.
Saulnier’s evidence is that Martin later reported back that the Mohawk Inn owners would sell for $16,500,000 and that, on this basis, Pride Group made offers: $12,500,000 for the Campground Property and $16,500,000 for the Mohawk Inn Property. The sale negotiations then allegedly shifted when Martin told Saulnier that the Mohawk Inn owners in fact wanted an additional $3,000,000, meaning a purchase price of $19,500,000. According to Saulnier, Martin said the deal could be salvaged if Saulnier accepted $3,000,000 less for the Campground Property, effectively reallocating value between the two properties. Saulnier refused, citing other creditors needing to be paid, and asserts that when Pride Group learned of the additional $3,000,000 required, the transaction collapsed.

Competing narratives about the failed transaction

The defendants’ position is that Martin misrepresented what Sherk and Rogister were willing to accept for the Mohawk Inn Property and that he effectively interfered with, or sabotaged, a sale that would have paid out Celernus. Saulnier says that in 2025 he learned from Sherk that Sherk had never insisted on a $19,500,000 price, that the Mohawk Inn owners would have accepted $16,500,000, and that Martin was not in direct contact with Sherk at all but only with Rogister. Based on this, the defendants say Sherk and Rogister have relevant evidence that contradicts Martin’s account, and that the realtor Vettese and Pride Group executive Jas Jamal have further evidence on Pride Group’s readiness, willingness and ability to complete the deal and on the impact of the price change.
Martin, in his responding affidavit, gives a different account. He acknowledges speaking with Saulnier and contacting the Mohawk Inn owners, but says he was told the Mohawk Inn Property would require a price of $19,500,000. He denies having told anyone that $16,500,000 was an acceptable figure to close the transaction and denies that his conduct caused the deal to fail. From his perspective, as a creditor, his consistent goal was for Celernus to be repaid.

The defendants’ non-party discovery motion

In light of the contested evidence surrounding the failed sale, the defendants sought, by motion under Rule 31.10 of the Ontario Rules of Civil Procedure, leave to examine four non-parties for discovery: Sherk, Rogister, realtor Vettese, and Pride executive Jamal. They argued these individuals “may have information relevant to material issues,” particularly whether Celernus, through Martin, interfered with the prospective sale that might otherwise have satisfied the mortgage debt. The defendants said they had asked Sherk and Vettese to swear affidavits but both refused, and they had been unable to contact Rogister or Jamal. Their stated purpose was to obtain evidence “to properly defend this matter and oppose the summary judgment motion.” If the examinations produced favourable evidence, they intended to seek a further order allowing that evidence to be used on the summary judgment motion.

Service problems and procedural fairness

A fundamental procedural flaw in the motion was that the defendants did not serve any of the four proposed non-party witnesses with their motion materials. The court emphasized that subrule 37.07(1) requires service of a notice of motion on any person who will be affected by the order sought, unless the Rules provide otherwise, and that this requirement applies to Rule 31.10 motions. Prior case law confirms that prospective non-party deponents must be served so they can decide whether to participate, object, or retain counsel. The court referenced authorities in which service was held to be mandatory on Rule 31.10 motions, and more recent guidance that proposed witnesses are “entitled to notice” so that the court can properly assess whether they have relevant evidence and what their position is. Initially, the defendants suggested service was unnecessary and that objections could be dealt with later, but they ultimately accepted that notice ought to have been given and asked for an adjournment to cure the omission. The court noted that the motion had been pending since September 2025 and, while an adjournment could have been granted if the motion were otherwise viable, the lack of service was at least potentially fatal and, in the circumstances, supported dismissal.

Correct rule for the intended use of evidence

Beyond service, the court held that the defendants had proceeded under the wrong rule. Rule 31.10 governs leave to examine non-parties for discovery in aid of trial, subject to strict cumulative criteria. Here, however, the defendants made it clear—both in argument and in their materials—that their purpose was to obtain evidence to use on the pending summary judgment motion. They intended to examine the non-parties and then, if the evidence proved favourable, bring another motion to have that evidence admitted on the Rule 20 summary judgment hearing. The judge concluded that when non-party evidence is sought for a summary judgment motion, the proper procedural path is through Rules 39.02 and 39.03, which govern examinations and cross-examinations on motions and require leave (or consent) where a party has already cross-examined the opposing witness. By proceeding under Rule 31.10, the defendants were, in effect, trying to sidestep the different test and potential consequences that apply under Rules 39.02 and 39.03.

Abuse of process and failure to meet Rule 31.10 test

The court characterised this approach as an abuse of process. If the defendants were permitted to use Rule 31.10 in this way, they could selectively examine non-parties, review the transcripts, and then decide whether to deploy the evidence depending on whether it helped their case. This kind of unilateral “gatekeeping” of discovery on a live summary judgment motion was said to be inconsistent with how the Rules are meant to function. On that basis alone, the motion warranted dismissal.
Even assuming Rule 31.10 could apply, the judge went on to find that the defendants had not met the rule’s cumulative test. Rule 31.10(2) requires, among other things, that the moving party show it has been unable to obtain the information from parties it is entitled to examine for discovery as well as from the non-parties themselves, and that it would be unfair to proceed to trial without the opportunity to examine the non-party. Here, no examinations for discovery of the parties had taken place at all. The defendants therefore could not demonstrate that the sought-after information could not be obtained from the parties to the litigation, as required by the cumulative test articulated in case law interpreting Rule 31.10. Given the absence of party discoveries, the failure of service, and the intended use of the evidence on a summary judgment motion under a different procedural framework, the requirements of Rule 31.10 were not satisfied.

No ruling under Rule 39 and reservation of costs

Recognizing that Rules 39.02 and 39.03 were the proper provisions for seeking leave to examine non-parties for use on a motion, the plaintiff spent considerable time explaining why that test was not met either. The defendants, in reply, tried to argue that they satisfied both Rule 31.10 and Rule 39.02. The court, however, noted that no motion had actually been brought under Rule 39.02. In the absence of a properly constituted motion under that rule, the judge declined to decide whether the defendants would or would not meet the Rule 39 test on the existing record. The only motion formally before the court was the Rule 31.10 application, which was dismissed. As to costs of this motion, the judge recorded that no costs outlines had been provided and therefore directed that costs be reserved to the summary judgment motion scheduled for June.

Outcome and financial consequences

In the result, the court dismissed the defendants’ motion for leave to examine non-parties under Rule 31.10, finding both procedural defects (lack of service) and substantive problems (misuse of the rule and failure to meet its cumulative test). Celernus Investment Partners Inc., the plaintiff mortgagee, is accordingly the successful party on this interlocutory motion. However, this endorsement does not finally decide the underlying mortgage enforcement claim or the amount, if any, that will ultimately be awarded. The court does not order any monetary relief, damages, or costs in this decision; costs are expressly reserved to the upcoming summary judgment motion. Because the judge has not fixed or awarded any specific amount in Celernus’s favour at this stage—either for debt, damages, or costs—the total monetary award in favour of the successful party under this decision cannot be determined from the endorsement.