A judge in Sudbury has ruled that a Sudbury mortgage company and broker personally guaranteed repayment of investment loans to fund his business, which now total more than $1.3 million. Ryan Kirwan is the sole shareholder of HQ Financing Inc., which has operated as a mortgage broker in Sudbury for several years. In order to fund mortgages, HQ entered into loan agreements with Migsim Holdings Inc., whose sole shareholder was Jean-Robert Paquette (JRP). “Kirwan was a licensed mortgage broker,” said a decision by the Superior Court of Justice in Sudbury. “He incorporated HQ and operated his mortgage brokerage through it. HQ would loan funds to various borrowers who would be expected to repay the loans with interest.” Paquette said Kirwan first approached him in 2014 about providing funds for the mortgages. Kirwan told Paquette that he knew several people that needed mortgages. At the time, Kirwan’s company was called e-Money Solutions Group Inc. Promised safe loans, high rate of return “From his experience as a mortgage broker, he had identified loans and bridge financing that were safe investments, delivering a high rate of return. Any loans Migsim made to e-Money would be safe and profitable,” the court said. “The loans from Migsim to e-Money would be secured by promissory notes which Kirwan, as shareholder of e-Money, would guarantee personally.” While Kirwan admitted to the terms, he denied ever making personal guarantees that the money would be repaid. Between 2014 and 2016, Migsim made loans to e-Money, which were repaid under the agreed terms. In 2016, Kirwan told Paquette that the loans would now be made to HQ, “but that everything would be the same as the previous loans. This is not denied by Kirwan, save for his denial that he would personally guarantee anything.” From 2016-2024, Migsim made several loans to HQ at an annual interest rate of 12.5 per cent, with compound interest accruing at two per cent a month in the event of a default. Promissory notes personally guaranteed “Payment of the loan by HQ was personally guaranteed by the shareholders of HQ,” the court said. “JRP says each loan was evidenced by a promissory note encompassing these terms.” Paquette also made a personal loan in 2018 of $90,000 to HQ from his personal funds, under the same terms as the other loans. By late 2024, however, “HQ largely ceased making payments on the loans,” the court decision said. “Regular inquiries by the plaintiffs resulted in regular promises of payment. Promises that were not met.” With interest accruing every month, Paquette and Migsim went to court, seeking a summary judgment that said Kirwan was personally responsible for the debt. While a summary judgment against HQ was obvious, the court said it had to decide whether the promissory notes also justified a summary judgment against Kirwan personally. Paquette provided copies of the promissory notes that included the phrase, “the borrower and all shareholders corporately and personally guarantee the principal amount owing under this promissory note.” “The notes that are signed are signed by JRP and by HQ under the signature of Kirwan with the descriptor: ‘Ryan Kirwan, president,’” the court said. “There is no line for signature by a shareholder in his personal capacity and no other signature by Kirwan.” In his decision, Justice Robbie D. Gordon said not only was Kirwan aware of the guarantee clause binding him personally to the debt, but “it was also specifically inserted by him.” “The guarantee clause is anything but standard in that it, among other things, has the borrower guarantee payment when the borrower’s obligation to pay is already set out in paragraph one of each note,” Gordon wrote. “The wording of the guarantee clause would lead a reasonable person to conclude that the person signing on behalf of the corporation was also signing in his capacity as a shareholder: ‘The borrower and all shareholders corporately and personally guarantee…’ connotes a single signature binding both the corporation and Mr. Kirwan as its shareholder. To interpret the signature otherwise would render the guarantee clause ineffective.” Gordon made a summary judgment in favour of money owed to Migsim in the amount of $702,211.91 against HQ, with an annual interest rate of 12.5 per cent. In addition, he ruled that Kirwan personally owes $549,812.50, with post-judgment interest. For the personal loans that Paquette made, HQ owes $56,177.50 with post-judgment interest at 12.5 per cent per year, while Kirwan owes $44,350, also with post-judgment interest. The full decision, dated Oct. 30, can be read here.
