Caplink Financial Corp. v. Petra Corp. et al., (2015) 599 A.R. 48

• Judge: Watson, Rowbotham and McDonald, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: February 04, 2015
• Citations: (2015), 599 A.R. 48;2015 ABCA 55

Caplink Financial Corp. v. Petra Corp. (2015), 599 A.R. 48; 643 W.A.C. 48 (CA)

MLB headnote and full text

Temp. Cite: [2015] A.R. TBEd. MR.045

Caplink Financial Corporation (not a party to the appeal/plaintiff) v. Petra Corp. and Daniel Matthews Corns (not a party to the appeal/defendants) and Scott Ryan Cummings (respondent/applicant/respondent) and Steinke & Company Realty Ltd. (appellant/defendant)

Caplink Financial Corporation (not a party to the appeal/plaintiff) v. Petra Corp. and Daniel Matthews Corns (not a party to the appeal/defendants) and Scott Ryan Cummings (respondent/applicant/respondent) and 1469897 Alberta Ltd. (appellant/respondent/applicant)

(1303-0218-AC; 1303-0219-AC; 2015 ABCA 55)

Indexed As: Caplink Financial Corp. v. Petra Corp. et al.

Alberta Court of Appeal

Watson, Rowbotham and McDonald, JJ.A.

February 6, 2015.

Summary:

Caplink Financial Corp. held a first mortgage on land owned by Petra Corp. In February 2006, Cummings loaned $200,000 to Petra pursuant to a promissory note signed by Petra's principal, Corns, and encumbrances were registered respecting Petra's land behind Caplink's mortgage. On January 29, 2009, Caplink commenced foreclosure proceedings. In August 2009, Steinke & Co. Realty Ltd. registered a caveat on title to the lands, claiming $250,000 in outstanding commissions owed by Petra. While the lands were still subject to foreclosure proceedings, Corns, incorporated a new company, 1469897 Alberta Ltd. (146), and transferred the land from Petra to 146. On March 12, 2010, Cummings demanded payment from Petra, Corns and 146, pursuant to the promissory note. No payment was made. On September 23, 2010, the lands were sold by court order, Caplink's mortgage claim was paid and the surplus of $225,662.72 was deposited into court. Cummings claimed entitlement to the funds under the promissory note. Steinke & Co. Realty Ltd. and 146 jointly opposed Cummings' claim. At issue was whether any limitation period affecting Cummings' entitlement had expired. A Master ordered that $200,000 be paid out of court to Cummings. An appeal before Clackson, J., was allowed, but a subsequent application before Burrows, J., ordered payment out on the same terms as the Master's order - see [2013] A.R. Uned. 379. Steinke and 1469897 appealed that order.

The Alberta Court of Appeal dismissed the appeals.

Limitation of Actions - Topic 206

Practice - Requirement of pleading expiry of limitation period - Section 3(1) of the Limitations Act provided that if a claimant did not seek a remedial order within two years after the date on which the claimant became aware of the injury, or 10 years after the claim arose, whichever period expired first, the defendant, on pleading the Act as a defence, was entitled to immunity from liability in respect of the claim - The Alberta Court of Appeal stated that "It is clear that a defence under the Limitations Act is only available to a defendant (that is someone against whom a remedial order is being sought) and then only if expressly pled by the defendant ... Accordingly, a third party cannot rely upon a limitations defence nor can the court take cognizance of it when it is not properly pled by a defendant" - See paragraphs 22 and 23.

Limitation of Actions - Topic 2189

Actions in contract - Mortgages - Distribution of surplus funds - Caplink Financial Corp. held a first mortgage on Petra's land - Thereafter, in February, 2006, Cummings loaned Petra money pursuant to a promissory note and registered encumbrances - Petra did not make any payments to Cummings after April 29, 2008 - On January 29, 2009, Caplink commenced foreclosure proceedings - On March 12, 2010, Cummings demanded payment but no payment was made - On September 23, 2010, the lands were sold by court order - Caplink's interests were satisfied and the surplus of $225,662.72 was deposited into court - Cummings claimed entitlement to the funds - An issue arose as to whether Cummings' claim was barred by the Limitations Act (s. 3(1)) - The Alberta Court of Appeal affirmed that the claim was not barred - Assuming that this was a term note, Cummings had until April 29, 2010, (i.e., two years form the last payment) to commence enforcement proceedings - However, Caplink's foreclosure proceedings were already extant at that time, and there was, according to Alberta law, no need for Cummings, a subsequent encumbrancer, to commence a separate action while the foreclosure proceedings were ongoing - See paragraphs 19 to 38.

Limitation of Actions - Topic 2189

Actions in contract - Mortgages - Distribution of surplus funds - Section 3(1) of the Limitations Act provided that if a claimant did not seek a "remedial order" within two years after the date on which the claimant became aware of the injury, or 10 years after the claim arose, whichever period expired first, the defendant, on pleading the Act as a defence, was entitled to immunity from liability in respect of the claim - The Alberta Court of Appeal stated that "... a remedial order as defined in the Limitations Act [s. 1(i)] clearly encompasses an order for the distribution of the surplus funds in a foreclosure proceeding ..." - See paragraphs 29 to 31.

Limitation of Actions - Topic 2401

Actions in contract - Actions on negotiable instruments - General - [See second Limitation of Actions - Topic 2189 ].

Mortgages - Topic 5706

Mortgage actions - Proceeds of sale - Surplus - Distribution of - [See both Limitation of Actions - Topic 2189 ].

Cases Noticed:

Decock et al. v. Alberta et al. (2000), 255 A.R. 234; 220 W.A.C. 234; 2000 ABCA 122, refd to. [para. 18].

Northland Bank (Liquidation), Re (1997), 200 A.R. 150; 146 W.A.C. 150 (C.A.), refd to. [para. 18].

Talbot v. Ocean Oil Corp. and Pan Ocean Oil Ltd. (1977), 5 A.R. 361; 3 Alta. L.R.(2d) 354 (C.A.), refd to. [para. 19].

Laschuk v. Makowichuk, [2013] A.R. Uned. 717; 2013 ABCA 439, refd to. [para. 23].

Toronto Dominion Bank v. Letendre et al. (2014), 577 A.R. 163; 613 W.A.C. 163; 2014 ABCA 232, refd to. [para. 24].

Community Futures Lesser Slave Lake Region v. Alberta Indian Investment Corp. - see Toronto Dominion Bank v. Letendre et al.

Canadian Pacific Railway Co. v. The Canadian Wheat Growing Co. (1919), 47 D.L.R. 102 (Alta. C.A.), refd to. [para. 25].

Daniels v. Mitchell (2005), 371 A.R. 298; 354 W.A.C. 298; 2005 ABCA 271, refd to. [para. 29].

Sawchuk v. Bourne, [2004] A.R. Uned. 404; 2004 ABQB 334, refd to. [para. 36].

Statutes Noticed:

Limitations Act, R.S.A. 2000, c. L-12, sect. 1(i) [para. 29]; sect. 3(1) [para. 22]; sect. 8 [para. 35].

Rules of Court (Alta.), rule 3.77 [para. 27].

Counsel:

M.D. Lennie, Q.C., for the appellant, Steinke & Company Realty Ltd.;

R.D. Gillespie, for the appellant, 1469897 Alberta Ltd.;

E.G. Rice, Q.C., for the respondent.

These appeals were heard on February 4, 2015, in Edmonton, Alberta, before Watson, Rowbotham and McDonald, JJ.A., of the Alberta Court of Appeal. The following memorandum of judgment was filed by the court on February 6, 2015.