Equitable Trust Co. v. 2062277 Ontario Inc. et al.,

• Jurisdiction: Ontario
• Judge: O'Connor,Perell,Simmons
• Neutral Citation: 2012 ONCA 235
• Subject Matter: LIMITATION OF ACTIONS,GUARANTEE AND INDEMNITY
• Citation: (2012), 289 O.A.C. 345 (CA),2012 ONCA 235,289 OAC 345,(2012), 289 OAC 345 (CA),289 O.A.C. 345
• Date: 16 March 2012
• Court: Court of Appeal (Ontario)

Equitable Trust v. 2062277 Ont. (2012), 289 O.A.C. 345 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. AP.021

The Equitable Trust Company (plaintiff/respondent) v. Ernest Marsig , 2062277 Ontario Inc., Rhys Trenhaile, Isle Griegl-Schott and First National Financial Corporation (defendants/ appellant /respondents)

2062277 Ontario Inc. and Ernst Marsig (plaintiffs by counterclaim) v. The Equitable Trust Company, First National Financial Corporation and Canadian Mortgage Housing Corporation (defendants by counterclaim)

(C54423; 2012 ONCA 235)

Indexed As: Equitable Trust Co. v. 2062277 Ontario Inc. et al.

Ontario Court of Appeal

O'Connor, A.C.J.O., Simmons, J.A., and Perell, J.(ad hoc)

April 13, 2012.

Summary:

Marsig signed a guarantee that was included within a registered mortgage document. The mortgage went into default. After Equitable Trust Co., the mortgagee, exercised its power of sale, there was a deficiency. Equitable sued Marsig. Asserting that his guarantee was a demand obligation and that all demand obligations were subject to the two year limitation period prescribed by the Limitations Act, 2002 (Ont.), Marsig moved for summary judgment to dismiss the action.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 5294, denied the motion. Marsig appealed.

The Ontario Court of Appeal dismissed the appeal.

Editor's Note: For the decision regarding costs of the summary judgment motion, see [2011] O.T.C. Uned. 5580.

Guarantee and Indemnity - Topic 1059

Liability of surety to creditor - Action against surety - Time for - Marsig signed a guarantee that was included within a registered mortgage document - The mortgage went into default - After Equitable Trust Co., the mortgagee, exercised its power of sale, there was a deficiency - Equitable sued Marsig - Asserting that his guarantee was a demand obligation and that all demand obligations were subject to the two year limitation period prescribed by the Limitations Act, 2002 (Ont.), Marsig moved for summary judgment to dismiss the action - Ramsay, J., denied the motion, finding that the applicable limitation period was the 10 year period provided for under s. 43 of the Real Property Limitations Act - The Ontario Court of Appeal dismissed Marsig's appeal - The court agreed with Ramsay, J.'s conclusion that guarantees found in a mortgage instrument were governed by s. 43(1) of the Real Property Limitations Act such that the 10 year limitation period applied - The Limitations Act, 2002, was enacted to deal with limitation periods other than those affecting real property - A guarantee given in conjunction with a mortgage transaction affected real property law rights.

Limitation of Actions - Topic 2181

Actions in contract - Mortgages - General - [See Guarantee and Indemnity - Topic 1059 ].

Limitation of Actions - Topic 2230

Actions in contract - Actions against surety - When time begins to run - [See Guarantee and Indemnity - Topic 1059 ].

Cases Noticed:

Bank of Nova Scotia v. Williamson (2009), 256 O.A.C. 286; 97 O.R.(3d) 561; 2009 ONCA 754, refd to. [para. 15].

Montreal Trust Co. of Canada v. Vanness Estate et al., [2005] O.A.C. Uned. 76 (C.A.), refd to. [para. 20].

Martin v. Youngson (1924), 55 O.L.R. 658 (C.A.), refd to. [para. 21].

Canadian Financial Co. v. First Federal Construction Ltd. et al. (1982), 34 O.R.(2d) 681 (C.A.), leave to appeal denied (1982), 35 O.R.(2d) 224n (S.C.C.), refd to. [para. 28].

394363 Ontario Ltd. v. Fuda (1983), 49 O.R.(2d) 672 (H.C.), affd. (1986), 54 O.R.(2d) 443n, leave to appeal denied (1986), 56 O.R.(2d) 608n (S.C.C.), refd to. [para. 28].

Scotia Mortgage Corp. v. Young et al., [2002] O.T.C. 467; 2 R.P.R.(4th) 57 (Sup. Ct.), refd to. [para. 28].

Statutes Noticed:

Real Property Limitations Act, R.S.O. 1990, c. L-15, sect. 43(1) [para. 12].

Counsel:

Melvyn L. Solmon, for the appellant:

Howard W. Reininger, for the respondent, The Equitable Trust Company;

Katrina Marciniak, for the respondent, Isle Griegl-Schott.

This appeal was heard on March 16, 2012, by O'Connor, A.C.J.O., Simmons, J.A., and Perell, J.(ad hoc), of the Ontario Court of Appeal. On April 13, 2012, Perell, J.(ad hoc), delivered the following reasons for judgment for the court.