1427814 Ontario Limited v. 3697584 Canada Inc.
Because s.27 of the Mortgages Act applies only to debts and expenses "then due" and the claimed litigation costs were not yet incurred and therefore not then due, they do not fall within s.27; additionally the mortgage contained no s.30 declaration to contract out of the Act, so the appellant's claim fails and the...
Source-derived case information.
- Citation
- C41429
- Parties
- Respondent: 1427814 Ontario Limited; Appellant: 3697584 Canada Inc.; Co Appellant: Aird & Berlis LLP
- Court
- Court of Appeal for Ontario
- Jurisdiction
- Canada
- Judgment Date
- 24 March 2005
- Procedural Posture
- Collection / Appeal to Court of Appeal From Superior Court Judgment
- Outcome
- Appeal dismissed
- Legal Topics
- Application of Mortgages Act S.27, Expenses Incident to Sale, Contracting Out Under S.30, Litigation Costs, Slander of Title
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
1427814 Ontario Limited
Respondent
3697584 Canada Inc.
Appellant
Aird & Berlis LLP
Co Appellant
Procedural Posture
Collection / Appeal to Court of Appeal From Superior Court Judgment
Legal Issues
- 1 Whether anticipated litigation costs fall within "expenses incident to the sale" under s.27 of the Mortgages Act
- 2 Whether proceeds of a mortgagee sale may be applied to litigation costs not yet incurred
- 3 Whether a mortgage without an express declaration under s.30 can contract out of the Mortgages Act
Ratio Decidendi
Because s.27 of the Mortgages Act applies only to debts and expenses "then due" and the claimed litigation costs were not yet incurred and therefore not then due, they do not fall within s.27; additionally the mortgage contained no s.30 declaration to contract out of the Act, so the appellant's claim fails and the appeal is dismissed.
Court Disposition
Appeal dismissed
Orders
- Appeal dismissed
- Costs to respondent fixed at $7,500 inclusive of disbursements and GST
Full Case Text
Judgment text and source record
1 paragraphs
1427814 Ontario Limited v. 3697584 Canada Inc. Collection Decisions of the Court of Appeal Date 2005-03-24 Docket numbers C41429 Judges Doherty, David H.; Sharpe, Robert J.; Armstrong, Robert Patrick Subject Civil Decision Content DATE: 20050324 DOCKET: C41429 COURT OF APPEAL FOR ONTARIO RE: 1427814 ONTARIO LIMITED (Applicant/Respondent in Appeal) – and – 3697584 CANADA INC. and AIRD & BERLIS LLP BEFORE: DOHERTY, SHARPE and ARMSTRONG JJ.A. COUNSEL: William A. Chalmers for the appellant Maurice J. Neirinck for the respondent 1427814 Ontario Ltd. HEARD & RELEASED ORALLY: March 22, 2005 On appeal from the judgment of Justice Andromache Karakatsanis of the Superior Court of Justice dated February 16, 2004. ENDORSEMENT [1] In our view, s. 27 of the Mortgages Act is dispositive of the appellant’s claim and of this appeal. That provision mandates the payment of the proceeds from a sale in a specific manner. We agree with the application judge that the appellant’s claim does not fall within s. 27. [2] We do not accept the submission that the as yet to be incurred costs of litigation arising from the respondent’s claim against the appellant regarding improvident sale or slander of title are “expenses incident to the sale” within the meaning of s. 27: see Strawrene Ltd. v. Kay et al. (1986), 55 O.R. (2d) 429 (H.C.J.) [3] Assuming that the appellant could, at some point, add the litigation costs at issue to the principal of the mortgage, those costs have not yet been incurred. Section 27 provides, that the proceeds of the sale shall be applied, inter alia, “in discharge of all of the principal money then due in respect of the mortgage” (emphasis added). The appellant’s claim relates to the costs of future litigation that will be incurred after the sale. They are not “then due” and, therefore, do not fall within s. 27. [4] While s. 30 of the Mortgages Act permits parties to a mortgage to contract out of that part of the Act, by the terms of s. 30, the mortgage must contain a declaration to that effect. There is no such declaration in this mortgage. To hold that nothing more than a potential inconsistency between the terms of the mortgage and the terms of the Act is capable of ousting the Act would denude the statutory requirement for a declaration of any meaning. [5] Accordingly, the appeal is dismissed with costs to the respondent fixed at $7,500 inclusive of disbursements and GST. “D.H. Doherty J.A.” “Robert J. Sharpe J.A.” “R.P. Armstrong J.A.”