Court File and Parties

Court File No.: DC-0859 Released: 20090122

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Re: MCAP Service Corporation v. Frederick McLaren

Before: Cunningham A.C.J.S.C.J., Swinton and Karakatsanis JJ.

Counsel: Mark Hartman for the Appellant MCAP No one appearing for the Respondent

Heard at Brampton: January 21, 2009

ENDORSEMENT

[1] This is an appeal with leave from the order of Coats J. dated February 5, 2007 dismissing the appellant’s motion for partial summary judgment.

[2] The appellant’s claim is on a mortgage dated February 22, 2006 between the respondent Frederick McLaren as chargor and the appellant as chargee.

[3] In our view, the motions judge erred in finding that there was a genuine issue for trial as to whether the appellant “knew or ought to have known that the debtor was signing the mortgage under false pretences or some misapprehension.”

[4] A bank lending money to a borrower has no duty of care to the borrower absent a special relationship that gives rise to a fiduciary duty (Canada Trustco Mortgage Co. v. Pierce Estate, [2005] O.J. No. 1886 (C.A.) at para. 27). The motions judge correctly held that there was no evidence to support a finding of a special relationship giving rise to a fiduciary duty on the part of the appellant.

[5] The motions judge held that there was a genuine issue for trial as to whether the lender knew or ought to have known whether the respondent was signing the mortgage under false pretences or a misapprehension. In reaching this conclusion, she erroneously relied on considerations relating to the doctrine of rectification (Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678 at para. 53). Rectification is not an issue in this case. Moreover, the respondent did not plead a duty of care on the part of the appellant in his Statement of Defense.

[6] The respondent has acknowledged that he signed the relevant documents in support of the mortgage agreement, and he did so at a lawyer’s office. Therefore, the motions judge erred in finding that there was a genuine issue for trial with respect to his liability.

[7] The appeal is allowed. The order of the motions judge is set aside, and the motion for partial summary judgment is granted. The appellant shall have judgment against the respondent in the amount of the deficiency after sale, to be proved by filing an affidavit through the Divisional Court office in Toronto. The respondent’s approval of the form and content of a draft order is dispensed with.

Cunningham A.C.J.S.C.J. Swinton J. Karakatsanis J.

Released: January , 2009