COURT OF APPEAL FOR ONTARIO

DATE: 20000210

DOCKET: C32368

RE: 675830 ONTARIO INC., IN TRUST (Appellant/Plaintiff)

v. 2792231 CANADA INC., formerly known as ALDUS/FRANCIS

CORP., WILLIAM J. FRANCIS, IN TRUST and 43 AURIGA DRIVE

INC. (Respondents/Defendants)

BEFORE: CATZMAN, WEILER and ABELLA JJ.A.

COUNSEL: Peter H. Griffin and Mark Veneziano

for the appellant

Thomas S. Heintzman for

for the respondents

HEARD: February 8, 2000

On appeal from the order of the Honourable Mr. Justice Binks

dated June 15, 1999.

E N D O R S E M E N T

[1] In our view, this appeal does not turn on whether Roy J.

granted judgment on the covenant. His endorsement resulted in

voluminous correspondence between the parties on the meaning of

his endorsement. As a result of this exchange, it would have

been very clear to the appellant that the respondents were not

prepared to agree to anything that would render the guarantor

liable.

[2] The conversion of the action from a foreclosure action to

one for judicial sale, made s. 20(3) of the Mortgages Act and the

choice of parties a central issue. The consent order of Master

Schreider emanating from the negotiations surrounding this

conversion, was clear and unequivocal. The appellant seeks to

have it set aside as a nullity despite the clarity of its

language, the prior exchange of letters dealing with the attempt

to protect the guarantor from liability, the fact that no appeal

was taken from Master Schreider’s order, and the fact that the

only clause of that order the appellant sought initially to

challenge dealt with the quantum of damages.

[3] In our view, this was not a case of mistaken intentions or

of a judgment erroneously failing to reflect the agreement of the

parties. All the issues were squarely before both parties when

they negotiated the terms which formed the basis of Master

Schreiber’s consent order. In particular, we agree with Binks J.

that the appellant would have to have known that he had to make a

choice about which defendant he would obtain judgment against and

that there were consequences to that choice. There is no reason

to conclude that the judgment of Master Schreider, a judgment the

appellant relied on in proceeding with the judicial sale, does

not accurately reflect that choice. By signing judgment against

43 Auriga Drive Inc., the appellant’s right to recover against

2792231 Canada Inc. was terminated by s. 20(3) of the Mortgages

Act.

[4] Accordingly, Binks J. was correct in granting a stay of the

action against 2792231 Canada Inc. and this appeal is dismissed

with costs.