DATE: 20021210

DOCKET: C37985

COURT OF APPEAL FOR ONTARIO

RE: CIBC MORTGAGE CORPORATION (Plaintiff/Appellant) v. GREENWOOD DEVELOPMENT CORP., TRILLIUM NORTHERN INVESTMENT CORP., TERESA COCCIMIGLIO, JAMES CONCI AND JAMES CONCI HOLDINGS INC. (Defendants/Respondents)

BEFORE: DOHERTY, AUSTIN and CHARRON JJ.A.

COUNSEL: Alan J. Butcher for the appellant

Christopher Hacio For the respondents, Conci and Conci Holdings Inc.

Michael Cupello for the respondent, Coccimiglio

HEARD: December 3, 2002

RELEASED ORALLY: December 3, 2002

On appeal from the judgment of Justice S.R. Kurisko dated February 11, 2002.

E N D O R S E M E N T

[1] The CIBC Mortgage Corporation (CIBCMC) appeals from the dismissal of its action against Teresa Coccimiglio on her guarantee. In granting summary judgment in favour of Teresa Coccimiglio, the motions judge properly identified the principles governing the circumstances in which guarantors may be discharged as a result of a change in the principal contract. We are satisfied, however, that the motions judge erred in holding that any such change occurred here.

[2] The respondent, Teresa Coccimiglio, agreed to the sale of the property by the principal debtor Trillium, a company in which she had a 50 percent ownership, to Greenwood Development Corp., a company in which she had no interest and over which she had no control. The subsequent sale of the shares of Greenwood by its shareholders to Crestwood, a corporation controlled by third parties, did not in any way vary the contract between the principal debtor and CIBCMC, and did not breach the terms of the guarantee contract between Ms. Coccimiglio and CIBCMC. The mere fact that the sale of the shares may have had some effect on the risk to which Ms. Coccimiglio was exposed by virtue of her guarantee of the principal debt is not a basis upon which to discharge her from her obligations under the guarantee. The appeal must be allowed.

[3] Counsel agreed that if CIBCMC was successful on the appeal it was entitled to summary judgment on the guarantee. Consistent with our holding in the companion appeal, C38068, the appellant is entitled to judgment in the amount of $869,091.18 against Ms. Coccimiglio. She may or may not wish to become involved in the counterclaim brought in that action against CIBCMC. We intend no comment on her entitlement to do so.

[4] The appeal is allowed, the judgment dismissing the appellant’s action is set aside and in its place judgment will go in favour of CIBCMC in the amount $869,091.18.

[5] CIBCMC is entitled to costs. Mr. Butcher, counsel for the appellant, candidly advises that he doubts the collectibility of any costs order. He is content to have costs fixed for both the appeal and the action at $6,250.

“Doherty J.A.”

Austin J.A.”

“Louise Charron J.A.”