DATE: 20031024

DOCKET: C39388

COURT OF APPEAL FOR ONTARIO

RE: DBM CAPITAL CORP. (Plaintiff/Respondent) –and–

JOSEPH MARINO and 1184464 ONTARIO LIMITED (Defendants/Appellants)

BEFORE: MOLDAVER, BORINS and MacPHERSON JJ.A.

COUNSEL: Calin A. Lawrynowicz and Bhupinder Nagra for the appellants

Michael J. Valente and Mark W. Taggart for the respondent

HEARD: October 14, 2003

On appeal from the final order of Justice T. David Marshall of the Superior Court of Justice dated December 9, 2002.

E N D O R S E M E N T

[1] This is a highly unusual case on its facts. In the circumstances, we think that the motions judge is to be commended for getting to the heart of the matter and resolving the real issue in dispute.

[2] Of the many issues raised by the appellant, we believe that the appeal turns on whether the motions judge erred in concluding that the appellant could not rely upon s. 22(1) of the Mortgages Act (the “Act”) because the respondent mortgagee had sold the property under s. 22(1)(a) before the appellant took what he submits were the necessary steps to redeem. In that regard, although much of the argument before us focused on whether the April 5, 2002 agreement of purchase and sale, which contained a number of conditions, constituted a ‘sale’ within the meaning of s. 22(1)(a), we find it unnecessary to finally resolve that issue.

[3] Assuming that no sale had occurred until May 3, 2002, when the purchaser waived any outstanding conditions in the April 5th agreement of purchase and sale, as extended, the motions judge found that there was no evidence that the respondent mortgagee was aware of the injunctive relief obtained by the appellant pursuant to the ex parte order of Matheson J. dated April 29, 2002. In our view, that finding was open to the motions judge and it is fatal to the appellant’s position. In short, even if the payment into court pursuant to Matheson J.’s order could be considered as payment of the amount due under the mortgage pursuant to s. 22(1) of the Act (something the motions judge did not accept), as the mortgagee had no notice of the payment into court, it was not precluded from pursuing and finalizing the sale under the power of sale. The result was that on May 3, 2002, the agreement of purchase and sale became unconditional and constituted a sale within the meaning of s. 22(1)(a) of the Act. Accordingly, the appellant was not entitled to rely on s. 22(1) of the Act to redeem the mortgage.

[4] For these reasons, we would dismiss the appeal with costs fixed at $15,000.00 inclusive of G.S.T. and disbursements.

Signed: “M.J. Moldaver J.A.”

“S. Borins J.A.”

“J.C. MacPherson J.A.”