Court File and Parties

CITATION: All-Mar Development Limited v. HSBC Bank Canada, 2010 ONCA 221

DATE: 20100324

DOCKET: C51000

COURT OF APPEAL FOR ONTARIO

Goudge, Feldman and Epstein JJ.A.

BETWEEN:

All-Mar Development Limited

Applicant (Appellant)

and

HSBC Bank Canada

Respondent (Respondent in Appeal)

Counsel:

Melvyn Solmon, for the appellant

J. Brian Casey, for the respondent

Heard: February 18, 2010

On appeal from the judgment of Justice Katherine Swinton of the Superior Court of Justice dated August 14, 2009.

ENDORSEMENT

[1] On the hearing of the appeal, it emerged that the fundamental issue in this appeal is whether what was done by counsel on behalf of the appellant on May 25, 2009 constitutes a proper tender so as to stop the running of interest and entitle the appellant to the discharge it sought. We therefore do not need to address the other issues dealt with by the application judge.

[2] In our view, counsel for the appellant’s May 25, 2009 letter did not constitute proper tender. The appellant concedes that proper tender requires the tendering of the principal and interest owing as of that day together with the costs demanded by the respondent. Assuming that those costs were fixed at $6,000.00 the tender is defective in two fundamental respects.

[3] First, it was not an unconditional offer to pay. The tender letter is conditioned on, for example, the provision by the respondent of a Document Registration Agreement as prepared by the appellant. Second, the proposal concerning costs clearly meant that the $6,000.00 would be held in trust for the appellant, not the respondent by counsel for the appellant, and that the funds would be returned by counsel for the appellant to his client if certain steps were not taken by the respondent within 30 days. Both these flaws are fatal to proper tender.

[4] Since the tender was defective, the appellant was not entitled to the order sought. The appeal must be dismissed.

[5] The appellant also seeks leave to appeal the costs order below. However we see no basis to interfere with the broad discretion of the application judge to order the costs as she did.

[6] Finally, the respondent is entitled under the mortgage to costs of the appeal on a substantial indemnity basis. We fix those at $23,000.00 inclusive of disbursements and G.S.T.

“S.T. Goudge J.A.”

“K. Feldman J.A.”

“G. Epstein J.A.”