Bieberstein v. Kirchberger et al.

[Indexed as: Bieberstein v. Kirchberger]

Ontario Reports

Court of Appeal for Ontario,

MacPherson, Watt and Pepall JJ.A.

October 17, 2013

117 O.R. (3d) 321 | 2013 ONCA 629

Case Summary

Limitations — Foreign law — Appellant giving guarantees of German bank loans to his companies in form of submissions to compulsory enforcement ("SCEs") between 1992 and 2000 — Respondent acquiring SCEs and bringing action in Ontario to enforce them in 2010 — Motion judge correctly concluding that SCEs were not German judgments and that 30-year limitation period applied under German law.

The appellant guaranteed loans made to his companies by German banks between 1992 and 2000. The guarantees took the form of special German instruments called submissions to compulsory enforcement ("SCEs"). The respondent acquired the SCEs from the German banks and commenced an action in Ontario in 2010 based on the SCEs. The appellant moved for partial summary judgment on the basis that the limitation period to enforce the SCEs had expired. The motion was dismissed. The appellant appealed.

Held, the appeal should be dismissed.

The motion judge was correct in finding that the SCEs were not German judgments. The fact that an SCE proceeds under the same provisions of the German Civil Code as a German judgment did not transform it into one. It was not contested that the applicable substantive law was that of Germany. The motion judge did not err in finding that the applicable limitation period was 30 years as German law applies a 30-year limitation period to enforce SCEs.

Cases referred to

Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, [1994] S.C.J. No. 110, 120 D.L.R. (4th) 289, 175 N.R. 161, [1995] 1 W.W.R. 609, J.E. 95-61, 51 B.C.A.C. 241, 100 B.C.L.R. (2d) 1, 77 O.A.C. 81, 26 C.C.L.I. (2d) 1, 22 C.C.L.T. (2d) 173, 32 C.P.C. (3d) 141, 7 M.V.R. (3d) 202, 52 A.C.W.S. (3d) 40

Statutes referred to

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.], s. 23

Rules and regulations referred to

Code of Civil Procedure (Germany)

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(1) (a)

APPEAL from the order of Wilton-Siegel J., [2012] O.J. No. 6103, 2012 ONSC 6524 (S.C.J.) dismissing a motion for partial summary judgment.

Endorsement by the COURT: --

Introduction

Jonathan L. Rosenstein, for appellants.

Julian N. Falconer, Elisabeth Widner and Frederick J. Shuh, for respondent. [page322]

[1] The appellants appeal the December 20, 2012 order of Wilton-Siegel J. in which he dismissed their motions for partial summary judgment. He also ordered that the appellants' acknowledgements, known as "submissions to compulsory enforcement" ("SCEs"), were enforceable in Ontario and that the applicable limitation period was 30 years.

Facts

[2] The appellant, Gabriel Kirchberger, formerly of Germany, guaranteed loans made to his real estate companies by German banks. The loans were made between 1992 and 2000.

[3] The guarantees took the form of special German instruments called SCEs. While not issued by a court, under the German Code of Civil Procedure an SCE may be enforced in the same manner as a German judgment.

[4] The respondent acquired the SCEs from the German banks in 2008 and 2009.

[5] In January 2010, the respondent commenced actions against the appellants in Ontario, where Kirchberger resides, based on the SCEs.

[6] The appellants moved for partial summary judgment on the basis that the limitation period to enforce the SCEs had expired; however, the motion proceeded under rule 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for a determination of a question of law raised by the pleadings.

[7] The parties agreed on the appropriate approach to be used by the motion judge:

(1) characterization of the issue to identify the relevant choice of law rule;

(2) identification of the connection factor by applying the choice of law rule; and

(3) application of the governing law.

The parties agreed that once the SCEs had been characterized, Germany would be the appropriate governing law.

[8] The motion judge decided that an SCE was not a foreign judgment and the respondent's action was not barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B because a 30-year limitation period applied pursuant to German law. [page323]

Appeal

[9] The appellants advance three grounds of appeal and also seek to admit fresh evidence.

[10] Firstly, the appellants submit that the motion judge erred in concluding that the SCEs were not German judgments for the purpose of Ontario limitations law. They argue that had he done so, as a foreign judgment, either a two-year or a six-year limitation would have applied. In our view, the motion judge was correct in concluding that the SCEs were not German judgments. We agree with the respondent's submission that the fact that an SCE proceeds under the same provisions of the German Civil Code as a German judgment does not transform it into one. It is neither a court order, an arbitral award nor an instrument that has any of the accepted characteristics of a judgment.

[11] We do not give effect to this ground of appeal.

[12] Secondly, the appellants submit that the motion judge erred in basing his analysis on a claim which does not appear in the statements of claim.

[13] On the motion, the respondent restricted his request for relief in the statement of claim to an order realizing the collateral security given by the appellants. This was pleaded in paras. 1(a)(i) and 16 of the statements of claim. The motion judge interpreted this as a request for an order that the respondent was entitled to enforce against the appellants' assets in Ontario in the manner and to the extent as if he had obtained judgment against the respondent for payment.

[14] In our view, the motion judge did not recast the appellants' claim; rather, he was simply describing the nature of the SCEs. This was neither a new argument nor theory of the case. We see no error in this regard.

[15] Thirdly, the appellants submit that the motion judge misinterpreted and misapplied German limitations law.

[16] The appellants submit that while the motion judge erred in not treating the SCEs as foreign judgments, having characterized them as agreements, a three-year limitation was applicable under German law.

[17] Again, we are of the view that the motion judge reached the correct conclusion. The applicable substantive law was that of Germany. As mentioned, this was not contested. This principle is reflected in s. 23 of the Limitations Act, 2002, which provides that for the purposes of applying the rules regarding conflicts of laws, limitation laws of Ontario or elsewhere are substantive law. See, also, Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, [1994] S.C.J. No. 110. [page324]

[18] Because German law applies a 30-year limitation period to enforce SCEs, the motion judge correctly treated 30 years as the applicable limitation period and dismissed the motion for partial summary judgment.

[19] Given our conclusion, it is unnecessary to consider the fresh evidence.

[20] The appeal and the motion to admit the fresh evidence are dismissed.

[21] The appellants shall pay the respondent's costs fixed in the amount of $40,000, inclusive of disbursements and applicable taxes.

Appeal dismissed.

End of Document