Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220309 DOCKET: C69480

Trotter, Coroza and Favreau JJ.A.

BETWEEN

1250140 Ontario Inc. Plaintiff (Respondent)

and

Parveneh Bader, also known as Pamela Bader Defendant (Appellant)

Counsel: Heath P.L. Whiteley, for the appellant Alexander Hora, for the respondent

Heard: February 18, 2022 by videoconference

On appeal from the order of Justice Frederick L. Myers of the Superior Court of Justice, dated April 15, 2021.

Reasons for Decision

[1] The appellant, Pamela Bader, appeals an order finding her liable to pay 1250140 Ontario Inc. (“125”) $243,992.11 in respect of a mortgage debt assumed in 2008.

[2] The motion judge found that the action was not barred by the 10-year limitation period in s. 23(1) of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (“the RPLA”) because Ms. Bader acknowledged the debt within this time frame. Finding that there was no genuine issue for trial, the motion judge granted summary judgment in favour of 125.

[3] Ms. Bader challenges the motion judge’s conclusions on the applicability of the RPLA, and whether she acknowledged the debt. We do not accept her submissions and dismiss the appeal.

Background

[4] In 2008, 125 advanced a loan to Ms. Bader. She granted a seventh-ranking mortgage on her home as security. She defaulted on the loan that same year.

[5] In 2010, a higher-ranking mortgagee commenced foreclosure proceedings. In that proceeding, on November 15, 2010, Ms. Bader swore an affidavit in which she said “a charge dated March 25, 2008 in the amount of $190,000 in favour of [125]” was registered on her property. She later indicated her understanding that “$243,992.11” was owing to 125 “in respect of the Seventh Mortgage”. Ms. Bader concluded her affidavit by stating: “Ultimately, I want [the property] sold at a fair price which enables payment of all bona fide debts owing on the Property and returns my equity and life savings in the Property to me.”

[6] On November 15, 2010, 125 commenced a separate action against Ms. Bader on the covenant in the mortgage to recover the amount owing. However, that action was administratively dismissed for delay on July 15, 2011.

[7] On March 29, 2011, the Superior Court approved the sale of the property in the foreclosure action. There were insufficient funds to satisfy Ms. Bader’s indebtedness to 125.

[8] On December 2, 2019, 125 commenced another action, again seeking to recover the amount owning under the loan. It also sought to set aside the dismissal of its previous action. That motion was unsuccessful.

[9] 125 moved for summary judgment on its 2019 action. The question before the motion judge was whether the claim was statute barred, given that Ms. Bader’s debt to 125 was incurred in 2008 (more than 10 years earlier).

[10] The motion judge observed that neither party disputed that s. 23(1) of the RPLA applied. The section provides that a claim falling within the ambit of the RPLA expires after 10 years:

23(1) No action shall be brought to recover out of any land or rent any sum of money secured by any mortgage or lien, or otherwise charged upon or payable out of the land or rent, or to recover any legacy, whether it is or is not charged upon land, but within ten years next after a present right to receive it accrued to some person capable of giving a discharge for, or release of it, unless in the meantime some part of the principal money or some interest thereon has been paid, or some acknowledgment in writing of the right thereto signed by the person by whom it is payable, or the person’s agent, has been given to the person entitled thereto or that person’s agent, and in such case no action shall be brought but within ten years after the payment or acknowledgment, or the last of the payments or acknowledgments if more than one, was made or given. [Emphasis added.]

[11] The motion judge found that Ms. Bader acknowledged the debt in her affidavit in the foreclosure proceedings, thereby extending the limitation under s. 23 of the RPLA. As he said in his reasons, “[t]his is not just any old acknowledgment in writing. It is sworn testimony before the court in a proceeding in which both the defendant and the plaintiff were named parties.”

Discussion

[12] The appellant submits that s. 23 of the RPLA did not apply in the circumstances of this case because, by the time 125 commenced its 2019 action, the property had been sold. The appellant submits that s. 23 applies only to actions for in rem remedies. In this case, because the property had already been sold, it was a proceeding for an in personam remedy. As such, the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B applied and the action was time barred. We do not accept this submission.

[13] First, this submission was not made before the motion judge. Ms. Bader did not raise this issue in her Statement of Defence. Instead, she simply took the position that the 10-year limitation had expired. As discussed below, she disputed that she had acknowledged the debt in the interim. Moreover, Ms. Bader’s Notice of Appeal failed to raise this issue. It was first raised by new counsel (Mr. Whiteley) when he filed a Supplementary Notice of Appeal.

[14] Raising a new issue for the first time on appeal undermines the important interest of finality in judicial proceedings. It leads to inefficiencies in the adjudicative process. It places this court in the role of a first instance decision-maker, rather than a reviewing court. No explanation was provided for this change in position on appeal. In these circumstances, an appellate court should be reluctant to entertain the new submission: see Albert Bloom Limited v. London Transit Commission, 2021 ONCA 74, at para. 46.

[15] Nonetheless, we do not accept that s. 23 of the RPLA only applies when the mortgagor is still in the possession of the property or when the proceeds of the realization of the property have yet to be distributed. Section 23 makes no such distinction. No cases directly support Ms. Bader’s position.

[16] Put simply, s. 23 of the RPLA governs actions about claims to real property: see Equitable Trust v. Marsig, 2012 ONCA 235, 109 O.R. (3d) 561, at para. 27. When Ms. Bader assumed her debt to 125, it was secured by a mortgage on the property. This was not a situation where the land was incidental to an action based in negligence, breach of contract, breach of fiduciary duty, or some other basis of liability: Zabanah v. Capital Direct Lending Corp., 2014 ONCA 872, 123 O.R. (3d) 350. Rather, the claim for debt was based on a covenant in the mortgage, and the land, as security for the debt, was critical to that claim.

[17] Ms. Bader has provided no support for the contention that a mortgagee becomes disentitled to the longer limitation period in the RPLA when the property in question has been disposed of in the meantime. While the land may be out of reach for enforcement purposes, there is no principled reason why a mortgagee should be prevented from pursuing an action for any money still owing, as long as the claim is commenced within the limitation period set out in the RPLA. The prospect of a shifting limitation period, tied to the disposition of the property in issue, would only foster uncertainty in the application of the RPLA.

[18] This ground is dismissed.

[19] We also dismiss Ms. Bader’s challenge to the motion judge’s finding that she had acknowledged the mortgage debt in her 2010 affidavit. It was open to the motion judge to conclude that Ms. Bader acknowledged the debt. There is no requirement that such an acknowledgment must reflect an awareness of the precise amount owing, nor must it be accompanied by a promise to pay.

Disposition

[20] The appeal is dismissed. The respondent is entitled to costs in the amount of $10,000, inclusive of taxes and disbursements.

“Gary Trotter J.A.”

“S. Coroza J.A.”

“L. Favreau J.A.”