Court of Appeal for Ontario

Date: 2025-07-14
Docket: COA-25-CV-0264
Coram: Steve Coroza, Lise Madsen, Mahmud Rahman

Between

6971971 Canada Inc., MD Majibur Rahman and Farhana Urme
Applicants (Respondents)

and

Eli Messica
Respondent (Appellant)

Appearances:
Preetmohinder Singh Wadhwa, for the appellant
Obaidul Hoque, for the respondents

Heard: 2025-06-30

On appeal from the order of Justice William S. Chalmers of the Superior Court of Justice, dated January 28, 2025.

Reasons for Decision

[1] The appellant, Eli Messica, appeals from the order of the application judge who granted the respondents’ application and dismissed the appellant’s cross-application. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. These are our reasons.

[2] The appellant is the owner of a commercial property located at 2460 St. Clair West, Toronto (the “leased premises”). In 2014, the appellant entered into a lease with 2417178 Ontario Inc. The terms of the lease permitted the tenant to assign the lease, subject to the appellant’s consent.

[3] In September 2015, the appellant consented to the assignment of the lease to 6971971 Canada Inc. (“697 Canada”). The respondents, MD Majibur Rahman and Farhana Urme became the guarantors of the lease. Mr. Rahman provided security in the amount of $100,000 by way of a charge registered against his residential property. The charge was registered on title to his property in October 2019.

[4] The appellant and 697 Canada renewed the lease in January 2019. Pursuant to the terms of the lease renewal agreement, 697 Canada was required to perform certain repairs to the leased premises prior to October 30, 2019.

[5] On September 3, 2019, 697 Canada entered into an agreement to assign the lease to Moksha Enterprise Limited (“Moksha”). The appellant did not consent to the assignment because some of the repairs to the leased premises had not been completed by 697 Canada. On March 18, 2020, Perell J. found that the appellant’s refusal to consent was unreasonable: 6791971 Canada Inc. v. Messica, 2020 ONSC 1642. The lease assignment to Moksha was finalized on April 16, 2020.

[6] Pursuant to the assignment of lease, Mr. Rahman and Ms. Urme were replaced as guarantors. Moksha provided a new guarantee to the appellant in the form of a charge registered on residential property in the amount of $100,000. Mr. Rahman did not seek to have the charge removed from title at this time. On August 3, 2022, Mr. Rahman requested that the charge be removed because he was refinancing his house. The appellant refused to remove the charge.

[7] The respondents brought an application seeking the removal of the charge. The appellant brought a cross-application for an order directing Mr. Rahman and Ms. Urme to pay $145,205 to complete the work in the lease renewal agreement.

[8] The application judge granted the respondents’ application and ordered that Mr. Rahman’s security be discharged. The application judge found that the lease provided that once the landlord approves the assignment of the lease, the guarantors will be released immediately. Once the lease was assigned to Moksha and the guarantors were replaced, Mr. Rahman’s security should have been discharged. Absent a finding that 697 Canada was in default of the lease, the application judge held that the appellant did not have any entitlement to Mr. Rahman’s security.

[9] The application judge also dismissed the appellant’s cross-application because it was statute-barred by the two-year limitation period in the Limitations Act, 2002, SO 2002, c 24, Sch B. The application judge found that the appellant issued his notice of the cross-application on March 31, 2024, almost four years after the assignment of the lease. At the latest, the application judge held that the two-year period began to run on April 16, 2020, when the lease was assigned to Moksha and the appellant acknowledged that the work was not completed.

[10] The appellant advances three submissions on appeal.

Issues on Appeal

[11] First, the appellant contends that the application judge erred in declining to convert the application to an action. We reject this argument. In his reasons, the application judge concluded that the application and cross-application raised two discrete issues relating to the release of Mr. Rahman’s guarantee and whether the cross-application was statute-barred. The application judge determined that these issues could be resolved on a paper record. We see no reversible error in his exercise of discretion under r. 38.10 of the Rules of Civil Procedure, RRO 1990, Reg 194. In any event, the appellant has not pointed to any prejudice that flowed to him from the application judge’s decision.

[12] Second, the appellant submits that the application judge erred in finding that the two-year period in the Limitations Act governed the cross-application rather than the ten-year period set out in s. 4 of the Real Property Limitations Act, RSO 1990, c L.15 (“RPLA”).

[13] We disagree with the appellant’s submission. Although there was a charge registered on Mr. Rahman’s property, the fact that real property is incidentally involved does not necessarily mean that the appellant’s cross-application was governed by the RPLA: Harvey v. Talon International Inc., 2017 ONCA 267, para 51. The application judge found that the substance of the appellant’s claim was damages for breach of contract set out in the lease renewal agreement. He held that this was not an action that affected real property or one that related to an interest in land. We see no basis to interfere with this conclusion. Accordingly, the cross-application was barred by the two-year limitation period in the Limitations Act.

[14] Nor do we see any merit in the appellant’s third submission that the application judge erred in his factual finding that the appellant’s cross-application was commenced in 2024. Even if we were to assume that the application judge misapprehended the record, and the cross-application was commenced in March 2023 as the appellant contends, it was still barred by the two-year limitation period which began running in April 2020.

Disposition

[15] For these reasons, the appeal is dismissed with costs payable by the appellant to the respondents in the agreed upon amount of $20,000, all-inclusive.

“Steve Coroza J.A.”
“Lise Madsen J.A.”
“Mahmud Rahman J.A.”