COURT FILE NO.: FS-19-00096766-0000 (Brampton) CV-21-00000471-0000 (Milton) DATE: 2023 08 18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Mary KOSTA-CADAS and Peter CADAS -and- Dino DIPUCCHIO, Anna DIPUCCHIO, Loreta IANNETTA, 2196710 ONTARIO INC., OLYMPIA TRUST COMPANY AS TRUSTEE FOR RRIF #267823 FOR AMERICO PESEGI, OLYMPIA TRUST COMPANY AS TRUSTEE FOR RRIF #266576 FOR LORETA IANNETTA, & OLYMPIA TRUST COMPANY AS TRUSTEE FOR RRIF #265475 FOR ANTONIO IANNETTA and Chris CADAS, Mary KOSTA, & DR. CHRIS CADAS DENTISTRY PROFESSIONAL CORPORATION

BEFORE: RSJ L. RICCHETTI

COUNSEL: B. Hahn (in the Family Proceeding) and J. Hewlett (in the Civil Proceeding), Mary Kosta-Cadas; A. Shahmiry (in the Family Proceeding) and T. Markovic (in the Civil Proceeding), for Peter Cadas; N. Leon for Robert Mammone and S.O.R.A Real Estate & Insurance Ltd o/a MIC Financial

HEARD: August 08, 2023, by Videoconference

ENDORSEMENT

The Motion

[1] The Defendants by counterclaim, Robert Mammone and S.O.R.A. Real Estate & Insurance Ltd. o/a MIC Financial (“the Brokers”) move for summary judgment on the basis of the expiration of the applicable limitation period in Mrs. Kosta’s claim against them and the lack of evidence to support a claim against these Defendants in law.

[2] Mrs. Kosta-Cadas’ (Mrs. Kosta) claim against the Brokers is that they failed to comply with their duty to Mrs. Kosta under the Mortgage Brokerages, Lenders and Administrators Act, namely, to ensure that she understood, agreed and signed the mortgage and mortgage renewal documents on her jointly owned home, with Dr. Peter Cadas, at 5198 Mississauga Road (Home).

[3] The Brokers acknowledged at the hearing that Mrs. Kosta’s claim in negligence would necessarily raise a genuine issue requiring a trial. In essence, while raised in the factum as to the “lack of evidence to support” the claim against the Brokers, that became a non-issue at the hearing. The sole remaining issue was the limitation issue.

[4] The Brokers submit that the Plaintiff by counterclaim, Mrs. Kosta, became aware of her alleged claim against the Brokers no later than May 1, 2018 and failed to bring the action within two (2) years plus six (6) months (for Covid tolling).

[5] The Brokers submit that, Mrs. Kosta’s claim is in negligence against the Brokers, however, framed as a “contribution and indemnity” claim. The Brokers submit that a negligence claim is not a proper claim for contribution and indemnity. Hence, the two-year limitation period is the applicable limitation period in the Limitation Act, 2002 (Limitations Act) for the claim for negligence against the Brokers.

Mrs. Kosta’s Position

[6] Mrs. Kosta submits that her claim against the Brokers is a claim in negligence for indemnification of damages which she may be found liable to the Plaintiffs.

[7] Mrs. Kosta submits that the applicable limitation period is two years from the date the Plaintiff’s claim was served on her pursuant to s. 18 of the Limitations Act.

The Background, Facts and Discussion

[8] Dr. Cadas and Mrs. Kosta were married.

[9] The Home, subject of the Mortgage described below, is their matrimonial home. They separated in 2017.

[10] There is an outstanding family law proceeding that has been highly contentious. In the family law proceeding, Mrs. Kosta claims an unequal division that the Mortgage should be solely a liability of Dr. Cadas.

[11] The family law proceeding is being tried together with the Plaintiffs’ action in September 2023.

[12] Prior to 2015, Dr. Cadas and Mrs. Kosta had extensive experience with various financings including granting security by way of mortgages. That experience included granting prior mortgages and financings on their Home. For example, the Mortgage at issue was part of a loan package, where part of the security for the loan included a third mortgage on the Home. And that loan package replaced a prior bank loan.

[13] Some of the Home financings by Dr. Cadas and Mrs. Kosta were facilitated through the same broker, MIC Financial (of which Mr. Mammone is a principal). Those financings included the current first and second mortgages on the Home.

[14] For the purpose of refinancing a RBC loan, Mrs. Kostas and Dr. Cadas executed a Letter of Intent on March 11, 2015, to borrow $250,000 at a 15% interest rate. This new loan was:

a) To be secured as a third mortgage on the Home.

b) A GSA over all business assets of Dr. Cadas.

c) Mrs. Kostas and Dr. Cadas were to also provide personal guarantees for the loan.

d) This loan was to replace an existing RBC loan in the amount of $230,000.

e) The Lender was yet to be determined.

f) The term of the loan was for one year. However, the loan provided that the principal and interest was due on maturity “unless a renewal is offered for an additional term”.

[15] A “Disclosure to Borrower”, from/to the Brokers, was executed by Mrs. Kostas and Dr. Cadas.

[16] The Loan was advanced by Community Trust Company, 2196710 Ontario Inc. Dino DiPucchio, Anna DiPucchio and Loreta Iannetta, the lenders. The Plaintiffs, include their investment vehicles, as parties in the main action.

[17] The loan was advanced. The security was provided by Mrs. Kosta and Dr. Cadas including the Mortgage, the GSA and the personal guarantees. The Mortgage was registered as a 3rd mortgage on title to the Home.

[18] The Mortgage contains the usual personal covenant of the borrowers. The Mortgage contains a term that interest was payable “before and after maturity until the principal is paid in full.” The Mortgage also expressly provided that the Mortgage could, if requested, be renewed at the Mortgagee’s sole discretion.

[19] Mrs. Kosta admitted, in her examination, that:

a) She met with her lawyer, the former Defendant by counterclaim, Poorna Jayasena, in March 2015 and executed all legal documents including the Mortgage.

b) She knew she was providing a personal guarantee for the Mortgage.

c) She had received legal advice in connection with the loan and security from Ms. Jayasena.

d) She was fully aware of the nature and effect of the documents executed by her, and

e) She was fully aware of the manner that liability for the loan could be enforced.

[20] Mrs. Kosta’s position is that she only agreed to this financing including the Mortgage security, for the one year. She did so to assist Dr. Cadas.

[21] The Mortgage was not repaid at the end of the first year. The Mortgage monthly payments continued to be paid for some time.

[22] The renewal of the outstanding Mortgage came up in 2017. Whether there was a prior renewal is not clear from the evidence.

[23] An invoice dated November 7, 2017, for the 2017 renewal of the Mortgage was sent to Mrs. Kosta and Dr. Cadas. There is no dispute that this Mortgage renewal invoice was received by Mrs. Kosta as it was sent by email to her AND to Dr. Cadas at their respective emails.

[24] In the interim, Mrs. Kosta and Dr. Cadas separated in 2017.

[25] The renewal of the Mortgage came up again in early 2018.

[26] On May 1, 2018, MIC Financial sent to Mrs. Kosta an outstanding invoices for the Mortgage renewal (and the other mortgages on the Home). One unsigned cheque was returned to Mrs. Kosta. MIC Financial requested Mrs. Kosta to provide a replacement cheque.

[27] On May 9, 2018, MIC Financial wrote to Dr. Cadas setting out the renewal documents for the Mortgage confirming that the Mortgage had “matured” on March 30, 2018. The “Re: line” on this document was “Matured mortgage.” Dr. Cadas forwarded the May 9, 2018 email to Mrs. Kosta with the suggestion that it was a “perfect time” to lock into the new interest rate.

[28] Mrs. Kosta responded to Dr. Cadas’ email that she was “meeting with Robert to deal with this Monday.” Robert being Robert Mammone the principal of MIC Financial.

[29] By this point in time, Mrs. Kosta was clearly aware that the Mortgage had continued past the original one-year term at least in 2017 and again in 2018. Mrs. Kosta also knew that the Mortgage required to be renewed (or presumably paid off).

[30] On November 27, 2020, Mrs. Kosta wrote to Robert Mammone at MIC Financial as follows:

I know this is not easy but I need to get sorted with what is owed. He did not pay for two years. I should have been told. I cannot sign these renewals. I didn’t sign for them in the first place. Frankly, I would not have sold an appreciating asset if I knew the situation. I did ask with no response.

I really need to hear from you PLEASE. Is there anything else I should know? Are there more mortgages? Has he paid?

[31] On February 9, 2021, the Lenders commenced an action against Mrs. Kosta and Dr. Cadas to recover the outstanding principal and interest on the loan; under their personal covenants in the Mortgage; to take possession of the Mortgage; and realize on the collateral in the GSA.

[32] On March 31, 2021, Mrs. Kosta filed a defence to the claim.

[33] In the pleading, Mrs. Kosta alleges that the Mortgage is fraudulent, not renewed by her, not signed by her, and therefore not her liability:

26. Mary claims as against the Defendants by Counterclaim Poorna Jayasena, Poorna Law Professional Corporation, Robert Mammone a.k.a Roberto Gabriel Mammone and S.O.R.A Real Estate & Insurance Ltd. o/a MIC Financial Brokerage:

a. Contribution and indemnity for any amounts which may be found to be owing by her in respect of the main action;

b. Costs of the main action and the counterclaim on a substantial indemnity basis plus HST;

c. Pre-judgment and post-judgment interest on all amounts awarded pursuant to the Courts of Justice Act; and

d. Such further and other relief as this Honourable Court may deem just.

32. Mary states and the fact is that Mammone acted on behalf of Cadas in respect of the subject mortgage and the renewals thereof. Mary further states that Mammone and MIC purported to act on Mary’s behalf in respect of the subject mortgage and renewals thereof, and did so without knowledge, consent or authority.

33. Mary states and the fact is that Mammone and MIC owed her a duty of care and breached the same by failing to take appropriate steps to ensure Mary’s knowledge and consent to the subject mortgage and any renewals thereof.

34. Mary states and the fact is that by virtue of these Defendants actions, the subject mortgage and renewals were registered against title to the property without her knowledge or consent.

[34] During the examination of Robert Mammone, he agreed that he had not met with nor discussed the Mortgage renewals with Mrs. Kosta.

[35] Mrs. Kosta’s affidavit includes a handwriting expert’s report that suggests the renewal documents were not signed by her.

The Law

[36] Summary judgment motions under Rule 20 are a significant alternative manner of adjudication: Hryniak v. Mauldin, 2014 SCC 7, at paras. 34-44.

[37] Where a summary judgment is sought, judges are obliged to grant summary judgment where they are satisfied that there is no genuine issue requiring a trial: Hryniak, at para. 68.

"There will be no genuine issue requiring a trial if the summary judgment process provides [the judge] with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure": Hryniak, at para. 66.

[38] The fact-finding powers in Rules 20.04(2.1) and (2.2), being to weigh evidence, evaluate credibility, draw reasonable inferences, or receive selected oral evidence, are presumptively available to a summary judgment motion judge to use to fairly and justly adjudicate a claim: Hryniak, at para. 45.

[39] Sections 4, 5 (2) and(3) and 18 of the Limitations Act provide:

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

5 (2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

(3) For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.

18 (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.

[40] The proper application of s. 18 of the Limitations Act is central to the decision on this motion.

[41] This provision was considered by the Ontario Court of Appeal in Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378. Essentially, the Court of Appeal described the way s. 18 of the Limitation Act applies. The Court states that s. 18 of the Limitations Act applies, not only to claim for contribution and indemnity between tortfeasors, but all claims for contribution and indemnity by one “wrongdoer” against another “whether the right to contribution and indemnity arises in respect of a tort or otherwise”:

[20] The second change is in the specific wording of s. 18, which contains two features that are consistent with and, in my view, driven by that general overall purpose. Significantly, s. 18 departs from the model established in 1948 in the Negligence Act. The provision in the Negligence Act applied only to claims for contribution and indemnity as between tortfeasors. It allowed such claims to be brought within one year of settlement or judgment in the underlying action, despite the expiry of any limitation period governing the claim of the injured party against the other tortfeasor. In contrast, s. 18 applies not only to claims as between tortfeasors but also to claims for contribution and indemnity by one "wrongdoer" against another, "whether the right to contribution and indemnity arises in respect of a tort or otherwise". Moreover, s. 18 significantly shortens the limitation period governing contribution and indemnity claims to two years from the date the first alleged wrongdoer was served with the underlying claim, thereby encouraging resolution of all claims arising from the wrong at the same time.

[24] In my view, the departure from the 1948 model to embrace "wrongdoers", not just tortfeasors, and to cover claims that arise "in respect of a tort or otherwise" represented a conscious decision to expand the scope of the provision beyond the tort context to include claims like the one at issue in this case. [page649] …

[28] The legal theory grounding the contribution and indemnity claim is not relevant for deciding whether s. 18 is triggered; the provision applies when there is a claim for contribution and indemnity, no matter what legal theory underlies the claim.

[29] I therefore cannot agree that the fact that Canaccord's claim is based upon the employment agreement rather than upon the Negligence Act excludes the claim from the reach of s. 18. In my respectful view, to so hold would be to ignore a fundamental feature of the Act. It is, on its face, a claim for indemnity brought by one alleged wrongdoer against another and the fact that it is grounded in contract has no bearing on the question of whether or not it falls within the reach of s. 18 ….

[32] Similarly, in IPEX Inc. v. Lubrizol Advanced Materials Canada Inc., 2012 ONSC 2717, 4 B.L.R. (5th) 148 (S.C.J.), at para. 19, Belobaba J. held that an indemnity claim based in contract and tort is "primarily a claim for indemnity" and therefore governed by s. 18.

[33] There is a suggestion in the reasons of the motion judge that s. 18 does not apply because it is a claim only for "indemnity" and not "contribution and indemnity". I agree with Roscoe that that is a distinction without a difference. The difference between contribution and indemnity is simply the extent of the recovery: see Hardisty v. 851791 N.W.T. Ltd., 2004 NWTSC 70, 26 C.C.L.T. (3d) 305, at para. 3.

(Emphasis added).

[42] As a result, claims for “contribution and indemnity” and claims for “indemnity” are caught by s. 18 of the Limitations Act regardless of the legal theory grounding the claim.

[43] While Canaccord suggests that the two-year limitation period is “deemed” to start upon the service of the Claim, the subsequent decision of the Ontario Court of Appeal in Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429 determined that, because of the reference in s. 18 to s. 5, the discoverability of the claim extend the commencement of the start date of the two-year limitation by the application of discoverability principles.

[44] The facts in Mega are not entirely dissimilar to the facts in the instant case – a claim by the lender against two creditors, then the creditors claimed contribution and indemnity against a third party for allegedly having caused the liability to the lender.

[45] In Mega, the defendants were sued on their personal guarantees by a bank. One defendant was served with the statement of claim in January 2011. The other defendant was served in April 2013. The defendants then commenced a third-party claim against their former lawyer in September 2015 for contribution and indemnity, claiming that they instructed their lawyer to obtain releases of their personal guarantees and that he failed to do so. The lawyer moved successfully under Rule 20 for summary judgment dismissing the claim as statute barred.

[46] The motion’s judge in Mega, applied a strict two-year limitation from the date of service of the claim by the creditor:

Based on the material filed, I am satisfied that the Third Party Claim can be determined by way of summary judgment. Section 18 of the Act sets out an absolute two year limitation period in respect of Yung and Lai's Third Party Claim which begins to run from the time the defendants were served with the Statement of Claim in the action. As both Lai and Yung were served with the Statement of Claim more than two years before the Third Party Claim was commenced, the Third Party Claim was commenced after the limitation period had expired and cannot succeed.

(See para. 2 of the motions judge’s endorsement).

[47] The Court of Appeal in Mega held that the deemed or presumed two-year limitation period can be rebutted to start to run at a later date than the date of service of the claim by the application of the discoverability principles:

[74] I would therefore hold that the motion judge erred in his interpretation of s. 18. The two-year limitation period prescribed by ss. 4, 5(2) and 18 for contribution and indemnity claims presumptively begins on the date of service of a claim in respect of which contribution and indemnity is sought. That presumptive limitation period start date, however, can be rebutted by the discoverability principles prescribed in s. 5 of the Limitations Act, 2002.

[77] The motion judge therefore erred when he stated that Mr. Yung's and Ms. Lai's claims were barred by an absolute two-year limitation period that was triggered when Ms. Lai was served. He should have held that the presumptive limitation periods against Mr. Yung and Ms. Lai run separately, depending on when each of the them was served, and he should then have gone on to resolve the discoverability issue.

[48] In Mega, the issue was whether delayed discoverability could EXTEND the deemed two-year limitation period in s. 18 of the Limitations Act. The Court of Appeal in Mega, expressly limited discoverability to delay the deemed or presumed start date set out in the Limitations Act:

[54] ….Properly interpreted, s. 18 works with other provisions of the Limitations Act, 2002 to create a presumed start date for the running of the limitation period. That presumed limitation period start date will result in a claim for contribution or indemnity being statute-barred two years after the party seeking contribution or indemnity is served with a claim in the proceeding in which contribution or indemnity is sought, unless that party proves that the claim for contribution or indemnity was not discovered and was not capable of being discovered through the exercise of due diligence until some later date.

(Emphasis added).

[49] No legal authority has been produced where the court determined that the limitation period can start to run prior to the deemed or presumed date because the claim was or could have been discovered before the “deemed” or presumed start date in s. 18 of the Limitations Act.

[50] The Court in Maynards v. Royal Bank, 2011 ONSC 2656, held that:

Since [the defendants] commenced its claim before [the plaintiffs] had even commenced its suit against [the defendants], let alone served it, [the defendants] had no cause of action for contribution and indemnity [against a third party] when the claim was issued.

[51] In my view, to permit earlier discoverability to start an earlier limitation period before the deemed date in s. 18 of the Limitation Act is not the proper interpretation of that provision. Such an interpretation would be inconsistent with the use of the word “deemed”. Such an interpretation would be inconsistent with the objective described in Canaccord and Mega which is that all the claims made relating to the same event be tried together for efficiency and to avoid inconsistent findings and judicial determinations. Such an interpretation would require claims to be issued just because a party thought a potential claim for contribution and indemnity might be brought in the future – and what would happen if the claim was brought more than two years later? This would spawn more protective and speculative proceedings that may never been needed.

[52] The law is now accurately set out in Hamilton Trampoline, ULC v. First Data Canada Ltd., 2022 ONSC 1657:

[17] Pursuant to sections 18, 4 and 5 of the Limitations Act (Ontario), subject to discoverability, the limitation period for FD’s claims against Vantiv for contribution and indemnity began to run on May 10, 2018 when FD served the Original Defence (Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429 at paras. 59-71)….

(Emphasis added).

Analysis

[53] If the issue to be decided was whether the Brokers were negligent (owed a duty, breached that duty), then this motion would have to be dismissed because there is a genuine issue for trial. That is because, there is some evidence that Mr. Mammone admitted that he never met with Mrs. Kosta to sign the renewals, he did not discuss nor explain the effects of the renewals with Mrs. Kosta, and he did not witness Mrs. Kosta sign the renewals or confirm that she had signed the renewals. As stated above, this was conceded during submissions and is not an issue that needs to be decided by this court.

[54] The sole and central question for this motion is whether there is a genuine issue requiring a trial that Mrs. Kosta’s claim against the Brokers is expired due to the limitation period.

[55] For the reasons that follow, I am satisfied that the Mrs. Kosta’s claim was commenced within the limitations period set out in the Limitations Act, 2002.

What is Mrs. Kosta’s claim against the Brokers?

[56] The claim, in the main action, by the Plaintiffs is a typical creditor claim against a borrower. It includes claims under personal covenants in the Mortgage and enforcement of the security, namely, the Mortgage and GSA.

[57] In Mrs. Kosta’s defence to the Plaintiffs’ claim, she:

a) Denies she entered into the Mortgage;

b) Denies entering into any renewals of the Mortgage; and

c) Alleges that Dr. Cadas entered into the Mortgage and renewals without her knowledge or consent.

[58] Mrs. Kosta crossclaims against Dr. Cadas for contribution and indemnity for any amounts she is required to pay to the Plaintiffs under the Mortgage.

[59] Mrs. Kosta’s claim against the Brokers for “[c]ontribution and indemnity for any amounts which may be found to be owing by her in respect of the main action”.

27. Mary states and the fact is that Mammone acted on behalf of Cadas in respect of the subject mortgage and the renewals thereof. Mary further states that Mammone and MIC purported to act on Mary’s behalf in respect of the subject mortgage and renewals thereof, and did so without Mary’s knowledge, consent or authority.

28. Mary did not authorize Mammone or MIC to act on her behalf. Mary would not have so authorized Mammone or MIC to act on her behalf had she been asked for authorization in that respect.

29. Mary states and the fact is that Mammone and MIC owed her a duty of care and breached the same by failing to take appropriate steps to ensure Mary’s knowledge and consent to the subject mortgage and any renewals thereof.

30. Accordingly, these Defendants are liable for damages as sought in the prayer for relief in the within counterclaim.

Negligence Apportionment and Contribution Only?

[60] I am satisfied that the Plaintiffs/Mortgagees’ claim against Mrs. Kosta is in contract under the Mortgage.

[61] Mrs. Kosta’s claim against the Brokers is in negligence.

[62] There is no real “contribution” or “apportionment” Mrs. Kosta seeks by or against the Brokers in the sense of any shared responsibility or apportionment of liability with the Plaintiffs/Mortgagees. Rather she seeks indemnification from the Brokers for any damages she is found liable to the Plaintiffs/Mortgagees.

[63] In this respect, I disagree with the Broker’s submission that, for s. 18 of the Limitations Act to apply, Mrs. Kosta’s claim must require some apportionment of responsibility or liability between the Brokers and the Plaintiffs/Mortgagees.

[64] As stated above in Canaccord, a claim for indemnity by a defendant against a third party, is subject to s. 18 of the Limitations Act. As the Court of Appeal said in Canaccord, the claim need not be for contribution and indemnity but may be a claim solely for indemnity. See para. 29 of Canaccord.

[65] In Mega, the creditor made a claim against the debtor, but the debtor brought an indemnity claim against their solicitors for negligence. The legal claims are the same as in this case.

[66] I reject the Broker’s submission repeated here:

However, Kosta’s claim is by label only. Kosta is not claiming that she is one wrongdoer claiming contribution and indemnity from another: she is alleging that she should not be responsible for the mortgage on title and that if she is, these defendants should have to pay it as having caused or contributed to the existence of the mortgage.

See para. 45 of the Broker’s factum.

[67] Mrs. Kosta may be an alleged wrongdoer, a debtor who has not paid her creditor – the Plaintiffs. And she is claiming indemnity from the alleged wrongdoer, the Brokers, for her liability to the Plaintiffs.

[68] This is a typical indemnity claim. One party (in this case, Mrs. Kosta) seeks indemnity from a third party (the Brokers) for any liability that the party (Mrs. Kosta) may owe the Plaintiffs (the Lenders). If Mrs. Kosta is successful in her defence to the Plaintiffs’ claim, then the liability issue may become moot. On the other hand, if Mrs. Kosta is unsuccessful in the Plaintiffs’ claim, she is entitled to advance her claim against the Brokers on the basis that the Brokers were negligent to her and caused her damages. Whether the Plaintiffs’ claim is in contract or in tort makes no difference.

[69] Does the start date of the limitation period start before the Plaintiffs’ claims were served on Mrs. Kosta if Mrs. Kosta knew of the potential claim before the Plaintiffs commenced this action?

[70] The Brokers point to various authorities as to the discoverability of claims and the running of the limitation period. The evidence, on this motion (and solely for the purpose of this motion) establishes that Mrs. Kosta was aware that the Mortgage had been granted by her in 2015, had not been repaid by 2017; and needed to be renewed by at least by May 1, 2018. Mrs. Kosta knew she had potential liability under the loan and Mortgage (whether or not it had been renewed). Even accepting for the purpose of this motion that Mrs. Kosta didn’t sign the renewals, she knew there was a Mortgage on the Home that she had signed in 2015, it had not been discharged by 2018 and therefore she continued to be potentially liable to the Mortgagees, sooner or later. However, that does not answer the question whether the start date for the limitation period commenced prior to the date the Plaintiffs served their claim on Mrs. Kosta.

When did the Limitation period start?

[71] Does the limitation period on Mrs. Kosta’s claim against the Brokers in negligence commence when she discovered that the Mortgage had not been discharged (or that it had been renewed) OR when she was served with a claim by the Plaintiffs/Mortgagees?

[72] Mrs. Kosta submits that the two-year limitation period in s. 18 applies from the date the Brokers served the Statement of Claim on Mrs. Kosta. If so, then there is no issue regarding the timeliness of the claim against the Brokers.

[73] The Brokers submit that this court should find that the limitation period of Mrs. Kosta’s claim against the Brokers commenced when Mrs. Kosta knew the Mortgage remained unpaid in 2017 or early 2018. If so, then Mrs. Kosta’s claim would be barred by the limitation period.

[74] Essentially, the Brokers seek to extend Mega to, not only apply discoverability to extend (or start the limitation period at a later date) than the “deemed” two-year limitation (date of service of the claim) in s. 18 of the Limitations Act, but also to start the limitation period before the start date of the “deemed” two-year limitation period (date of service of the claim) if the claim was discoverable on an earlier date.

[75] The first difficulty that the Brokers have is that s. 18 “deems” that for the purpose of a limitation period in sections 5 and 15, the start date for the limitation period is the date that the person is served with the claim.

[76] To suggest that the limitation period in s. 18 can reduced/eliminated by discoverability would render s. 18 meaningless. Discoverability of the claim for contribution and indemnity or indemnity alone, would be the sole basis for the commencement of the two-year limitation period.

[77] The second difficulty is that in 2017 or 2018, all that Mrs. Kosta knew was that there was a potential claim against her by the Mortgagees. The Plaintiff, although having the right to exercise their creditor rights and security rights, could have chosen other remedies such as selling the Home under a power of sale (in which case, if there was no shortfall, there would be no claim against Mrs. Kosta), or realizing on the GSA assets, or commence proceeding against Dr. Cadas. I am satisfied that the claim for indemnification crystalized, demanding that Mrs. Kosta take some action to advance her indemnity claim, when the Plaintiffs made and served a claim against Mrs. Kosta, allowing Mrs. Kosta to consider whether there was any other wrongdoer responsible who should indemnify her.

[78] Until the Plaintiffs’ claim was issued and served on Mrs. Kosta, it was appropriate for her to wait before commencing an indemnity claim against the Brokers when she had not suffered damages and it was unknown whether she ever would suffer damages. See Maynards at para. 23.

[79] What the Brokers miss is that there may be valid grounds for finding that the Mortgage is valid as against Mrs. Kosta but Mrs. Kosta may have a valid ground for asserting that, but for the negligence of the Brokers, her liability to the Mortgagee should have been zero or something less than 100% - in other words indemnity by the Brokers in whole or in part.

[80] I am satisfied that Mrs. Kosta’s claim was brought within the applicable limitation period. This issue does not require a trial to make a fair and just determination on this limited issue.

Conclusion

[81] The Broker’s motion is dismissed as it relates to the limited issue that the limitation period had expired by the time that Mrs. Kosta commenced her claim against the Brokers.

Costs

[82] Either party seeking costs may submit written submissions, within two weeks, limited to 3 pages PLUS any Offers and authorities.

[83] A party against whom costs are claimed, may submit responding written submissions, within two weeks, limited to 3 pages PLUS any Offers and authorities.

[84] There will be no reply submissions.

[85] As for costs of the June 14, 2023 hearing, the parties were advised to provide written submissions.

RSJ L. RICCHETTI Released: August 18, 2023