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LIMITATION OF ACTIONS - Expiry of limitation period - Effect of

Wednesday, July 15, 2020 @ 9:28 AM  

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Appeal by the mortgagee and cross-appeal by the mortgagor’s estate from an order discharging a mortgage on the basis that the limitation period for the appellant to enforce the mortgage had expired. The mortgage had been granted to Transwest acting as agent for the appellant. The mortgagor died in 2012. By July 2013, the full amount owing under the mortgage was due and payable by the estate. The last contact between the estate and Transwest occurred in December 2016. The relationship between Transwest and the appellant broke down in 2015. In May 2018, the registration of the mortgage was transferred into the appellant’s name. In 2019, the estate applied for an order vacating the registration of the mortgage. The parties proceeded on the basis that more than two years had passed since Transwest had discovered the claim on the mortgage and any right it might have had to sue on the mortgage had passed. The appellant argued the chambers judge erred in concluding that the appellant was impressed with Transwest’s knowledge of its right to sue such that the appellant’s ability to sue was also time-barred. The estate disputed the chambers judge’s finding that the limitation period began running in December 2016 when Transwest sent an e-mail to the estate advising of the balance owing on the mortgage rather than July 2013 when the default occurred.

HELD: Appeal and cross-appeal dismissed. The appellant was bound by Transwest’s knowledge based on s. 9(2) of the Limitations Act. The statutory language strongly suggested that s. 9(2) was intended to conclusively establish that the principal’s knowledge of the facts set out in s. 6(1) existed once an agent had actual or constructive knowledge and a duty to communicate such matters to the principal. Transwest’s knowledge that allowed for the accrual of the cause of action under the mortgage in accordance with s. 6(1) of the Limitations Act fell squarely within the scope of the agency relationship between Transwest and the appellant and Transwest had a duty to communicate those matters to the appellant. The applicable limitation period began to run against the appellant on the same date it would have begun had Transwest sued on the mortgage. The appellant’s claim was therefore time-barred. While the estate’s assertion that the chambers judge erred in her conclusion that the cause of action accrued in December 2016 rather than July 2013 was supportable, the judge’s conclusion that the appellant’s claim was time-barred was unaffected by whether the limitation period began to run in December 2016 or July 2013 since neither party suggested that the legal rights of either party were affected by the determination as to which of these two dates was operative.

Roesslein Estate v. Equinav Financial Corp., [2020] S.J. No. 227, Saskatchewan Court of Appeal, R.K. Ottenbreit, L.M. Schwann and R. Leurer JJ.A., June 9, 2020. Digest No. TLD-July132020006