December 26, 2024
We have written several articles about why it is essential to beware of time limits, and to commence your action in a timely fashion, yet examples continue to come to our attention of situations in which parties attempt unsuccessfully to make arguments to extend the time and validate a claim started too late.
THE CASE
Albrecht v. 1300880 Ontario Inc. is such a case. It involves a limitation, a mortgage, and arguments that the time to pay was extended, thereby extending the time to sue. The claim was determined to be too late. The mortgage default occurred in 2011, and a demand letter was sent in 2023, but no action was commenced. The property owner applied for a declaration that the mortgagee ( the lender) was prevented from collecting on the mortgage.
This claim was subject to the Real Property Limitations Act rather that the more common Limitations Act, 2002. The Real Property Limitations Act requires that any agreement to extend the time to sue must be in writing. Yet the mortgagee relied upon an alleged oral agreement.
How could they hope to succeed?
By arguing that equity favoured not permitting the mortgagor to rely upon the limitation.
The court did not buy this argument.
There are situations where equity might assist. In this case, the doctrines of promissory estoppel and part performance were relied upon. Neither was fund to apply.
Promissory estoppel is an equitable doctrine which is designed to protect you if another person attempts to back out of a promise after you have changed your legal position in reliance upon the promise. The judge found as a fact that there was no such promise.
Part performance is a doctrine which suspends the application of the Statute of Frauds, which requires agreements regarding real property to be in writing, to prevent fraud. It however requires that there be an oral agreement that has been partially performed, along with other requirements. The judge found that no oral agreement to extend the time was ever made, so the doctrine of part performance did not apply.
The application was allowed, and an order made that the mortgage must be deleted from the parcel register.
TAKEAWAYS
- The law of limitations is subtle and complex.
- Facts are often central to the decision as to the proper time limit.
- Getting sound legal advice as soon as you suspect you have been wronged is always a sound investment.
HOW WEILERS LLP CAN HELP YOU
Our real estate team are experienced and knowledgeable about mortgages. If you hire us to review the agreement, or to complete a transaction, you will receive the personal attention that you desire and have ready access to quick advice if the mortgage goes into default.
If you are unfortunate enough to find yourself in a mortgage collection dispute, our litigation team has the skills to maximize the results for you.
Next time you have either a real estate transaction or a potential lawsuit, give us a call and see if we are the right lawyers for you.