



COURT OF APPEAL FOR ONTARIO

CITATION: Van Halteren v. Deboer Tool Inc., 2016 ONCA 559

DATE: 20160711

DOCKET: C60941

MacPherson, Cronk and Benotto JJ.A.

BETWEEN

Jacob Van Halteren

Plaintiff (Appellant)

and

Deboer Tool Inc.

Defendant (Respondent)

John W. Findlay, for the appellant

Tyler H. McLean, for the respondent

Heard: July 8, 2016

On appeal from the order of Justice Dale Parayeski of the
    Superior Court of Justice, dated August 5, 2015.

By the Court:

[1]

The appellant appeals from the August 5, 2015 order of Parayeski J. of
    the Superior Court of Justice dismissing: i) the appellants motion for summary
    judgment for repayment of a loan made to the respondent in the sum of $500,000,
    plus interest; and ii) the appellants claim against the respondent, to the
    extent that it is based on the Original Promissory Note and a Loan, on the
    ground that it is statute-barred.

Background

[2]

There is no dispute that, in late 2002, the appellant lent to or
    invested the sum of $500,000 in the respondent company.  The loan was secured
    by a promissory note dated November 20, 2003 that the parties resigned, on
    the same terms, on November 21, 2005 (the 2003/2005 Notes).  These are the Original
    Promissory Note and Loan referred to in the motion judges order.

[3]

The appellant maintained that the respondent signed a new, replacement
    promissory note, for the same loan, on November 21, 2008 (the 2008 Note). 
    The respondent denied signing the 2008 Note and led expert handwriting evidence
    on the summary judgment motion that the 2008 Note contained a simulation or
    forged version of his signature.

[4]

The motion judge held that any claim based on the 2003/2005 Notes was
    statute-barred by the expiry of the applicable two-year limitation period
    because demand was made under the 2003/2005 Notes, at the latest, by February
    20, 2006.  Accordingly, the applicable limitation period expired on February
    21, 2008.  However, the appellant did not commence his action until October
    2012, well after the expiry of the limitation period.

[5]

The motion judge, relying on the expert evidence proffered by the
    respondent, also held that the 2008 Note was a forgery.  Consequently, no
    sustainable claim against the respondent could be advanced on the 2008 Note, in
    equity or in contract.

[6]

The motion judge therefore dismissed the appellants motion.

Issues

[7]

The appellant argues that the motion judge erred in two respects. 
    First, he submits that the motion judge erred in law by finding that the 2008
    Note was a forgery, when: i) neither party had requested a determination of
    this issue; ii) the appellant had not admitted that it was a forgery and proffered
    no evidence on the issue; and iii) the issue whether the note was a forgery
    required a trial.  Second, the appellant maintains that the motion judge
    further erred by determining the availability of equitable relief, when this,
    too, was a genuine issue requiring a trial.

[8]

For the reasons that follow, we reject these arguments.

Contract Claim

[9]

The appellants claim, in respect of which he sought summary judgment,
    was not specific to any of the 2003/2005 or 2008 Notes.  In his notice of
    motion, the appellant said that he sought an order compelling the respondent to
    pay him the principal amount of $500,000, plus interest, on account of monies
    lent to the respondent as of December 31, 2002, which was secured by a series
    of promissory notes confirming the indebtedness.

[10]

Thus, the relief claimed by the appellant on the motion centred on the
    $500,000 loan advanced on December 31, 2002, rather than one or more of the
    promissory notes.  In these circumstances, all the promissory notes were
    relevant on the motion and it was necessary for the motion judge to consider
    and assess the validity of the appellants repayment claim based on each note.

[11]

The motion judge first addressed the 2003/2005 Notes.  Before this
    court, the appellant does not dispute the motion judges holding that any contract-based
    claim for repayment of the loan based on the 2003/2005 Notes is statute-barred.

[12]

Moreover, the appellant himself testified on cross-examination that the
    2008 Note was given to replace the 2003/2005 Notes.  Accordingly, on the
    appellants own testimony, no viable repayment claim could be advanced on the
    2003/2005 Notes.

[13]

However, the appellant argues that the respondent acknowledged its
    indebtedness to the appellant on two separate occasions (February 11, 2011 and
    August 22, 2011) and that these acknowledgements give rise to promissory
    estoppel.

[14]

The motion judge disagreed.  He held that the acknowledgments relied
    upon did not assist the appellant because they were not made prior to the
    expiry of the limitation period, that is, before February 21, 2008. 
    Consequently, they did not operate to toll the limitation period.

[15]

Nonetheless, relying on
Montcap Financial Corp. v. Schyven
,
    2011 ONSC 4030, the appellant says that the acknowledgements give rise to a
    genuine issue requiring a trial concerning whether promissory estoppel
    precludes the respondent from denying the debt owed, even if the limitation
    period had expired.

[16]

We do not accept these submissions.  To the extent that the appellants
    repayment claim was based on the 2003/2005 Notes, the expiry of the limitation
    period is dispositive of the appellants claim.  Alleged after-the-fact
    acknowledgments do not operate to revive the 2003/2005 Notes or trigger the
    commencement of a new limitation period.

[17]

The only remaining potential basis for the appellants claim for
    repayment of the same loan, together with accumulated interest, was the
    respondents alleged promise to pay set out in the 2008 Note.  And, contrary to
    the appellants submission, the respondent put the validity of the 2008 Note
    squarely in issue on the summary judgment motion, both in its counsels
    argument on the motion and by reason of the expert opinion evidence tendered by
    it concerning the authenticity of the 2008 Note.  Further, the appellant also
    gave evidence, on cross-examination, regarding the 2008 Note.

[18]

The appellant was obliged to put all relevant evidence upon which he
    would rely at trial before the motion judge in support of his claim, including
    in response to the respondents challenge to the validity of the 2008 Note.  In
    turn, it was incumbent on the motion judge to determine whether summary
    judgment should be granted based on the whole of the record before him.  He
    concluded, as he was entitled to do on the evidence on the motion, that the
    2008 Note was a forgery.  This finding was firmly rooted in the uncontradicted expert
    evidence before the motion judge.

[19]

These findings, collectively, were dispositive of the appellants
    contract-based claim to summary judgment.

Claim in Equity

[20]

Finally, the appellants claim that the motion judge erred by
    determining the availability of equitable relief cannot succeed.

[21]

First, the appellants pleading does not advance any claim in equity. 
    Nor did the appellants notice of motion on the summary judgment motion.

[22]

Second, as we have said, no sustainable claim could be grounded on the
    2003/2005 Notes  in contract or in equity  due to the expiry of the
    applicable limitation period.

[23]

Finally, no claim for equitable relief could be anchored on a forged
    promissory note purportedly entered into in 2008.  As the motion judge put it,
    at para. 14: The tendering of the forged note by the [appellant] disentitles
    him to any of the alternate equitable relief he advances.  He does not come to
    court with  clean hands.

[24]

In any event, not every claim of promissory estoppel that arguably tolls
    a limitation period requires a determination at trial.  Here, the motion
    judges finding that the appellant did not come to court with clean hands was
    reasonably available on the record.  That finding foreclosed any equitable
    relief.

Disposition

[25]

For these reasons, the appeal is dismissed.  The respondent is entitled
    to its costs of the appeal, fixed in the agreed amount of $10,000, inclusive of
    disbursements and HST.

J.C. MacPherson J.A.

E.A. Cronk J.A.

M.L. Benotto J.A.


