



COURT OF APPEAL FOR ONTARIO

CITATION: Bieberstein v. Kirchberger, 2013
    ONCA 629

DATE: 20131017

DOCKET: C56739

MacPherson, Watt and Pepall JJ.A.

BETWEEN

Harry Bieberstein

Respondent (Plaintiff)

and

Gabriel Kirchberger, Susanne Viktoria Schmidt,
    Nomen Fitness Inc., 487223 Ontario Limited and 1171852 Ontario Limited carrying
    on business as G.K. York Management Service

Appellants (Defendants)

Jonathan L. Rosenstein, for the appellants

Julian N. Falconer, Elisabeth Widner and Frederick J.
    Shuh, for the respondent

Heard:  October 8, 2013

On appeal from the order of Justice H.J. Wilton-Siegel of
    the Superior Court of Justice, dated December 20, 2012.

ENDORSEMENT

Introduction

[1]

The appellants appeal the December 20, 2012 order of Wilton-Siegel J. in
    which he dismissed their motions for partial summary judgment.  He also ordered
    that the appellants acknowledgements, known as Submissions to Compulsory
    Enforcement (SCEs), were enforceable in Ontario and that the applicable
    limitation period was 30 years.

Facts

[2]

The appellant, Gabriel Kirchberger, formerly of Germany, guaranteed
    loans made to his real estate companies by German banks. The loans were made
    between 1992 and 2000.

[3]

The guarantees took the form of special German instruments called SCEs. While
    not issued by a court, under the
German Code of Civil Procedure
an SCE
    may be enforced in the same manner as a German judgment.

[4]

The respondent acquired the SCEs from the German banks in 2008 and 2009.

[5]

In January, 2010, the respondent commenced actions against the
    appellants in Ontario where Kirchberger resides, based on the SCEs.

[6]

The appellants moved for partial summary judgment on the basis that the
    limitation period to enforce the SCEs had expired, however, the motion
    proceeded under rule 21.01(1)(a) of the
Rules of Civil Procedure
for a
    determination of a question of law raised by the pleadings.

[7]

The parties agreed on the appropriate approach to be used by the motion
    judge:

(1)

characterization of the
    issue to identify the relevant choice of law rule;

(2)

identification of the
    connection factor by applying the choice of law rule; and

(3)

application of the governing
    law.

The parties agreed that once the SCEs had been
    characterized, Germany would be the appropriate governing law.

[8]

The motion judge decided that an SCE was not a foreign judgment and the
    respondents action was not barred by the
Limitations Act, 2002,
S.O. 2002, c.24, Sched. B

because a 30 year limitation period applied pursuant to
    German law.

Appeal

[9]

The appellants advance three grounds of appeal and also seek to admit
    fresh evidence.

[10]

Firstly,
    the appellants submit that the motion judge erred in concluding that the SCEs
    were not German judgments for the purpose of Ontario limitations law.  They
    argue that had he done so, as a foreign judgment, either a two-year or a six-year
    limitation would have applied. In our view, the motion judge was correct in
    concluding that the SCEs were not German judgments. We agree with the
    respondents submission that the fact that an SCE proceeds under the same
    provisions of the
German Civil Code
as a German judgment does not transform
    it into one.  It is neither a court order, an arbitral award, nor an instrument
    that has any of the accepted characteristics of a judgment.

[11]

We
    do not give effect to this ground of appeal.

[12]

Secondly,
    the appellants submit that the motion judge erred in basing his analysis on a
    claim which does not appear in the statements of claim.

[13]

On
    the motion, the respondent restricted his request for relief in the statement
    of claim to an order realizing the collateral security given by the appellants.
    This was pleaded in paragraphs 1(a)(i) and 16 of the statements of claim. The
    motion judge interpreted this as a request for an order that the respondent was
    entitled to enforce against the appellants assets in Ontario in the manner and
    to the extent as if he had obtained judgment against the respondent for
    payment.

[14]

In
    our view, the motion judge did not recast the appellants claim; rather, he was
    simply describing the nature of the SCEs. This was neither a new argument nor
    theory of the case.  We see no error in this regard.

[15]

Thirdly,
    the appellants submit that the motion judge misinterpreted and misapplied
    German limitations law.

[16]

The
    appellants submit that while the motion judge erred in not treating the SCEs as
    foreign judgments, having characterized them as agreements, a three-year
    limitation was applicable under German law.

[17]

Again,
    we are of the view that the motion judge reached the correct conclusion. The
    applicable substantive law was that of Germany. As mentioned, this was not
    contested. This principle is reflected in s. 23 of the
Limitations Act,
    2002
, which provides that for the purposes of applying the rules regarding
    conflicts of laws, limitation laws of Ontario or elsewhere are substantive law.
    See also
Tolofson v. Jensen
, [1994] 3 S.C.R. 1022.

[18]

Because
    German law applies a 30-year limitation period to enforce SCEs, the motion
    judge correctly treated 30 years as the applicable limitation period and
    dismissed the motion for partial summary judgment.

[19]

Given
    our conclusion, it is unnecessary to consider the fresh evidence.

[20]

The
    appeal and the motion to admit the fresh evidence are dismissed.

[21]

The
    appellants shall pay the respondents costs fixed in the amount of $40,000
    inclusive of disbursements and applicable taxes.

J.C.
    MacPherson J.A.

David Watt
    J.A.

S.E.
    Pepall J.A.


