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Equity - Laches

. Greenspan v. Van Clieaf

In Greenspan v. Van Clieaf (Ont CA, 2023) the Court of Appeal considered an issue of laches, here in the context of enforcement of an equitable mortgage:
[60] Finally, the application judge made a legal error in relying on the fact that JKSD had delayed in taking steps to enforce its right to an equitable fourth mortgage. In considering that delay weighed against JKSD’s claim, the application judge failed to consider whether it was appropriate to rely on the doctrine of laches to bar the appellants’ equitable claim. Delay on its own is not sufficient for the doctrine of laches to apply: M.(K.) v. M.(H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6, at para. 98. In order for the doctrine of laches to apply, the application judge would have to be satisfied that, by delaying the institution of its application, JKSD acquiesced to the non-registration of a fourth mortgage after Jaymor defaulted on the loan or that the respondents relied on the delay to their detriment: M.(K.), at para. 98. See also Chippewas of Sarnia Band v. Canada (Attorney General) (2000), 2000 CanLII 16991 (ON CA), 51 O.R. (3d) 641, at para. 297, leave to appeal refused, [2001] S.C.C.A. No. 63; K.(K.) v. G.(K.W.), 2008 ONCA 489, 90 O.R. (3d) 481, at para. 41. In this case, there is no evidence that would support a finding favourable to the respondents on either branch of this test. There is no evidence that the appellants agreed to forego registration of a fourth mortgage. Further, they notified the respondents about their claim and commenced the application relatively soon after learning about the respondents’ writ of execution. There is no evidence that the respondents suffered any prejudice in reliance on JKSD’s conduct. Again, the application judge erred in failing to apply the correct legal principles to the issue of whether any delay on JKSD’s part should preclude the court from granting an equitable remedy, namely from finding that it was entitled to an equitable fourth mortgage.
. Hazout v. The Attorney General of Ontario

In Hazout v. The Attorney General of Ontario (Div Court, 2023) the Divisional Court considers whether Ontario, which is not normally subject to a limitation period [under s.16(1)(j) and s.16(2) Limitations Act] nonetheless is subject to the standard s.4 two-year limitation where it takes assignment or has direct standing as a guarantor (which was also found) of a debt.

In these quotes the court considers 'laches', essentially as a limitation substitute:
[13] In Husar Estate v. P. & M. Construction Limited, 2007 ONCA 191, [2007] OJ No 968 (QL) at para. 45, the Court of Appeal reproduced a description of the doctrine of laches endorsed by the Supreme Court of Canada that described it as a “defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him” in certain circumstances. Delay alone is not sufficient to trigger the doctrine. Instead, the doctrine considers whether the delay constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable: Husar Estate, at para. 46; see also Kloos v. Tangas, 2016 ONCA 149, at para 11.

[14] The Deputy Judge did not address whether, here, the doctrine arose in the context of an equitable claim. Following from my analysis above, I would find Ontario’s right to indemnification to be contractual, given the express provision in the loan agreement. Although Ontario did not sign the agreement, it is evident it agreed to its terms. The loan agreement was entitled a “New Ventures Loan Agreement” and specifically stated that New Ventures was a “major initiative of the Government of Ontario” with loans under the program “guaranteed by the Province.” Ontario acted in accordance with its guarantee upon default of the loan. Therefore, I would find that Ontario had a legal right to indemnity and laches does not apply.

[15] However, Ontario’s claim also pleaded the equitable claim of unjust enrichment, where laches could potentially apply. The Deputy Judge dismissed the application of laches because, as he found at para. 10, Ontario “took active steps over many years to collect the debt.” He stated that “no fewer than four collection agencies attempted to collect the monies owing.” He found that Mr. Hazout could not have been taken by surprise or otherwise prejudiced.

[16] The Deputy Judge’s findings were well supported by the record. Ontario’s witness testified to both the usual practice in collecting debts and to the involvement of collection agencies in this particular case. By contrast, Mr. Hazout did not testify nor call any witnesses. The Deputy Judge was entitled to find, as he did, that there was no acquiescence and that laches did not apply.
. Kloos v. Tangas

In Kloos v. Tangas (Ont CA, 2016) the court made the following brief but salutory comments on the doctrine of laches:
[11] We disagree. At the hearing, appellant’s counsel acknowledged that the timing of events in this case brought them within the analytical framework regarding laches described by this court in Perry, Farley & Onyschuk v. Outerbridge Management Ltd. (2001), 2001 CanLII 5678 (ON CA), 54 O.R. (3d) 131 (Ont. C.A.). In Perry, at para. 36, this court stated: “A party relying on the defence [of laches] must show a combination of delay and prejudice.” Accordingly, delay, standing alone, could not give rise to laches.
. Van Allen v Vos

In Van Allen v Vos (Ont CA, 2014) the Court of Appeal comments on a laches argument:
[35] The same is true for the appellant’s laches and estoppel arguments. The doctrine of laches provides a defence to an equitable claim where the plaintiff’s delay in bringing a claim constitutes acquiescence or results in circumstances that make prosecution of the action unreasonable: M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6, at pp. 77-78. However, a plaintiff cannot acquiesce without knowledge of the facts giving rise to her claim: ibid., at p. 78. The respondent here lacked this requisite knowledge.
. Cosentino v. Roiatti

In Cosentino v. Roiatti (Div Ct, 2006) the Divisional Court considered the equitable doctrine of laches in the context of a solicitor suing for his fees:
[29] The Supreme Court of Canada in M.(K.) v. M. (H.) reviewed the equitable doctrine of laches. The court adopted the formulation of the doctrine which provides that a defendant can successfully resist an equitable claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either:
(a) acquiesced in the defendant’s conduct,

(b) caused the defendant to alter his position in reasonable reliance of the plaintiff’s acceptance of the status quo, or

(c) otherwise permitted a situation to arise which would be unjust to disturb. See M. (K.) v. M. (H.,) 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6 para. 98.
[30] Ultimately, laches must be resolved as a matter of justice between the parties, as is the case with any equitable doctrine M. (K.) v. M. (H.), supra, para. 98.


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Last modified: 19-10-23
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