DAILY
CASE-EXTRACTS
Stay Current With all
Ontario and Canada
Appeal Court Dicta
|
|
Securities - General. Grewal v. 102095 P.E.I. Inc.
In Grewal v. 102095 P.E.I. Inc. (Ont CA, 2022) the Court of Appeal considered basics of security law:[7] In this case, once the individual appellant paid the amount that was due on the principal debt, that is the promissory note, the respondent no longer had any right to claim on the security, i.e., the collateral mortgage. The security was spent as a result of the honouring of the main obligation. The respondent simply cannot advance or maintain a claim under the security when the principal debt has been paid. Nor can the respondent enforce a judgment on that security when the judgment on the principal debt has been paid. To allow otherwise would be inconsistent with the fundamental purpose of the security, as is indicated by the use of the term “collateral” mortgage.
[8] This principle is a basic one in commercial law. It was recited by this court in Mortgage Insurance Co. of Canada v. Grant Estate, 2009 ONCA 655, 99 O.R. (3d) 535, at para. 39, with a simple quote from M.H. Ogilvie, Canadian Banking Law, 2nd ed. (Scarborough: Carswell, 1998):Since a collateral security is one taken to secure the performance of an obligation, then upon the performance of the obligation the security should be surrendered or discharged.
|
