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Greetings all,

Professor Albert Oosterhoff of the Faculty of Law, University of Western Ontario has written to tell me about three important new cases on subrogation from the Ontario Court of Appeal. A synopsis of his report:

Three cases on subrogation were released on Aug. 11 by the Ont. C.A. Please feel free to pass the information on to Restitution discussion group. The three appeals (from different judges) were heard together by the same panel (Brooke, Osborne and Austin JJ.A.). All concern (1) claims by a mortgagee to be subrogated to the rights of a former mortgagee whose mortgage was discharged with moneys from the mew mortgage; and (2) negligence by the mortgagee's solicitor who failed to notice an intervening registration. The cases are on QuickLaw:

Midland Mortgage Corp. v. 784401 Ontario Ltd., [1997] OJ No. 3257
Mutual Trust Co. v. Creditview Estate Homes Ltd., [1997] OJ No. 3258
Armatage Motors Ltd. v. Royal Trust Corp. of Canada. [1997] OJ No. 3259

In the first case the judge of first instance dismissed the mortgagee's claim because it was inconsistent with the Land Titles Act (the correct view in my opinion, but long since discredited by the Supreme Court of Canada, which did not understand the theoretical basis of the Act). The Court of Appeal reversed.

The second case involved an intervening registration of a certificate of pending litigation. Both courts upheld the mortgagee's claim.

The third case involved a second mortgage. The judge of first instance held that the second mortgagee had priority over the first and disallowed the subrogation claim. The majority in the Court of Appeal agreed, holding that subrogation is a discretionary remedy and should be refused if the second mortgagee should suffer injury and if the mortgagee has another remedy, viz., an action against the solicitor. Brooke J.A., dissented.

Professor Oosterhoff has just edited the second and third cases for publication in the the DLRs. The first is sufficiently similar that it won't be reported in the DLRs.

Many thanks to Professor Oosterhoff for this update.

Lionel