Ontario court refuses to add mortgage investors to Niagara Falls loan lawsuits

Dozens of syndicated-mortgage lenders cannot be added as plaintiffs to three lawsuits over unsuccessful Niagara Falls development loans because the deadline for bringing their claims had passed, an Ontario court has ruled.

In 2309522 Ontario Inc v. Milborne, 2026 ONSC 5944, dated October 15, 2026, Associate Justice D. Michael Brown of the Ontario Superior Court of Justice dismissed the motions to add the lenders. The underlying lawsuits were not dismissed.

The proposed amendments would have added between 20 and 42 lenders to each action. Brown found that naming only the company administering the loans had been an intentional litigation choice, not a naming error that could be corrected after the limitation period expired.

An agent sued over the loan shortfalls

The plaintiff, 2309522 Ontario Inc., formerly Marchant Realty Partners Inc. and called Marchant in the reasons, began the three actions in December 2020 as agent for the lenders. It sued Andrzej Roman Kepinski and Charles Hunter Milborne as guarantors of three separate syndicated mortgage loans.

Marchant administered the loans but had not advanced any of the money. The lenders themselves were not parties to the lawsuits.

The loans financed proposed developments in Niagara Falls that did not proceed as planned. They matured on October 23, 2016. After Marchant sought receivership in September 2018, the parties entered a forbearance agreement that November, allowing additional time before enforcement. That agreement expired in December 2019.

A receiver was appointed in August 2020 and sold the mortgaged property in 2021. The sale proceeds left a shortfall on the loans. The reasons do not quantify that shortfall.

Standing remained an issue for trial

Both defendants challenged Marchant's standing to sue in defences served in November 2021. Marchant replied that it had standing and the exclusive right to enforce the guarantees, a position it continued to maintain.

When Marchant sought summary judgment in October 2024, Justice Stevenson refused to decide the claims without a trial. As Brown recounted that earlier endorsement, the standing question alone raised a genuine issue for trial.

The concern was that an agent contracting for disclosed principals does not generally acquire the contractual rights of those principals in its own name, although express terms or narrow exceptions may change that result. Stevenson did not finally decide whether Marchant lacked standing. He said Marchant would have to decide whether the lenders needed to be joined or substituted before another summary-judgment motion or trial.

Marchant sought to add the lenders in July 2025. Brown held that Stevenson's earlier comments had not decided whether adding them was legally available at that point, or resolved the limitation-period obstacle.

A naming-error exception did not fit

The motions engaged Rules 5.04(2) and 26.01 of Ontario's Rules of Civil Procedure, which address adding parties and amending pleadings. Brown explained that amendments should not be permitted where they would cause prejudice that could not be addressed through costs or an adjournment.

The court's powers were also limited by section 21 of the Limitations Act, 2002. Brown applied the rule that an expired limitation period cannot be avoided by adding a party to an existing proceeding. That restriction applies to adding plaintiffs as well as defendants.

The defendants argued that the claims arose when the forbearance payment deadline expired on December 31, 2019. Marchant did not dispute that the relevant limitation period had expired on or about December 31, 2021. Instead, it relied on the statutory exception allowing correction of a party's misnaming or misdescription, known as misnomer.

Brown rejected that argument. A true naming mistake can be corrected under the exception, but an intentional, tactical choice of plaintiff is different.

Nothing in the evidence suggested Marchant had been wrongly named or described. It still insisted it was the proper plaintiff. Nor was it asking to replace itself with the lenders: the proposed amendments would leave Marchant in place and add the lenders as co-plaintiffs asserting the same claims.

Brown found that Marchant had knowingly chosen not to name the lenders when the proceedings began and had maintained that choice after the defendants questioned its standing. The pleadings did not show an intention to make the lenders the plaintiffs.

The judge drew support from the reasoning in Eisen v. Altus Group, another syndicated-mortgage case discussed in the reasons. That analysis distinguished mistaken identity from a mistaken view of who could legally pursue a claim. Brown concluded that Marchant's deliberate choice did not qualify for the misnomer exception.

Three motions dismissed, with costs against Marchant

Brown found that the limitation period for the proposed lenders' claims expired on December 31, 2021, more than three years before the July 2025 motions. Adding them would also prejudice the defendants in a way costs or an adjournment could not remedy.

He therefore refused permission to amend the claims and dismissed all three motions, which had been argued together.

Marchant was ordered to pay partial-indemnity costs of $15,193.98 to Kepinski and $4,981.27 to Milborne, both including HST, within 30 days. Those are litigation costs payable by the plaintiff, not damages or payments ordered against the proposed lender-plaintiffs.

The decision closes the requested route for adding the lenders to these actions. It does not finally determine Marchant's standing, decide the guarantors' liability, or establish that the investors have lost every possible avenue of recovery. Its central distinction is between correcting a genuine naming mistake and trying to change an intentional choice of plaintiff after the applicable deadline.