Facts: A promissory note, dated April 25, 2008, was executed in favour of 2148251 Ontario Incorporated (“Keystone”) as payee by Catan as payor and Duscio as guarantor. Interest payable both before and after maturity was never paid and an unsuccessful demand for payment was made on May 31, 2010. Catan and Duscio argued that the claim, issued on April 20, 2011, was time-barred because the limitation period began to run when Catan failed to make the first interest payment, due on June 25, 2008.
The motion judge sided with Keystone, finding that the limitation period did not begin to run until the date of the demand, since the note provided that it was payable “on demand after maturity date or at the discretion of the payee on the occurrence of any of the following events: (a) if the Payor does not pay when due any of its obligations to the Payee… .”
Held: The Court upheld the motion judge’s finding that the limitation period did not begin to run, at the earliest, until maturity. The express terms of the promissory note gave the Payee the right, but not the obligation, to demand payment of the full amount of the note on the Payor’s default. The Payee had no obligation to demand repayment of the principal when an interest payment was missed. Parole evidence, to alter or vary the terms of the promissory note, was not considered by the Court.