Legal Blog

Title Insurance

Nodel v. Stewart Title Guaranty Co. 2017 Ont SCJ

Identity fraud took place resulting in the Director of Titles voiding a mortgage that had been title insured by Stewart Title. The policy covered the mortgagee for mortgage fraud, but had an exception: the proceeds of the mortgage had to be paid to the registered title holder. In this case, the lawyer for the mortgagee made the funds payable, on direction, to the mortgagor’s lawyer in trust and, it seems, the mortgagor’s lawyer paid the money to people other than the registered title holder. The motions judge decided that the exception was ambiguous. It did not bear the interpretation that the insurer was attempting to put on it (i.e. money being paid means that the cheque must be made payable to title holder or wired to his bank account directly). The insurer argued that a direction to pay to the mortgagor’s lawyer would be acceptable only if that lawyer undertook to disburse the funds directly to the title holder. The motions judge disagreed and held that, because the insurer did not express the manner of payment, the exception permitted multiple payment methods, including disbursing the funds in trust to the mortgagor’s lawyer.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.