ABBA Ventures Inc. v. Royal Trust Corp. of Canada et al., (1996) 176 N.B.R.(2d) 33 (TD)
Judge | Clendening, J. |
Court | Court of Queen's Bench of New Brunswick (Canada) |
Case Date | March 08, 1996 |
Jurisdiction | New Brunswick |
Citations | (1996), 176 N.B.R.(2d) 33 (TD) |
ABBA Ventures v. Royal Trust (1996), 176 N.B.R.(2d) 33 (TD);
176 R.N.-B.(2e) 33; 447 A.P.R. 33
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[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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ABBA Ventures Inc. (plaintiff) v. Royal Trust Corporation of Canada and Kris Markusson (defendants)
(F/C/80/92)
Indexed As: ABBA Ventures Inc. v. Royal Trust Corp. of Canada et al.
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Fredericton
Clendening, J.
March 8, 1996.
Summary:
Royal Trust provided a commitment letter which provided for bridge financing and take-out financing for the plaintiff's construction project. The plaintiff returned the letter with the required commitment fee of $17,325. Royal Trust subsequently approved take-out financing only and not bridge financing and refused the plaintiff's request for an extension of the deadline for acceptance of the take-out loan while it waited to see if bridge financing would be approved elsewhere. The plaintiff accepted Royal Trust's offer and paid a placement fee of $31,850. The plaintiff obtained full financing elsewhere and did not proceed with the Royal Trust mortgage. The plaintiff sued Royal Trust and its representative (Markusson), alleging breach of contract and negligent misrepresentation.
The New Brunswick Court of Queen's Bench, Trial Division, allowed the action. The plaintiff was entitled to the return of the commitment fee and the placement fee and Royal Trust was ordered to pay the plaintiff $5,000, the amount paid by the plaintiff to the Bank of Montreal in an attempt to secure the financing.
Damages - Topic 3630
Deceit and misrepresentation - Negligent misrepresentation - A commitment letter from Royal Trust provided for bridge financing and take-out financing for the plaintiff's construction project - The plaintiff paid the required commitment fee ($17,325) - Royal Trust subsequently approved take-out financing only and not bridge financing - The plaintiff accepted Royal Trust's offer and paid a placement fee ($31,850) - The plaintiff obtained full financing elsewhere and sued Royal Trust and its representative (Markusson), alleging negligent misrepresentation - The New Brunswick Court of Queen's Bench, Trial Division, allowed the action - The plaintiff was entitled to the return of the commitment fee and the placement fee and Royal Trust was ordered to pay the plaintiff $5,000, the amount paid by the plaintiff to the Bank of Montreal in an attempt to secure the financing.
Fraud and Misrepresentation - Topic 2508
Misrepresentation - Negligent misrepresentation - A commitment letter from Royal Trust provided for bridge financing and take-out financing for the plaintiff's construction project - The plaintiff paid the required commitment fee ($17,325) - Royal Trust subsequently approved take-out financing only and not bridge financing - It also refused the plaintiff's request for an extension of the deadline for acceptance of the take-out loan while the plaintiff waited to see if bridge financing would be approved elsewhere - The plaintiff accepted Royal Trust's offer and paid a placement fee ($31,850) - The plaintiff obtained full financing elsewhere and sued Royal Trust and its representative (Markusson), alleging negligent misrepresentation - The New Brunswick Court of Queen's Bench, Trial Division, allowed the action - Markusson should have informed the plaintiff of all problems relating to bridge financing and the plaintiff would not have entered the agreement with Royal Trust had it not been for Markusson's misrepresentations.
Mortgages - Topic 1322
The mortgage - Agreement to make loan - Effect of - A commitment letter from Royal Trust set out the terms for a second mortgage on property and provided for bridge financing and take-out financing for a project by the plaintiff company - The plaintiff accepted the conditions in the commitment letter and paid the required commitment fee of $17,325 - Royal Trust subsequently approved take-out financing only and not bridge financing - The New Brunswick Court of Queen's Bench, Trial Division, held that the commitment letter was specific and enforceable even though it contemplated a formal loan agreement to be executed later - When it was repudiated by Royal Trust in terms of the bridge financing, Royal Trust was no longer entitled to keep the commitment fee.
Mortgages - Topic 1323
The mortgage - Agreement to make loan - What constitutes - [See Mortgages - Topic 1322 ].
Mortgages - Topic 1326
The mortgage - Agreement to make loan - Breach of - [See Mortgages - Topic 1322 ].
Cases Noticed:
Accord Holdings Ltd. v. Excelsior Life Insurance Co. (1982), 44 A.R. 368 (Q.B.), refd to. [para. 27].
Billings Mechanical Ltd. v. Lloyds Bank of Canada and Continental Bank of Canada (1987), 82 N.B.R.(2d) 54; 208 A.P.R. 54 (T.D.), consd. [para. 31].
Authors and Works Noticed:
Bell, Trevor W., Commitment Letters and Loan Agreements in Banking and Finance Law Review (1988), vol. 2, generally [para. 35]; pp. 9 [para. 25]; 12 [para. 27].
Counsel:
Hugh Cameron, for the plaintiff;
John M. Hanson, Q.C., for the defendants.
This action was heard on August 31, September 1 and 7, 1995, before Clendening, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following decision on March 8, 1996.
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Table of cases
...2007 SCC 50 ............................................................... 820 Abba Ventures Inc. v. Royal Trust Corp. of Canada (1996), 176 N.B.R. (2d) 33, [1996] N.B.J. No. 131, 25 B.L.R. (2d) 211 (Q.B.).......... 130 Abbot of Westminster v. Clerke (1536–37) 1 Dyer 27a, 73 E.R. 59 (K.B.)......
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Table of cases
...2007 SCC 50 ............................................................... 820 Abba Ventures Inc. v. Royal Trust Corp. of Canada (1996), 176 N.B.R. (2d) 33, [1996] N.B.J. No. 131, 25 B.L.R. (2d) 211 (Q.B.).......... 130 Abbot of Westminster v. Clerke (1536–37) 1 Dyer 27a, 73 E.R. 59 (K.B.)......