Alnu Electric Ltd. v. CIBC Mortgage Corp., (1995) 165 N.B.R.(2d) 149 (TD)

• Judge: Russell, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: June 22, 1995
• Jurisdiction: New Brunswick
• Citations: (1995), 165 N.B.R.(2d) 149 (TD)

Alnu Electric v. CIBC Mortgage (1995), 165 N.B.R.(2d) 149 (TD);

    165 R.N.-B.(2e) 149; 424 A.P.R. 149

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Alnu Electric Ltd. (plaintiff) v. CIBC Mortgage Corporation (defendant)

(F/C/403/93)

Indexed As: Alnu Electric Ltd. v. CIBC Mortgage Corp.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Russell, J.

August 15, 1995.

Summary:

The plaintiff sought mortgage financing from the bank to purchase commercial prop­erty. The plaintiff advised the bank that it could only afford to pay $1,000 per month for the mortgage payment and property taxes. The plaintiff provided the bank with a 1988 standard listing agreement show­ing property taxes at $722 per year. In fact, property taxes for 1991 were $4,299. The plaintiff closed the purchase based on the erroneous tax estimate. The plaintiff, now over budget, was forced to sell the property and sued the bank for damages, claiming breach of fiduciary duty and negli­gent mis­representation as to the correct amount of taxes.

The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action. The plaintiff had knowledge of the correct information before it closed the purchase, accordingly, it did not rely on the guidance or advice of the bank. The bank was not in a fiduciary relationship with the plaintiff and, if it was, that fiduciary duty was not breached. The plaintiff could not rely on negligent misrepresentation where there was no reliance, as the plaintiff knew before closing the true facts respecting the taxes.

Banks and Banking - Topic 744

Duties of banks - Fiduciary relationships -Debtor's reliance on bank - The plaintiff sought mortgage financing from the bank, advising that it could not afford to pay more than $1,000 per month for the mort­gage payment and property taxes - The plaintiff provided the bank with a 1988 standard listing agreement showing prop­erty taxes at $722 per year - Before clos­ing, both the plaintiff (through its lawyer) and the bank (through its assess­ment) knew that taxes exceeded $4,000 per year - In fact, property taxes for 1991 were $4,299 - The plaintiff closed the purchase, but was forced to sell the property because it could not afford the monthly payment for mortgage and taxes, which exceeded $2,000 - The plaintiff sued the bank, claiming breach of fiduciary duty and negligent misrepresen­tation - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action - The plaintiff knew the correct information before it closed, accordingly, it did not rely on the bank - The bank was not in a fiduciary relationship with the plaintiff and, if it was, that fiduciary duty was not breached - There was no negli­gent mis­representation, where there was no reliance on the bank.

Fraud and Misrepresentation - Topic 2825

Misrepresentation - Defences - Lack of reliance - [See Banks and Banking - Topic 744 ].

Cases Noticed:

Recha and Klein v. Yeamans and Gere (1993), 135 N.B.R.(2d) 360; 344 A.P.R. 360 (C.A.), refd to. [para. 20].

Lloyd's Bank Ltd. v. Bundy, [1974] 3 All E.R. 757 (C.A.), dist. [para. 23].

Royal Bank of Canada v. Green and Forest Green Holdings Corp. (1993), 135 N.B.R.(2d) 81; 344 A.P.R. 81 (T.D.), refd to. [para. 25].

Hedley Byrne & Co. v. Heller Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 26].

Queen v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 69; 60 O.A.C. 1, refd to. [para. 26].

Mason (V.K.) Construction Ltd. v. Bank of Nova Scotia and Courtot Investments Ltd., [1985] 1 S.C.R. 271; 58 N.R. 195; 8 O.A.C. 381; 116 D.L.R.(4th) 598; 35 R.P.R. 118, dist. [para. 26].

Counsel:

Kelly VanBuskirk, for the plaintiff;

Terrence J. Morrison, for the defendant.

This action was heard on June 22, 1995, before Russell, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following judgment on August 15, 1995.