Bank of Nova Scotia v. Martin, (2013) 403 N.B.R.(2d) 125 (TD)

• Judge: Morrison J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: October 02, 2012
• Jurisdiction: New Brunswick
• Citations: (2013), 403 N.B.R.(2d) 125 (TD);2013 NBQB 135

BNS v. Martin (2013), 403 N.B.R.(2d) 125 (TD);

    403 R.N.-B.(2e) 125; 1045 A.P.R. 125

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Sommaire et texte intégral

[French language version follows English language version]

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

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Temp. Cite: [2013] N.B.R.(2d) TBEd. JN.004

Renvoi temp.: [2013] N.B.R.(2d) TBEd. JN.004

The Bank of Nova Scotia (plaintiff) v. Fidelle Gordon Martin and Lynn Rose Martin (Duffy) (defendants)

(W/SC/72/11; 2013 NBQB 135; 2013 NBBR 135)

Indexed As: Bank of Nova Scotia v. Martin

Répertorié: Bank of Nova Scotia v. Martin

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Woodstock

Morrison J.

April 11, 2013.

Summary:

Résumé:

The plaintiff bank sued to recover a mortgage deficiency in the amount of $18,050.20 from the defendant mortgagors, Martin and Duffy. Default judgment was issued against Martin. Duffy filed and served a dispute note and appeared at the trial. Duffy argued, inter alia, that the bank failed to obtain fair market value for the property when it realized on its security. The "Leech Appraisal" obtained by the bank prior to the mortgage sale showed a market value of $33,000. At the mortgage sale on July 28, 2010, the property was sold to the bank for $1,000. On November 24, 2010, the bank listed the property for sale at an asking price of $23,000. On December 21, 2010, an agreement was concluded for the sale of the property to a third party for $21,750.

The New Brunswick Court of Queen's Bench, Trial Division, held that the bank failed to demonstrate that it obtained true market value on the third party sale of the property for $21,750. The court accepted the Leech Appraisal as the best evidence of the true market value of the property. The mortgage deficiency would therefore be calculated on the basis of fair market value at the time of the mortgage sale, being $33,000. The bank was not entitled to recover its legal fees and property management fees accrued after the date of the mortgage sale. In the result, the bank had not suffered a mortgage deficiency and in fact had recovered a surplus. Its action was therefore dismissed. Although the defendants did not advance a counterclaim, principles of equity dictated that they be entitled to recover the mortgage surplus realized by the bank. The bank was ordered to pay to the defendants jointly and severally, the sum of $7,068.23 with interest from the date of the mortgage sale. The default judgment against Martin was set aside.

Evidence - Topic 7000.3

Opinion evidence - Expert evidence - General - Opinion evidence - What constitutes - [See Evidence - Topic 7001 ].

Evidence - Topic 7001

Opinion evidence - Expert evidence - General - Qualifications and declaration that a witness is an expert - A bank sued to recover a mortgage deficiency - The bank argued that it obtained fair market value for the property when it was sold by private sale - The bank relied on a market analysis prepared by Hatfield - The New Brunswick Court of Queen's Bench, Trial Division, stated that "Inexplicably, Mr. Hatfield, the author of the market analysis, was not called as a witness at trial. Instead, Kevin MacDonald, a colleague of Mr. Hatfield, was called to give evidence with respect to Mr. Hatfield's market analysis. Mr. MacDonald did not prepare the analysis and his evidence was based on a review of the documents prepared by Mr. Hatfield. The market analysis prepared by Mr. Hatfield is, in essence, an opinion as to the expected selling price. Opinion evidence can only be provided by a properly qualified expert witness. The proper procedure would have been to call the author of the opinion evidence (Mr. Hatfield) and have him qualified as an expert witness. That was not done. As a result, I reject the market analysis and place no reliance upon it. No explanation was given as to why Mr. Hatfield was not called as a witness. Even if I was to accept that Mr. MacDonald could prove the opinion of Mr. Hatfield (which I soundly reject), no attempt was made to have Mr. MacDonald qualified as an expert to give opinion evidence" - See paragraph 19.

Mortgages - Topic 7851

Statutory and contractual rights - Duties of mortgagee - Respecting sale price - [See Mortgages - Topic 8049 ].

Mortgages - Topic 7853

Statutory and contractual rights - Sale under power of sale - Duties of mortgagee - As buyer and on resale - [See Mortgages - Topic 8049 ].

Mortgages - Topic 8044

Statutory and contractual rights - Sale under power of sale - Deficiency judgment - Defences or bars - The plaintiff bank sued to recover a mortgage deficiency from the defendant mortgagors, Martin and Duffy, pursuant to a covenant to pay contained in the mortgage - Default judgment was issued against Martin - Duffy filed and served a dispute note and appeared at the trial - Duffy denied any liability to the bank on the basis that her former husband, Martin, had assumed all responsibility for payment of the mortgage upon their separation - She maintained that Martin breached his agreement to assume responsibility for payment of the mortgage and therefore she should not be held liable to the bank for the outstanding debt - The New Brunswick Court of Queen's Bench, Trial Division, rejected Duffy's argument that the agreement between herself and Martin afforded her a defence to the action - The bank was not a party to the agreement between Martin and Duffy and was not bound by it - See paragraph 14.

Mortgages - Topic 8049

Statutory and contractual rights - Sale under power of sale - Deficiency judgment - Calculation of deficiency - Where mortgagee buys property at sale - The plaintiff bank sued to recover a mortgage deficiency in the amount of $18,050.20 from the defendant mortgagors - The bank had obtained the "Leech Appraisal" of the property prior to the mortgage sale which showed a market value of $33,000 - At the mortgage sale on July 28, 2010, the property was sold to the bank for $1,000 - On November 24, 2010, the bank listed the property for sale at an asking price of $23,000 - On December 21, 2010, an agreement was concluded for the sale of the property to a third party for $21,750 - The New Brunswick Court of Queen's Bench, Trial Division, held that the bank failed to demonstrate that it obtained true market value on the third party sale of the property for $21,750 - The court accepted the Leech Appraisal as the best evidence of the true market value of the property - The mortgage deficiency would therefore be calculated on the basis of fair market value at the time of the mortgage sale, being $33,000 - The bank was not entitled to recover its legal fees and property management fees accrued after the date of the mortgage sale - In the result, the bank had not suffered a mortgage deficiency and in fact had recovered a surplus - Its action was therefore dismissed - Although the defendants did not advance a counterclaim, principles of equity dictated that they be entitled to recover the mortgage surplus realized by the bank - The bank was ordered to pay to the defendants jointly and severally, the sum of $7,068.23 with interest from the date of the mortgage sale - See paragraphs 15 to 31.

Hypothèques - Cote 7851

Droits légaux et contractuels - Vente en vertu du pouvoir de vente - Obligations du créancier hypothécaire - Concernant le prix de vente - [Voir Mortgages - Topic 7851 ].

Hypothèques - Cote 7853

Droits légaux et contractuels - Vente en vertu du pouvoir de vente - Devoirs du créancier hypothécaires - Comme acheteur et à la revente - [Voir Mortgages - Topic 7853 ].

Hypothèques - Cote 8044

Droits légaux et contractuels - Vente en vertu du pouvoir de vente - Jugement pour le déficit - Moyens de défense ou obstacles - [Voir Mortgages - Topic 8044 ].

Hypothèques - Cote 8049

Droits légaux et contractuels - Vente en vertu du pouvoir de vente - Jugement sur manque à gagner - Calcul du manque à gagner - Achat par le créancier hypothécaire lors de la vente - [Voir Mortgages - Topic 8049 ].

Preuve - Cote 7000.3

Témoignages d'opinion - Preuve d'expert - Généralités - En quoi consiste - [Voir Evidence - Topic 7000.3 ].

Preuve - Cote 7001

Témoignages d'opinion - Preuve d'expert - Généralités - Compétences et déclaration qu'un témoin est un expert - [Voir Evidence - Topic 7001 ].

Cases Noticed:

Bank of Montreal v. MacCallum (1994), 151 N.B.R.(2d) 138; 387 A.P.R. 138 (Q.B.), refd to. [para. 14].

CIBC Mortgages Inc. v. LeBlanc (2012), 386 N.B.R.(2d) 379; 999 A.P.R. 379; 2012 NBQB 129, refd to. [para. 14].

London Life Insurance Co. v. Carrick (2002), 255 N.B.R.(2d) 332; 668 A.P.R. 332; 2002 NBQB 392, consd. [para. 15].

Scotia Mortgage Corp. v. Jamieson, 2012 NBQB 69, consd. [para. 16].

Assumption Mutual Life Insurance Co. v. Harmer (2004), 271 N.B.R.(2d) 311; 712 A.P.R. 311; 2004 NBQB 65, refd to. [para. 26].

Scotia Mortgage Corp. v. Braysford et al. (2011), 379 N.B.R.(2d) 315; 978 A.P.R. 315; 2011 CarswellNB 602 (T.D.), refd to. [para. 26].

Bayview Credit Union Ltd. v. Gambit Holdings & Development Ltd. et al. (2002), 251 N.B.R.(2d) 158; 654 A.P.R. 158; 2002 NBCA 49, refd to. [para. 26].

Counsel:

Avocats:

Benoit G. Arsenault, for the plaintiff;

Lynn Rose Martin (Duffy), per se.

This action was heard on October 2, 2012, and April 2, 2013, before Morrison, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Woodstock, who delivered the following decision on April 11, 2013.