Confederation Life Insurance Co. v. Rayter Management Ltd. et al., (1994) 130 N.S.R.(2d) 95 (SC)

• Judge: Nathanson, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: March 18, 1994
• Jurisdiction: Nova Scotia
• Citations: (1994), 130 N.S.R.(2d) 95 (SC)

Confederation Life v. Rayter Mgt. (1994), 130 N.S.R.(2d) 95 (SC);

  367 A.P.R. 95

MLB headnote and full text

Confederation Life Insurance Company (plaintiff) v. Rayter Management Limited, as general partner of 6100 Young Street Limited Partnership, Estate of Joseph D.R. Potter, Marcan Investment Corporation Limited, Edith Potter and Potter Holdings Limited (defendants)

(S.H. No. 93-6529)

Indexed As: Confederation Life Insurance Co. v. Rayter Management Ltd. et al.

Nova Scotia Supreme Court

Nathanson, J.

April 8, 1994.

Summary:

A mortgagee applied, at the same time, for a foreclosure order and judgment against the guarantor for the deficiency to be calculated after the sale.

The Nova Scotia Supreme Court granted a foreclosure order, but held that contempor­aneous judgment against a guarantor was precluded by Civil Procedure Rule 47.09 and the equitable doctrine of subrogation.

Guarantee and Indemnity - Topic 1059

Liability of surety to creditor - Action against surety - Time for - A mortgagee contemporaneously applied for a foreclos­ure order and judgment against the guar­antor for the deficiency - The Nova Scotia Supreme Court held that Civil Procedure Rule 47.09 precluded judgment against the guarantor until the proceeds of the fore­closure sale were realized - Additionally, the equitable doctrine of subrogation (cod­ified under s. 43(7) of the Judicature Act), which entitled the guarantor to pay the mortgagee and stand in the mortgagee's place, also precluded a contemporaneous action against the guarantor.

Guarantee and Indemnity - Topic 1450

Rights of surety - Re security - Right to security upon payment to creditor - [See Guarantee and Indemnity - Topic 1059 ].

Cases Noticed:

Royal Bank of Canada v. Fox et al. (1972), 29 D.L.R.(3d) 167 (N.S.T.D.), affd. (1973), 6 N.S.R.(2d) 684; 44 D.L.R.(3d) 69 (C.A.), refd to. [para. 9].

Pledge v. Buss (1860), 70 E.R. 585 (Vice Ch.), refd to. [para. 10].

Forbes v. Jackson (1882), 19 Ch.D. 615, refd to. [para. 10].

Mayhew v. Crickett (1818), 36 E.R. 585 (Ch.), refd to. [para. 11].

MacDonald v. Hirsh, [1932] 4 D.L.R. 121 (N.S.C.A.), refd to. [para. 11].

Dixon v. Steel, [1901] 2 Ch. 602, refd to. [para. 11].

Stokes v. Clendon (1790), 36 E.R. 812 (Ch.), refd to. [para. 12].

Allison v. Rent, [1926] 1 D.L.R. 885 (N.S.C.A.), refd to. [para. 12].

Duncan, Fox & Co. et al. v. North and Sales Wales Bank et al. (1880), 6 App. Cas. 1 (H.L.), refd to. [para. 14].

Aldrich v. Cooper (1803), 36 E.R. 402 (Ch.), refd to. [para. 14].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 47.09 [para. 2].

Judicature Act, R.S.N.S. 1989, c. 240, sect. 43(7) [para. 15].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 20, para. 280 [para. 10].

McGuiness, The Law of Guarantee, paras. 6.16, 6.17 [para. 5].

Counsel:

Frank J. Powell, for the plaintiff;

No one appearing on behalf of the defen­dants.

This application was heard at Halifax, N.S., on March 18, 1994, in Chambers, before Nathanson, J., of the Nova Scotia Supreme Court, who delivered the following judgment on April 8, 1994.