Digest: 2055190 Ontario Ltd. v Zhao, 2018 SKCA 66

• Date: August 18, 2019

Reported as: 2018 SKCA 66

Docket Number: CACV 3068|CACV 3069 , CA17176

Court: Court of Appeal

Date: 2019-08-18

Judges:

• Ottenbreit
• Herauf
• Ryan-Froslie

Subjects:

• Debtor and Creditor � Preservation Order � Application to Extend
• Statutes � Interpretation � Enforcement of Money Judgments Act, Section 5, Section 8

Digest: The plaintiffs and the defendant each appealed the decision of a Queen�s Bench judge wherein the plaintiffs had obtained an extension of a preservation order granted to them under s. 8 of The Enforcement of Money Judgments Act (EMJA). The plaintiffs had first sued the defendant, asserting that it, their landlord, had breached the restrictive covenant in their lease by renting space in its mall to another dollar store. When the plaintiff learned that the defendant was going to sell the mall, they brought an ex parte application for a preservation order under s. 5 of the EMJA because the sale would jeopardize its ability to enforce a damages award if they were successful at trial. The ex parte application was granted for a period of 21 days. They then sought to extend the order beyond that period until the end of trial pursuant to s. 8 of the EMJA. The chambers judge granted the application but reduced the amount to be held in trust from $659,600 to $292,000 (see: 2017 SKQB 117). The plaintiffs appealed on the ground that the judge erred in reducing the quantum. The defendant appealed on the ground that the judge erred in when he failed to require the plaintiffs to provide security pursuant to s. 5(7) of the EMJA. The judge accepted the plaintiffs� undertaking as to damages as a viable form of security.
HELD: The plaintiffs� appeal was dismissed. The defendant�s appeal was allowed and the matter was remitted to the chambers judge to determine the amount of security. The court found regarding the plaintiffs� ground of appeal that the chambers judge had not erred. If a court found that a preservation order under the EMJA should be made, it is within its discretion to determine the quantum. In this case, the chambers judge had correctly identified the principles he needed to consider in the exercise of his discretion. Regarding the defendant�s ground of appeal, the court found that an undertaking did not meet the security requirements of s. 5(7) of the EMJA and it was an error of law for the judge not to order the plaintiffs to provide security on granting the extension and, alternatively, it was an...