First Mortgage Nova Scotia Fund (III) Inc. et al. v. HSBC Capital Inc., 2002 NSCA 32

• Judge: Bateman, J.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: February 28, 2002
• Jurisdiction: Nova Scotia
• Citations: 2002 NSCA 32;(2002), 203 N.S.R.(2d) 29 (CA)

First Mortgage v. HSBC Capital (2002), 203 N.S.R.(2d) 29 (CA);

 635 A.P.R. 29

MLB headnote and full text

Temp. Cite: [2002] N.S.R.(2d) TBEd. MR.047

HSBC Capital Canada Inc. (applicant/appellant) v. First Mortgage Nova Scotia Fund (III) Inc. and First Mortgage Fund (IV) NB Inc. (respondents)

(CA 177131; 2002 NSCA 32)

Indexed As: First Mortgage Nova Scotia Fund (III) Inc. et al. v. HSBC Capital Inc.

Nova Scotia Court of Appeal

Bateman, J.A.

March 6, 2002.

Summary:

HSBC Capital Canada Inc. was a custodian of immigrant investor funds (the Funds) un­der various offering memoranda. The agree­ments expired and the Funds sought the re­turn of the remaining monies held by HSBC belonging to the Funds.

The Nova Scotia Supreme Court, in a deci­sion not reported in this series of reports, granted summary judgment to the Funds. HSBC appealed and applied for a stay pend­ing the appeal.

The Nova Scotia Court of Appeal, per Bateman, J.A., dismissed the application.

Editor's note: For a previous decision in this matter, see 192 N.S.R.(2d) 362; 599 A.P.R. 362.

Practice - Topic 5706

Judgments and orders - Summary judg­ments - Counterclaim or set-off - Effect of - HSBC was a custodian of immigrant in­vestor funds (the Funds) under various of­fering memoranda - The agreements ex­pired - The Funds obtained summary judg­ment for the return of any remaining monies - HSBC appealed, arguing that summary judgment should not have been granted where it had claimed set-off in its defence - The Nova Scotia Court of Ap­peal, per Bateman, J.A., refused to grant a stay pending the appeal - There was no ar­guable issue - The "set-off" related to an account with a third party - Responsibility for payment of the account had not yet been determined - The "set-off" claimed by HSBC did not impeach the Funds' owner­ship of the money - See paragraphs 16 to 37.

Practice - Topic 8954

Appeals - Stay of proceedings pending appeal - What constitutes "irreparable harm" - HSBC was a custodian of immi­grant investor funds (the Funds) under various offering memoranda - The agree­ments expired - The Funds obtained sum­mary judgment for the return of any re­maining monies - The Nova Scotia Court of Appeal, per Bateman, J.A., refused to grant a stay of proceedings pending HSBC's appeal - The court was not satis­fied that the Funds' potential inability to respond to a debt to be fixed in the future would constitute the necessary "irreparable harm" - In refusing to release the Funds' monies, HSBC was attempting to establish security for payment of a future debt - The stay application was a bid to freeze the Funds' assets pending judgment in another action - See paragraphs 38 to 41.

Practice - Topic 8959

Appeals - Stay of proceedings pending appeal - Considerations - Summary judg­ment was granted against the applicant - The applicant appealed and applied for a stay pending the appeal - The Nova Scotia Court of Appeal, per Bateman, J.A., stated that "where, as here, the granting of the stay will essentially afford the applicant party the relief sought in the main action and where there is no dispute on the facts, leaving only a question of law which can be readily resolved, it is appropriate to consider the merits of the appeal." - See paragraph 26.

Cases Noticed:

Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R.(2d) 341; 272 A.P.R. 341 (C.A.), refd to. [para. 13].

Metropolitan Stores (MTS) Ltd. v. Mani­toba Food and Commercial Workers, Local 832 and Labour Board (Man.), [1987] 1 S.C.R. 110; 73 N.R. 341; 46 Man.R.(2d) 241, refd to. [para. 14].

Manitoba (Attorney General) v. Metropoli­tan Stores (MTS) Ltd. - see Metropolitan Stores (MTS) Ltd. v. Manitoba Food and Commercial Workers, Local 832 and Labour Board (Man.).

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241, refd to. [para. 14].

American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396, refd to. [para. 14].

Coughlan et al. v. Westminer Canada Ltd. et al. (1993), 125 N.S.R.(2d) 171; 349 A.P.R. 171 (C.A.), refd to. [para. 15].

Austin et al. v. Habitat Development Ltd. et al. (1992), 109 N.S.R.(2d) 290; 297 A.P.R. 290 (C.A.), refd to. [para. 19].

Purdy v. Fulton Ins. Agencies (1991), 105 N.S.R.(2d) 421; 284 A.P.R. 421 (C.A.), refd to. [para. 31].

Chet's Transport Inc. v. Seaway Distribu­tors Limited (1983), 69 N.S.R.(2d) 88; 163 A.P.R. 88, refd to. [para. 33].

Atlantic Lines & Navigation Company Inc. v. Ship "Didymi" and Didymi Cor­poration (1987), 78 N.R. 99; 39 D.L.R.(4th) 399, refd to. [para. 34].

Authors and Works Noticed:

Sharpe, Robert J., Injunctions and Specific Performance (Looseleaf Ed.) (November 2001, update), pp. 2-13 to 2-20 [para. 27].

Counsel:

William L. Ryan, Q.C., for the applicant/ appellant;

Michael S. Ryan, Q.C., for the respon­dents.

This application was heard in Chambers on February 28, 2002, by Bateman, J.A., of the Nova Scotia Court of Appeal, who delivered the following decision on March 6, 2002.