Flying L v. TD Bk., (1976) 9 Nfld. & P.E.I.R. 209 (NFCA)

JudgeFurlong, C.J.N., Mifflin and Noel, JJ.
CourtNewfoundland Court of Appeal
Case DateFebruary 09, 1976
JurisdictionNewfoundland and Labrador
Citations(1976), 9 Nfld. & P.E.I.R. 209 (NFCA)

Flying L v. TD Bk. (1976), 9 Nfld. & P.E.I.R. 209 (NFCA);

    12 A.P.R. 209

MLB headnote and full text

Flying "L" Ranching Co. Ltd. v. The Toronto-Dominion Bank and Ballard et al.

Indexed As: Flying "L" Ranching Co. v. Toronto-Dominion Bank et al.

Newfoundland Court of Appeal

Furlong, C.J.N., Mifflin and Noel, JJ.

February 9, 1976.

Summary:

This case arose out of the appellant's claim against the respondents for damages for wrongful entry onto the appellant's land to exercise a power of sale, for the improper and improvident manner of exercising the power of sale and for an accounting. The appellant attempted to establish a large cattle ranching enterprise with the assistance of loans from the respondent bank given on the security of an assignment under s. 88 of the Bank Act, S.C. 1953-54, c. 48. The enterprise failed, leaving the ranch and livestock in extremely poor condition. The bank exercised its power of sale of the appellant's assets in order to salvage what it could of its security. The appellant brought an action for damages resulting from the exercise of the power of sale. The bank counterclaimed for the deficiency remaining after the sale. The Supreme Court dismissed the appellant's action and allowed the bank's counterclaim in the amount of $410,143.45. The appellant appealed.

The Newfoundland Court of Appeal dismissed the appeal and held that the respondent bank was justified in exercising a power of sale in the circumstances.

Banks and Banking - Topic 5231

Loans - Secured loans - Assignment under s. 88 of the Bank Act - Duties of bank on realization of security - Duty to account - Bank exercised its power of sale of assets which were subject to an assignment under s. 88 of the Bank Act - Assignor brought an action against the bank for damages for improperly and improvidently exercising its power of sale and claimed an accounting - The accounts were thoroughly examined at trial - The Newfoundland Court of Appeal court held that the accounting at the trial discharged the duty of the bank to account to the assignor - Paragraphs 10 to 11, 40 to 43 and 55 to 56.

Banks and Banking - Topic 5231

Loans - Secured loans - Assignment under s. 88 of Bank Act - Duties of bank on realization of security - General principles - Bank loaned money to a large cattle ranching enterprise which failed, leaving the ranch and livestock in extremely poor condition - Bank exercised its power of sale and sold the remaining livestock and other assets - The Newfoundland Court of Appeal stated that a bank in realizing its security by selling the assigned property is bound to act in good faith, but is not acting the capacity of a trustee - The Court of Appeal held that the bank was not bound to enter the ranching business to salvage the operation, but was entitled to liquidate the assets - Paragraphs 8 to 9 and 28 to 29 and 51 to 53.

Cases Noticed:

British Columbia Land and Investment Agency v. Ishitaka, 45 S.C.R. 302, appld. [para. 28].

Mayer v. Murray (1878), 8 Ch. D. 424, appld. [paras. 42 and 56].

Statutes Noticed:

The Bank Act, R.S.C. 1970, c. B-1, sect. 88.

The Rules of the Supreme Court (P.E.I.), Order 30 [para. 56].

Counsel:

Randell Earle, for the plaintiff-appellant;

P.D. Lewis, Q.C., for the defendant-respondent.

FURLONG, C.J.N.: - paragraphs 1 to 14,

MIFFLIN, J., - paragraphs 15 to 44,

NOEL, J., [dissenting in part] - paragraphs 45 to 57.

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