HarbourEdge Mortgage Investment Corp. v. Powell Associates Ltd., (2016) 449 N.B.R.(2d) 1 (QB)

• Judge: Glennie, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: January 18, 2016
• Jurisdiction: New Brunswick
• Citations: (2016), 449 N.B.R.(2d) 1 (QB);2016 NBQB 61

HarbourEdge Mortgage v. Powell Assoc. (2016), 449 N.B.R.(2d) 1 (QB);

    449 R.N.-B.(2e) 1; 1180 A.P.R. 1

MLB headnote and full text

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: [2016] N.B.R.(2d) TBEd. JL.002

Renvoi temp.: [2016] N.B.R.(2d) TBEd. JL.002

HarbourEdge Mortgage Investment Corporation (appellant) v. Powell Associates Ltd., in its capacity as Trustee under the Proposal of Mall Centre-Ville Ltd., Mall Centre-Ville Ltée (respondent)

(NB21456; 51-2028272; 2016 NBQB 61; 2016 NBBR 61)

Indexed As: HarbourEdge Mortgage Investment Corp. v. Powell Associates Ltd.

Répertorié: HarbourEdge Mortgage Investment Corp. v. Powell Associates Ltd.

New Brunswick Court of Queen's Bench

In Bankruptcy and Insolvency

Judicial District of Saint John

Glennie, J.

February 1, 2016.

Summary:

Résumé:

HarbourEdge Mortgage Investment Corporation appealed a decision of the trustee under the proposal of Mall Centre-Ville Ltd., Mall Centre-Ville Ltée to disallow part of the Proof of Claim of HarbourEdge as a secured claim.

The New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, directed the trustee to accept the entirety of HarbourEdge's Proof of Claim as a secured claim.

Bankruptcy - Topic 3639

Creditors - Claims - General - Disallowance of (incl. notice of) - [See Mortgages - Topic 1427 ].

Bankruptcy - Topic 3937

Secured creditors - What constitutes a secured creditor - Respecting mortgages - [See Mortgages - Topic 1427 ].

Bankruptcy - Topic 4101

Secured creditors - Mortgages - General - [See Mortgages - Topic 1427 ].

Contracts - Topic 7401

Interpretation - General principles - Intention of parties - [See Mortgages - Topic 1427 ].

Mortgages - Topic 1427

The mortgage - Amount secured - Collateral mortgage - Mall Centre-Ville Ltd., Mall Centre-Ville Ltée owned and operated the Shediac Mall - Pursuant to the terms of a Commitment Letter, HarbourEdge Mortgage Investment Corporation agreed to provide financing by way of a loan to Mall Centre-Ville - The financing was for an aggregate principal amount of up to $4,574,000 (the "Principal Amount"), plus interest at the rate of 11.75% per annum and costs and disbursements - HarbourEdge took, among other security, a first charge mortgage (the "Collateral Mortgage") collateral to a promissory note - HarbourEdge filed a Proof of Claim with the trustee under the proposal of Mall Centre-Ville, claiming $5,483,728.54 as secured debt - In addition to the Principal Amount and the interest, the Proof of Claim included HarbourEdge's claim for additional funds advanced by HarbourEdge in order to preserve its assets and protect the properties (the "protective disbursements") - The trustee disallowed HarbourEdge's inclusion of protective disbursements as well as its various other costs and expenses pertaining to its loan to Mall Centre-Ville as a secured claim and proposed to limit HarbourEdge's secured claim to just the Principal Amount and interest thereon at a rate of 11.75% and only allow HarbourEdge's claim for the protective disbursements as an unsecured claim - HarbourEdge appealed the trustee's decision to disallow part of its Proof of Claim as a secured claim - The New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, concluded that "when reading the whole of the Collateral Mortgage and the Commitment Letter in this case, it was always the intention of the parties that the Collateral Mortgage would be security for all present and future debts and liabilities, matured, or not, direct or indirect, absolute or contingent, now or at any time due or owing to HarbourEdge by Mall Centre-Ville, without limitation as to aggregate amount, save and except that HarbourEdge would not advance more than $4,574,000.00 as the Principal Sum of the subject loan and therefore the Collateral Mortgage would only secure up to $4,574,000.00 as the Principal Sum; but all other amounts owing to HarbourEdge by Mall Centre-Ville under the terms of the Collateral Mortgage would be secured thereby with no limit as to aggregate amount. As mentioned, when any conflict exists between the provisions of the Collateral Mortgage and the Commitment Letter, the terms and conditions of the Commitment Letter must prevail. Accordingly, I direct the Trustee to accept the entirety of HarbourEdge's Proof of Claim as a secured claim" - See paragraphs 33 to 67.

Counsel:

Avocats:

R. Gary Faloon, Q.C., for Mall Centre-Ville Ltd., Mall Centre-Ville Ltée;

George L. Cooper and April L.D. Parker, for HarbourEdge Mortgage Investment Corporation;

John McGillivray, for Powell Associates Ltd.

This appeal was heard on January 18, 2016, before Glennie, J., of the New Brunswick Court of Queen's Bench, In Bankruptcy and Insolvency, Judicial District of Saint John, who delivered the following decision orally on February 1, 2016.