Hopper v. Hopper et al., 2014 NBCA 16

• Judge: Robertson, Bell and Green, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: April 03, 2014
• Jurisdiction: New Brunswick
• Citations: 2014 NBCA 16;(2014), 419 N.B.R.(2d) 186 (CA)

Hopper v. Hopper (2014), 419 N.B.R.(2d) 186 (CA);

    419 R.N.-B.(2e) 186; 1090 A.P.R. 186

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.B.R.(2d) TBEd. AP.012

Renvoi temp.: [2014] N.B.R.(2d) TBEd. AP.012

David Hopper (appellant) v. Stephen Hopper, Tanya Hopper, Michael Tingley and Melissa Patten (respondents)

(17-13-CA; 2014 NBCA 16)

Indexed As: Hopper v. Hopper et al.

Répertorié: Hopper v. Hopper et al.

New Brunswick Court of Appeal

Robertson, Bell and Green, JJ.A.

April 3, 2014.

Summary:

Résumé:

David Hopper (David) allegedly lent up to $600,000, unsecured, to Stephen and Tanya Hopper (the Hoppers), his son and daughter-in-law, and Michael and Melissa Tingley (the Tingleys) for the construction of a convenience store. David then obtained a collateral mortgage on three lots owned by the Hoppers: the lot on which the store was built (the store lot), the lot on which the Hoppers' house was built (Hopper Home Lot), and the lot on which the Tingleys' house was built (Tingley Home Lot). David sued the Hoppers and the Tingleys for the reimbursement of the funds he had advanced (Hopper Action). The Hoppers permitted judgment to be entered against them for $250,000 plus $950 costs. In a separate dispute, the Tingleys sued the Hoppers and David (Tingley action), asking for orders that (1) they owned the Tingley Home Lot and that title to it be transferred to them; and (2) David be directed to discharge the collateral mortgage and discharge his judgment against the Hoppers which had been registered against the Tingley Home Lot, and damages. Alternatively, the Tingleys sought relief on a "quantum meruit/unjust enrichment basis". The Tingleys also argued that the Hoppers had, "fraudulently and without colour of right" pledged the Tingley Home Lot by a collateral mortgage to David. The actions were heard together under rule 6.01(1)(d) of the Rules of Court. They were not consolidated.

The New Brunswick Court of Queen's Bench, Trial Division, in decisions not reported in this series of reports, made the following orders: (1) upon an application by the Tingleys, the sheriff's sale of the Store Lot and the Tingley Home Lot was stayed until judgment was delivered in both the Hopper and the Tingley actions or until further court order; (2) a Consent Order dated October 15, 2009, under which (a) the Tingleys consented to a judgment in favour of David in his action for $350,000 plus $14,875 costs, (b) the judgment to be registered against the Store Lot only, and (c) the Store Lot to be listed for sale for a period expiring on December 14, 2009. In addition, the Consent Order provided that David could pursue whatever remedies he deemed necessary to enforce his judgment if the Store Lot was not subject to a binding agreement of purchase and sale by December 14, 2009. The Store was not subject to such an agreement on December 14, 2009. When the Tingleys completed their evidence in their action, David moved for a non-suit. The motion was granted only with respect to the Tingleys' fraud allegations. The court then found that the Tingleys owed the Hoppers $20,000, that the Hoppers were unjustly enriched and that a constructive trust existed in favour of the Tingleys in respect of the Tingley Home Lot. The appropriate remedy would be for the Hoppers to transfer the Tingley Home Lot to the Tingleys free and clear of all encumbrances except David's judgment. The court then ordered the following: (1) the Store Lot would continue to be listed for sale for two years after the October 15, 2009 Consent Order judgment against the Tingleys; (2) the Hoppers were to have judgment against the Tingleys for $20,000; (3) the Hoppers would provide a proper deed of conveyance to the Tingleys for the Tingley Home Lot free of all encumbrances except David's judgment. David appealed, in the Tingley action, arguing that the court erred by: (1) "restricting and limiting [his] ability to enforce" the two judgments he obtained in his action against the Hoppers and the Tingleys; (2) directing "how he is able to realize on those two judgments ... with respect to what and when certain property of the Judgment Debtors can be seized"; (3) changing his two judgments against [the Hoppers and the Tingleys] because the court was functus officio after granting the non-suit motion; and (4) misapprehending the evidence by finding: (a) that the Tingley Home Lot would not be subject to his judgment until the convenience store property was sold, and (b) finding that the Store Lot "was probably worth more than [his] judgments". David sought to enforce his judgments against any and all property of the Hoppers and the Tingleys forthwith. There was no appeal in the Hopper action.

The New Brunswick Court of Appeal, in a decision reported at 370 N.B.R.(2d) 355; 956 A.P.R. 355, dismissed the appeal. David acquired the convenience store property at a tax sale for the amount of the arrears ($66,000) and now wished to seize and sell the Tingleys' home. The Tingleys brought a motion seeking an order that the judgment against them be "deemed satisfied and discharged".

The New Brunswick Court of Queen's Bench, Trial Division, granted an order. David claimed that the order had the legal effect of granting the relief sought. He appealed.

The New Brunswick Court of Appeal dismissed the appeal.

Courts - Topic 2004

Jurisdiction - General principles - Inherent jurisdiction (incl. parens patriae jurisdiction and jurisdiction to stay an action) - David Hopper (David) lent money to his son and daughter-in-law, Stephen and Tanya Hopper (the Hoppers), and their friends, Michael and Melissa Tingley (the Tingleys), so the four could build a convenience store on one of three lots owned by the Hoppers (Store Lot) - The two other lots had on them, respectively, the Hoppers' home and the Tingleys' home (Tingley Home Lot) - David ended up with a collateral mortgage on all three lots, with suing the Hoppers and the Tingleys for repayment (Hopper action), and, eventually, with a judgment against the Hoppers and the Tingleys - In a separate dispute, the Tingleys sued David and the Hoppers to obtain title to the Tingley Home Lot and the discharge of David's judgment and collateral mortgage respecting the Tingley Home Lot - Under the Rules of Court, the actions were heard together, but not consolidated - The Tingleys and Hoppers consented to judgment for $364,875, but the order was subject to a condition that stayed enforcement for two years - The condition directed the Tingleys and Hoppers to list the property for sale in the hope they could sell the business's principal asset, a convenience store property, thereby eliminating or substantially reducing the amount of the debt - However, steps were not taken to effect a sale within the prescribed period - David purchased the store property at a tax sale for the amount of the arrears ($66,000) and now wished to seize and sell the Tingleys' home - The Tingleys brought a motion seeking an order that the judgment against them be "deemed satisfied and discharged" - The motion judge (who was also the trial judge) granted an order - David maintained that the order had the legal effect of granting the relief sought - He appealed - The New Brunswick Court of Appeal assumed, without deciding, that the motion judge possessed the jurisdiction to extinguish a debt (and discharge a judgment) because of non-compliance with a related court order (the matter was not in issue) - The court opined that the issue would bring into play the principles surrounding the inherent jurisdiction (powers) of superior courts and their ability, for example, to prevent abuses of the judicial process and steps being taken to render judicial proceedings inefficacious - See paragraphs 3 and 16 - The court dismissed the appeal - There was sufficient evidence of "passive collusion" between David and his son, Stephen Hopper - They exercised effective control over the store property - The son's failure to comply with the court order fell equally on the father's shoulders, and there was a rational explanation for the Tingleys' failure to comply with the court order - Further, the underlying facts presented a case of potential "unjust enrichment" that would have driven the motion judge to decide as he did - There was no evidence that David took steps to recover on the judgment from his son and daughter-in-law - See paragraphs 1 to 25.

Creditors and Debtors - Topic 521

Creditors' rights - Against collateral security - General - [See Courts - Topic 2004 ].

Creditors and Debtors - Topic 1501

Payment of debt - General - [See Courts - Topic 2004 ].

Execution - Topic 3864

Sale of land of judgment debtor - Conduct of sale - Price - A judgment creditor purchased the debtor's land at a tax sale in 2011 - The New Brunswick Court of Appeal stated that "There is a relatively short response to the contention the price paid at a tax auction must be deemed a sale at fair market value. According to the spirit of the tax legislation, the assessed value equals the fair market value of the property, at least in the eyes of the Government and for purposes of raising revenue. There is no evidence before us of the property's assessed value. But it is unreasonable to infer that a property with an appraised value of $574,000 in 2006 is now reduced to a value of $66,000 because someone went to an auction sale and placed a bid for the amount of the outstanding property taxes. ... the argument that a property's fair market value equals the amount of property taxes which are in arrears has no support, and one need only turn to the provisions of the Real Property Tax Act to reach that conclusion." - See paragraphs 23 and 24.

Practice - Topic 5876

Judgments and orders - Satisfaction or discharge of judgments - General - [See Courts - Topic 2004 ].

Practice - Topic 5877

Judgments and orders - Satisfaction or discharge of judgments - What constitutes - [See Courts - Topic 2004 ].

Créanciers et débiteurs - Cote 521

Droit des créanciers - Contre une garantie accessoire - [Voir Creditors and Debtors - Topic 521 ].

Créanciers et débiteurs - Cote 1501

Paiment - Généralités - [Voir Creditors and Debtors - Topic 1501 ].

Exécution - Cote 3864

Vente d'un bien-fonds du débiteur judiciaire - Conduite de la vente - Prix - [Voir Exécution - Topic 3864 ].

Procédure - Cote 5876

Satisfaction des jugements - Généralités - [Voir Practice - Topic 5876 ].

Procédure - Cote 5877

Satisfaction des jugements - Éléments constitutifs - [Voir Practice - Topic 5877 ].

Tribunaux - Cote 2004

Compétence - Compétence inhérente - [Voir Courts - Topic 2004 ].

Cases Noticed:

Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corp. Ltd., [1981] A.C. 909 (H.L. (E.)), refd to. [para. 16].

College Housing Co-Operative Ltd. et al. v. Baxter Student Housing Ltd. et al., [1976] 2 S.C.R. 475; 5 N.R. 515, refd to. [para. 16].

MacMillan Bloedel Ltd. v. Simpson et al., [1995] 4 S.C.R. 725; 191 N.R. 260; 68 B.C.A.C. 161; 112 W.A.C. 161; 140 D.L.R.(4th) 385, refd to. [para. 16].

R. v. Caron (G.), [2011] 1 S.C.R. 78; 411 N.R. 89; 499 A.R. 309; 514 W.A.C. 309; 2011 SCC 5, refd to. [para. 16].

Authors and Works Noticed:

Jacob, I.H., The Inherent Jurisdiction of the Court (1970), 23 Current Legal Problems 23, generally [para. 16].

Mason, Keith, The Inherent Jurisdiction of the Court (1983), 57 Aust. L.J. 449, generally [para. 16].

Counsel:

Avocats:

Andrew J. Valeri, for the appellant;

Ian Girard, for the respondents, Stephen Hopper and Tanya Hopper;

Melissa Patten appeared on her own behalf;

No one appeared for the Estate of Michael Tingley.

This appeal was heard on October, 2013, by Robertson, Bell and Green, JJ.A., of the New Brunswick Court of Appeal. Robertson, J.A., delivered the following decision for the court, in both official languages, on April 3, 2014.