Hornstein v. Gardena Properties Inc., (2006) 212 O.A.C. 203 (CA)

• Judge: Feldman, Gillese and MacFarland, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 12, 2006
• Jurisdiction: Ontario
• Citations: (2006), 212 O.A.C. 203 (CA)

Hornstein v. Gardena Prop. Inc. (2006), 212 O.A.C. 203 (CA)

MLB headnote and full text

Temp. Cite: [2006] O.A.C. TBEd. JL.015

Jack Hornstein and Adriana Hornstein (appellants) v. Gardena Properties Inc. (respondent)

(C43996)

Indexed As: Hornstein v. Gardena Properties Inc.

Ontario Court of Appeal

Feldman, Gillese and MacFarland, JJ.A.

July 10, 2006.

Summary:

The mortgagors defaulted on a mortgage on a commercial property. The mortgagee put in a receiver and eventually issued a Notice of Sale Under Mortgage. After the mortgagee accepted an offer to purchase the property, the mortgagors obtained a higher offer and sought to enjoin the mortgagee's sale.

The Ontario Superior Court, in a decision reported at [2005] O.T.C. 714, declined to enjoin the sale. The mortgagors appealed.

The Ontario Court of Appeal dismissed the appeal.

Mortgages - Topic 5662

Mortgage actions - Sale - When available - [See third Mortgages - Topic 5663 ].

Mortgages - Topic 5663

Mortgage actions - Sale - Notice of sale - The mortgagors defaulted on a mortgage on a commercial property - The mortgagee put in a receiver and eventually issued a Notice of Sale Under Mortgage - After the mortgagee accepted an offer to purchase the property, the mortgagors obtained a higher offer and sought to enjoin the mortgagee's sale - The application judge declined to enjoin the sale - The mortgagors appealed - They argued that the Notice of Sale was defective because it did not particularize the details of the receiver's costs and expenses including its fees - Instead, the Notice showed a credit of the amount the receiver held on hand at the date of the Notice - The evidence was that the amount on hand was always changing as moneys were collected and expenses paid - The Ontario Court of Appeal dismissed the appeal - The court upheld the application judge's conclusion that the Notice of Sale was not defective because although the mortgagors could question some expenses such as the leasehold improvements or the amount of the receiver's fees, these were matters that could be raised on a subsequent accounting, but did not affect the reasonableness of the amount claimed in the Notice of Sale - See paragraph 4.

Mortgages - Topic 5663

Mortgage actions - Sale - Notice of sale - The mortgagors defaulted on a mortgage on a commercial property - The mortgagee put in a receiver and eventually issued a Notice of Sale Under Mortgage - After the mortgagee accepted an offer to purchase the property, the mortgagors obtained a higher offer and sought to enjoin the mortgagee's sale - The application judge declined to enjoin the sale - The mortgagors appealed - They argued that the Notice of Sale was defective on the basis that while payments were made by the mortgagors and other amounts were received that reduced the amount owing, no new Notice was issued - As a result of the changes in the amount outstanding, at some point the Notice of Sale expired - The Ontario Court of Appeal dismissed the appeal - The application judge made it clear that the mortgagors raised none of their objections to the Notice of Sale until they came forward with their new purchaser, nor did they ever attempt to redeem the mortgage - Although there might well be circumstances when a Notice of Sale became inaccurate and misleading, in this case the application judge concluded that the Notice was reasonable - See paragraph 5.

Mortgages - Topic 5663

Mortgage actions - Sale - Notice of sale - The mortgagors defaulted on a mortgage on a commercial property - The mortgagee put in a receiver and eventually issued a Notice of Sale Under Mortgage - After the mortgagee accepted an offer to purchase the property, the mortgagors obtained a higher offer and sought to enjoin the mortgagee's sale - The application judge declined to enjoin the sale - The mortgagors appealed - They argued that the receiver's sale was improvident - The Ontario Court of Appeal dismissed the appeal - On the issue of improvidence, the offer accepted by the mortgagee was the best offer it had received after several months of exposing the property to the market - The purchase price exceeded the appraised value by a considerable amount - Also, the mortgagee had engaged the services of a real estate agent requested by the mortgagors - The fact that a better offer was received after the mortgagee accepted an offer did not mean that the mortgagee acted in bad faith - Where the mortgagee acted in good faith, it would not be restrained from exercising the power once it had entered into a binding agreement of purchase and sale - After that time, the mortgagor no longer had the right to tender payment - See paragraphs 6 to 9.

Cases Noticed:

Toronto-Dominion Bank v. Pallett Developments Ltd. (1984), 3 O.A.C. 161; 47 O.R.(2d) 251 (Div. Ct.), refd to. [para. 7].

Arnold v. Bronstein, [1971] 1 O.R. 467 (H.C.), refd to. [para. 9].

Logozzo v. Toronto-Dominion Bank (1999), 126 O.A.C. 59; 45 O.R.(3d) 737 (C.A.), refd to. [para. 9].

Daniels (Theodore) Ltd. v. Income Trust Co. (1982), 37 O.R.(2d) 316 (C.A.), refd to. [para. 9].

Mission Construction Ltd. v. Seel Investments Ltd., [1973] 2 O.R. 190 (H.C.), refd to. [para. 9].

Regal Constellation Hotel Ltd. (Receivership), Re (2004), 188 O.A.C. 97; 71 O.R.(3d) 355 (C.A.), refd to. [para. 10].

Counsel:

A. Patrick Wymes, for the appellant;

James Klein and Eve Halpern, for the respondent;

David P. Preger, for the receiver.

This appeal was heard on June 12, 2006, by Feldman, Gillese and MacFarland, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Feldman, J.A., on July 10, 2006.