Kelvedon Holdings Ltd. v. Papandreou, (1996) 190 A.R. 222 (QB)

• Judge: Paperny, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 18, 1996
• Citations: (1996), 190 A.R. 222 (QB)

Kelvedon Holdings Ltd. v. Papandreou (1996), 190 A.R. 222 (QB)

MLB headnote and full text

Kelvedon Holdings Ltd. (plaintiff/appellant) v. Athanase Papandreou and Christine Papandreou (defendants) and 635693 Alberta Ltd., operating as Sitar Restaurant (respondent/cross-appellant/not party to the action)

(Action No. 9501-08252)

Indexed As: Kelvedon Holdings Ltd. v. Papandreou

Alberta Court of Queen's Bench

Judicial District of Calgary

Paperny, J.

October 18, 1996.

Summary:

Kelvedon Holdings Ltd. was a mortgagee of a leased property. Kelvedon received an assignment of rents from the mortgagor as additional security. The mortgagor defaulted. Kelvedon received two months rent from Sitar. Kelvedon commenced a foreclosure action. A receiver-manager was appointed and Sitar paid rent to the receiver-manager. A Master of the Alberta Court of Queen's Bench granted a Rice order in the foreclo­sure action, without prejudice to the lessee's (Sitar's) rights or the issues of privity of contract and privity of estate. The Master subsequently ordered that the Registrar cancel the existing Certificate of Title free of all encumbrances except Sitar's interest. Kelvedon appealed. Sitar cross-appealed.

The Alberta Court of Queen's Bench allowed the appeal and dismissed the cross-appeal.

Equity - Topic 1061

Equitable relief - Relief from forfeiture - General - [See Mortgages - Topic 4612 ].

Landlord and Tenant - Topic 5001

Assignment of lease - General principles - Assignment defined - [See Landlord and Tenant - Topic 6528 ].

Landlord and Tenant - Topic 6528

Termination, forfeiture and reentry - Ter­mination - Mortgage foreclosure - Kelvedon was a mortgagee of a leased property - The mortgagor gave Kelvedon an assignment of rents as security - The mortgagor defaulted - Kelvedon received two months rent from Sitar - Kelvedon commenced a foreclosure action - A receiver-manager was appointed (Harlen) and Sitar paid rent to Harlen - A Master accepted a tender by Kelvedon, and ordered final foreclosure subject to Sitar's lease - Kelvedon appealed - The Alberta Court of Queen's Bench allowed the appeal - Kelvedon was not a mortgagee in pos­session; there was no landlord and tenant relationship between Kelvedon and Sitar, no privity of contract or privity of estate; Sitar was not entitled to relief from for­feiture under s. 10 of the Judicature Act where there was no legal relationship between the parties.

Mortgages - Topic 4612

Redemption of mortgage - General prin­ciples - Requirement of exercise of right - Kelvedon, a mortgagee and assignee of rents, commenced a foreclosure action - A Master ordered final foreclosure subject to Sitar's lease - The Alberta Court of Queen's Bench held that there was no landlord and tenant relationship, no privity of contract or privity of estate, created between Kelvedon and Sitar - The court rejected Sitar's submission that it should be granted relief from forfeiture under s. 10 of the Judicature Act where there was no legal relationship between the parties - In a foreclosure proceeding a tenant had an equity of redemption and was entitled to redeem - The appropriate relief available to Sitar would have been to redeem the mortgage - See paragraphs 34 to 38.

Mortgages - Topic 4745

Redemption of mortgages - Persons entitled - Lessees - [See Mortgages - Topic 4612 ].

Mortgages - Topic 6804

Mortgage accounts - General principles - Mortgagee in possession defined - [See Landlord and Tenant - Topic 6528 ].

Cases Noticed:

Manufacturers Life Insurance Co. v. J.K.P. Holding Co. (1986), 70 A.R. 360; 44 Alta. L.R.(2d) 390 (C.A.), refd to. [para. 15].

Ronan v. Derheim (1977), 4 A.R. 192; 78 D.L.R.(3d) 622 (C.A.), refd to. [para. 17].

Lavalin Services Inc. v. National Life Assurance Co. of Canada (1984), 70 A.R. 358; 42 Alta. L.R.(2d) 28 (C.A.), refd to. [para. 20].

Marcil Group Ltd. v. Integrated Building Corp. (1989), 100 A.R. 318; 71 Alta. L.R.(2d) 225 (C.A.), refd to. [para. 21].

Manufacturers Life Insurance Co. v. Toronto-Dominion Bank (1988), 92 A.R. 92; 63 Alta. L.R.(2d) 80 (C.A.), dist. [para. 23].

Unican Development Corp. v. Settlers Savings and Mortgage Corp. (1984), 51 A.R. 178; 30 Alta. L.R.(2d) 66 (Q.B.), refd to. [para. 29].

Noyes v. Pollock (1886), 32 Ch. D. 53 (C.A.), refd to. [para. 30].

Wasyl Holdings Ltd. v. Allarie and Allarie (1981), 31 A.R. 275 (Q.B. Master), refd to. [para. 35].

Olympia & York Developments Ltd. v. Calgary (City) (1983), 45 A.R. 204 (C.A.), refd to. [para. 36].

Statutes Noticed:

Law of Property Act, R.S.A. 1980, c. L-8, sect. 44(1) [para. 13].

Authors and Works Noticed:

Price, Frances and Trussler, Marguerite, Mortgage Actions in Alberta (1985), p. 326 [para. 28].

Counsel:

R.G. Stevens, Q.C., for the plain­tiff/appellant;

J. Gruber, for the respondent;

B.R. Crump, for Royal Trust Corp. of Canada.

This appeal was heard by Paperny, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the fol­lowing judgment on October 18, 1996.