Liberty Mortgage Services Ltd. et al. v. 123 Street Investments Ltd. et al.,

• Judge: Hanebury
• Neutral Citation: 2011 ABQB 542
• Subject Matter: PRACTICE,EQUITY,BROKERS
• Citation: 2011 ABQB 542,(2011), 523 A.R. 321 (QBM),523 AR 321,(2011), 523 AR 321 (QBM),523 A.R. 321
• Date: 30 June 2011
• Court: Court of Queen's Bench of Alberta (Canada)

Liberty Mortgage v. 123 Street Inv. (2011), 523 A.R. 321 (QBM)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. SE.046

Liberty Mortgage Services Ltd. and the Canada Trust Company (plaintiffs/defendants by counterclaim) v. 123 Street Investments Ltd., Julie Anna Hoffman also known as Julie Hoffman, Geoff Francis Hoffman also known as Geoff Hoffman also known as Geoffrey Hoffman, James Albert Walker also known as James Walker also known as Jim Walker, Rhonda Maureen Pallister also known as Rhonda Pallister and John Gardner Bennett also known as Jon Gardner Bennett (defendants/plaintiffs by counterclaim)

(1001 08304; 2011 ABQB 542)

Indexed As: Liberty Mortgage Services Ltd. et al. v. 123 Street Investments Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hanebury, Master

September 6, 2011.

Summary:

Liberty Mortgage Services Ltd. applied for summary judgment, including redemption orders and orders for sale in a foreclosure action against various properties owned by the defendants. The defendants 123 Street Investments Ltd. and the Hoffmans opposed the application. Liberty filed an affidavit of default that established the facts in support of the relief it sought. In response, the defendants argued that there were genuine issues to go to trial: (1) that Liberty acted as a mortgage broker and breached fiduciary duties; (2) that the mortgage documents on which Liberty relied did not charge the properties; and (3) that there was a lack of consideration for the mortgages and other security contracts.

A Master of the Alberta Court of Queen's Bench granted the application for summary judgment.

Brokers - Topic 3625

Duties of broker to third parties - Mortgage brokers - Fiduciary duty - Liberty Mortgage Services Ltd., who described itself as a "broker" and a "lender", applied for summary judgment, including redemption orders and orders for sale in a foreclosure action against various properties owned by the defendants - The defendants stated that Liberty breached fiduciary duties owed to them - Liberty Mortgage did not deny that it was a mortgage broker, but argued that the relationship was merely one of creditor and debtor - A Master of the Alberta Court of Queen's Bench assumed, without deciding, that there was a duty on Liberty to act in good faith and make relevant and timely disclosure of matters that might impact the defendants' ability to make informed decisions - The defendants failed to establish that there was a genuine issue to go to trial on the question of whether there was a breach of those obligations - "The fact situation does not support a claim for a breach of a fiduciary duty. It supports the lender fulfilling a legislative requirement necessary due to the nature of its business. Furthermore, there is no evidence of damages suffered by the defendants had such a breach occurred" - In the end result, the court summarily dismissed the statement of defence - See paragraphs 19 to 34.

Equity - Topic 3716.1

Fiduciary or confidential relationships - Commercial relationships - Mortgages - [See Brokers - Topic 3625 ].

Equity - Topic 3966

Fiduciary or confidential relationships - Evidence and proof - Burden re breach of relationship - [See Brokers - Topic 3625 ].

Equity - Topic 3967

Fiduciary or confidential relationships - Evidence and proof - Burden re damages - [See Brokers - Topic 3625 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - [See Brokers - Topic 3625 ].

Practice - Topic 5710

Judgments and orders - Summary judgments - Evidence - A Master of the Alberta Court of Queen's Bench described the test for summary judgment - "The plaintiff must prove the facts necessary to make out its cause of action. If it does so on the balance of probabilities, the defendant must then demonstrate that it has a defence on the merits, or in other words, there is a genuine issue to go to trial. The defendant cannot rely on mere allegations in support of its defence; it must rely on evidence" - See paragraph 17.

Cases Noticed:

Royal Bank of Canada v. McLean (1997), 211 A.R. 297 (Q.B.), affd. (1998), 216 A.R. 172; 175 W.A.C. 172; 1998 ABCA 163, refd to. [para. 17].

Pioneer Exploration Inc. Estate (Bankrupt) v. Euro-Am Pacific Enterprises Ltd. (2003), 339 A.R. 165; 312 W.A.C. 165; 2003 ABCA 298, refd to. [para. 17].

First Calgary Financial Savings and Credit Union Ltd. v. Meadows (1990), 109 A.R. 220 (C.A.), refd to. [para. 20].

Royal Trust Corp. v. Giuggio (1993), 32 R.P.R.(2d) 267, refd to. [para. 20].

Manufacturers Life Insurance Co. v. Executive Centre at Manulife Place Inc., [2011] A.R. Uned. 252; 2011 ABQB 189, refd to. [para. 20].

Baldwin v. Daubney, [2005] O.T.C. 1047; 2005 CanLII 46087 (Sup. Ct.), affd. (2006), 216 O.A.C. 72; 2006 CanLII 32901 (C.A.), refd to. [para. 20].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 77; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1 (S.C.C.), refd to. [para. 22].

DeJesus v. Sharif (2010), 284 B.C.A.C. 243; 481 W.A.C. 243; 2010 BCCA 121, refd to. [para. 24].

Mortgage Makers Inc. et al. v. McKeen (2009), 349 N.B.R.(2d) 115; 899 A.P.R. 115; 2009 NBCA 61, refd to. [para. 24].

Montreal Trust Co. of Canada v. Sagars Investments Inc. et al. (1995), 167 A.R. 290 (Q.B. Master), refd to. [para. 29].

Tucson Properties Ltd. v. Sentry Resources Ltd. and Fournel (1982), 22 Alta. L.R.(2d) 44; 39 A.R. 341 (Q.B. Master), refd to. [para. 29].

Jason Development Corp. and Brookdale Investments Ltd. v. Robertoria Properties Ltd. (1980), 42 A.R. 369 (Q.B. Master), refd to. [para. 29].

Kendell v. Kendell et al. (2006), 411 A.R. 332; 2006 ABQB 664, refd to. [para. 35, footnote 1].

Bank of Montreal v. Sperling Hotel Co., 1973 CarswellMan 32 (Q.B.), refd to. [para. 37].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Agency (7th Ed. 1996), p. 181 [para. 27].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (5th Ed.), p. 110 [para. 37].

Counsel:

Inna Lazman (Fleming LLP), for the plaintiffs/defendants by counterclaim;

Kari L. Sejr (Bishop & McKenzie LLP), for the defendants/plaintiffs by counterclaim, 123 Street Investments Ltd., Julie Anna Hoffman also known as Julie Hoffman, Geoff Francis Hoffman also known as Geoff Hoffman also known as Geoffrey Hoffman.

This application was heard on June 30, 2011, before Hanebury, Master, of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment, with reasons, on September 6, 2011.