Petranik v. Dale, Parker and Berwick, (1976) 11 N.R. 309 (SCC)

• Judge: Laskin, C.J.C., Judson, Ritchie, Spence and Dickson, JJ.
• Court: Supreme Court of Canada
• Case Date: May 05, 1976
• Jurisdiction: Canada (Federal)
• Citations: (1976), 11 N.R. 309 (SCC);[1977] 2 SCR 414;1976 CanLII 191 (SCC);11 NR 309;[1977] 2 SCR 959;67 DLR (3d) 294;1976 CanLII 1257 (SCC);1976 CanLII 34 (SCC);69 DLR (3d) 411

Petranik v. Dale (1976), 11 N.R. 309 (SCC)

MLB headnote and full text

Petranik v. Dale, Parker and Berwick

Indexed As: Petranik v. Dale, Parker and Berwick

Supreme Court of Canada

Laskin, C.J.C., Judson, Ritchie, Spence and Dickson, JJ.

October 5, 1976.

Summary:

This case arose out of a default by a mortgagor and the foreclosure proceedings commenced by the mortgagee. The mortgagor failed to appeal in the foreclosure proceedings and the mortgagee signed judgment nisi which directed a reference. Later the mortgagee abandoned the foreclosure proceedings and purported to exercise the power of sale contained in the mortgage. The mortgagor commenced an action for a declaration that the conveyance made by the mortgagee under the power of sale contained in the mortgage was invalid. The trial judge allowed the mortgagor's action and declared invalid the conveyance made under the power of sale. The trial judge held that after the mortgagee obtained the judgment nisi for foreclosure that the mortgagee could not exercise the power of sale under the mortgage without leave of the court.

On appeal to the Ontario Court of Appeal, the appeal was allowed and the judgment of the trial court was set aside. The Ontario Court of Appeal held that the judgment nisi in the foreclosure action did not confer any rights on the mortgagor and did not operate to suspend the mortgagee's power of sale under the mortgage.

On appeal to the Supreme Court of Canada the appeal was allowed, the judgment of the Ontario Court of Appeal was set aside and the judgment of the trial court was restored. The Supreme Court of Canada stated that a mortgagor retains the right of redemption after a judgment nisi at least until final judgment - see paragraph 22. The Supreme Court of Canada stated that the equitable right of redemption of a mortgage is a property right or interest in the mortgaged land and that such right cannot be clogged or fettered - see paragraphs 18 and 26.

Judson and Ritchie, JJ., dissenting, in the Supreme Court of Canada, would have dismissed the appeal and would have affirmed the judgment of the Ontario Court of Appeal. Judson, J., stated that the judgment nisi in the foreclosure action effectively foreclosed the mortgagor's right of redemption. Judson, J. stated that the mortgagee was entitled to pursue all remedies available to him, concurrently or in succession - see paragraphs 52 and 57.

Mortgages - Topic 5511

Mortgage actions - Action for foreclosure and sale - Effect of an order or judgment nisi - A mortgagee commenced foreclosure proceedings - The mortgagor failed to appear and the mortgagee signed a judgment nisi which directed a reference - Later the mortgagee abandoned the foreclosure proceedings and purported to exercise the power of sale contained in the mortgage - The mortgagor commenced an action for a declaration that a conveyance made under the mortgagee's power of sale was invalid - The Supreme Court of Canada held that after the judgment nisi was signed, the mortgagee could not sell the mortgaged land under the power of sale without the leave of the court - The Supreme Court of Canada declared the conveyance invalid - The Supreme Court of Canada stated that a mortgagor retains the right of redemption after a judgment nisi at least until final judgment - See paragraph 22.

Mortgages - Topic 4603

Redemption of mortgage - General principles - Nature of right to redeem - The Supreme Court of Canada stated that the equitable right of redemption is a property right or interest in the mortgaged land - See paragraphs 18 and 26 - The Supreme Court of Canada stated that the right of redemption cannot be clogged or fettered - See paragraph 26.

Cases Noticed:

Stevens v. Theatres, Ltd., [1903] 1 Ch. 857, folld. [paras. 10, 28]; dist. [para. 51].

De Beck v. Canada Permanent Loan and Savings Co. (1907), 12 B.C.R. 409, folld. [para. 10]; refd to. [para. 51].

Marshall v. Miles, [1970] 3 O.R. 394, folld. [para. 10]; refd to. [para. 51].

Casborne v. Scarfe (1738), 1 Atk. 603, folld. [para. 26].

Burgess v. Wheats (1759), 1 Eden. 177, folld. [para. 26].

Heath v. Pugh (1881), 6 Q.B.D. 345, folld. [para. 26].

Tarn v. Turner (1881), 39 Ch.D. 456, folld. [para. 26].

Campbell v. Holyland, [1877] 7 Ch.D. 166, folld. [para. 28].

Statutes Noticed:

Mortgages Act, R.S.O. 1970, c. 279, sect. 40 [para. 52].

Rules of Practice (Ont.), R.R.O. 1960, Reg. 396, rule 465 [para. 21]; rule 467 [para. 43].

Authors and Works Noticed:

Falconbridge, Law of Mortgages, 3rd ed. (1942), pages 50 to 53 [para. 18]; 450 [para. 44]; 687 [para. 52]; 888 [para. 52].

Holdsworth, A History of English Law, Vol. 6, p. 663 [para. 26].

Marriott, Practice in Mortgage Actions in Ontario, 2nd ed., (1955), p. 322 [para. 29].

Megarry and Wade, The Law of Real Property, 3rd ed., p. 885 [para. 31].

Cheshire's, Modern Real Property, 10th ed., p. 568 [para. 31].

Counsel:

Nelles Starr, Q.C. and Walter S. Gonet, Q.C., for the appellant;

George T. Walsh, Q.C. and Tom Pratt, for the respondents.

This appeal was heard by the Supreme Court of Canada at Ottawa, Ontario on May 5, 1976. Judgment was delivered by the Supreme Court of Canada on October 5, 1976 and the following opinions were filed:

LASKIN, C.J.C. - see paragraphs 1 to 25.

DICKSON, J. - see paragraphs 26 to 32.

JUDSON, J., dissenting - see paragraphs 33 to 58.

RITCHIE, J., dissenting - see paragraph 59.

SPENCE, J. concurred with LASKIN, C.J.C.