Royal Bank of Canada v. Madill, (1981) 43 N.S.R.(2d) 574 (CA)

• Judge: MacKeigan, C.J.N.S., Coffin, Hart, Jones and Pace, JJ.A.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: January 14, 1981
• Jurisdiction: Nova Scotia
• Citations: (1981), 43 N.S.R.(2d) 574 (CA)

Royal Bk. v. Madill (1981), 43 N.S.R.(2d) 574 (CA);

    81 A.P.R. 574

MLB headnote and full text

Royal Bank of Canada v. Madill

(S.C.A. No. 00613)

Indexed As: Royal Bank of Canada v. Madill

Nova Scotia Supreme Court

Appeal Division

MacKeigan, C.J.N.S., Coffin, Hart, Jones and Pace, JJ.A.

January 14, 1981.

Summary:

This case arose out of a bank's application for a declaration that a debenture formed a fixed mortgage and charge on after-acquired real property. The debenture, which was given by a company in the business of buying and selling land, stated that the bank had a fixed and specific mortgage and charge on "any other real property hereafter acquired by the company." Subsequently the company bought and disposed of a block of land without obtaining a debenture release from the bank. The bank applied for a declaration that the property was subject to a fixed mortgage under the debenture. The Nova Scotia Supreme Court, Trial Division, in a judgment reported at 41 N.S.R.(2d) 440; 76 A.P.R. 440, dismissed the application. The bank appealed.

The Nova Scotia Court of Appeal dismissed the appeal and affirmed that the property was not subject to a fixed mortgage. The court thoroughly canvassed the problem of mortgaging after-acquired property and concluded that such a mortgage could not affect bona fide purchasers for value without notice, because it could not be found upon a search of the registry.

Company Law - Topic 5426

Borrowing - Debentures - Effect of after-acquired real property clause - A company gave to a bank a debenture which stated that the bank had a fixed and specific mortgage and charge on "any other real property hereafter acquired by the company" - Subsequently the company bought and disposed of a block of land in the course of its business of buying and selling land without obtaining a debenture release from the bank - The Nova Scotia Court of Appeal affirmed the dismissal of the bank's application for a declaration that the property was subject to a fixed mortgage under the debenture - The court held that, whether or not such an attempt to mortgage after-acquired property might be enforced in equity, it could never affect the interest of a bona fide purchaser for value without notice, because such a mortgage could not be found upon a search of the registry and was ineffective under ss. 17 and 25 of the Registry Act, R.S.N.S. 1967, c. 265.

Mortgages - Topic 1407

Property mortgage - After-acquired property - The Nova Scotia Court of Appeal discussed the issue of mortgaging after-acquired property.

Cases Noticed:

Imrie v. Archibald et al. (1895), 25 S.C.R. 368, appld. [paras. 10, 34].

Breffit et al. v. Campbell et al., 24 N.S.R. 389 (N.S.C.A.), appld. [para. 10].

Abell v. Middleton (1901), 11 O.L.R. 209, consd. [para. 29].

Holroyd v. Marshall (1861), 11 E.R. 999; 10 H.L.C. 191, consd. [para. 30].

Doe Irvine v. Webster (1842), 2 U.C.Q.B. 224, refd to. [para. 34].

Doe ex dem. Tiffany v. McEwan (1837), 5 U.C.Q.B.O.S. 598, refd to. [para. 34].

Bank of Montreal v. Glendale (Atlantic) Limited (1977), 20 N.S.R.(2d) 216; 27 A.P.R. 216, refd to. [para. 36].

Stave Falls Lumber Company et al. v. Westminister Trust Company et al., [1940] 4 D.L.R. 382 (B.C.C.A.), refd to. [para. 36].

Tailby v. The Official Receiver (1888), 13 App. Cas. 523, consd. [paras. 41, 108].

Coombe v. Carter (1887), 36 Ch. D. 348, consd. [para. 42].

Re Dickens (1978), 24 N.B.R.(2d) 607; 48 A.P.R. 607, consd. [para. 46].

Meen v. Realty Development Company Limited, [1954] O.W.N. 193, consd. [para. 47].

Coyne v. Lee (1887), 14 O.A.R. 503, consd. [para. 47].

Lazarus v. Andrade (1880), 5 C.P.D. 318, consd. [para. 54].

Belding v. Reed (1865), 3 H. & C. 955; 159 E.R. 812, consd. [para. 55].

Re Lind, [1915] 2 Ch. 345, consd. [paras. 63, 108].

Metcalfe v. Archbishop of York (1836), 1 My. and Cr. 547; 40 E.R. 485, consd. [para. 64].

Inkpen v. Keeping et al. (1940), 14 M.P.R. 400, consd. [para. 65].

Trusts and Guarantee Co. Limited v. Grand Valley R.W. Co. (1918), 44 O.L.R. 398, consd. [para. 66].

Collyer v. Isaacs (1881), 19 Ch. D. 342, consd. [para. 66].

Clements v. Matthews (1883), 11 Q.B.D. 808, consd. [para. 69].

Countway v. Haughan and Chataway (1975), 15 N.S.R.(2d) 138; 14 A.P.R. 138, consd. [para. 73].

Wilcocks v. Wilcocks, 2 Vern. 557; 23 E.R. 961, consd. [para. 74].

Montagu v. Earl of Sandwich (1885), 32 Ch. D. 525, consd. [para. 78].

Carson v. McMahon (1940), 15 M.P.R. 109, consd. [para. 84].

Ross v. Hunter (1881), 14 N.S.R. 44; 75 C.R. 289, consd. [para. 85].

Driver v. Broad, [1893] 1 Q.B. 744, consd. [para. 107].

McKenzie and Walsh, 61 S.C.R. 312, consd. [para. 108].

Union Bank of Halifax and General Investment Trust (1908), 40 S.C.R. 510, consd. [para. 111].

Statutes Noticed:

Registry Act, R.S.N.S. 1967, c. 265, sect. 1(e) [para. 9]; sect. 17 [paras. 9, 94]; sect. 25 [paras. 14, 94]; sect. 26(1) [para. 9].

Statute of Frauds, R.S.N.S. 1967, c. 290, sect. 3 [para. 9].

Authors and Works Noticed:

Davies, Canadian Corporation Precedents, vol. 3, pp. 11-45 [para. 110].

Encyclopaedia of Forms and Procedures (3rd Ed.), p. 1192 [para. 110].

Falconbridge on Mortgages (4th Ed.), pp. 17, 80-84 [para. 105]; 89-90 [para. 109].

Fisher and Lightwood's Law of Mortgage (8th Ed.), pp. 5, 11 [para. 107].

Fraser and Stewart, Company Law of Canada (5th Ed.), pp. 373-377 [para. 103]; 399, 414 [para. 110].

Halsbury's Laws of England (4th Ed.), vol. 7, para. 810, p. 481 [para. 40]; vol. 32, para. 436 [para. 107].

Hanbury's Modern Equity (6th Ed.), p. 475 [para. 32].

Palmer, Company Law (22nd Ed.), vol. 1, pp. 454-456 [para. 102].

Counsel:

David R. Chipman, Q.C. and Carol MacAskill, for the appellant;

Arthur R. Moreira, Q.C. and Alexander S. Beveridge, for the respondent.

This case was heard on September 17, 1980, at Halifax, N.S., before MacKEIGAN, C.J.N.S., COFFIN, HART, JONES and PACE, JJ.A., of the Nova Scotia Supreme Court, Appeal Division.

On January 14, 1981, the judgment of the Appeal Division was delivered and the following opinions were filed:

MacKEIGAN, C.J.N.S. - see paragraphs 1 - 17;

COFFIN, J.A. - see paragraphs 18 - 96;

JONES, J.A. - see paragraphs 97 - 112.

HART and PACE, JJ.A., concurred with COFFIN, J.A.