Royal Bank of Canada v. Stallman et al.,

• Judge: Hanebury
• Neutral Citation: 2009 ABQB 766
• Citation: 2009 ABQB 766,(2009), 485 A.R. 391 (QBM),485 AR 391,(2009), 485 AR 391 (QBM),485 A.R. 391
• Date: 21 August 2009
• Court: Court of Queen's Bench of Alberta (Canada)

Royal Bk. v. Stallman (2009), 485 A.R. 391 (QBM)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. JA.029

Royal Bank of Canada (plaintiff) v. Michael Stallmann and Marilyn Shingoose (defendants)

(0901 09700; 2009 ABQB 766)

Indexed As: Royal Bank of Canada v. Stallman et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hanebury, Master

December 29, 2009.

Summary:

The Royal Bank of Canada (RBC) applied for an order for sale and judgment for a deficiency on a mortgage made pursuant to an RBC Homeline Plan. The court raised the issue of whether the arrangement between the parties permitted the RBC to avoid the protections found in s. 40(1) of the Law of Property Act that limited its claim to the land alone.

A Master of the Alberta Court of Queen's Bench dismissed the application. RBC had not met its burden to provide evidence of the substance of the transaction sufficient to satisfy the court that s. 40(1) did not apply.

Mortgages - Topic 5405

Mortgage actions - Action on the covenant - Prohibition against - The Royal Bank of Canada (RBC) applied for an order for sale and judgment for a deficiency on a mortgage made pursuant to an RBC Homeline Plan - The court raised the issue of whether the arrangement between the parties permitted the RBC to avoid the protections found in s. 40(1) of the Law of Property Act that limited its claim to the land alone - A Master of the Alberta Court of Queen's Bench dismissed the application - RBC had not met its burden to provide evidence of the substance of the transaction sufficient to satisfy the court that s. 40(1) did not apply - In this case, the borrower provided a new mortgage for a greater amount, and paid out an old mortgage - Borrowers and lenders did this all the time - That was not enough to avoid the restrictions of s. 40(1) - Furthermore, there was no other security - There was only the first mortgage on the same property and the covenant to pay - The lender was not juggling securities to make sure it had adequate coverage - There was no evidence that RBC was trying to shore up its position in relation to that indebtedness.

Cases Noticed:

Clayborn Investments Ltd. v. Wiegert (1977), 5 A.R. 50; 3 Alta. L.R.(2d) 295 (C.A.), refd to. [para. 20].

Calgary Federal Credit Union Ltd. v. McLaren (1984), 56 A.R. 1; 32 Alta. L.R.(2d) 102 (Q.B.), refd to. [para. 21].

McClare v. Tadman (1984), 34 Alta. L.R.(2d) 268 (Q.B.), refd to. [para. 21].

Merit Mortgage Group Ltd. v. Sicoli, [1983] 5 W.W.R. 381; 75 A.R. 204 (C.A.), refd to. [para. 21].

Canadian Imperial Bank of Commerce v. Andrejcsik (1984), 53 A.R. 137 (Q.B.), refd to. [para. 22].

Bank of Nova Scotia v. Bailey (1986), 71 A.R. 321 (Q.B. Master), refd to. [para. 25].

Canadian Imperial Bank of Commerce v. Robertshaw (1985), 61 A.R. 192 (C.A.), refd to. [para. 28].

Edmonton Savings and Credit Union Ltd. v. Weir (1988), 86 A.R. 329 (Q.B.), refd to. [para. 28].

Royal Bank of Canada v. Platts and Platts (1987), 82 A.R. 397 (C.A.), dist. [para. 29].

Bank of Montreal v. Pawluk (1990), 107 A.R. 135 (C.A.), dist. [para. 29].

Continental Bank of Canada v. Trim and Trim (1985), 61 A.R. 133; 37 Alta. L.R.(2d) 356 (Q.B.), refd to. [para. 38].

Bank of Nova Scotia v. Bouwsema (1992), 120 A.R. 152; 8 W.A.C. 152 (C.A.), affing. (1991), 116 A.R. 316 (Q.B.), refd to. [para. 39].

Alberta (Treasury Branches) v. Bullock and Bullock (1992), 126 A.R. 349 (Q.B.), refd to. [para. 40].

Canadian Imperial Bank of Commerce v. Secrist (1993), 140 A.R. 111 (Q.B.), refd to. [para. 43].

Alberta Agricultural Development Corp. v. Schamuhn et al. (1994), 152 A.R. 341 (Q.B.), refd to. [para. 44].

Royal Bank of Canada v. Morrison, [1995] A.J. No. 1576 (Q.B. Master), refd to. [para. 46].

Tuxedo Savings and Credit Union Ltd. v. Krusky (1987), 75 A.R. 190; 49 Alta. L.R.(2d) 282 (C.A.), refd to. [para. 55].

Statutes Noticed:

Law of Property Act, R.S.A. 2000, c. L-7, sect. 40(1) [para. 18].

Counsel:

D. Michael Ellery (Warren Tettensor Amantea LLP), for the plaintiff;

No one appeared on behalf of the defendants.

This application was heard in Chambers, on August 21, 2009, by Hanebury, Master, of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on December 29, 2009.