Saskatoon Credit Union Ltd. v. Goertz and Atlas Industries Ltd., (1989) 73 Sask.R. 81 (CA)

• Judge: Wakeling, Gerwing and Sherstobitoff, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: February 17, 1989
• Jurisdiction: Saskatchewan
• Citations: (1989), 73 Sask.R. 81 (CA)

Saskatoon Credit Union Ltd. v. Goertz (1989), 73 Sask.R. 81 (CA)

MLB headnote and full text

Saskatoon Credit Union Limited (plaintiff appellants) v. Otto P. Goertz and Atlas Industries Ltd. (defendant respondents)

(No. 9538)

Indexed As: Saskatoon Credit Union Ltd. v. Goertz and Atlas Industries Ltd.

Saskatchewan Court of Appeal

Wakeling, Gerwing and Sherstobitoff, JJ.A.

February 17, 1989.

Summary:

A credit union loaned Goertz money for commercial purposes, taking as security his promissory note and a collateral mortgage on land. Upon Goertz's default, the credit union sought judicial sale of the mortgaged premises and judgment against Goertz for the full amount owing.

The Saskatchewan Court of Queen's Bench in a judgment reported in 62 Sask.R. 282 refused to grant the credit union the relief requested, but granted an order nisi of foreclosure. The credit union appealed.

The Saskatchewan Court of Appeal allowed the appeal and ordered judicial sale.

Mortgages - Topic 5662

Mortgage actions - Sale - Judicial sale - When available - A credit union advanced a loan to Goertz for commercial purposes, taking as security his promissory note and a collateral mortgage on land - Upon Goertz's default, the credit union sought judicial sale, which would not realize the amount of the debt; a substantial deficiency was inevitable for which the credit union intended to proceed against Goertz - The Saskatchewan Court of Appeal awarded judicial sale and held that ss. 5 and 6 of the Limitation of Civil Rights Act, R.S.S. 1978, c. L-16, did not convey a discretion on the court to limit judicial sale or the mortgagee's rights on the covenant - See paragraphs 8 to 32.

Mortgages - Topic 5662

Mortgage actions - Sale - Judicial sale - When available - The Saskatchewan Court of Appeal held that judicial sale may be ordered at the request of any party, without the requirement of a deposit, where necessary or expedient - The court held that the remedy is statutory and is governed by the Queen's Bench Act, R.S.S. 1978, c. Q-1, s. 45(19), and rule 428 of the Queen's Bench Rules, which have supplanted s. 48 of the Chancery Procedure Amendment Act, 1852 (Imp.), 15 & 16 Vict., c. 86 - See paragraphs 8 to 19 - The court held that s. 133 of the Land Titles Act did not grant a power to order judicial sale - See paragraph 10.

Mortgages - Topic 5671

Mortgage actions - Sale - Judicial sale - Upset price or reserve bid - The Saskatchewan Court of Appeal held that in ordering judicial sale the court must set a reasonable upset price which is as near fair market value as is possible at a forced sale - The court stated that it is the court's responsibility to ensure that the best possible price will be obtained - The court stated that the up set price is not required to be set at a minimum of the amount owing under the mortgage, which would deprive the mortgagee of its right to judicial sale and judgment on the covenant - See paragraphs 33 to 34.

Statutes - Topic 1626

Interpretation - Extrinsic aids - Other statutes - Similar statutes in other jurisdictions - The Saskatchewan Court of Appeal considered a similar Manitoba statute in construing the Saskatchewan Limitation of Civil Rights Act - See paragraph 28.

Statutes - Topic 4508

Operation and effect - General principles - Contracting out of statute - What constitutes - The Limitation of Civil Rights Act, R.S.S. 1978, c. L-16, s. 40, provided that any agreement that the Act did not apply was void - A mortgagor, who was borrowing money from the mortgagee for commercial purposes and not to purchase the mortgaged land, acknowledged in the mortgage that the mortgagee "is not a vendor of the lands within the meaning of the Limitation of Civil Rights Act and that Act shall have no application to this mortgage" - The Saskatchewan Court of Appeal held that the mortgage clause did not violate s. 40, because the mortgagor merely acknowledged the fact that the mortgagee was not a vendor under the Act - See paragraphs 35 to 36.

Cases Noticed:

Industrial Development Bank v. Lees (1969), 68 W.W.R.(N.S.) 476; 6 D.L.R.(3d) 156, affd. 75 W.W.R.(N.S.) 445; 14 D.L.R.(3d) 612 (Sask. C.A.), appld. [paras. 8, 16, 23].

Co-Operative Trust Company v. Target 21 Industries Ltd., [1988] 3 W.W.R. 97; 63 Sask.R. 13; 47 D.L.R.(3d) 349 (C.A.), appld. [para. 10].

Woolley v. Colman (1882), 21 Ch.D. 169; 51 L.J. Ch. 854, consd. [para. 12].

Canada Permanent Trust Company v. King Art Development Ltd. et al., [1984] 4 W.W.R. 587; 54 A.R. 172, appld. [para. 17].

Co-Operative Trust Company of Canada v. O'Grady (No. 2), [1984] 2 W.W.R. 666; 32 Sask.R. 224, dist. [paras. 20, 22].

J.I. Case Co. v. Preston (1909), 12 W.L.R. 12 (Sask. K.B.), consd. [para. 23].

McLean v. Badger, [1925] 3 W.W.R. 575 (Sask. K.B.), consd. [para. 23].

Gordon Grant and Company Limited v. Boos, [1926] 3 W.W.R. 57 (P.C.), consd. [para. 23].

Bank of Toronto v. Matheson and McCaskill, [1928] 1 W.W.R. 846 (Sask. K.B.), consd. [para. 24].

Canada Permanent Mortgage Corporation v. Jesse (1909), 2 Sask. L.R. 251 (Sask. S.C. en banc), refd to. [para. 24].

Mutual Life Assurance Company of Canada v. Douglas (1918), 57 S.C.R. 243, refd to. [para. 25].

Manitoba Development Corporation v. Berkowits, [1979] 5 W.W.R. 138, consd. [para. 28].

Statutes Noticed:

Chancery Procedure Amendment Act, 1852 (Imp.), 15 & 16 Vict., c. 86, sect. 48 [para. 9].

Conveyancing and Law of Property Act, 1881, 44 & 45 Vict., c. 41 [para. 12].

Land Titles Act, R.S.S. 1978, c. L-5, sect. 133 [para. 10].

Limitation of Civil Rights Act, R.S.S. 1978, c. L-16, sect. 2 [paras. 28-36]; sect. 5, sect. 6 [para. 6]; sect. 40(1) [para. 35].

Queen's Bench Act, R.S.S. 1978, c. Q-1, sect. 45(19) [para. 10].

Rules of Court (Sask.), Queen's Bench Rules, rule 428 [para. 10].

Saskatchewan Act, 1905, 4 & 5 Edw. 7, c. 42, sect. 16 [para. 11].

Authors and Works Noticed:

Di Castri, Thom's Canadian Torrens System (2nd Ed.), p. 499 [para. 8].

Halsbury's Laws of England (3rd Ed.), vol. 27, p. 701 [para. 8].

Judicial and Legislative Response to Price Inadequacy in Mortgage Foreclosure Sales, [1980] Southern Cal. L. Rev. 843 [para. 34].

Robertson, Joseph T., Problem of Price Adequacy in Foreclosure Sales (1987), 66 Can. Bar Rev. 671 [para. 34].

Counsel:

W.L. Pederson, for the appellant;

J.A. Hesje, for the respondent.

This case was heard before Wakeling, Gerwing and Sherstobitoff, JJ.A., of the Saskatchewan Court of Appeal.

On February 17, 1989, Sherstobitoff, J.A., delivered the following judgment for the Court of Appeal: