Saskatoon Credit Union Ltd. v. Goertz and Atlas Industries Ltd., (1987) 62 Sask.R. 282 (QB)

• Judge: Dielschneider, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 26, 1987
• Jurisdiction: Saskatchewan
• Citations: (1987), 62 Sask.R. 282 (QB)

Saskatoon Credit Union Ltd. v. Goertz (1987), 62 Sask.R. 282 (QB)

MLB headnote and full text

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

(No. 4334 A.D. 1985)

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

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Dielschneider, J.

June 26, 1987.

Summary:

A credit union loaned Goertz money for commercial purposes. Goertz gave the credit union a promissory note and a collateral mortgage. The credit union sued for judicial sale of the mortgaged premises and judgment against Goertz for the full amount owing.

The Saskatchewan Court of Queen's Bench refused to grant the credit union the relief requested. The court granted an order nisi of foreclosure.

Mortgages - Topic 5405

Mortgage actions - Action on the covenant - Prohibition against - The Saskatchewan Court of Queen's Bench held that s. 2 of the Limitation of Civil Rights Act applied to the following mortgages: (1) a mortgage by a purchaser to a vendor securing the purchase price of land; (2) a mortgage collaterally securing the purchase price of land in a vendor/purchaser transaction and (3) a mortgage securing a lender not privy to the purchase/sale transaction but who has advanced money to the purchaser for the purpose of buying the land - The court held that with such mortgages, the mortgagee's right to recover any unpaid balance is limited to the land mortgaged and to foreclosure of the mortgage or sale of the property and no action shall lie on the covenant for payment contained in the mortgage - See paragraph 11.

Mortgages - Topic 5662

Mortgage actions - Sale - Judicial sale - When available - The Saskatchewan Court of Queen's Bench held that s. 2 of the Limitation of Civil Rights Act applied to the following mortgages: (1) a mortgage by a purchaser to a vendor securing the purchase price of land; (2) a mortgage collaterally securing the purchase price of land in a vendor/purchaser transaction and (3) a mortgage securing a lender not privy to the purchase/sale transaction but who has advanced money to the purchaser for the purpose of buying the land - The Saskatchewan Court of Queen's Bench held that if a mortgage falls within one of the foregoing categories, the mortgagee may apply for and obtain an order for judicial sale, but the upset price must in that event not be lower than the amount of the debt, so that the intent of s. 2 will not be frustrated - See paragraph 2.

Mortgages - Topic 5662

Mortgage actions - Sale - Judicial sale - When available - A credit union advanced money to Goertz for commercial purposes - Goertz gave a promissory note and a collateral mortgage - The credit union sought judicial sale - Sale of the mortgaged premises would not realize the amount of the debt; a substantial deficiency was inevitable - The credit union intended after judicial sale to proceed against Goertz personally for the deficiency - The Saskatchewan Court of Queen's Bench held that ss. 5 and 6 of the Limitation of Civil Rights Act applied - The court refused to order judicial sale under s. 5, because to do so would allow the credit union to avoid foreclosure and defeat the consequences of s. 6 - See paragraphs 15 to 20.

Cases Noticed:

Co-operative Trust Company of Canada v. O'Grady, [1984] 2 W.W.R. 666 (Sask. Q.B.), affd. [1986] 1 W.W.R. 731; 43 Sask.R. 317 (C.A.), folld. [para. 7].

Canada Permanent Trust Company v. King Art Developments Ltd. et al., [1984] 4 W.W.R. 587; 54 A.R. 172, refd to. [para. 9].

Battersby v. Lenhoco Enterprises Ltd. and Leniczek, [1980] 3 W.W.R. 56; 3 Sask.R. 112 (C.A.), refd to. [para. 13].

Industrial Development Bank v. Lees (1970), 75 W.W.R.(N.S.) 455 (Sask. C.A.), refd to. [para. 16].

Lozinski v. Mayoh et al. (1984), 32 Sask.R. 312, refd to. [para. 18].

Statutes Noticed:

Limitation of Civil Rights Act, R.S.S. 1978, c. L-16, sect. 2 [paras. 10-13]; sect. 5 [paras. 7, 14, 18-19]; sect. 6 [paras. 7, 14, 18-19]; sect. 40 [para. 21].

Counsel:

G.B. McDonald, for the plaintiff;

J.R. Beckman, for the defendant, Otto P. Goertz.

This action was heard before Dielschneider, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, whose decision was delivered on June 26, 1987.