Michael N. Varpio

Addendum to a prior decision addressing an argument concerning the applicability of s. 25 of the Personal Property Security Act regarding security interests in proceeds.

The applicant argued that the respondent’s consent to franchise agreement transfers eliminated the priority of the respondent’s security interest over those agreements.

The court accepted that the respondent’s signature constituted consent to the transfers and that, under s. 25 of the PPSA, the respondent’s security interest would not have priority over the applicant’s with respect to the franchise agreements in evidence.

However, the court declined to extend the finding to franchise agreements not supported by evidence in the record.

Following earlier reasons amending an order under the slip rule, the court addressed competing claims for costs.

The applicants sought partial indemnity costs after succeeding on the motion to correct the order, while the respondent sought substantial indemnity costs and personal costs against opposing counsel under Rule 57.01 and Rule 57.07.

The court declined to revisit the merits of the slip issue despite further submissions from the respondent.

Applying the principles governing personal costs against counsel, the court found the case did not meet the high threshold for such relief and that the respondent had largely been unsuccessful.

Given that the applicants’ counsel created the error necessitating the motion and contributed to unnecessary conflict, the court also declined to award costs in the applicants’ favour.

The applicants brought a motion under Rule 59.06(1) of the Rules of Civil Procedure seeking to amend a prior order on the basis that it contained an accidental slip.

The earlier order, which permitted payment of mortgage funds into court and directed a trial of issues, mistakenly referred to “other monies,” which the respondent argued entitled her to withdraw the full amount paid into court before trial.

The court found that the word “other” was a drafting error copied from an alternative draft order and did not reflect the manifest intention of the original judge.

The court held that the funds were intended to remain as security pending trial rather than an admission of liability.

The order was varied to remove the erroneous wording, the respondent’s cross‑motion was dismissed, and the respondent was permitted to withdraw only the undisputed portion of the mortgage debt.