R.A. Gosbee

The appellant, Osborne Barnwell, appealed a Master's decision declining summary judgment, which had found a genuine issue for trial regarding an assignment clause in an escrow agreement.

The Superior Court judge found the Master erred in principle by not applying the Hryniak v. Mauldin framework holistically.

The judge determined that the interpretation of the escrow agreement was a discrete legal issue suitable for summary resolution.

The judge interpreted the assignment clause, finding it did not require Barnwell's consent for the assignment of the cause of action to the plaintiff, JVJ Consulting Inc., as the agreement was no longer executory.

The motion for summary judgment was dismissed, but the discrete interpretation issue was decided against Barnwell.

The court also added King Square as a defendant, seized Master Mills for case management, ordered document production, and awarded costs to the respondent.

The moving defendants sought an injunction restraining the plaintiff mortgagee from completing a power of sale closing scheduled for the following day.

The dispute arose in a mortgage enforcement action where the defendants had filed a statement of defence and a request to redeem after a default judgment had been set aside.

The court held that the defendants retained an equitable right to redeem under the Rules of Civil Procedure and that the plaintiff could not render that right nugatory by proceeding with a power of sale after commencing a foreclosure or sale action.

Applying the test for an interlocutory injunction, the court found a prima facie case, irreparable harm through the loss of the defendants’ equitable interest in the mortgaged property, and a balance of convenience favouring the defendants.

The court therefore restrained the proposed sale until the redemption period expired and the mortgage accounts were taken and judgment rendered.