COURT FILE NO.: CV-21-1466
DATE: 2022-07-26
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: The Bank of Nova Scotia
v.
Linda J. Carmichael
BEFORE: The Honourable Mr. Justice M.J. Valente
COUNSEL: Todd R. Christensen, for the Applicant
HEARD: June 22, 2022
E N D O R S E M E N T
[1] The Bank of Nova Scotia, in its capacity as a judgment creditor, seeks an order directing a reference to conduct the sale of the judgment debtor’s real property. It seeks this relief as opposed to disposing of the judgment debtor’s lands by means of a sheriff’s sale to enforce its money judgment. The judgment debtor did not appear on the motion before me.
[2] As authority for the relief sought, the moving party relies on the 2015 decision of Mr. Justice Broad in Canaccede International Acquisitions Ltd v. Abdullah, 2015 ONSC 5553 (‘Canaccede’). Justice Broad found that this Court:
“… has an inherent jurisdiction to make an appropriate order which will do justice between the parties… and should do so where the circumstances warrant it, in the absence of binding authority or an overriding policy reason constraining it from following such a course.’ (at para 27)
[3] In making this finding, Justice Broad relied on the decision of the Court of Appeal in Citi Cards Canada Inc v. Pleasance, 2011 ONCA 3, 103 (‘Citi Cards’), where the Court found that a mortgagee is prevented by the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5 (‘PIPEDA’) from providing a mortgage statement to a third-party judgment creditor of the mortgagor so that the creditor may pursue a legal remedy to realize on its debt.
[4] Justice Broad found that the practical implication of a mortgagee being prevented from providing the sheriff with the mortgage statement required to conduct a sale is that an execution creditor wishing to initiate a sheriff’s sale of an encumbered property is likely to be required “to undertake potentially protracted and expensive examinations in aid of execution and other processes, with uncertain outcomes, just to get into the position of being able to initiate the sale process” (at para 24).
[5] If PIPEDA did not result in a complete impediment to a sheriff’s sale, Justice Broad also found that the consequences of PIPEDA created special circumstances which permitted him to exercise his discretion to order the reference and sale process now being sought by the moving party.
[6] Following the issuance of Justice Broad’s decision in Canaccede, the Supreme Court of Canada found in Royal Bank of Canada v. Trang, 2016 SCC 50 that PIPEDA did not preclude a mortgagee from producing a discharge statement to a mortgagor’s judgment creditor without the mortgagor’s express consent.
[7] I therefore find that the “impediment” or “special circumstances” relied upon by Justice Broad to permit him to exercise his discretion to order the reference and judicial sale no longer commonly apply.
[8] Counsel for the moving party nonetheless argues that I should exercise my discretion, as did Justice Broad, because the sheriff’s sale process is cumbersome, expensive and often ineffective. These consequences of the sheriff’s sale amount to an impediment to the employment of that sale process, or at a minimum, are “special circumstances” were one to adopt the rationale of Justice Broad.
[9] While the sheriff’s sale procedure may indeed have all of the negative characteristics attributed to it by counsel for the bank, I have no evidence of those characteristics before me. Indeed, Justice Gray in Luu v. Abuomar, 2016 ONSC 4299, found that the process of appointing a referee and conducting a judicial sale is “rather a cumbersome and expensive process, probably more so than a sale under the Execution Act” (para 68). In these circumstances, I am therefore, unable to find that the relief sought is the most just, expeditious and least expensive process for the sale of the debtor’s lands.
[10] In the alternative, counsel for the moving party submits that if I am not prepared to follow Canaccede, and grant the order being sought as equitable relief, I should consider the reference and judicial sale process under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as statutory remedies.
[11] In response to this submission, I am guided by Justice Kurz’s decision in RBC v Wong, 2022 ONSC 54. In that recent decision this Court found that the Legislature, through the Execution Act, RSO 1990 c. E.24, “signaled its choice of a sheriff’s sale as the vehicle for the enforcement of a writ of seizure and sale against real property” (at para. 30). Justice Kurz also found that since the Execution Act sets out procedures for the sale of real property, “absent special circumstances or some other injustice”, the processes prescribed by legislation “should prevail over common law process” (at para. 32).
[12] Again, on the evidence before me, I find no such ‘special circumstances’ or ‘other injustice’.
[13] Justice Kurz also found in Wong that while the Rules of Civil Procedure, like all regulations, are made “for the due enforcement and carrying into effect any Act of the Legislature” (at para. 33), where there is a conflict between a statute and a subordinate regulation, “the regulation must be read as not violating the statute” (at para. 34) or deemed to be ultra vires.
[14] Therefore, for the above noted reasons, the motion of the moving party is dismissed.
M.J. Valente
DATE: July 26, 2022