Cite as: Prenor Trust Company of Canada v. S.B. Gupta Investments Ltd., 1991 NSSC 3 1990 ~ S.H. No. 74308 IN THE SUPREME~OURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: PRENOR TRUST COMPANY OF CANADA, a body corporate (formerly Atlantic Trus~ Company of Canada PLAINTIFF - and -S.B. GUPTA INVESTHENTS LIllITED, a body co r po r a t e , and SILVl B. GUPTA DEFENDANTS HEARD: At Halifax, Nova Scotia, before the Honourable Mr. Justice David W. Gruchy, in Chambers, on December 20, 1990. DECISION: January 7, 1991 COUNSEL: Wayne R. Marryatt, Counsel for the Plaintiff Robert McCleave, Solicitor for the Defendants
1990 IN THE SUPREME COURT TRIAL DIVISION BETWEEN: PRENOR TRUST COMPANY OF CANADA, corporate (formerly Atlantic Trust Company of Canada) - and S.B. GUPTA INVESTMENTS LIMITED, corporate, and SHAM B. GRUCHY, J. This matter has come opposing applications: the plaintiff 10, 1990, has applied for summary Procedure Rule 13; the def en dzin t s 17, 1990, applied for "an order defence". The applications wer-e heard on December 20th. The originating notice this matter were dated September forec losure of a mortgage dated April of claim alleges that the defendant Limited mortgaged certain property mortgage was guaranteed by the statement of claim further alleges S.H. No. 74308 OF NOVA SCOTIA a body PLAINTIFF a body GUPTA DEFENDANTS before me by means of two by notice dated December judgment pursuant to Civil have by notice filed December to amend the statement of and statement of claim in 14, 1990, and is a claim for 28, 1989. The statement S.B: Gupta Investments to the plaintiff, which defendant Sham B. Gupta. The default by the corporate
- defendant and sets forth the plaintiff claimed the payment foreclosure and sale and possession of the property mortgaged. By demand for particulars the defendants requested certain iden':i~ication of the plaintiff amoun~s ~dvanced and/or paid. On October 31, 1990, demand for particulars, explaining that the plaintiff's corporate na~e had changed from Atlantic Trust Company of Canada to Prenor Trust Companj of Canada and, ~ortgage w~~e required in the circumstances. set forth the various amounts advanced pursuant to the mortgage and appended a calculation of the arrears of the mortgage. eli November 9, 1990, which defence is set forth in full as follows: " 1 . The Def endan ts , S . B. and Sham B. Gupta, deny each the Statement of Claim and put the Plaintiff to strict proof thereof. 2. The Defendants plead and rely upon the principle of non est factum. 3. In the al terna tive, of them are found to have an obligation under an alleged mortgage, which is not Defendants state that the calculations of the Plaintiff as contained in the Statement Demand for Particulars are in error and more particularly that there are no arrears the said mortgage. 4. The Defendants, S.B. and Sham B. Gupta, therefore 'seek action with costs." On December 10, 1990, summary judgment pursuant to Civil an order for foreclosure and 2 details of such default. The of the mortgage or, in default, dated October 15, 1990, information concern~~g the and details of t.r.e v a r i cu s the plaintiff replied to the accordingly, no assig~ments of The repl; f~rt~er the defendants filed a defence Gupta Investments Limited and every allegation in if the Defendants or either admitted but deni ed, the of Claim and Reply to and . therefore no default of Gupta I:1vestme!1ts Limited dismissal of this the plaintiff ~pplied for Procedure Rule 13 and for sale. That application was
- supported by the affidavit of essentially set forth that the action was commenced to foreclose the equity of redemption of certificate of ti tle showing to leases, holds a first mortgage against the property in question, that being the herein. certificate of title further a numbe r of subsequent encumbrances. summary judgment was also the af fidavi t mortgage development officer of the calculations of the arrears original mortgage and sets forth of the mortgage in full, including all r e c s: .:. \;e ~1 • The defendanLs made no direct reply to the application for summary judgment, but applied for leave to amend the defence filed herein by adding thereto the following paragraphs: "4. The Defendants state, the Plaintiff is aware that it will likely acquire title to the property at a foreclosure sale, have to wait several months favourable terms. The Defendants foreclos~re and sale at this time is an excessive remedy, being wasteful of equity property, being unreasonably of both Defendants and all and not being reasonable mitigation of losses under all of the circumstances. 5. The Defendants state, that the Plaintiff, who recovering any monies owed with interest in time, stands to prof it from being able at a foreclosure sale at a later when -market conditions would be disproportionate the alleged mQrtgage agreement. the Plaintiff owes a duty take advantage of its posi tion to take control property, and that the Plaintif f duty in a tortous manner. 3 the plaintiff's solicitor which the defendants, attached a that the plaintiff, sUbject only mortgage sought to be foreclosed shows that there are With the application for of one Fred Mack, the the plaintiff which sets forth of the mortgage, appends the a statement of the account amounts advanced and in the alternative, that but might then to resell the property at further state that or potential equity in the harmful to the interests SUbsequent encumbrancers, the Plaintiff's also in the alternative, is virtually guaranteed of to bid on the property now low price and then sell it improve. This recovery to any losses flowing from The Defendants state to both Defendants not to of the is in breach of that
- 6. The Defendants repeat all of the above and state that the actions of the Plaintiff the Defendants considerable damage, claim as a set off against Plaintiff might be successful. 7. The Defendants therefore action with costs, or in Honourable Court invoke Judicature Act or under other principles of law or equity to address the concerns of above. The Defendan~s further out above." With the application for was the af f idavi t of the defendant's the application. That affidavit reads in full as follows: .. 1 THAT I am the solicitor for Gupta Investments Limited of all matters deposed to indicated. 2. THAT THIS Af f i d av i t; an application for leave Statement of Defence. 3. THAT as the issues involved in such an application do not lend themselves to provision an Af f idavi t , there is not I can set out for the court that would be of assistance. I intend to make a submission Defendants should be allowed contained in the draft Amended I had not thought of such filed the Statement of Defence in this matter. 4. THAT it will be my prejudice--to the Plaintiff by an award of costs on this application." I will deal with the the following in the order listed: 1. Defence; 2. Application to amend defence; and 3. Application for summary judgment. 4 are and will cause which the Defendants any claim with which the seek dismissal of this the alternative, that this its jurisdiction under the the Defendants as set out claim damages as set leave to amend the defence solie i tor in support of Sham Gupta and S. 3. and have personal knowledge herein except as otherwise is submi tted in support of to amend the Defendants' of information in much that °1 bel ieve that to the effect that the to advance the Defence Statement of Defence. a Defence when I originally further submission that any can be readily compensated matter by addressing each of
.t:'~ C:::U.U...I-.1 19'- -cJ... ~...L-...I-'t..:J J.......rJ... ~ TY .I.:'I1....:J T"\y~..clil" ~~ evidence by which the facts statement shall be as brief as <ldmi~3. 14.05 A party by his pleading law. " The defence, as filed, 14. That Rule 14.04 is virtually the same as the English Order 18, Rule 7 • In Nova Scotia, as in England, the gu';'ding ~rinciples of pleadings. pleadings should be statements state, and state only, the material facts relied the evidence by which they are to be proved". See the Supreme Court Practice, 1988, p. "it is clear that the principles to pleading is that it should state: l. Material facts, not law; 2. Material facts, not evidence; 3. Material facts only; 4 • All material facts; and S. In a summary form" Paragraph 1 of the defence is often referred the "rolled-up plea". I will below. Paragraphs 2 and 3 Rule 14. Parag.raph 2, in particular, - 5 .."
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are to be proved, and the the nature of the case may raise any point of does not comply with Rule the Rule sets forth It is clear ;, ... t h a t in a summary form, and should on, and not 268: be followed in any to as say more concerning that plea of the defence do not comply with pleads what 1S described
- as a principle of law, without which the defendant relies. to me, counsel stated that he reli upon that plea. Paragraph error on the part of the plaintiff and makes forth the defendant I s version of the facts. that paragraphs 2 and 3 of the defence be struck. 2. Amended Defence to be speculations on the part of will occur at and after the whatsoever are alleged or set defence. They do not comply with Rule I d~srni5s t~e appl~c~tion for leave to amend the defence. I have to comment as well on the affidavit in support of the application to amend " ... there is not much that I the court that would be of allegation upon which I should allow intention to make a submission to the court would simply result in the avoidance of setting amendments in an acceptable manner. had not "thought of such a Defence the Statement of Defence in this matter" both the defence and the proposed amendments. when combined wi th the apparent non est factum, leads one to the conclusion that the intention of the defendants is to delay substance of the amendment is considered, it is clear that the defendants are concerned about a forec los ure sale wi 11 be held. consideration by this Court. 3. Application for and 13.02 read as follows: 6
setting forth any facts upon During the defendants I submission had not recivec1 instructions to 3 of the defence simply alleges no attempt to set I therefore order The amendments sought appear the defendants as to what foreclosure sale. No facts forth as will justify such a 14.04 and, according ly, the defence. The statement that believe that I can set out for .assistance" is not a factual an amendment. The stated forth the real objective of the The statement that counsel when (he) originally filed speaks loudly against That statement, change in position regarding this proceeding. When the the market conditions in which That l s not a factor for summary judgment Rules 13.01
"13.01 Where a defendant has filed a on a hearing under an or ig ina t. i nq notice, may, on the ground that to a claim in the originating notice or except to the amount of the court for judgment against the defendant. 13.02 On the hearing of an application under rule 13.01, tll<2 court may on such terms as it thinks just, (b) grant judgment for the plaintiff on the claim or any part thereof;" MacDonald, J .A. in the case of and Robert Simpson Eastern (2d: 532,. .iad t he following to say about Rule 13: " Rule 13 has its antecedents in Order English Supreme Court Rules. Court Practice (1976), Vol. of 0.14 is to enable a judgment without trial if he can prove his claim clearly, and if the defendant is defence, or raise an issue against the claim which ought to be tried. Roberts v. Plant, Robertson & Co. v ~ Lynes, Mortgage Ins. Corpn., [ 1894] v , Davis, 4 T.L.R. 385. tha t he has some reasonable action. In Anglo-Italian Bank 38 L.T.' 197, at p.199 Jessel, intended to prevent a man from being delayed, where defence to be brought forward'. In Carl B. Potter Ltd. the Mercantile Bank of 408; 14 A.P.R. 408, additional authorities with respect to the pr inciples to be summary judgment were reviewed by my brother Cooper. The issue may, I believe, whether there is a fair some reasonable ground of defence." - 7 defence or appeared the plainti f f the defendant has no' defence a part thereof any damages claimed, apply to Bank of Nova Scotia Limited v. Dombrowski, 23 N.S.R. 14 of the As stated in the Supreme 1, at p.136 the purpose plaintiff to obtain summary unable to set up a bona fide [1895] 1 Q.B. 597 (C.A.); [1894] 2 Q • B . 577; Dane v. 1 Q. B. 54 (C. A. ); Edwards' The defendant is bound to show ground of def ence to the v. Wells (and Davies) , M.R., said that 0.14 'is clearly entitled to money there is no fairly arguable v. Antil Canada Ltd. and Canada (1976), 15 N.S.R.(2d) applied in an application for be summarized as being issue to be tried, based on
- I also refer to Brown v. ( 2d) 139. In that case a summary case, however, involved a defence on the part of the plaintiff was alleged and the Trial Division concluded that a fairly arguable defence had been raised. In the case of Carl Ltd. and Mercantile Bank of Canada, matter of summary judgments was Court found that a fairly arguable defence existed and no summary judgment was permitted. Rule Cooper, J.A., as follows: "8 We were referred to what an applicant under our ru l.e s in other jur isdictions s ummar y judgment. I~ is Practice 1973, vol. 1 at p. 132 that: The purpose of o. 14 to obtain summary judgment can prove his claim clearly, is unable to set up a bona fide defence, an issue against the claim which ought to Roberts v , Plant, [1895] & Co. v , Lynes, [1894] 2 Ins. Corpn., [ 1894] 1 Q. B. Press v , Tyler, 70 L.T. T:L.R. 385, C.A.). I When the Judge is satisfied not only that there is no defence but no fairly argued on behalf of the defendant, it is his to give judgment for the M.R., Anglo-Italian Bank 201, C.A.). 9 In Royal Bank of Canada v. Malouf, 526 (Sask. C.A.) Martin, J.A., said at p.529: It is well settled that the provisions of Rule 127 are not to be used to strike out unless it is very clear that no substantial defence but when a Judge is satisfied, not only that there is no defence, but no 8 Trynor and Boyd, 37 N.S.R. judgment was refused. That wherein misrepresentation B. Potter Ltd. v , Anil Canada 15 N.S.R. (2d) 408, the considered. In that case the 13 was, however, considered by authorities which set out Rule 13 and corresponding must establish to obtain stated in The Supreme Court is to enable a plaintif f without trial, if he arid if the defendant or raise be tried 1 Q.B. 597, C.A.; Robinson Q. B • 577; Dane v ; Mortgage 54, C. A.; Nassau Steam 376; Edwards v , Davis, 4 arguable point to be duty plaintiff' (per Jessel, v. Wells, 38 L.T., p. [1932] 2 W.W.R. a defence, the defendant has to submit to the Court; fair ly arguable point to
- be presented on behalf of the defendant, it is his duty to give effect to the to enter judgment for v , Wells (1878) 38 L.T. Bourke (1885) 10 P.R. 2 Sask. L.R. 296, 11 resist an application under the Rule, it is not sufficient for the defendant to say merits; the defence must :acts must appear to defence, or at least, as stated by Jessel, M.R., in Anglo Italian Bank v , Wells, to be argued on behalf of the defendant:' ... 10 The matter was also Court of Appeal in Featherstonhaugh v. Featherstonhaugh, [1.939] 2 D.L.F.. 262, where at p.268 said: The defendant is to show the nature of his defence, aDd tc disclose such sufficient to entitle upon his success or f ai lure in doing fate of the motion must usual rule is reversed for this special purpose, and the burden of proof, the defendant and not upon the plaint.iff." As I have indicated the defence are not acceptable pleadings. "rolled-up plea". The late g-reatly respected County Court Judge, Peter J. 0' Hearn, addres sed the matter Charge v : Price (1977), 42 N.S.R. when dealing with a plea virtually of this defence, (at p.48) that such plea a denial, in fact, of whatever of the legality or sufficiency in a pleading of any matter in otherwise, nor can any statutory it ... Paragraph 1 of the defence disclose a reasonable defence within the meaning of C.P.R. 14.25 ( 1) (a) • " 9 Rule and to a I l ow the plaintiff his claim: Anglo-Italian Bank 197, at 200; Ontario Bank v , 561; Velie v. Hemstreet (1909) W.L.R. 297. Morover, in order to he has a good defence on the be disclosed, and sufficient show that there is a bonafide supra, 'a fairly arguab Le point dealt wi th by the Ontario Robertson, C.J.O., facts as may be deemed him to defend, and it is so that the turn. In a sense the such as it is, lies upon above, paragraphs 2 and 3 of Paragraph 1 is the of. that p lea in Master (2d), 244, and considered, identical to paragraph 1 " ... simply constitutes was pleaded and not a denial law of the contract and not justification, or excuse, or defence be raised under there fore appear s to me to
- have r.o t; made any attempt to counter clear from a reading of Rule an onus rests upon the defendants facts upon which I could conclude that an issue e x i s ts which ought not made any attempt to discharge such onus. I can only canclude that there is no fairly arguable point to be tried. I therefore judgment herein, with costs. application for summary jUdgment application for leave to amend of $350.00. It appears from the am~ndments of the defence sought that the defendants are concerned about the course of the sale of the property. In view of plaintiff may proceed, but as if it had notice pursuant to Rule 12.07. Halifax, N.S. I January 7, 1991 10 those statements. It is 13 and of the cases above cited, to bring forth sufficient a bona fide defence or to be tr ied. The defendants have grant the plaintiff summary I fix costs for both the and for the defendants' the defence in the total sum that concern, I order that the received a demand of
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.