Home Trust Company v Robinson, 2011 ABQB 480

Court of Queen ’ s Bench of Alberta Citation: Home Trust Company v Robinson, 2011 ABQB 480 Date: 20110722 Docket: 1103 06189 Registry: Edmonton Between: Home Trust Company Plaintiff/Appellant - and - Dedric Joseph Robinson Defendant/Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________ [ 1 ] This is an appeal from the Master’s decision to continue a property listing for a further 60 days at $1,370,000 in a residential foreclosure action.

The Appellant argues that the Master erred in law in interpreting the law applicable to the question of fact raised by the evidence specifically in interpreting Section 41(1) and (2) of the Law of Property Act , R.S.A. 2000, c. L-7, and seeks to set a $1,069.00 listing price given that the property was listed previously for $1,370,000 with no activity or offers being made. [ 2 ] Home Trust Company as the first mortgagee is currently owed approximately $925,000, and originally advanced a principal amount of $823,672 on February 7, 2008.

Its application is supported by the second mortgagee Symmetry 2 Mortgage Investment Corporation who originally advanced $250,000 on March 5, 2008, and is currently owed approximately $303,277 plus costs.

[ 3 ] This appeal is opposed by the third mortgagee who is owed approximately $150,000 plus interest. The third mortgagee advances the position taken by the registered owner of the residence Mr. Dedric Robinson supporting the listing price set by the Master of $1,370,000. [ 4 ] The first mortgagee has also produced a City of Edmonton property tax search that indicates that over $10,000 in taxes is owing to the City as of June 30, 2011.

The first and second mortgagees take the position that the Master erred when he refused to set a 60 day redemption period at a price of $1,069,000, because that is now the market value of the house. [ 5 ] In addition to the property not selling in the previous 90 day listing period from March to May, 2011 at $1,370,000, the Appellant points out that the property had been listed in 2010 for 90 days at $1,185,000 and also did not sell.

It is submitted by the Appellant that since the property did not even come close to selling at either of those prices, the Master’s continuation of the $1,370,000 listing price is clearly inappropriate. [ 6 ] In the Master’s decision to continue the listing price at $1,370,000, the Master directed that the listing be “tuned up to match the qualities of the property” as set out in Mr. Robinson’s Affidavit. The Master appears to have accepted Mr.

Robinson’s complaints in his Affidavit of Value filed on June 17, 2011 in which at paragraph 5 he states that the listing information which garnered no sales “was largely inaccurate” and that it was “prejudicial to the interest” of himself. The particulars of paragraph 5 read as follows:– MLS Listing States Should State 4 bedrooms 6 bedrooms 4 pc. ensuite 5 pc. ensuite 2 - 4 pc. baths 3 - 4 pc. baths 3.5 baths total 4.5 baths total No fireplaces 3 fireplaces No den Den on main floor No bonus room Bonus room 3 car garage 4 car garage with 3 car entry [ 7 ] Mr.

Robinson deposed as a realtor himself for eight years who has sold houses worth $1,300,000, that the listing information is critical and that the differences in the omitted characteristics and amenities of the house would make a major difference in offers by perspective buyers at that price level. I note interestingly that it was Mr. Dushenski, counsel for the third mortgagee, who now supports Mr. Robinson’s application who swore Mr.

Robinson’s Affidavit filed before the Master on June 17, 2011. [ 8 ] Home Trust has to date resisted complying with the Master’s Order in terms of providing an “accurate” description (at least according to the third mortgagee and the Defendant) of the property on MLS.ca and wherever else listing information may be found.

It is submitted that without proper disclosure of this property’s feature, the marketing process under the supervision of the Court has been flawed since the start. [ 9 ] It is submitted that the understating of the features and amenities of the property from the beginning has worked to the prejudice of the second and third mortgagees, although I note that the second mortgagee supports the first mortgagee’s appeal herein.

The third mortgagee argues that a fulsome description of the features of this home in its listing for the next 60 days is the last and only chance for the second and third mortgagee to recover all or part of their investment.

[ 10 ] It is submitted that proper disclosure of the features of this property is vital as a “lowball” offer of 92% of the AACI appraised value would cover the first and second mortgagee and an offer of 95% of the listing price would result in recovery for the third mortgagee. Diligence and attention to factual particulars in marketing by the listing realtor may result in an offer yielding recovery on all three mortgagees and it is submitted that that objection should be upheld by this Court.

Conclusion [ 11 ] I note that Master Prowse in Calgary on March 17, 2011 accepted the Affidavit evidence of the two AACI appraisers as expert evidence over the listing realtor’s “market analysis”. [ 12 ] At the hearing of this appeal on July 5, 2011, I directed that Mr. Dushenski and Mr. Robinson’s concerns regarding the alleged inaccuracies in the description of the subject property be the subject of a further Affidavit by the listing realtor, Janice Kosak. The Court could then determine the accuracy of the alleged inaccuracies, and how they related to the Master’s Reasons for Decision.

My direction was made pursuant to Rule 6.14(3) and (7) which read as follows:– 6.14(3) An appeal from a master’s judgment or order is an appeal on the record of proceedings before the master and, if the judge permits, may also be based on new evidence that is significant enough that it could have affected the master’s decision. . . .

(7) A party may rely on its original written argument, if any, that was before the master or any further argument filed under subrule (5)(

c) or (6)(a), or both the original argument and the further argument. Underlining Added [ 13 ] This further Affidavit has now been filed with the Court on July 11, 2011 by the listing realtor which reads as follows:– 2. I confirm that the home in fact has 4 bedrooms above grade and two rooms in the basement being used as bedrooms which may or may not be legal bedrooms approved by the City of Edmonton by-laws. I cannot and will not make representations that this may be incorrect and err on the side of caution, however they are listed on MLS as Bonus Rooms in the MLS listing. 3.

I confirm that I advised the home and my notes indicate that the ensuite bathroom is a 4 piece bathroom, however the abundance of articles in the bathroom may have hidden another sink on the vanity. However I advise that the Defendant himself had it listed that the property had a 4 piece ensuite bathroom. 4. I confirm that I did over look the fact that there was an additional 4 piece bathroom off of the nursery bedroom. 5.

I am aware that the home has 3 fireplaces, however MLS does not make this a mandatory field for entry, nor did I know the fireplaces were in working order or properly installed and permitted, therefore I again choose not to make any representation that I am unable to substantiate. 6. I am assuming that the Defendant is referring to his office as a dent in his affidavit. Most builders are calling these flex rooms or offices. Unfortunately I used the maximum room fields on the listing due to the fact that the home has so many rooms, it exceeds the capacity of the input system that we currently use.

7. The bonus room is listed with the other rooms on the MLS sheet, as are the two rooms in the downstairs that are bing used asbedrooms. 8. With regards to the garage, it is in fact a 3 car garage as stated on the MLS listing. The appraisal that the Defendant has nowsupplied me with states that the home has a 3 car garage. 9. I further confirm that listing accuracy is very important as it is the market pricing of the home. During all the showings theDefendant was present in most cases and has shadowed the realtor and their clients causing them unease.

All interested buyers andrealtors have made some comment that the home is overprices, [sic] especially since it is a Foreclosure home and no warranties orrepresentations can be made to the state of the property at the time of possession. the buyers have expressed concern over what willhappen to the state of the property if an offer is accepted because the Defendant has express to them that he is removing every singleappliance, a number of light fixtures, a theatre, Hunter Douglas Windows (coverings), and custom wooden shutter blinds.

This causesconcerns as to what else may happen to the property and what impact it may have on the value of the property when a potentialpurchaser has just spent more than a million dollars to purchase same. One of the realtors who showed the property most recently isprepared to make an offer on the house but did not because of the above aforementioned reasons and are still prepared to make an offer ifthe house can be sold with warranties. 10. I confirm that not one of the realtors have said anything about the discrepancies in the listing except the Defendant himself.

Overthe past 3 month listing period, I have spoken with the Defendant on many occasions and he has never mentioned any concern about thelisting or it would have been discussed. [14] The balance on the first mortgage as of June 13, 2011 including taxes, administration and foreclosure costs was $917,500.The second mortgagee was owed $303,277 plus costs as at December 3, 2010 under their consent order. [15] The test in this appeal under the new Rules is set forth in paragraphs 20 - 24 of the Lee v Le Page, 2010 ABQB 829 whichreads as follows:– 20 At the outset of the appeal hearing, and because of their different approach in written submissions, I asked Counsel to address thenew Rule 6.14 and whether or not that approach is de novo or a record review. 21 If under 6.14 the appeal exercise is de novo, which I believe it is not, that perspective can relate both to the nature of the hearing(i.e., a new and in-depth hearing) and, de novo can also reflect the standard of review. 22 That the hearing is on the record, as opposed to de novo, is supported by the recent analyses of both Justices Manderscheid andMacklin, respectively, in Royal Bank of Canada v.

Place, 2010 ABQB 733 and Janvier v. 834474 Alberta Ltd., 2010 ABQB 800. 23 In Royal Bank, Manderscheid J. said this at paras. 27-28: 27. The Rules of Court, Alta. Reg. 184/2010 (New Rules) create a significant change from the Rules of Court, Alta. Reg. 390/68 (OldRules) in this regard. As of November 1, 2010, any appeal of a Master's decision is now "on the record of proceedings before themaster": New Rules, Rule 6.14(3). 28. An appeal on the record suggests that the standard of review should then be that of general appellate review as set out by theSupreme Court of Canada in Housen v.

Nikolaisen, 2002 SCC 33 , [2002] 2 S.C.R. 235, and summarized by our Court of Appealin Harper v. Canada (Attorney General), 2002 ABCA 301 (rev'd 2004 SCC 33 , [2004] 1 S.C.R. 827 on other grounds) (at para.35): The standard of appellate review have been extensively set out by the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33.

The standard of appellate review have been extensively set out by the Supreme Court of Canada in Housen v. Nikolaisen , 2002 SCC 33 . The standard of review for questions of law is one of correctness. For findings of fact, it is palpable and overriding error. For inferences of fact, the standard is also palpable and overriding error.

On questions of mixed fact and law, the standard is overriding and palpable error, unless it is clear that the trial judge made some extricable error in principle with respect to the characterization or application, in which case, the error may be an error of law subject to a correctness standard. 24 In a record review, our role then is to dismiss unless there is overriding and palpable error as it relates to the facts determined below, meaning, the Master made a clear and obvious mistake. [ 16 ] It is submitted that the Master made no clear and obvious mistake in the evidence before him in ordering the listing price be maintained at $1,370,000 or in ordering correction of the listing information by the Court appointed realtor.

However the Master himself commented on June 17, 2011 “You know, I mean my sense is that it is probably completely academic because the Plaintiff is either going to foreclose or take an Order for Sale, which might be a fight about value in 60 days.” [ 17 ] The initial listing in this matter was for 90 days and commenced shortly after the redemption period expired on October 29, 2010. The June 30, 2010 Order Nisi had directed that the listing price be $1,185,000, which was the appraised value at the time.

The property did not sell, or come close to selling at that price as I understand it. [ 18 ] On March 17, 2011 when the Appellant applied to renew the listing for a further 90 days, Master Smart granted that application, and at Mr. Robinson’s request he set the listing price at $1,370,000. [ 19 ] On June 17, 2011 Master Schlosser continued that listing for another 60 days at the value set in the March 17, 2011 Order of $1,370,000 because the qualities of the property had not been set out in the previous listing as per the Affidavit of Mr. Robinson.

It is this Order that is being appealed currently before me. [ 20 ] Now that I have received clarification concerning the accuracy of the listing details and the history in this matter under Rule 6.14(3) and (7), I conclude that the appeal should be granted. The mortgaged premises municipally described as 417 Caldwell Place NW, Edmonton, Alberta, T6M 2X3 should be offered for sale by judicial listing for 60 days at a reduced listing price of $1,069,000. [ 21 ] I am satisfied that the inaccuracies and missing details alleged by Mr. Robinson have been satisfactorily explained to the Court.

The property has not sold primarily because the listing price has been too high relative to the market, and because Mr. Robinson remains in the property as an undischarged mortgagor. The Master himself alluded to the ultimate fate of this property yet, with respect, did not follow his own conclusion that Mr. Robinson’s Affidavit “was probably academic”. [ 22 ] Leave is granted to the Plaintiff/Appellant to speak to the matter of costs in this application within 60 days of these Reasons. Heard on the 5 th day of July, 2011.

Written Submissions receiving July 13 th and 19 th , 2011 Dated at the City of Edmonton, Alberta this 22 nd day of July, 2011.

Donald Lee J.C.Q.B.A. Appearances: James R. Vaage Emery Jamieson LLP As Agent for Vickers Hendricks LLP for the Plaintiff Dedric Joseph Robinson Appeared on His Own Behalf Matthew Pruski Ogilvie LLP - for Symmetry 2 Mortgage Investment Corporation William Dushenski Blake & Dushenski for Lawrence Dushenski and Peter Dushenski