Bank of Montreal v. Cochrane, 2012 ABQB 212

Court of Queen ’ s Bench of Alberta Citation: Bank of Montreal v. Cochrane, 2012 ABQB 212 Date: 20100330 Docket: 0901 07347, 1001 01528 Registry: Calgary Between: Docket: 0901 07347 Bank of Montreal Plaintiff - and - Cochrane et al Defendants And Between: Docket: 1001 01528 Bank of Montreal Plaintiff - and - Emmeline Noblet and 844712 Alberta Ltd. Defendants _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice G.C. Hawco

_______________________________________________________ [ 1 ] Ms. Emmeline Noblet has been sued by the Bank of Montreal (“BMO”) on a mortgage which she maintains may not have been signed by her. If it was signed by her, it was for the incorrect amount. She then goes on to allege that if it was her mortgage, it was obtained because she was misled and intimidated by a former boyfriend, a Mr. Bartlett, who is a Defendant in the BMO action against Cochrane et al. [ 2 ] Ms.

Noblet seeks to have action 1001-01528 (“the foreclosure action”) by the BMO against her to be stayed or to be consolidated with action 0901-07347 by BMO v. Cochrane (“the fraud action”). [ 3 ] BMO resists either a stay or consolidation. Its argument is that it has already obtained an order for foreclosure against Ms. Noblet. It already has received the property in respect of which Ms. Noblet signed the mortgage back and has sold it. It is owed approximately $360,000 on the property as a result of a deficiency. It seeks to obtain judgment against Ms.

Noblet for the balance owing under the mortgage. [ 4 ] As I said during the hearing on March 9, this action, the action by BMO against Ms. Noblet with respect to for the deficiency, is not suitable for consolidation with the fraud action. This is an action for debt based upon a mortgage which appears to have been granted by Ms. Noblet. She does not deny that her signature appears on the mortgage document. She claims that she did not understand that she was borrowing the amount as shown in the mortgage document itself. [ 5 ] The fraud action alleges fraud and criminal behaviour.

In that action, the BMO seeks damages for the fraud. The Plaintiff is the same in both. Ms. Noblet is also a named Defendant in the fraud action, but she is but one of a list of hundreds of people alleged to have been involved in the fraud. Whether she will be found liable in that action for fraud is a question in which this Court in the foreclosure action is not concerned.

This action has wound its way through Statement of Claim, Foreclosure, Property Sale and now approaches a claim for judgment on the amount of the deficiency. [ 6 ] To warrant consolidating two actions, there must be common questions of law and facts arising out of the same transactions. The facts in the foreclosure action are entirely different from the facts alleged in the fraud action. While Ms.

Noblet has denied knowledge of the amount of the mortgage, and has denied having met with the Bank’s lawyer at the time, Michael Bondar, his evidence is quite clear that he did meet with her and obtained identification from her to ensure that it was her who was signing the mortgage document. [ 7 ] The foreclosure action is ready to be concluded. The other is really in its early stages. One is simple – how much is owed.

The other is quite complicated. [ 8 ] I am quite satisfied that this is not a proper matter to be consolidated. [ 9 ] With respect to the application for a stay, for much the same reasons, I choose not to exercise my discretion and stay this action. Once again, the issues are simply not the same. Although Ms. Noblet argues strenuously that they are, or will be if she is permitted to raise the issue of intimidation and mistake in any subsequent proceedings on the deficiency by BMO in the foreclosure action. If Ms.

Noblet seeks to raise the issue of duress or mistake, I am quite satisfied that she will have a difficult time in view of her admissions in the questioning which has taken place. But that may be a decision for another time or another judge. [ 10 ] I am simply not satisfied that continuation of this action would be oppressive to Ms. Noblet. She may seek indemnity from Mr. Bartlett or others in the fraud action. As Madam Justice Smith stated in Toronto Dominion Bank v. Hale, 1992 CarswellAlta 871 , at para 11 :

I am satisfied that the nature of the applicant’s claim goes outside the bounds of the foreclosure action and is doubtful against the bank. Therefore, I find she must make her claim by a separate action. [ 11 ] Again, as Madam Justice Smith has stated, in para 9: ... the bank should not be delayed or prejudiced from obtaining its relief over a peripheral or doubtful counterclaim. [ 12 ] Likewise, in Royal Bank v. Parmar, 2005 CarswellBC 1898 , 2005 BCSC 1155 , Justice Shabbits of the British Columbia Supreme Court, at paras 14-15: 14 The target of the fraud, however, was not Ms. Parmar.

The target of the fraud was the petitioner, Royal Bank of Canada, and that is so even though Ms. Parmar may have been used by the perpetrators of the fraud, as a dupe that facilitated them to defraud the Royal Bank of Canada of monies. 15 Ms. Parmar agreed to permit the property to be registered in her name. The property was registered in her name. Ms. Parmar signed the paperwork relating to the conveyance and the mortgage. She signed documents in front of lawyers. Ms. Parmar knew that the petitioners were advancing the principal amount of the mortgage set out in the mortgage. Ms.

Parmar is the sole mortgagor under the mortgage document. Ms. Parmar agreed to repay to the petitioner the principal amount of the mortgage. Ms. Parmar involved herself in this scheme because Mr. Kular offered to pay her $5,000. [ 13 ] In the end result, the application by Ms. Noblet to stay or consolidate the foreclosure action is denied, with costs. Heard on the 9 th day of March, 2012. Dated at the City of Calgary, Alberta this 29 th day of March, 2012. G.C. Hawco J.C.Q.B.A. Appearances: M. Mohamed C. Plante Bennett Jones LLP for the Plaintiff

Melodi E. Ulku McLeod & Company LLP for the Defendant Emmeline Noblet