Royal Bank of Canada v Krushlenicki, 2014 ABQB 782

Court of Queen ’ s Bench of Alberta Citation: Royal Bank of Canada v Krushlenicki, 2014 ABQB 782 Date: 20141218 Docket: 1401 05515 Registry: Calgary Between: Royal Bank of Canada Plaintiff - and - Rick Krushlenicki also known as Richard Kalvin Krushlenicki and Sheryll Krushlenicki also known as Sheryll A. Krushlenicki Defendants _______________________________________________________ Reasons for Decision of J.B. Hanebury , Master in Chambers _______________________________________________________ [ 1 ] This is a foreclosure action against the Krushlenickis who hold the title to the lands.

The foreclosure is not yet complete. An execution creditor of Mr. Krushlenicki, Aga Rettie, registered a writ against the title in November, 2012, for approximately $220,000.00. She commenced enforcement proceedings. Those proceedings are not a part of this action.

[ 2 ] Mark Coney has a contract for the sale of the lands signed several years ago by Mr. Krushlenicki. The sale has never been completed, in that no transfer has apparently ever been prepared. Mr. Coney’s counsel brought an application in morning chambers for: a declaration that: Mr. Coney is the legal and beneficial owner of the property; a direction to the Registrar to register the property in his name and discharge Ms. Rettie’s writ; and, a declaration that the residential purchase contract between he and Mr. Krushlenicki be declared valid and enforceable. [ 3 ] Mr.

Coney has apparently filed nothing against the title claiming an ownership interest, and is not named as a party in the foreclosure action. [ 4 ] A question arose as to the procedure followed by Mr. Coney as his application for this relief was brought in the foreclosure action. Furthermore, the contract upon which he relied had been executed more than two years prior to his application. [ 5 ] The parties were asked to provide short written briefs on the issues raised by this application.

Briefs and a reply brief were filed. [ 6 ] I have reviewed the briefs and will not deal with most of the issues raised as I have come to the conclusion that Mr. Coney’s application, which seeks to enforce a contract he had with Mr. Krushlenicki, cannot be launched under the umbrella of the foreclosure action. ANALYSIS [ 7 ] Mr. Coney relies on the Civil Enforcement Act , R.S.A. 2000, c. C- 15 and the Land Titles Act , R.S.A. 2000, c.

L – 4, as authority for his ability to bring this application in the foreclosure proceedings. [ 8 ] First, he argues that s. 5 of the Civil Enforcement Act permits an interested party to make an application to the Court and allows the Court to “…give direction in respect of or determine any matter or issues that arises out of any civil enforcement proceedings.” Pursuant to that

section the Court has the authority to make a binding declaration of right to ensure the protection of the interest of any person in property that is subject to civil enforcement proceedings. The

section gives the Court wide authority to make orders and directions in respect of matters under the Act . [ 9 ] “Civil enforcement proceedings” is defined to include “writ proceedings” which is in turn defined as being “any action, step or measure authorized by this Act to be taken for the purpose of enforcing a money judgment.” [ 10 ] The simple answer to this argument is that a foreclosure action is not a civil enforcement proceeding as it seeks to enforce a remedy against land. The governing statute is the Law of Property Act , R.S.A. 2000, c.

L-7 and the procedure to be followed is set out in the Rules of Court. [ 11 ] This foreclosure proceeding is not a proceeding taken under the Civil Enforcement Act to enforce a money judgment. Ultimately, in some cases, such as a CMHC-insured mortgage, a deficiency judgment may be obtained, and ultimately a writ may be issued. Should that occur, proceedings to collect on that writ would qualify as civil enforcement proceedings. However, at this stage of the process the action is for a remedy against the lands. [ 12 ] Mr. Coney’s argument that Ms.

Rettie seeks to enforce her writ through this foreclosure action is simply not the case. This is not her action. She is not the plaintiff. Ultimately, if there are funds remaining subsequent encumbrancers, such as Ms. Rettie, may be paid, but that does not change this foreclosure action into a writ enforcement proceeding. [ 13 ] Furthermore, the Rules differentiate between foreclosure proceedings and a sale of lands other than by foreclosure proceedings:

Part 9, division 5 and division 6. Rules found in division 6 are subject to the Civil Enforcement Act and do not apply to foreclosure proceedings: rule 9 :37. [ 14 ] Mr. Coney next relies on s. 190(1) of the Land Titles Act as the basis for the hearing of this application within the foreclosure action. It allows a Judge to direct the Registrar, by decree or order, to cancel, correct, substitute or issue any Certificate of Title. He also points to

section 125 of the Land Titles Act which requires the Registrar of Land Titles to discharge a writ registered against land upon production to the Registrar of a Judge’s order directing its discharge. [ 15 ] These sections provide for the remedy available. They do not provide for the procedure required to obtain that remedy. To determine that procedure the Rules of Court and other legislation must be considered. [ 16 ] Finally, Mr. Coney points to the foundational rules and argues that the Court has an obligation to promote efficiency.

However, the Court of Appeal has made it clear that the general rules exist to help interpret ambiguous rules or doubtful points. They “do not repeal, nor give a judge power to dispense with observing, specific Rules...” As the Court noted, “legislation is to be followed, and is not an optional suggestion”: Gallant (Litigation Guardian of) v Farries , 2012 ABCA 98 , para 20 . . [ 17 ] The usual procedure when seeking to enforce a contract when the other contracting party has defaulted is to issue either a statement of claim or an originating notice of motion. Alternately, Mr.

Coney may be able to bring an application pursuant to the Civil Enforcement Act in the writ proceedings, if any, initiated by Ms. Rettie. His application in the foreclosure action is dismissed. [ 18 ] As a result of this determination it is unnecessary to consider the other matters raised by the parties. [ 19 ] Ms. Rettie is entitled to her costs.

Heard on the 26 th day of November, 2014. Dated at the City of Calgary, Alberta this 18 th day of December, 2014. J.B. Hanebury M.C.C.Q.B.A. Appearances: Stephen C. Mogdan Stringam Denecky LLP for the Applicant, Mark Coney Kelly P. Colborne Stones Carbert Waite LLP for the Respondent, Aga Rettie Denise A. Whiteley Warren Benson Amantea LLP for the Royal Bank of Canada