Sandhu v Meg Place LP Investment Corporation, 2016 ABQB 503

Court of Queen’s Bench of Alberta Citation: Sandhu v Meg Place LP Investment Corporation, 2016 ABQB 503 Date: 20160907 Docket: 1101 03927 Registry: Calgary Between: Darcy Sandhu, 934608 Alberta Ltd. and 587901 Alberta Ltd. Plaintiffs - and - Meg Place LP Investment Corporation, Safeguard Real Estate Investment Fund V Limited Partnership and Concrete Associates IV Investment Corporation Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice B.R.

Burrows _______________________________________________________ [ 1 ] On July 27, 2016, pursuant to Civil Enforcement Act, s. 5, Master Mason ordered the correction of an error in a Notice of Intention to Sell Land served on Meg Place LP Investment Corporation on February 4, 2016. She ordered that the Notice be amended nunc pro tunc to substitute the name “934608 Alberta Ltd.” in place of the name “Darcy Sandhu” as the enforcement creditor.

Her order provided further, “For greater clarity, the Notice of Intention to Sell Land served February 5, 2016 will continue to operate as if it were served by 934609 Alberta Ltd. on February 5, 2016.” Meg Place appeals from Master Mason’s order. [ 2 ] There was a trial in this debt action in 2014 and 2015. The trial judge, Poelman J., granted one of the three plaintiffs, 934608 Alberta Ltd., judgment against the three defendants jointly and severally for $1,416,666.00 plus prejudgment interest and costs.

The other two plaintiffs were not mentioned in judgment roll, except in the style of cause. [ 3 ] On November 23, 2015 the Clerk of the Court, at the instance of Patrick Robinson, Counsel for the Plaintiffs, issued a writ of enforcement against the three defendants for the total amount owing as of that date, $1,821,705.87. I shall refer to this writ of enforcement as “Writ #1”. Writ #1 correctly identified 934608 as the only enforcement creditor. On December 18, 2015, Writ #1 was

registered as instrument 151 331 847 against the title to a building in Calgary owned by Meg Place. [ 4 ] On December 22, 2015 the Clerk, again at the instance of Mr. Robinson, issued a second writ of enforcement against the three defendants, for the total amount owing to that date, $1,822,921.96. I shall refer to this Writ of Enforcement as “Writ #2”. Writ #2 incorrectly identified Darcy Sandhu and 587901 Alberta Ltd. as enforcement creditors in addition to 934608. Writ #2 was registered at the Personal Property Registry on December 22, 2015.

The registration indicates that all three plaintiffs are creditors and the three defendants are shown as the debtors. [ 5 ] On February 5, 2016, a process server served a Notice of Intention to Sell Land on Meg Place. It stated that Consolidated Civil Enforcement Inc. had been instructed by Gowling Lefleur Henderson LLP on behalf of Darcy Sandhu, to sell the previously mentioned building owned by Judgment Debtor, Meg Place.

It referenced “Writ of Enforcement number 151 331 847” which, as previously mentioned, was the instrument number for the registration of Writ #1 on the title to the lands to which the Notice of Intention to Sell Land related. [ 6 ] The Notice of Intention to Sell Land did not mention Writ #2. In my view the error in Writ #2 (the identification of the two plaintiffs who did not recover judgment as enforcement creditors) is therefore of no significance in this application. [ 7 ] The reference to Darcy Sandhu in the Notice of Intention to Sell Land clearly was an error.

Darcy Sandhu is not an enforcement creditor in these proceedings. The only enforcement creditor, and the only party capable of giving notice of intention to sell land is 934608. Mr. Sandhu is the principal of 934608. That fact was, at all relevant times, well known to all concerned. [ 8 ] The Plaintiffs brought this application for an order “permitting the enforcement creditor, Darcy Sandhu, be replaced with 934608 Alberta Ltd., as the instructing creditor with respect to the Notice of Intention to Sell Land”. The Plaintiffs sought that order under CEA , s. 5(2)(

e) which permits the court to direct that an enforcement creditor replace another enforcement creditor as the instructing creditor. [ 9 ] Master Mason noted that the situation did not fit into CEA s. 5(2)(

e) because Darcy Sandhu is not an enforcement creditor. However she granted the error correcting order described previously, in exercise of the authority given by CEA s. 5(1): 5(1) The Court may, on application by an interested party or an agency, give directions in respect of or determine any matter or issue that arises out any civil enforcement proceedings. [ 10 ] She held, invoking that section, that she could, “. . . look at this notice and decide whether it can operate to give notice of the sale or if a new notice has to be given.” [ 11 ] She held that identifying Mr.

Sandhu as the party giving the notice could not have caused any confusion or mistake by Meg Place, which knew that Mr. Sandu owned 934608 and would have recognized that he “likely gave the instruction on behalf of 934.” She noted that there was no evidence of any prejudice. She noted that the practical consequence of not making the order she made was that the judgment creditor would have to reserve the notice and wait another 6 months before proceeding to a enforcement sale of the building. She concluded: I do not see that there has been any lack of notice here.

I think that the notice that was given, in the particular circumstances before me, is adequate to give notice that 934 intended to sell MEG’s land to satisfy its judgment. There is no confusion. To find otherwise would be a triumph of form over substance and that is not consistent with the broad powers granted to the court in section 5(1) of the CEA. But, section 5(1) does grant the Court very broad authority in respect of civil enforcement proceedings. [ 12 ] Meg Place submits that CEA ss. 45 (c), 46(1)(a)(

i) and 70(1) operate to require that a notice of intention to sell land provide the name and address of the instructing creditor. Meg Place submits that, as the notice served in this case did not identify 934608 as the instructing creditor, but identified a party who was not a judgment creditor as the instructing creditor, it was a nullity. [ 13 ] Further, Meg Place submits that there is a limit on the court’s CEA s. 5(1) authority to give directions or determine any matter or issue in any civil enforcement proceeding.

That authority should not be used to relieve an enforcement creditor from strict compliance with the procedural requirements of the enforcement sale of land process.

Meg Place cites Alberta decisions which adopt a principle set out by James, L.J. in Johnson v Lyttle’s Iron Agency (1877), 5 Ch.D. 687 : It was the established rule of the Court of the Chancery and of the Courts of Common Law that no forfeiture of property could be made unless every condition precedent had been strictly and literally complied with. [ 14 ] That rule was cited and applied in Big Valley Collieries Ltd. v MacKinnon and Consumers Co-operative Company Limited, [1915] 4 W.W.R. (Alta S.C.) and Fortune Village Inn Ltd. v 203870 Restaurants and Catering Ltd., Tainsh and Goodchild, (1980) 26 A.R. 512 (Q.B., per Funduk, MC) . [ 15 ] These were cases where the contracts (in both cases commercial leases) provided that the landlord could respond to the tenant’s default by terminating the lease.

The contract set out the procedure which the landlord would be required to follow in order to do so. The landlord’s compliance with that procedure was not perfect. The courts ruled that the tenant’s interest in the lease would not be forfeited unless the landlord complied strictly with the contractually required procedures. [ 16 ] In my view the situation is different here. Service of the Notice of Intention to Sell Land in an enforcement proceeding does not result in the immediate forfeiture of the debtor’s interest in the land.

It launches a process which has no immediate result and, if the debtor wishes, can involve significant judicial supervision. The sale of land cannot proceed before the expiration of 180 days from the service of the notice unless the court orders that time to be reduced. The debtor can seek an order extending the 180 days ( CEA s. 72(12)). The debtor can require that the terms of a proposed sale be judicially approved ( CEA s. 74). The Registrar of Land Titles will

not register a transfer until satisfied that there has been no appeal of an order for sale ( CEA s. 75(2)). [ 17 ] The rule referenced in the cases cited applies where the parties have agreed in their contract to an unsupervised forfeiture process. Strict compliance with the process in such cases is reasonably required. Enforcement sale of land is a statutory process subject to the supervision of the court. An independent party, the court, is available to assess whether or not an imperfect compliance with the statutory procedures should nullify the step taken.

CEA s. 5 assigns that role to the court. [ 18 ] Here, as Master Mason concluded, the error caused no confusion to any party. No prejudice was suffered because of it. The error was not of such a nature that the Notice of Intention to Sell Land should be held ineffective. [ 19 ] The standard of review on an appeal from a Master in Chambers is correctness. In my view Master Mason’s decision was correct. The appeal is dismissed. Heard on the 15 th day of August, 2016. Dated at the City of Calgary, Alberta this 07 th day of September, 2016. B.R. Burrows J.C.Q.B.A.

Appearances: Jennifer Koschinsky and Patrick Robinson for the Plaintiffs Blair C. Yorke-Slader, Q.C. for the Defendants