Alta West Mortgage Capital Corporation v, 2016 ABQB 641

Court of Queen’s Bench of Alberta Citation: Alta West Mortgage Capital Corporation v 955492 Alberta Ltd, 2016 ABQB 641 Date: 20161117 Docket: 0901 10328 Registry: Calgary Between: Alta West Mortgage Capital Corporation, 564581 Alberta Ltd., Heather Wrigley and Foremost Foods Ltd. Plaintiffs - and - 955492 Alberta Ltd. and Ranbir Kaur Nahal Defendants _______________________________________________________ Memorandum of Decision of A. R.

Robertson , Q.C., Master in Chambers _______________________________________________________ Overview [ 1 ] This application is for judgment following the conclusion of a foreclosure of vacant development lands. The lands were ultimately sold for $4,990,000.00 and the mortgagee asks for judgment against the guarantor of the debt for the deficiency resulting between the selling price and the actual debt. The guarantor, Ms. Nahal, objects to judgment being granted for the deficiency that has resulted.

She argues that she is not liable at all, or alternatively the amount of the interest that has accrued should be reduced on equitable grounds. [ 2 ] I have concluded that the plaintiff is entitled to the deficiency judgment requested.

[ 3 ] The actual calculation of the deficiency is not in dispute. What is in dispute is the fact that the foreclosure proceedings have now taken approximately seven years, and approximately five of those years were spent attempting to sell the lands. The History [ 4 ] Ms. Nahal argues for equitable relief on a variety of grounds.

She asserts that the mortgagee was lackadaisical in pursuing its in rem remedy; that the realtors appointed by the court, at the behest of the mortgagee, did not do their jobs properly; that for lengthy periods of time the property was not actually listed for sale; that when it was listed for sale there was no “for sale” sign apparent to anyone passing near the lands; that it was only occasionally listed using the MLS system; and that virtually all of the interest that ultimately led to a successful sale was generated by her.

She says she was denied access to the realtors’ marketing materials and was left to her own devices of contacting possible interested parties. In many instances she was able to find an offer to purchase, many of which were accepted by the Court (although all but one did not close) when the realtors were not able to identify any purchaser. Ms. Nahal is a laboratory technician, not a licensed realtor. [ 5 ] Accordingly, she asks that the interest calculation be stopped for some significant period of time, with the consequence that she would be liable for significantly less than is claimed.

After crediting the sale of the lands, the mortgagee’s calculation of the debt as at September 16, 2016 was $1,138,160.62. Interest is running at $399.25 per day. [ 6 ] She also has asserted that the original realtor was involved in a secret arrangement to pay a portion of any commission that he earned to an officer of the plaintiff. Such a secret arrangement would, of course, be completely inappropriate. The amount claimed by the individual officer would presumably be justified as a “referral fee”. However, it would in reality be a secret profit.

The appointment of a realtor is by the Court, and the Court expects all transactions in which it is involved to be completely transparent. A “kickback” is not permissible. [ 7 ] The plaintiff does not deny that the arrangement was made with the original realtor here, and counsel does not try to defend it. He was not counsel at the time of the appointment of the first realtor. [ 8 ] Counsel for the mortgagee points out that there were many court orders directing the sale of the land and either appointing in a realtor, or re-appointing a realtor, and either setting or adjusting the listing price.

Orders were granted October 30, 2009; April 1, 2010; October 27, 2010; February 25, 2010; February 11, 2011; October 17, 2011; March 19, 2012 (although this was a consent refiling of the October 17, 2011 order, amending the list price); March 26, 2013; November 6, 2013; March 25: 2014; May 2, 2014, and July 3, 2014. Most, if not all, of the complaints made now were addressed by the masters who heard those applications at the time. He submits that the current arguments constitute collateral attacks on those orders. [ 9 ] Four offers were approved by the Court that did not close.

An offer was accepted on June 10, 2010 in the amount of $3,750,000, resulting in a forfeited deposit of $100,000. There was a dispute over the alleged negligence of the realtor in not properly addressing GST concerns in the offer, and $50,000 of that forfeited deposit was used as a settlement of that claim, directing a distribution of the fees, but only $35,000 was paid to the realtor and the balance was paid to the first mortgagee. [ 10 ] In January 30, 2012 an offer was accepted in the amount of $4,300,000.

The buyer did not complete but there were no deposits contained in the offer. [ 11 ] On August 13, 2012, an order was granted accepting an offer of $3,990,000, but the buyer did not complete and another deposit of $100,000 was forfeited. No real estate commissions were paid out of that offer. Eventually all of it was credited towards the debt. [ 12 ] On May 9, 2014 an offer was accepted in the amount of $4,900,000, but the buyer did not complete and another $100,000 was forfeited as a deposit.

Half of that was paid to the real estate agent as a commission and the other half was applied to the mortgage. [ 13 ] Finally, on July 21, 2014 an offer was accepted in the amount of $4,900,000. The order of July 3, 2014 that had most recently re-directed the listing of the property directed specifically that the lands be listed on the MLS system. However, the offer was submitted was the same offeror whose offer had been accepted on May 9. The listing on MLS did not find that buyer. [ 14 ] This application for judgment was originally set down for December 15, 2014 – approaching two years ago.

Various steps were taken by both parties, the application came back before the Court in May 2016, and at that time it was set down to be heard as a special application on September 16, 2016 before me. [ 15 ] Accordingly, there are two distinct time frames regarding the allegations of delay. The main body of the allegations relate to the attempts at selling the property. A discrete allegation of delay relates to the period between the date of the sale that finally resulted from a July 21, 2014 order and the appearance on September 16, 2016. Request for Leave to Defend [ 16 ] Ms.

Nahal also argues that her guarantee was not effective. She asserts that the requirement of an appearance by her before a Notary Public under the Guarantees Acknowledgement Act was not met. Ms. Nahal originally filed a statement of defence in 2009, and it was struck by order granted October 30, 2009. In that statement of defence she acknowledged that she signed a guarantee. She deposes that it was much later that she learned about the requirement of the legislation, and that her guarantee was not valid.

Accordingly, she asks that she be allowed to amend her statement of defence so as to plead the invalidity of her guarantee. [ 17 ] In reply, the plaintiff has filed an affidavit from the lawyer who signed the certificate of notary public required by the legislation. He says that she did appear before him as notary, and he explains an anomaly in the dates of the documents (which she relies on to assert her claim of non-compliance) from his review of his file records. [ 18 ] I dismissed her request at the hearing. She had not brought a formal application for leave to deliver a defence, and she was

applying to deliver a statement of defence seven years after her original statement of defence was struck, where the original defence actually admitted the guarantee. [ 19 ] A discussion of the “classic rule” allowing amendments, provided no prejudice occurred, or that prejudice could be addressed in costs, is not relevant for these circumstances.

An application to defend where no defence was initially filed involves showing that there is an arguable defence, showing that she intended to defend at the appropriate time, and explaining the delay. [ 20 ] The intention to defend is assumed to be on the issue on which the defendant now intends to defend. Ms. Nahal clearly intended to deliver a defence – she did deliver one, although it was struck – but in it she expressly admitted this issue.

She did not intend to defend on the basis that her guarantee was unenforceable. [ 21 ] Throughout the litigation she has been self-represented from time to time but she has often been represented, by several different relatively senior counsel who are known to be familiar with commercial litigation. Her explanation for the delay is that she did not understand the law, but even if ignorance of the law is a proper foundation for leave to defend late, she has had access to legal counsel for many years.

Authority for Relief Sought re Delay [ 22 ] In oral argument, I questioned whether the court has a legal basis for disallowing interest on the basis that the plaintiff did not proceed with its claim quickly enough. Counsel for the plaintiffs conceded that if the facts properly support a claim that the mortgagee benefitted from an abuse of the litigation process by the delays and allegedly sloppy efforts at sale, then it is possible for the Court to grant, as an equitable remedy, a stay of the calculation of interest from time to time for those periods when the foreclosure was not proceeding properly.

This entitlement does not arise by virtue of the Judgment Interest Act , R.S.A. 2000, chap J-1, section 2(3), which allows the Court to refuse to award interest under

Part 1 of the Judgment Interest Act , if the court “considers it just to do so having regard to… the circumstances of the case or the conduct of the action” - because the interest claimed here is not interest awarded under

Part 1. The interest claimed here is interest arising from a contract, which is expressly excluded from

Part 1 by section 2(2)(

h) of that Act . [ 23 ] However, counsel conceded that it is an equitable form of relief allowed in some cases dealing with foreclosures, particularly those dealing with orders directing sale to the plaintiff, commonly known as “Rice Orders”. In a Rice Order, a deficiency is structured artificially by the “sale” to the plaintiff at the appraised fair market value of the land. [ 24 ] Here there is no artificial deficiency; rather there is an actual deficiency resulting from an actual sale. Nonetheless, dicta in Resmor Trust Co. v.

Rahman , 2011 ABQB 725 , 2011 CarswellAlta 2065, at para. 17 is to the effect that “where a lender is foreclosing in a situation involving personal liability, the lender has an obligation to proceed in a reasonably expeditious fashion.” Master Laycock referred an oral decision of Master Hanebury in Servus Credit Union Ltd. v. Bardenhagen , Action No. 0900108. She had determined that the lender in Servus had failed in its obligation, and she restricted the interest, maintenance costs, legal fees and tax adjustment to a date earlier than the ultimate date of the Rice Order.

Her decision in Servus was upheld by Burrows, J. in another oral decision, on September 21, 2011. [ 25 ] I have subsequently learned that the case law is not consistent on this point. The case law is discussed at length in Scotia Mortgage Corp. v. Manzouri , 2012 ABQB 395 , 2012 CarswellAlta 1061, where Master Prowse concluded that he was “unaware of any jurisdiction by which contractual interest rates may be capped.” He reviewed cases where interest had been capped, but he noted that it had been done without any discussion of the jurisdictional basis for the result.

Where the jurisdiction to make such an order had been questioned, the conclusion reached was that there is none.

In particular, he followed the decision of Graesser, J. in Brennenstuhl Estate v Trynchy , 2008 CarswellAlta 529, 2008 ABQB 256 , as well as the British Columbia Court of Appeal and the Nova Scotia Supreme Court in other decisions. [ 26 ] I agree with Master Prowse, but in light of the concession by plaintiff’s counsel here, the conflicting case law and practice of other masters in chambers in Alberta, and in light of the lengthy foreclosure here and the relatively unusual facts, I will review the evidence and arguments as if I have jurisdiction to grant the relief Ms. Nahal seeks.

Is the Equitable Relief Appropriate Here? [ 27 ] Notwithstanding the acknowledgement on behalf of the lender that this form of equitable relief might be available, the plaintiffs submit that the facts here do not justify it. What happened here was that it simply took several years to sell a parcel of land on the outskirts of Calgary that were undeveloped. A buyer who was actually willing to close could not be found for a period of five years. The sorts of delays that resulted were primarily normal delays that occur in the course of litigation.

For example, an order for sale would be granted and a realtor appointed, but the term of the listing, initially only 90 or 120 days, would run out and time would then be lost while a fresh application was brought to reappoint the realtor and perhaps to adjust the listing price. The plaintiffs submit that this is not a case where the lender did nothing for extended periods of time, and it is inappropriate for the Court to play “armchair quarterback” and purport to micromanage the foreclosure litigation after the fact. [ 28 ] Furthermore, this was a second mortgage.

The first mortgage was, oddly enough, for a higher interest rate, but a dispute arose over the amount of the interest that the lender could claim. An error had been made in preparing a redemption order in that claim, and that led to a special application to resolve that issue. The mortgagee here supported the position of the defendant in the attempt to fix the first mortgagee with the lower, but incorrect, interest rate.

After the Court concluded that the redemption order in the first mortgage proceedings should be corrected, Alta West, one of the plaintiffs here, bought the position of the first mortgagee. [ 29 ] All of that must be taken into account when considering whether there has been delay. There were several orders, much conflict, and for a time, there were two parallel foreclosure proceedings underway. Relief in this action may have depended, in part, on the calculation of the first mortgagee’s claim. [ 30 ] Ms.

Nahal has submitted several affidavits throughout the course of the litigation setting out various complaints about how the lawsuit was managed and how the realtors mismanaged the marketing of the property. These affidavits were affirmed on the following

dates: October 28, 2009; March 26 2010; May 27, 2010; July 8, 2010; October 22, 2010; February 1, 2011; March 7, 2014; March 24, 2014; March 28, 2014; July 23, 2014; October 13, 2015; and May 16, 2016. [ 31 ] A detailed review of those affidavits was necessary to consider Ms. Nahal’s concerns. I have attached my

summary of the affidavits, comments, and some of the reply evidence, as

Schedule “A” . [ 32 ] A careful review of the history of Ms. Nahal’s complaints about the process reveals, if her assertions as to the actions of Alta West are true, some legitimate concerns about the sale process. [ 33 ] As mentioned, referral fees by the plaintiff for an agent appointed by the Court without disclosure to the Court are inappropriate, if not unethical, because they are secret commission being made on the sale that the Court is supervising.

If the referral fee were disclosed to the Court, it is extremely unlikely that the Court would agree to the appointment of the realtor. [ 34 ] The same applies to secret caps on commissions.

The Court assumes that realtors will split commissions according to widely- accepted practices in accordance with the appointment of the real estate agent, not pursuant to some special deal made to favour the lender. [ 35 ] A court-appointed realtor should be cautious about telling a prospective buyer that a price reduction is being sought, even if the prospective buyer has made it clear that the property is listed at too high a price. Certainly the price reduction should not be suggested as being automatic.

Telegraphing an expected price reduction may turn out to be a foolish move: the Court does not always agree that the price should be reduced, or that it should be reduced as much as the real estate agent asks. Sometimes knowledge that an offer is being presented causes other potential buyers to make competing offers. Sales at higher than appraised value are not uncommon in foreclosures. They are not the norm, but they are not so infrequent as to be considered rare oddities.

The listing realtor, acting for both parties, who suggests submitting a low-ball price thinking he or she will earn all of the commission may find that the commission is split with another agent whose client submits a higher offer. [ 36 ] But the complaint now is that there has been delay.

Most of the matters that she complains about were raised with the various masters hearing the many applications along the way. [ 37 ] Where a listing realtor is not doing his or her job, clear evidence of how the job is not being done properly should be brought to the attention of the Court and a different listing agent should be proposed. Ms. Nahal made such applications here. They were dealt with. Different real estate agents were appointed from time to time. Resolution [ 38 ] Accordingly, Ms. Nahal is attempting to collaterally attack orders made in the course of the proceedings, long after the fact.

I cannot sit on appeal of the masters who heard and decided them. If the outcome of one of those hearings was not satisfactory, then an appeal might have been appropriate. [ 39 ] The land was undeveloped and marketed for development purposes. The value of such land is difficult to determine until there is an actual buyer making an offer. In commercial real estate the “income approach” is often the most important tool, but undeveloped land has no income stream - only the potential for further investment to realize on dreams.

The “replacement cost approach” is also often important, especially as a cross-check, because if the property could be replicated at a certain price then the comparable sales might have to be scrutinized carefully. But it generally does not apply to undeveloped land except for such factors as demolition and environmental issues. Even the “comparison approach” is problematic. Development lands have no immediate use, as a residential house does.

There is generally not the same kind of broad, strong market of potential buyers of undeveloped lands - they have to be prepared to buy the land and then make further investments for development. [ 40 ] The many appraisals that we see here, and the many accepted offers that did not close, underscore these realities. The opinions of value and the prices offered vary widely. Ms. Nahal’s own view as to value changed widely from time to time – even within one of the affidavits she presented.

The actual appearance of a buyer, with funds, who is ready to close, takes on great significance when trying to determine the value of undeveloped land. [ 41 ] She would suggest that while the agents had the listing, they did little or nothing. But while Ms.

Nahal’s complaints about the absence of a sign or the absence of MLS listing are all legitimate questions to ask of a real estate agent, the Court is not blind to the fact that undeveloped land is not marketed the same as a residential home, and a sign on the property (particularly if it becomes weathered with age) may not be an effective marketing tool when the land has been, or is expected to be, on the market for an extended time. [ 42 ] Ms. Nahal has set out her own opinions, and occasionally passed on a comment or opinion made to her by another agent.

Aside from the concern about this being a collateral attack on earlier orders, without expert evidence as to what forms the actual marketing took and how the marketing was professionally deficient, the Court is hard-pressed to second-guess the real estate agents’ steps. [ 43 ] On July 3, 2014 Master Hanebury required that the realtor list the property on MLS, in light of Ms. Nahal’s complaints. She also directed in that order that unless the lands had been sold, the realtors were required to provide to plaintiff’s counsel a full

summary of all marketing efforts and responses received no later than August 26, 2014. However, that is when the lands were sold, so the

summary would not have been provided to the plaintiff. (I assume that the intent was the plaintiff’s counsel would share the report with the defendant’s counsel if it were received.) [ 44 ] Much of Ms. Nahal’s evidence was not properly admissible. She expressed opinions about the value, although she is not an appraiser. She expressed opinions about the quality of the work done (or not done) by the real estate agents, although she is not a real estate agent. She made various assertions of wrongdoing, mostly with little or no detail of what was said when, the names of the parties involved, and other information that would lift her evidence from self-serving to probative.

[ 45 ] There is much evidence of Ms. Nahal attempting to insert herself in the sale process, and she adduces some evidence that Alta West might have been acting inappropriately, but generally that evidence does not lead to the conclusion that there was material delay, and it is clear that overall there has been a great deal of discord throughout. But that does not lead to the conclusion that the property was not reasonably aggressively offered for sale, rather that the market may have endured some confusion as a result of the discord that may have frustrated the sale process. [ 46 ] Ms.

Nahal emphasizes that she was the one who introduced the various potential buyers to the land, other than one, and she uses that to support her argument that the real estate agents and Alta West were not trying hard enough. However, only one of those potential buyers actually closed after several false starts over many years. Fortunately, two of them forfeited significant deposits. Some of the things that Ms.

Nahal complains about – the fact that potential buyers she identified shied away after learning about the foreclosure proceedings – are not inconsistent with the experience of selling land in foreclosure generally. An owner trying to compete with the listing realtor is bound to lead to confusion and uncertainty, which tend not to lead to secure offers. Conclusion [ 47 ] In the result, the plaintiff is entitled to judgment for the deficiency as asked for. Heard on the 16 th day of September, 2016. Dated at the City of Calgary, Alberta this 17 th day of November, 2016. A. R. Robertson, Q.C. M.C.C.Q.B.A.

Appearances: Jim Reich Reich Law for the Applicants (Plaintiffs) Kent W. Jesse McLennan Ross LLP for the Defendant (Respondent) Ranbir Kaur Nahal

Schedule “A” [1] October 28, 2009: In this affidavit, Ms Nahal asked for a six month redemption period expiring April 29, 2009. She described a sale she had made privately that did not close and efforts she was making to re-finance. She asserted that there was sufficient equity for both mortgagees to be paid. [2] March 26, 2010: She provided this affidavit in opposition to an application to renew the listing at a reduced price. It had been listed at $5,600,000 and the lender was asking for a reduction to $3,600,000. She described re-financing that she was working on.

Finally, she complained that she believed that the realtor had not made sufficient efforts to sell the lands, although the only fact that she

identified was the absence of a “for sale” sign on the property. [3] May 27, 2010: She provided this affidavit to oppose a sale at $3,750,000 for which an offer had been received.

She asserted that one of the reasons that the property did not sell during the first listing was that Cal Morstad of Alta West had capped the sales commission for any purchasing realtor at $40,000, and “the listing realtor was insisting on keeping most of the commission himself.” (Since the appointment of the real estate agent is by the Court, it is not clear how anyone might think that an employee of the plaintiff is authorized to direct how the commissions are to be split.

The plaintiff does not have that authority, and if a mortgagee purports to assert this right, it should be reported promptly to the Court.) [4] She speculated that realtors representing purchasers would be less inclined to market the lands given the inequitable split. She also asserted that the commission of 5% in the current listing was excessive because “normal commissions for sales of bare lands like this are typically 3%.” However, in his March 17, 2010 affidavit Mr.

Morgan deposed that in the sale of commercial premises the rates differ from the commissions paid on residential sales, and he said he was willing to accept the listing with a 5% commission. That appears to have been presented on notice to Ms. Nahal and accepted by the Court. [5] Ms. Nahal also said that she had a competing offer for $4,500,000 which she also felt was low, but it also required her to sell an adjacent parcel. It appears that she had no intention of doing that. She complained that Mr.

Morgan, the listing real estate agent, had expressed an opinion that the lands were only worth $3,600,000, and that this tainted his ability to get a reasonable price. In an affidavit sworn May 13, 2010 Mr. Morgan opined that the list price should be reduced to $3,600,000 “if a quick sale is to be achieved”. This was expressed with a comparative marketing analysis, commonly provided to the court when the listing has not led to an acceptable offer and the agent believes the list price is too high.

In his December 20, 2010 affidavit, providing a further comparative market analysis, he revised his recommendation upwards to $4,000,000. [6] July 8: 2010: She complained that the order accepting the offer at $3,750,000 contained a significant error because the offer was inconsistent about wither GST was included, and had she understood that GST was included in the price, she would have accepted the offer at $4,500,000 plus GST and sold the neighbouring lands. She advised that she would withdraw her objection if the sale clearly included GST. (As mentioned above, the sale did not close in any event. Mr.

Morgan asserted in his November 22, 2010 affidavit that he raised the GST issue at the outset, but in any event the failure to close the amended offer that resulted from the controversy was not related to the GST issue.) [7] October 22, 2010: She complained about the excess legal fees that she had incurred as a result of the GST error. [8] February 1, 2011: She complained that Chad Morgan was still involved in trying to sell the lands and that he had not posted a “for sale” sign.

She asserted that he had raised the issue of the $500 cost of the sign, and that the listing realtors had made little or no effort to market the lands and appeared to have no experience marketing this kind of land. She asserted that Mr. McKitrick, the current listing realtor, was a shareholder of Alta West (a plaintiff) and “is in a conflict of interest” although she did not explain what that conflict was. She expressed opinions about comparable properties used to establish value. [9] Of significance, she attached an email from Ken Aarsby at CIR Realty, who advised that he had contacted Mr.

Morgan in mid-December 2010 to ask about an environmental study and he mentioned that “he” was applying to the court for a price reduction. Mr. Aarsby said that he had potential purchasers and he relayed this information to them. They told him they would wait to see what transpired, but since nothing further came of it they lost interest. Ms. Nahal asserted, without any basis for saying why, that she believed that Mr.

Morgan had volunteered that they should wait, and that he never followed up on the environmental concerns. [10] April 9, 2012: This is an affidavit submitted in the first mortgage foreclosure, 1001-03409. It deals with some issues in that action, and includes complaints by Ms. Nahal about the real estate agent appointed in these proceedings, Harvey Russell of CB Richard Ellis. She had requested monthly listing reports from him, and he had not complied. Of course, he was not retained by her; he was appointed by the Court. She proposed a different agent.

She also wanted the listing price to increase from $4,500,000. [11] June 18,2012: This affidavit was also submitted in the first mortgage foreclosure. She was opposing an offer of $3.5 million, and she described her various complaints about the agents who had been appointed up to that date, , and said that when the previous listing lapsed she took it upon her self to hire a realtor to list the lands – the agent she had proposed in the April 9 affidavit.

She attached a letter from him suggesting a listing at $6,750,000 with an estimated market value to be $6,000,000+/-. [12] March 7, 2014: She stated that she had been told not to contact the current listing realtor, Cypress Realty and that Alta West was not agreeing to provide her with any marketing material. She identified other properties in the area that for sale. Mr.

Chuck McKitrick expressed the concern in his March 24, 2014 affidavit that “the Defendant has consistently marketed this property personally and has used professionals to attempt to sell the Lands during both the [previous] and the current listing. I believe that such actions undermines the ability of the Court ordered realtors to obtain offers. [13] March 24, 2014: She submitted this affidavit as supplemental to her affidavit of March 7, and described various potential buyers and said that there is “a commission issue”, not fully explained.

She was opposing a reduction to the judicial listing price. [14] March 28, 2014: This affidavit was stated to be supplemental to her March 24 affidavit. She attached an email for counsel for the plaintiffs in which he raised with Ms. Nahal’s counsel an on-going difficulty: that agents were confused as to who was in charge of selling the property. He said, “[the agent’s] efforts to sell the property where [sic] being thwarted by Ms. Nahal’s attempts in the community to concurrently sell the property.” He noted that Ms. Nahal had received a total of five offers, none of which had become unconditional.

However, in the email counsel mentioned that the agent was “hopeful tat he might have an offer in the next week” and she focused on that to say, “If there are offers being generated in respect to the existing listing price, I do not understand why there should be a reduction to this price in this judicial listing at this time.” [15] July 3, 2014: This affidavit was provided to ask for a listing price of $9,950,000 in a new order for sale, based on an appraisal that she attached, from an appraisal firm, giving the opinion that the value was $10,300,000. The appraisal itself was not under oath.

She also wanted to change realtors because in the six months since this current realtor had had the listing, the property had not

sold. She noted that the last offer accepted by the Court was for $4,900,000, and it was obtained by her efforts. It did not close.

She complained that “Alta West” had reduced the price to $5,000,000 and had they not done that this offeror would have offered $5,200,000 “and most likely higher since the economy has improved.” (Of course, it is the Court that sets the listing price, after giving the parties an opportunity to make submissions, not the lender.) [16] She also asserted that Cal Morstad had requested “referral fees” from realtors to whom “Alta West” gave the listings, and that she knew of a realtor (unnamed) who had refused to take the listing because of it.

She also described the history of a previous change in realtors: in 2010 her lawyer had opposed a re-listing with Chad Morgan because he was not qualified, and had agreed to Chuck McKitrick, who was associated with Alta West, but Mr. McKitrick then proceeded to involve Mr. Morgan as “co-lister”. [17] She complained about counsel for Alta West because of what she described as unprofessional conduct in the courtroom in an appearance where he is alleged to have said negative things about her (apparently said while sitting in the gallery, not while making his submissions).

She asserted, without details, that a party had written an offer to her for $5,500,000 “but when they found out that the property [was] in foreclosure they approached Alta West and wrote an offer for $4,000,000.” She found out that her property had not been listed in the MLS system or ICX (an online real estate searching app) since 2011. She then asserted that she had another offer coming within the next 48 hours for $10,920,000.

Although in paragraph 5 of this affidavit she asked for a listing at $9,950,000, at paragraph 32 she asked that the court list the property at $10,300,000 “without the property being marketed as a foreclosure”. [18] October 13, 2015: It is in this affidavit that she asserted that the Guarantees Acknowledgement Act had not been complied with and that invalidated her guarantee.

She reviewed her prior complaints about the selection of real estate agents, the absence of a “for sale” sign, the capping of the commissions to a purchasing realtor, Alta West insisting on a referral fee, the use of a real estate agent employed by Alta West, and (in paragraph 27) she asserts what I understand to be her frustration that she had several times discussed marketing the lands with realtors who then backed away after speaking to Alta West.

She complained about a $50,000 amount released to a prior realtor when it “should have gone to the credit of the sale” resulting in the realtor being overpaid, but she noted that related to the July 3, 2014 Order for Sale. [19] Overall, her complaint is summarized as being one that Alta West was not diligent with their realtors, and that they had profited “owing to the length of this foreclosure”. She also asserted that Alta West had “sabotaged” an offer by disclosing to the purchaser that the property was in foreclosure after agreeing to keep the court proceedings confidential.

She provided no details of this alleged promise of confidentiality. However, the foreclosure process could not realistically be kept confidential from a purchaser although I note that there was no CLP registered on the title. The closing process would require the purchaser’s counsel to ensure that the action had been discontinued or that the sale had been concluded through the court process. [20] May 16, 2016: This affidavit is an overall

summary of Ms. Nahal’s complaints. [21] In oral argument I was also told of affidavits of Ms. Nahal that were said to have been made in March, 2011; October, 2011; April 9, 2012; June 2012; and September, 2012, but I have reviewed the court file and found no such affidavits in this action.