Toronto Dominion Bank v Leffler, 2017 ABQB 154

Court of Queen’s Bench of Alberta Citation: Toronto Dominion Bank v Leffler, 2017 ABQB 154 Date: 20170303 Docket: 0703 02877 Registry: Edmonton Between: The Toronto Dominion Bank Plaintiff / Defendant by Counterclaim - and - David Kenneth Leffler Defendant / Plaintiff by Counterclaim _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice Dawn Pentelechuk _______________________________________________________ Appeal from the Decision by S.L. Schulz, Master in Chambers Filed on the 25 th day of June, 2015 Dated the 25 th day of June, 2015 (Unreported, Docket: 0703 02877) I. Introduction

[ 1 ] Both the plaintiff/defendant by counterclaim, the Toronto-Dominion Bank (“TD”) and the defendant/plaintiff by counterclaim, David Kenneth Leffler (“Mr. Leffler”), appeal the Master’s decision in granting

summary dismissal of some but not the entirety of the counterclaim filed by Mr. Leffler. [ 2 ] This is a de novo hearing. The parties agree and I am satisfied that the standard of review for an appeal of a Master’s order is correctness on all issues: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 , 524 AR 382; McGowen v Lang , 2015 ABCA 217 at para 32 , 602 AR 168. [ 3 ] The issue for me to decide, therefore, is whether a disposition that is fair and just to both parties can be made on the existing record. If it can, then

summary judgment may be issued: Maxwell v Wal-Mart , 2014 ABCA 383 at para 12 , 588 AR 6. This threshold has also been described as whether an argument or issue has “merit”: Pyrrha Design Inc v Plum and Posey Inc , 2016 ABCA 12 at para 19 . II. Background [ 4 ] Mr. Leffler was the co-owner and, after September 2005, the sole owner of a house located on Alberta Avenue, in Edmonton (“the property”). TD held a Canada Mortgage and Housing Corporation (“CMHC”) mortgage on the property. [ 5 ] The City of Edmonton was corresponding with Mr. Leffler as early as May 2005 regarding concerns with the property.

In June 2016, the City of Edmonton issued an Order under the Safety Codes Act , RSA 2000 c S-1 to Mr. Leffler that he must either retain an engineer to provide an opinion on the structural integrity of the building or demolish the building, by July 21, 2006. [ 6 ] Mr. Leffler took neither of these steps. [ 7 ] In January 2007, as a result of the Safety Codes Act order on the property, TD sent a letter to Mr. Leffler advising he was in breach of the terms of the mortgage and demanding the full balance under the mortgage. [ 8 ] In February 2007, the City of Edmonton sent another letter to Mr.

Leffler directing him to either retain an engineer to provide a “detailed design repair method” or demolish the building. [ 9 ] In March 2007, TD commenced a foreclosure action against Mr. Leffler. [ 10 ] Mr. Leffler was then noted in default. [ 11 ] In June 2007, TD obtained a redemption order (order nisi) with a six month redemption period to be followed by a 90 day judicial listing. At this time, $87,918.92 was owing on the mortgage. [ 12 ] The value of property and land were appraised in April 2007 as $165,000.00.

TD obtained a second appraisal of the property on July 20, 2007, requesting only the land be appraised. This appraisal noted the property had been slated for demolition by the City of Edmonton. The land was appraised at $160,000 but there is no evidence this appraisal was ever filed with the Court. [ 13 ] In September 2007, before the expiration of the six month redemption period, the property was destroyed by fire. [ 14 ] In January 2008, the property was listed for sale for $165,000, which was the appraised value of the land and building in April 2007.

On March 19, 2008, TD received an offer to purchase for $125,000 but did not accept it. [ 15 ] In May 2008, TD obtained an order amending the listing price to $130,000 and extending the listing for another 90 days. TD obtained offers of $99,000 and $105,000, but rejected these as well. [ 16 ] In October 2008, TD obtained a third order, amending the listing price to $110,000 and extending the listing agreement for another 90 days. [ 17 ] On February 6, 2009, Master Smart granted an order confirming sale of the property for $94,000. By this date, TD claimed $117,730.13 owing from Mr. Leffler.

Master Smart adjourned TD’s application for a deficiency judgment, which was argued before him on June 25, 2009. [ 18 ] In reasons reported at Toronto-Dominion Bank v Leffler , 2010 ABQB 353 , 188 ACWS (3d) 1161, Master Smart granted TD a deficiency judgment against Mr. Leffler for the sum of $22,408.72 plus solicitor and client costs, but stayed enforcement of the judgment for 60 days to permit Mr. Leffler to file a counterclaim as Mr. Leffler had raised issues “which he should be permitted to argue by way of set-off against the judgment”. [ 19 ] Mr.

Leffler filed his counterclaim July 19, 2010 as a self-represented litigant. Two of the claims are in issue in these appeals, that TD was negligent in: 1. its handling of the judicial sale of the property (paras 1-15 of the counterclaim); and 2. failing to insure Mr. Leffler’s interest in the property and in failing to submit an insurance claim after the fire (paras 16 and 17 of the counterclaim and para (

d) of the relief). [ 20 ] TD applied to strike out the Leffler counterclaim on August 3, 2010, arguing that Mr. Leffler’s pleading, “a stand-alone counterclaim”, cannot exist in law. Master Breitkreuz rejected that argument, noting Mr. Leffler was following the Court’s direction, and that an impending change in the Alberta Rules of Court permitted exactly this kind of action: Toronto-Dominion Bank v Leffler , 2010 ABQB 547 , 192 ACWS (3d) 74.

[ 21 ] On October 9, 2014, TD Bank made application under Rule 7.3 of the Alberta Rules of Court , Alta Reg 124/2010 for

summary judgment to dismiss Mr. Leffler’s counterclaim in its entirety. [ 22 ] The application was argued before Master Schulz June 25, 2015. III. The Master’s Decision [ 23 ] In oral reasons on that date, Master Schulz granted partial

summary judgment against Mr. Leffler, dismissing the negligence claims in relation to insurance. However, she refused to order

summary judgment concerning the negligence claims in how TD handled the judicial sale. [ 24 ] After explaining the concept of res judicata to Mr. Leffler, the Master concluded: Now, with respect to the insurance issues, Mr. Leffler, if you think that you paid some insurance or something that you did not get, that is for you to take up with the insurance company. This is not for us to deal with today. I think that that matter was dealt with by Master Smart in his decision, and he particularly addressed it when he talked about refunding a portion of the premiums.

And, therefore, I am finding that the insurance issue is res judicata and that that should be struck from the counterclaim. IV. The Current Appeals [ 25 ] Both TD and Mr. Leffler challenge Master Schulz’s conclusion. TD seeks to extinguish Mr. Leffler’s remaining cause of action, that TD conducted itself in an improper and negligent manner during the foreclosure. Mr. Leffler appeals to restore his claim against TD for its failure to pursue insurance claims after the September 2007 fire. A. TD Appeal [ 26 ] TD seeks

summary judgment for Mr. Leffler’s remaining cause of action. 1. The Foreclosure Misrepresentation / Negligence Claim [ 27 ] The only remaining action after Master Schulz granted TD’s application in

part is one which alleges TD engaged in willful misconduct and was negligent during the foreclosure of Mr. Leffler’s property. Particulars of this negligence and mishandling include: 1. failing to deal fairly with Mr. Leffler; 2. listing the property for sale for $165,000, notwithstanding:

a) the property had been destroyed in a fire and

b) the Edmonton housing market had undergone a significant decline since the property had been appraised; 3. failing, through its counsel, to be forthright with the Court in their representations; 4. failing to accept the first offer for $125,000 made in March 2008; 5. failing to obtain the listing agent’s input as to a fair and obtainable selling price; and 6. failing to effectively market the property. [ 28 ] In declining to dismiss Mr.

Leffler’s claim in negligence for the handling of the judicial sale, the Master provided the following reasons: Master Schulz: Now, what I do want to say is that I am troubled by what I have heard in the evidence about the – and misrepresentation may be the wrong word, but I am going to use it. The representations or the inaccuracies, is probably a better way of putting it, that were made by counsel at the time when these matters came to court. And I am thinking particularly with respect to whether offers were received and whether they were relying on the Court to be aware of some of the documents that got filed.

As I mentioned earlier, the Court relies very heavily on the representations that counsel makes when they come to court. Mr. Leffler: Yeah, yeah. Yeah I understand. Master Schulz: Mr. Leffler, please sit down, I think you need to hear this. We rely very heavily on what counsel has to say, and I want to make sure it is very clear for the record that Ms. Bourgeois was not counsel at the time that those representations were made. As a result of what happened there is that I think that there is some basis for continuing Mr. Leffler’s claim with respect to the negligence aspect.

I understand what you were saying about pure economic loss and the issues around that, but I do believe that there – if it is found that what happened falls within the category of negligent misrepresentation that there could be a claim for the pure economic loss.

2. TD’s Grounds for Appeal [ 29 ] TD appeals Master Schulz conclusion, arguing the Master erred in: 1. Fashioning a cause of action for negligent misrepresentation into Mr. Leffler’s counterclaim, and then failing to consider whether this claim for negligent misrepresentation should be summarily dismissed. 2. Failing to properly address the claim for negligent realization upon the security of the mortgage and in doing so, erred in not summarily dismissing the claim, by specifically, failing to:

a) consider and give effect to the contractual provisions in

Article 15 of the mortgage expressly excluding liability for loss on any sale or resale of the property; and

b) appreciate the evidence and to apply the correct test for standard of care of the mortgagee realizing on security, and for causation. 3. Analysis: Fashioning a Cause of Action for Negligent Misrepresentation and then Failing to Consider Whether this Claim Should be Summarily Dismissed [ 30 ] This ground of appeal can be dismissed in short order. [ 31 ] In her oral reasons, the Master does reference negligent misrepresentation and a possible claim for pure economic loss, but this cannot be parsed from the totality of the reasons provided.

In reviewing the reasons as a whole, I conclude that Master properly framed the cause of action as negligence, although statements made by counsel for TD in the course of various applications to the Court provided reason for pause. [ 32 ] Further, counsel for TD was not under the impression that the claim had been expanded or fashioned into one of negligent misrepresentation. [ 33 ] The counterclaim itself does not allege negligent misrepresentation vis a vis Mr. Leffler and TD and therefore, there was no error in the Master failing to consider whether such a claim should survive

summary judgment. 4. Analysis: Failure to Properly Address and Dismiss the Claim for Negligent Realization Upon the Security of the Mortgage in Counterclaim (Paragraphs 11-15) [ 34 ] TD advances two separate legal arguments as to why Mr. Leffler’s claim in negligence is without merit. TD argues that: 1. Mr. Leffler was contractually barred in claiming against TD by the terms of the mortgage itself, and 2. TD met the requisite standard of care of a mortgagee to act in good faith and exercise reasonable care to obtain the true market value at the time of selling the property. a. The Mortgage Contract Blocks Mr. Leffler’s Action [ 35 ] TD points to two sections of the standard CMHC mortgage:

Article 9: The Mortgagor covenants with the Mortgagee that the Mortgagor will pay the Indebtedness to the Mortgagee as and when provided in the Mortgage without any deduction, set-off, abatement or counterclaim . ...

Article 15(i): The Mortgagee may sell, transfer and convey any part of the Mortgaged Premises on such terms ... as shall appear to the Mortgagee most advantageous and for such prices as can reasonably be obtained therefore ... and on any sale or resale, the Mortgagee shall not be answerable for loss occasioned thereby ; and for any such purposes the Mortgagee may make and execute all agreements and assurances that the Mortgagee shall deem advisable or necessary. [Emphasis added.] [ 36 ] TD argues that when read together and given their plain and ordinary meaning, Mr.

Leffler is precluded from filing a counterclaim or claiming any set-off of damages against the default judgment. [ 37 ] Mr. Leffler argues that matters raised on this appeal are res judicata . Master Smart allowed him to file a counterclaim to address matters raised at the default judgment application, staying the default judgment, and allowing Mr. Leffler to plead equitable set- off. Mr. Leffler argues that TD’s

summary judgment application before Master Schulz was a wrongful attempt to have another Master overturn the decision of Master Smart. Instead, TD should have appealed the original decision. [ 38 ] In permitting Mr. Leffler to file a counterclaim, Master Smart made only oblique reference to the matters Mr. Leffler raised during the application. I see no error in TD waiting until the counterclaim was filed to then assess whether the claims could survive

summary judgment. [ 39 ] I do find, however, that Master Smart’s decision to stay the default judgment to allow a counterclaim to be filed is res judicata .

Article 9 should have been raised at the application before Master Smart, or his decision should have been appealed on that point. Mr. Leffler therefore raises an arguable issue that

Article 9 does not apply during foreclosure proceedings. TD’s argument on that basis is therefore rejected.

[40] TD provides no authority on whether

Article 15(

i) provides complete protection for a mortgagee regardless of thatmortgagee’s negligence, recklessness or wilful misconduct. Instead, it relies on Alberta Opportunity Co v Houssian (1988), 87 AR 385, (Alta QB) and the Alberta Court of Appeal decision in Alberta Opportunity Company v Moulton, 1990 ABCA 359,which follows Bauer v Bank of Montreal, (SCC), [1980] 2 SCR 102, 110 DLR (3d) 424. [41] These cases involved provisions within a guarantee that are markedly different from the wording of

Article 15(i). InHoussian, the clause in question indicated the liability of the guarantor is not lessened by any loss in respect of the securities whetheroccasioned by the fault of the lender or “any other thing whatsoever which under law relating to sureties would, but for this provision,have the effect of releasing the guarantors or any of them”. [42] It is indisputable that clauses purporting to eliminate rights must be clearly worded, particularly where the clause purports toeliminate a common law duty of care. [43] TD concedes that at common law, TD owes a duty of care to Mr. Leffler in disposing of the property given that he is vitallyaffected by the result of any judicial sale.

Article 15(

i) purports to place a positive duty on the mortgagee to sell the property for the mostadvantageous price that can be reasonably be obtained.

Article 15(

i) is therefore arguably better described as putting an onus on the bankto sell foreclosed properties for the most advantageous reasonable result, and, if it does so, then the bank is not responsible for any lossthat results. [44] Such a reading would be consistent with the common law duty of both receivers and mortgagees to act in good faith and usereasonable care to obtain the true market value of the secured property at the time it is sold: CIBC v Haley (1979), (NB KB), 100 DLR (3d) 470, 25 NBR (2d) 304 (NBCA); WG Keith Management Ltd v Royal Bank of Canada (1986), (AB KB), 72 AR 204, 46 Alta LR (2d) 273 (Alta QB); Seattle First Holding Co v Western Crane Service Ltd (1987), (AB KB), 82 AR 171, 56 Alta LR (2d) 39 (Alta QB). [45] In my view,

Article 15(

i) is not so clearly worded that it precludes any claim against the mortgagee for its handling of theforeclosure proceedings. b. Did TD Meet Its Duty of Care in Handling the Judicial Sale? [46] The next issue is whether on the evidence I may conclude that there is no merit to Mr. Leffler’s argument that TD wasnegligent in its handling of the foreclosure. [47] TD urges that the ultimate application for approval to sell the land for $94,000 should not be viewed with the benefit ofhindsight.

The bank should not be faulted for its failure to accept higher offers as they were guided by the values outlined in the variousappraisals obtained. The terms of the judicial sale orders obliged TD to bring forward only those offers over the listing price. TD arguesthat it listed the property for the appraised values at the time and the offers received were well below those appraised values. [48] Mr.

Leffler acknowledges that TD was well within its right to sell the property, but says the second court application on May20, 2008, when the listing price was reduced to $130,000, was so problematic that it taints all of the proceedings that follow. [49] On the record before me, TD misstated or failed to disclose some key pieces of information at this application: 1. TD represented that the house had been demolished as a result of Safety Code issues from the City. By this time, of course, theproperty had been destroyed by fire, but this fact was not brought to the Court’s attention. 2.

TD also failed to disclose that it had received an offer of $125,000 in March 2008 that had no deadline for acceptance. [50] Mr. Leffler argues that the implications from the submissions made would be clear: the house had been demolished becauseof Safety Code concerns and therefore, the new appraisal of $130,000 was entirely reasonable. [51] In the course of this foreclosure TD obtained four different valuations of the property. All four were done by the sameappraiser. The first was in April 2007. No interior inspection was conducted.

The appraiser was aware the home had been cited under theSafety Codes Act and a professional building inspection was recommended. The appraised value of the property at that point was$165,000. [52] A second appraisal was done July 20, 2007, again based on an exterior inspection. The appraiser referenced that the housewas slated for demolition by the City of Edmonton. The appraised value was $160,000 for land only, but this valuation was not filed withthe Court nor brought to its attention. [53] The house was listed for sale in January 2008, after expiration of the redemption period.

Rather than having the propertyreappraised at the time of listing in January 2008, the bank proceeded to list the property at $165,000, the original April 2007 appraisedvalue, rather than the more recent July 2007 appraisal value of $160,000. By then, the house had been destroyed by fire and it isundisputed that the real estate market was at the precipice of a steep decline.

A third appraisal was conducted April 21, 2008, and theland was valued at $130,000, a drop of $30,000 in nine months. [54] The fire was not brought to the Court’s attention and it is unknown whether the Master would have directed preparation ofanother appraisal based on land value only, or questioned about fire insurance and any fire insurance claims. [55] TD, as a large national Bank, is well placed to monitor the economic climate.

Questions arise as to whether the poor economicforecast coupled with the fact the building had been destroyed by fire should have compelled TD to get another appraisal before listingthe property in January 2008. At a minimum it could have disclosed the July 20, 2007 appraisal. [56] Further, the record does not disclose what, if any efforts were made by TD to accept the $125,000 offer, or at least attempt to

resurrect it, when it learned of the reduced appraised value of $130,000, a month later, in April 2008. [ 57 ] Similarly, it is unclear why TD rejected the offer of $105,000 received in June 2008. It is true that both previous offers were well below the appraisals TD had in hand, but so was the offer of $94,000 for which TD did seek Court approval. [ 58 ] Had TD accepted the offer of $125,000 in March 2008, the entirety of TD’s arrears would have been covered and Mr. Leffler would have received some amount towards his equity in the property. By June 2009, when the offer of $94,000 was received, Mr.

Leffler was confronted with a default judgment, which stands at $32,000, including solicitor and client costs. c. Additional Evidence Concerning the Foreclosure [ 59 ] In support of its appeal, TD relies on the Affidavit of Rhonda Reid sworn December 16, 2016.

This is additional evidence that was not before Master Schulz. [ 60 ] An appeal from a master’s judgment or order is an appeal on the record of proceedings before the master, however Rule 6.13(3) also permits “... additional evidence that is, in the opinion of the judge hearing the appeal, relevant and material.” Any additional evidence must be filed within one month after service of the Notice of Appeal: Rule 6.14(5). 6.14(5) The appellant must file and serve on the respondent to the appeal, within one month after service of the notice of appeal, ... (

b) any additional evidence referred to in subrule (3) ... [ 61 ] TD filed its Notice of Appeal on July 10, 2015. The Affidavit of Ms. Reid was filed December 16, 2016 and is included in Vol 11 of the Record, filed February 7, 2017. [ 62 ] This Affidavit was served well outside the timeline contemplated by Rule 6.12, however, the parties agreed to extend the timelines for filing of the Briefs and instead agreed to be bound by Civil Practice Note 2.

Practice Note 2 does not specifically address deadlines for filing of additional evidence, but does set out strict timelines for the filing of affidavits. [ 63 ] Because the time of filing of this Affidavit was not raised by Mr. Leffler, I will not comment further. [ 64 ] Ms. Reid is a legal assistant with Field LLP. She deposes to a conversation with Mr. Leffler on May 2, 2008 wherein he advised her he was opposed to selling the property at $130,000.

She also deposes to receiving instructions from TD to reject both the $99,000 and $105,000 offers received in June 2008, as they were too low. [ 65 ] The evidence is clearly relevant and material, but without knowing the full context of Mr. Leffler’s discussions with Ms. Reid, and the extent of information that was provided to him, I decline to draw conclusions from this evidence. This evidence involves the type of credibility and fact findings more appropriate to trial. d. Conclusion [ 66 ] I therefore conclude that there is some merit to Mr.

Leffler’s claim in negligence, and this issue cannot fairly be determined on the record before me. The Master made no error in declining to summarily dismiss paragraphs 1-15 of Mr. Leffler’s counterclaim. B. Mr. Leffler’s Appeal [ 67 ] Mr. Leffler argues that the Master erred in dismissing his claim against TD for its failure to apply for and obtain insurance proceeds following the fire. [ 68 ] Counsel for TD fairly concedes that the Master erred in concluding that the insurance related claims had been decided by Master Smart and were therefore res judicata .

It is acknowledged that the merit of these claims must be assessed in the context of the appeal before me. [ 69 ] Mr. Leffler agrees that under the terms of the mortgage, TD had no obligation to place insurance on the property. He does not suggest TD, in deciding to place insurance, had a duty of care to cover his own interest in the property too. Mr. Leffler simply argues that in deciding to exercise its right to insure its interest in the property, TD had an obligation to submit a claim when the covered peril - the fire - occurred. Mr.

Leffler argues the proceeds of that claim would have covered most of his liability to TD. [ 70 ] TD argues it did not put forward a claim because at the time of the fire the property held no value. It was slated for demolition and, therefore, TD had no insurable interest. [ 71 ] Although requested by way of undertaking, the Policy of insurance placed and the various renewals were not produced. Thus, it is not clear when TD first placed the insurance on the property.

The only documents in evidence are coverage summaries for the renewal periods August 31, 2007 to August 31, 2008, and August 31, 2008 to August 31, 2009. This would suggest that coverage was in place since at least August 2006. [ 72 ] The Policy was issued to TD by TD Meloche Monnex, a wholly owned subsidiary. The coverage

summary indicates “Policy Insurance has been effected for the Bank’s financial interest in the property described below”: Contract Number 134611

Status OPEN Mortgage / Loan # 4598485 Type of Loan Mortgage Client Name LEWIS, CURTIS Property Type 08-09 Residential Property Location 11244 96 STREET, EDMONTON, AB T5G 1S9 O/S Balance Or Replacement Value $84081 Premium Amount $260.00 Payment Method AUTOMATIC [73] The following is found under the heading “Limits of Liability”: Coverage is for replacement or repair value up to the Bank’s financial interest at the subject location.

The contract covers losses from AllRisks of direct physical loss or damage however caused including but not restricted to loss due to Fire, Water damages, theft, vandalism,and windstorm, subject to the perils excluded in the policy, whether the property is vacant or occupied. [74] It is not clear on the record before me that the City of Edmonton had, in fact, issued a demolition order prior to the fireoccurring. In answer to undertaking, TD advised that on July 4, 2007 it received another order from the City of Edmonton, advising theywould be enforcing a demolition order.

No such order is in evidence and it is unclear whether a specific date for demolition had been set.But even if a date for demolition had been scheduled, coverage under the Policy appears tied to the Bank’s “financial interest”, not theactual cash value of the property. [75] Because the Policy wording is not in evidence, “financial interest” is not defined. The wording of the coverage

summarysuggests TD had coverage for $84,081, upon the occurrence of a covered peril, including fire. If TD’s right to claim insurance proceedsis limited because the property was slated for demolition and thus had no value, that would presumably be the subject of an exclusionclause within the Policy.

That issue cannot be determined as the Policy is not in evidence. [76] If TD’s position has merit, it is curious why it continued to keep the coverage in place (and charge the premiums back to Mr.Leffler), after receiving advice from the City that the property would be demolished and after the property had been destroyed by fire. [77] Mr.

Leffler cites Leger v Royal Insurance Company Limited (1968), (NB CA), 70 DLR (2d) 344, 1 NBR(2d) 1 (NBSCAD) as authority for the proposition that even probable demolition of a building by the City does not affect the intrinsicvalue of the building as of the date of the fire and, therefore, an insurable interest remains. [78] TD cites Maxey v Canada Permanent Trust Co (1984), (MB CA), 9 DLR (4th) 380, 26 Man R (2d) 55(Man CA) and responds that it had no obligation to insure the property, let alone Mr. Leffler’s interest.

The value of the building wasonly $5,000, the deductible for the insurance contract was $5,000, so no claim could have been advanced, and Mr. Leffler cannotequitably be permitted to rely on the bank to insure his property, particularly since he was in breach of the mortgage contract. [79] I conclude this is a situation where

summary judgment is not an appropriate remedy. TD’s basis to value the Leffler propertyat $5000 is, at best, weak. While TD argues it is Mr. Leffler who receives a windfall via an insurance claim, and that is wrong in equity,TD also has arguably failed to pursue its own right under the insurance Policy, and then shifted that onto the person who paid for thatPolicy, Mr. Leffler. That too seems inequitable. Further, parties in a

summary judgment application are obliged to “put their best footforward”: Pyrrha Design Inc. v Plum and Posey Inc., 2016 ABCA 12 at para 19. TD cannot complain when I observe that the law hereis not clear cut, particularly since the insurance contract which actually governs TD’s potential claim is not in evidence. That is its fault. V. Conclusion [80] The portions of Mr. Leffler’s counterclaim that allege negligence in TD’s handling of the foreclosure action and judicial sale(paras 1-15) and negligence in TD’s failure or refusal to submit an insurance claim following the fire (paras 16 and 17) have sufficientmerit to resist

summary dismissal. To an extent, the claims are intertwined, because the destruction of the property by fire was neverbrought to the Court’s attention. I conclude that a disposition on the record that is fair and just to both parties cannot be made. To besure, there are some novel elements to Mr. Leffler’s counterclaim, but the law is unsettled and his arguments should be allowed to goforward. [81] TD’s appeal is dismissed and Mr. Leffler’s appeal is allowed. Mr. Leffler is awarded costs of the applications both here andbelow. [82] I will make one final comment.

The quantum at issue does not support the history of litigation on this matter. Now that Mr.Leffler is represented by counsel, the parties are encouraged to engage in settlement discussions or explore alternative dispute resolution.

Heard on the 17 th day of February, 2017. Dated at the City of Edmonton, Alberta, this 3 rd day of March, 2017. Dawn Pentelechuk J.C.Q.B.A. Appearances: Daniel P. Carroll, Q.C. / A. Danielle Bourgeois Field LLP for the Plaintiff / Defendant by Counterclaim Ronald G. Hopp, Q.C. / Sang Ho You for the Defendant / Plaintiff by Counterclaim