2011 NBCA 1, 2011 NBCA 1

COURT OF APPEAL OF NEW BRUNSWICK 82-10-CA ANDRÉ MURRAY APPELLANT ANDRÉ MURRAY APPELANT - and - - et - BETTY ROSE DANIELSKI RESPONDENT BETTY ROSE DANIELSKI INTIMÉE Murray v. Danielski, 2011 NBCA 1 Murray c.

Danielski , 2011 NBCA 1 CORAM: The Honourable Justice Deschênes The Honourable Justice Richard The Honourable Justice Quigg CORAM : L’honorable juge Deschênes L’honorable juge Richard L’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: June 10, 2010 Appel d’une décision de la Cour du Banc de la Reine : Le 10 juin 2010 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : Inédite Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard and judgment rendered: November 9, 2010 Appel entendu et jugement rendu : Le 9 novembre 2010 Reasons delivered: January 13, 2011 Motifs déposés : Le 13 janvier 2011

Counsel at hearing: For the appellant: André Murray Appeared in person For the respondent: E. Thomas Christie, Q.C. Avocats à l’audience : Pour l’appelant : André Murray a comparu en personne Pour l’intimée : E. Thomas Christie, c.r. THE COURT The appeal is allowed without costs. LA COUR Accueille l’appel sans dépens. The following is the judgment delivered by THE COURT I. Introduction [ 1 ] On November 9 th , 2010, the Court allowed Mr. Murray’s appeal from the bench, without costs.

In doing so, the Court set aside the motion judge’s order and ordered a new hearing before the Court of Queen’s Bench with reasons to follow. Here are those reasons. II. Background [ 2 ] On April 16, 2009, Mr. Murray filed a Claim for Lien under the Mechanics’ Lien Act , R.S.N.B. 1973, c. M-6, for the sum of $80,000. He claimed that, between September 2005 and April 2009, he furnished materials and performed work on Ms. Danielski’s property at 29-31 Marshall Street, in Fredericton, N.B. On April 21, 2009, he filed a Notice of Action against Ms. Danielski.

However, he did not set the action down for trial within one year, as required by s. 52.1 of the Act. On April 20, 2010, he filed a Notice of Motion for an extension of time to continue his action. The relevant

section of the Act is reproduced in Appendix A. [ 3 ] Meanwhile, Ms. Danielski’s property was sold at a mortgage sale pursuant to the terms of a mortgage with the Royal Bank of Canada. When Mr. Murray’s motion to continue his action was heard in the Court of Queen’s Bench, it was dismissed on the grounds that the mortgage took priority over the lien. However, at the hearing, neither Mr. Murray nor counsel for Ms. Danielski were given any meaningful opportunity to be heard. The motion judge hijacked the proceedings and, from the outset, questioned counsel for Ms.

Danielski regarding the mortgage sale, the amount of the mortgage and the amount for which the property was sold at auction. [ 4 ] None of the information requested by the motion judge was contained in the material filed with respect to the motion. Ms. Danielski’s counsel, for the most part, did not have personal knowledge of the information sought. As he was requested by the motion judge to obtain it, he phoned two lawyers during an adjournment.

Upon resumption of the hearing, he advised the judge that the amount owing on the mortgage, inclusive of taxes and legal fees, was $79,078.65, that the property was sold at auction for $79,101,

leaving a balance owing of $22.35. Although no evidence was filed in support of those facts, the judge immediately relied upon that information and denied the motion. III. Issues on Appeal [ 5 ] Although the Notice of Appeal lists 18 grounds, they can be condensed into two complaints:

(1) The judge erred in relying on hearsay evidence given by counsel for Ms. Danielski;

(2) The judge erred in not giving Mr. Murray a fair hearing. IV. Analysis [ 6 ] Not much need be said about the fact the appellant was simply not accorded a fair hearing. A cursory review of the judge’s ruling makes evident that at no time was Mr. Murray given an opportunity to argue the grounds he wished to advance. The motion judge’s post-adjournment comments bear reproduction: THE COURT: That’s what I thought. All right. I’m going to now go back to the recitation of the events and the dates and so on for the record, and I’m going to start at the beginning again.

On October the 24th, 2000 Betty Rose Danielski purchased the subject property. On October the 26th, 2000 she put a mortgage on which the Bank of Montreal (sic) of $86,700. On ... the plaintiff in this action alleges that in July of 2005 he has ... he had a contract with Danielski. In ... On April the 16th, 2009 the plaintiff filed a claim for lien in the amount of $80,000. And on April the 21st he filed a Notice of Action and Statement of Claim and a Certificate of Pending Litigation with the court.

On July the 16th, 2009 the Royal Bank of Canada exercised its power of sale under the Property Act and conducted a mortgage sale with respect to the property. I now know, because I’ve been told by Mr. Christie, that the property sold ... the mortgage at that point, or the amount due at that point was $79,101. The property was sold at the mortgage sale for $79,078 which means, assuming that we know everything ... MR. CHRISTIE: Those ... If I may, those numbers are reversed. THE COURT: I’m sorry. MR. CHRISTIE: That’s okay. I just wanted to let the ... THE COURT: Okay. The amount due under the mortgage was ... MR.

CHRISTIE: $79,078.65. THE COURT: All right. And the mort ... and the property was sold for $79,101, which left a, a ... $23.

On October the 19th the defendant was served with the Statement of Claim. On October the 20th -- this is 2009 -- the plaintiff was ordered to vacate the property. On November the 26th, 2009 the defendant filed a Notice of Intent to Defend along with a Demand for Particulars. On December the 8th, 2009 there was a hearing before the Court of Appeal in which the plaintiff sought leave to appeal the order that was made in the Moncton court on October the 20th, 2009. The leave to appeal was not granted, however the Court of Appeal noted that the order related only to 29 Marshall Street.

So the plaintiff moved back into the property at whatever the other number is. On October the ... on April the 20th, 2010 this motion was filed. Okay. Now, the mortgage takes priority over the lien with respect to all monies advanced before the lien was filed, which means that the plaintiff, if he were to succeed in his claim for lien, would have $23, maybe. Maybe not, but maybe. Therefore, it is a complete waste of time to continue this claim for lien. Now I will tell you, Mr. Murray, that you can bring an action personally against the defendant, Betty Rose Danielski, but your claim for lien is worth nothing.

MR. MURRAY: May I address that, Madam Justice? What I’d like to point out is that the mortgage sale that took place in July had a prospective purchaser who paid a deposit for purchasing the property, and the sale has not closed. So that sale is not final. The, the prospective purchaser ... THE COURT: It doesn’t matter, Mr. Murray. No matter what happens to this property the Royal Bank’s claim is in priority to yours. MR. MURRAY: What, what ... THE COURT: It is a priority claim. The mortgage ... The Royal Bank will be paid before you no matter what. MR.

MURRAY: What I’d like to point out, Your Honour, though is that since the mortgage ... since the transfer of title has not happened yet and the sale has not happened yet, we cannot consider it a done deal because the prospective purchaser may back out on that deal. The property may be put back up for option … or for auction, and the sale might happen a second time for a much higher value which means that my, my lien may be covered. There’s a potential there and it would be an extreme prejudice to the plaintiff in this matter to quash a lien that potentially could still be .... THE COURT: I’m not quashing a lien.

You are asking me to give you an extension. I’m not quashing anything. You are asking me to exercise my discretion to give you an extension of time ... MR. MURRAY: Yes. THE COURT: ... and I am not doing that. MR. MURRAY: Madam Justice, if I do not have the extension of time then the lien is extinguished because my understanding of the Mechanics Lien Act is that within one year if the action is not set down for trial ... THE COURT: And it hasn’t been. MR. MURRAY: ... yes, or if there has not been a continuance granted then the mechanics lien is, is, is done; it’s no longer ... cannot move forward any more.

So, in effect, my lien would be quashed. What I’m requesting ...

THE COURT: In effect, I am not giving you an extension on this matter. No extension. It is a waste of this court’s time. It is a waste of money. It is a waste of everything. The Royal Bank of Canada has a priority lien against this property, and you are going to get zero from the property. You can sue Ms. Danielski, but nothing is going to come out of the property to you. And it makes no sense to give you the extension, and I’m not giving it. MR. MURRAY: Your Honour ... THE COURT: The end. MR. MURRAY: Your Honour, may I speak...

THE COURT: The end. [ 7 ] Most importantly, the motion judge sought the help of opposing counsel in gathering hearsay evidence by phoning two different sources, and then relied on that information to justify her decision to deny the continuance order. [ 8 ] It may well be that, at the end of the day, the appellant ought not to obtain a continuance order. However, once he appears before a motion judge for a hearing related to the order sought, he is entitled to a fair hearing. This concept entails the right to advance arguments in line with the relevant evidence adduced by the parties to the motion.

In this case, the appellant neither had a say in the information gathered by opposing counsel at the request of the motion judge (a process which, by itself, is inimical to the concept of fairness), nor was he given a reasonable opportunity to challenge it. Even counsel for the respondent was unable to argue that the appellant was given a fair hearing. [ 9 ] At some point during the hearing, we inquired whether we should grant the order that ought to have been granted below, had the appellant been given the fair hearing to which he was entitled.

However, the appellant’s written submission did not deal with the reasons why he ought to have been granted an order of continuance, but with the fact that he had been denied a fair hearing and why he ought to obtain one before the Court of Queen’s Bench. [ 10 ] Mr. Murray informed the Court he was not prepared at that time to argue for a continuance. The Court thus decided it would not be appropriate to deal with the matter on its merits, but that the appellant should be allowed to argue his case before another motion judge. V. Disposition [ 11 ] The appeal is allowed, without costs.

The order of the motion judge is set aside and the appellant’s motion for a continuance shall be heard by another judge of the Court of Queen’s Bench. ______________________________________ ALEXANDRE DESCHÊNES, J.A. _______________________________________ J.C. MARC RICHARD, J.A.

________________________________________ KATHLEEN A. QUIGG, J.A. APPENDIX A 52.1

(1) An action to enforce a lien shall be deemed to be discontinued one year after the action is commenced unless (

a) the action has been set down for trial, or (

b) an application has been made to a judge of The Court of Queen’s Bench of New Brunswick for an order continuing the action and a copy of the notice of application has been served on the defendant to the action. 52.1

(2) In ordering the continuance of an action, the judge may impose such terms and conditions and give such directions as the judge considers appropriate for the continuation of the action. 1982, c. 38, s. 2 ; 1992, c. 84, s. 7 .