MANULIFE BANK OF CANADA PLAINTIFF - and- JANICE MARILYN TAYLOR, BARRY HADDOW, TAMMY JESSOP-HADDOW, KELLY CHRISTOPHERSON v. JAC-O, 2023 SKKB 105

KING ’S BENCH FOR SASKATCHEWAN 2023 SKKB 105 Date: 2023 05 18 Docket: QBG-RG-01843-2021 Judicial Centre: Regina BETWEEN: MANULIFE BANK OF CANADA PLAINTIFF - and- JANICE MARILYN TAYLOR, BARRY HADDOW, TAMMY JESSOP-HADDOW, KELLY CHRISTOPHERSON AND JAC-O CHRISTOPHERSON DEFENDANTS Docket: QBG-RG-01845-2021 Judicial Centre: Regina BETWEEN: MANULIFE BANK OF CANADA PLAINTIFF -and- DALE ADAM HOLMES, JANICE MARILYN TAYLOR, TAMMY JESSOP-HADDOW, KELLY CHRISTOPHERSON AND JAC-O CHRISTOPHERSON DEFENDANTS Counsel:

Adam MacNeil for Manulife Bank of Canada Grant Richards for Janice Marilyn Taylor and Dale Adam Holmes Tammy Jessop-Haddow, Barry Haddow, Kelly Christopherson, and Jac-o Christopherson no one apearing FIAT ROBERTSON J.

May 18, 2023 Contents Paragraph INTRODUCTION .. 1-2 BACKGROUND .. 3-8 Parties . 3-5 Materials filed . 6-7 Chronology . 8 POSITION OF PARTIES . 9-11 ISSUES . 12 LAW ... 13-26 Supervisory jurisdiction . 14 Equitable jurisdiction . 15 Consumer protection legislation . 16-17 The King’s Bench Act, SS 2023 c28 . 18 The Queen’s Bench Rules . 19 Strict compliance with terms of order nisi 20-21 Court’s discretion to confirm judicial sale not unfettered . 22-26 ANALYSIS . 27-111 Do the proposed sales comply with the terms of the order nisi ? . 28-33 Does the court have jurisdiction to confirm a sale which does not comply with terms of the order nisi ? . 34-54 Standard requirements . 48-54 If the court has jurisdiction, how should it exercise its discretion? . 24 Evidentiary foundation for the sale? . 59 Opinions of market value and changes in those values . 60-68 Status of the mortgagor? . 69-71 Failure to bid? . 72-76 Second attempt at judicial sale? . 77 Second application? . 78-85

Is the sale price reasonable? . 86-87 Selling Officer . 88-97 Explanation for delay? . 98-105 Is there an unreasonable loss to the debts?................................................... 106-109 Conclusion . 109 Costs . 110-111

SUMMARY .. 112-114 Order . 113-114 INTRODUCTION [ 1 ] This decision addresses applications by the plaintiff, Manulife Bank of Canada [Manulife], to amend two orders nisi for sale by real estate listing by reducing the minimum sale price and to then confirm the sale of the mortgaged properties for the reduced sale price. The defendant-owners oppose the applications because, they argue, the process followed was improper. [ 2 ] For the following reasons, both applications are granted but with no award of costs.

BACKGROUND Parties [ 3 ] Janice Marilyn Taylor is the registered owner of real property with a civic address of 2317 Cameron Street, Regina, Saskatchewan and legally described as Lot 5, Block 48, Plan No DV270.

She borrowed money from Manulife under an agreement dated July 2, 2008, and a mortgage agreement dated September 8, 2008, which was registered against title to the property. [ 4 ] Dale Adam Holmes and Janice Marilyn Taylor [Owners] are registered owners as joint tenants of real property with a civic address of 2119 Lindsay Street, Regina, Saskatchewan legally described as Lot 24, Block 451, Plan No 99RA02447LO.

They borrowed money from Manulife under a mortgage agreement signed March 23, 2009, which was registered against title to the property. [ 5 ] The other defendants registered interests against the properties. Materials filed [ 6 ] In addition to the materials filed earlier on the application for leave to commence action and the application for orders nisi , Manulife filed the following affidavits for its applications to vary the upset price and confirm the sales: QBG-RG-01843-2021: (

a) Jaymie Walker, realtor, sworn February 7, 2023 (

b) Crystal Plante, mortgage collection specialist, sworn February 8, 2023 (

c) Avery Layh, selling officer, sworn February 9, 2023 (

d) Avery Layh sworn March 14, 2023 (

e) Jaymie Walker sworn March 15, 2023 QBG-RG-01845-2021: (

a) Jaymie Walker, realtor, sworn February 1, 2023 (

b) Avery Layh, selling officer, sworn February 3, 2023 (

c) Crystal Plante, mortgage collection specialist, sworn February 8, 2023 (

d) Raleigh Clements, appraiser, sworn February 15, 2023 (

e) Avery Layh sworn March 14, 2023 (

f) Jaymie Walker sworn March 15, 2023

[ 7 ] On QBG-RG-01843-2021 the Owners filed an affidavit of Janice Taylor sworn April 6, 2023 attaching email correspondence between their lawyer, Grant Richards, and the selling officer, Avery Layh.

Chronology [ 8 ] The history of the two actions is summarized below: QBG-RG-01843-2021: 2317 Cameron Street, Regina 2021 October 14 Krogan J. grants leave to commence action 2022 January 22 Statement of claim issued May 6 Noted for default of defence July 26 Robertson J. grants order nisi for sale by real estate listing with: judgment for $153,951.24; 60 day redemption period; Avery Layh appointed as selling officer; and authorizing listing period up to 90 day with minimum price of $109,650.00 November 16 Listing agreement signed by Avery Layh with: listing period from November 16, 2022 to February 2, 2023; asking price of $109,650.00; and possession date 30 days from court approval (Affidavit of Avery Layh sworn March 14, 2023) December Tenant vacated property (Affidavit of Crystal Plante sworn February 8, 2023, paragraph 9) 2023 January 11 Counter offer accepted by proposed purchaser with: sale price of $95,000.00; possession date 30 days after court approval; and sale to be conditional upon court order varying upset price and confirming sale (Affidavit of Jaymie Walker, realtor, sworn February 7, 2023, at paragraph 6) January 23 Sale price reduced to $91,500.00 because of cost of sewer line repair (Affidavit of Jaymie Walker, realtor, sworn February 7, 2023, at paragraph 7) March 24 Fiat of Mitchell J. adjourning application to chambers when Robertson J. will be presiding April 13 Application heard by Robertson J. with decision reserved QBG-RG-01845-2021: 2119 Lindsay Street, Regina 2022 January10 Kilback J. grants leave to commence action February 8 Statement of claim issued May 6 Noted for default of defence July 26 Robertson J. grants order nisi for sale by real estate listing with: judgment for $180,365.81; 60 day redemption period; Avery Layh appointed as selling officer; and authorizing listing period for up to 90 days with minimum price of $131,750.00 November Tenant vacated property (Affidavit of Crystal Plante sworn February 8, 2023, at paragraph 10) 2023 January 11 Listing agreement signed by Avery Layh with: listing period from January 11, 2023 to April 11, 2023; asking price of $131,750.00; and possession date 30 days from court approval (Supplemental Affidavit of Avery Layh sworn March 14, 2023) January 13 Counteroffer accepted by proposed purchaser with: sale price of $117,000.00; and sale to be conditional upon court order varying upset price and confirming sale (Affidavit of Jaymie Walker, realtor, sworn February 1, 2023) March 24 Fiat of Mitchell J. adjourning application to chambers when Robertson J. will be presiding April 13 Application heard by Robertson J. with decision reserved POSITION OF PARTIES [ 9 ] Both parties filed briefs of law and made argument at the hearing of the applications. [ 10 ] Manulife argued that its applications were proper and that the applications were justified by the surrounding circumstances, as supported by the affidavit evidence. [ 11 ] The Owners argued that: only the justice who granted the order nisi can amend its terms; and the applications cannot be granted because Manulife failed to strictly comply with the terms of the order nisi by accepting offers during the listing period,

rather than waiting until the listing period expired, and which were below the upset price. ISSUES [12] The issues as I understand them are: (

a) Whether the proposed sales comply with the terms of the order nisi? (

b) If not, whether the court has jurisdiction to consider the applications? (

c) If so, whether the court should exercise its discretion to grant the applications? LAW [13] Before addressing the issues, it may be helpful to review the principles that govern foreclosure actions, inparticular the remedy of judicial sale. Supervisory jurisdiction [14] A judicial sale, like all major remedies of the mortgagee, is subject to supervision by the court: See Co-Operative Trust Company v.

Target 21 Industries Ltd., at para 18, (SK CA), 47 DLR (4th) 349 (Sask CA); SaskatoonCredit Union Ltd. v Goertz and Atlas Industries Ltd., (SK CA), [1989] 3 WWR 244 (Sask CA) at para 10 [Goertz];and The Toronto-Dominion Bank v Gibbs, 2019 SKCA 57 at paras 49-50, [2019] 12 WWR 71. Equitable jurisdiction [15] Judicial sale is an equitable remedy and will only be granted in accordance with the rules of equity. See Co-operative Trust Company of Canada v O’Grady (1985), (SK CA), 43 Sask R 317 (Sask CA) at para 4; and Goertz atparas 11-22.

Consumer protection legislation [16] The Legislature of Saskatchewan has enacted laws which govern foreclosure proceedings: The Land Contracts(Actions) Act, 2018, SS 2018, c L-3.001; The Land Titles Act, 2000, SS 2000, c L-5.1, s 132; The Limitation of Civil Rights Act, RSS1978, c L-16 [Act]; and The King’s Bench Act, SS 2023, c 28 s 70 [King’’s Bench Act]. This Court has also adopted procedural rules inThe Queen’s Bench Rules, in particular Divisions 5 and 6 of

Part 10. [17] The court’s exercise of discretion in its supervisory role is properly informed by its understanding of the purposeof the governing legislation. The public policy behind this legislation is to provide consumer protection, as recognized by the Court ofAppeal in Lozinski v Mayoh and Mayoh (1984), (SK CA), 32 Sask R 312 (Sask CA) at paras 10-12 and Walker vBank of Montreal, 2017 SKCA 42 at paras 7-10, 415 DLR (4th) 277. The King’s Bench Act, SS 2023, c 28 [18] The King’s Bench Act, s 70 codifies the court’s jurisdiction to order judicial sale.

Order for sale of real property 70(1) In an action or matter relating to real property, if it appears necessary or expedient that the real property or any part of the realproperty should be sold: (

a) a judge may order the real property or part of the real property to be sold; and (

b) any party bound by the order who is in possession of the real property or in receipt of the rents and profits of the real property shalldeliver up that possession or receipt to the purchaser or to any other person directed by the order.

(2) When a judge makes an order pursuant to clause (1)(a), the following persons are deemed to be trustees within the meaning of TheTrustee Act, 2009 [SS 2009, c T-23]: (

a) any person entitled to or in possession of the real property, or any heir, executor or administrator of that person; and (

b) any party to the action or any other person who is otherwise bound by the order. The Queen’s Bench Rules [19] Manulife relied upon Rules 10-11, 10-45 and 10-49 of The Queen’s Bench Rules, which are reproduced belowalong with Rule 1-3(1). Purpose and intention of these rules 1-3(1) The purpose of these rules is to provide a means by which claims can be justly resolved in or by a court process in a timely andcost effective way. …

Further directions after judgment 10-11(1) Subject to subrule (2), the Court may make a further or other order and give further or other remedy that the Court considersmay be required if in an action: (

a) a judgment has been pronounced or an order has been made and the judgment or order has been formally drawn up and entered; and (

b) it subsequently appears that further directions are necessary in order to insure to the party entitled to the benefit of the judgment ororder the remedy to which he or she is entitled, whether costs or otherwise.

(2) The Court may give further or other remedy only if it does not necessitate any variation of the judgment or order as to any matterdecided by the original judgment or order. … Actions respecting agreements for sale of land 10-45(1) The provisions of this Division applicable to mortgage actions apply, with necessary modification, to actions by vendors, ortheir personal representatives or assignees: (

a) for specific performance or cancellation of agreements for the sale of land; (

b) for sale or possession of the land sold pursuant to any agreement for the sale of land; or (

c) for any other remedy that may be granted pursuant to the provisions of any agreement for the sale of land.

(2) For the purposes of this rule: (

a) the claim in all actions with respect to an agreement for sale of land is to be in Form 10-45A; (

b) an order nisi for cancellation of an agreement for sale of land is to be in Form 10-45B; and (

c) a final order for cancellation of an agreement for sale of land is to be in Form 10-45C. … Sale requires approval of Court 10-49(1) Unless the Court orders otherwise, if a judgment is given or an order made, whether in Court or in chambers, directing anyproperty be sold, the property must be sold to the best purchaser.

(2) For the purposes of this rule, the best purchaser is the person so approved by the Court.

(3) All proper parties shall join in the sale and conveyance in accordance with any direction of the Court. Strict compliance with terms of order nisi [20] The Owners argued that the applications should not be considered because Manulife failed to strictly complywith the terms of the orders nisi by accepting offers before the expiry of the listing period and by accepting offers below the upset prices. [21] I agree that the terms of the order nisi are binding on the parties and that there must be strict compliance.

Inother words, parties cannot play fast and loose with court orders, picking and choosing terms with which they will comply. Court’s discretion to confirm judicial sale not unfettered [22] Given that the court exercises a supervisory jurisdiction and judicial sale is an equitable remedy, the courtnecessarily has some discretion over whether to grant applications for judicial sale.

But to what degree? [23] Chief Justice Martin, writing for the Court of Appeal for Saskatchewan in Huron & Erie Mortgage Corporationv Chambers, (SK CA), [1944] 1 DLR 131 (Sask CA) at para 10, referred to the court having “an unfettereddiscretion having regard to all the facts”.

The Chief Justice went on, at para. 14, to say “the discretion provided is very wide and itsexercise must depend on the circumstances of each case”: [14] I do not think that the Court should attempt to set out any principles to be followed in the exercise of the discretion provided by TheLand Contracts (Actions) Act, 1943 [ch 17]; the discretion provided is very wide and its exercise must depend on the circumstances ofeach case.

It should be observed that the value of the land, the state of cultivation, the condition of the mortgagor’s account with themortgagee are according to the statute, important considerations as well as the income of the parties, and prevailing conditions of a localor temporary nature.

I must say however that if litigants expect a discretion to be exercised in their favour and extensions of time forpayment granted because of unfortunate conditions of a local and temporary nature and any other matters which appear relevant, theyshould be prepared to show a bona-fide effort to observe their covenants and not dismiss a request for payment with the casual remarkthat they do not think they can pay anything out of a crop, a part of which legally belongs to the creditor. [24] The Court of Appeal, in the majority judgment of Jackson J.A. in D & H Farms Ltd. v Farm Credit Canada,2002 SKCA 88, 223 Sask R 95 [D & H Farms] found the chambers judge erred in declining to approve a judicial sale where the onlyreason was a late bid three percent higher than the otherwise highest bid submitted before the deadline.

Jackson J.A. at para. 44,

cautioned that “a chamber judge’s discretion on an application to confirm a land sale of this sort is not unfettered”: [44] In

summary, a chamber judge’s discretion on an application to confirm a land sale of this sort is not unfettered. It is governed by theterms of the order nisi and the general law.

It is not necessary to indicate the precise limits of that discretion, but it is sufficient to holdthat a chamber judge’s discretion does not extend to refusing to approve the highest bidder where a late bid showing an increase in valueof 3% only is the sole factor upon which the judicial sale process is to be disregarded. [25] Smith J. considered D & H Farms in FMI Developments Ltd. v 1269917 Alberta Ltd., 2011 SKQB 240 at paras32-34, 380 Sask R 13 [FMI] stating: [32] The lesson I draw from D & H is that although a chambers judge has discretion on the issue of confirming a judicial sale, suchdiscretion must be exercised cautiously.

The Court and the administration of justice have an abiding interest in maintaining commercialprobity and reasonableness in any sale directed by the Court. [33] Any act or judicial fiat that detracts from commercial certainty may negatively affect the integrity of the judicial sale process. [34] Thus, if the selling officer has prima facie complied with the terms of the order nisi for judicial sale, then the order confirming suchsale should be granted unless there has been manifest and substantial departure by the selling officer and/or the listing agent fromcommercial best practices or if the subject matter of the judicial sale was sold at an unfairly low price. [26] D & H Farms and FMI were considered by Danyliuk J. in Kokanee Mortgage M.I.C.

Ltd. v Rozdilsky, 2020SKQB 52 [Kokanee]. In Kokanee, Danyliuk J. cautioned against a misinterpretation of those decisions, stating at para. 40: [40] This “cherry picking” of the quotes from FMI results in a misleading application of that case. In fact, what Justice Smith [in FMI] issaying in that case is that confirmation orders should issue unless there is cogent proof of some compelling reason not to do so…The“discretion” discussed is the discretion to refuse a confirmation order.

The Court of Appeal authority [in D & H Farms] cautions againstliberal use of that discretion because it could denigrate the judicial sale process. Andrew’s argument is a misapplication of these twoauthorities. ANALYSIS [27] Although the two orders nisi are individual, the issues are common to both. So, I will deal with the twoapplications together.

Do the proposed sales comply with the terms of the order nisi? [28] The first question then is whether these proposed sales comply with and conform to the terms of the order nisi. [29] The properties were listed for sale as required by the order nisi, in particular with respect to the listing periodsand asking price. It is unusual that the upset price was the asking price, however, the affidavit evidence satisfies me that it wasreasonable to do so in the particular circumstances of these properties.

The realtor, upon being engaged to list the properties, inspectedthe properties and reviewed the real estate market to determine a probable sale price and a list price. In both cases, she found that theprobable sale price was below the upset prices set in the order nisi. [30] The Owners argued that the selling officer deviated from the terms of the order nisi by accepting offers beforethe expiry of the listing periods.

I agree that the selling officer must be open to offers during the listing period to ensure a fairopportunity for the public to make an offer in the hope of getting the best price. [31] But the evidence before me does not show that the listing periods were abbreviated. On the contrary, JaymieWalker as realtor in her affidavit sworn February 1, 2023 (for 2119 Lindsay Street – QBG-RG-01845-2021) at para. 8 states “I haveactively marketed the Property since January 3, 2023.” and at para. 9 that the property had been shown to five groups and was thesubject of four other inquiries, none of which resulted in an offer.

Ms. Walker, in her affidavit sworn February 7, 2023 (for 2119 LindsayStreet – QBG-RG-01843-2021) at para. 7 states “I have actively marketed the Property since November 16, 2023.” There is no evidencedisputing those statements. [32] The offers were made and conditionally accepted during the listing period. The offers conditionally acceptedwere the highest offers received during the listing period. There is no requirement to refuse to receive an offer or bid until the listingperiod has expired.

And, in any event, the listing periods had expired by the time I heard the applications. [33] The upset price is the minimum price that may be accepted. It is intended to prevent a “fire sale” at anunreasonable price. The proposed sale prices are both below the upset prices set in the order nisi. That is contrary to an express term ofthe order nisi. But is that an absolute bar against an application to confirm such a sale?

Does the court have jurisdiction to confirm a sale which does not comply with terms of the order nisi? [34] The Owners initially argued that only the justice who authorized the order nisi could entertain an application toamend the order nisi. See: Scotia Mortgage Corporation v Labonte, 2022 SKQB 130 at paras 17-20. This objection is now academicsince Mitchell J. adjourned the applications to a chambers date when I would be presiding. [35] The Owners say the court cannot entertain an application to confirm a proposed sale if it does not comply withthe terms of the order nisi.

Put another way, the court cannot ignore its own order. [36] The Owners rely upon the following decisions of this court: (

a) Saskatchewan Economic Development Corp. v Smith-Roles Ltd. and Royal Bank of Canada (1988), (SK KB), 71

Sask R 315 [Smith-Roles] (

b) Theodore Credit Union Ltd. v Kitzul, 2001 SKQB 412, 211 Sask R 161 [Theodore Credit Union] (

c) Royal Bank of Canada v Hanterman, 2013 SKQB 158, 419 Sask R 253 [Hanterman] (

d) Royal Bank of Canada v Pheasant Meadows Holdings Ltd, 2013 SKQB 420 [Pheasant Meadows] (

e) Royal Bank of Canada v Pearl Boutique Ltd., 2020 SKQB 106 [Pearl Boutique] [37] In Smith-Roles, Hrabinsky J. dismissed an application to confirm a judicial sale because of non-compliance withthe term in the order nisi requiring advertising of the sale, stating at para 10: [10] I am of the view that essential to confirmation of a judicial sale is strict compliance with the terms of the order nisi forjudicial sale. The reason for setting out in detail the mode and time of advertising is obvious. It is imperative the best possible sale pricebe obtained.

This means that the notice of the sale must be brought to the attention of as many potential purchasers as possible. Added tothat there is the necessity of giving these potential purchasers adequate time prior to the sale to enable them to inspect the property andeven in some cases to arrange for an appraisal of the property in question. There is good reason for ordering that the first publication ofthe notice of sale be a specified period prior to the sale - in this case, four weeks.

Publishing the notices closer to the date of the sale thanthe date ordered by the court may result in attracting fewer bidders and as a consequence there is a possibility that the highest price maynot be obtained.

With that possibility the mortgagee and other creditors may suffer a loss if an order confirming the sale is granted in acase such as this. [Emphasis added] [38] In Theodore Credit Union, Pritchard J. dismissed an application to confirm judicial sale because the order nisihad not been served on any of the defendants, stating at para. 4: [4] The Order also provides for the 90 day redemption period to commence from the last day that any of the defendants are served withthe Order.

As none of the defendants was served with the Order, the 90 day redemption period has never expired and the sale should nothave proceeded. The purported judicial sale is therefore not in conformance with the terms of the Order and cannot beconfirmed. (See Royal Bank of Canada v. Guran et al (1993), (SK KB), 114 Sask. R. 193 and SaskatchewanEconomic Development Corp. v. Smith-Roles Ltd. and Royal Bank of Canada, (SK KB), [1988] 6 W.W.R. 343; 71Sask.

R. 315) [Emphasis added] [39] In Hanterman, Gabrielson J. declined an ex parte application for a renewed order nisi for judicial sale andinstead provided instructions on what would be required to obtain a renewed order nisi for judicial sale. The original order nisi provideda 60-day redemption period and an upset price of $97,000.00. The proposed renewed order nisi provided a one-day redemption periodand an upset price of $48,000.00. The applicant attributed the difference in values to the inability of the realtor who gave the originalopinion of value to gain access to the interior of the property.

The property had not been listed in accordance with the original order nisi,presumably because of the new opinion of value. Gabrielson J. commented at paras. 8-9 on the resulting situation: [8] I am not satisfied that I have sufficient information as to the true value of the mortgaged property in order to grant a renewed ordernisi for judicial sale. It is inconceivable to me how, in the current real estate market, the value of the property would drop by almost 50percent from June 13, 2012, to March 22, 2013, regardless of the “rough condition” (as it was described in Mr. Payne’s letter) of theinterior.

When the Court is requested to make an order for judicial sale, it must rely upon accurate information as to the value of theproperty in order to set the upset price necessary for the judicial listing. In my opinion, the order nisi for judicial sale cannot be renewedwithout the benefit of an appraisal from an accredited appraiser so that an informed upset price can be set. [9] Furthermore, based upon the response received from Mr. Kroczynski in his letter of April 12, 2013, it appears that the property wasnever listed for sale in accordance with Justice Danyliuk’s original order of November 23, 2012.

Once the formal order was issued byplaintiff’s counsel, it cannot be just ignored, and if it was issued in error because the opinion of value upon which it was basedwas in error, that error ought to have been brought to Justice Danyliuk’s attention to see if he was prepared to amend his order.In my opinion, one judge of the Court cannot sit on appeal of a decision of another judge of the Court.

However, in the circumstances ofthis case, as the 90-day listing period ordered by Justice Danyliuk will soon expire, rather than just dismiss the ex parte application, I am also providing instructions as to what is requiredin order to obtain a renewed order nisi for judicial sale. [Emphasis added] [40] In Pheasant Meadows, Mills J. dismissed an application to confirm a judicial sale because the sale price wasbelow the upset price. In doing so, he made the following comment at paras. 2-4. [2] The upset price set by the order is the minimum amount that the land could be sold for.

The selling agent has no authority to acceptan offer for sale outside of the parameters of the order. On this basis, the application for confirmation must be dismissed. [3] If the plaintiff’s selling agent was unable to sell the property in compliance with the terms of the order, then it was incumbent uponthe plaintiff to apply to the court for a variation of the existing order or a new order prior to the property being sold. [4] The plaintiff has been claiming its solicitor costs throughout.

The costs incurred by the plaintiff and its selling agent in this abortedorder nisi for judicial sale by tender are not recoverable by the plaintiff…

[ 41 ] Pheasant Meadows is the closest case on the facts to these applications, so bears careful consideration. [ 42 ] There are some distinguishing features between the applications before me and Pheasant Meadows .

The proposed sale below upset price was only one of the defects in the Pheasant Meadows application. [ 43 ] In Pheasant Meadows at para 2 , Justice Mills noted significant omissions in the application which he found would be sufficient to dismiss the application to confirm the sale: no affidavit from the selling officer showing compliance with the advertising requirements nor any other information about publicizing of the sale; bids received outside the tender period stipulated in the order nisi ; and no affidavit evidence explaining why the offer was accepted outside the parameters of the order for sale.

Mills J. also characterized the plaintiff as ignoring the court order. [ 44 ] In the case of these order nisi , Manulife has provided a full and frank explanation supported by affidavit evidence. [ 45 ] In Pearl Boutique , Robertson J. dismissed an application to confirm judicial sale because the sale did not conform to two terms of the order nisi : 1. the method of sale was different from what was authorized; and 2. the sale price was below the upset price. The mortgagee was instead given leave to apply for foreclosure.

Should this judicial sale be confirmed? [106] I have decided against confirming this judicial sale. There are two reasons. First, the sale did not conform to Order #4, in that the method of sale is different from what was authorized and the sale price is below the upset price. Second, it would not be equitable to do so. The Bank has had over two years to exercise its remedies. It chose judicial sale. All attempts to sell the Property have been unsuccessful.

It now asks the court to approve a sale for a fraction of its original estimate of value and give judgment for the deficiency against Pearl, for which the Guarantors would also be liable. [107] The Bank seeks accrued interest on the amounts guaranteed. The Bank has not disclosed what the total amount owed would be with that accrued interest. If the interest is from March 2013, when the guarantees were signed, it would be significant.

In this and other respects, the Bank’s delay has prejudiced the Guarantors. [ 46 ] The decisions reviewed above all concluded that the proposed sale should not be confirmed because, sometimes amongst other reasons, the proposed sales did not conform to the terms of the order nisi . But I do not read these decisions as removing the court’s jurisdiction or establishing an absolute bar against confirming a sale where the sale does not conform with a term of the order nisi .

Rather, in that case, the court will require compelling reasons to confirm the sale. [ 47 ] The decisions show the court considering whether to confirm the sales having regard to the law and individual facts. In each case, the court decided to apply a general rule to dismiss those applications. But that does not mean that the court must always do so. In considering whether to exercise its discretion, the court will consider whether it would be equitable to do so, with particular regard to the effect on the debtors.

Standard requirements [ 48 ] The court has by practice—sometimes incorporated into The Queen’s Bench Rules or its forms—established a number of standard requirements or rules for foreclosure actions and judicial sales. For example: (

a) Pre-leave costs not normally awarded: see Affinity Credit Union v Rawlyk , 2014 SKCA 34 at para 5 , 433 Sask R 233 . (

b) Ninety-day redemption period: see “Notice from Chief Justice Gerein”

(2001) Vol 14, Issue #6 Bencher’s Digest; and Scotia Mortgage Corporation v McNaughton , 2021 SKQB 159 at paras 14-22 . (

c) Upset price calculated at a percentage (usually 80-90%) of the estimated market value (recognizing that estimates of value are inexact and represent a range of value): see CIBC Mortgages Inc. v Taylor , 2018 SKQB 118 at para 38 , [2018] 9 WWR 340 [ Taylor ] . (

d) Independent selling officer: see Toronto-Dominion Bank v Sader , 2021 SKCA 154 [ Sader CA ] . (

e) Costs award at conclusion usually fixed (currently $5,000): see First National Financial GP Corporation v Maurice , 2021 SKQB 248 ; and Bank of Nova Scotia v Smith , 2022 SKQB 162 . These are usual requirements which apply by default. But all admit of exceptions where good and sufficient reason is demonstrated.

The rules allow for exception, but the exceptions do not become the rule. [ 49 ] It should be emphasized that any application to depart from the general requirement or standard should not only be supported by evidence but must also be clearly brought to the attention of the presiding justice on a with notice application or reviewing justice on a without notice application. Failure to do so erodes the trust in lawyers on which the proper operation of the court depends. See: (

a) Hanterman at paras 9-10 (Gabrielson J.) (

b) CIBC Mortgages Inc. v Eldstrom , 2014 SKQB 337 at para 14 , 458 Sask R 314 (Layh J.) (

c) CIBC Mortgages Inc. v Kjarsgaard , 2015 SKQB 411 at paras 27-28 (Barrington-Foote J.)(as he then was) (

d) Royal Bank of Canada v Yuzak , 2019 SKQB 145 at para 27 [ Yuzak ] (Danyliuk J.) (

e) Affinity Credit Union 2013 v Algner , 2020 SKQB 174 at para 7 (Danyliuk J.)

(

f) Canadian Imperial Bank of Commerce v Doan , 2020 SKQB 274 at paras 15-16 (Robertson J.) (

g) Toronto-Dominion Bank v Ho , 2021 SKQB 104 at paras 40-41 [ Ho ] (Robertson J.) (

h) Homequity Bank v Lindemann , 2021 SKQB 326 at para 54 [ Lindemann ] (Robertson J.) (

i) Bank of Nova Scotia v Smith , 2022 SKQB 162 at para 15 (Danyliuk J.) (

j) Toronto-Dominion Bank v Clark (25 April 2023) Battleford, QBG-BF-00093-2022 (Sask QB) at paras 5 and 11-12 [ Clark ] (Hildebrandt J.). [ 50 ] Manulife had obtained order nisi , but belatedly realized that the upset prices it had proposed were likely not realistic. Manulife said it found itself in the old dilemma of either seeking permission now or forgiveness later. It chose to carry out the terms of the order nisi .

As it turned out, the judicial sales did result in better offers than expected, but still below the upset price. [ 51 ] Given that the selling officer’s acceptance of the offers was conditional, I see no bar against proposing those offers in an application to vary the order nisi in the manner done here. To bar such an application might risk losing the best possible offer to the detriment of all parties. As stated in Smith-Roles at para 10 “It is important the best possible sale price be obtained”. Such an application will, however, call for greater scrutiny by the court. [ 52 ] And these are order nisi .

They are not final orders. As explained in Conexus Credit Union 2006 v Benko , 2021 SKQB 321 at paragraphs 32-37 , order nisi are conditional orders that will come into force on a future event or date, so are more amenable to amendment. [ 53 ] Finally, the Owners argued that Manulife cannot combine in its application both the lowering of the upset price and confirmation of the sale. This overlooks the sequential aspect of the relief sought. Requiring the applications to be separated and staged over multiple chambers dates would serve no good purpose and add cost and delay.

That would be inconsistent with the intent of the foundational rules as expressed in Rule 1-3(1) reproduced above. [ 54 ] I conclude that the applications may be considered on their merits. In doing so, I take note of the statement from the Court of Appeal in Goertz at para 34 , reproduced above, that “ the judge must use the substantial discretion vested in him to ensure a reasonable price on the one hand and to ensure that the sale not be abortive on the other”.

If the court has jurisdiction, how should it exercise its discretion? [ 55 ] The leading Saskatchewan decision on applications to vary an order nisi is Taylor , a decision of Danyliuk J. It has been cited and followed in many decisions of this Court, including a dozen reported decisions. (

a) Royal Bank v Gaudet , 2019 SKQB 87 (

b) Bank of Nova Scotia v Moore , 2019 SKQB 122 (

c) Yuzak (

d) Bank of Nova Scotia v Nieswandt , 2020 SKQB 53 [ Nieswandt ] (

e) Kokanee (

f) Pearl Boutique Ltd . (

g) Toronto-Dominion Bank v Greening, 2020 SKQB 275 [ Greening ] (

h) Fairstone Financial Inc. v Hein , 2020 SKQB 301 [ Hein ] (

i) Westfield Twins Condominium Corporation v Reginald Mark Wilchuck , B2B Bank, 2021 SKQB 23 (

j) Ho (

k) Lindemann (

l) CIC Asset Management Inc. v Townsgate Development Corporation , 2021 SKQB 327 ; leave to appeal refused 2022 SKCA 31 [ Townsgate CA ] [ 56 ] Most recently, Taylor received favourable mention from the Court of Appeal in Townsgate CA at paras 1 and 25 . [ 57 ] In Taylor at para 30 , Danyliuk J. reviewed Saskatchewan case law and distilled the factors to be considered in an application to vary an order nisi for sale. [30] After a review of the existing law on this subject, I distil the following factors to be considered by the court on an application to vary an order nisi for sale by extending the time for sale and varying the other terms of that order, including the upset price: (

a) Any judicial sale (or extension thereof) is an equitable remedy and will only be granted in accordance with the rules of equity . In determining whether to grant a sale, the court must balance the competing interests of mortgagor and mortgagee. Wolff [ Royal Bank of Canada v Wolff , 2017 SKQB 318 , 17 CPC (8 th ) 395 ], para 34; Forsyth [ Toronto-Dominion Bank v Forsyth , 2017 SKQB 235 ], para 16; Schnedar [ Royal Bank of Canada v Schnedar , 2004 SKQB 146 , 248 Sask R 123 ], paras 7 and 14.

(

b) The granting or refusing of such a sale order or extension is discretionary. Neither party has a right to a second judicial sale or anextension of the original order nisi. Schnedar, para 7. (

c) As with most aspects of foreclosure practice, judicial sales are subject to this court’s supervision. Royal Bank of Canada v Hollmann,2017 SKQB 299 at paras 16 and 17; Royal Bank of Canada v Viloria, 2014 SKQB 110 at paras 14 and 15, 443 Sask R 121; Co-operativeTrust Co. of Canada v Target 21 Industries Ltd. (1988), (SK CA), 47 DLR (4th) 349 (Sask CA); Co-operative TrustCo. of Canada v O’Grady, (1986), (SK CA), [1986] 1 WWR 731 (Sask CA). (

d) Generally speaking, where the mortgagee reserves to itself the right to bid or offer at the sale and no offers are made (including fromthe mortgagee), the circumstances will not be appropriate to order a second sale or an extension of the original order nisi at themortgagee’s request. This is because the mortgagee is given the right to bid at the sale in order to crystallize the deficiency amount whenno other acceptable offers are forthcoming, rather than have the property be foreclosed, which would eliminate the right to claim adeficiency payment. Schnedar, paras 8-10; Saskatoon Credit Union Ltd. v Goertz, (SK CA), [1989] 3 WWR 244(Sask CA). (

e) Allowing a second sale or listing at a lower upset price can amount to an improper appeal of the first order, in terms of that price.Schnedar, para 10(vi). (

f) A second application to lower the upset price works only in favour of the interests of the mortgagee and not of the mortgagor, whichis contrary to the balancing of interest required by s. 5 of The Limitation of Civil Rights Act, RSS 1978, c L-16. Schnedar, para 10(vii). (

g) If any delay has occurred within the foreclosure action or sale process on the part of the mortgagee, it must be explained to the court.This delay may militate against a sale or extension being ordered. Wolff, paras 16 to 20; Forsyth, paras 11 to 16; Schnedar, para 14. (

h) The setting or varying of any reserve bid or upset price is also subject to the court’s discretion, and the court must satisfy itself thatthe land not be sold for an unreasonable sum. Manufacturers Life Insurance Co. v Ens Construction Ltd. (1989), (SKKB), 78 Sask R 42 (QB) at para 10. (

i) The court must guard against unreasonable loss to the debtors (either loss of their equity in the property or their exposure to adeficiency judgment), whether same emanates from the creditor’s acts or neglect, or from depressed economic conditions. Schnedar,para 6; Goertz, page 255. (

j) Is there an appropriate evidentiary foundation for the making of such a sale or extension order? Proper, cogent evidence ought to befiled as to: (

i) The narrative or history giving rise to the current application. (ii) The nature of the property within its location, and local economic factors that could affect its value or marketability. (iii) The actual present market value of the property. (iv) Any changes in that value, and the reasons for same. (

v) The qualifications and experience of the person offering the opinion evidence as to value. (vi) Confirmation that the deponent offering the opinion on value understands his or her obligation as an expert and that he or sheunderstands the duty an expert owes to the court. (vii) Full and complete details as to what occurred during the initial listing period(s). (viii) If the mortgagee had leave to bid or offer and this was not done, an explanation as to why it was not done. (

k) The court should consider the status of the mortgagor. Has the mortgagor been active in the action? Is the mortgagor bankrupt,whether discharged or undischarged? Has the mortgagor sought input into the sale’s terms? Does the mortgagor occupy the subjectproperty? [58] I will review some of these factors as they relate to these applications, but in a different order from that set out inTaylor. Evidentiary foundation for the sale? [59] As set out above, Manulife filed several affidavits in support of each application.

The filed materials, includingthe materials filed earlier and court record of proceedings, provide a sufficient evidentiary foundation. Opinions of market value and changes in those values [60] Over the course of the proceedings, Manulife commissioned three reports providing estimates of value for 2317Cameron Street (QBG-RG-01843-2021). Appraiser Valuation date Estimate of valueHaleigh Clements, B.R. Gaffney & Associates July 8, 2021 $65,000 to $90,000

Haleigh Clements, B.R. Gaffney & Associates May 2, 2022 $100,000 to $129,000 Jaymie Walker, realtor November 3, 2022 $65,000 [ 61 ] The first “appraisal” by Haleigh Clements of B.R. Gaffney & Associates was a “Drive by Residential Report” and valued the property as of July 8, 2021 at $65,000 to $90,000 (Affidavit of Crystal Plante sworn July 23, 2021, Exhibit “E”). [ 62 ] The second and similar appraisal by Haleigh Clements estimated the value of the property as of May 2, 2022 at $100,000 to $129,000 (Affidavit of Crystal Plante sworn June 6, 2022, Exhibit “A”).

That report at page 3 states the property was currently listed on MLS at a price of $135,000 and had been on the market for 31 days. It was previously listed October 14, 2021 at a price of $149,000, but the listing expired after 85 days on the market.

The upset price of $109,650 was based on 85% of $129,000, being the estimate of value from this second drive by valuation. [ 63 ] There is no explanation in the affidavit or valuation report for the increased estimate of value between the two reports. [ 64 ] Jaymie Walker, an experienced realtor, prepared a “Comparative Market Analysis” as of November 3, 2022, estimating the value of the property at $65,000 (Affidavit of Jaymie Walker sworn February 7, 2023, Exhibit “A”). Ms.

Walker in her affidavit at para. 4 states that she had access to the property in preparing her estimate of value, unlike the previous appraisal when access was not granted. Ms. Walker also states the Property had many defects, which were unknown when the prior drive by valuations were done. [ 65 ] Manulife commissioned and filed three estimates of value for 2119 Lindsay Street (QBG-RG-01845-2021). Appraiser Valuation date Estimate of value Haleigh Clements, B.R. Gaffney & Associates July 8, 2021 $185,000 to $222,550 Haleigh Clements, B.R.

Gaffney & Associates May 2, 2022 $120,000 to $155,000 Jaymie Walker, realtor November 30, 2022 $70,000 [ 66 ] Haleigh Clements prepared a first “appraisal” as a “Drive by Residential Report” estimating the market value as of July 8, 2021 at $185,000 to $222,550. She prepared a second similar valuation estimating the value as of May 2, 2022 at $120,000 to $155,000.

The upset price of $131,750 was based upon this second valuation. [ 67 ] Jaymie Walker prepared a Comparative Market Analysis as of November 30, 2022 estimating the probable sale price at $70,000, representing land value only, minus demolition cost (Affidavit of Jaymie Walker sworn February 1, 2023, Exhibit “A”). Ms. Walker in her affidavit at para. 9 lists numerous defects and disrepair observed from her exterior and interior inspection of the vacant building. Ms.

Walker in her affidavit sworn February 15, 2023 at para. 2 confirmed that she had inspected both the interior and exterior of the building and at para. 8 lists observed defects and disrepair. [ 68 ] Jaymie Walker, realtor, in her affidavits sworn March 15, 2023, at para. 3 (identical on both files), attributes the decreased value of the properties to both the building disrepair and a falling real estate market, but mainly the market. (

d) Since the Order Nisi was granted on July 26, 2022, the real estate market in Regina has continued to slow down, and decrease considerably. This, along with the condition of the Property (as detailed in the First Affidavit), is the main reason the Property’s realistic selling price has dropped since the upset price was set within the Order Nisi. Status of the mortgagor? [ 69 ] The properties were not owner-occupied. They were rental properties. [ 70 ] Manulife described the Owners as “inactive”, apart from contesting this application.

The court record shows that they have been represented throughout the court proceedings and cooperated. They retained a lawyer who then accepted service and represented them at court appearances. They consented at the first appearance to the court granting leave to commence action and did not defend the actions. Nor did they oppose the applications for orders nisi . They voluntarily vacated the properties, which had been rented. [ 71 ] The one complaint made by Manulife was that the Owners did not provide access for its realtor or appraiser to view the properties when making an estimate of value.

But the evidence suggests that was an omission on the part of the non-resident Owners, rather than a refusal, and involved tenants who occupied the properties. Failure to bid? [ 72 ] The Act, s. 5 requires a judge ordering judicial sale to include an upset price or reserve bid. Reserve bid in mortgage sales 5 Where, in an action upon or relating to a mortgage of real property, the mortgagee, or a person claiming through or under him, seeks to have the property sold, and the proceeds of sale applied in satisfaction of the mortgage indebtedness in whole or in part, the

court or judge shall not order sale of the property except subject to such upset price or reserve bid as the court or judge deems proper having regard to all the circumstances [ 73 ] In Goertz at para 34 , Sherstibitoff J.A. for the Court of Appeal wrote that s. 5 of the Act is intended to protect the mortgagor (debtor). [34] The general principle governing the upset price or reserve bid under s. 5 has been touched on above: the amount fixed by the judge must be a reasonable price, that is, as near the fair market value as is possible to be obtained at a forced sale.

Since the judge did not fix a reserve bid and since this case must be remitted to the court below for up-to-date evidence as to present value of the property, prevailing market conditions and all other relevant factors before a reserve bid can be fixed, it is inappropriate to attempt any more than a very general statement of principle. Since s. 5 applies only to sales at the request of the mortgagee, it was obviously enacted to protect the interest of the mortgagor.

Whether the land is worth more or less than the amount owing, it will always be in the best interest of the mortgagor that the land not be sold at a price far below its real value, always a possibility at a forced sale. Thus, the primary responsibility of the judge must be to ensure that the best possible price will be obtained for the land. Examination of English, American and Canadian judgments and literature shows the substantial legal and practical difficulties (see e.g., King Arts , supra, Robertson, Joseph T., The Problem of Price Adequacy in Foreclosure Sales (1987), 66 Can.

Bar Rev. 671, The Judicial and Legislative Response to Price Inadequacy in Mortgage Foreclosure Sales [1980] Southern Cal. L. Rev. 843). Nevertheless, the judge must use the substantial discretion vested in him to ensure a reasonable price on the one hand and to ensure that the sale not be abortive on the other. [ 74 ] In the case of QBG-RG-01845-2021 (2119 Lindsay Street), the order nisi at clause 7(

d) set the upset price at “$109,650.00 being 85% of the high end of the range of the appraised value of the Land in accordance with the Appraisal.” and at clause 7(

e) stated “The Plaintiff and Defendants have leave to make offers to purchase the Land”. [ 75 ] In the case of QBG-RG-01843-2021 (2317 Cameron Street), the order nisi at clause 7(

d) set an upset price of $131,750, again based on 85% of the high end of the range of the appraised value of the property, and at clause 7(

e) gave the parties a right to make offers to purchase the property. [ 76 ] Under both orders nisi , Manulife had a right to bid on the sales and failed to do so. Manulife explained that it declined to bid because, by the time the properties were listed for sale, it knew the upset price was well above the market price. That explanation is reasonable. Second attempt at judicial sale? [ 77 ] Unlike many of the cases cited, the applications are not for a second attempt at judicial sale, but rather to confirm the best sale obtained at the first attempt.

Second application? [ 78 ] At the same time, this is a second application. Manulife seeks to amend the order nisi by lowering the upset price. As stated in many decisions, the court will be reluctant to do so. [ 79 ] The Owners point to decisions of mine in which I declined to allow a further sale attempt and instead offered the alternative remedy of foreclosure: (

a) Hein (

b) Greening (

c) CIC Asset Management Inc. v Townsgate Development Corporation , 2021 SKQB 327 [ Townsgate QB ] ; leave to appeal dismissed 2022 SKCA 31 [ Townsgate CA ] [ 80 ] I agree that may be the result on a subsequent application. But every decision depends on its facts. [ 81 ] In these three decisions, the Taylor factors were reviewed. In each case, there were different facts which distinguish those decisions from the subject applications. [ 82 ] In Hein , two years had passed since the original order nisi in 2018, which set the upset price at $165,750.

The court had amended the order nisi in 2019 to reduce the sale price to $85,000. The mortgagee applied again in 2020 to again reduce the upset price to $40,000. That application was refused. [ 83 ] In Greening , the original order nisi set the upset price at $235,000 in 2019. In 2020 the court granted an application to reduce the upset price to $135,000. The court refused a second application to reduce the upset price to $70,000 and instead gave leave to apply for foreclosure. Rather than follow that direction, the mortgagee applied again seeking an upset price at $110,000.

That application was refused as improperly asking a judge of the same court to ignore or sit in appeal of a prior decision of a fellow judge. [ 84 ] In Townsgate , 31 months had passed since the original order nisi during which the real estate market had declined. Over that time, the court had granted fifteen applications from the mortgagee.

The application to vary constituted a complete substitution of the original order nisi , including an indefinite listing period and reducing the upset price of the remaining properties to two-fifths of the original upset price. [ 85 ] In each of these cases, delay and the adverse impact on the defendants were primary considerations in dismissing the applications and leaving the alternative of foreclosure.

Is the sale price reasonable? [86] I am satisfied that the sale prices are reasonable. Generally, a sale obtained on the open market between awilling seller and a willing buyer is the best evidence of market value. The sale prices obtained represent the best offer and therefore themarket value and a reasonable price. [87] I also take account of the Owners’ prior and unsuccessful attempt to sell 2119 Lindsay Street. (QBG-RG-01845-2021: Affidavit of Crystal Plante sworn June 6, 2022, Exhibit “A” Drive by Residential Report at p. 3) Selling Officer [88] Another important consideration is the selling officer.

For over two decades, this Court has repeatedlyemphasized the value of and requirement for independent selling officers. See, for example: (

a) Farm Credit Canada v Lundback, 2002 SKQB 376, at paras 2-4, 225 Sask R 315 [Lundback] (Wright J.). (

b) Toronto-Dominion Bank v Schell, 2014 SKQB 344 at para 4, 461 Sask R 257 (Rothery J.). (

c) Toronto-Dominion Bank v Forsyth, 2017 SKQB 235 at paras 4-7[Forsyth] (Mills J.). (

d) Royal Bank of Canada v Strelioff, 2020 SKQB 23 at para 14 (Rothery J.). (

e) Nieswandt at para 6 (Danyliuk J.). (

f) Pearl Boutique Ltd. at paras 56-58 and 103-104 (Robertson J.). (

g) Toronto-Dominion Bank v Sader, 2021 SKQB 160 (Tochor J.); affirmed 2021 SKCA 154 [Sader CA]. (

h) Townsgate QB at paras 12-14 (Robertson J.); leave to appeal dismissed Townsgate CA (

i) Toronto-Dominion Bank v Sader, 2022 SKQB 91 (Krogan J.). (

j) Clark (Hildebrandt J.). [89] The reason for an independent selling officer is to preserve the integrity of the judicial sale process and avoidany taint of conflict of interest. This was aptly and concisely expressed by Wright J. in Lundback at para 3. [3] In my respectful view, it is not appropriate for the Court to appoint, as selling officer, the solicitor for the applicant creditor. Thereare obvious difficulties with conflict of interest.

Who does the selling officer serve: the Court, from which his or her authority originates;or the client? [90] This rationale was accepted by the Court of Appeal in Sader CA at paras 7-10. [7] The principle that an independent selling officer for a judicial sale is required and the reasons for this were concisely set out in FarmCredit Canada v Lundback, 2002 SKQB 376 at para 3, 225 Sask R 315 [Lundback].

There, the court found it was not appropriate for itto appoint the solicitor for the creditor as selling officer because that would create a conflict of interest; who does the selling officerserve: the court (from which his or her authority originates) or the client? Over time, that dicta became established as the governing law. [8] The genesis of the concern that a conflict of interest may arise where the mortgagee’s lawyer is appointed as the selling officer wasnot explored by TD before the Chambers judge.

However, it appears that the recognition of a potential conflict where the selling officeris not independent has been long established. For example, a mortgagee’s unrestricted right to bid on the property where it is a trustee orhas conduct of the sale: London & British North America Company, Limited v Haigh and Investment Trustees Company, (SK KB), [1922] 1 WWR 172 (Sask SC). Notably, the order nisi for sale granted TD the right to bid.

Based on this older case lawalone, an independent selling officer was warranted in the case before us. [9] It is apparent that the issue of conflict of interest is broader than just whether the right of the mortgagee to bid at the sale conflictswith the appointment of its representative as a selling officer. That much is clear from the following excerpt from Ronald C.C. Cuming,Overview of Saskatchewan Real Property Security Law (Regina: Office of the Queen’s Printer, 2016) at 11–17 [Cuming]: …The power to order a judicial sale is based in equity and, consequently is in the discretion of the court.

The role of judicial sale is toensure, as much as is possible, a fair balance between the interests of mortgagors and mortgagees… (Emphasis added) [10] This excerpt highlights the existence of an inherent conflict between the mortgagor and mortgagee in foreclosures and judicial salesas seen from the viewpoint of equity. That conflict continues to exist and perhaps is highlighted where the selling officer is, in fact, themortgagee’s solicitor. To ameliorate that conflict – real and perceived – courts have required independent selling officers or persons whoare not retained by the mortgagee.

In Ontario, for example, the law governing judicial sales provides for a referee that is a quasi-judicialofficer: see Rules of Civil Procedure, RRO 1990, Reg 194, s 55.06, 64.03, 64.04 and 64.06. [91] The selling officer is usually proposed by the mortgagee (lender) as applicant but is appointed by the court. Asstated in Lundback above, the selling officer serves the court from which their authority originates. The selling officer acts on behalf ofthe court as its delegate in exercise of the court’s supervisory role over the judicial sale, subject always to the court’s direction andconfirmation of the sale.

The selling officer looks to the order nisi for direction, but may also seek additional instruction from the court,if required.

[ 92 ] The requirement for an independent selling officer is identified in The Queen’s Bench Rules through Forms 10- 47C and 10-47D, both titled “Order Nisi for Sale by Real Estate Listing”. [T]he Land shall be sold under the direction of ____________ (the “selling officer”) ( specify name of independent lawyer or as the case may be ) through a licensed real estate salesperson and sold pursuant to the terms of an offer: [Emphasis added] [ 93 ] These forms describe some of the duties of the selling officer: (

a) Sale under the direction of the selling officer: clause 7 (

b) Selling officer accepts offer, subject to confirmation by the court: clause 7(a) (

c) Selling officer authorized to sign any listing agreement at the listing price determined by the selling officer: clause 9(a) (

d) Selling officer has discretion to lower the listing price as he or she considers appropriate: clause 9(b) (

e) Selling officer has discretion to accept any offer and to make any counteroffer as she or she considers appropriate: clause 9(d) (

f) Selling officer appoints real estate salesperson: clause 10 [ 94 ] It is worth noting that the role of selling officer was once primarily performed by the Sheriff, who is a court official. As recounted by Mills J. in Forsyth at paras 3-7 , the court intervened to require independent lawyers when mortgage lenders began seeking appointment of realtors or their own lawyers as selling officer. [ 95 ] The selling officer, Avery Layh, is a senior lawyer known to the court as experienced in real estate law, including foreclosure practice. She is independent of both Manulife and the law firm acting for Manulife.

Her background reassured the court that the sales would be properly conducted. [ 96 ] From the evidence provided, the selling officer understood her role and took her direction from the court.

The selling officer swore affidavits filed for both applications in which she explained why she accepted the offers, subject to the court’s approval. [ 97 ] While I am satisfied that the selling officer was independent and took her direction from the court, the selling officer also reasonably consulted with lawyers for the parties, including the lawyer representing the Owners (See Affidavit of Janice Taylor sworn April 6, 2023, Exhibit “A” emails with Grant Richards). I see nothing wrong in her keeping them informed or receiving their input so she could take account of their interests.

Explanation for delay? [ 98 ] As set out in the chronology above, there was a delay between the granting of order nisi and listing of the properties: almost 4 months for 2317 Cameron Street (QBG-RG-01843-2021: July 26 – November 16, 2022); and 5 and one-half months for 2119 Lindsay Street (QBG-RG-1845-2021: July 26/22 – January 11/23). [ 99 ] There will always be some interval, given the administrative processes involved.

The significance of the delay in the case of these judicial sales is that the real estate market was declining. [ 100 ] Manulife, in its brief of law at paragraphs 6, 19 and 26(b), concedes that the delay contributed to loss in value of the properties from a falling residential market. For example, at para. 6: 6. At the time the Property was listed, the Regina real estate market was also experiencing a massive downturn, making it even harder to sell homes in Regina.

This also causes the expected selling point of the Property to decrease. [ 101 ] At the same time, Manulife also attributes the difference between the estimates of value, which formed the basis for its proposed upset prices, and the eventual selling prices to interior disrepair and hidden defects which it could not have discovered until it gained access to the buildings. [ 102 ] Jaymie Walker, realtor, in her affidavits sworn March 15, 2023 at para. 3 (identical on both files) attributed the decreased value of the properties to both the building disrepair and a falling real estate market, but mainly to the market. 3.

Since the Order Nisi was granted on July 26, 2022, the real estate market in Regina has continued to slow down, and decrease considerably. This, along with the condition of the Property (as detailed in the First Affidavit), is the main reason the Property’s realistic selling price has dropped since the upset price was set within the order Nisi. [ 103 ] Manulife as a sophisticated mortgage lender would be aware of the falling market. Further, although the order nisi were granted in mid-summer, the properties were not listed until winter.

I take judicial notice that spring/summer is usually preferred for sale of residential properties. [ 104 ] So, it is likely that delay in selling the properties will result in higher deficiency judgments. [ 105 ] I was unable to find in the materials filed any stated explanation for these delays. I infer that the occupancy of the properties by tenants until November and December 2022 likely contributed to the delay in listing, having regard to the other evidence about difficulty in gaining access for the purpose of valuing the properties.

Is there an unreasonable loss to the debtors? [ 106 ] The upset price is normally proposed by the mortgagee (lender) based on a percentage of its estimate of the market value of the property. So, if the upset price is not realistic, the mortgagee is usually held responsible. This sometimes results from so-called “drive by” valuations which estimate the value without an interior inspection, as initially was done for these properties. [ 107 ] While the court understands the cost advantage of drive by valuations, proper appraisal reports are generally more reliable and should be obtained where warranted.

Mortgagees who use the lower cost option do so at their own risk and may be subject to judicial criticism. See, for example: (

a) Hanterman at para 8 (

b) Royal Bank of Canada v Gaudet , 2019 SKQB 87 at para 27 (

c) Yuzuk , at para 26 (

d) Nieswandt at para 14 (

e) Canadian Imperial Bank of Commerce v Doan , 2021 SKQB 94 at para 10 . [ 108 ] But in this case, the use of drive by valuations and probable resulting inaccuracy in valuation was in part the result of the Owners’ failure to provide access to the properties.

See: QBG-RG-01843-21 and QBG-RG-01845-2021 Affidavits of Crystal Plante sworn July 23, 2021, Exhibit “D” letters dated May 12. 2021 from Fashia Richards to Janice Taylor and Dale Holmes at page 2 requesting access for the purpose of conducting appraisals; and QBG-RG-0845-21 Affidavit of Jaymie Walker sworn March 15, 2021 at para. 4 about denial of access for 2119 Lindsay Street for May 2022 appraisal.

Conclusion [ 109 ] Having regard to the factors reviewed above, in particular what would be equitable, I conclude that the applications should be granted to vary the order nisi by reducing the upset prices and then to confirm sale at those reduced prices. Dismissing the applications would prolong the process with additional costs and without any realistic prospect of obtaining better sale prices. That would then increase the loss to the parties. Costs [ 110 ] Rule 11-1 of The Queen’s Bench Rules provides guidance on award of costs.

Although the successful party is usually awarded costs, that is just one factor to consider amongst the many listed in Rule 11-1(4). In this case, I decline to make an award of costs. [ 111 ] Manulife is a sophisticated party in the business of lending against property. It was in the driver’s seat on the foreclosure action. It decided to use drive by valuations which proved unreliable. It proposed the terms of the order nisi , including the upset prices which it later concluded were above market value. It decided to proceed with the sale rather than return to seek variation of the upset price.

While I make no criticism, recognizing the dilemma it faced, Manulife bears responsibility for the situation which brought about these applications. And given the state of the law, I find that it was reasonable for the Owners to resist the application.

SUMMARY [ 112 ] I answer the three questions posed above as follows: 1. Did the proposed sales comply with the terms of the order nisi ? No. The proposed sales are below the upset prices set as terms. 2. If not, does the court has jurisdiction to consider the applications? Yes, the court retains its jurisdiction to consider whether to exercise its discretion to grant or refuse the applications. 3. If so, should the court exercise its discretion to grant the applications? Yes, having regard to the Taylor factors and recognizing that doing so is an exception to the usual rule.

Order [ 113 ] The draft orders filed may issue, except that: paras. 1 and 2 shall be reversed, since the reduction in sale price should precede confirmation of the sale; para. 5 should be revised to reflect the decision to make no award of costs; and para. 6 should be deleted because the Owners are represented by counsel and have cooperated throughout the foreclosure proceedings. [ 114 ] Finally, I wish to thank both counsel for their able arguments and assistance in helping me to come to a decision.

J. D.N. ROBERTSON