MOSKOWITZ CAPITAL MORTGAGE FUND II INC. PLAINTIFF - v. –, 2023 SKKB 148

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 148 Date: 2023 07 11 Docket: QBG-SA-00685-2020 Judicial Centre: Saskatoon BETWEEN: MOSKOWITZ CAPITAL MORTGAGE FUND II INC. PLAINTIFF - and – KOLISNEK DEVELOPMENTS INC., KURTIS KOLISNEK, DR. ROD HAFEZI MEDICAL PROF. CORP., COLLEGE DRIVE CAPITAL CORPORATION, BEVERLY ELAINE KOLISNEK, DI-AD INVESTMENT CORPORATION OF CANADA LTD., ZDA INVESTMENTS LTD., and THE BANK OF NOVA SCOTIA DEFENDANTS Counsel: Alexander E. Buchan for the plaintiff Avery D. Layh as selling officer Dr.

Ali Honar (not counsel) for Caravan Counselling Inc. (a non-party) ___________________________________________________________________________ JUDGMENT DANYLIUK J. July 11, 2023 ___________________________________________________________________________ Introduction [ 1 ] Two applications came before the Court on this matter. The plaintiff seeks amendments to the Order Nisi for Sale by Judicial Listing granted on June 29, 2021.

The selling officer applies for directions regarding an offer to purchase land subject to the order nisi, as well as approval of her fees to date. [ 2 ] These applications are deceptively simple, yet trigger a number of legal issues pertaining to Saskatchewan’s land realization process. Each such issue will be dealt with in turn. Facts [ 3 ] It is of some benefit to briefly review the procedural history of this matter. [ 4 ] In May 2020 a statement of claim was issued claiming, inter alia , foreclosure, sale, and a deficiency judgment.

In the spring of 2018, the plaintiff advanced a loan to Kolisnek Developments Inc. (“KDI”). In June 2018 the plaintiff obtained an assignment of a mortgage on land granted by KDI to a credit union in 2013. That mortgage was held as security for the debt. The subject property forming the security for this loan consists of two business condominium units together with 30 parking units on site.

[ 5 ] KDI fell into default on the loan and this triggered the within action. When the statement of claim was issued KDI owed just under $2.8 million. Leave to commence this action was not required under The Land Contracts (Actions) Act, 2018 , SS 2018, c L-3.001 , because this was a mortgage from a corporate entity and the legislative protection was waived, and the land is purely commercial in nature. [ 6 ] KDI and Kurtis Kolisnek defended. In the fall of 2020, the plaintiff applied to strike out that defence.

By order dated November 12, 2020, the statement of defence was struck as disclosing no reasonable defence. [ 7 ] In early 2021 the plaintiff applied for an Order Nisi for Sale by Judicial Listing. The application was adjourned from time to time for several reasons until such an order was granted on May 20, 2021.

This order nisi had notable features: - The total sum owing as of May 5, 2021 was $3,146,121.16, with interest running at 8.5%. - Subject to the other terms of the order nisi, judgment was granted against KDI in the plaintiff’s favour in that amount. - The redemption period was set at one day following service. - Avery Layh, a solicitor independent of all parties to these proceedings, was appointed as the selling officer. She was empowered to list the land for sale for up to 180 days at a list price she determined. The upset prices for these condominium units were set out in an affidavit that was sealed by order.

Ms. Layh could reduce the list price at her discretion but not below the upset prices. Any sale was subject to court confirmation. [ 8 ] Difficulties were encountered in dealing with the land pending sale. Accordingly, on June 30, 2021, the plaintiff obtained an order for immediate possession, the right to appoint a property manager to collect all rents, and a direction that KDI provide the plaintiff with copies of all lease agreements, all keys to the building and units, and all security deposits. [ 9 ] The listing period expired.

The plaintiff discharged its counsel and, as a corporation, could not proceed with court applications. As a result, in February 2023 the selling officer applied for an extension of the listing period, the initial 180 days having expired. In Ms. Layh’s notice of application, paragraph 6 noted “The Selling Officer is neutral in these proceedings …”. On February 7, 2023, an order was granted empowering Ms. Layh to list the property for an additional 180 days. She did so. [ 10 ] In April 2023 the two applications now before me were filed. [ 11 ] Ms. Layh’s was first in time.

As selling officer she sought direction from the Court regarding an offer to purchase the subject land, as well as assessment and approval of her fees to date. Those solicitor-client costs were claimed in the sum of $13,970.57. This is a complex matter. From the material it is clear Ms. Layh has spent a lot of time and effort on it. [ 12 ] An affidavit was filed by the selling officer. This affidavit was from Dan Torwalt, a realtor from Humboldt, Saskatchewan with 19 years’ experience. Each of the two commercial condo units was formally assigned one parking unit, but there were 28 others.

He explained that the initial listing of the property was done by another realtor, and the units were listed as follows: - Unit 109: This is a vacant undeveloped commercial office space with one attached parking unit. It was initially listed for $995,000.00. - Unit 101: This is a developed commercial business centre housing individual offices with shared common areas. It also has one attached parking unit but for some reason the additional 28 parking units were listed with this unit and marketed as such.

Unit 101 was initially listed for $2,959,000.00. [ 13 ] On February 28, 2023, an offer was made to purchase Unit 101, which was the unit with all the parking listed with it. The offer was for $2,828,000.00. The selling officer counter-offered with proposed changes to the terms. The counter-offer was signed by both parties. The selling officer attempted to obtain information necessary to close the transaction. It was discovered the plaintiff disputed the offer. [ 14 ] The basis of the dispute was the manner of listing the two units, one with all the parking and the other with almost none.

This created not only a difference in value, but it is submitted it makes the unit with no parking virtually unmarketable. [ 15 ] This was crystallized in the plaintiff’s application filed shortly after that of the selling officer. That application sought amendments to the sale order. In particular, the amendments that were sought by the plaintiff: - specified a different realtor to market the property; - split the parking units as between the two office units; and - provided insulation or indemnity against the selling officer in conjunction with this matter.

The proposed amendment said: “No party may bring an action in any court or tribunal against the Selling Officer in connection with the sale of any of the properties subject to this Order except with leave of this Court”. [ 16 ] In support of the plaintiff’s application was referenced the affidavit of Brian Moskowitz sworn in December 2020. That affidavit was sealed by order because it discloses information about the reserve bids.

Such information becoming public could negatively affect this particular sale and the integrity of the judicial sale process generally. [ 17 ] The overarching tenor of that sealed affidavit was to demonstrate that the sale of all the parking stalls with one unit would adversely affect the plaintiff in realizing upon its security in a meaningful way. [ 18 ] The plaintiff also relied upon the unsealed December 2020 affidavit of Brian Moskovitz which had been filed in

support of the original order nisi application. [ 19 ] In direct support of this current application was the affidavit of Brian Moskovitz sworn April 18, 2023. With some 20 years’ experience in this field, the deponent attests to the value of the commercial parking spaces. He describes such parking spots as being of “critical importance” (paragraph 8) to real estate developers. [ 20 ] Of great significance is that Mr. Moskovitz attests that he spoke with the original listing realtor about this issue. Paragraph 9 of his affidavit states: 9. I spoke with Ajit Matharu about this issue.

He told me that the parking spots were listed with 101 College for convenience, as it would be difficult and confusing to list all of them individually online. Ajit Matharu told me that this issue would be discussed and worked out with any potential buyers during the inquiry stage and negotiation of an offer. [ 21 ] Mr. Moskovitz was aware of the terms of Caravan’s initial offer to purchase and he says he again raised these concerns with him, wanting further negotiation to form a better distribution of the parking units. His exhibited email of February 28, 2023 to Mr. Matharu requested that changes be made.

They were not. He wrote to the selling officer via email the next day raising his concern about the amount of the offer given that all the parking was included and the concern about parking. In spite of all this, Mr. Moskovitz received a copy of the selling officer’s counter-offer on March 8, 2023. That counter-offer was accepted by Caravan.

This deponent notes that if all the parking is sold with unit 101, the sale of 109 is compromised such that it will be “impossible to sell 109 College at or above the upset price” (paragraph 15). [ 22 ] To complicate matters, in mid-April 2023 another corporate entity sought to purchase unit 101 with a total of 19 parking stalls. While the offer is less, Mr. Moskovitz says that cumulatively the offer is worth more because some parking is allotted to unit 109. [ 23 ] On behalf of the plaintiff, the request of Mr.

Moskovitz is that the order nisi be amended to equitably distribute the parking spots as between the two units for sale. [ 24 ] Caravan caught wind of this and through counsel suggested it could sue the selling officer if the sale did not proceed. Caravan (now unrepresented) notes it did nothing wrong here. It saw a property listed for sale and made an offer on the property, as listed . Caravan’s offer was not accepted as is, or through inadvertence. Caravan notes the selling officer prepared a detailed counter-offer with several schedules. The counter-offer amounted to an offer to sell to Caravan.

Caravan accepted those terms. Caravan says it has a valid contract for the purchase and sale of land, and the Court should not be used to break that contract for the commercial expediency of one party. [ 25 ] Essentially, the plaintiff wishes to remedy the sloppy (perhaps negligent) marketing and sale of the property by the realtors, which was not checked or remedied by the selling officer. [ 26 ] I note the brief of plaintiff’s counsel suggests that the selling officer is seeking direction as to whether she may accept the new offer after accepting the Caravan offer.

In fact, her notice of application seeks no such remedy. The “new” offer did not even exist when the selling officer brought her application. This position “evolved” since the formal applications were brought. [ 27 ] Finally, there have been new and significant developments. By letter dated June 23, 2023, the selling officer advised of factual changes. The initial offeror, Caravan, pulled its offer to purchase. Discussions had occurred to try to resolve this difficult situation but no accord was reached, therefore Caravan retracted its offer and no one opposed that.

That aspect of the selling officer’s application – whether she could accept multiple offers subject to Court approval – is no longer urgent although the selling officer invites this Court to provide any directions it may. As well, the subsequent offeror also has withdrawn any offer previously made and the intent is that a new offer will be submitted following the relisting of the subject property. [ 28 ] As will be seen below, this development is most fortuitous for the selling officer as well as for the plaintiff. [ 29 ] This being so, there is no accepted offer before me under the existing listing.

The selling officer advises her intention is to amend the listing to ensure there is an equitable redistribution of the parking units as between the two condo units to be sold under order. This leads to consideration (in a new light) of the plaintiff’s application to amend the order nisi and to change the realtors involved in listing these properties for sale. The selling officer takes no position on changing realtors. Issues [ 30 ] The issues before the Court are: 1. What are the applicable general principles, including the nature of a selling officer? 2.

Is there any jurisdiction to amend the order nisi for sale regarding either unit after an offer on one unit was accepted by the selling officer, subject to Court approval? 3. Should directions be given to the selling officer and, if so, what should they be? Analysis 1. What are the applicable general principles, including the nature of a selling officer?

[31] Recently there has been a spate of applications pertaining to judicial sales. Some lawyers claim there isconfusion as to the applicable law. Respectfully, there is not. There is a body of law that clearly lays out the guiding principles. Anyconfusion is brought about by a failure to follow those principles, as opposed to a lack of clarity in the law. Supervisory Jurisdiction [32] First, I note that the foreclosure/judicial sale process is one that is always subject to the supervisory jurisdictionof this Court.

It is a general principle of long- standing that the Court is engaged in all aspects of this process. The purpose is well-known, of long-standing, and is valid. The Court ensures that there is equity and balance in the land realization process. Nowhere is thismore acute than in the sale process. [33] This principle is so oft-repeated that it should be trite law. It was reviewed by Robertson J. in Homequity Bank vLindemann, 2021 SKQB 326. While that case engaged The Land Contracts (Actions) Act, 2018, there is no doubt the statements thereinbear a broader application.

At para. 14 Robertson J. appropriately said: [14] The court’s exercise of discretion in this supervisory role is necessarily informed by its understanding of the purpose of thegoverning legislation. The legislation balances the legitimate interest of mortgage lenders to be repaid with the public interest thatborrowers be protected against predatory lending practices and the vagaries of the market. Its primary purpose is consumer protection. … [34] The principle of court supervision had arisen in CIBC Mortgages Inc. v Taylor, 2018 SKQB 118, [2018] 9WWR 340.

The principle that the Court enjoys an overriding jurisdiction in land realization matters was affirmed at para. 20: [20] There will be no shock to those experienced with foreclosure practice in Saskatchewan that this court jealously guards, andsedulously fosters, its supervisory jurisdiction. This has evolved through legislation, case law, and longstanding practice.

Much of thelegislation and case law in this area is designed for the protection of debtors, and to ensure that creditors realizing on their security do soin an orderly fashion. [35] The judges of this Court (and the Court of Appeal) have consistently recognized and applied this principle.

See,for example: Royal Bank of Canada v Pearl Boutique Ltd., 2020 SKQB 106 at paras 40-42; Royal Bank of Canada v Strelioff, 2020SKQB 23 at para 12 ; Bank of Nova Scotia v Moore, 2019 SKQB 122 at para 33; Royal Bank v Gaudet, 2019 SKQB 87 at para 30;Taylor at para 30(c); Royal Bank of Canada v Hollmann, 2017 SKQB 299 at paras 16-17; Scotia Mortgage Corporation v Conroy, 2016SKQB 281 at para 7; Royal Bank of Canada v Viloria, 2014 SKQB 110 at para 14, 443 Sask R 121; CIBC Mortgage Corp. vDubois, 2003 SKQB 472 at para 7, 240 Sask R 50; Toronto-Dominion Bank v Gibbs, 2019 SKCA 57, [2019] 12 WWR 71. [36] In Moore at para 33, Pritchard J. noted “Extensive and growing Saskatchewan case law establishes that thisCourt does not take a passive role in supervising a lender’s enforcement of its mortgage security”.

In Gibbs at para 49, Leurer J.A. noted“In my view, the Chambers judge correctly understood that judicial sale is an equitable remedy subject to supervision by the court.” [37] These are only some of the reported cases on point. I could not locate any reported decisions to the contrary.There is no confusion. Judicial Sales [38] This is an area that has attracted considerable judicial attention of late.

Some creditors’ counsel are seeking toappoint non-lawyers, or lawyers from the same firm as is mortgagees’ counsel, as opposed to independent lawyers as selling officers.They argue that this is allowed by some judges. They argue that the appointment of an independent selling officer simply runs up costswhich are passed on to the mortgagor, although many mortgagees’ lawyers will candidly acknowledge that deficiency judgments areoften granted but rarely actually collected. [39] There is a significant body of case law applicable.

Rather than trying to “slip one by” a judge, mortgagees’counsel should be citing this body of case law where applicable. This is a professional and ethical obligation, not merely a legal one.Where legal authority exists contrary to the point asserted by a lawyer, that lawyer has an affirmative duty to raise the case(

s) with theCourt and explain or distinguish same. Simply ignoring a large number of cases running contrary to the espoused position is not anappropriate option for creditors’ counsel. [40] This body of case law dates back at least 20 years. The judges of this Court have said, over and over, that thereare good reasons to appoint independent counsel as selling officers.

See: London & British North America Company, Limited v Haighand Investment Trustees Company (1921), [1922] 1 WWR 172, (Sask KB); Farm Credit Corporation v Lundback,2002 SKQB 376, 225 Sask R 315; Toronto-Dominion Bank v Schell, 2014 SKQB 344, 461 Sask R 257; Toronto-Dominion Bank vForsyth, 2017 SKQB 235; Royal Bank of Canada v Strelioff, 2020 SKQB 23; Bank of Nova Scotia v Nieswandt, 2020 SKQB 53; PearlBoutique, Affinity Credit Union 2013 v Algner, 2020 SKQB 174; Toronto Dominion Bank v Sader, 2021 SKCA 154; CIC AssetManagement v Townsgate Development Corporation, 2021 SKQB 327, leave to appeal dismissed 2022 SKCA 31; Toronto DominionBank v Sader, 2022 SKQB 91; Toronto-Dominion Bank v Clark, 2023 SKKB 114. [41] In Pearl Boutique Justice Robertson noted the following at paras. 56 to 58: [56] The courts require that the selling officer be an independent lawyer.

Rothery J. stated this requirement in Schell at para 4: THE APPROPRIATE SELLING OFFICER [4] The draft order proposes that after the end of the redemption period, the mortgaged land be sold under the direction of theplaintiff’s lawyers, by way of listing the property for a period of ninety days with a licenced real estate agent. While the assistance of a

real estate agent is beneficial in obtaining the best price for a residential property such as this, it has long been decided by this court that another solicitor other than the plaintiff’s own solicitor must direct the sale. [57] Again, this requirement is reflected in Forms 10-47A, at para. 7, and 10-47B, at para. 5, which similarly require the applicant to “specify lawyer, sheriff, or as the case may be”.

Forms 10-47C, at para. 7, and 10-47D, at para. 5, similarly state: The 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: (

a) that the selling officer accepts; and (

b) that is confirmed by the Court, on application. [58] This requirement that the selling officer be an independent lawyer was recently re- stated by Danyliuk J. in Bank of Nova Scotia v Nieswandt , 2020 SKQB 53 at para 6 . [ 42 ] I will now deal with the reasons for the general requirement that the selling officer be an independent lawyer. [ 43 ] Creditors’ lawyers who propound appointing selling officers from their own firms often advance arguments minimizing the potential for conflict. A lawyer appointed from the firm of the mortgagee’s solicitor can readily find himself or herself in a conflict of interest.

This was recently recognized in Sader CA at paras 9, 10 and 14: [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 conflicts with 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 to ensure, 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 sales as seen from the viewpoint of equity. That conflict continues to exist and perhaps is highlighted where the selling officer is, in fact, the mortgagee’s solicitor. To ameliorate that conflict – real and perceived – courts have required independent selling officers or persons who are not retained by t he mortgagee.

In Ontario, for example, the law governing judicial sales provides for a referee that is a quasi-judicial officer: see Rules of Civil Procedure , RRO 1990, Reg 194 , s 55.06, 64.03, 64.04 and 64.06. … [14] The Chambers judge’s decision and the case law recognizes the conflict of interest, real or apparent, that the appointment of the mortgagee’s lawyer will create. This is so notwithstanding that the financial interests of the mortgagor and mortgagee in respect of the sale may be arguably aligned in some circumstances.

Although the process of a judicial sale must be expedient and economical, it must also be just to the mortgagor and without the appearance of conflict. In this way it strikes the equitable balance described in the excerpt from Cuming set out earlier. [ 44 ] This argument is often amplified by the assertion that there really is no true risk of a conflict of interest, because all parties want the property to be sold for the highest price. In Sader CA this argument was discounted. There is more to a court- supervised sale process than the price.

The overall terms are of importance. [ 45 ] The case at bar aptly illustrates this type of conflict. When these two applications were argued before me, the mortgagee was dissatisfied with its previous solicitors, its realtor, and even the selling officer. That original firm of solicitors was discharged by the plaintiff. Imagine the situation if the selling officer had been a member of that firm. The plaintiff could have rights of action against its previous counsel, the realtor, and the selling officer.

Even if no such action had been taken against the selling officer, had she been a member of the same firm her situation and continuation in the role of selling officer would have been untenable. [ 46 ] Further, in this situation the selling officer’s acts or omissions are, potentially, assailable. The realtors were allowed to list and continue with almost all of the parking attached to one unit. Understandably Caravan’s offer was based on the listing. But this is not a case where there was a mere slip and the selling officer accepted an offer without proper examination. It is more than that.

The selling officer put forth a counter-offer wherein essential terms of the transaction were dealt with. It is at least arguable that she ought to have reviewed the overall proposed deal with more care, and caught the issue with the parking units. I do not have to determine that point. However, to say that there can be no conflict arising is quite obviously just plain wrong in fact and in law. [ 47 ] Mortgagees often argue that the addition of an independent lawyer as selling officer adds costs. While that is true, in the grand scheme of things those costs are minimal.

But much more compelling is the maxim that justice and ethics have no price tags attached; they are not for sale in a constitutional democracy with a truly independent judiciary. We do not look away from legal and ethical problems to save a few dollars. The proper administration of justice, which includes legal ethics, is not a trifle to be sacrificed on the twin altars of economics and expediency. [ 48 ] Increased costs were specifically argued in Sader CA . The Court of Appeal was not persuaded that this was a factor which would permit a selling officer from the same firm as mortgagee’s counsel to be selected.

As noted at para. 13 in Sader CA , even if expenses are increased through the appointment of an independent selling officer “that consideration is not determinative”.

[ 49 ] Further, having regard for the Foundational Rules of The Queen’s Bench Rules , the expense of a selling officer is proportionate to the amounts and issues at stake in foreclosure and sale proceedings. There is nothing inordinate or disproportionate in the costs of an independent selling officer when compared to the benefits derived therefrom. [ 50 ] Another rationale used by mortgagees (and which was used in Sader CA ) is that given this Court’s assertion of its supervisor jurisdiction the Court can ensure the terms of any sale order are strictly adhered to by the parties, including the selling officer.

Any “mischief” can be prevented or curtailed by the Court exercising this supervision. [ 51 ] No credence was given to this assertion in Sader CA . There is a fundamental flaw in this assertion. While litigation is an adversarial process, it is still an honest one. Realization proceedings are hardly designed to be a “catch me if you can” exercise. Parties are expected to act in a commercially reasonable manner. Their counsel are ethically obligated to act in an appropriate way.

In short, it is incumbent upon the parties and their lawyers to act properly rather than treating foreclosure proceedings as some sort of game. [ 52 ] Finally, it is common that these arguments are made without a scintilla of supporting evidence. This was the case in Sader CA at paras 15 and 16: [15] TD argues in this Court as it did before the Chambers judge that, in reality, there is no conflict of interest. I am not satisfied this is so in this case.

In support of this submission, TD, in its factum, makes the same sweeping factual assertions about the behaviour of mortgagees and the interests of mortgagors as did in its brief before the Chambers judge. All of this is, as it was in the court below, without a shred of evidence to underpin those assertions. For example, the order nisi for sale in this matter provides that both the plaintiff and defendants have leave to bid at the sale.

In respect of this, TD makes the bald statement without any evidentiary foundation that mortgagees never bid on the property for sale, notwithstanding that they have a right to do so. [16] If the exercise of the Chambers judge’s discretion is to be properly informed with regard to the appointment of the mortgagee’s lawyer as the selling officer, more is required than a draft order nisi for sale with the mortgagee’s lawyer’s name inserted as selling officer and a brief of law containing unsupported factual assertions and speculation about how the interests and behaviour of the parties will play out. [ 53 ] Finally, it is sometimes argued that there is no legal basis to require an independent solicitor as a selling officer.

That is only true if two things are ignored, the first being the body of case law referenced herein. The second item that must be entirely ignored to make this argument are the substance of the rules and forms of this Court.

See, for example, Justice Robertson’s comments in Pearl Boutique at paras 56 and 57, as outlined in para. 41 above. [ 54 ] I am left with no doubt that the general rule of law in Saskatchewan is that under an order nisi for sale the selling officer is to be an independent lawyer. [ 55 ] This is not to say that it is an absolute, immutable rule that an independent lawyer must always be appointed. There may be a very slim set of circumstances where a lawyer from the same firm could be appointed as a selling officer. This was recognized in Sader CA . However, that door was left slightly ajar as opposed to wide open.

The Court of Appeal observed it would be an “uphill battle” (para. 18) to convince a judge that a lawyer from the same firm should be appointed selling officer. Evidence amounting to compelling reasons to appoint a lawyer from the same firm is required. These cases will be relatively few and far between and cogent evidence militating strongly in favour of a departure from the general rule must be adduced. [ 56 ] Finally, in this case there was discussion about standing. There seemed to be some question as to whether selling officers could independently come to court seeking directions or relief.

The short answer is “of course they can”. The independent selling officer is responsible to the Court, not either party. He or she may always seek the input, approval or directions of the Court. 2. Is there any jurisdiction to amend the order nisi for sale regarding either unit after an offer on one unit was accepted by the selling officer, subject to Court approval? [ 57 ] I am persuaded that the order nisi for sale ought to be amended in these unique circumstances. Primarily I am moved by the apparent neglect of the listing realtors in ascribing almost all of the parking units to one condo unit.

One does not need to be a realtor or lawyer to figure out that would have been a disaster. As well, this error was not caught or dealt with by the selling officer, and such action on her part would have been within her core functions as selling officer. [ 58 ] I am further persuaded that the Court remains cloaked with jurisdiction to amend an order nisi, although not for all the reasons proffered by the plaintiff. [ 59 ] At para. 25 of its brief the plaintiff states: “Paragraph 14 of the Order Nisi permits the plaintiff to apply to court to amend the terms of the Order Nisi”.

This is not entirely correct and is a misstatement of what both the plain words and the obvious intention is of paragraph 14 of the order nisi for sale. That paragraph reads: 14. If no offers are made by the expiration of the Listing Period, or should any sale be abortive or not confirmed, the plaintiff may apply: (

a) to amend the terms of this Order; or (

b) to foreclosure absolute. [ 60 ] None of the listed preconditions apply to the current application. Offers were not only made but were accepted. No sale was abortive at the time the plaintiff’s application was brought, nor was judicial confirmation ever refused. Thus, the triggering events for the amendment jurisdiction created by the order nisi for sale itself are missing. The plaintiff is incorrect that paragraph 14 confers an amendment jurisdiction on this Court on these facts.

[61] The plaintiff further relies on Rule 10-11 of The Queen’s Bench Rules, which the plaintiff says permits a matterto be returned for further directions to ensure that an order reflects the Court’s intended meaning. That also is not the factual situationbefore me on this application. As well, the plaintiff again misstates matters. Ignored is Rule 10-11(2), which expressly provides that suchamendments may only be made “if it does not necessitate any variation of the judgment or order as to any matter decided by the originaljudgment or order”. Again, that is not the situation here.

The authorities interpreting this Rule are clear. It is designed to deal withvagaries within an order that make it difficult to discern or implement the Court’s true intent. It is not designed to give a party who, withthe benefit of hindsight, a second kick at the judicial can in order to get different relief than what was originally intended to be granted. [62] The plaintiff does not fit squarely within Rule 10-11. [63] However, an order nisi for foreclosure or sale may be amended by the Court before matters under such order arefinalized. This jurisdiction was not expressly explored but was recognized in Moore.

The same is true of Gaudet. [64] However, in Taylor at para 30, I expressly addressed the factors to be considered in an application to vary anorder nisi, and set out a non-exhaustive list of same. The list in Taylor has been followed in numerous other decisions of this Court andhas been utilized by the Court of Appeal (CIC Asset Management v Townsgate Development Corporation, 2022 SKCA 31).

Paragraph30 of Taylor states: [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 tovary 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. Indetermining whether to grant a sale, the court must balance the competing interests of mortgagor and mortgagee. Wolff [Royal Bank ofCanada v Wolff, 2017 SKQB 318, 17 CPC (8th) 395], para 34; Forsyth, para 16; Schnedar [Royal Bank of Canada v Schnedar, 2004SKQB 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 vHollmann, 2017 SKQB 299 at paras 16 and 17; Royal Bank of Canada v Viloria, 2014 SKQB 110 at paras 14 and 15, 443 Sask R121; Co-operative Trust Co. of Canada v Target 21 Industries Ltd. (1988), (SK CA), 47 DLR (4th) 349(Sask CA); Co-operative Trust Co. of Canada v O’Grady, (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 thatprice. 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 thecourt. 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 subject property? [ 65 ] At para. 33 of CIC the amendment or outright replacement of an order nisi for judicial sale was contemplated. [ 66 ] While for substantially different reasons than those set out by counsel for the plaintiff, I am satisfied this Court may amend an order nisi within land realization proceedings. [ 67 ] In these circumstances (and with slight modifications) I agree with all the proposed amendments to the order nisi as set out in the draft amended order nisi filed by plaintiff’s counsel on April 28, 2023 – except one. Paragraph 1(

f) of that draft amended order nisi provides: No party may bring an action in any court or tribunal against the Selling Officer in connection with the sale of any of the properties subject to this Order except with leave of the Court. [ 68 ] Respectfully, this is a remarkable proposition. This proposed amendment was clearly directed at Caravan. The plaintiff took a strong position that Caravan had no standing in this application and should not even be heard in chambers.

Yet the plaintiff wanted a declaration and order that no party (which would certainly include Caravan) could sue the selling officer for anything. [ 69 ] Before depriving a person or corporation, or a class of persons or corporations, of any right to bring a lawsuit or application involving a cause of action for any reason, the Court needs to hear from that person or corporation. In Windels v Reddekopp , 2023 SKCA 38 , an appeal was taken on numerous grounds, including a denial of basic procedural fairness.

Among other things, the chambers judge ( see 2021 SKQB 313 ) made orders against people who were not even before the Court, and who were not named in the litigation or heard in court. They had no opportunity to make representations. On appeal those orders were overturned. It is with this in mind that I allowed Dr. Honar to speak for Caravan in chambers. [ 70 ] As Caravan has withdrawn its offer, this matter is now moot, and the amendment is not required. However, had Caravan remained in the picture I would not have granted this amendment to the order nisi for sale.

It is relief that is sweeping, overbroad, and draconian, and it is relief that would be granted without even notice being given to the party most affected by such an order. This aspect of the plaintiff’s application was ill-conceived and improper. [ 71 ] Except for that proposed amendment the order nisi should be amended as sought. This amendment will not only ensure that justice is done in this particular case, it will protect the integrity of the sale process generally. Below I have set out the precise order granted. 3.

Should directions be given to the selling officer and, if so, what should they be? [ 72 ] Factually, what occurred here is the Caravan offer was presented to the selling officer through the realtors. A counter-offer was crafted and signed by the selling officer, then presented to Caravan. The counter-offer was accepted. Subject primarily to this Court’s approval there was a firm land deal in place. [ 73 ] Then another offer came in. At least arguably the second offer was better. The selling officer – quite fairly – was unsure whether she could entertain the second offer.

She decided to seek directions from this Court. [ 74 ] In my view what the selling officer did in this regard was exactly the right thing. Directions can be sought from the Court. The Court has the power to grant them. What will be done will vary, case to case. [ 75 ] Beyond that, I will not venture. This is because the selling officer’s letter to the Court dated June 23, 2023 explains that the first offer has been withdrawn and matters regarding the sale of these units are in limbo. The issue of whether directions should be granted (and, if so, what they should be) is now moot.

As a result, there is no need for me to pass upon this matter. Conclusion [ 76 ] Accordingly, I make the following order: 1. The order nisi for sale by real estate listing granted by Justice Clackson on June 29, 2021 shall be amended as follows: a. Paragraph 7 shall be amended by substituting Joel Trapp of RealtyOne Real Estate Services Inc. (the “Realtor”) as the realtor in charge of listing and selling the subject property. b. In the order nisi all subsequent references to “real estate salesperson” shall be replaced with “Realtor”. c. Paragraph 9(

a) shall be amended and shall read as follows: The Selling Officer is directed and authorized to sign a listing agreement with the Realtor to have the Land listed for sale for a period not exceeding 180 days (the “Listing Period”), at the listing price determined by the Selling Officer. d. Paragraph 9(a.1) shall be added, reading as follows:

Unit #125 shall be listed and sold with Parking Units #36, #37, #38, #39, #40, #62, #63, #110, #113, and #114. e. Paragraph 9(a.2) shall be added, reading as follows: Unit #127 shall be listed and sold with Parking Units 2. Any agreements previously entered into by the Selling Officer are declared null and void as of the date hereof. 3. The application of the Selling Officer for directions is dismissed due to mootness, with no order for costs to any party. [ 77 ] My thanks to counsel for their assistance in this matter. ______________________________J. R.W. DANYLIUK