John Cook Applicant And: Patrick Street Holdings Ltd. First Respondent And: 11368 NL INC. Second Respondent - v. -, 2020 NLSC 99

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Cook v. Patrick Street Holdings Ltd. , 2020 NLSC 99 Date : July 16, 2020 Docket : 201601G6652 Between: John Cook Applicant And: Patrick Street Holdings Ltd. First Respondent And: 11368 NL INC. Second Respondent - AND - Docket : 201601G6654 BETWEEN: J-3 Consulting & Excavation Ltd. Applicant And: Patrick Street Holdings Limited FIRST Respondent And: 11368 NL INC. SECOND Respondent

Before: Justice Garrett A. Handrigan Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 24, 2020

Summary: 11368 NL Inc. gave a mortgage over properties in a subdivision it was developing in St. John’s, NL. The mortgagee, Patrick StreetHoldings, sold the property to itself under a power of sale after 11368 defaulted on the mortgage. When other creditors obtained anaccounting of the power of sale showing that Patrick Street Holdings had a surplus, 11368 applied for orders directing Patrick StreetHoldings to pay another encumbrancer and to hold the balance of the funds in trust for 11368.

The Court allowed 11368’s application, granted the relief it was looking for and ordered Patrick Street Holdings to pay 11368’s costs. Appearances: No appearance On behalf of the Applicants Thomas W. Fraize, Q.C. Appearing on behalf of the Kalli Fraize First Respondents Sarah J. Clarke Appearing on behalf of the Second Respondents Authorities Cited: CASES CONSIDERED: Re Brenton Brothers Ltd., (1979), 24 Nfld. & P.E.I.R. 25, 1979 CarswellNfld 104 (S.C. (T.D.)); Central TrustCo. v. Phaseco Ltd., (NB CA), [1988] N.B.J.

No. 1059, 93 N.B.R. (2d) 157 (C.A.); Patrick Street Holdings Ltd. v.Cook, 2019 NLCA 69; Dorbern Investments Ltd. v. Provincial Bank of Canada, (SCC), [1981] 1 S.C.R. 459; GlasswallLtd. v. 2009861 Nova Scotia Ltd., (NS SC), [1994] N.S.J. No. 133, 130 N.S.R. (2d) 241 (S.C.); Cook v. Patrick StreetHoldings Ltd., 2017 NLTD(G) 167 STATUTES CONSIDERED: Conveyancing Act, R.S.N.L. 1990, c.

C-34 REASONS FOR JUDGMENT Handrigan, J.: INTRODUCTION [1] On November 26, 2019, 11368 NL Inc. (“11368”) filed an Interlocutory Application asking for orders that Patrick StreetHoldings Limited pay $168,237.82 plus interest to Deanna Cheeke and $3,976,707.72 plus interest to 11368 NL Inc. from the proceeds

Patrick Street Holdings received on selling various properties in Kenmount Terrace Subdivision, in St. John’s, NL. Patrick Street Holdings sold the properties, by exercising the power of sale in a mortgage 11368 gave over these properties to a third party, which the third party assigned to Patrick Street Holdings. 11368’s Interlocutory Application followed my ruling on an Originating Application that J-3 Consulting & Excavating Ltd. and John Cook filed to obtain an accounting from Patrick Street Holdings of the power of sale, under

section 10 of the Conveyancing Act , R.S.N.L. 1990, c. C-34 . J-3 Consulting and John Cook were subsequent to the mortgagee, Patrick Street Holdings, as mechanics’ lien holder and collateral mortgagee, respectively, of the Kenmount Terrace properties. [ 2 ] I allowed the Originating Application and set out the priorities amongst various 11368 creditors for distributing the proceeds that Patrick Street Holdings received from the power of sale.

In particular, I ordered Patrick Street Holdings to pay the balances that 11368 owed to J-3 Consulting and John Cook; and I am informed that Patrick Street Holdings paid those balances.

In my accounting, I rejected several amounts that Patrick Streets Holding allowed in its accounting of the power of sale, including an $800,000 bonus and $4,000,000, both supported by collateral mortgages. [ 3 ] 11368 gave the $4,000,000 collateral mortgage to Patrick Street Holdings to secure a guarantee that 11368 gave on behalf of a group of companies related to 11368, to another group of companies, including Patrick Street Holdings. In the result, because I did not allow those amounts, I found that Patrick Street Holdings had a surplus from the power of sale, and I valued the surplus at $4,241,865.01.

That, of course, was before Patrick Street Holdings paid the balances it owed to J-3 Consulting and John Cook. With the payments that Patrick Street Holdings made to both, 11368 says that Patrick Street Holdings still has a surplus from the power of sale, which it values at $4,080,961.94. [ 4 ] In its Interlocutory Application, 11368 notes that there is another mortgagee, Deanna Cheeke, to whom it owed $168,237.82 and it asks that I order Patrick Street Holdings to pay Ms.

Cheeke that amount; following which 11368 says, it has a right, as a “person entitled to the mortgaged property” under section 14(3) of the Conveyancing Act , to the remaining proceeds from the power of sale. 11368 also wants its costs of the Interlocutory Application.

The Issues [ 5 ] 11368’s Interlocutory Application raises these issues: 1) May Patrick Street Holdings retain the $800,000 bonus payment it claimed for the sale of lots above the 190m contour line in the Kenmount Terrace Subdivision? 2) May Patrick Street Holdings and its related companies retain $4,000,000 of proceeds from the power of sale, because of the collateral mortgage 11368 gave over the Kenmount Terrace properties to secure a guarantee that 11368 gave on behalf of another group of companies? 3) Did Patrick Street Holdings realize a surplus on the power of sale:

a) If so, is Deanna Cheeke entitled to share in the surplus because of her collateral mortgage?

b) If so, is 11368 entitled to the balance of the surplus, as a “person entitled to the mortgaged property”, under section 14(3) of the Conveyancing Act ? The Law Statute – Priority of Distribution [ 6 ]

Section 14 of the Conveyancing Act , provides as is relevant here: 14.

(1) A mortgagee exercising the power of sale conferred by this Act shall have power by deed to convey the property sold for the estate and interest in the estate that is the subject of the mortgage, freed from all estates, interests and rights to which the mortgage has priority, but subject to all estates, interests and rights that have priority to the mortgage. …

(3) The money that is received by the mortgagee arising from the sale, after the discharge of prior encumbrances to which the sale is not made subject, shall be held by him or her in trust to be applied (a) 1st, in payment of all costs, charges and expenses properly incurred as incident to the sale or an attempted sale, or otherwise; (

b) secondly, in discharge of the mortgage money, interest and costs, and other money due under the mortgage; and

(

c) the residue of the money received shall be paid to the person entitled to the mortgaged property or authorized to give receipts for theproceeds of the sale of the mortgaged property. Case Law – Priority of Distribution [7] In Re Brenton Brothers Ltd., (1979), 24 Nfld. & P.E.I.R. 25, 1979 CarswellNfld 104 (S.C. (T.D.)) Goodridge, J. (as he thenwas), offered his thoughts on the meaning of section 14(3) of the Conveyancing Act, particularly of the words “person entitled to themortgaged property” in section 14(3)(c). He said as follows, commenting on what was then section 7(3) of the Act: 20.

It is my opinion that the effect of that subsection is to impress the surplus proceeds with a trust in favour of the persons entitled tothe mortgaged property. 21. One might query who are the persons entitled to the mortgaged property. It is my further opinion that they are those same personswho would be entitled to redeem the mortgage or who would be entitled to be joined as defendants in a foreclosure action. 22.

These two classes of persons are basically the same and both clearly include judgment creditors who have levied upon themortgaged property and subsequent or puisne encumbrances and, of course, the mortgagor itself. [8] I note that Stratton, C.J.N.B (as he then was) adopted Goodridge, J.’s definition of the “person entitled to the property” inCentral Trust Co. v. Phaseco Ltd., (NB CA), [1988] N.B.J. No. 1059, 93 N.B.R. (2d) 157 (C.A.), as did White, J.A. inPatrick Street Holdings Ltd. v.

Cook, 2019 NLCA 69; who noted that “[t]he fourth step in distribution of funds established by section14(3)(c) [of the Conveyancing Act] was interpreted by Goodridge, J. in Re Brenton Brothers Ltd. (citation omitted)”. White, J.A. reliedon Goodridge, J.’s

interpretation of then section 7(3) of the Act when he said: On the same basis the I would conclude that the directions to pay are not encumbrances under the Mechanics’ Lien Act, I would alsoconclude that they are not an encumbrance that would make the beneficiary of the directions ‘a person entitled to the mortgagedproperty’. … (Patrick Street Holdings v. Cook, paragraph 37).

Case Law – Collateral Mortgages [9] Collateral mortgages were ubiquitous on the Kenmount Terrace properties that Patrick Street Holdings sold by power of sale.For example, all the mortgages that Patrick Street Holdings relied on were collateral mortgages, as were the two John Cook and theDeanna Cheeke mortgages. It is relevant to consider what priority, if any, collateral mortgages confer on their holders.

This is especiallygermane to the collateral mortgage that 11368 gave to a group of companies, including Patrick Street Holdings, to secure a guarantee that11368 gave to them on behalf of another group of companies, completely unrelated to the Kenmount Terrace properties; because PatrickStreet Holdings relies on that collateral mortgage to claim priority over Deanna Cheeke and 11368 to the nearly $4,000,000 surplus onthe power of sale. [10] In Dorbern Investments Ltd. v.

Provincial Bank of Canada, (SCC), [1981] 1 S.C.R. 459, the Supreme Court ofCanada examined the priorities between a mechanics’ lien and a collateral mortgage. Laskin, C.J.C. (as he then was) acknowledges thepriority that collateral mortgages gain when they are registered: 14.

I do not think that any supportable distinction can be drawn between a collateral mortgage which, as here, was given as additionalsecurity for a previous advance made to finance construction on the land on which a lien is claimed and a collateral mortgage given asadditional security for an advance not related to construction on the particular land. It was pointed out by counsel for the respondent andconceded by counsel for the appellant that The Mechanics' Lien Act does not purport to control the destination of advances made onsecurity of land on which a lien arises.

They may be put to uses other than for construction and improvement of the mortgaged land, saveas the mortgage itself, through the requirement of progress certificates to support further advances as stipulated in the mortgage, providessome control. In the present case, therefore, I find no basis upon which the collateral mortgage, by reason only of being collateral, maybe subordinated to an unregistered or later registered lien claim of which the mortgagee had no previous notice. (Dorbern, paragraph 14) [11] In Glasswall Ltd. v. 2009861 Nova Scotia Ltd., (NS SC), [1994] N.S.J.

No. 133, 130 N.S.R. (2d) 241 (S.C.),Stewart, J. examined the priorities between 12 registered mechanics’ lien claims and a prior registered collateral mortgage for$185,000.00. The learned justice stated the issue this way: 24. The plaintiffs contend that because funds were not advanced by the…[mortgagee] directly to the…[owner of the land on whichconstruction was done], under the collateral mortgage, the mortgage does not qualify as a ‘prior mortgage or other charge’ for thepurposes of withstanding a priority challenge by subsequent lien claimants.

As the…[owner of the land] never acquired control over orthe benefit of the monies advanced, there was no advance under the mortgage at the time of the registration of the liens. (Glasswall, paragraph 24) [12] Stewart, J. rejected the plaintiff’s contention: 28. A collateral mortgage, even if provided as collateral security for the debts or obligations of a different corporate entity, may beprior to a later registered lien claim. The priority in favour of a collateral mortgage security given to secure the debts of another is not

excluded, notwithstanding the apparent unfairness created by mortgage monies being advanced to another entity, on another project and not for the purpose of increasing the selling value of the lands on which the lien holders have expended labour or furnished supplies. ( Glasswall , paragraph 28) [ 13 ] This is the law I will apply to the issues I stated earlier. I turn now to analyze those issues, starting with the background to them. Analysis Background [ 14 ] I will not set out here the full background to 11368’s Interlocutory Application.

It arises from the Originating Application that I referred to earlier by which J-3 Consulting and John Cook asked for and obtained an accounting from Patrick Street Holdings of its power of sale. The parties to this Application know the background well, and for those who do not know it, but are interested in the background, it is available at Cook v. Patrick Street Holdings Ltd. , 2017 NLTD(G) 167 (my ruling on the Originating Application), as supplemented by White, J.A.’s reasons in Patrick Street Holdings Ltd. v. Cook , 2019 NLCA 69 .

I will, however, provide background to the $800,000 bonus and the $4,000,000 mortgage amounts that Patrick Street Holdings claims, as well as the Deanna Cheeke mortgage; where I start. Deanna Cheeke Mortgage [ 15 ] 11368 gave a mortgage to Ms. Cheeke (then Churchill) over certain properties in the Kenmount Terrace Subdivision on February 23, 2016 to secure repayment of $150,000 that 11368 owed to Ms. Cheeke. Ms. Cheeke provided $150,000 to 11368 by a promissory note for that amount, with interest to be calculated at 18% annually for a two-year term.

By August 23, 2016, from an email that solicitor Robert Regular sent to Paul Madden on that date, the balance owing under the mortgage was $163,462.54, with $73.97 interest accumulating daily; prepayment and discharge fees added another $3,000 to the balance. [ 16 ] 11368 gave John Cook two collateral mortgages both securing the same $225,000 and both were registered on August 10, 2016. By a Postponement Agreement dated June 8, 2016, between Mr. Cook and Ms. Cheeke, both as mortgagees of 11368, Ms.

Cheeke subordinated the priority of her mortgage to the two Cook mortgages, even though her mortgage ranked ahead of them. $800,000 Bonus Payment [ 17 ] White, J. dealt with the proposed bonus payment comprehensively in his reasons in Patrick Street Holdings Ltd. v. Cook , 2019 NLCA 69 . I take the liberty of quoting from his judgment for the background to this amount: 44. The Applications Judge removed $800,000 from the amount attributed to a mortgage given by Madden’s Ltd. This mortgage was collateral security for three promissory notes. 45. The $800,000 promissory note was not a conventional debt obligation.

While the promissory note itself stated that the debtors were obligated to pay $800,000, this was subject to clause 21 of a Letter of Offer dated December 19, 2011. This clause reads as follows: There will be an $2,000.00 per lot bonus on lots sold from the lands above the 190 metre contour line, the total bonus shall be the greater of $800,000.00 or $2,000.00 x the number of lots, the bonus shall be secured by a second mortgage on the lands above the 190 metre contour line, subject to the First Mortgage given to support the financing hereunder.

The bonus has to be paid within 10 years of the date hereof, [no interest shall apply to the outstanding balance of the bonus during the 10 years]. [ 18 ] I deducted the bonus payment from the Patrick Street Holdings’ accounting of its power of sale because 11368’s obligation for the bonus was contingent on selling lots in the Kenmount Terrace Subdivision above the 190m contour line; and no sales of those lots had occurred by that time.

I also deducted the interest on the $800,000 bonus amount that Patrick Street Holdings included in its accounting of the power of sale, simply (and obviously) because, if the principal amount was not allowed, interest on it could not be allowed either. $4,000,000 Mortgage Amount [ 19 ] In April 2014, Patrick Street Holdings and related companies claimed that three other companies connected with 11368, but not involved in the Kenmount Terrace Subdivision, owed Patrick Street Holdings and its related companies, $10,072,816.52.

Patrick Street Holdings (and its related companies) claimed to have loaned that money to the three other companies and it asked 11368 to guarantee the debt; which 11368 did and secured its guarantee with a collateral mortgage over the Kenmount Terrace properties.

Patrick Street Holdings registered the collateral mortgage in the Registry of Deeds on August 1, 2013. [ 20 ] I deducted the $4,000,000 that Patrick Street Holdings claimed through the collateral mortgage in its accounting of the power of sale because Patrick Street Holdings provided no analysis of what amount, if any, may have been owing under the collateral mortgage. This is how I put it, in the reasons I filed in Cook v.

Patrick Street Holdings Ltd. , 2017 NLTD(G) 167: 11368 NL Inc. says Patrick Street Holdings should have done a proper analysis if it wished to include any amount from this mortgage to be paid from the power of sale proceedings. I accept this analysis and make no allowance for this mortgage in the accounting. ( Cook v. Patrick Street Holdings , paragraph 62) [ 21 ] This is the background to the matters in issue in 11368’s Interlocutory Application. I turn now to discuss, against this

background, the issues I stated earlier. Discussion $800,000 Bonus Payment [ 22 ] As I noted earlier, I deducted the bonus payment from the Patrick Street Holdings’ accounting of its power of sale because 11368’s obligation for the bonus was contingent on selling lots in the Kenmount Terrace Subdivision above the 190m contour line; and no lots above that line were sold. White, J.A. elaborated on the contingency that would have triggered the bonus payment in his reasons, but ultimately accepted my conclusion that the bonus was not available to Patrick Street Holdings.

He ended his discussion of the issue this way: Accordingly, I would not interfere with the Applications Judge’s conclusion that the $800,000 was not payable at the time the power of sale took place”: ( Patrick Street Holdings Ltd. v.

Cook , 2019 NLCA 69 , paragraph 53 ) [ 23 ] I have been shown nothing to cause me to change my mind on this issue; and I accept White, J.A.’s affirmation of the conclusion I stated on the bonus payment amount in the reasons I filed on the Originating Application. $4,000,000 Mortgage Amount [ 24 ] Again, as I noted earlier, I deducted the $4,000,000 that Patrick Street Holdings claimed through the collateral mortgage in its accounting of the power of sale because Patrick Street Holdings provided no analysis of what amount, if any, may have been owing to it under the collateral mortgage.

White, J.A. accepted my conclusion and ended his discussion of the issue this way: The Applications Judge’s conclusion that the amount owing was not established, and that therefore the mortgage should be disallowed from the accounting, is entitled to deference on appeal. As there is no basis before the Court to warrant appellate intervention, I would uphold the decision of the Applications Judge in finding that there should be no payment under the $4,000,000 mortgage in priority to the J-3 Consulting lien or the Cook mortgages. ( Patrick Street Holdings Ltd. v.

Cook , 2019 NLCA 69 , paragraph 63 ) [ 25 ] I have been shown nothing to cause me to change my mind on this issue; and I accept White, J.A.’s affirmation of the conclusion I stated on the $4,000,000 mortgage amount in the reasons I filed on the Originating Application.

Surplus on the Power of Sale [ 26 ] On April 28, 2015 11368 gave a mortgage to PMC Holdings Limited for $1,875,000.00 to provide collateral security to PMC Holdings Limited for two promissory notes, both dated April 24, 2015 by which 11368 promised to pay PMC Holdings Limited $1,775,000.00 and $100,000.00, using Parcels #1, 2 and 3 of the Kenmount Terrace Subdivision as security.

The funds were to be applied generally to costs 11368 (or related companies) had already incurred for the Kenmount Terrace Subdivision (e.g., $21,120.00 to PMC Holdings for drawings from Kavanagh & Associates; $50,000.00 for municipal taxes; $300,000.00 for releases of a mortgage to Moore Holdings on Kenmount Terrace Subdivision, etc.). [ 27 ] PMC Holdings Limited assigned the $1,875,000 mortgage to Patrick Street Holdings on March 31, 2016. 11368 defaulted on the mortgage and Patrick Street Holdings began power of sale proceedings.

Ultimately, Patrick Street Holdings transferred the Kenmount Terrace properties to itself on September 19, 2016 for the nominal consideration of $11,400,000.00, $75,000.00 more than 75 percent of their appraised value of $15,100,000.00; and just enough to avoid obtaining Court approval for the sale.

Of course, Patrick Street Holdings was obliged as purchaser of the property to satisfy the claims of any of 11368’s creditors whose security interests ranked ahead of the Patrick Street Holdings’ mortgage by which it obtained title to the Kenmount Terrace properties. [ 28 ] In my accounting of the power of sale, I disallowed Patrick Street Holdings’ claims for five directions to pay, the $800,000 bonus payment amount, the $4,000,000 collateral mortgage amount and adjusted the amounts that Patrick Street Holdings could claim for several other mortgages that had priority to the proceeds of the sale.

For example, Patrick Street Holdings allowed $3,521,564.61 for mortgages #1, 2 and 3. The face amount of mortgage #3 was simply a consolidation of the two amounts that show in mortgages #1 and 2 and added no new money to 11368 NL Inc.’s indebtedness to Madden’s Limited. Thus, I allowed $2,237,180.95 for all three charges.

I made other adjustments of the kind. [ 29 ] Overall, I was satisfied that there was a surplus balance from the power of sale proceedings of $4,241,865.01, from which the J- 3 Consulting mechanics’ lien for $96,919.47 was to be paid, and the John Cook mortgages for $63,983.60, with the net amount being $4,080,961.94.

I confirm that this amount is the surplus available for distribution from the Patrick Street Holdings’ power of sale of the Kenmount Terrace properties. [ 30 ] Patrick Street Holdings retains the title to the properties that it acquired on the power of sale; but, to use the wording in section 14(3) of the Conveyancing Act :

(3) The money that is received … from the sale, after the discharge of prior encumbrances to which the sale is not made subject, shall be held by him or her in trust to be applied (a) 1st, in payment of all costs, charges and expenses properly incurred as incident to the sale or an attempted sale, or otherwise; (

b) secondly, in discharge of the mortgage money, interest and costs, and other money due under the mortgage; and (

c) the residue of the money received shall be paid to the person entitled to the mortgaged property, or authorized to give receipts for the proceeds of the sale of the mortgaged property. [ 31 ] Deanna Cheeke and 11368, the mortgagor in the mortgage under which Patrick Street Holdings exercised the power of sale, are two of the persons, for whom Patrick Street Holdings is obliged to hold the money in trust. Sharing the Surplus Deanne Cheeke’s Collateral Mortgage [ 32 ] 11368 gave Deanna Cheeke a collateral mortgage to secure the $150,000 that it borrowed from Ms.

Cheeke by a promissory note for that amount. 11368 gave the mortgage on February 23, 2016 and it would have ranked ahead of the John Cook mortgages but for the postponement agreement Ms. Cheeke made with Mr. Cook on June 8, 2016, subordinating her collateral mortgage to the Cook mortgages. Because of my ruling on the Originating Application that Mr. Cook and J-3 Contracting brought against Patrick Street Holdings, Patrick Street Holdings paid the amounts owing to Mr.

Cook on his collateral mortgages and to J-3 Contracting on its mechanics’ lien. [ 33 ] I have already addressed the efficacy of collateral mortgages as security instruments, ranking in priority to other security interests, even where the funds disbursed are not used for the properties over which the mortgage is granted.

I note what Stewart, J. said about this in Glasswell : … The priority in favour of a collateral mortgage security given to secure the debts of another is not excluded, notwithstanding the apparent unfairness created by mortgage monies being advanced to another entity, on another project and not for the purpose of increasing the selling value of the lands on which the lien holders have expended labour or furnished supplies. ( Glasswell , paragraph 27) [ 34 ] Accordingly, I order Patrick Street Holdings to pay Deanna Cheeke $150,000, the principal amount of the promissory note, together with interest at the contract rate of 18% per annum, starting February 23, 2016. 11368 – The Mortgagor [ 35 ] In Re Brenton Brothers , Goodridge, J. confirmed that the words, “person entitled to the mortgaged property”, in section 14(3) of the Conveyancing Act included “the mortgagor itself”; after all other persons (e.g., “judgment creditors who have levied upon the mortgaged property and subsequent or puisne encumbrances”) have been satisfied.

In this case, all other persons entitled by law to the mortgage property have been satisfied. It follows then, that the balance of the surplus of $4,080,961.94 that Patrick Street Holdings realized on the power of sale of the Kenmount Terrace properties, less what is paid to Deanna Cheeke, are impressed with a trust in favor of 11368, the mortgagor and payable to it. [ 36 ] Accordingly, I order Patrick Street Holdings to pay to 11368 NL Inc. the balance of the surplus of $4,080,961.94 that Patrick Street Holdings realized on the power of sale of the Kenmount Terrace properties, less what it pays to Deanna Cheeke.

Costs [ 37 ] I see no reason to depart from the usual rule that costs follow the cause. Accordingly, I order Patrick Street Holdings to pay 11368’s costs to be taxed under Column 3 of the Scale of Costs.

Summary and Disposition [ 38 ] 11368 NL Inc. gave a mortgage over properties in a subdivision it was developing in St. John’s, NL. The mortgagee, Patrick Street Holdings, sold the property to itself under a power of sale after 11368 defaulted on the mortgage.

When other creditors obtained an accounting of the power of sale showing that Patrick Street Holdings had a surplus, 11368 applied for orders directing Patrick Street Holdings to pay another encumbrancer and to hold the balance of the funds in trust for 11368. [ 39 ] The Court allowed 11368’s application, granted the relief it was looking for and ordered Patrick Street Holdings to pay 11368’s costs. Order [ 40 ] In the result, I order Patrick Street Holdings to pay: 1. Deanna Cheeke, $150,000, the principal amount of the promissory note, together with interest at the contract rate of 18% per

annum, starting February 23, 2016; 2. 11368 NL Inc., the balance of the surplus of $4,080,961.94 that Patrick Street Holdings realized on the power of sale of the Kenmount Terrace properties, less what it pays to Deanna Cheeke; and 3. 11368’s costs to be taxed under Column 3 of the Scale of Costs . _____________________________ Garrett A. Handrigan Justice