Home Trust Company v. Ballam

IN THE COURT OF APPEAL OF NEWFOUNDLAND AND LABRADOR Citation: Home Trust Company v. Ballam, 2025 NLCA 10 Date: March 18, 2025 Docket Number: 202401H0034 BETWEEN: HOME TRUST COMPANY APPELLANT AND: TERRANCE BALLAM, also known as TERRENCE BALLAM RESPONDENT Coram: D.E. Fry C.J.N.L., K.J. O’Brien and G.L.C. Noel JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador, General Division 202301G1375 (2024 NLSC 67) Appeal Heard: January 23, 2025 Judgment Rendered: March 18, 2025 Reasons for Judgment by: G.L.C. Noel J.A. Concurred in by: D.E. Fry C.J.N.L. and K.J. O’Brien J.A. Counsel for the Appellant: Joshua J. Santimaw Counsel for the Respondent: No Appearance Page 2 Authorities Cited: CASES CITED: Home Trust Company v. Ballam, 2024 NLSC 67; Doucet- Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3; Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; CM v. Alberta, 2024 ABCA 136; Davidner v. Schuster, 1935 CanLII 182 (SKCA); J.K. Read Engineering Ltd. v. R., 2014 TCC 309; Reference re Section 32 of the Pension Benefits Act, 1997, 2018 NLCA 1; Reference re: Workers’ Compensation Act, 1983 (Nfld.), ss. 32, 34, 1987 CanLII 118 (NLCA), aff’d [1989] 1 S.C.R. 922; Finn v. Earle Estate, 2008 NLCA 14; Thomas v. Rio Tinto Alcan Inc., 2024 BCCA 62, leave to appeal to SCC refused, 41241 (10 October 2024). STATUTES CONSIDERED: Conveyancing Act, RSNL 1990, c. C-34, sections 6- 15, 40. G.L.C. Noel J.A.: OVERVIEW [1] Home Trust Company (“Home Trust”) appeals a decision of the Applications Judge involving statutory interpretation of the Conveyancing Act, RSNL 1990, c. C- 34 (Home Trust Company v. Ballam, 2024 NLSC 67 (the “Decision”)). The Decision was intended “to give certainty to lenders, mortgagors, encumbrancers and guarantors on how the court will usually approach” a lender’s application to enforce nonpayment of a residential mortgage through the power of sale process (at para. 65). [2] Circumstances surrounding this appeal are most unusual. Prior to the hearing of the appeal, this Court raised a preliminary issue with counsel for Home Trust. The Court sought and received submissions on the appropriateness of hearing an appeal on a matter that had been entirely resolved between the parties by Consent Order. [3] These reasons explain why, in the absence of an adversarial dispute, the Judge ought not to have acceded to Home Trust’s request to embark on an exercise of statutory interpretation of the Conveyancing Act. The issues between the parties became moot once the Consent Order was entered. Although the Judge did not Page 3 consider whether he should proceed to hear a matter that was moot, had he done so, he would necessarily have concluded that he should not. [4] In proceeding as he did, the Judge rendered a decision that provides only commentary and a non-binding opinion. This cannot provide grounds for an appeal on the merits of the Decision. [5] I would dismiss Home Trust’s appeal. BACKGROUND [6] The Judge began to hear what he anticipated to be a contested application by Home Trust seeking vacant possession of a property occupied by Mr. Ballam. At the commencement of the hearing, he advised the parties that he would also provide guidance about lenders’ applications during powers of sale. [7] Shortly after the hearing began, the Judge encouraged the parties to take a break in the proceeding to discuss settlement. They did, and within a short period of time, the parties arrived at a consent agreement and advised the Judge accordingly. The Consent Order required Mr. Ballam to vacate the property on or before February 29, 2024. [8] The Judge then advised Mr. Ballam that he could leave the courtroom, as the next part of the hearing did not concern him. Mr. Ballam left. [9] The Judge proceeded to hear submissions from Home Trust’s counsel. He reserved and filed written reasons. The Judge’s Decision [10] In the Decision, the Judge noted the case raises issues about lenders’ applications during powers of sale for mortgages on residential properties. He stated, at paragraph 4: “Home Trust asked that I resolve these issues for the benefit of people who borrow money secured by mortgages on their properties (mortgagors), lenders who lend money secured by mortgages, and the legal community”. Page 4 [11] The Judge discussed: (a) the steps a lender must take to complete a power of sale; (b) the facts a lender must prove to complete a power of sale; and (c) who a lender must notify during a power of sale and how to do so. [12] He proceeded to interpret sections 6 through 15, and 40 of the Conveyancing Act governing how a lender enforces its mortgage through a power of sale. Home Trust’s Grounds of Appeal [13] Home Trust asserts in its grounds of appeal that the Judge erred in law by interpreting section 40 of the Conveyancing Act as applying to sections 6, 7 and 10. Section 40 states that a notice required or authorized by the Conveyancing Act is to be “served”. The Judge held that lenders can serve the applicable notices by “non- personal service” in one of two ways stipulated under subsections 40(3) and (4) (Decision, at paras. 11-12, 48, 60). [14] More specifically, Home Trust submits the Judge erred because: • the language of section 6 simply requires a lender to “give” notice by regular and registered mail; • section 7(1) does not require the lender to “serve” notice in addition to publishing a notice of sale in a newspaper; and • section 10 only requires the lender “send” an accounting by regular and registered mail. Page 5 ISSUES [15] This decision will not address the merits of Home Trust’s grounds of appeal. Instead, I would decide this appeal on the preliminary issue raised by the Court. [16] The preliminary issue raises two analytical questions: (1) Did the Judge err by providing statutory interpretation and directions to Home Trust and lenders without considering the mootness criteria? (2) Should this Court consider Home Trust’s appeal arising from a moot proceeding and the Judge’s commentary and non-binding opinion? ANALYSIS (1) Failure to Consider Mootness Criteria [17] The Judge erred in law by failing to consider that the issue or issues between the parties had become moot. The Judge failed to apply the doctrine of mootness. Had he done so, a proper exercise of his discretion could not have allowed him to engage in the legislative analysis performed. [18] The Supreme Court of Canada has stated in Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3, at paragraph 17: “The doctrine of mootness reflects the principle that courts will only hear cases that will have the effect of resolving a live controversy which will or may actually affect the rights of the parties to the litigation except when the courts decide, in the exercise of their discretion, that it is nevertheless in the interest of justice that the appeal be heard (see Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, at p. 353)” (underlining added). [19] In Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, Sopinka J. outlined the following criteria for courts to consider in exercising discretion to hear a moot case (at 358-363): (1) the presence of an adversarial context; Page 6 (2) the concern for judicial economy; and (3) the need for the Court to be sensitive to the role of the Court as the adjudicative branch in the Canadian political and constitutional framework. [20] The entering of the Consent Order resolved the issue or issues between Home Trust and Mr. Ballam. There was no “live controversy” between “the parties” and the legal proceeding had become moot. The Judge could only proceed with Home Trust’s request for directions once the underlying dispute had become moot by considering the criteria in Borowski, as to when a court can nevertheless exercise discretion to proceed. Applying the Borowski criteria, the Judge could not have exercised his discretion in a principled manner to entertain Home Trust’s request for statutory directions. [21] First, the adversarial context criterion is based upon the rationale that the resolution of legal disputes before the courts is rooted in the adversarial system. This is because, “[t]he requirement of an adversarial context is a fundamental tenet of our legal system and helps guarantee that issues are well and fully argued by parties who have a stake in the outcome” (Borowski, at 358-359). [22] In this case, the appropriate adversarial context did not persist beyond the Consent Order. Mr. Ballam had left the courtroom following the granting of the vacant possession Consent Order. There was no one present to advance arguments contrary to Home Trust’s position on the interpretation of notice and service requirements under the Conveyancing Act. The Judge’s decision to proceed on a moot issue without the benefit of alternative arguments – disregarding this fundamental tenet of our legal system – negatively impacts the reliability of the Decision. This one-sided advocacy can be contrasted with Doucet-Boudreau, in which the Supreme Court of Canada in exercising discretion to consider a moot appeal noted, “[t]the litigants have continued to argue their respective sides vigorously” (at para. 19). [23] Assessing the proper adversarial context requires the Court to consider whether the issues have been “‘fully and vigorously argued’ by both sides, and whether the parties have presented the issues in a way that would allow a court to Page 7 fairly decide” the issues (underlining added) (CM v. Alberta, 2024 ABCA 136, at para. 35). [24] Borowski recognized that the necessary adversarial relationship may exist, despite the cessation of a live controversy, where “there may be collateral consequences of the outcome” (at 359). The outcome of the dispute between the parties resulted in the Consent Order. There are no collateral consequences arising from that resolution. There is no ongoing or other litigation between the parties that would warrant the court’s exercise of discretion to provide directions for collateral disputes involving the same parties. [25] Second, as to the concern for judicial economy and resources, counsel for Home Trust conceded at the appeal hearing that notice and service issues routinely arise in applications that are before the court for power of sale and vacant possession. These issues are not evasive of review. Judicial resources can appropriately be utilized to resolve such issues when they arise in a genuine adversarial context. [26] The Supreme Court of Canada in Borowski made clear that the courts should wait to determine matters in an adversarial context “unless the circumstances suggest that the dispute will have always disappeared before it is ultimately resolved” (at 361). Home Trust, other lenders, and mortgagors will have ample opportunity to contest in other proceedings before the court whether, as Home Trust contends at paragraphs 30-34 of its Factum, the Judge erred in holding that section 40 of the Conveyancing Act is “umbilically tied” to sections 6 and 10 in the context of the legislative amendments in 1988. [27] The third underlying rationale of the mootness doctrine is the need for the court to demonstrate a measure of awareness of its proper law-making function. “Pronouncing judgments in the absence of a dispute affecting the rights of the parties may be viewed as intruding into the role of the legislative branch” (Borowski, at 362). [28] The Supreme Court in Borowski observed that the consideration of the three factors “for enforcement of the mootness doctrine” is not “a mechanical process”, and “[t]he presence of one or two of the factors may be overborne by the absence of the third, and vice versa.” (at 363). In the present case, all three factors weigh against hearing the moot proceeding. Page 8 [29] While the Judge was well-intentioned in that he wanted to provide directions to achieve certainty and consistency for power of sale proceedings under the Conveyancing Act, he proceeded without consideration of the mootness issue. If he had, he would have inevitably concluded that it was not appropriate to proceed. (2) No Grounds for an Appeal on the Merits [30] As in the court below, there is no adversarial argument before the Court. Although Mr. Ballam was given notice of this appeal, he did not file a factum or appear to make submissions. This is not surprising given his status as a self- represented litigant who was advised by the Judge that the further matters being considered did not concern him. [31] In this case not only was the matter heard without a dispute or opposing argument, but also there was nothing in the grounds of appeal that referred to any part of the Decision that comprised the Consent Order. The comments of the Judge providing guidance played no part in the determination of the dispute – i.e. the Application for a vacant possession order. [32] The Judge’s comments, once the underlying dispute and issues between the parties were resolved by Consent Order, can only be considered commentary and a non-binding opinion, which is insufficient to ground an appeal on the merits. [33] The commentary at best constitutes obiter dicta. Obiter dicta are expressions of opinion on matters of law, given by a judge in reasons, but not forming an essential part of the reasons determining the issues in dispute between the parties, and, therefore, not constituting a binding authority (Davidner v. Schuster, 1935 CanLII 182 (SKCA), at paras. 71-73). [34] In J.K. Read Engineering Ltd. v. R., 2014 TCC 309, the court commented at paragraph 22, that “[i]t is well accepted that obiter dictum is not a binding judicial opinion”. The court further points out at paragraph 23, quoting author Joyce J. George that advisory opinions and obiter dicta comments, especially in lower courts, are discouraged: Page 9 [23] This is because [footnote 13: Joyce J. George, Judicial Opinion Writing Handbook, 2nd ed. (Buffalo: William S. Hein, 1986) at p. 109.]: Courts are instituted to decide questions which must be resolved to end controversies. Therefore, advisory opinions and obiter dicta in opinions are not recognized as bases for decisions, and they are not encouraged. The law abhors opinions written without conflict. Such opinions do not receive the benefit of the full contest of opposing briefs, arguments, or full consideration by the court. (Emphasis in original.) [35] This Court has held that obiter dicta pronouncements are not generally subject to appeal. [36] In Reference re Section 32 of the Pension Benefits Act, 1997, 2018 NLCA 1, the Court noted, at paragraph 6, referring to the earlier case of Reference re: Workers’ Compensation Act, 1983 (Nfld.), ss. 32, 34, 1987 CanLII 118 (NLCA), aff’d [1989] 1 S.C.R. 922, “the judge had expressed the view that two provisions of the legislation were of no force or effect. Since this was obiter dictum, which did not provide grounds for an appeal, the Lieutenant Governor referred the question of the validity of the legislation to the Court of Appeal”. [37] In Finn v. Earle Estate, 2008 NLCA 14, the Court held: [36] The cross-appeal can be addressed briefly. The trial judge's comments on possible enforcement of the exchange agreement were clearly obiter and do not bind a court before whom that issue may be brought…. [38] Other appellate authorities confirm this Court’s approach to obiter dicta, and that grounds of appeal based on obiter comments are either not appealable or unnecessary to address on appeal (see e.g. Thomas v. Rio Tinto Alcan Inc., 2024 BCCA 62, leave to appeal to SCC refused, 41241 (10 October 2024)). CONCLUSION [39] The Judge failed to consider and apply the mootness criteria. If he had considered the Borowski factors, the Judge should have necessarily declined to engage in statutory interpretation of the Conveyancing Act. Page 10 [40] The Judge’s commentary and non-binding opinion cannot ground an appeal on the merits. DISPOSITION [41] For the foregoing reasons, I would dismiss the appeal. As Mr. Ballam did not participate, there is no order as to costs. _____________________________ G.L.C. Noel J.A. I concur: ____________________________ D. E. Fry C.J.N.L. I concur: ____________________________ K.J. O’Brien J.A.