Spicer v. Middleton (Town)

Spicer v. Middleton (Town) Court Supreme Court Date 2014-02-25 Citation 2014 NSSC 66 Docket Ken 408723 Judge/Registrar/Adjudicator Muise, Pierre, L. (Honourable Justice) Document Type Decision Relations Library Sheet - Spicer v. Middleton (Town) - 2014 NSSC 66 - 2014-02-25 - Library Sheet Decision Content Supreme Court of Nova Scotia Citation: Spicer v. Middleton (Town), 2014 NSSC 66 Date: 2014-02-25 Docket: Kenville No. 408723 Registry: Kentville Between: Peter M. Spicer, P.M. Spicer Contracting Limited, and 3257581 Nova Scotia Limited Applicants And The Town of Middleton, Brocklin Enterprises Incorporated, 3263689 Nova Scotia Limited, Mid-Valley Motel Limited, Edward Brock Savage and Sean Pickrem Respondents Judge: The Honourable Justice Pierre L. Muise Heard: Nov 13, 14, 15, and 18, 2013 in Digby, Nova Scotia Counsel: Applicants – Randall Balcome The Town of Middleton - W. Bruce Gillis, QC Brocklin Enterprises Inc., 3263689 Nova Scotia Ltd., and, E. Brock Savage – David Cottenden, QC. Sean Pickrem – Self-represented Mid-Valley Motel Limited – Not Represented INTRODUCTION [1] Mid-Valley Motel Limited (“Mid-Valley”) was the owner of lands at Middleton, Annapolis County, Nova Scotia on which it operated the Mid-Valley Motel (“Motel”). Taxes fell into arrears and those lands were sold at a tax-sale on April 19, 2012. The purchaser was the Applicant, Peter Spicer (“Spicer”), the sole owner of P.M. Spicer Contracting Limited (“Spicer Contracting”). [2] Spicer and James Robinson (“Robinson”) decided to operate the Motel through 3257581 Nova Scotia Limited (“the Applicant Numbered Company”). They each owned 50% of the shares in that company. They intended that the tax deed would be put in the company’s name following the redemption period. [3] Mid-Valley owed Savage Oils Limited, a company owned by Brock Savage (“Savage”) over $52,000 for heating oil. Sean Pickrem (“Pickrem”) owed about $40,000 on a personal line of credit he incurred to keep the Motel operating, as he had managed the Motel up to the day before the tax-sale. However, Mid-Valley was owned solely by his mother, Joan Pickrem-Dupree (“Dupree”). [4] There were negotiations, and an understanding, amongst Spicer, Robinson, Pickrem, Savage, and David Gough, Savage’s son-in-law (“Gough”), in relation to the Spicer Group paying sufficient funds to Pickrem and Savage to cover those debts, in exchange for them refraining from taking steps to have the property redeemed. [5] The Business Development Bank of Canada (“BDBC”) held a mortgage on the lands with an outstanding balance of about $522,000. As such, it could redeem the property. It was prepared to accept, from Dupree, $125,000 in exchange for a release of the mortgage. Savage arranged for that release to be obtained. [6] Mid-Valley conveyed the lands to Brocklin Enterprises Inc. (“Brocklin”), a company owned solely by Savage, by deed dated May 16, 2012. Savage and Gough, through the Gough Family Trust, became shareholders of 3263689 Nova Scotia Limited (“Respondent Numbered Company”), incorporated June 6, 2012, with the intention of having the Motel owned and operated through it. On June 15, 2012, Savage attended the Office of the Town of Middleton (“Town”) and paid the redemption price calculated by the Chief Administrative Officer (“CAO”) of the Town, Clayton MacMurtry (“MacMurtry”). The bulk of the redemption price, $172,472.69, was paid by a cheque from the account of the Respondent Numbered Company. The remainder, $85.18, was paid cash by Savage. [7] A dispute had arisen regarding a portion of the redemption amount calculation which resulted in MacMurtry advising he would hold back some of the redemption price calculated. Following June 15, 2012, an issue was raised regarding the validity of the redemption. No redemption funds were released. [8] In the period between the tax-sale and the redemption payment, the Applicants operated the Motel, effected repairs and improvements on it, and purchased goods for use in its operation. They allege that Savage agreed to pay for some of those. [9] The Applicants commenced this Application in Court and challenge the validity of the redemption on grounds which include that: 1. The deed into Brocklin was invalid because it was executed by Bruce Gillis pursuant to a Power of Attorney given to him by Dupree which was not a permissible re-delegation of her corporate powers and responsibilities; 2. Brocklin was not authorized to redeem the property because it was not an owner, person with a charge on it, or person interested in it, at the time of the tax-sale; 3. The Respondent Numbered Company could not redeem the property because it was not an owner, person with a charge on it, or person interested in it, at the time of the tax-sale, nor at the time of redemption; and, 4. The redemption amount has not been paid to the Applicants. [10] Even if the redemption is valid, the Applicants assert that the repairs and improvements they made to the Motel, in the redemption period were proper and reasonable, and claim the cost of those repairs and improvements: 1. From the Respondents on the basis of breach of contract, contractual misrepresentation, or unjust enrichment; 2. In part, from Savage, based on an enforceable promise to pay; and, 3. At least in part, along with the expenses they incurred in the operation of the Motel, beyond the amounts calculated by MacMurtry as being included in the redemption amount. [11] On April 23, 2012, Pickrem executed a bill of sale purporting to convey to the Applicant Numbered Company, the moveable property of Mid-Valley located at the Motel. On June 5, 2012, Mr. Gillis, by power of attorney, executed another bill of sale, on behalf of Dupree, purporting to convey the same property to Brocklin. The Applicants seek a declaration that the immoveable property in question is owned by the Applicant Numbered Company. [12] The Respondents oppose such a declaration on the basis that Pickrem signed the first bill of sale without authority to sell the assets of Mid-Valley and with the understanding that he was only agreeing to loan the property referred to therein so that the Applicants could operate the Motel, thus allowing the staff to maintain their employment. [13] The Respondents contest the remainder of the Application on grounds that the Applicants’ assertions are incorrect and without merit, and on the following grounds: 1. The Applicants gave notice of intention to bring an action, not an application in court, without including all of the claims they now advance, and, as such did not comply with Section 512 of the Municipal Government Act, S.N.S. 19988, c. 18 (“MGA”); and, 2. The Applicants have no standing to challenge Dupree’s re-delegation of corporate power and responsibility, and the validity of the deed into Brocklin. ISSUES [14] This Application raises the following issues: 1. Should the claim against the Town be dismissed on the grounds that the notice of intended proceeding against it was defective? 2. Do the Applicants have standing to challenge the validity of the deed into Brocklin? 3. If so, was the deed into Brocklin valid? 4. Who redeemed the property? 5. Was the person who redeemed the property authorized to so? 6. How does the withholding of the redemption funds by the Town affect the validity of the redemption? 7. What is the proper redemption amount? 8. Was there an enforceable agreement by Savage to pay for certain work done, and goods left, on the property by the Applicants? 9. Are the Respondents responsible for the cost of repairs and improvements not included in the redemption price? 10. Who is the owner of the chattels purportedly conveyed in the bills of sale from Mid-Valley? LAW AND ANALYSIS [15] There was divergent evidence on the details of the discussions related to this matter. Therefore, prior to addressing each of the issues, I will make general comments in relation to the credibility and reliability of the witnesses. CREDIBILITY AND RELIABILITY OF WITNESSES Spicer and Robinson [16] Robinson gave their evidence in a relatively straightforward and un-evasive fashion. They acknowledged points against interest and admitted when they did not know something. They displayed appropriate attitude and demeanor. With the exception of some minor inconsistencies which I will touch upon, their evidence was generally internally and externally consistent, except where it conflicted with the evidence of the respondents. [17] Inconsistencies in Spicer’s evidence include the following. He testified that he was put on notice on June 1 that there would be redemption on June 2. Then he testified that he became aware on June 1 that the redemption would be taking place on June 15. He initially admitted that some of the expenses submitted to be factored into the redemption price were the same as those in the invoice to Savage’s company following the date of redemption. However, he then denied it being a double billing. [18] They expressed uncertainty regarding the content of relevant discussions and when they took place, and they are of course parties with a financial interest in the outcome of the proceedings, raising some concerns about the reliability of their evidence in relation to those discussions. Pickrem [19] Pickrem also: gave his evidence in a straightforward, un-evasive fashion; acknowledged points against interest; admitted when he did not know the answer to something; displayed appropriate attitude and demeanor; and, was internally and externally consistent. Further, though he was a party, he had little or nothing to gain or lose from the proceedings. He does not have a claim for the $40,000 debt that he incurred for the running of the Motel. No one is specifically seeking compensation from him in relation to the chattels purportedly conveyed in the bill of sale signed by him on behalf of Mid-Valley, nor for any other reason. Savage and Gough [20] Savage, at times, while testifying on cross-examination by the lawyer for the Applicants, became argumentative, interrupted the questioning, and tried to control the order of questions being asked. There was some evasiveness in the sense of engaging in longer explanations than required, rather than directly responding to the question. Before hearing him testify on cross-examination by the lawyer for the Town and on re-direct examination by his own lawyer, his approach to answering questions raised credibility concerns. However, in the course of those additional examinations, I noted that he interrupts questioning and adds additional unnecessary comments and explanations, instead of directly and succinctly answering the question, even where his comments are not contradictory to what the questioner is suggesting, and where he is not being challenged. Therefore, I am of the view that it is his way of conversing and expressing himself, and not a point which raises credibility concerns. [21] Gough was extremely straightforward and un-evasive, giving clear, succinct and directly responsive answers. [22] Both acknowledged points against interest and things they did not know. Apart from Savage’s argumentativeness, they displayed appropriate attitude and demeanor. Gough’s attitude and demeanor were particularly positive. [23] There was some apparent inconsistency in Savage’s evidence regarding who redeemed the property. However, in my view, there is a reasonable explanation for those inconsistencies, as will be discussed further when the question of who redeemed is addressed. An attempt was made to demonstrate an inconsistency between his discovery evidence and his evidence at the hearing in relation to when he became aware of the power of attorney held by Pickrem. However, in my view, Savage’s evidence explained that he knew, prior to the meeting question, that Pickrem had authorization to do certain things; but, did not know what the source of that authority was, i.e. whether it was by way of power of attorney or other source. [24] Otherwise, their evidence was internally and externally consistent, except where it contradicted the evidence of the Applicants. [25] The fact that they are parties with a financial interest in the outcome of this proceeding is a factor to consider in assessing the reliability of their evidence. MacMurtry [26] MacMurtry was straightforward, un-evasive, and ready to admit what he did not know. He displayed appropriate attitude and demeanor. There was a great deal of inconsistency in his evidence regarding who redeemed the property. I will address those further when I examine that question. However, he has absolutely no interest in these proceedings. He is no longer in the employ of the Town. He did not appear to be, in any way, attempting to defend or justify any decisions he made as Treasurer, at the time. Rather, he appeared to be matter-of-factly explaining what he recalled happening. He readily acknowledged points against interest. General Comment [27] As a general comment, I am not of the view that any of the witnesses were attempting to deliberately mislead the court. Rather, they have differing interpretations and recollections of what transpired, depending upon their interests and priorities. Therefore, determining which evidence to accept will depend largely upon an assessment of the sense of the evidence, against the backdrop of any relevant reliability concerns arising from uncertainty, imprecision, lack of evidence or interest in the proceedings. ISSUE 1: SHOULD THE CLAIM AGAINST THE TOWN BE DISMISSED ON THE GROUNDS THAT THE NOTICE OF INTENDED PROCEEDING AGAINST IT WAS DEFECTIVE? [28] Section 512 of the MGA provides that no action may be brought against a municipality, its officer or its employee without at least one month prior notice being served on such defendants. A town is included in the definition of municipality in Section 3(aw). The Applicants served notice on the Town and MacMurtry the requisite one month in advance of commencing this Application, indicating that they were both intended defendants. The Town asserts that the notice is defective as it does not specify that the proceeding was to be an application in court, with the Town being a respondent, rather than a defendant, and additional respondents were added. It does not suggest that the Town was misled in any way regarding the subject of the intended proceeding. It takes the position that the defect should result in the Application being dismissed. [29] An application in court is a type of proceeding which “is available, in appropriate circumstances, as a flexible and speedy alternative to an action”: Civil Procedure Rule 5.01. This type of proceeding was not available when the MGA was drafted. Section 512 refers only to actions, not applications in court. However, since an application in court is an alternative to an action, notice is required prior to commencing an application in court. [30] I, nevertheless, disagree with the Town’s position that a notice of an intended action becomes invalid notice simply because the party having given notice chooses to proceed by way of application in court instead of by way of action. Either way, the municipal body has notice of an intended proceeding and what it is about. It can take steps to preserve evidence, negotiate a settlement and/or incorporate contingent liabilities in its budgeting. If the municipal body views the choice to proceed by application in court as being inappropriate in the circumstances, it can move to convert the application to an action. [31] The MGA does not require that the Town be given notice of other intended defendants, and only those listed in Section 512(1) need receive notice. Therefore, the addition of the other respondents does not contravene the MGA. [32] Further, the dispute over the redemption amount is an issue which can be referred to this Court, pursuant to Section 153(3) of the MGA without notice prior to commencing the proceeding. [33] There is no indication the Town was misled or prejudiced by the Notice referring to an action and defendants, rather than and application and respondents. Consequently, in my view, the claims against it ought not be dismissed for that reason. [34] The Town also notes that the Notice of Intended Action only refers to claims for losses and damages arising from listed errors or omissions, and does not refer to the declaratory relief or remedies claimed in paragraphs b, c, d, e, i, “maybe” j, k, l and m of the Notice of Application in Court. It submits that the Court does not have jurisdiction to hear claims not referenced in the Notice of Intended Action. That submission is based on the requirement in Section 512(3) that the “cause of action” be specified in the Notice of Intended Action. It provided a number of authorities in support of the proposition that the Applicants must prove strict compliance with the notice requirements of section 512(3) of the MGA. [35] Those authorities are: 1. Cameron v. The Town of New Glasgow, (1970) 1 N.S.R.(2d) 651 (S.C., T.D.); 2. Johnson v. The City of Halifax and Dominix, (1975) 12 N.S.R.(2d) 547 (S.C., A.D.); 3. Lloyd v. Richards, (1985) 67 B.C.L.R. 22 (S.C.); and, 4. Carston v. Cowichan Valley (Regional Dist.), (1988) 28 B.C.L.R.(2d) 360 (S.C.). [36] It is noteworthy that these cases dealt with situations where either there was no notice at all or the timing of the notice was defective. [37] The Applicants acknowledge that the Town, in its Notice of Contest, included a general allegation that the Applicants failed to comply with the requirements of the MGA “in other ways which will be identified further”. They add that the Town, in response to a demand for particulars simply stated that the demand was refused “because the ground contemplates that the Respondents will have an opportunity to examine the Applicants via discovery or at the hearing and it is anticipated the answers given by the Applicants may identify further failures by the Applicants to comply with the provisions of the Act”. They indicate that they had no notice that the Town was challenging the validity of the Notice of Intended Action, on the basis that it did not include some of the claims being advanced, until it was raised in closing arguments following the hearing. As such, they had no opportunity to prepare to respond. Therefore, they submit is too late for the Town to raise such an objection. [38] The Town takes the position this notice issue need not be raised in the Notice of Contest as the notice requirement is a condition precedent and it is up to the Applicants to prove that it has been satisfied. It adds that, failure to do so, makes the proceeding void ab initio. It further argues that its challenge to the validity of the Notice of Intended Action was outlined in its prehearing memorandum. However, as indicated, the prehearing memorandum did not make reference to the omission of various claims from that Notice. [39] Contrary to the submissions of the Town, as the Court in Kurolak v. Saskatchewan (Minister of Highways & Transporation), 1986 CarswellSask 211 (Q.B.), at paragraph 23, stated: If failure to give a 30-day notice … is viewed as a condition precedent analogous to failure to obtain leave, then non-compliance with the section would not render the plaintiffs’ action void ab initio. However, when the defendant files a statement of defence pleading the omission to give notice, the plaintiffs’ action will be doomed. [40] Therefore, in my view, it is necessary for the issue to be raised by the applicable responding party. [41] In the case at hand, it was not raised until closing submissions. In my view, it is unfair to the Applicants to raise the issue at that late date. The Town was clearly aware of the claims being advanced by the Applicants prior to filing its pretrial memorandum. The issue ought to have been raised by that time. At the latest, it ought to been raised at the commencement of the hearing. In my view, it is improper to wait until closing submissions to raise the issue. Therefore, I agree with the Applicants that the issue has been raised too late. [42] In the event am wrong, I will go on to consider the alternate argument advanced on behalf of the Applicants. [43] The Applicants argue that, even though the Notice does not specify each claim being advanced, it contains sufficient detail to fulfill the general purpose of the notice requirements and, as such, is in substantial compliance with the notice provision. In support, it cites Petten v. E.Y.E., 1994 CarswellNfld 358 (S.C., T.D.). In that case, the notice of intended action referred to a claim in negligence. At trial, the plaintiffs sought to add conspiracy as a cause of action. The Court held that it was not necessary to file a new notice of intended action referencing conspiracy as the underlying factual context had not changed, and the Crown had been alerted to the potential claims and was able to take steps to protect its interests in relation to such claims. [44] However, the same result will not obtain where the claim in question was not “capable of contemplation” in the notice of intended action: Canadian Javelin Ltd. V. Newfoundland, 1978 CarswellNfld 97 (S.C., T.D.). [45] Joseph v. Canada (Attorney General), 1985 CarswellBC 2378 (County Court), at paragraph 12, noted the reason for requiring strict compliance with statutory provisions mandating notice to the Crown is that such provisions have to be “strictly interpreted in favour of the Crown” because the Crown has merely “relaxed its traditional immunity from claims against it”. Strictly speaking, a municipal unit is not the Crown. It is merely an incorporated body to which a provincial legislature has delegated some powers: Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, paragraph 11. Therefore, provisions requiring notice to municipal units ought not be interpreted as strictly as those requiring notice to the Crown. [46] The claims which the Town submits have been omitted from the Notice of Intended Action include the following: 1. a declaration that the warranty deed dated May 16, 2012 from Mid-Valley to Brocklin was void ab initio; 2. a declaration that the redemption of the Motel Property by Brocklin was void ab initio; 3. declaration that the Motel Property is presently owned, by virtue of the tax sale, by the Applicants; 4. a declaration, and order in the nature of mandamus and/or a mandatory injunction requiring the Town to execute a deed to the Applicants pursuant to Section 155 of the MGA; 5. any rectification of parcel registers or other appropriate remedy pursuant to the Land Registry Act; 6. interest on any proper amount owing to the Applicants from the Town at a rate of 10% per annum as outlined in Section 152(2)(b) of the MGA; 7. a declaration and appropriate damages with regard to the principles of unjust enrichment and constructive trust; 8. damages for breach of warranty of authority; and, 9. aggravated damages. [47] In my view, items 1, 5 and 7 are not claims against the Town, and do not affect it. Therefore it is irrelevant whether or not they were included in the Notice. [48] The claim in item 8 was not advanced at the hearing. Therefore, it is also irrelevant whether that item was included in the Notice. [49] The purposes of requiring notice to the Crown, and also to municipal units, are referenced in Lloyd v. Richards, at paragraph 10, and in Petten v. E.Y.E., at paragraph 77. They include giving the municipal unit the opportunity to: gather and preserve evidence; consider whether to settle the claim or contest it, to avoid the expense and embarrassment of litigation; and, plan for potential future financial liability. [50] MacMurtry testified that, within days of the redemption, he became aware that the Applicants were seeking to have the redemption set aside. As a result, he withheld the entire redemption funds because, if they were released to the Applicants, and the redemption was ultimately invalidated, the Town would have to use taxpayers’ money to repay the redeemer. That was even before the service of the Notice of Intended Action. Therefore, the Town has had the opportunity to prepare, and has prepared, for the potential financial liability arising from the claims of the Applicants. [51] Further, the Notice specifies that the losses and damages arise from: A. improperly allowing the Motel lands to be redeemed following a tax sale on April 19, 2012; B. errors with respect to the calculation of the redemption price and value of proceeds to be returned to the tax sale purchaser; C. misrepresentation regarding the submission and approval of expenses arising from operating the Motel following the tax sale; D. failure on the part of the Town Treasurer to perform their statutory duty with respect to submission, review, and approval of expenses; and, E. bad faith with respect to the conducting of the redemption process generally and in particular in failing and/or refusing provide any of the redemption funds to the tax sale purchaser following the redemption. [52] Therefore, the Notice made it clear that the Applicants would be seeking losses and damages arising from the way in which the town handled the redemption process and redemption funds. In my view, it ought reasonably have been in the contemplation of the Town that the Applicants would be seeking interest on amounts it alleged were improperly withheld. In addition, the factual foundation for that request is outlined in the Notice. Therefore, as it relates to item 6, in my view, the Notice was in substantial compliance with the requirements of Section 512, and adequate. [53] Section 512 does not require that the types of damages being sought be specified. Therefore, the failure to do so does not prevent the Applicants from claiming item 9, aggravated damages. [54] The remaining items, items 2, 3 and 4 seek only declarations, including declarations in the nature of mandamus and an injunction, which, in my view, only indirectly affect the interests of the Town. Section 512 of the MGA does not apply to claims for such declaratory relief against a municipal unit: Joseph v. Canada, paragraph 13; Pendergast v. Newfoundland, 1987 CarswellNfld 147 (S.C., T.D.); paragraph 28; and, MacNeil v. Nova Scotia (Board of Censors), (1974) 9 N.S.R.(2d) 483 (S.C., A.D.), affirmed, on other grounds only, [1976] 2 S.C.R. 265. [55] The Town highlighted, as a distinguishing feature between the former Towns Act, R.S.N.S. 1989, c. 472 and the MGA, that the Towns Act referred to an action ex delicto, while the MGA refers to an action, without any qualifier. However, the applicable proceedings against the Crown legislation in MacNeil dealt with cases in which “the land, goods or money of the subject are in the possession of the Crown”, in addition to contract and tort cases. Therefore, in my view, the distinction is of no consequence to whether a claim for declaratory relief needs to be included in a Notice of Intended Action. [56] Therefore, in my view, the Applicants may proceed with their claim for such declaratory relief irrespective of whether they were included in the Notice of Intended Action. [57] Based on the foregoing, I find that: I have jurisdiction to hear all of the claims advanced by the Applicants; and, none of the claims advanced by the Applicants ought to be dismissed by reason of a defective Notice of Intended Action. ISSUE 2: DO THE APPLICANTS HAVE STANDING TO CHALLENGE THE VALIDITY OF THE DEED INTO BROCKLIN? [58] Dupree was the sole shareholder of Mid-Valley. In a Power of Attorney dated February 19, 2003, “individually and as an officer and director in any incorporated company” she appointed Mr. Gillis her “attorney to do all acts as fully and effectually as [she] could if personally present, whether individually or in any capacity of … officer, director” and other capacities, including selling real estate and executing deeds. Mr. Gillis executed the deed into Brocklin for the Motel lands. [59] The Applicants challenge the validity of that deed. The Respondents, except Mid-Valley and Pickrem, take the position that the Applicants have no standing to bring such a challenge, as they are strangers to the corporate action and property conveyance involved. In support, they refer to: “Locus Standi: A Commentary on the Law of Standing in Canada”, by Thomas A. Cromwell, as he then was, (Carswell – 1986); and, Cowan v. CBC, [1966] 2 O.R. 309 (C.A.). [60] In Cowan, the plaintiff sought an injunction restraining CBC from using one of its radio stations exclusively for French-language broadcasts. The Court found that he had no standing and explained, at paragraph 5, that: A plaintiff, in attempting to restrain … the act of a public or quasi-public body which affects the public generally, is an outsider unless he has sustained special damage or can show he has some “special interest, private interest, or sufficient interest”. [61] A similar reference to the type of interest required to have standing is found in the following summary of the nature of standing found in Abrams, McGuinness and Brecher, “Halsbury’s Laws of Canada – Civil Procedure” (2012 Reissue), under “II. Fundamental Principles, 2. Accrual of Causes of Action, (4) Standing”, where it is stated: Standing is the legal right to initiate a legal proceeding with respect to a specified cause of action. It involves the threshold issue in a legal proceeding of whether the complainant is entitled to have the court decide the merits of the dispute or of particular issues. To enjoy standing, the complainant must be sufficiently affected by the matter that gives rise to the cause of action. In general, to enjoy standing, the complainant must have suffered injury or damage in fact, in the form of some invasion of a legally protected, concrete and particularized interest belonging to that complainant. The injury or damage must be actual or imminent, rather than conjectural or hypothetical. It has been said that the requirement for standing is imposed to ensure that “courts reserve their judicial power for concrete legal issues, presented in actual cases, not abstractions”. [62] With the exception of a reference to page 123, where Cowan is discussed, the Respondents did not specify which portions of Locus Standi they were relying upon. Following trial, they provided the Court with pages 43 to 49, dealing with standing in the municipal law context, and with pages 121 to 147, dealing with declarations. [63] At pages 123 to 125, Cromwell, as he then was, indicated that the “cause of action” approach used in Cowan no longer represented the law in Canada. He went on, at pages 125 to 131, to describe a broadly interpreted rights or interests approach, focusing on the reality of the economic or other significance of the issue in question to the applicants, or whether the declaration sought has some practical value to them, as representing the law in Canada. At page 146, he summarized the approach as follows: Putting aside the constitutional cases for a moment, the test for standing to seek declarations appears to be that the plaintiff must have “an interest” in the issue sought to be litigated. The term “interest” has been given a variety of meanings, but the most recent cases have given it a broad interpretation. Notions of privity between the parties and private law concepts of pecuniary and proprietary interests have given way to a more pragmatic, if not well articulated approach. The tendency has been to abandon formalistic analysis and to examine the real significance of the issue to the plaintiff. [64] At page 129, he referenced Canadian Pacific Railways v. Teamsters Union, Local 213, (1975) 60 D.L.R.(3d) 249 (B.C.C.A.). In that case, the union, based on clauses in a collective agreement between it and the building trades council, refused to unload trucks owned by the plaintiff, but driven by union members. The plaintiff sought a declaration that those clauses were invalid. The defendant challenged the plaintiff’s standing on the basis that it was not in privity with the collective agreement. The trial judge dismissed the plaintiff’s request for declaratory relief. The Court of Appeal overturned the trial judge, stating: I think … that the right to give declaratory relief is, and should be, interpreted in a large rather than narrow sense, and that a private right is affected when there is a “dispute” used in a larger meaning than a limitation to some legal relationship between the parties. [65] In Re Walmsley, 2001 PESCTD 37, an adverse claimant to land conveyed in a deed was found to have standing to challenge the validity of that deed even though he was not a party to the transaction and was not claiming an interest from or under the grantor. [66] In the case at hand, if the deed into Brocklin is declared invalid, there would have been no transfer of ownership authorizing Brocklin to redeem the property. That would result in an invalid redemption and and the Applicants being entitled to a tax deed to the property. Their pending right to acquire the property by tax-deed following the redemption period has been prevented from ripening by the redemption. If Brocklin was not authorized to redeem due to the deed into it being invalid, the Applicants were wrongfully deprived of the ripening of their right to obtain a tax-deed. They have suffered a real injury or damage, not a hypothetical one. Therefore, in my view: the Applicants have a legal interest in relation to the property which has been affected by the conveyance into Brocklin; the validity of the conveyance has a real economic significance to them; a declaration of invalidity has practical value to them; and, the validity of the conveyance is an element in the dispute regarding the validity of the redemption, irrespective of whether the Applicants were a party to the conveyance. [67] The Town cited the following excerpt from Halsbury’s, which is found immediately after the portion I cited above: The requirement for standing has two far-reaching implications with respect to the nature of disputes that may be brought before the court. The first is that, except in very limited circumstances (e.g., where claim is instituted on behalf of a minor by litigation Guardian, or in trust related claims), one person enjoys no standing to institute a legal proceeding in respect of some wrong done to another person. Instead, a party may only assert his or her own rights. A claim cannot be based upon the rights of a nonparty who is not before the court. [68] The Town submits that the Applicants’ challenge to the validity of the deed into Brocklin is in contravention of these legal principles. However, the legal proceeding instituted by the Applicants claims a declaration that the redemption was invalid. The invalidity of the deed is simply a portion of what they seek to demonstrate in order to establish their claim that the redemption was invalid. As such, they are not asserting any rights relating directly to the deed. They are merely trying to establish that neither Brocklin, nor the respondent numbered company could have acquired the right to redeem because the deed was invalid. [69] The Town argues that Re Walmsley is distinguishable on the basis that it dealt with a quieting of titles application, where all persons with an interest must be given notice. It indicates that, in contrast, notice of redemption to the tax sale purchasers is given solely to invite the information required to calculate the proper redemption amount, as opposed to providing them an opportunity to challenge the validity of the redemption. In my view, the purpose of the notice does not inform the inquiry into whether or not the party pursuing a claim has a sufficient interest in it. It is not a helpful nor relevant distinguishing feature. [70] The Town further argues that the deed did not have any effect on the rights of the Applicants, as it did not change their situation. They remained the purchasers at the tax sale and the length of the redemption period did not change. All that changed was that a different person could redeem. With respect, in my view it is irrelevant whether or not the Applicants’ situation changed. An issue to be determined is still whether or not Brocklin became the owner of the property by virtue of the deed in question. If not, it was not in a position to redeem. Further, their situation has changed in that the prior owner, Mid-Valley, had walked away from the property. There was no indication it did, nor would, make any effort to redeem. There is only evidence of Brocklin’s effort to redeem. [71] In my view, the analysis advocated by the Respondents is of the formalistic type which has been abandoned, in favor of a more pragmatic approach. [72] In my view, the Applicants have a sufficient interest to give them standing to challenge the validity of the deed, and for me to have jurisdiction to determine the merits of their challenge. ISSUE 3: IF SO, WAS THE DEED INTO BROCKLIN VALID? [73] The Applicants challenge the validity of the deed into Brocklin on the basis that it was executed by power of attorney which was invalid because: 1. It was an impermissible re-delegation of corporate power and fiduciary responsibility; and/or, 2. The Court ought to draw an adverse inference from the failure to produce, following request by the Applicants, a subsequent power of attorney given by Dupree, that it nullified or revoked the power of attorney granted in 2003. [74] I will address the adverse inference argument first. [75] “Wigmore on Evidence, Third Edition, Volume 2”, at page 162, states: The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated, serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstances or document or witness, if brought, would have exposed facts unfavorable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions; and they are also open always to explanation by circumstances which make some other hypothesis a more natural one than the party’s fear of exposure. But the propriety of such an inference in general is not doubted. [76] Our Court of Appeal, in C.R. Falkenham Backhoe Services Ltd. v. Nova Scotia (Human Rights Board of Inquiry), 2008 NSCA 38, at paragraph 48, in the context of failure to call witnesses, stated: The decision to draw an adverse inference and the weight to be attached to it is discretionary. Whether or not to invoke such judicial license will depend on the specific circumstances of the case. It is permissive and not mandatory. [77] The Court in McIlvenna v. Viebig, 2012 BCSC 218, at paragraphs 71 to 74, also addressed the issue of adverse inferences arising from failure to call witnesses. It referred to some of the factors which are relevant to determining whether or not to draw adverse inferences. They include the following: 1. whether there is a legitimate explanation for failing to call the witness; 2. whether the witness is in exclusive control of one party or available to both; 3. whether the witness can provide key evidence or is the best person to provide it; 4. the nature of the evidence that could be provided; and, 5. the extent of disclosure made to the other party. [78] At Paragraph 70, the Court, cited with approval the following passage from Halsbury's Laws of Canada [Civil Procedure II, 1st ed (Markham: LexisNexis, 2008) at para 228; Evidence, 1st ed (Markham: LexisNexis 2010), at para 14: The court may draw an adverse inference from the fact that a party fails to testify, provided that it is reasonable in the circumstances to do so. In order for an adverse inference to be drawn, there must be a dispute as to those facts concerning which the party would be competent to testify. Furthermore, if the plaintiff has failed to establish a prima facie case against the defendant, no adverse inference will be drawn should the defendant not testify. Nor is a party required to testify to rebut allegations that are plainly absurd. More generally, an adverse inference will not be drawn where the effect of drawing such an inference is to reverse the onus of proof. [79] Similarly, the Court in Dandeneau v. Dandeneau, 2000 ABQB 959, at paragraphs 11 and 12, stated: 11 However, the party asking the court to draw an adverse inference must present some evidence to support the inference. In Alavinejad v. Farimani (August 9, 1991), Doc. Vancouver A903100 (B.C. S.C.), Spencer J. held at p. 9: An adverse inference is not permissible unless there is evidence lead for the plaintiff that would tend to prove the facts to be inferred to the extent that they demand an answer from the defendant. 12 The evidence must show on a balance of probabilities that the inference could be made: Eng v. Eng, [1998] B.C.J. No. 2574 (B.C. S.C.) [80] The subsequent power of attorney named Pickrem and his sister, Shannon. However, Pickrem was not asked to provide a copy of it and has not located one. [81] Counsel for the Town indicated that he gave no undertaking to produce a copy of the power of attorney and does not know whether one exists. He asked Dupree, the grantor of the power of attorney, about where he might find a copy, and searched his own office, as that is where it was prepared. However, he did not succeed in locating it. [82] In my view, that is a legitimate explanation for failing to produce the document. [83] The applicants have not provided any evidence to support the inference that the subsequent power of attorney would have revoked the one pursuant to which Mr. Gillis signed the deed. They merely speculate that it might have. [84] Pickrem indicated the second power of attorney gave him and his sister authority to do things to run the motel business, but not to sell any of its assets. Therefore, there would appear to be no reason for it to revoke the prior power of attorney authorizing the execution of documents conveying the Motel Property. [85] The Town has little interest in whether or not the deed into Brocklin is declared invalid, even though it relied upon it being valid when it accepted the redemption funds. It still has those funds. There was no reason for it to doubt the validity of the deed at the time of redemption. If I find the deed and redemption to be invalid, it can return the funds to the Respondent Numbered Company. Therefore, the Town has no reason to deliberately withhold that subsequent power of attorney. [86] It may be that the lawyer for the Town has an interest in withholding it. It was prepared in his office. He executed the deed pursuant to a previous power of attorney also prepared in his office. If the subsequent power of attorney did revoke the previous one, he is the one who would have executed the deed pursuant to an invalid power of attorney. He is the one who would have had knowledge of its invalidity. The Applicants stated that the lawyer for the Town was in a conflict of interest, because of these circumstances and because he handled the tax-sale for the Town. However, none of the parties asked that the lawyer for the Town be forced to withdraw from the case for conflict of interest. Therefore, I make no comment on whether or not he should have. I state only that I am not of the view that those are circumstances from which it would be proper to draw the adverse inference requested. [87] In my view, the evidence does not establish that the requested adverse inference should be made. [88] The fact that the subsequent power of attorney was not provided to the Applicants, such that they could not provide the document to the Court, in my view, does not tip the balance so as to justify drawing the inference, even though the document would likely provide conclusive evidence regarding whether it contained provisions revoking a prior power of attorney. To require the Town, or one of the other Respondents, to produce the document or face an adverse inference, would be a reversal of the onus of proof. It would be requiring the Respondents to prove the validity of the deed, rather than requiring the Applicants to establish its invalidity. [89] Considering these factors, I find that it would be inappropriate for me to exercise my discretion to draw the requested inference. [90] I will now address the argument that the deed was executed pursuant to an impermissible re-delegation of corporate power and fiduciary responsibility. [91] Savage testified that the negotiations leading to the conveyance of the property into Brocklin were conducted between Dupree and himself. Those negotiations, which occurred after the tax-sale, had been preceded by discussions between he and Dupree, well before the tax-sale, when he agreed to provide heating oil to the Motel on credit, on the faith of Pickrem’s promise that he would be paid. I accept that evidence. [92] Therefore, it is only the signing of the deed that was done by power of attorney. [93] Jasmine Sweatman, in her text “Guide to Powers of Attorney” (Canada Law Book – 2002), after referring, at page 15, to the common law principle prohibiting re-delegation of authority, stated at page 16,that: Where … the principal is a fiduciary and has exercised his or her discretion, the signing authority to carry the act into effect may be validly delegated … . [94] In support, she referenced McLellan Properties Limited v. Antoine Roberge and L.D. Roberge, [1947] S.C.R. 561, in which the Court, at page 573, stated: While it is true that a trustee may not delegate his power to sell, I see no reason why a trustee may not authorize an agent to sign on his behalf documents such as the letters which are here in question in the course of carrying out a sale which he himself has already made. As stated in Williams on Executors, 12th ed. 598, while executors cannot contract to sell by attorney this extends merely to the discretionary act. Having once exercised such discretion they may complete the transaction by attorney. [95] Dupree had exercised the discretion to convey the property to Brocklin. Therefore, in my view, her delegation, to Mr. Gillis, of the power to execute the deed was proper, and the power of attorney authorizing him to do so was valid. ISSUE 4: WHO REDEEMED THE PROPERTY? [96] The redemption of the Motel Property occurred on June 15, 2012. Savage, in his affidavit sworn September 5, 2013, at paragraph 19, indicated that he attended at the office of MacMurtry on June 15, 2012, and paid $174,557.87 to the Town. $174,472.69 of that amount was by way of certified cheque drawn on the account of the Respondent Numbered Company. Savage paid the remainder in cash. He obtained a receipt from the Town made out to the Respondent Numbered Company for the full amount. [97] Savage also provided discovery evidence in relation to the redemption. It included the following. The Respondent Numbered Company was incorporated on June 6, 2012 for the purpose of obtaining a loan and because they did not want to run the Motel through Brocklin. He agreed with the suggestion that it was also to redeem the property, adding that they were probably advised by their accountants to do it in that fashion. They wanted to keep the financing of the Motel purchase separate. However, he believes the money came out of his “pocket somewhere”. The advice of his solicitor and accountant was that that was the best way to do it. He agreed that, though it was his personal money flowing through the Numbered Company, the funds that redeemed the property came from the Numbered Company. [98] During the hearing, he provided the following evidence on cross-examination. The redemption price was paid by the certified cheque in question. However, the money behind it came out of his Visa and money borrowed from other people. Their ultimate plan was to have the Numbered Company own and run the Motel. However, they were being “pushed hard” by the BDBC, and the Numbered Company had to be incorporated after the formation of the Gough Family Trust. Therefore, they had to purchase the property through Brocklin and then roll it into the Numbered Company. So the redemption monies were paid for Brocklin. The new company was incorporated within 30 days and the property rolled over to it. [99] If one considers only the date of incorporation, which was June 6, 2012, this explanation does not make sense. However, a closer look at the profile for the company, attached as Exhibit 1 to the affidavit of David Gough dated September 5, 2013, clarifies the matter. It shows that, on July 16, 2012, which was not a lot longer than 30 days later, the following were registered: an appointment of agent; a change of directors; an address change; and, two special resolutions. Therefore, more likely than not, the steps required for the family trust to take control of the Numbered Company were not completed until July, which was after the redemption date, explaining why the redemption would have been done for Brocklin, rather than for the Numbered Company. [100] At the hearing, Savage reconfirmed that the redemption funds came from the Numbered Company, by way of certified check, drawn on funds that he personally infused. He acknowledged that: the Numbered Company is owned by the Gough Family Trust; and, Brocklin and the Numbered Company own no shares in each other, adding that he is the common denominator as he has control over both companies. [101] MacMurtry, in his affidavit sworn September 4, 2012, indicated the following. The property in question was sold by Mid-Valley to Brocklin, with the deed having been recorded on May 17, 2012. After that, Brocklin asked him about the amount required to redeem the property. He provided information in relation to the amounts he calculated pursuant to Sections 152 and 153 of the MGA, except the amounts for fire insurance and repairs. He also advised the Purchaser at the tax sale, which was the Applicant Numbered Company, of the intention to redeem, and requested a breakdown of repairs and expenses, so that he could calculate the applicable figures for redemption. He then had a significant amount of contact with both parties regarding the details of the redemption and the redemption amounts. [102] In his supplementary affidavit dated October 12, 2012, MacMurtry indicated that “the owner” paid the redemption amount he had calculated, totaling $174,557.87, on June 15, 2012. [103] At the hearing, MacMurtry provided the following evidence on cross-examination by the Applicants’ lawyer. He thought it was the Respondent Numbered Company that owned the Motel as of June 15, 2012, and that it was it who redeemed on that date. He provided the following evidence on cross-examination by the lawyer for the Respondents, Brocklin, the Numbered Company, and Savage. On June 15 he was advised by the Town’s solicitor that the Numbered Company was the owner. However he then immediately agreed with the suggestion that Savage had told him that it was Brocklin doing the redemption, adding that he probably told him that Brocklin owned the companies, including the Respondent Numbered Company. He agreed that, on June 15, 2012, it was Brocklin who redeemed and that the payment came from the Respondent Numbered Company. It did not matter to him where the money came from. On re-direct-examination he confirmed that the information in his affidavit sworn September 4, 2012 was accurate and stated that, at that time, the information set out would have been clearer in his mind. Then, on re-cross-examination by the lawyer for the Applicants he confirmed that, in his discovery evidence, he had indicated that he probably thought it was Brocklin who had redeemed, but would have realized shortly after that it was the Numbered Company, owned by Brocklin, who had redeemed. [104] MacMurtry clearly gives conflicting evidence in relation to who he understood was redeeming. In my view, he did not turn his mind to the details of which legal person was redeeming. He was dealing with Savage. He knew Savage owned and controlled multiple companies, including the company which had acquired the Motel Property from Mid-Valley by recorded deed. He was prepared to accept the redemption price being paid in full from any source Savage decided to use. His contradictory statements on the question, in my view, arise from inattention to detail, not credibility concerns. He is no longer in the employ of the Town. The Town is not directly affected by an invalidation of the redemption. As such, MacMurtry has no personal interest in providing false or inaccurate information on the subject. [105] No one disputes the fact that most of the redemption funds were drawn on the account of the Respondent Numbered Company. I accept the evidence of Savage that the funds in that account were infused by him from sources outside of the Numbered Company. The question remains whether the redemption was on behalf of Brocklin or the Numbered Company. [106] Savage understood that, in order to redeem, he or one of his companies had to be the owner of the property. That is why he arranged for the property to be conveyed to Brocklin from Mid-Valley. He also knew, on June 15, 2012, that the property had not been conveyed from Brocklin to the Respondent Numbered Company. Therefore, it would not make sense that he would have intended that the redemption be effected by the Respondent Numbered Company. It would make sense that he intended that the Respondent Numbered Company pay for the redemption and obtain a receipt in its name, so that the expense could later be claimed for income tax purposes, as it was intended that the Motel would ultimately be owned and run by the Numbered Company. His explanation that the corporate steps required to effect a conveyance directly to the Numbered Company were taking time, and that they were being pressed by the BDBC, who was the mortgagee of the property, such that they had to redeem through Brocklin, and then roll over into the Numbered Company, in my view, makes sense. In my view, when Savage stated, during his discovery examination, that the Numbered Company was incorporated to obtain a loan and redeem the property, he meant that it was to pay the redemption price. As suggested at lines 12 and 13 of page 367 of the discovery transcript, “it would be funds from the numbered company that redeemed the property”. That payment of the redemption price, in my view, in the circumstances, would, more likely than not, have been made on behalf of the owner, Brocklin. [107] That is supported by Spicer’s recollection that he was told one of Savage’s companies would be redeeming, even though he thought it was Savage Oils Limited. [108] Therefore, I find that it is Brocklin who redeemed the property, despite the redemption funds having been paid by the Numbered Company. ISSUE 5: WAS THE PERSON WHO REDEEMED THE PROPERTY AUTHORIZED TO DO SO? [109] Section 152(1) of the MGA provides that: “Land sold for non-payment of taxes may be redeemed by the owner, a person with a mortgage, lien or other charge on the land or a person having an interest in the land … .” [110] The Applicants submit that the “owner”, in section 152(1), is limited to the owner at the time of the tax sale. Their submission is based on the following. The purpose of the redemption provision is to give owners, and other persons listed, a second chance to keep the land. Black’s Law Dictionary defines “redeem” as meaning to “buy back”. [111] In my view, there is nothing in the wording of the MGA which limits the definition of owner in that fashion. I agree with the statement of our Court of Appeal in Point East Investments Ltd. v. Barry, 2001 NSCA 7, at paragraph 23, that those acquiring title during the redemption period can redeem. In that regard, the court stated: If the assessed owner remains unchanged from the first failure to pay taxes through to the issuance of the tax deed, the legislative intent is clear that he should be constructively fixed with all notice necessary to the validity of the tax deed. Likewise, any purchaser from that owner during the tax sale process must be deemed to acquire the property at the existing stage of the municipality’s proceedings, with the same constructive notice and the same rights as the vendor. … The Bank and the Barrys both acquired their title during the redemption period; each could have redeemed the property until February, 1997. [112] If the Legislature had meant to restrict the definition of “owner” to that of the owner at the time of the tax sale, it would have been easy to so specify. Section 139A refers to “assessed owners”. Such a qualifier could also have been used in section 152 to limit the right of redemption to the owner at the time of tax sale, if so intended. [113] The definition of “redeem” in “Black’s Law Dictionary, Abridged Sixth Edition” (St. Paul – West Publishing Co. 1991) includes: To free property or article from mortgage or pledge by paying the debt for which it stood as security. To repurchase in a literal sense; as, to redeem one’s land from a tax sale. It implies the existence of a debt and means to rid property of that incumbrance. [114] Its definition of “redemption” includes: The process of canceling and annulling a defeasible title to land, such as is created by a mortgage or a tax sale, by paying the debt or fulfilling the other conditions. [115] In my view, a person who becomes an owner following tax sale can repurchase the tax sale purchaser’s inchoate interest and, thereby, cancel and annul its defeasible title to the property, as easily as the owner at the time of the tax sale. The definitions of “redeem” and “redemption” do not exclude that scenario. [116] As noted in Smith v. MacLeod, 1966 CarswellNB 13 (S.C., T.D.), at paragraph 8: The whole purpose of the legislation is the collection of taxes, and is not at all concerned with taking land away from its legal owners. The wording of the Act indicates to me that anyone who has a legal or equitable title in real estate sold for unpaid taxes may redeem the real estate, so sold. The Act does not provide for the redemption of his interests or title in the land, but refers to the redemption of “that real estate”, which in my opinion means the whole property. [117] Similarly, Section 152 of the MGA refers to the ability to redeem “land sold for nonpayment of taxes”. [118] Since the “whole purpose of the legislation is a collection of taxes”, the purpose of the legislation is equally fulfilled whether the redemption funds are paid by the owner at the time of the tax sale or by a subsequent owner. Allowing a subsequent owner to redeem provides the owner at the time of the tax sale a second chance to arrange for the taxes to be paid, and to gain whatever other advantage from the land that it can, by conveying it. Further, the practical result is no different than a situation where a third party pays the redemption price on behalf of the owner at the time of tax sale, subject to an agreement that the property will be conveyed to it post-redemption. [119] Therefore, I find that Brocklin was authorized to redeem the property. ISSUE 6: HOW DOES THE WITHOLDING OF THE REDEMPTION FUNDS BY THE TOWN AFFECT THE VALIDITY OF THE REDEMPTION? [120] MacMurtry, on the day of redemption, June 15, 2012, provided, to Spicer Contracting and to the solicitor for Savage, Brocklin and the Respondent Numbered Company, a breakdown of the amount to be paid for redemption and the amount to be repaid to the purchaser upon redemption. The breakdown of the amount to be repaid to the purchaser was as follows: 1. price paid a tax sale $152,675.76 2. interest thereon at 10% for 58 days $2,426.08 3. insurance $1,118.00 4. pest control $1,725.00 5. sewer repairs $3,085.56 Total $161.030.40 $161,030.40 Less gross revenue net of payroll and utility expense -$3.747.28 -$3,747.28 ____________ Balance due $157, 283.12 [121] From that amount due to the purchaser, MacMurtry indicated he would be withholding $32,863.28, which was the total claimed for payroll and utilities, “pending satisfactory documentation to establish the amount legitimately or resolution between the parties or through the Court”. [122] To that amount due to the purchaser, he added $17,189.57, for current taxes and interests, and, $85.18, for the release registration fee, resulting in a total amount to be paid for redemption of $174,557.87. That is the amount that was paid by the Respondent Numbered Company on behalf of Brocklin. [123] However, none of those funds have been paid over to the purchaser, the Applicant Numbered Company. The Town decided to withhold all of the funds, not just the hold-back amount, because it learned that the Applicants would be challenging the validity of the redemption. [124] The Applicants submit that the failure of the Town to pay over the redemption funds to which the purchaser was entitled invalidates the redemption because it is not in strict compliance with the redemption provisions. They argue that, at the very least, the Town should have paid over the amount due less the hold back amount, being a net of $124,419.84. [125] The relevant portions of Sections 152 to 154 of the MGA state as follows: “Redemption of tax sale property 152 (1) Land sold for non-payment of taxes may be redeemed by the owner, a person with a mortgage, lien or other charge on the land or a person having an interest in the land within six months after the date of the sale … . (2) To redeem the land the person redeeming shall pay (a) the sum paid by the purchaser; (b) interest at the rate of ten per cent per annum on the total sum paid by the purchaser from the date of the sale to the date of redemption; (ba) the full amount of any outstanding taxes arising before the tax sale where the purchaser paid less than the amount of the outstanding taxes on the land; (c) taxes levied on the land after the sale and any interest; (d) the fee to record the certificate of discharge; (e) all sums paid by the purchaser for fire insurance premiums to insure buildings on the land; and (f) all amounts paid by the purchaser for necessary repairs made, with the written approval of the treasurer, to buildings on the land, less any balance remaining in the tax sale surplus account with respect to the property and any rent or other income earned by the purchaser from the land. …. (4) Where redemption takes place before the tax rate is set, the taxes payable by a person redeeming are those payable for the preceding year and after the tax rate is set, any surplus shall be refunded to the person redeeming and the land is liable for any deficiency. …. Repayment to purchaser 153 (1) Where redemption of land is to take place, the purchaser shall, within fourteen days of being requested to do so, provide a statement of amounts spent for fire insurance premiums and repairs made, with the written approval of the treasurer, to buildings on the land. (2) After delivery of the statement of amounts spent, the purchaser shall receive the (a) sum paid upon the purchase of the land; (b) interest on the purchase price; and (c) sums paid with respect to fire insurance premiums and repairs, less any rent or other income earned by the purchaser from the property. (3) A dispute concerning the amount to be paid for redemption or to be repaid to the purchaser upon redemption may be referred to the Supreme Court of Nova Scotia. Purchaser rights cease 154 From the time of the payment to the treasurer of the full amount for redemption, the purchaser of the land ceases to have a right to it.” [126] The Court in Moore v. Wheadon, (1993) 126 N.S.R.(2d) 47 (S.C.), at paragraphs 13 and 26, stated that the purpose of tax-sale legislation was to collect arrears of taxes and, because it could result in depriving people of an interest in property, it must be strictly construed to avoid an owner unfairly losing its property. Therefore, in my view, the reason for requiring strict compliance with tax-sale provisions is to ensure that the owner is not unfairly deprived of its property. As such, any defect in the process which risks having that effect may invalidate it and result in the property remaining with the owner, at least until a proper sale process is strictly adhered to. In my view, the same strict approach is not meant to apply to the process for the owner to redeem. [127] This view is supported by the decision of the Court in Cameron Auctioneers & Appraisers Ltd. v. New Brunswick (Minister of Finance), 1998 CarswellNB 418 (C.A.), which dealt with a challenge to the validity of the redemption process. It ruled that the redemption provisions should be liberally construed, favoring substance over form, noting that the purpose of the legislation was to collect taxes, while allowing the “delinquent taxpayer to ‘make good’ on the debt, and to redeem the interest in the property”. [128] In Cameron Auctioneers, the Province received the owner’s redemption cheque prior to the redemption deadline, in the amount initially calculated by the Province. However, it returned the owner’s redemption cheque because it exceeded the new amount it had calculated for redemption. It included a notice regarding the correct amount. The new cheque from the owner was received after the initial redemption deadline. The redemption was declared valid. The Court was of the view that, as it was the Province which determined the redemption amount, it could adjust it. [129] Calculation of the redemption price depends upon information being supplied by the purchaser, within a relatively short window of 14 days; and, eleventh hour redemptions will at times result in some uncertainty as a result of incomplete information at the time of redemption. Therefore, I am of the view that some flexibility in the redemption process is required. [130] In calculating the redemption price, the amount paid by the purchaser and the interest to be added to it will usually be known and not in dispute. The outstanding taxes to be added will either be known or dealt with on the basis of the preceding year’s tax rate, with provision under Section 152(4) for refund to the redeemer or liability on his part for any deficiency. The recording fee will be known. The insurance premiums will be easily ascertainable. But for the requirement that the purchaser obtain written approval for necessary repairs in order to be entitled to have them included in the redemption price, difficulty would often arise in determining the appropriate amount for necessary repairs. Therefore, in my view, a redemption price based upon the repairs approved in writing by the treasurer ought not result in an invalidation of the redemption, even if written approval was unreasonably withheld. Otherwise, the purchaser would be able to delay the redemption process simply by challenging the reasonableness of the withholding, resulting in uncertainty in the redemption process. Given the need to ascertain the proper redemption price relatively quickly, such uncertainty would be unworkable. [131] In calculating the deductions from the redemption price, the tax sale surplus will be known. However, the rent or other income, net of expenses needed to generate them, will not be as easily ascertainable. That is particularly the case in circumstances such as those in the case at hand. As testified to by Robinson, the purchaser was of the view that the Town has “no business delving into [its] business”, leading to reluctance in providing the clear and detailed information to perform the required calculations. As a result, as MacMurtry’s evidence showed, he was unable to fully understand the submitted information, and needed further information to complete the calculations. Therefore, in my view, the proper approach is to initially reduce the redemption price only by that amount of net revenue which is clearly ascertainable on the information provided by the purchaser. Any uncertainty regarding gross income, or expenses to be deducted therefrom, in my view, properly results in those amounts being held back pending determination, as occurred in the case at hand. [132] Section 153(3) does provide for disputes in relation to the redemption price to be referred to this Court. However, in my view, it is not necessary that this Court resolve the dispute prior to the redemption taking effect. Otherwise, the purchaser could delay the redemption, even past the six-month limitation period, simply by challenging the redemption amount, and thereby foil the owner’s attempt to redeem. In my view, provided the owner pays the redemption price calculated by the treasurer, as being the full amount required for redemption, the redemption will be valid, and it will gain the benefit of Section 154. [133] If this Court, in a reference pursuant to Section 153(3), determines that the proper redemption price is greater than that calculated by the treasurer, it can simply order the deficiency to be paid. It need not declare the redemption void. That would be an overly formalistic approach which would risk unfairly depriving an owner of its property, even though it provided the full redemption price requested by the treasurer. [134] Section 154 provides that the purchaser ceases to have a right to the land once the full amount for redemption is paid to the treasurer. It is not dependent upon the full amount owing to the purchaser being repaid to it, nor even to any of that amount being repaid. It is dependent only upon the amount being paid to the treasurer. Therefore, in my view, the fact that the Town did not pay any of the redemption funds over to the Applicant Numbered Company does not invalidate the redemption. ISSUE 7: WHAT IS THE PROPER REDEMPTION AMOUNT? [135] The Applicants submit that the total redemption price should have been $31,527.13 more than that calculated by MacMurtry. $3747.28 of that amount is based upon their submission that the operational Motel expenses incurred exceeded the revenue, such that there should be no reduction for revenue. The remainder is based upon the cost of repairs which they submit ought to have been approved in writing by the treasurer. [136] The repairs which they allege ought to have been approved as being necessary include the following: 1. labour and materials for crack-filling, painting and repairs to broken windows in rooms 1, 3, 6, 9, 10, 24, 25, 34, and 36, totaling $9,097.00; 2. the cost of cleaning rooms so that they could be rented, totaling $10,836.00; 3. materials, labour and HST for repairs to the swimming pool, totaling $5,886.85; and, 4. the cost of painting and filling the main lobby, totaling $1,960.00. [137] Sections 152 and 153 of the MGA do not specify that the written approval for necessary repairs must be provided in advance of the repairs being effected. However, if no prior written approval is obtained, purchasers take the risk that it will not be provided after-the-fact. As noted in John Cameron’s email of May 22, 2012, to MacMurtry, attached as Exhibit B, to the affidavit of MacMurtry sworn September 4, 2012, “they would be extremely imprudent to make any such expenditures without … prior consent”. Mr. Cameron was representing the Applicants. Therefore, I infer they were aware of the risk the approval would be denied, and of the imprudence of proceeding without prior approval. [138] In my view, the requirement for written approval is there to provide a level of certainty to the calculation of the redemption price. It removes uncertainty as to which repairs will be added to the redemption price, leaving only uncertainty as to the acceptable costs of the repairs. Therefore, in my view, it is not open to the purchasers, on a reference pursuant to Section 153(3), to challenge a refusal to approve certain repairs. They would have to challenge such a refusal in another manner. However, they, in appropriate circumstances, might be able to raise the refusal in defense of a claim that they were negligent in their duty to preserve the property. [139] I will, nevertheless, address the question of whether or not the treasurer ought to have provided written approval for these additional repairs. [140] Pickrem testified that he managed the continued operation of the Motel up to and including the day before the tax sale, and convinced the staff to remain voluntarily and continue the operation. He indicated that is what they did. I accept his evidence. Therefore, the motel did not cease operation. As such, in my view, it could have been continued to be operated in the manner that it had been without repairs other than those immediately required to prevent further damage. [141] The memorandum from Hank Sawchuk to MacMurtry, dated May 28, 2012, and attached as Exhibit 7 to the affidavit of Spicer sworn October 18, 2012, indicates that the Motel had 60 units, but did not normally exceed an occupancy of 20 units. Therefore, in my view it has not been established why it was necessary to crack-fill, paint and repair broken windows in rooms 1, 3, 6, 9, 10, 24, 25, 34, and 36. There was no evidence that the windows were broken to the extent that failure to repair them would result in further damage to the building. There would have been plenty other rooms to fill the occupancy demand. Therefore, it has not been shown that repairs to those rooms could not reasonably have been deferred to a date past the redemption deadline. The fact that “CAA” would not give its approval to the Motel in the condition it was in, does not mean it could not be run as a motel without that approval. [142] In my view, the cost of cleaning rooms so that they can be rented is not one fitting under necessary repairs. Rather, in my view, it is an operational expense incurred for the purpose of generating revenue from the property. Further, the invoice which included the charge for cleaning 48 rooms was from Spicer Contracting, who was not dealing at arm’s length with the Applicant Numbered Company, and the amount charged appears unreasonable, and unreliable. The invoice indicated that each room required three people for a full eight hour day at $14.75 per hour. That is a $354 per room, resulting in a total, for all 48 rooms, of $16,992. The Applicants only claim $10,836 of that amount. It is unclear whether that is because they have reduced the number of rooms they are claiming for, or have reduced the price per room. If they are still claiming for 48 rooms, the price per room would be $225.75. In my view, that is still highly excessive. Pickrem testified that the most it would take one person to clean each room was 90 minutes and that they paid their cleaners minimum wage. That would amount to less than $20 per room. [143] Mr. Sawchuk did indicate that the swimming pool had cracks which needed to be repaired in order for it to be filled. He also indicated that this should be done to provide use for the customers. However, he did not indicate that it needed to be done to prevent further damage to the swimming pool or other parts of the property. There was no evidence in relation to whether or not the swimming pool had been filled for the use of customers in the season preceding the tax sale. Although the presence of a usable swimming pool is a feature which may attract customers, it is not one which is a necessary to preserve the property. Therefore, in my view: it has not been established that the repairs to the swimming pool needed to be effected prior to the redemption deadline; and, I cannot find that MacMurtry erred in refusing to approve that expenditure. [144] Similarly, there is no evidence that the main lobby needed to be painted and filled to prevent further damage. As such, it was not a repair which needed to be made prior to the expiry of the redemption period. [145] Mr. Sawchuk did indicate that: the east exterior wall needed to be repaired to prevent further damage to the structure; a hole in the roof leaking over the kitchen area needed temporary protection; and, brickwork needed to be repaired in the front office area to prevent water getting into the structure. However, the applicants are not claiming expenses for these repairs to be added to the redemption price. [146] In my view the “repairs” for which approval is sought were effected to improve the property, with a view to increasing its profitability, rather than because they were necessary to preserve the property. They were expenditures from which the purchasers hoped to gain long-term benefit. I am of the view that MacMurtry was justified in refusing to provide written approval for them. [147] Unlike necessary repairs, the purchasers need not obtain written approval for expenses incurred to earn revenue from the property. In addition, the redemption provisions in the MGA do not specify that purchasers are required to provide a statement of revenue and expenses within 14 days of being requested to do so. Section 153(1) does require them to provide a statement of amounts expended for insurance and repairs in that timeframe. Given these distinguishing features, in my view the question of the amount of revenue from the property to be deducted from the redemption price is something which is open for determination by this Court on a reference pursuant to Section 153(3). [148] Further, the absence of the 14 day deadline, in my view, allows this Court to consider expenses incurred prior to redemption, to earn revenue, even if the accounting in relation to those expenses is delivered to the treasurer after redemption. In my view, practical constraints require such an approach. For example, unless utilities are prepaid, the invoice for them will often not be available until after the expenses are incurred. As a result, it may not be possible to provide proof of all expenses until some time after the redemption date. [149] In the case at hand, MacMurtry deducted, from the total revenue of $38,318.52, payroll expenses of $20,013.24 and utility expenses of $14,558.00, leaving a net revenue of $3,747.28, which he deducted from the redemption price. Those amounts were extracted from the Mid Valley Motel Income Statement 04/26/2012 to 06/10/2012, included in Exhibit 10 to the affidavit of Spicer sworn October 18, 2012. [150] However, at some point on or before approximately June 27, 2012, Spicer provided MacMurtry with additional information which revealed that the utilities expenses, including heating oil, electricity, phones, cable and internet, totaled $19,862.79. The receipts supporting those total utilities expenses are also found in Exhibit 10 to the Spicer affidavit. Those total utilities expenses are $5304.79 more than the utilities expenses deducted from the motel revenue, by MacMurtry, to calculate the net revenue. Those extra utilities expenses, by themselves, reduce the net revenue to less than zero. [151] Therefore, there was a net loss of revenue, and, in my view, MacMurtry ought not have deducted any amount for revenue earned from the property. [152] Consequently, $3747.28 is to be added to the redemption price to be paid by Brocklin and to be repaid to the Applicant Numbered Company. [153] The Applicants submit that interest of at least 10% should be added to the full redemption amount, from the date of redemption. In my view, that submission is flawed. Section 152(2)(b) specifically and clearly provides that the yearly interest rate of 10% is on the sum paid by the purchaser at the tax sale and is for the period “from the date of the sale to the date of redemption”. In my view, it would be contrary to this express provision to order 10% interest to be paid on any amount other than the sum paid by the purchaser, and for any period beyond the redemption date. Further, it would be unfair to Brocklin, which paid the full amount directed on the day of redemption. [154] However, the Applicant Numbered Company has been without the use of the redemption funds since the redemption date. Therefore, in my view, it is appropriate to add prejudgment interest to the redemption funds to be repaid to the Applicant Numbered Company from June 15, 2012, except for the hold-back which will be discussed shortly. [155] None of the parties have provided evidence, nor submission, pursuant to Civil Procedure Rule 77.07, to satisfy me that the prejudgment interest should be other than 5% per year, calculated simply. Therefore, interest at that rate, calculated in that fashion, should be added to the redemption amount. [156] It is the Town which has been holding on to the $157,283.12 it calculated should be repaid to the Applicant Numbered Company, subject to confirmation of payroll and utility expenses, resulting in the holdback of $32,863.28. The additional information confirming payroll and utility expenses was provided on or before June 27, 2012. Therefore, in my view, it is appropriate to require the Town to pay prejudgment interest on $124,419.84 from June 15, 2012 to the date of judgment, and on the remaining $32,863.28 from June 27, 2012 to the date of judgment. [157] The additional information required to clarify that the payroll and utility expenses reduced the net motel revenue to less than zero was not provided by the Applicant Numbered Company until on or before June 27, 2012. In my view, Brocklin could not reasonably have been asked to pay the additional $3747.28 until that time. However, it has had the benefit of a delayed payment since then. Therefore, it ought to be required to pay prejudgment interest on that $3,747.28 from June 27, 2017. ISSUE 8: WAS THERE AN ENFORCEABLE AGREEMENT BY SAVAGE TO PAY FOR CERTAIN WORK DONE, AND GOODS LEFT, ON THE PROPERTY BY THE APPLICANTS? [158] Spicer provided evidence that, on or about June 14, 2012, Savage told him that he would pay him and Robinson for the: new items they brought on the Property, such as linens and televisions; improvements and repairs made to the Property; and, oil left in the tanks. As a result, he prepared an invoice and submitted it to Savage and Brocklin, on or about June 18, 2012. The invoice included the following items and charges: Purchase of vacuums $192.00 Purchase of bedding, towels $1200.00 Cost of crack filling, painting and repairs to several broken Windows (Rooms 1, 3, 6, 9, 10, 24, 25, 34, 36) Total hours to complete 4 men 9 days @ $25.00 per hr $7200.00 Materials $1897.00 Cost of cleaning rooms so they could be rented 42 rooms cleaned, total hours for 3 people per day per room $10,836.00 Oil left in tanks as of June 14 $6500.00 Purchase of 15, 32” TV’s (used) @ $50.00 $750.00 TOTAL $28,575.00 [159] None of the Respondents have paid any of these amounts. [160] None of the Respondents provided any contradictory evidence to challenge Spicer’s assertions. In addition, they made no submissions regarding whether or not an enforceable agreement was formed. [161] I accept Spicer’s evidence that Savage agreed to pay for these items. [162] The consideration provided by the Applicants in relation to the goods was that they were left on the property to be owned and used by the Respondent Numbered Company which would be operating the Motel. [163] The work done on the Property, for which payment was sought, was not something which could be removed. As such, the only consideration which the Applicants could have provided is a compromise of the dispute relating to payment for that work, and forbearance to claim. [164] The amounts included in the invoice to Savage for that work are less than the amounts noted in the invoice dated June 14, 2012, from Spicer Contracting to the Mid-Valley Motel. Therefore, it appears that there was some compromise in the amount claimed. However, according to Spicer’s evidence, which I also accept, at some point between June 5 and June 27, 2012, that June 14 invoice, along with other invoices, was provided to the Town so that the amounts invoiced could be factored into the redemption price. Therefore, in my view, the Applicants did not provide any consideration for Savage’s promise to pay for that work. They claimed the full amount as part of the redemption. As such, the Respondent Numbered Company received no benefit of a compromised claim and forbearance. [165] Consequently, I find that there was an enforceable agreement to pay for the goods left on the property, but not for the work done. [166] There is no evidence that the price to be paid for the goods was agreed upon. Therefore, it was implicitly agreed that a reasonable price would be paid. I accept that the Applicants invoiced the approximate cost to them of the goods. The bedding and towels were purchased at Walmart during a going-out-of-business sale. At the earliest, that would have been at some point in May. Therefore, they would have been used very little, if at all, and, more likely than not, still worth the going-out-of-business sale price. The TVs were used and only $50 each. $192 appears to be a reasonable price for vacuum cleaners. The value of the oil left in the tanks was estimated based on it having cost $8100-$8300 to fill them only seven days earlier, and it being summertime, which reduced oil consumption. In my view, the amounts invoiced for these goods is reasonable. [167] I, therefore, find that there was an enforceable agreement that Savage or the Respondent Numbered Company would pay, to the Applicants, $8,642.00 for the vacuums, bedding, towels, TVs and oil. [168] No terms of payment were specified. I am of the view that one month to pay is reasonable. Therefore, prejudgment interest of 5%, commencing July 18, 2012, is also to be paid on that amount. ISSUE 9: ARE THE RESPONDENTS RESPONSIBLE FOR THE COST OF REPAIRS AND IMPROVEMENTS NOT INCLUDED IN THE REDEMPTION PRICE? [169] The Applicants submit that they are entitled to restitution for the cost of repairs and improvements not included in the redemption price based upon the principles of unjust enrichment. In support, they cite Carabin v. Offman (1988), 87 N.S.R.(2d) 407 (C.A.) and Irving Oil Limited v. Hi-Liner Fishing Gear & Tackle Co., 2007 CarswellNS 621 (Small Claims Ct.). The question of unjust enrichment was canvassed by this Court more recently in Annapolis (County) v. Kings Transit Authority, 2012 NSSC 615, where the Court incorporated the more recent developments of that area of the law by the Supreme Court of Canada, in Garland v. Consumers' Gas Co. (Garland), 2004 SCC 25, and Kerr v. Baranow (Kerr), 2011 SCC 10. [170] The Court in Annapolis v. Kings, at paragraphs 7 to 9, gave an overview of what it described as a five part unjust enrichment analysis as follows: 7 This analysis can be divided into five parts: the benefit or enrichment analysis, the detriment or deprivation analysis, the two-stage "absence of juristic reason" analysis, the defences analysis, and the remedy analysis. 8 In this case, Annapolis is obliged to establish, on a balance of probabilities, facts supporting the following: (i) enrichment or benefit to Kings Transit, (ii) a corresponding deprivation or detriment to Annapolis, and (iii) absence of a juristic reason for the benefit/detriment based on the first step of the juristic reason analysis -- existence of an established category of juristic reason for retention of the benefit and deprivation. 9 If Annapolis succeeds, the burden shifts to Kings Transit to establish through evidence: (iv) existence of a juristic reason for retention of the benefit under the second step of the juristic reason analysis -- consideration of the reasonable expectations of the parties and public policy considerations, (v) a defence, or (vi) that the discretion of the Court to grant a remedy should not be exercised for some other equitable reason. Defences and reasons to refuse a remedy are unlimited. They may relate to, but are not limited to, benefits accruing to Annapolis that are equal to the benefits accruing to Kings Transit, unreasonable delay, a change in position by the beneficiary, or that the claimant did not come before the Court with clean hands. [171] At paragraph 60, it stated: The analytical framework described in Garland, beginning at para. 28, and Kerr, beginning at para. 31, is as follows. 1. Was the defendant enriched by the plaintiff? Enrichment connotes a tangible economic benefit conferred on the defendant. This analysis is devoid of moral or policy considerations. In Kerr, the Court clarified that the benefit may be positive or negative. 2. Was the plaintiff deprived? The Garland and Kerr courts do not analyze this step in any depth. Deprivation or detriment does not appear to have been in serious dispute in these cases. In Garland, the transfer of money was directly from the plaintiff to the defendant. In Garland, the Court described deprivation as involving a tangible, economic deprivation, devoid of moral or policy considerations. In Kerr, the Court clarified that the deprivation is a "corresponding" deprivation that may, in respect of a benefit to the Defendant, occur directly or indirectly. 3. While the Garland Court described the issue in para. 28 as: "Is there a juristic reason for the enrichment?", the analysis begins at para. 38 and clearly frames the third question as whether there is "an absence of juristic reason" for the enrichment. The answer to the question may require a two-step analysis. As noted above, in response to academic and judicial commentary, the Court described the first step as requiring the deprived party to prove that none of the established justifications for the benefit apply. If it is successful, the evidential burden shifts to the beneficiary to establish a juristic reason for retention, either by establishing a new category of juristic reason, or alternatively, that in the particular circumstances of the case (without establishing a new category) the retention is justified. Justice Cromwell amplifies the juristic reason analysis at paras 40 to 46 in Kerr. 4. Can the Defendant avail itself of any defence? Garland effectively sets this up as a fourth question (para. 28.2 and beginning at para. 62). In Garland the defences advanced included the 'change of position' defence, and the 'regulated industry' or obedience-to-a-statute defence. In Kerr the defences included the 'mutual enrichments' defence. 5. What remedy, if any, should the court order? One of the features of equity is that equitable remedies are discretionary. The Supreme Court has not suggested, either in Garland or Kerr, that unjust enrichment has lost its equitable foundation such as to restrict the discretion of the Court in granting a fair remedy, or refusing any remedy. [172] The Applicants submit that the following factors lead to a finding that they are entitled to restitution based on unjust enrichment: 1. Savage led them “to believe that they had an understanding or agreement with him that if certain payment was made to him or his company and Sean Pickrem then he would not attempt to redeem the property”; 2. Savage led them “to believe that they had or were about to enter into a form of ‘partnership’ or collaboration whereby for a certain sum of money Mr. Savage would not redeem the property and the parties would operate the motel under some form of business arrangement”; 3. “MacMurtry, after being told by the Applicants of their plans to improve and repair the motel and run it is a motel, failed to specifically advise the Applicants that they could not do so or that compensation would not be considered with respect to their financial efforts to improve the motel”; 4. “Savage, without the knowledge of the Applicants, went ahead on his own to have the Respondent, Brocklin Enterprises Incorporated, purchase the property”; 5. “Bruce Gillis was at all material times in a conflict of interests and allegedly representing the interests of both the Town of Middleton and also representing the interests of the owner of the property”; and, 6. “Savage specifically promised the Applicants, at the time that he took over control of the Mid-Valley Motel property on June 15, 2012, that he would pay for items outlined in paragraph 38 of Mr. Spicer’s Affidavit, and the sums outlined in Exhibit 16 of Mr. Spicer’s Affidavit”. [173] The Court in McGrath v. Hazlett, (1973) 13 N.S.R.(2d) 567 (S.C., T.D.), as in the case at hand, dealt with a claim for restitution for improvements and repairs to a property that was ultimately redeemed. The Court dismissed the claim on the basis that the defendant had not engaged in wrongful conduct. At paragraph 18, the Court noted that: If the defendant knew the plaintiff’s mistaken belief in his rights to recover for expenditures made on the property and deliberately acquiesced in those expenditures being made in the hope of gaining future advantage, the relief would be granted. If the defendant had fraudulently led the plaintiff to believe that the property would not be redeemed and he was safe in proceeding with his expenditures I am sure that a Court of equity could not permit him to take advantage of his fraud. [174] However, at paragraph 19, the Court found that: From the very beginning he gave ample notice of the possibility of redemption to the plaintiff and to the Municipality. He went further and stated that the notice was being given so that there would not be any unnecessary expenditures made upon the property. [175] Then, at paragraph 20, the Court stated: The plaintiff, on the other hand, went ahead recklessly with improvements to the property. He learned that the owner had a year in which to redeem, but was anxious to make the building suitable for his own purposes and proceeded with construction even after receiving notice of intention to redeem. He claims to have believed that he had the right to recover any amounts spent on improvements, but this is an unreasonable assumption for any person to make under the circumstances. A simple reading of the legislation under which the tax sale took place would have indicated very clearly that he should limit his activities to repairs only, and since the old building was worth very little the amount of the repairs that could be justified would normally be very small. Before proceeding with expensive construction he could easily have sought legal advice and prevented his error. He preferred, however, in the face of all warnings to rely upon the hope that the redemption would not be made and to ready the property for his own use. [176] Shortly after the tax sale, commencing on April 23, 2012, there were a series of the three meetings amongst Spicer, Robinson, Savage and Gough. Pickrem also attended the second meeting, which occurred on April 24, 2012. The third meeting occurred around the end of April or in early May, likely on or about May 8. Only Spicer, Robinson and Savage were present for that meeting. [177] The affidavit evidence of Spicer and Robinson is that Savage told them that, if they paid him the $52,000 owed to Savage Oils, for oil delivered to the Motel, plus approximately $50,000 to Pickrem and Dupree for personal debts they incurred to keep the Motel running, there would be no redemption of the Property. They agreed with the price, but “wanted assurances no one else would redeem the property”. [178] They testified that, though they knew that the BDBC could redeem the Property, they were not concerned that it would do so because it had not shown up at the tax sale. They also testified that they did not believe that someone who purchased the Property during the redemption period could redeem as an owner. They believed it had to be the owner at the time of the tax sale. [179] They indicated that, during the last meeting, Savage told them that they could “own the motel by day’s end and to expect a call from … John Cameron, to go and pay him $100,000 that afternoon”. However, the call did not come. [180] Spicer testified that the question of the $100,000 payment came up, and was taken into consideration with a lot of interest; however, they did not affirm that they would pay it. Robinson testified that they “considered” paying the $100,000 if they could get unencumbered title. He added that, if BDBC was going to redeem, they “had concerns”. In addition, Spicer acknowledged that if BDBC redeemed, neither Savage Oils, nor Pickrem, would get their money. [181] On May 16, 2012, a warranty deed conveying the Property from Mid-Valley to Brocklin was executed. They received a letter dated May 29, 2012, from Savage, indicating he had acquired the Property and was offering to sell it to them for $395,000. They refused the offer. [182] They also indicated that, when they first bought the property of the tax sale, they did not think that they were permitted to run it is a business. However, during the first meeting, Savage had convinced them to speak with John Cameron, a lawyer who was familiar with the Municipal Government Act regarding that issue. They met with Mr. Cameron and determined that they could run the Motel as a business. [183] Spicer then proceeded to advise MacMurtry of their plans to repair and improve the Motel, with a view to operating it. Spicer indicated that MacMurtry told him to “go ahead with any repairs and then … submit bills to him and if there was a redemption they would review the invoices in the end to approve them or otherwise”. In addition, Robinson testified that, MacMurtry advised him that, in addition to looking at the invoices submitted, he would have to go through the Town Solicitor, and could not approve them on his own. Further, Spicer acknowledged that, by the end of April, he was aware that the Municipal Government Act required written approval of repairs so that they could be claimed as part of the redemption price. [184] They then proceeded to spend money on repairing and upgrading the Motel, and procuring goods to use in its operation. [185] However, MacMurtry did not approve, in writing, all repairs and upgrades, for inclusion in the redemption price. [186] Savage and Gough provided the following evidence in relation to the first two meetings. [187] There was an understanding that Spicer and Robinson would pay the $52,506.18 owed to Savage Oils, “provided they could get a guarantee that there would be no redemption”. They also discussed the mortgage the BDBC held on the property and the letter to Dupree offering to release it for $125,000, even though the debt was significantly larger. Savage told them that they would have to buy out that mortgage. However, they did not want to do so. So the possibility of redemption was discussed. That possibility made Savage very uneasy. [188] They confirmed that Spicer and Robinson were of the view they could not operate the Property as a business and that Savage did suggest that they call Mr. Cameron to discuss that. [189] During the second meeting, Spicer and Robinson agreed, in principle, to also pay Pickrem $40,000, for a total of approximately $92,000. However, they wanted to wait until the end of the redemption period. [190] Savage provided evidence that, during the third meeting, he asked for written confirmation from Spicer and Robinson that they would pay the $92,000. Robinson stated that they had never made any such promise to pay. Savage responded by telling them, at least three times, that he needed to protect himself. He indicated as well that his body language would have conveyed his discontent, as he “bristled” and did not use soft words. Because of that, he did not feel it was necessary to advise them that the negotiations were over. No further negotiations occurred. [191] He added that, following that third meeting, he looked into having the BDBC mortgage assigned to him for the $125,000 they had offered to take from Dupree as a payout. However, they refused to do so. Therefore, the only way he could protect himself was to arrange for the payout of the mortgage through Dupree and for the Motel to be conveyed to him from Mid-Valley. That is what happened. After receiving the warranty deed into Brocklin, he had numerous conversations with MacMurtry regarding redemption. MacMurtry indicated that he advised Spicer and Robinson about the intention to redeem. Spicer acknowledged that he was told that at least one of Savage’s companies would be redeeming. Savage offered to sell the property to Spicer and Robinson. They refused, stating that they were the owners of the Property. So he proceeded with the redemption process. [192] Spicer and Robinson acknowledged that they never agreed to pay the $100,000 and wanted to ensure that there would be no redemption by BDBC prior to doing so. Therefore, even on their own evidence, in my view, they could not have a legitimate expectation that their discussions would hold Savage from taking steps to protect the recovery of the debt owed to him, including by acquiring title to the Property and redeeming it. The fact that they wrongly believed only the owner at the time of the tax sale could redeem, in my view, does not make such an expectation legitimate. In my view, they wanted to try to avoid having to incur the expense of buying out the mortgage, because they did not feel there was a significant risk that BDBC would redeem. They knew that Mid-Valley had already let the property go for taxes. So there was little risk it would redeem. They did not think a subsequent purchaser, receiving title within the redemption period, could redeem. So they wanted to wait out the redemption period before determining whether or not they would pay the $100,000. In taking that approach, they were asking Savage to incur all risks associated with their attempt to save themselves money, and keep the property which they obtained at a bargain price. According to them, the discussions were mere negotiations, which would not bind Savage. [193] Savage and Gough’s description of the negotiation meetings, in my view, makes more sense in the circumstances, and I accept it. I find that Savage and Pickrem would have agreed that there would be no redemption initiated by them, if there had been a binding promise from Spicer and Robinson to pay the $92,000. I accept that Savage was uneasy with the risk that he would lose his $52,000 if BDBC redeemed. I accept that Robinson did tell him that they never promised to pay the $92,000. That makes sense because, even at the hearing of the application, both the Spicer and Robinson were still confirming that they did not agree to make that payment. Savage, having thought that they had agreed to make the payment, and being already concerned about the risk of waiting until the end of the redemption period to see whether or not BDBC would redeem, would understandably have been upset by that revelation. As such, the reaction he described, bristling and stating in firm words that he had to protect himself, makes sense. I accept that he left the meeting, leaving Spicer and Robinson with the clear message that negotiations were over. [194] Spicer and Robinson then proceeded to continue with repairs and improvements, and purchasing goods for the operation of the Motel. They knew that: redemption was a possibility; the Municipal Government Act required written approval for repairs be claimed as part of the redemption price; and, MacMurtry had not indicated that he would give written approval for repairs and improvements, he had only indicated that he would review the invoices and go through the Town Solicitor prior to determining which expenses to approve. [195] In my view, Spicer and Robinson were trying to improve the profitability of the Motel by making it more appealing for the immediate tourist season, and seizing an opportunity to buy bedding and towels at a closing sale, despite knowing of the risk that there might be a redemption and they might not be able to recoup some of their expenditures in the redemption price. [196] The result has been that there has been an enrichment of the Respondent Numbered Company, in that it has retained the benefit of the repairs and improvements which were not factored into the redemption price. To the extent that Savage has an interest in the Respondent Numbered Company he has also been enriched. There has been a corresponding deprivation to the Applicants, in that they have lost the benefit of the monies they invested in those repairs and improvements. There has not been any enrichment of the Town, Brocklin, Mid-Valley, nor Pickrem, which corresponds to that deprivation. [197] However, in my view, there was a juristic reason for the enrichment and corresponding deprivation. One of the examples of established juristic reasons noted at paragraph 41 of Kerr v. Baranow, is “where a valid statute denies recovery”. In the case at hand, Section 152, of the Municipal Government Act denies recovery, as part of the redemption price, for repairs made by the purchaser without the written approval of the treasurer. The Applicants are seeking to recover that which the Act denies recovery for. [198] Further, in my view, Savage did only what a reasonably cautious business person would have done to protect his ability to recover the money owed to one of his companies. There was nothing fraudulent in his actions or statements. He had already engaged in discussions with Dupree, well before the tax sale, including some eight months before the tax sale, regarding what steps they might take to secure the debt owed to Savage Oils by Mid-Valley. Part of those discussions included the possibility that he would buy the Motel. However, he was unable to attend the tax sale because he was away in Florida at the time. Nevertheless, he did not immediately proceed to purchase the Property and seek to redeem. Instead, in good faith, he approached Spicer and Robinson to see whether they would agree to pay the debt owed. They did not agree to do so, and wanted him to wait until after the redemption period before deciding whether they would or not. Savage did what he had to do to protect the financial interests of his company. [199] Spicer and Robinson were confident that Savage was not a redemption threat, because they did not feel that a subsequent purchaser could redeem. As such, they saw themselves in a superior bargaining position. They felt that Savage was at their mercy and took advantage of that in expecting him to assume all risks. Even after Brocklin acquired title to the property, Savage, on behalf of Brocklin still offered to sell the property to them. If they had purchased the property they could have retained the benefit of the repairs and improvements. However, they did not attempt to make any counteroffer, nor negotiate in any way. They simply took the cavalier approach of asserting that they were the owners, thus implying that Brocklin had not acquired any rights to the property. [200] In my view, Savage did not fraudulently, nor otherwise, lead Spicer and Robinson to believe that the property would not be redeemed. Any such forbearance from redemption would naturally have been premised upon agreement to pay the amount requested. Spicer and Robinson have acknowledged there was no such agreement. Further, in my view, it ought to have been clear to Spicer and Robinson, when Savage, during the third meeting, told them, in a firm voice, with a bristled demeanor, that he had to protect himself, that there would be no such forbearance from redemption. As soon as the Savage had taken the steps required to acquire title to the Property, through Brocklin, he approached MacMurtry regarding redemption. MacMurtry immediately conveyed the intention to redeem to Spicer and Robinson. As such, in my view, it cannot be said that Savage stood by and allowed Spicer and Robinson to continue making expenditures on the Property with the mistaken impression that they could recover them. In my view, Spicer and Robinson knew that there was at least a risk of redemption by BDBC and Mid-Valley, and that their expenditures would not be approved. [201] As in McGrath v. Hazlett, Spicer and Robinson went ahead with repairs and improvements in a cavalier and reckless fashion, knowing of those risks. [202] Consequently, in my view, it is not inequitable to allow the Respondent Numbered Company to retain the benefit of those repairs and improvements not factored into the redemption price. ISSUE 10: WHO IS THE OWNER OF THE CHATTELS PURPORTEDLY CONVEYED IN THE BILLS OF SALE FROM MID-VALLEY? [203] Pickrem, on behalf of Mid-Valley, signed a bill of sale to the Applicant Numbered Company dated April 25, 2012, purporting to convey ownership of “all the furniture, appliances, equipment, articles of adornment and other movable property situate on the premises” of the Mid-Valley Motel. [204] Pickrem provided evidence that he did not have authority to convey any assets of Mid-Valley. He indicated that the power of attorney given to him only authorized him to run the business. He understood that the document he was signing merely had the effect of loaning the chattels in question to Spicer and Robinson. [205] Neither he, nor Mid-Valley, were paid any money for the chattels. He had worked with the staff at the Motel for about 10 years. They were like family to him. He wanted them to be able to continue working. So he wanted to allow the chattels to be used to facilitate the continued operation of the motel for that purpose. He told Spicer and Robinson that he did not have authority to sell any property. Robinson replied that he was not selling them the property, so it should be fine. They promised to return the chattels should they cease operating the Motel. When Pickrem attended John’s Cameron’s office to sign the necessary paperwork he also told him that he could not sign anything for the sale of property and that he was there to sign over the use of the chattels. [206] Savage and Gough provided evidence that Pickrem made it clear to everyone at the second meeting that he had no authority to sell the chattels, and only authority to let Spicer and Robinson use them. [207] Spicer and Robinson provided affidavit evidence that Pickrem told them he had authority to execute a bill of sale on behalf of Mid-Valley. They did not give evidence in relation to whether or not he understood what a bill of sale was. On cross-examination, Spicer acknowledged that: Pickrem did not say he had authority to sell anything; he did not ask Pickrem what authority he had; and, he just assumed that Pickrem had a power of attorney since he was running the Motel while Dupree was away in Florida. Robinson admitted on cross-examination that he gave his word that if he did not continue the operation of the motel he would return the chattels. [208] The power of attorney pursuant to which Pickrem signed the bill of sale was not produced. Therefore, I cannot determine whether or not it authorized him to execute the document transferring ownership of any chattels belonging to Mid-Valley. However, considering all of the evidence on the issue of this bill of sale, and my previous observations on the credibility of the witnesses, I accept his evidence that it is his understanding that the power of attorney did not give him any such authorization. I accept that he signed the bill of sale in question believing that it was merely to confirm that Spicer and Robinson were permitted to use the chattels. He has nothing to gain from a declaration that the bill of sale did not convey ownership of the chattels. He had allowed them to be used for free. There is no evidence that he received any benefit from the same chattels being ultimately conveyed in a bill of sale signed by Bruce Gillis, as attorney for Dupree. Therefore, he had no personal financial reason to misrepresent that point. [209] I find that he signed the document under the mistaken belief that it was only to authorize the use of the chattels under loan. He did not intend to sign any document conveying ownership of them. I find that Spicer and Robinson knew, or were willfully blind to the fact, that Pickrem was mistaken as to the character of the document he was signing. They stood by and let him sign knowing of his mistaken understanding. Therefore, in my view, neither they, nor the Applicant Numbered Company can enforce the terms of the bill of sale. At best, the document would only have the effect of permitting the Applicant Numbered Company to use the chattels while it was operating the motel. It ceased doing so. Therefore, the document would no longer authorize it to use those chattels. [210] A bill of sale, dated June 5, 2012, from Mid-Valley to Brocklin, signed by Mr. Gillis, as attorney for Dupree, also purports to convey the chattels situate on the Motel Property. [211] There is no evidence that Mr. Gillis did not understand the character of the document he was signing on behalf of Dupree. [212] I find that the negotiations leading to the transfer of Mid-Valley’s moveable property were conducted between Dupree and Savage, and Dupree made the decision to effect the transfer, delegating to Mr. Gillis only the authority to sign the bill of sale on her behalf. Therefore, for the same reasons that I found the warranty deed into Brocklin valid, I find the bill of sale into Brocklin to be valid. [213] Therefore, Brocklin is the owner of the chattels conveyed in that bill of sale. CONCLUSION AND ORDER [214] For the reasons outlined, I conclude and order that: 1. Brocklin Enterprises Inc., on June 15, 2012, validly redeemed the Mid-Valley Motel Property sold at the tax sale on April 19, 2012; 2. $3747.28 is to be added to the redemption price to be paid by Brocklin Enterprises Inc. to the Town of Middleton, and to be repaid by the Town of Middleton to the Applicant Numbered Company, 3257581 Nova Scotia Limited; 3. Whereas the Town of Middleton has been withholding, since June 15, 2012, the full $157,283.12 it calculated should be repaid to the Applicant Numbered Company, 3257581 Nova Scotia Limited, following redemption, despite having determined it was proper to holdback only $32,863.28 pending receipt of additional information confirming payroll and utility expenses, which information was provided on or before June 27, 2012, the Town of Middleton shall pay prejudgment interest on $124,419.84 from June 15, 2012 to the date of judgment, and on the remaining $32,863.28 from June 27, 2012 to the date of judgment; 4. Brocklin Enterprises Inc. shall pay, directly to Applicant Numbered Company, 3257581 Nova Scotia Limited, prejudgment interest on the additional redemption amount of $3,747.28, from June 27, 2017 to the date of judgment; 5. Edward Brock Savage or the Respondent Numbered Company, 3263689 Nova Scotia Limited, shall pay, to the Applicant Numbered Company, 3257581 Nova Scotia Limited, $8,642.00 for the vacuums, bedding, towels, TVs and heating oil, with prejudgment interest from July 18, 2012 to the date of judgment; 6. Prejudgment interest shall be 5% per year, calculated simply; 7. The bill of sale to the Applicant Numbered Company, 3257581 Nova Scotia Limited, dated April 25, 2012, and signed by Sean Pickrem, on behalf of Mid-Valley Motel Limited, purporting to convey ownership of chattels of the Mid-Valley Motel Limited, is not a valid conveyance of those assets; and, 8. Brocklin Enterprises Inc. is the owner of the chattels conveyed in the bill of sale, dated June 5, 2012, from Mid-Valley Motel Limited to Brocklin Enterprises Inc. [215] I ask counsel for the Respondents, Brocklin Enterprises Incorporated, 3263689 Nova Scotia Limited, and Edward Brock Savage, to prepare the order. Muise, J.