R. England's Warehouse Ltd. v. Canadian Imperial Bank of Commerce

R. England's Warehouse Ltd. v. Canadian Imperial Bank of Commerce Court Court of Appeal Date 1996-05-15 Citation 1996 NSCA 131 Docket CA 123154 Judge/Registrar/Adjudicator Bateman, Nancy J. (Honourable Justice) (CA); Jones, Malachi C. (Honourable Justice) (CA); Flinn, Edward J. (Honourable Justice) Document Type Decision Decision Content C.A. No. 123154 NOVA SCOTIA COURT OF APPEAL Cite as: R. England’s Warehouse Ltd. v. Canadian Imperial Bank of Commerce, 1996 NSCA 131 Bateman, Jones and Flinn, JJ.A. BETWEEN: R. ENGLAND'S WAREHOUSE LIMITED ) Alison Scott Butler ) for the Appellant Appellant ) ) - and - ) ) Robert W. Carmichael ) for the Respondent CANADIAN IMPERIAL BANK ) OF COMMERCE ) ) Respondent ) Appeal Heard: ) May 15, 1996 ) ) ) Judgment Delivered: ) May 15, 1996 ) ) ) ) ) ) ) ) THE COURT: Appeal dismissed per oral reasons for judgment of Flinn, J.A.; Jones and Bateman, JJ.A. concurring. FLINN, J.A.: In 1988 the appellant executed a fixed and floating charge demand debenture in favour of the respondent to secure payment of a $950,000 loan. Following a period of arrears, the respondent called the loan on December 1, 1992; and, on February 10, 1993, presented the debenture for payment by the appellant. Foreclosure proceedings ensued with respect to the real property secured by the fixed charge provisions of the debenture. The foreclosure sale did not produce sufficient funds to pay out the debenture. The respondent then made application to Justice Davison, of the Supreme Court of Nova Scotia in Chambers, for leave to enter deficiency judgment against the appellant for the difference between the amount due on the debenture and the amount realized at the foreclosure sale. Following Justice Davison's decision, which was appealed to this Court, the deficiency has been fixed for an amount in excess of $400,000. In November 1995, Justice Davison granted a further order for foreclosure and sale with respect to the real property secured by the floating charge provisions of the debenture. It is from this decision of Justice Davison that the appellant now appeals. It is our unanimous opinion that this appeal should be dismissed. Justice Davison made no error when he concluded, by reference to s. 3.2 of the debenture, that since the loan was in default, the respondent was entitled to realize on the security which was charged by the debenture, and that the property sought to be foreclosed was so charged. He said: "The debenture clearly states the plaintiff can realize on the "security", which is defined as the mortgages and charges in the document, and enforce its rights by proceedings for sale and foreclosure for "all or any part of the Charged Premises"." Justice Davison also, quite properly, made reference to the fact that the parties had agreed, in 1994, as to how they would proceed if there was a deficiency from the foreclosure and sale of the real property secured by the fixed charge provisions of the debenture. Justice Davison said: "Notwithstanding the position of both parties with respect to the legal action, it seems clear the parties reached an agreement in August 1994. It is clear from the order of Justice Nunn the parties were in dispute concerning all property charged by the debenture and agreed the plaintiff "shall be at liberty" to apply to the Supreme Court for an order foreclosing "any other property charged by the Debenture" if a deficiency remains after sale of fixed charges. I have found a deficiency remains." Finally, Justice Davison clearly provided in his decision, and the order issued pursuant to it, that the foreclosure and sale remedy was only available once the actual deficiency had been determined, following the appeal of his earlier decision with respect to the deficiency, and that has now been done. The appeal will, therefore, be dismissed. The respondent shall have its costs of this appeal which we hereby fix at $1,500 plus disbursements. Flinn, J.A. Concurred in: Jones, J.A. Bateman, J.A. C.A. No. 123154 NOVA SCOTIA COURT OF APPEAL BETWEEN: R. ENGLAND'S WAREHOUSE LIMITED ) Appellant ) - and - ) REASONS FOR ) JUDGMENT BY: CANADIAN IMPERIAL BANK ) OF COMMERCE ) ) FLINN, J.A. ) (Orally) Respondent ) ) ) ) ) ) )