Pew v. Zinck et al

Pew v. Zinck et al
Collection
Supreme Court Judgments
Date
1953-02-23
Report
[1953] 1 SCR 285
Judges
Estey, James Wilfred; Kellock, Roy Lindsay; Locke, Charles Holland; Cartwright, John Robert
On appeal from
Nova Scotia
Subjects
Priorities and hypothecs
Decision Content
Supreme Court of Canada
Pew v. Zinck et al, [1953] 1 S.C.R. 285
Date: 1953-02-23
Alberta C. Pew Appellant;
and
Harry L Zinck (Plaintiff) and Lobster Point Realty Corporation, Lyttleton B. P. Gould and The Eastern Trust Company (Defendants) Respondents
1952: June 23, 24, 25, 26; 1953: Feb. 23
Present: Rand, Kellock, Estey, Locke and Cartwright JJ.
ON APPEAL FROM THE SUPREME COURT OF NOVA SCOTIA IN BANCO
Mortgagor and Mortgagee—Foreclosure and Sale—Following sale, equity of redemption extinguished and Purchaser entitled to Court's approbation as matter of right—R.S.N.S. 1923, c. 140, ss. 14 and 16—The Judicature Act, S. of N.S., 1919, c. 32, o. 51, r. 8.
Under the law of Nova Scotia the Court has no jurisdiction to allow a mortgagor of lands to redeem after a sale under a decree but before conveyance and before a report has been made to the Court and approved. Dicta in Stubbings v. Umlah 40 N.S.R. 269 at 271; Ritchie v. Pyke 40 N.S.R. 476 at 478, disapproved. Per: Locke J. While r. 8 of o. 51, The Judicature Act, R.S.N.S. 1919, c. 32, requires either the plaintiff in a foreclosure action or the sheriff after the sale to secure the approval of the Court, the Appellant in the Present case was entitled as a matter of right to such approval since the sale had been conducted in the manner directed by the Court and the regularity of the proceedings was not impeached. The equity of redemption was extinguished by the sale.
APPEAL from a judgment of the Supreme Court of Nova Scotia in Banco (Illsley C.J. and MacQuarrie J. dissenting)[1], affirming the decision of Hall J.[2] permitting the respondent Lobster Point Realty Corporation, the owner of the equity of redemption in mortgaged lands, to redeem after foreclosure and sale by the Sheriff.
W. P. Potter, Q.C. for the appellant.
Donald McInnes, Q.C. for Lobster Point Realty Corp., and L. B. P. Gould, respondents.
The judgment of Rand, Kellock, Estey and Cartwright, JJ. was delivered by:—
RAND J.:—The question on which this appeal hinges is whether or not under the law of Nova Scotia the court has jurisdiction to allow a mortgagor of lands to redeem after a sale under decree but before conveyance and before a report has been made to the court and approved.
Several special features of that law should first perhaps be mentioned. The rule, as far back as 1833, authorized and since then followed, is that long ago adopted in Ireland under which, instead of foreclosure as in England, the realization of a mortgage is by way of sale. The order formally forecloses the equity of redemption and directs a sale, but reserves a further right of redemption until the day of the sale. By c. 140, R.S.N.S. 1923, continuing, in this respect, the provision of preceding enactments, the sale, unless otherwise ordered by the court, shall be made by the sheriff of the county in which the lands lie, who is authorized to execute a deed which "when delivered to the purchaser shall convey the land ordered to be sold." The purchaser can pay the price and the sheriff execute the deed immediately upon acceptance of the bid. The sheriff renders as report of the proceedings to the court, but whether that report must be confirmed is disputed. Rule 8 of Order 51 of the Supreme Court practice provides that where an order is made directing any property to be sold,
the same shall, unless otherwise ordered, be sold, with the approbation of the court or a judge, to the best purchaser that can be got, the same to be allowed by the judge, and all proper parties shall join in the sale and conveyance as the judge directs.
This, with an immaterial change, reproduces Order 51 of the Rules of the Supreme Court, 1883. This latter was, in turn, taken from Rule 13 of Order 35 adopted by the Court of Chancery in 1852 under the Chancery Procedure Act, c. 86, 15 & 16 Vitt. For the purposes of the matter before us, it is, in my opinion, of no significance that the rule applies, but on the assumption that it does, I examine the main question.
Both the general practice in the Court of Chancery and the statute here speak of a "sale" of land, and the decisions make it clear that the transaction is not confined to a mere voluntary payment of money in exchange for the conveyance.
In Ex parte Minor[3], 32 E.R. 1206, in which the question was the point of time at which the equitable ownership became attributed to the purchaser, Lord Eldon had this to say:—
The question '(whether the purchaser must bear a loss by fire before confirmation of the sale) must depend upon the point, what is the date and time of the contract, at which it can be said to have been complete. Is the bidding in the Master's office the contract between the Court and the bidder; or only an authority to the Master to tell the Court, that if the Court approves, the Court may make a contract with him upon the terms proposed . . . In some of the cases that have been cited, the change of property is said to be from the date of the Report: in others from the time of the conveyance: so, that, though confirmed as the best purchaser, if he had not got the conveyance, he would have been entitled to say, the estate was not his. That cannot be according to the principle. Suppose, this person had insured the premises, while in the Master's office, from fire: would he according to the cases in late times have had an insurable interest? His interest is not near so thin as many, that have been considered insureable.
The decree was that the loss must fall upon the vendor and that there be deducted from the purchase price the amount of deterioration in value found by the master. But any inference that until the order of confirmation either the purchaser or the court could withdraw is clearly unwarranted. In Anon[4], after the report had been confirmed nisi, a motion made that the best bidder should complete his purchase and pay the money on or before a specified day was refused. In Lord Chancellor Loughborough's view, until confirmation the purchaser was always "liable to have the biddings opened; until that non constat that he is the purchaser": in other words, the purchaser could not be compelled to pay before confirmation of the report as the time fixed for performance, but with the implication that there is a 'continuing obligation and that he can be so ordered thereafter. In Else v. Barnard[5], property ordered to be sold by the court was bought in, but 'before the auctioneer had 'left the rostrum the unsuccessful bidder signed a contract to purchase it 'at the reserved price, improperly disclosed to him, slightly higher than the bid. Before confirmation, the purchaser repudiated and the question was whether he could do so. The Master of the Rolls, Sir John Romilly, holding that he could not, says:—
I do not, at this present time, go into the question or consider whether that is a sale by auction or not, but I think it is impossible for Mr. Courtauld to say that it is not to be treated as a sale by auction, for he signs a bidding paper, by which he agrees that it shall be so treated; it is impossible for him afterwards to say that he is not bound by it. . . I am of opinion that this amounts to a contract, by which he agrees that it shall be treated as a sale by auction; that he must be treated as the highest bidder at the sum of £2,500; that he cannot repudiate his contract, but must be held to be the purchaser.
In Anson v. Towgood[6], where the question was when the purchase should be deemed to become effective to determine the right to receive interest on consols, Lord Eldon observed:—
Can anything turn upon the report not being confirmed? There was a case about a house being burned down before the confirmation of the report (ex parte Minor[7]). But if the tenant for life had died the same night, must not the purchase money have been paid? The report I think, when confirmed, must have relation back to the purchase; and the contract, I apprehend, was made the moment that the purchaser's name was entered in the Master's book. If the purchaser had lived till the 6th of July, and then died, he would have had nothing if he is not entitled to these dividends.
It is settled, too, that obedience to the contract can be enforced either 'by ordering a resale subject to the payment of all costs and any deficiency by the first purchaser or by attaching the latter to compel him to carry the bargain out: Lansdown v. Elderton[8]; Gray v. Gray[9].
The conclusion from this is that on the acceptance of a bid either a contract is entered into by the purchaser with the court in its own capacity or as representing the parties in interest, or in the case of Nova Scotia, conceivably with the sheriff, that the one will buy and the other sell the land, subject only to the approval of the report; or the purchaser submits to the jurisdiction of the court on those contractual terms. The obligations are reciprocal and from them neither the court nor the purchaser can withdraw except upon the failure of the condition; but, apart from consent, only by its operation, which is determined by rules of law, can the obligation and correlative right of the purchaser be destroyed.
On what grounds, then, may the court refuse to confirm? Although it would be impossible to enumerate them all, fraud, mistake, misconduct by the purchaser, error or default in the proceedings are well established. But the controlling fact to which these grounds give emphasis, is that the purchase can be defeated only by juridical action. To hold, on the other hand, that the court, acting otherwise than in setting aside the sale, can destroy such a right would be to attribute to it the repudiation of its own contract without proper cause.
But it is said that so long as the court retains the power of 'approval, the original jurisdiction to permit redemption is preserved and that this is a further condition to which the purchaser submits himself. Redemption in that case would be an act intercepting the approval, not a ground for refusing approval: and allowing it would, on the theory advanced, wipe out all steps following the order for sale. Since no case has been cited in which that has been done, we have no indication of how the resulting matters would be dealt with, such as the purchaser's discharge, the costs and expenses, the deposit, the reconveyance where the deed has been given before redemption. In the last situation, it would be extraordinary that the court should permit the instrument to remain outstanding.
If such a condition has, for the past century, been annexed to sales under decree, we surely would have some reference to it in the cases or in the standard works on equity practice; but the researches of counsel have failed to discover one instance in which such a power has been exercised in any jurisdiction within the British Commonwealth. There are a number of authorities directly in point from the United States: Brown v. Frost[10], holding that there was no power to redeem after a sale, although the mortgagee was the purchaser: Pennsylvania Company v. Broad St. Hospital[11], declaring that the mortgagor's right of redemption "must be exercised before the sheriff's hammer falls"; Parker v. Dacres[12], in which the United States Supreme Court, speaking through Harlan J. at p. 47 said:—
In the view we take of this case it is unnecessary to express an opinion whether the provision relating to sales under execution, properly interpreted, give a right of redemption after sale under a decree of foreclosure. If it did not, the decree below must be affirmed, for a right to redeem, after sale, does not exist unless given by a statute.
Young's Appeal[13], in which Ross J. on appeal used this language:—
The bona fide purchaser, at a public sale of land, the moment it is knocked off to him, if .he complies in all respects with the conditions of sale, instantly acquires a vested right to the property sold.
and
Gibson v. Winslow[14], in which it is stated:—
The moment the land was struck down, the interest of the purchaser attached.
In Gordon Grant & Co. v. Boos[15], action had been brought to enforce a mortgage of lands in Trinidad and for sale in default of payment. The property was sold by auction, purchased by the mortgagees and later disposed of for a much larger price. Thereafter the mortgagees sued in New York to recover on the personal covenant the mortgage debt less the amount realized on the sale under the decree. The mortgagor thereupon sought a declaration that his right to redeem had been revived and for an injunction, and the West Indian courts granted the latter relief. The Judicial Committee, speaking through Lord Phillimore, in reversing the judgment, had this to say on the nature of judicial sale:—
No doubt the sale realized very little, and the mortgagee, who had leave to bid, apparently bought a valuable property for a small sum; and their Lordships can understand that the Courts in the West Indies may have felt some aversion to granting the mortgagee further advantages. But it was a judicial sale which is not impeached, and the mortgagor, who could have made a bid or procured a bid, must take the consequences.
There remains the question whether the existence of such a condition must be gathered from a uniform practice of the court in Nova Scotia, the disturbance of which might adversely affect existing rights or titles. The most diligent search by counsel has uncovered no case in which it has been directly decided. What is relied upon is Stubbings v. Umlah[16], decided in 1900, in which Meagher J. in an obiter dictum expressed himself as follows:—
An absolute right of redemption exists in this Province, up to the completion of the sale, at least, if not, as I am inclined to think it does, up to the granting of the final order of confirmation.
Even after that, especially where the plaintiff is the purchaser, and retains the title, the court, it seems to me, possesses a discretionary power to decree redemption, just as the court in England possesses such a power after a foreclosure order absolute has been made.
There is, therefore, at least, this distinction between our decree and the English final order: that, under the former, the right of redemption exists absolutely, pending the sale and final confirmation thereof; while under the latter, no such absolute right exists.
Again by the same judge when speaking for the court consisting of MacDonald C.J., Weatherbe and Meagher JJ. in Ritchie v. Pyke[17], but likewise obiter:—
Under our practice which has prevailed for nearly half a century at least, no time for redemption is fixed where a sale is ordered, but the right to redeem, of course, endures until the proceedings have been finally confirmed by order of the court, after the sale, payment of the price, and conveyance to the purchaser have been completed.
In Wallace v. Gray[18], on the other hand, Graham E.J. at p. 288 said:—
In this province, where there is no intervening step between the sale and the deed, no confirmation of sale, payment into court, inquiry as to title, settling and execution of the deed by the proper parties, etc., before the deed is given, all causing delay, the amount of deposit required is not important. The deed, upon the name being inserted, may be executed by the sheriff directly the hammer falls.
and in Power v. Foster[19], at pp. 487 and 488, he speaks to the same effect:—
The sale more resembling .a sale of land under execution followed by a deed executed by the sheriff, and not by the party, there has grown up a practice differing from that prevailing in other places. The deed is given by virtue of a statute; and the provisions applicable to this case would be the Act of 1890, Ch. 14, secs. 5, 6 and 10.
I take this language to imply that the execution of the deed under statutory authority would end the matter; but if, contrary to his apparent understanding of the practice, confirmation should be necessary, then the contract would be subject only to the setting aside, on proper grounds, of the proceedings themselves.
The question seems to have been raised still earlier. In Slayter v. Johnston[20], a suit for redemption, Young C.J. at pp. 508-9 said:—
We are told that the foreclosure might be opened, which would be a strange thing, at the instance of the mortgagee, and a very startling thing if it could be done at the instance of the mortgagor in this country after a sale.
and Wilkins J. at pp. 522 and 523:—
If there had been, and there has not been, so far as we are informed, an instance in this Province, of opening a decree of foreclosure after sale, where there was no fraud or illegality, and if an authority were adduced, as there has not been, warranting us to take that judicial course in a case where a mortgagee elected to purchase at the sale; still, it would be our duty to proceed further, and, considering the origin of the doctrine contended for to inquire, how far it would consist with adjudicated cases, or (in the absence of these) with equitable principles, to apply it to such a case as this.
In Bigelow v. Blaiklock (undated but between July, 1873 and December, 1877) Russell's Equity Decisions of Ritchie E.J., the mortgagor claimed a re-sale on the ground of a misunderstanding at the sale because the properties were described differently in the advertisement and in the mortgage and writ. He was held entitled to a re-sale notwithstanding that the mortgagee, after having purchased at the sale, had agreed to sell one of the lots, since he had obtained no deed and the sale had not been confirmed. Ritchie E.J. at p. 25 said:—
Though I have in this case ordered a resale on the grounds I have stated, the plaintiff being the purchaser, and under similar circumstances the result might have been the same if a stranger, possessed of the same knowledge, had been the purchaser, yet there is a manifest distinction between the plaintiff in a suit and a stranger; and I do not wish it to be inferred from what I have said, that in a case where the plaintiff himself has bid on the mortgaged property, and the amount of principal, interest and costs is tendered to him before the deed is given and the sale confirmed, he would not be required to take it and give up the purchase. This point, however, is not before me at present.
In Diocesan Synod N.S. v. O'Brien (1879) Russell's Equity Decisions, 352, a purchaser at a foreclosure sale who had made a deposit of 10 per cent as required by the terms of the sale refused to complete on the ground that a good title in fee simple could not be given. The Court declined to enforce specific performance, but ordered the payment of the deposit to the mortgagee. Ritchie E.J. at p. 354 remarked:—
Inasmuch as the terms of sale are clear and unambiguous, •and the purchaser by paying the balance of the purchase money could have got all that he bid for and agreed to buy, he cannot recover back the deposit, the vendor being willing to convey to him all that was offered for sale.
It would seem to be an astonishing proposition that the sale under such a power and a fortiori, the title, before confirmation, should still carry with it an inverted equitable clog of a right to redeem. Between the conveyance and the confirmation, the property might have passed through the hands of several bona fide purchasers; what would their position be? Would they, through their notice of the title at sale, be bound by that equity? The judicial statements brought to our attention pertinent to this are those first of Jessel M.R. in Campbell v. Holyland[21]:—
Under what circumstances that discretion should be exercised is quite another matter. The mortgagee had a right to deal with an estate acquired under foreclosure absolute the day after he acquired it; but he knew perfectly well that there might be circumstances to entitle the mortgagor to redeem, and everybody buying the estate from a mortgagee who merely acquired a title under such an order was considered to have the same knowledge, namely, that the estate might be taken away from him by the exercise, not of a capricious discretion, but of a judicial discretion by the Court of Equity which had made the order.
and of Meredith, C.J.C.P., to the same effect, in Dovercourt Land Building & Savings Co. v. Dunevegan Heights Land Co.[22]. But proceedings in foreclosure and those for sale under statutory authority are essentially different: the one deals with an equitable creation of the court, the equity of redemption, the other with a statutory power to convey both the legal and beneficial interests of the mortgagor in the land. I am quite unable to accept the view that the statutory sale is burdened with a discretionary right of redemption in the absence of an express term in the conditions of sale, or an undisputed practice or rule of court; whether such a term, practice or rule could 'be annexed to the power where the intention that it should be so could not be inferred from the legislation, it is unnecessary to consider: nothing of the sort is present here. A sale under a power in the mortgage or given to the mortgagee by statute means what the term implies, a power to make an out-and-out transfer of ownership: Waring (Lord) v. London & Manchester Assurance Co.[23]; Saltman v. McColl[24], on what ground, then, should we attach to a like statutory power given the court a collateral condition that can nullify its exercise?
That no disturbance of titles could result from its rejection in this case admits of no doubt. If a purchaser has acquiesced in a redemption notwithstanding his contract, it would mean that he had abandoned it or that it had with his consent been rescinded or otherwise terminated. If there had been a conveyance, the contract had become fully executed and he must have re-conveyed or acquiesced in an order setting it aside, which he would now be estopped from questioning: in either case, if acting under a mistake, it would have been as to his rights in law.
The question of the right to raise before us the point of the discretionary jurisdiction to permit redemption, which had been decided in an earlier appeal to the Court en banc, was challenged. The issue here is between the mortgagor and the purchaser in which the mortgagee is not interested, and although the action was brought in 1948, that issue arose only in 1950. By s. 41 of the Supreme Court Act this Court has jurisdiction to grant leave to appeal from the first ruling, and in the circumstances, but without touching the question of our right, in this appeal, to deal with the first judgment without it, leave is given and all necessary ancillary orders made, to enable the question now to be dealt with.
I would, therefore, allow the appeal and direct the conveyance of the lands in accordance with the contract made at sale. The appellant will have her costs in this Court and in the Court en banc on the second motion: there will be no costs of the first motion to the Court en banc or on either application in chambers.
LOCKE J. :—This is an appeal by Alberta C. Pew, a purchaser of lands at a mortgage sale, from a judgment of the Supreme Court of Nova Scotia in banco by which an appeal of the present appellant from a judgment of Hall J., where by the respondent corporation was declared to be entitled to redeem the lands in question and in respect of which an order for foreclosure 'and sale had been made upon the application of the respondent Zinck was dismissed.
The facts, in so far as they appear to me to be relevant, are as follows: On September 30, 1929, the respondent Zinck conveyed to the respondent Gould, Sr. the lands in question, in consideration of the payment of a sum in cash and the granting of a mortgage dated October 23, 1929, to the said Zinck in the sum of $25,000, the balance of the purchase price, such sum to be repaid in instalments over a period of eight years. In the year 1931 Gould conveyed the lands, subject to the mortgage, to the respondent corporation. During the interval between this conveyance and February 26, 1948, when the writ in the present action was issued, there were various defaults in payment under the mortgage: in the year 1934 mortgage foreclosure proceedings were instituted by Zinck and an order for foreclosure and sale made but these proceedings were not carried to a conclusion, the parties entering into an agreement extending the time for payment of the mortgage moneys: this was followed by other agreements the last of which was made on October 1, 1938, which substituted new terms and times for payment for those provided by the mortgage. In the present action the plaintiff alleged a series of defaults on the part of the mortgagor and the respondent corporation in respect of instalments and interest and principal and interest due under the terms of the mortgage, as amended by the said agreement, and in payment of various taxes and claimed payment of the principal amount due with accumulated interest.
and in default of payment foreclosure of the said mortgage as altered or modified by the said agreement of the 1st of October 1938 and/or rescission of the said Agreement, sale of the mortgaged premises and possession of the same; and if the purchase money is insufficient to pay what is found to be due to the plaintiff for principal, interest, insurance premium, taxes, rates, charges and interest and costs of this action the plaintiff further claims an order for judgment for the payment of the deficiency against the defendant, Lyttleton B. P. Gould, mortgagor as aforesaid.
While the defendant corporation and Gould entered a statement of defence to the action, they did not appear when the action was set down for trial and on November 25, 1949, Parker J., after hearing evidence for the plaintiff proving the various defaults and the amount of the sum due, found that the amount due on the mortgage and on the agreement was the sum of $15,266.10 as of October 2, 1949, with interest on the principal sum secured at the rate of six per cent from that date and directed that the interest of the respondent corporation in the lands and premises be foreclosed and that the property be sold. The formal judgment was entered on December 16, 1949, and included the following terms:—
AND IT IS FURTHER ORDERED that the estate, interest and equity of redemption of the Defendant, Lobster Point Realty Corporation, and of all parties claiming or entitled 'by, through or under the Defendant, Lobster Point Realty Corporation, in the lands and premises described in the Mortgage be forever BARRED AND FORECLOSED and that a sale of the mortgaged property described in the statement of Claim herein be made by the Sheriff of the County of Lunenburg after four notices in the "Chronicle-Herald" and in the "Mail-Star" newspapers published at 'Halifax in the County of Halifax alternatively by two notices in each of the said newspapers for at least thirty days prior to the day appointed for such sale and by one notice in the "Progress-Enterprise" newspaper published at Lunenburg, in the County of Lunenburg for at least 30 days prior to the day appointed for such sale and by handbills :posted in the municipality of Chester in the County of Lunenburg for at least twenty days before the day appointed for such sale.
This was followed by a direction that unless before the day appointed for the sale the amount found due, together with the costs and disbursements thereafter referred to, should 'be paid to the plaintiff:—
the said Sheriff shall proceed to sell and execute to the purchaser or purchasers thereof at such sale a Deed or Deeds conveying and which shall convey to him or them all the estate, right, title, interest, claim, property and demand of the Mortgagor, Lyttleton B. Gould and of the defendant, Lobster Point Realty Corporation, owner of the equity of redemption, and of each of them at the time of the making of the Mortgage and at the time of the making of the Agreement foreclosed in this action, or at any time since, and of all parties claiming or entitled by, from or under the original Mortgagors or either of them of, in and to the lands purchased at such sale.
This was followed by a term providing for the disposition by the sheriff of the proceeds of the sale, for paying the arrears of taxes upon the lands, the costs of the proceedings, the amount found due as the mortgage debt and interest, the amount paid by the plaintiff for fire insurance premiums on the property and the balance, if any, to the Accountant General of the Supreme Court to abide further order.
The property was duly advertised for sale by the sheriff in accordance with the directions of the judgment and on March 25, 1950, 'bids were asked at public auction and on behalf of the appellant Edmund Fader offered the sum of $18,000, a bid which was accepted by the sheriff. The plaintiff's agent, Edmund Fader, thereupon paid to the sheriff a sum of $2,300 on account of the purchase money and, at the sheriff's request, signed a memorandum endorsed on the back of one 'of the posters advertising the sale which read as follows:—
Lunenburg, N.S.
March 25, 1950.
I acknowledge purchasing at foreclosure sale this day the property as within described for the sum of $18,000.
Edmund Fader
Agent for Mrs. Alberta C. Pew of Ardmore, Penn.
Married Woman.
Fader then inquired from the solicitor for the plaintiff as to when he could expect to receive a deed of the property, saying that he would be prepared to pay the balance of the purchase price whenever it was ready and was referred by the solicitor to the sheriff. On April 21, 1950, Fader, accompanied by the solicitor for Mrs. Pew, attended upon the sheriff and paid the balance of the purchase price of $18,000 and asked for a deed. On May 22, 1950, the solicitors for the plaintiff moved before Hall, J. for an order to confirm the sale and on this application the respondent corporation and the respondent Gould were represented by counsel and asked that an order be made declaring that the respondent corporation was entitled to redeem the property. Mrs. Pew was also represented by counsel on this application. After argument, Hall J. made an order to the effect that the respondent corporation was entitled to redeem the property sold, by paying to the plaintiff the sums specified in the order for foreclosure and sale. and certain sums for costs on or before May 8, 1950, and redirecting that if such redemption took place the sheriff should refund to Mrs. Pew the amounts paid on her behalf to the sheriff.
By order of the Supreme Court in banco, Mrs. Pew was granted leave to appeal from this order and, on this appeal, the order of Hall J. was set aside and the matter remitted to him to permit the respondent Zinck to renew his motion to confirm the sale, the respondent corporation, the respondent Gould and the present appellant to be at liberty to file further affidavits upon the renewal of the hearing. All of the members of the Court were of the opinion that, despite the sale, the Court was not in the circumstances without power to permit redemption. On April 10, 1951, Hall J., after again hearing the matter and considering the further material, found that the respondent corporation should be permitted to redeem upon the terms set out in his previous order. The present appellant appealed from this order and by the decision of the majority of the members of the Court the appeal was dismissed. Ilsley C.J. and MacQu'arrie J. who dissented, were of the opinion that the material filed did not disclose a proper case for such relief and would accordingly have set aside the order of Hall J.
No objection of any kind is made to the regularity of the proceedings taken by the plaintiff in the action up to the time of the holding of the sheriff's sale. While in asking for an extension of time for redemption the respondent Corporation and Gould filed some evidence in the form of affidavits, in an endeavour to show that the sale had been made at an undervalue, it is not suggested that this was a ground for impeaching the regularity of the sale. The present appellant was an entire stranger to the proceedings up to the time the sale was held. It is said on her part that it was unnecessary that any application should have been made by the plaintiff in the action to confirm the sale. The question to be determined on this appeal is as to the nature of the rights of a purchaser at such a sale which, assuming confirmation to be necessary, has not been confirmed.
The appellant who had been permitted to intervene in the litigation by a rule of the Court did not appeal from the first judgment of the Court in banco. The question as to whether the first judgment of that Court in which it was decided that the Supreme Court of Nova Scotia might in a proper case extend the time for redemption after a sale has been held, pursuant to the judgment of the Court, was a final judgment and whether, accordingly there having been no appeal, the matter was to this extent res judicata, has been argued before us. The appellant, while contending that that judgment was interlocutory in its nature, asks leave to appeal if we should be of a contrary opinion. Since the issues raised on the appeal arise entirely from matters occurring after the 1949 amendment to s. 41 of the Supreme Court Act, this Court has, in my opinion, jurisdiction to grant such leave and, without expressing a decided opinion as to it being necessary, I would, in the circumstances of this case, grant leave to the present appellant to appeal from the first judgment.
In deciding that in a proper case the Court might permit redemption on the application of the mortgagor after the premises had been sold by the sheriff pursuant to a judgment of the Court, the majority of the learned Judges of the Supreme Court in banco expressed the view that a statement of the law made by Sir George Jessel M.R. in Campbell v. Holyland[25], might properly be applied. In that case, after saying that an order for foreclosure, according to the practice of the old Court of Chancery, was never really absolute and that the principle applied has always been that, though a mortgage is in form an absolute conveyance when the condition is broken in equity it is always security, and that courts of equity interfered with the actual contract to this extent by permitting redemption after foreclosure in a proper case where the mortgagee retained title or control of the property, the Master of the Rolls said in part (p. 172) :—
Under what circumstances that discretion should be exercised is quite another matter. The mortgagee had a right to deal with an estate acquired under foreclosure absolute the day after he acquired it; but he knew perfectly well that there might be circumstances to entitle the mortgagor to redeem, and everybody buying the estate from a mortgagee who merely acquired a title under such an order was considered to have the same knowledge, namely, that the estate might be taken away from him by the exercise, not of a capricious discretion, but of a judicial discretion by the Court of Equity which had made the order.
Reliance was also placed upon a passage from the judgment of Meredith C.J.C.P. in Dovercourt Land Building and Savings Co. v. Dunvegan Heights Land Co.[26], which reads (p. 108) :—
It is accurately said that a Court of Equity is always ready to hear a meritorious application for relief against a foreclosure, and will open it whenever good and substantial reasons for such a course are shown to it. . . the true equitable principle has always been that the mortgagor may be permitted to redeem when the equities in favour of it undoubtedly outweigh all that are against it.
This statement of the learned Chief Justice was founded primarily on what had been said by the Master of the Rolls in Campbell v. Holyland (supra).
The accuracy of that portion of the judgment of Sir George Jessel which is above italicized has not as yet been considered in this Court. Since the present case is as to the status of a purchaser at a judicial sale, it is not necessary for the disposition of this matter to consider it. It may be noted, however, in passing, that the purchaser whose rights were considered in that case had not purchased the property from the mortgagee after foreclosure, rather had he purchased the mortgagee's interest after the decree nisi but before the granting of the decree absolute. While it was Campbell, the mortgagee, who applied for the decree absolute, he did so on behalf of the purchaser Ford. At the time of the transaction between these persons, therefore, Campbell had not acquired title to the mortgaged property and could sell merely his interest as mortgagee. These being the facts, the portion of the quotation to which I refer was clearly obiter.
In considering the position of the appellant after her bid for the property was accepted by the sheriff and she had, through her agent, paid part of the purchase money and bound herself to pay the balance, the question as to the necessity of thereafter obtaining an order approving the sale while not, in my opinion, decisive, should be considered. The order for the sale of the property in this matter was made under the powers vested in the Court by An Act relating to the Law and Transfer of Real Property (c. 140, R.S.N.S. 1923), by The Judicature Act (e. 32, Statutes of N.S. 1919) and by Rules of Court made under powers conferred on the Judges of the Supreme Court by statute and having legislative approval. Rule 8 of Order 51 of the Supreme Court of Nova Scotia provides that where a judgment or order is given or made directing any property to be sold:—
the same shall, unless otherwise ordered, be sold, with the approbation of the court or a judge, to the 'best purchaser that can be got, the same to be allowed by the judge, and all proper parties shall join in the sale and conveyance as the judge directs.
The text of this rule, with a slight change which does not alter its meaning, is taken from Rule 3 of Order 51 of the Rules of the Supreme Court 1883, adopted in England in that year. The English Rule 3, in turn, was in the same terms as Rule 13 of Order 35 adopted in the Court of Chancery on October 16, 1852, under powers conferred upon the Judges by s. 48 of the Chancery Procedure Act (c. 86, 15 & 16 Vict.). Prior to the Chancery Procedure Act there was no statutory authority in England for a sale of property in proceedings upon a mortgage and the practice, unlike that in Ireland, was to order a foreclosure. The Rules of Court made under the Chancery Procedure Act adopted the practice which had theretofore been followed in regard to sales of land in administration and other like actions. That practice is described in the first edition of Daniel's Chancery Practice, Vol. 2, p. 92, published in 1837. If, at the sale, a sufficient bid was obtained, the bidder was required to sign a memorandum whereby he agreed to become the purchaser of the property, and, thereafter, to procure a report of the Master showing the result of the sale and then apply to the Court by motion for its confirmation.
While Rule 13 of Order 35 of the Court of Chancery was supplemented 'by other rules defining the procedure to be followed, which was in effect simply 'an adoption of the previous practice, in my opinion, the language 'of the rule itself made it clear that, after the holding of the sale directed by the order, the approval 'of the Court was to be obtained. The sale was to be made, with the approbation of the Judge, "to the best purchaser that can be got, the same to be allowed by the Judge." Clearly, "the same" refers to a sale that had been held. There are further rules supplementing R