J. 2002 SKQB 144 Q.B.G. A.D. 2001 No. 330 J.C.B. IN THE COURT OF QUEEN’S BENCH JUDICIAL CENTRE OF BATTLEFORD BETWEEN: BORDER CREDIT UNION LIMITED Plaintiff/Respondent and IAN DALE KLARENBACH, SANDRA LORRAINE KLARENBACH and LLOYDMINSTER CREDIT UNION LIMITED Defendants/Applicant Bruce A. Knight for the applicant, Ian Klarenbach Miguel F. Martinez for the respondent, Border Credit Union No one appearing for the respondent, Sandra Klarenbach FIAT April 11, 2002 KRUEGER J. [1] After a decree nisi of foreclosure had issued, but before expiration of the redemption period, one of the defendant registered owners, Ian Klarenbach, applied for judicial sale of the mortgaged property, being the matrimonial home. The relief sought is for an order that the property be listed with private realtor for fixed time at an upset (listing) price of $120,000.00. Commission is to be payable on sale at the rate of six percent on the first $100,000.00 and three percent on any sum above that. The purchase monies are to be paid into court and applied as directed by the court. [2] The mortgagee, Border Credit Union, opposed the application and the co-owner, Sandra Klarenbach, did not participate in the hearing. The defendant, Lloydminster Credit Union, has no further interest in the property and was not served with the application. [3] Border Credit Union holds first mortgage on the property. As of December 4, 2001, the amount owing to the Credit Union was $99,873.82 plus costs. According to an appraisal filed in support of the foreclosure proceedings the property had market value of $119,000.00 on August 28, 2001. The property was listed for sale by the applicant on February 18, 2002. The listing realtor believes that it can be sold in four to six weeks for between $124,000.00 and $125,000.00 if shown to prospective buyers. After payment of the first mortgage, real estate commission and municipal taxes to the date of sale there would, no doubt, be modest surplus accruing to the registered owners. [4] The 90-day redemption period has now expired and subject to this application Border Credit Union is entitled to apply for final order of foreclosure. Any further delay that does not result in sale and payment of the mortgage in full, it was argued, will result in lost security value for the Credit Union. [5] In Industrial Development Bank v. Lees et al, (1970) 1970 CanLII 643 (SK CA), 75 W.W.R. 445 (Sask. C.A.), Culliton C.J. at page 452 stated: In my opinion the power of sale so conferred upon the courts, both of the Northwest Territories, and of the province, was such that it gave to these courts the right, in foreclosure proceedings, to make an order for sale whenever the court deemed it necessary or expedient to do so, notwithstanding that an order nisi had been issued. Statutory authority for judicial sale in mortgage foreclosure proceedings was contained in the Chancery Procedure Amendment Act, 1852 (Imp.) 15 16 Vict., c. 86. That Act was repealed in 1881 and replaced by O. 51, R.1, which Rule became law in the Northwest Territories by virtue of the Judicature Ordinance, No. 1893. In its modified form it is now found in s. 70 of The Queen’s Bench Act, S.S. 1998, c. Q-1.01. [6] The court’s entitlement to order judicial sale at any stage of foreclosure proceedings before a final decree issues is no longer questionable. See: Saskatoon Credit Union Ltd. v. Goertz et al (1989), 1989 CanLII 4446 (SK CA), 73 Sask. R. 81 (C.A.); Household Trust Co. v. 590188 Saskatchewan Ltd. et al (1994), 1993 CanLII 8955 (SK QB), 115 Sask. R. 187 (Q.B.). Deciding whether it is “necessary or expedient” within the meaning of s. 70 of The Queen’s Bench Act is, however, judicial exercise. [7] The married joint owners, Ian and Sandra Klarenbach, have been separated since May, 1999, and Sandra Klarenbach has exclusive possession of the property. They are involved in an acrimonious family law court action. Although the property was listed for sale by Ian Klarenbach in February, 2002, Sandra Klarenbach prevented every attempt by the realtor to show the property to prospective buyers. There is no reason to assume that she will be any more co-operative with a court-appointed realtor. As long as Sandra Klarenbach remains in possession of the property, judicial sale through realtor has little prospect of success. [8] Border Credit Union did not request immediate possession pursuant to Rule 439 of The Queen’s Bench Rules when applying for an order nisi of foreclosure. It does not now seek immediate possession. The applicant, Ian Klarenbach, is not entitled, in these proceedings, to a possession order. Sandra Klarenbach, it is expected, will remain in possession of the property until ordered to vacate. [9] Without some assurance that realtor, judicially appointed and authorized to effect sale of the property, will have reasonable access to the property, the order sought by the applicant is not expedient. In my view, judicial sale, in the circumstances of this case, is not realistic option at this time. Border Credit Union cannot be expected to endure further delay and deterioration of its security position without an undertaking by both registered owners that they will facilitate judicial sale. The material before me does not provide such assurance. On the contrary, there is no evidence that Sandra Klarenbach will co-operate in having the property shown to prospective buyers. [10] The registered owners have had ample opportunity since their separation to resolve their family property dispute. The foreclosure proceedings have been in progress for six months. This is not the proper forum to attempt to effect a family property settlement. The application is dismissed.
FIAT. After a decree nisi of foreclosure had issued but before expiration of the redemption period, one of the defendant registered owners (the former husband) applied for judicial sale of the matrimonial home. The joint owners separated in 1999 and are involved in an acrimonious family law court action. The wife has exclusive possession of the property. The Credit Union as first mortgagee opposed the application. The co-owner did not participate. HELD: The application was dismissed. 1)This is not the proper forum to attempt to affect a family property settlement. The husband was not entitled in these proceedings to a possession order. The wife prevented every attempt to show the property to prospective owners. There was no reason to assume she will be any more cooperative with a court appointed realtor. The Credit Union did not request immediate possession. 2)The court's entitlement to order a judicial sale at any stage of foreclosure proceedings before a final decree issues is no longer questionable. The court reviewed the history of the statutory authority for a judicial sale in a mortgage foreclosure proceedings. The 1852 Chancery Procedure Amendment Act was repealed in 1881 and replaced by Ordinance 51, Rule 1, which became law in the NWT by virtue of the Judicature Ordinance No.6 of 1893. It is now found in s.70 of the Queen's Bench Act in its modified form. Deciding whether it is 'necessary or expedient' within the meaning of s.70 of the Queen's Bench Act is, however, a judicial exercise.