The Plaintiff bank foreclosed against the Defendant and obtained a Redemption Order with a 6 month redemption period, setting the list price at $165,000. Prior to the expiry of the Redemption Order, the property was destroyed by fire. After the expiry of the redemption period, the property was listed for $165,000. In March, 2008, the Plaintiff received, but did not accept, an offer to purchase the property for $125,000. In May 2008, the Plaintiff amended the listing price to $130,000, and eventually sold the property in February 2009, for $94,000.

After the sale, the Plaintiff obtained a deficiency Judgment against the Defendant for $22,408.72 plus solicitor and client Costs. Enforcement of the deficiency Judgment was stayed to allow the Defendant, who was self-represented, to file a Counterclaim relating to his claims that the Plaintiff bank was negligent in its handling of the judicial sale, and that the bank had failed to submit an insurance claim after the property was damaged by fire, despite the fact that the property was insured, and the premiums were charged to the Defendant under the terms of the mortgage. The Plaintiff applied for Summary Judgment. The Master in Chambers dismissed the negligence claim regarding the failure to submit the insurance claim, but refused to dismiss the claim regarding the Plaintiff’s conduct of the judicial sale. The Parties cross-appealed the Master’s Order.

Justice Pentelechuk noted that the Plaintiff bank sought to adduce fresh evidence on Appeal under Rule 6.14(3), however, it had filed an Affidavit sworn by a legal assistant at the Plaintiff bank’s law firm five months after it served its Notice of Appeal, well outside the one month timeline provided by Rule 6.14(5). Justice Pentelechuk also noted, without ruling on the issue, that the parties had agreed to extend the timelines for filing Briefs, opting for the provisions of Civil Practice Note 2, rather than the timelines provided by Rule 6.14. Pentelechuk J. held that although the evidence contained within the Affidavit was relevant and material, it required findings of fact and credibility which were more appropriate for Trial. Pentelechuk J. declined to draw conclusions from the evidence without further context and information.

Pentelechuk J. held that the Plaintiff failed to demonstrate what efforts it took, if any, to resurrect the offer it obtained for $125,000, as well as why it had rejected the offers of $99,000 and $105,000, and why it failed to obtain another appraisal after the property was damaged by fire. In the face of that evidence, the Counterclaim respecting the handling of the judicial sale possessed sufficient merit to proceed to Trial. The bank’s Appeal was therefore dismissed.

Regarding the insurance Claim, Pentelechuk J. found that the Plaintiff failed to produce evidence to support its stated assumptions, particularly that there was no insurable interest to advance an insurance claim under, since the building on the property possessed no value. In the absence of this evidence, and coupled with the ambiguity in the law concerning insurable interests in buildings slated for demolition, Pentelechuk J. held that the Application for Summary Dismissal could not succeed. The Defendant’s Cross-Appeal was therefore allowed.