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T-612-74
John Harold Maxwell Lees (Plaintiff) v.
The Queen and Industrial Development Bank (Defendants)
Trial Division, Heald J.—Regina, May 7; Ottawa, May 21, 1974.
Jurisdiction—Action to set aside foreclosure of land— Mortgage to corporate agent of the Crown—No jurisdiction to set aside foreclosure order of provincial court—Federal Court Act, s. 17—Industrial Development Bank Act, R.S.C. 1970, c. 1-9, s. 3.
A final order of foreclosure was issued by the Saskatche- wan Court of Queen's Bench in favour of the defendant Industrial Development Bank, mortgagee, against lands in Saskatchewan of the plaintiff, mortgagor. The defendant mortgagee then transferred the lands to the defendant Crown. The plaintiff sued to set aside the final order of foreclosure and for redemption of the mortgaged lands, upon payment of the amount owing. The defendants filed a conditional appearance and applied by notice of motion objecting to the jurisdiction of the Court.
Held, dismissing the action, the Court has no jurisdiction under the Federal Court Act to set aside the order made by the Saskatchewan Court of Queen's Bench, a superior court of record, of which the orders cannot be questioned collater- ally. Such an order can be granted only by the Court which granted the foreclosure. The subsequent transfer to the Crown could not bring into operation the jurisdiction pro vided in section 17 of the Federal Court Act in cases where relief is claimed against the Crown, because section 3(3) of the Industrial Development Bank Act confers concurrent jurisdiction on other courts.
The Federal Court had no jurisdiction over the defendant Industrial Development Bank as "an officer or servant of the Crown" within section 17(4)(b) of the Federal Court Act because the Bank as a corporate agent of the Crown, under section 3(3) of the Industrial Development Bank Act, was not "an officer or servant of the Crown".
Hodge v. Béique (1908) 33 (Que.) S.C. 90; Keystone Shingles v. Royal Plate Glass (1955) 16 W.W.R. 273 and Industrial Development Bank v. Thornhill [1974] 2 W.W.R. 57, applied. King v. Her Majesty the Queen (not reported, T-2573-71), followed.
MOTION.
COUNSEL:
Dr. M. C. Shumiatcher, Q.C., for plaintiff.
B. D. Collins and P. Sorokan for defendants.
SOLICITORS:
Shumiatcher & Associates, Regina, for plaintiff.
Deputy Attorney General of Canada for defendants.
HEALD J.—This is an application by notice of motion on behalf of the defendants objecting to the jurisdiction of this Court.
The plaintiff was the mortgagor and the defendant, Industrial Development Bank, was the mortgagee on a mortgage registered under the Land Titles Act of Saskatchewan involving some 30 parcels of farm land in southern Sas- katchewan, containing a total, in excess of 13,000 acres. A final order for foreclosure issued out of the Saskatchewan Court of Queen's Bench on May 25, 1972 as a result of which the defendant, Industrial Development Bank, became the registered owner of said lands on May 26, 1972. Said defendant then trans ferred subject lands to the defendant Crown on March 13, 1973. Title to the aforesaid mort gaged premises remains in the name of the defendant, Her Majesty the Queen in right of Canada. The plaintiff alleges, inter alia, in the statement of claim that in January of 1974, he notified the defendants of his intention and desire to redeem the mortgaged premises and tendered the full amount required to redeem and that the defendants have neglected and/or refused to accept said tender. The statement of claim goes on to allege that there has been no disposition of the mortgaged premises since the final order for foreclosure and that none of the parties to the action have been prejudiced in any way by the plaintiff's failure to redeem at an earlier date.
The plaintiff's prayer for relief reads as follows:
15. . . .
(i) An Order that the Final Order for Foreclosure given in the within action by the Honourable Mr. Justice M.A. MacPherson on May 25, 1972, be set aside;
(ii) An Order that the Plaintiff, John Harold Maxwell Lees, be allowed to pay into Court the full amount now due and owing to the Defendant Industrial Development Bank, pursuant to the terms of the mortgage of January 11, 1963, in respect to the said mortgaged premises;
(iii) An Order declaring that upon payment into Court of the moneys referred to in sub-paragraph (ii) hereof, the Plaintiff John Harold Mawwell Lees has redeemed the said mortgaged premises, and thereafter directing the Reg istrar of the Regina Land Registration District to cancel the existing Certificates of Title to the said mortgaged premises, and to issue new Certificates of Title thereto in the name of the Plaintiff, John Harold Maxwell Lees, free and clear of the mortgage given by the Plaintiff to the Defendant, Industrial Development Bank, but subject to the encumbrances in favour of John Nicol Wilcox, the Canadian Imperial Bank of Commerce, the Toronto- Dominion Bank and Harold Lawrence;
(iv) An Order directing the Defendants to give and yield up possession of the said mortgaged lands to the Plaintiff John Harold Maxwell Lees, within such time as to this Honourable Court may seem appropriate;
(v) An Order that upon Titles issuing in the name of the Plaintiff John Harold Maxwell Lees, as aforesaid, the moneys paid into Court by the Plaintiff pursuant to these proceedings, be paid out to the Defendants;
The defendants filed a conditional appearance for the purpose of objecting to the jurisdiction of this Court. The grounds of objection as set out in the defendants' notice of motion are as follows:
(a) That the Court has no jurisdiction under the Federal Court Act, or any other statute or law, to grant the fundamental item of relief sought in the Statement of Claim, i.e. it has no jurisdiction to set aside the final order of foreclosure made by the Saskatchewan Court of Queen's Bench on May 25, 1972, or any other order of that Court.
(b) That a claim for the setting aside or reopening of a final order of foreclosure can only be asserted in the proceedings wherein the order was made, and does not give rise, to a cause of action which can be pursued in a different Court.
(c) That the Court has no jurisdiction under the Federal Court Act, or any other statute or law, as against the Defendant Industrial Development Bank, which is an essential party to any proceedings to set aside or reopen the final order of foreclosure in that it was the plaintiff mortgagee which obtained the said order and it would revert to the position of mortgagee if the said order were set aside.
Dealing firstly with objection (a), I have con cluded that this objection is well taken. The Federal Court of Canada and the Saskatchewan Court of Queen's Bench are both superior courts of record and the orders of such courts cannot be questioned collaterally. The Saskatch- ewan Court of Queen's Bench is not a Court subject to any superintending and reforming power which the Federal Court of Canada may have and thus this Court has no jurisdiction to set aside any order of the Saskatchewan Court of Queen's Bench'.
I have the further view that this Court has no jurisdiction to grant much of the other relief asked for in the statement of claim. In essence, the plaintiff is asking for the final order of foreclosure to be re-opened, the right to redeem by payment of the full amount owing, and a direction to the Registrar of the Regina Land Registration District to cancel the existing title and to issue a new title in the plaintiff's name. Even if this Court had jurisdiction to entertain this action, I am not aware of any provisions in the Federal Court Act or elsewhere that would give this Court the power to grant the relief asked for.
Turning now to objection (b), I have the view that this objection is also well taken. The plain tiff is seeking an order re-opening the foreclo sure granted by the Saskatchewan Court of Queen's Bench. This order can only be granted by the Saskatchewan Court of Queen's Bench, the Court which originally granted the foreclosure 2 .
The plaintiff, however, submits, that, since there has been a change of ownership subse quent to the final order of foreclosure and since the Crown in right of Canada is now the regis tered owner of the mortgaged lands, that the Trial Division of this Court is vested with exclu sive original jurisdiction by reason of the provi-
' See: Hodge v. Béique (1908) 33 (Que.) S.C. 90. See also: Keystone Shingles v. Royal Plate Glass (1955) 16 W.W.R. 273 at pp. 276 & 277.
2 See for example: Industrial Development Bank v. Thorn- hill [1974] 2 W.W.R. 57 at p. 60.
sions of section 17(1) of the Federal Court Act which reads as follows:
17. (1) The Trial Division has original jurisdiction in all cases where relief is claimed against the Crown and, except where otherwise provided, the Trial Division has exclusive original jurisdiction in all such cases.
The answer to this argument lies in the provi sions of section 3 of the Industrial Development Bank Act, R.S.C. 1970, c. I-9, the relevant portions whereof read as follows:
3. (1) There shall continue to be a bank called the Industri al Development Bank consisting of, as members
(a) those persons for the time being comprising the Board of Directors of the Bank of Canada, and
(b) the Deputy Minister of Industry, Trade and Commerce
who shall constitute a corporation which for all purposes of this Act is an agent of Her Majesty in right of Canada.
(3) Actions, suits or other legal proceedings in respect of any right or obligation acquired or incurred by the Bank on behalf of Her Majesty, whether in its name or in the name of Her Majesty, may be brought or taken by or against the Bank in the name of the Bank in any court that would have jurisdiction if the Bank were not an agent of Her Majesty.
In my view, section 3(3) clearly allows this plaintiff to pursue his action to re-open the final foreclosure order in the Saskatchewan Court of Queen's Bench (whether or not the plaintiff has to commence a new action there as he contends or can proceed in the original foreclosure motion; as to which contention it is not neces sary for me to express an opinion).
That "action" or "proceeding" would be in respect of a right acquired by the Bank on behalf of Her Majesty and thus under section, 3(3) may be taken against the Bank in any Court that would have jurisdiction if the Bank were not an agent of Her Majesty which would most certainly include the Saskatchewan Court of Queen's Bench. I accordingly have the view that the Trial Division of this Court does not have exclusive original jurisdiction in the circum stances of this case because section 3 of the Industrial Development Bank Act specifically confers concurrent jurisdiction on other Courts.
Coming now to objection (c), I also agree with the contention of counsel for the defendants that in the circumstances of this case, the Fed eral Court does not have jurisdiction against the defendant Industrial Development Bank. The plaintiff submits that the Federal Court has such jurisdiction under the provisions of section 17(4)(b) of the Federal Court Act which reads as follows:
(4) The Trial Division has concurrent original jurisdiction
(b) in proceedings in which relief is sought against any person for anything done or omitted to be done in the performance of his duties as an officer or servant of the Crown.
It is my view that section 17(4)(b) does not apply here because the defendant Industrial De velopment Bank is not "an officer or servant of the Crown". By section 3(1) of the Industrial Development Bank Act quoted supra, the Indus trial Development Bank is a "corporation agent" of the Crown. Mr. Justice Gibson of this Court decided that the term "servant or officer" in section 17(4)(b) does not include a "corpora- tion agent" of the Crown in the case of King v. Her Majesty the Queen 3 .
In summary, I have concluded that the defendants are entitled to succeed on all three grounds raised in their notice of motion. It fol lows that plaintiff's action must be dismissed with costs.
3 Court file T-2573-71—judgment dated November 17, 1971. See particularly pages 3,4 and 5 of that judgment.
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