•
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.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.