Mortgage Enforcement ESSENTIALS 2016 - LSUC

Practice Gems

Mortgage Enforcement ESSENTIALS 2016

chair Doug Bourassa

Chaitons LLP September 13, 2016

*CLE16-0090401-A-PUB*

DISCLAIMER: This work appears as part of The Law Society of Upper Canada's initiatives in Continuing Professional Development (CPD). It provides information and various opinions to help legal professionals maintain and enhance their competence. It does not, however, represent or embody any official position of, or statement by, the Society, except where specifically indicated; nor does it attempt to set forth definitive practice standards or to provide legal advice. Precedents and other material contained herein should be used prudently, as nothing in the work relieves readers of their responsibility to assess the material in light of their own professional experience. No warranty is made with regards to this work. The Society can accept no responsibility for any errors or omissions, and expressly disclaims any such responsibility.

? 2016 All Rights Reserved

This compilation of collective works is copyrighted by The Law Society of Upper Canada. The individual documents remain the property of the original authors or their assignees.

The Law Society of Upper Canada 130 Queen Street West, Toronto, ON M5H 2N6 Phone: 416-947-3315 or 1-800-668-7380 Ext. 3315 Fax: 416-947-3991 E-mail: cpd@lsuc.on.ca lsuc.on.ca

Library and Archives Canada Cataloguing in Publication Practice Gems: Mortgage Enforcement Essentials 2016

ISBN 978-1-77094-768-9 (Hardcopy) ISBN 978-1-77094-769-9 (PDF)

PRACTICE GEMS:

MORTGAGE ENFORCEMENT ESSENTIAChLaiSr: 2016 Doug Bourassa, Chaitons LLP

Chair: Doug Bourassa, Chaitons LLP

September 13, 2016 1:00 p.m. ? 4:00 p.m. Total CPD = 2 h 30 m Substantive + 30 m Professionalism

The Law Society of Upper Canada 130 Queen, Street West Toronto, ON

SKU CLE16-00904

Agenda

1:00 p.m. ? 1:10 p.m.

Welcome and Opening Remarks Doug Bourassa, Chaitons LLP

1:10 p.m. ? 1:35 p.m.

The Latest Law Affecting Mortgagees (Including Additional Charges and Fees)

Doug Bourassa, Chaitons LLP

1

1:35 p.m. ? 2:00 p.m.

2:00 p.m. ? 2:20 p.m.

2:20 p.m. ? 2:30 p.m. 2:30 p.m. ? 2:45 p.m. 2:45 p.m. ? 3:10 p.m. 3:10 p.m. ? 3:40 p.m.

3:40 p.m. ? 3:55 p.m. 3:55 p.m. ? 4:00 p.m. 4:00 p.m.

NSIs (Notices of Security Interest) and other Title Issues on Enforcement Amanda Jackson, Gowling WLG (Canada) LLP

Collateral Mortgages: Special Documentary Issues, Rights and Remedies Simon Crawford, Bennett Jones LLP

Go Ahead and Ask Us (Question and Answer Session)

Coffee and Networking Break

Mortgagees in Possession: Drawbacks and Benefits Jerry Udell, C.S., McTague Law Firm LLP

Things I May Have Forgotten but Really Need to Know: Protecting yourself in a Scary Market (30 minutes ) James Butson, Agueci & Calabretta Joel Kadish, Kadish Law Professional Corporation

Procedure for Assessing of Accounts, Fees, and Expenses Robert Macdonald, Fogler, Rubinoff LLP

Go Ahead and Ask Us (Question and Answer Session)

Program Ends

2

PRACTICE GEMS: MORTGAGE ENFORCEMENT ESSENTIALS 2016

TAB 1 TAB 2 TAB 3 TAB 4

September 13, 2016 SKU CLE16-00904

Table of Contents

Can a Mortgagee Sell to Itself Under Power of Sale? ........ 1 - 1 to 1 - 9

Doug Bourassa, Chaitons LLP Tushar Sabharwal, Chaitons LLP

Title Issues: Notices of Security Interest and Lodgements of Title .............................................................. 2 - 1 to 2 - 18

Amanda Jackson, Gowling WLG (Canada) LLP James Riewald, Gowling WLG (Canada) LLP

Collateral Mortgages (including, but not limited to, Mortgages on collateral) ...................................................... 3 - 1 to 3 - 30

Simon Crawford, Bennett Jones LLP Nicholas Arrigo, Student-at-Law, Bennett Jones LLP

Mortgagees in Possession: Drawbacks and Benefits ........ 4 - 1 to 4 - 7 Jerry Udell, C.S., McTague Law Firm LLP Omar Raza, Barrister and Solicitor Adam Bulkiewicz, Student-at-Law, McTague Law Firm LLP Samuel Atkin, Student-at-Law, McTague Law Firm LLP

TAB 5 TAB 6

Things I May Have Forgotten but Really Need to Know: Protecting yourself in a Scary Market ................................. 5 - 1 to 5 - 35

Investment Authority Investment Authority ? Form 9D Report on Investment ? Form 9E Mortgages and Record Keeping Requirements ? By-Law 9 - Q&A (CanLII) Law Society of Upper Canada v. Tinianov Resource Links

James Butson, Agueci & Calabretta Joel Kadish, Kadish Law Professional Corporation

Procedure for Assessing of Accounts, Fees and Expenses ................................................................................. 6 - 1 to 6 - 5

Robert Macdonald, Fogler, Rubinoff LLP

TAB 1

Practice Gems:

Mortgage Enforcement ESSENTIALS 2016

Can a Mortgagee Sell to Itself Under Power of Sale?

Doug Bourassa Chaitons LLP

Tushar Sabharwal Chaitons LLP

September 13, 2016

CAN A MORTGAGEE SELL TO ITSELF UNDER POWER OF SALE? Doug Bourassa and Tushar Sabharwal Chaitons LLP

Introduction

In today's real estate market, aggressive and entrepenurial mortgagees are often concerned not only with collecting their loaned monies, but will gaze longingly at the substantial equity upside of owning the mortgaged property. The natural enforcement remedy would be foreclosure. However, that remedy brings with it a lack of control over the process that is rarely attractive to a lender. Instead, the question that is more often heard in today's environment is whether the lender can purchase the property itself under power of sale. Pejoratively, this is known as the `loan-to-own' strategy.

The answer to this basic question turns out to be highly fact specific. As a starting point, one must be familiar with a fundamental legal principle, which is that an individual cannot sell to himself, including to a trustee for himself. Such a sale would be improvident and accordingly set aside. An early, yet frequently cited decision from England, Farrar v. Farrars ("Farrar")1, succinctly summarized this basic proposition:

"A mortgagee cannot sell to himself, nor can two mortgagees sell to one of themselves, nor to one of themselves and another. The reasons for this are obvious, and are not merely formal but substantial. A man cannot contract with himself, and in the cases supposed there cannot be any independent bargaining as between opposite parties. For similar reasons a mortgagee cannot sell to a trustee for himself; he cannot buy in the name of another"2

The passage above, though it may seem conclusive, actually raises further questions. Most importantly, what are the parameters of "himself"? Will the courts uphold a sale by a mortgagee to a spouse or a relative? What about a sale to corporation where the mortgagee is a shareholder? Finally are there any special provisions for banks and financial institutions?

This paper will canvass the jurisprudence beginning from some of the earliest to some of the most recent reported decisions on this question. This paper concludes that the principle from Farrar is not absolute and as long as certain "duties" are followed by the mortgagee, the sale will

1 (1888) 40 Ch. D 396 2 Ibid at para 5 (lower court decision)

1 - 1

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download