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mortgagee sale: doing it the lazy way: carrying out on sale when you should be running two sales




1427814 Ontario Limited v 3697584 Canada Inc., 2012 ONSC 156 (CanLII)

142 is the leading case exemplifying mortgagee negligence in the sale process.

one of the cases referred to indirectly, (at para 427) by way of Rutherford’s judgment in Sterne v. Victoria & Gray Trust, is Aldrich v. Canada Permanent Loan and Savings Co. [1897] O.J. No. 23:

A mortgagee gets into trouble when he sells two distinct parcels of land in one lot. The Court of Appeal of which Falconbridge was a member, described the mistake as marketing two distinct things (a collection of village houses and buildings being one parcel and a farm being a second parcel).

The 1897 Aldrich case is interesting for stating the duty of a mortgagee to sell as though he was the mortgagor.

The second point of purely academic interest in the Aldrich case is the reference to a decision of the vice-chancellor of the Duchy of Lancaster. The Duchy of Lancaster was the cabinet post that Churchill was demoted to when he was forced out of the admiralty on May 15 1915 because of the Gallipoli situation.

The legal importance of the Duchy of Lancaster is that it was a county palatine, created by Edward III as a kind of mini-sovereignty within England. Edward III gave this to Henry Plantagenet. Why did it not simply drift into historical obscurity as all the other legal particularisms have?

Because, when Henry VI overthrew Richard II (Shakespeare) Henry VI was worried that Henry did not have good title to the throne. Since he owned the Duchy of Lancaster, but his hold on the crown was tenuous and he might lose it, he decided to maintain and re-enforce the independence of the Duchy of Lancaster, just in case he was thrown off the throne, he’d have a roof over his head (Blackstone: Commentaries on the Laws of England Volume 1 p.114)

Hence we read cases from the Duchy of Lancaster and it continues as a formal cabinet post in the British Parliament.

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