Neider v. Carda of Peace River District Limited, [1972] SCR 678

Supreme Court of Canada

Neider v. Carda of Peace River District Limited, [1972] S.C.R. 678

Date: 1972-03-30

Lucie Neider (Plaintiff) Appellant;

and

Carda of Peace River District Limited (Carda de Rivière-Ia-Paix Limitée) (Defendant) Respondent.

1972: January 26; 1972: March 30.

Present: Martland, Ritchie, Hall, Spence and Laskin JJ.

ON APPEAL FROM THE SUPREME COURT OF ALBERTA, APPELLATE DIVISION

Sunday observance—Sale of land—Agreement under which transfer forms signed in blank entered into on a Sunday—Documents falsely dated and completed by purchaser—Action to set aside—Lord’s Day Act, R.S.C. 1952, c. 171, s. 4—The Land Titles Act, R.S.A. 1955, c. 170, s. 67.

The appellant, in order to effect the purchase from a third party of certain farmlands and village lots as well as some farm equipment, borrowed $19,400 from the respondent company, giving a mortgage on the lands for $14,065. She secured the balance of the loan by giving the respondent a chattel mortgage for $5,335 on the equipment. The payments fell into arrears and legal action having been threatened, the appellant, on a Sunday, met with officials of the respondent and a deal was made whereby appellant sold her farmlands but not the lots to respondent which agreed to discharge its mortgage against the lots and to discharge the chattel mortgage against the equipment. At this meeting the appellant affixed her signature to three printed transfer forms in blank. Subsequently, the said transfer forms were falsely dated and completed by officers of the respondent and thereafter these documents were registered by the respondent at the Land Titles Office.

The appellant sued for a declaration setting aside the transaction and for recovery of her lands and other relief. The trial judge found for the appellant but was reversed on appeal. He held that the transfers executed by the appellant were a sale and purchase of real property within the meaning of s. 67 of The Land Titles Act, R.S.A. 1955, c. 170, and having been made on the Lord’s Day, were utterly null and void. The Appellate Division held that the transaction giving rise to the signing of the transfers in blank, having taken place on a Sunday, the whole transaction was unlawful as being contrary

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to the provisions of s. 4 of the Lord’s Day Act, R.S.C. 1952, c. 171, and the parties being in pari delicto the appellant could not succeed.

Held: The appeal should be allowed.

The agreement under which the transfer forms were signed by the appellant, having been entered into on a Sunday, was illegal and unenforceable being contrary to s. 4 of the Lord’s Day Act, supra. The transaction came squarely within s. 4 because respondent was in the real estate and loan business, and in what it did, it was carrying out its ordinary business in realizing on an overdue security. Respondent could not rely on its own illegal agreement even though appellant was a party thereto to hold the titles it acquired by registering what were in reality false documents.

APPEAL from a judgment of the Supreme Court of Alberta, Appellate Division[1], allowing an appeal from a judgment of O’Byrne J. Appeal allowed.

A.G. MacDonald, Q.C., for the plaintiff, appellant.

D.C. McDonald, for the defendant, respondent.

The judgment of the Court was delivered by

HALL J.—This is an appeal from a judgment of the Appellate Division of the Supreme Court of Alberta¹, in which that Court reversed a decision of O’Byrne J. and dismissed the appellant’s action. The action arose out of a transaction between the parties under which appellant transferred to respondent certain lands in a purported settlement of an outstanding and overdue indebtedness. The appellant sued for a declaration setting aside the transaction and for recovery of her lands and other relief.

The appellant, a widow, had purchased three lots in the Village of Jean Côté in the Province of Alberta and three one-quarter sections of farmland nearby as well as some farm machinery and a used Mercury truck from one Leopold

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Savard. It was a cash deal between appellant and Savard and to effect the purchase she borrowed $19,400 from respondent, giving a mortgage on the farmlands and the lots for $14,065. She secured the balance of the loan by giving the respondent a chattel mortgage for $5,335 on the farm machinery she had acquired from Savard.

Farming conditions proved unprofitable and by November 1966 she was in arrears to the extent of $8,390.84. The respondent, by letter dated December 8, 1966, demanded payment of these arrears and threatened legal action. On receiving this demand, appellant, on Sunday, December 18, 1966, met with officials of respondent and the deal, the subject of this litigation, was then made.

The deal, as found by O’Byrne J., was that appellant sold her farmlands but not the lots to respondent which agreed to discharge its mortgage against the lots and to discharge the chattel mortgage covering the machinery. On the day in question, December 18, 1966, she affixed her signature to three printed transfer forms in blank. Her signature appears twice on each form, once as transferor and once in purported compliance with the dower affidavit required by The Land Titles Act of the Province of Alberta. The forms were undated.

On January 23, 1967, these three transfer forms were registered in the Land Titles Office for Northern Alberta by respondent and title issued to respondent for said farmlands. Respondent discharged the mortgage in so far as it covered the lots. It also discharged the chattel mortgage. The transfer forms, when so tendered for registration, each covered a one-quarter section. The dower affidavits purporting to have been sworn by appellant before one R. Deslauriers, a Notary Public who was also president of the respondent company, appeared to have been completed to comply with the provisions of The Land Titles Act of Alberta and as well affidavits of execution dated December 16, 1966, by one Paul Soulodre which purported to prove that

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the transfers had been executed in his presence by appellant. One transfer covering the southwest 35 was dated December 19, 1966, but the affidavit of execution was sworn on December 16th, three days before the date of the transfer. The other two transfers covering the northwest 19 and the northeast 19 were dated December 16, 1966, and each of the three transfers purported to be for a cash consideration of $6,000 and on each transfer there was an affidavit by respondent’s manager, Louis J. Laberge, to that effect. Two of these affidavits purported to have been sworn by Laberge on December 16, 1966, and the third (S.W. 35) on December 19, 1966.

It is conceded that all three transfer forms were signed in blank by appellant on Sunday, December 18. Had the date December 18 been inserted and had the affidavits of execution reflected that fact, the transfers would have been unregistrable because s. 67 of The Land Titles Act of Alberta, R.S.A. 1955, c. 170, provides that:

All sales and purchases and all contracts and agreements for sale or purchase of any real property made by any person or persons on the Lord’s Day are utterly null and void.

It is manifest that the transfer forms were falsely dated and completed to mislead the Registrar of Land Titles in order to obtain registration of the documents. Respondent’s president Deslauriers tried to explain why the dates December 16 and December 19 were inserted, but his explanation was not a credible one and it is clear that O’Byrne J. rejected the explanation when he stopped counsel for appellant in his cross-examination of Deslauriers with the statement:

I really don’t know why you want him to explain why the dates are as they are, seems to me that the inferences are abundantly clear.

Registration of the three transfers was obtained by the fraud thus practised on the Registrar of

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Land Titles. Until the transfer forms were “doctored” with the false dates and affidavits, these forms were useless as transfers in the hands of the respondent.

O’Byrne J. held on these facts that the purported purchase and sale was null and void, saying: “Registration of the transfers, as between the parties to this action, does not have the effect of perfecting the transaction”, and he directed that the titles to all the lands in question be restored to reflect their plight and condition immediately prior to the registration of the transfers covering the lands in question. He also directed that an accounting be taken by the Clerk of the Court relating to incomings and outgoings covering the period the respondent operated the farmlands subsequent to obtaining title. He disposed of other issues as set out in the formal judgment dated April 28, 1970, which reads as follows:

JUDGMENT

THIS ACTION having come on for trial before this Honourable Court at the sittings holden at the Court House, in the Town of Peace River, in the Province of Alberta, for the trial of actions without a jury, in the presence of counsel for the Plaintiff and for the Defendant, and upon hearing the evidence adduced and what was alleged by counsel, the Court was pleased to order that the action do stand over for judgment, and having come on this day for Judgment, viz., the 23rd day of January, A.D. 1970;

AND THE PLAINTIFF HAVING APPLIED for an Order giving her leave to adduce further evidence;

1. IT IS HEREBY ORDERED that the Plaintiff’s application for leave to adduce further evidence be and is hereby dismissed.

2. AND IT IS FURTHER ORDERED AND DECLARED that the transfers executed by the Plaintiff, referred to in paragraph 8 of the Statement of Claim herein, were a sale and purchase of real property within the meaning of Section 67 of The Land Titles Act, R.S.A. 1955, c. 170, and were made on the Lord’s day, and are utterly null and void.

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3. AND IT IS FURTHER ORDERED AND ADJUDGED that the registration of the said transfers does not have the effect of perfecting the transaction.

4. AND IT IS FURTHER ORDERED AND DIRECTED that the Registrar of the North Alberta Land Registration District do cancel the registration of the said transfers, being transfers numbered 5334 O.Y., 5335 O.Y. and 5336 O.Y., and the discharge of mortgage registered as number 48520Y, and that the titles to the lands referred to in the said transfers and the said discharge be restored to their respective plight and condition as at the time the said transfers and discharge were registered, which is to say, that the titles to the said lands, namely:

(1) The North East quarter of Section Nineteen (19), Township Seventy-Nine (79), Range Twenty-One (21), West of the Fifth Meridian, Province of Alberta;

(2) The North West quarter of Section Nineteen (19), Township Seventy-Nine (79), Range Twenty-One (21), West of the Fifth Meridian, Province of Alberta;

(3) The South West quarter of Section Thirty-five (35), Township Seventy-Nine (79), Range Twenty-Two (22), West of the Fifth Meridian, Province of Alberta;

(4) Lot (A) containing four and forty five hundredths (4.45) acres more or less, in Block Five (5), in the Townsite of Jean Cote, aforesaid, as shown on subdivision Plan 2042 K.S. (S.W. 1-80-22-W.5). Reserving unto her majesty all mines and minerals and the right to work the same;

(5) Lots Five (5) and Six (6), in Block Five (5), in the Townsite of Jean Cote, aforesaid, as shown on Subdivision Plan 2042 K.S. (S.W. 1-80-22-W.5). Reserving unto her majesty all mines and minerals and the right to work the same.

be in the name of Lucie Neider, and subject to a first mortgage in favour of Carda of Peace River District Limited (Carda De Riviere La Paix Limitee), successor to the mortgagee named in the said Mortgage, La Caisse d’Etablissement de Riviere-la-Paix Ltee.

5. AND IT IS FURTHER ORDERED AND ADJUDGED that the Defendant deliver up possession of the following lands and premises, viz.:

(1) The North East quarter of Section Nineteen (19), Township Seventy-Nine (79), Range

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Twenty-One (21), West of the Fifth Meridian, Province of Alberta;

(2) The North West quarter of Section Nineteen (19), Township Seventy-Nine (79), Range Twenty-One (21), West of the Fifth Meridian, Province of Alberta;

(3) The South West quarter of Section Thirty-five (35), Township Seventy-Nine (79), Range Twenty-Two (22), West of the Fifth Meridian, Province of Alberta;

unto the Plaintiff.

6. AND IT IS FURTHER ORDERED, ADJUDGED AND DIRECTED that the Clerk of this Honourable Court take an accounting relating to the income and expenditure during the period that the Defendant has carried out farming operations on the said lands.

7. AND IT IS FURTHER ORDERED, ADJUDGED AND DECLARED that the Defendant acted reasonably and properly in ploughing under the alsike clover crop on the said lands.

8. AND IT IS FURTHER ORDERED that should an issue arise in the accounting aforesaid, such issue may be referred to the Honourable Mr. Justice M.B. O’Byrne for determination.

9. AND IT IS FURTHER ORDERED, DECLARED AND DIRECTED that, should the Defendant so require, the registration of the chattel mortgage granted by the Plaintiff to the Defendant is to be restored in the Central Registry for the Province of Alberta to reflect the plight and condition of the said chattel mortgage immediately prior to the registration of the discharge of the aforesaid chattel mortgage.

10. AND IT IS FURTHER ORDERED AND ADJUDGED that the Defendant is entitled to the costs of the Plaintiff’s application to adduce further evidence.

11. AND IT IS FURTHER ORDERED AND ADJUDGED that the Plaintiff shall have costs of the action on Column 5 including Examinations for Discovery, any limiting Rule not to apply.

The respondent appealed to the Appellate Division which held that the transaction giving rise to the signing of the transfers in blank as aforesaid, having taken place on a Sunday, the whole transaction was unlawful as being contrary to the provisions of s. 4 of the Lord’s Day Act,

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R.S.C. 1952, c. 171, and the parties being in pari delicto the appellant could not succeed.

That the sale and transfers were null and void as being contrary to s. 67 of The Land Titles Act, supra, is beyond question. However, the respondent claims the right to retain title to the lands in question under the agreement which it says was made with appellant. In its statement of defence it alleged:

4. The defendant says that the plaintiff was well aware of the nature and content of the documents signed by her, referred to in paragraph 8A of the Statement of Claim (the transfers in question here) and that they were freely and voluntarily executed by her, and denies that the plaintiff was labouring under any mistake of fact.

But the agreement under which the transfer forms were signed by the appellant, having been entered into on a Sunday, was illegal and unenforceable being contrary to s. 4 of the Lord’s Day Act, supra. The transaction in question came squarely within said s. 4 because respondent was in the real estate and loan business, and in what it did on December 18, 1966, it was carrying out its ordinary business in realizing on an overdue security. Respondent cannot rely on its own illegal agreement even though appellant was a party thereto to hold the titles it acquired by registering what were in reality false documents.

I would, accordingly, allow the appeal and restore the judgment of O’Byrne J. with costs here and in the Appellate Division.

Appeal allowed with costs.

Solicitor for the plaintiff, appellant: H.C. Sisson, Peace River.

Solicitors for the defendant, respondent: McCuaig, McCuaig, Desrochers, Beckingham & McDonald, Edmonton.