THE

ONTARIO WEEKLY REPORTER

(TO AND INCLUding November 25TH, 1905.)

VOL. VI. TORONTO, NOVEMBER 30, 1905.

No. 20

CARTWRIGHT, MASTER.

NOVEMBER 18TH, 1905.

CHAMBERS.

EVANS v. JAFFRAY.

Evidence-Reference-New Master-Adoption of Evidence Taken before Former Master-Order Requiring - Jurisdiction of Master in Chambers.

Motion by plaintiff for an order requiring the Master at Sandwich to adopt the proceedings and evidence already taken.

The reference had been going on for some time before the predecessor of the present Master, and a considerable amount of evidence had been taken, so that a copy, it was stated, cost plaintiff $90. This evidence defendants were unwilling to allow to be used by the present Master.

W. J. Boland, for plaintiff.

R. McKay, for defendants.

THE MASTER:-In Holmested & Langton's Judicature. Act, 2nd ed., p. 865, it is said that in such a case an order may be made, not such as plaintiff desires, but only giving power to the new Master to adopt proceedings already taken. For reasons that will readily suggest themselves, it would not seem likely that a Master would be ordered to adopt evidence not given before him, unless it was of a formal character. nor would such a course be fair to the parties in all cases: see Re Solicitor, 6 O. W. R. 422.

VOL. VI. O.W.R. NO. 20-50

What strikes me as the proper course would be for the Master to take the evidence again if defendants insist on this being done. Then, if plaintiff desired, the Master should specially report the facts and state whether the refusal was reasonable, and let the Court deal with the costs of the reference as might seem just.

Something was said on the argument as to the powers of the present Master to proceed with the reference. The order was made by the Court of Appeal in June, 1904, and the present Master was only appointed on 26th July, 1905. His power to act, however, seems to be put beyond all question by the judgment in Re Glen, Fleming v. Curry, 27 A.R. 144.

As the Master in Chambers would have no power to make an order of reference, it does not seem that he can make such an order as is asked for here, even if it ought to be made. If any such relief can be had, it must be granted by the Court itself. .

[Reference to Anon., 4 Jur. 858.]

Motion dismissed without costs.

NOVEMBER 18TH, 1905.

DIVISIONAL COURT.

LEVI, BLUMENSTIEL, & CO. v. EDWARDS.

Set-off Claim and Counterclaim-Debt and Costs--Powers of Trial Judge-Rules 253, 1130, 1164, 1165-Solicitor's Lien.

Appeal by defendant from order of ANGLIN, J., 5 0. W. R. 796 (sub nom. Blumenstiel v. Edwards), in settling the minutes of judgment pronounced at the trial, directing that there should be a set-off of the damages and costs awarded to defendant upon his counterclaim against the much larger sum awarded to plaintiffs for debt and costs in the action.

The set-off was resisted upon the ground that the effect would be to prejudice the solicitor's lien for his costs of the counterclaim.

The appeal was heard by FALCONBRIDGE, C.J., STREET. J., BRITTON, J.

R. McKay, for defendant.

E. E. A. DuVernet and G. M. Clark, for plaintiffs.

STREET, J.-The effect of the first part of Rule 1165 seems to be, that if A. has judgment against B. for payment of a sum of money, and B. has judgment against A. for a sum of money, which includes costs due B.'s solicitor, A. cannot insist on having B.'s judgment set off against his own, if the effect of the set-off would be to prejudice the lien of B.'s solicitor for his costs of obtaining B.'s judgment. The latter part of the Rule entitles either party in an action to have interlocutory costs awarded against him set off against his claim in the same action without regard to the lien of the solicitor for such costs.

It is argued here by defendant (plaintiff in the counterclaim) that the first part of Rule 1165 applies, because the action and the counterclaim are to be treated as two distinct actions.

It is true that for the purposes of taxation of costs, and for many other purposes, an action and a counterclaim are treated as distinct actions; but for the purpose of execution for the final balance between the amount recovered by plaintiff for debt and costs and that recovered by defendant on his counterclaim for debt and costs, there is only one action: Westacott v. Bevan, [1891] 1 Q. B. 774; Stumore v. Campbell, [1892] 1 Q. B. 314.

Rule 253 is consistent with Rule 1165 only by treating a counterclaim as a part of the action in which it is set up, because Rule 253 expressly provides for the striking of a balance by way of set-off between the amount recovered by the plaintiff and that recovered by the defendant upon his counterclaim. It is argued that Rule 253 is not in terms applicable here, because the balance is not in favour of defendant, but Rules 252 and 253 must be read together. It would be unreasonable to construe these Rules as meaning that the only case in which a balance is to be struck is that in which the defendant's claim is found to exceed the plaintiff's.

Treating the action and the counterclaim as together constituting the action for the purpose of ascertaining the ultimate balance for which execution is to issue, we have further in Rule 1164 a special authority for setting off the costs taxable to the defendant against those taxable against him, without any saving of the solicitor's lien.

Appeal dismissed with costs.

FALCONBRIDGE, C.J., gave reasons in writing for the same conclusion, referring to Rules 1165 and 1130; Link v. Bush, 13 P. R. 425; Pringle v. Gloag, 10 Ch. D. 680.

SCOTT, LOCAL MASTER.

CHAMBERS.

NOVEMBER 3RD, 1905.

IMPERIAL BANK OF CANADA v. MARTIN.

Pleading-Statement of Defence-Motion for Leave to Add New Defence Mortgage Action-Illegal Consideration Bank-Future Advances-Affidavits of Merits—Delay.

Application by defendant for leave to amend statement of defence.

F. R. Latchford, K.C., for defendant.

Travers Lewis, Ottawa, for plaintiffs.

THE MASTER:-The action is brought for redemption or sale under a mortgage on defendant's house. The mortgage purports on its face to have been given as security for the repayment of all indebtedness and liabilities of defendant, and of him trading as Martin & Co., existing at its date.

The defence originally set up was that the debt for which the mortgage was given had been paid in whole or in part. It appears, however, from defendant's examination for discovery, that only a part repayment is claimed. The defendant now asks leave to add to his defence the following paragraph:—“ 5. That the said mortgage, while purporting to be given as collateral security for a past indebtedness, was in fact and in truth given without consideration and for an illegal consideration, namely, the agreement on the part of the plaintiff's to make to the defendant future advances for the purposes of his said business."

The plaintiffs resist the application on the grounds, first. that the paragraph discloses no defence good in law, and. secondly, that the defendant's affidavit of merits is not sufficiently specific.

With regard to the first ground, a party should not of course have leave to set up a plea which is clearly bad in

law. Such a plea, if set up, would be struck out on motion, though the motion could only be entertained by a Judge siting in Court. Taking the proposed paragraph as it stands, the defence set up is, I think, clearly good in law. The plaintiffs, however, say that it must be read in the light of defendant's examination for discovery. It is plain from the latter that there was in fact a debt existing at the date of the mortgage, but the defendant now alleges that by a secret agreement the mortgage was given to secure further advances as well. Even under the pleadings as they now stand, plaintiffs cannot recover any indebtedness accruing after the date of the mortgage. If on a reference to take the account any such item were claimed, it would have to be disallowed. But defendant goes further, and contends that owing to the consideration being, as he alleges, in part illegal, the mortgage is wholly void and is not a valid security even as to the pre-existing debt. If this defence is good in law, defendant should have the right to set it up, and, even if there is any reasonable doubt about it, he should have the benefit of that doubt. In this view I should, I think, make the order asked. The plaintiffs will not be prejudiced, even in the matter of delay. They have a motion now pending before a High Court Judge for a judgment for redemption or sale, with a reference to take the account. If the Judge who disposes of that motion is of opinion that the new plea is not good in law, he can of course give the plaintiff's judgment notwithstanding it.

With regard to the other ground on which plaintiffs opposed the motion, defendant's case would certainly have been stronger had he seen fit to depose more specifically to the facts on which he proposes to rely in support of his defence. Still he swears that the defence is good on the merits, and that the motion is not made for the purpose of delay, and I do not know that he is strictly bound to go any further. The delay in making the motion was also adverted to, but it is, I think, satisfactorily explained in the affidavits. The solicitor who originally took the instructions for the defence was called out of town and has only just returned, the pleading having been prepared and the other proceedings taken by his firm in his absence.

The motion will therefore be granted, with costs to plaintiffs in any event.