Court of Appeal

CASE NO.                                                  VOLUME                                                          PAGE

Cite as: Montreal Trust Company of Canada v. Hoque, 1997 NSCA 153

MONTREAL TRUST COMPANY                                       KHANDKER SHAMSUL HOQUE

OF CANADA and GARY GRAHAM

                                                                        - and -

(Appellants)                                                                                                              (Respondent)

C.A.  No.  137284                                Halifax, N.S.                                   CROMWELL, J.A.

APPEAL HEARD:                                        October 2, 1997

JUDGMENT DELIVERED:             October 27, 1997

SUBJECT:           Estoppel by Record - Res Judicata

SUMMARY:        The plaintiff and companies controlled by him had granted mortgages and entered into related agreements with the defendant Montreal Trust.  After the plaintiff had made an assignment in bankruptcy, Montreal Trust commenced action on the mortgages and obtained final orders of foreclosure by default.  After discharge from bankruptcy, the plaintiff commenced the present action for breach of fiduciary duty, breach of contract, tortious interference with business relations, trespass, and conversion arising out of Montreal Trust=s dealings with him in relation to the mortgages and related agreements.  The defendants brought an application before a Chambers judge to dismiss the plaintiff=s action on the basis of res judicata.  The Chambers judge dismissed the application and the defendants appealed.

ISSUE:                 Was the plaintiff=s action barred by res judicata? 

RESULT: Appeal allowed in part.  The plaintiff cannot be permitted to allege in this action anything which is inconsistent with the final orders of foreclosure.  Accordingly, the statement of claim should be struck out with the exception of the allegations relating to improper disclosure of confidential information to third party lenders and, perhaps, those relating to abusive and disrespectful conduct.  The statement of claim was struck out, with leave to amend for the purpose of pleading these two allegations to the extent that they were not inconsistent with the validity and enforcability of the mortgages and amending agreement, such amendments to be made within 30 days and  in default thereof the action will be dismissed.