Can a mortgagee under a power of sale under a security document (to get the highest price) become a purchaser?
Alberta, Canada
The following excerpt is from Canada Permanent Trust Company v. King Art Developments Ltd., 1984 ABCA 182 (CanLII):
In Crown Life the sale was conducted by the mortgagee under a power of sale in the security document. It was because the duty of the mortgagee as the person conducting the sale (to get the highest price) conflicted with his interest as bidder (to bid the lowest price) that chief Justice Harvey expressed his disapproval. Each of the cases he cites as authority has this expressed reason for the rule found in Guest v. Smythe (1870) L.R. 5 Ch. 551 at 556 that “where a man’s duty and interest in respect of the purchase conflict he cannot become the purchaser”.
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