Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether CIBC marketed the foreclosed property in a businesslike manner before approving a proposed sale.
   
• A dispute arose over whether the sale price to Jasjit Singh Aujla was provident given current market conditions.
   
• Khark Singh Grewal opposed the sale, asserting an unregistered beneficial interest in the property under a so-called loan agreement.
   
• Justice Milman's earlier decision on a certificate of pending litigation informed the court's assessment of Khark's claims.
   
• The parties disagreed over whether a $245,000 deposit already paid should count toward the sale price.
   
• Costs were addressed and summarily assessed following resolution of the substantive application.
   

Facts of the case

Canadian Imperial Bank of Commerce ("CIBC") holds a mortgage registered March 1, 2017 against a property at 819 Clearbrook Road, Abbotsford, BC. Surjit Singh Grewal and Kamaljit Kaur Grewal are the registered owners and reside at the property; Khark Singh Grewal, Surjit's son from a previous marriage, also lives there and operates a farm business. CIBC registered a certificate of pending litigation ("CPL") against the property on December 6, 2021. The property had been listed for sale at $3.5 million for 271 days between March and November 2021 without success. On December 9, 2021, Jasjit Singh Aujla entered a contract of purchase and sale with Surjit and Kamaljit for $3.175 million, paying a deposit of $245,000. Roughly 17 addenda executed between March 22, 2022, and May 31, 2026 extended the contract's completion date to July 15, 2026. CIBC obtained an order for conduct of sale on August 25, 2023 but did not act on it, having entered a forbearance agreement with Surjit, Kamaljit, and Khark. After Khark missed a forbearance payment in February 2026, CIBC enforced the conduct of sale. An appraisal dated as of February 9, 2022 had indicated a market value of $3.1 million; a further appraisal from December 2025 put fair market value at $3.29 million. CIBC relisted the property at $3.2 million on April 17, 2026, then reduced the price to $2.999 million on May 16, 2026, receiving no offers.

Policy and legislative provisions at issue

Surjit and Kamaljit brought their application for court approval of the sale under Rule 21-7(7) of the Supreme Court Civil Rules and section 15 of the Law and Equity Act, R.S.B.C. 1996, c. 253. The court applied the test from Elite Mortgage Corp. v. Derewenko, 2019 BCCA 125 at para. 18, under which an applicant must show it pursued a buyer in a businesslike manner and that the proposed sale is provident. It also drew on Kokanee Mortgage MIC Ltd. v. 669655 B.C. Ltd., 2014 BCSC 458 at para. 27, which requires that the marketing and sales process be fair and that the price reflect fair market value, and on Metropointe Mortgage Investment Corporation v. Patry, 2022 BCSC 1439 at para. 62, for the principle that true value is what a purchaser is actually willing to pay.

Reasoning and analysis

Justice Basran found that Surjit and Kamaljit could rely on CIBC's recent marketing efforts in support of the sale application. The property had been listed for more than two months without offers even after the price was lowered below $3 million, and no one at the hearing offered to pay more than Mr. Aujla. The court rejected Khark's argument that the deposit should be excluded from the sale price, holding it clearly formed part of the price, with any dispute over the proceeds to be resolved later by accounting once the underlying litigation over the alleged loan agreement is decided. The court was not persuaded the property was irreplaceable to Khark, noting his farm business had operated elsewhere before and could do so again. Referencing Justice Milman's earlier ruling, the court noted it was not disputed that the $3.175 million price was reasonable, and that Milman J. had denied removal of Khark's CPL on condition he bring the CIBC mortgage current and keep making payments. The court observed Khark had since failed to make the required March 2026 payment. Given that more than four years had passed since Milman J.'s decision and Mr. Aujla's offer appeared to exceed current fair market value, the court concluded the sale should not be delayed pending the outcome of the civil litigation between the parties, and that the property had been properly marketed and the contract price was provident.

Ruling and overall outcome

Justice Basran granted Surjit and Kamaljit's application, approving the sale of the property to Jasjit Singh Aujla on the terms requested by CIBC, with the order to reference a completion date of July 15, 2026 and the generic designation of "purchaser's lawyer." On costs, the court awarded Scale B costs to Surjit and Kamaljit, the parties who succeeded on the principal issue, summarily assessed at $1,000 payable within 30 days.