Foreclosure Petition: 1264777 B.C. Ltd. sought foreclosure on a $1,200,000 mortgage for property at 74 West 12th Ave., Vancouver.
Declaration Petition: 0694813 B.C. Ltd. sought to set aside two mortgages, alleging fraud by Tarsem and Surinder Gill.
Claims and Evidence
Mortgagor’s Claim: Gurdev Kaur Gill claimed the mortgages were fraudulently obtained by Tarsem and Surinder, who manipulated corporate records.
Mortgagee’s Claim: Paramjit Singh Grewal, principal of the mortgagee, conducted due diligence and was assured by Surinder, acting as a director.
Legal Analysis
Indoor Management Rule: Codified in s. 146 of the BCA, it protects parties dealing with a company from irregularities unless they had knowledge of fraud.
Court’s Findings: The court found no evidence that the mortgagee had actual or constructive knowledge of the fraud.
Decision
Foreclosure Granted: The court granted foreclosure with a 30-day redemption period.
Declaration Petition Dismissed: The court dismissed the petition to set aside the First Mortgage.
Special Costs Denied: No special costs were awarded as fraud allegations against the mortgagee were unsubstantiated.
Costs: Payable at scale B by the respondents in the Foreclosure Proceeding and vice versa in the Declaration Proceeding. The exact total monetary amounts for costs were not specified in the document.
The court upheld the mortgage's validity, rejecting fraud allegations due to lack of evidence.
