Law360 Canada (November 9, 2026, 12:50 PM EST) --
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| Balvinder Kumar |
A multimillion-dollar land deal collapses due to a chaotic procedural failure. A high-stakes legal case, involving six titles comprising 64 acres of land in Mission, B. C., ensues. This appeal concerns foreclosure proceedings and a refusal to extend the redemption period (
Grace Mtn. Land Company, Ltd. v. 1055249 B.C. Ltd., 2026 BCCA 349).
The appellants, Grace Mtn. Land Company, Ltd. (Grace), appealed an order of a chambers judge refusing an extension of time to appeal an “order absolute” respecting the lands. Grace granted two mortgages with overlapping priorities on the lands, with the total mortgage amount being approximately $1,750,000. This amount was split into two separate mortgages. One mortgage was granted to Jennifer Street (Street Mortgage) for $7,450,000 and another to 1055249 B.C. Ltd. (105 Mortgage) for $10,050,000. Street Mortgage was the first mortgagee on three of the six titles and the second mortgagee on the remaining three titles, on which 105 Mortgage was the first mortgagee.
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During the legal battle, 105 Mortgage bought out Street Mortgage, and an Assignment of Mortgage was completed. When completing assignment, 105 Mortgage borrowed from a third party, 1347851 B.C. Ltd. (134), $7.6 million to buy out the Street Mortgage. As such, 105 Mortgage was assigned both mortgages. To understand this case, it is important to look at the chronology.
March 2019: Street Mortgage had initially started the foreclosure proceedings when the appellants, Grace, fell behind on payments.
August 2019: Street Mortgage obtained an order
nisi in August 2021, where the court granted an “order absolute” if no redemption occurred before the redemption period expired in February 2022.
The clock started ticking for Grace.
Feb. 19, 2022: Appellants Grace did not redeem the Street Mortgage by February 2022.
May 11, 2023: An associate judge granted an order absolute in favour of 105 Mortgage and found that the appellants failed to meet the test for an extension of the redemption period.
Dec. 8, 2023: An appeal of the “order absolute” was allowed. There was a non-disclosure of an agreement between 105 Mortgage and third-party 134 in which 134 had agreed to advance $7.6 million to enable 105 Mortgage to buy out Street Mortgage. The commitment letter contemplated a total price of $18 million for the lands.
May 22, 2024: An associate judge granted a second “order absolute” and dismissed the application by the appellant Grace for an extension of the redemption period.
June 6, 2024: A 14-day period to file a notice of appeal in the Superior Court of British Columbia. The appellants Grace missed this deadline.
June 21, 2024: Notice of appeal was filed in the wrong court, Court of Appeal.
July 17, 2024: 41 days after the 14-day period to appeal expired, the appellants made an application in the Supreme Court for an extension of time to appeal for a stay of the “order absolute.”
July 19, 2024: The Court of Appeal dismissed the appellants’ application for leave filed on June 21, 2024, concluding that s. 13(2)(b) of the
Court of Appeal Act precludes a direct appeal of an order made by an associate judge to the Court of Appeal.
Sept. 6, 2024: The Supreme Court dismissed the application for leave to extend time to appeal the “order absolute.” Grace argued that the associate judge erred in assessing the magnitude of the windfall to the lenders by considering both mortgages (the Street and 105 Mortgages) together. The chambers judge concluded that the windfall issue had no reasonable prospect of success and was bound to fail because the associate judge had properly accounted for both the Street Mortgage and 105 Mortgage.
Sept. 26, 2024: The appellants filed a notice of appeal indicating that the leave of appeal was required on one issue, whether the associate judge erred in law in assessing the magnitude of a windfall to 105 by failing to properly assess the evidence, in other words, whether 105 was taking extra equity above what it was owed. The appellants argue the chambers judge erred by concluding that the appeal of the windfall issue was without merit.
May 7, 2025: The judge denied leave to appeal. The appellants failed to satisfy the court of a reasonable prospect of redemption. It has been four years since the redemption period expired and had the benefit of four-year extension to the redemption period. The appellants did not show any evidence of any possibility of redemptions. The court concluded that it was not in the interest of justice to grant the appellants Grace an extension of time to appeal. The appeal was dismissed.
Court deadlines and limitation periods are crucial in any litigation matter. This case is a clear example of this. While the legal system provides a mechanism to protect borrowers from predatory lending windfalls, the same legal system requires and demands absolute procedural precision in return. This case is also a brutal reality in real estate litigation where technical procedural errors can be fatal. By failing to meet strict appellate timelines and falling short of proving a disproportionate financial windfall, Grace Mtn. exhausted its legal lifelines.
Balvinder Kumar practises real estate law (residential and commercial) and is a freelance writer and author with LexisNexis.
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