MORTGAGES - Mortgage agreement - Persons liable - Validity - Payment

Law360 Canada (November 8, 2022, 6:15 AM EST) -- Appeal by 0941187 BC Ltd (187) from the finding that a mortgage (the Johal mortgage) was both valid and enforceable. Cross-appeal by the Trustee from the judge’s refusal to compel 187 to share the burden of other mortgage obligations incurred on behalf of the joint venture. In May 2012, three closely held companies, 187, 0927613 BC Ltd (613), and 0941185 BC Ltd (185) entered into a joint venture agreement to acquire three properties and develop townhouses for sale. In a complex proceeding related to the failure of the joint venture, the managing judge made an order allowing the parties to apply in chambers to determine their entitlement to disputed funds. 187 made such an application, seeking a declaration that enforcement of the Johal mortgage was barred by the Limitation Act and should not be paid out ahead of 187’s claim. Although the limitation period for action on the Johal mortgage had expired, the judge accepted the Trustee’s submission that there were several extant proceedings in which Johal could obtain a declaration as to the validity of his mortgage. The judge therefore concluded that the mortgage was valid and enforceable....
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