Digest: Firm Capital Mortgage Fund Inc. v West Canadian Development Kensington Project Ltd., 2018 SKQB 198

• Date: July 18, 2019

Reported as: 2018 SKQB 198

Docket Number: QBG 899/16 JCS , QB17584

Court: Court of Queen's Bench

Date: 2019-07-18

Judges:

• Mills

Subjects:

• Statutes � Interpretation � Land Titles Act, 2000, Section 107, Section 109

Digest: This application was part of the proceedings of a foreclosure action brought by the plaintiff against the defendant. It had entered into a mortgage with the defendant developer (Kensington) to secure funds that were used for the purpose and development of property in Saskatoon. The original mortgage property was subdivided in 2015 and 2017. The last subdivision resulted in the creation of 42 individual residential lots. The plaintiff advanced funds from the mortgage to facilitate the creation of the lots which would then be sold to home builders. When the subdivision was registered, it was expected to be registered against all of the 42 lots, but when the 2015 subdivision occurred, the land affected was owned by the defendant and the City of Saskatoon except for two lots, 29 and 30. When the 2017 subdivision was completed with the title for the 42 lots issuing in the name of the defendant, the mortgage of the plaintiff did not register against lots 29 and 30. When the plaintiff discovered this, two charges had already been registered against the lots, one enforcing a provincial judgment and the other pursuant to a federal judgment by the Canada Revenue Agency. The plaintiff then registered its mortgage as a charge. It sought an order under ss. 107 and 109 of The Land Titles Act, 2000 to rectify the original mortgage by adding the titles to lots 29 and 30 to the mortgage and have the same registered under the Act effective the date of registration of the mortgage. In order to retain priority, the plaintiff sought to postpone the interest of the two judgment creditors� interests registered in priority to the plaintiff. Alternatively, they sought a declaration that they had a valid equitable mortgage over the land and directing the registrar of titles to register it in priority to the creditors� claims. The defendant supported the application while the two judgment creditors opposed it. Under Queen�s Bench rule 3-84 the registrar applied to be added as a party to the action.
HELD: The plaintiff�s application was dismissed. The registrar�s application to be added as a party was granted. The court decided that the plaintiff�s mortgage could not be registered and backdated to give it a priority...