Vancouver City Savings Credit Union In Trust v. Cawker et al., 2004 BCCA 160

• Judge: Braidwood, Levine and Smith, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: January 19, 2004
• Jurisdiction: British Columbia
• Citations: 2004 BCCA 160;(2004), 197 B.C.A.C. 95 (CA)

Vancouver City Savings v. Cawker (2004), 197 B.C.A.C. 95 (CA);

    323 W.A.C. 95

MLB headnote and full text

Temp. Cite: [2004] B.C.A.C. TBEd. MR.090

Vancouver City Savings Credit Union In Trust (appellant/respondent by cross-appeal/petitioner) v. Charles Agnew Cawker and Geraldine Mary Cawker (respondents/appellants by cross-appeal/defendants)

(CA030515; 2004 BCCA 160)

Indexed As: Vancouver City Savings Credit Union In Trust v. Cawker et al.

British Columbia Court of Appeal

Braidwood, Levine and Smith, JJ.A.

March 19, 2004.

Summary:

The petitioner granted a mortgage to the defendants' daughter for the purchase of a condominium. The defendants signed the mortgage documentation as "covenantors". At the expiry of the mortgage's term, the daughter renewed it for a further five years at an increased interest rate. The defendants were not given notice of the renewal and did not sign the "mortgage modification agree­ment". The petitioner sued the defendants for the amount owing on the mortgage after the sale of the condominium following fore­closure. The petitioner applied for judgment.

The British Columbia Supreme Court, in a decision reported at [2002] B.C.T.C. Uned. 599, dismissed the application. The petitioner appealed. The defendants cross-appealed respecting the trial judge's ruling that they were not released from their obligations un­der the mortgage because they had not re­ceived independent legal advice.

The British Columbia Court of Appeal al­lowed the appeal and quashed the cross-ap­peal.

Contracts - Topic 1583

Formation of contract - Consent - Inde­pendent legal advice - [See Mortgages - Topic 5555 ].

Mortgages - Topic 3705

Renewals - General - Effect of - New mortgage or novation - The defendants signed a mortgage as covenantors (primary debtors) - The mortgagor renewed the mortgage on the expiry of its term at an increased interest rate - The defendants had no notice of the renewal and did not sign the "mortgage modification agreement" - The British Columbia Court of Appeal held that by its terms the modification agreement was not a new agreement, but an extension and modification of the origi­nal mortgage - The mortgage contemplated that changes to its terms could be made without the defendants' notice or consent - Their obligation under the original mort­gage to pay the principal balance and interest at the rate they agreed to was not extinguished when the terms of the mort­gage were varied - See paragraphs 21 to 43.

Mortgages - Topic 5555

Mortgage actions - Foreclosure and sale - Deficiency judgment - Defences or bars - The defendants signed a mortgage as cove­nantors (primary debtors) - The mortgagor renewed the mortgage on the expiry of its term at an increased interest rate - The defendants had no notice of the renewal and did not sign the "mortgage modifica­tion agreement" - Following foreclosure and sale, the mortgagee sued the defen­dants for the amount owing on the mort­gage - The defendants alleged that they were discharged from their obligations under the mortgage because they received no independent legal advice - The British Columbia Court of Appeal rejected the argument, holding that in the absence of a claim of undue influence, unconscionability or non est factum, the mortgagee's failure to provide independent legal advice did not void the mortgage - See paragraphs 44 to 58.

Cases Noticed:

Manulife Bank of Canada v. Conlin, [1996] 3 S.C.R. 415; 203 N.R. 81; 94 O.A.C. 161, not appld. [para. 2].

Prospect Mortgage Investment Corp. v. Van-5 Developments (1985), 68 B.C.L.R. 12 (C.A.), consd. [para. 3].

Credit Foncier Trust Co. v. Zatala Hold­ings Inc. (1986), 4 B.C.L.R.(2d) 25 (C.A.), consd. [para. 3].

Bank of Montreal v. Awards-West Ven­tures Inc. (1990), 50 B.C.L.R.(2d) 363 (C.A.), refd to. [para. 10].

Holland-Canada Mortgage Co. v. Hutch­ings, [1936] S.C.R. 165, refd to. [para. 26].

Eaton Bay Trust v. Pollon (1983), 48 B.C.L.R. 341 (S.C.), consd. [para. 29].

Polson v. Wulffsohn (1890), 2 B.C.R. 39, refd to. [para. 40].

MacKay v. Bank of Nova Scotia et al. (1994), 20 O.R.(3d) 698 (Gen. Div.), consd. [para. 47].

Bertolo v. Bank of Montreal (1986), 18 O.A.C. 262; 57 O.R.(2d) 577 (C.A.), refd to. [para. 47].

Gold v. Rosenberg, [1997] 3 S.C.R. 767; 219 N.R. 93; 104 O.A.C. 1, consd. [para. 48].

Bank of Montreal v. Featherstone, Cooke and Cross et al. (1989), 33 O.A.C. 377; 68 O.R.(2d) 541 (C.A.), consd. [para. 50].

Royal Bank of Canada v. Poisson (1977), 26 O.R.(2d) 717 (H.C.), refd to. [para. 51].

Stieber v. Canada (Attorney General) (2004), 194 B.C.A.C. 26; 317 W.A.C. 26; 2004 BCCA 44 (C.A.), refd to. [para. 57].

Counsel:

G.E.H. Cadman, Q.C., for the appellant;

G.K. Martin, for the respondent.

This appeal was heard in Vancouver, British Columbia, on January 19, 2004, before Braidwood, Levine and Smith, JJ.A., of the British Columbia Court of Appeal. The decision of the court was delivered by Levine, J.A., on March 19, 2004.