First West Credit Union v. DB Land Acquisitions Inc.

2025 BCSC 1876 First West Credit Union v. DB Land Acquisitions Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: First West Credit Union v. DB Land Acquisitions Inc., 2025 BCSC 1876 Date: 20250814 Docket: H2510579 Registry: Victoria Between: First West Credit Union Petitioner And: DB Land Acquisitions Inc., 1082112 B.C. Ltd., Pacific Cove Designs Inc., LV Solutions Inc., Matthew McKay, Margaret McKay, Gary Lahnsteiner, Laura Lahnsteiner, Erika Lahnsteiner, His Majesty the King in Right of British Columbia, His Majesty the King in Right of Canada, AAA Rebar Only Ltd., Aspect Structural Engineers Canada Ltd., City Pumping Ltd., Griff Building Supplies Ltd., Independent Concrete Ltd., Kalesnikoff Mass Timber Inc., M.R. Crane Service Ltd., Parsons Projects Inc., Radix Concrete Pumping Ltd., Scansa Construction Ltd., Starline Windows Ltd., Titan GMS GP Inc., Tri-X Excavating Ltd., TK Elevator (Canada) Limited and VI Rentals Ltd., Five Peaks Capital Ltd. Respondents Before: Associate Judge Harper Oral Reasons for Judgment In Chambers Counsel for the Petitioner: S. A. Dubo Counsel for the Respondents DB Land Acquisitions Inc., 1082112 B.C. Ltd., Pacific Cove Designs Inc., Matthew McKay, and Margaret McKay: N. M. Vaartnou F. D. Finn Counsel for the Respondents Gary Lahnsteiner, Laura Lahnsteiner, and Erika Lahnsteiner: C. N. Christie Counsel for the Respondents AAA Rebar Only Ltd., Aspect Structural Engineers Canada Ltd., City Pumping Ltd., Griff

Building Supplies Ltd., Independent Concrete Ltd., Kalesnikoff Mass Timber Inc., M.R. Crane Service Ltd., Parsons Projects Inc., Radix Concrete Pumping Ltd., Scansa Construction Ltd., Starline Windows Ltd., Titan GMS GP Inc., Tri-X Excavating Ltd., TK Elevator (Canada) Limited, and VI Rentals Ltd.: T. M. Summers Place and Date of Hearing: Victoria, B.C. August 14, 2025 Place and Date of Judgment: Victoria, B.C. August 14, 2025 [1] THE COURT: I will give you my reasons for judgment. As is the usual case, if a transcript is required, I reserve the right to edit for clarity. [2] This is a foreclosure proceeding. The petitioner seeks an order for a one‑day redemption period and immediate order for conduct of sale. The application is opposed by the mortgagor and guarantors. [3] The particular issue before the court is that the petitioner and DB Land Acquisitions ("DB Land") and related parties entered into a series of forbearance agreements which are clear on their face. The mortgagors agreed to a one‑day redemption period. They agreed to an immediate order for sale. This, of course, is in the circumstances of default. The first forbearance agreement was entered into in November of 2023 to expire in May of 2024. Further extensions were made to August 30, 2024, and December 2, 2024. [4] The critical provisions of the forbearance agreement are contained at paragraph 4.1(2) and (3).

The borrower, that is, DB Land, agrees to a one‑day redemption period on the basis that the forbearance period herein shall be considered by the parties to have replaced the usual redemption period, and an immediate order for conduct of sale. [5] DB Land has had 19 months to sell or refinance. DB Land and the related parties take the position that the court has a discretion not to follow the agreement, and that the usual six-month redemption period should occur, and that the forbearance agreement and the extensions do not, in and of themselves, constitute special circumstances. Further, there is equity in the property. [6] DB Land and the related parties anticipate, or hope, to obtain refinancing, but the evidence supports a finding that DB Land is hoping for favourable interest rates, and the existence of CPLs on the property has a negative effect on the interest rate that DB Land could achieve. [7] I agree that the court should exercise its discretion on the basis of the evidence as it exists at this time, but the evidence that exists at this time of course involves the existence of the forbearance agreement and the extensions. There is nothing in the evidence that would cause me to conclude that there is a probable prospect of repayment. [8] Regarding the forbearance agreement itself, I refer to Business Development Bank of Canada v. 129606 BC Ltd., an oral decision of

Associate Judge Schwartz dated June 9, 2025. The facts of that case, in my view, are virtually on all fours with the present case. In that case, the court upheld the terms of the forbearance agreement. [9] DB Land seeks to distinguish that decision by referencing para. 21, where the court says: I have reviewed the evidence that the principal of the mortgagor has provided saying he continues to seek refinancing, but nothing concrete is provided in terms of the prospect of repayment. [10] That is the case here. There is no concrete proof of any prospect of repayment to justify what is essentially an extension of the redemption period. [11] The redemption period of one day takes the place of the usual six‑month redemption period. If the petitioner had never offered the first forbearance agreement, or extended it, this matter would be concluded, even with a six‑month redemption period. [12] DB Land has had 19 months to, as counsel for the petitioner put it, "get the job done." It has failed to do so. I think there is a significant risk to future forbearance agreements between other lenders and other parties being avoided if there is uncertainty as to whether the court will uphold them. [13] DB Land had legal counsel throughout. They understood exactly what they were doing. They got the benefit of the forbearance period. They got the benefit of 19 months to try to resolve their

issues. I note as an aside the semi‑related litigation with DB Services. That seems to be a company that has common owners to DB Land, but I do not rely on that in my reasons. I just note it as being something that at least the principals of DB Land knew something about. [14] Further, that litigation was known to DB Land during the course of the forbearance agreement and the extensions. DB Land got the best deal from the credit union that it could. It got 19 months reprieve, and the time has now come to draw the foreclosure matters to a conclusion, and for similar reasons to Associate Judge Schwartz, I grant the order sought. [15] There will be costs on a full indemnity basis. "Associate Judge Harper"