Island Savings Credit Union v. Pearce

2000 BCSC 0119 Citation: Island Savings v. Pearce et al 2000 BCSC 0119 Date: 20000120 Docket No.: 018/00 Registry: Victoria IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: ISLAND SAVINGS CREDIT UNION PETITIONER AND: JARROD WESLEY PEARCE, DEBORAH YVONNE PEARCE, PATRICIA HERMIONE THACKER PONT AND JOHN DOE AND MARY DOE; THE TENANTS OCCUPYING THE PROPERTY 3122 SHERMAN ROAD, DUNCAN, BRITISH COLUMBIA RESPONDENTS REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE R. D. WILSON Counsel for the Petitioner K. P. Gustafson Counsel for the Respondent Patricia Hermione Thacker Pont Counsel for the Attorney General for British Columbia and the Registrar, proposed Third Parties M. D. Donison J. Racz Date and Place of Hearing/Trial: 11 January 2000 Victoria, BC I. [1] The petitioner is registered as a first mortgage chargeholder on the title to property in the name of the respondents Pearce. The respondent Pont is registered as a second mortgage holder. The respondents Pearce are in default in making the mortgage payments, they promised to make, to the petitioner. They have made assignments to a trustee in bankruptcy. The petitioner seeks an order nisi foreclosing the interests of all respondents in the property. The respondent Pont seeks an order that the proceeding be referred to the trial list. Or, alternatively, an order for an inquiry into the issue of priority. II. [2] Ms. Pont assisted Mr. And Ms. Pearce in their acquisition of the property. She loaned them $46,000.00. Repayment of that loan was to be secured by a second mortgage in her favour. Mr. And Ms. Pearce obtained the balance necessary to complete the purchase by borrowing $66,000.00 from the petitioner. To secure repayment of that loan, the petitioner obtained a mortgage from Mr. And Ms. Pearce. That mortgage, as well as Ms. Pont's second mortgage, had maturity dates of 1 July 1996. [3] In the spring of 1996, Ms. Pont entered into a contract to purchase certain land in the county. That contract was conditional upon her selling her then principal residence by 15 August 1996. This transaction was being handled for Ms. Pont by a real estate salesperson by the name of Lorraine Roberts. [4] It was Ms. Pont's intention to be out of the country between 21 June and 8 July 1996. To ensure that her conditional contract did not encounter any difficulties, she granted to Ms. Roberts a power of attorney. The document evidencing that grant of power was prepared by Mr. Herbert P. McCallum, a notary public in Duncan. Mr. McCallum caused Form 1 in the Schedule to the Power of Attorney Act to be completed. [5] The power is said to be subject to the following conditions and restrictions: Any and all matters to do with real estate including negotiating the contract of purchase or sale, executing documents with respect to buying, selling real estate. [6] The document indicates an execution date for Ms. Pont of 11 June 1996. However, Ms. Pont deposes that she executed the instrument on 7 June 1996. [7] During this same time period there was apparently some activity involving the petitioner on the one hand, and Mr. And Ms. Pearce on the other. In result, a solicitor was instructed to prepare a mortgage between Mr. And Ms. Pearce as mortgagor, and the petitioner as mortgagee, to secure repayment of a loan of $90,000.00. [8] As a result of information received by the solicitor's office, a priority agreement was forwarded to Mr. McCallum, with a request that he execute the same as attorney for Ms. Pont. That priority agreement, by its terms, granted priority to the petitioner's $90,000.00 mortgage, over Ms. Pont's second mortgage. [9] On 4 July 1996, Ms. Roberts attended to complete the declaration in the power of attorney instrument, and to sign, as attorney, the priority agreement forwarded to Mr. McCallum by the solicitor. [10] By letter dated 4 July 1996, Mr. McCallum returned the priority agreement, as executed, to the solicitors, with his account. The mortgage document, the power of attorney, and the priority agreement were accepted for registration in the Land Title Office at Victoria on 5 July 1996. [11] During the summer of 1998, the delinquency of Mr. And Ms. Pearce prompted Ms. Pont to consult solicitors. She says that it was at this time that she learned that she ranked in priority behind a $90,000.00 charge, not a $66,000.00 charge. [12] The petitioner's petition initiating this proceeding was issued 1 September 1999. II. [13] The foundation of Ms. Pont's present application is defined in the following extracts from her affidavit sworn 8 October 1999: 12. ... I sought the advice of MacCallum (sic) who suggested to me that I execute and deliver a Power of Attorney in favour of the said Lorraine Roberts for the limited purpose of allowing her to sign any documentation, if necessary, relating to my proposed purchase of the property at 3325 Trans Canada Highway. 13. ... I attended at the offices of MacCallum (sic) on the 7th day of June, 1996, at which time I executed and delivered a Power of Attorney in favour of the said Lorraine Roberts. ... 14. At the time I executed and delivered the Power of Attorney, I did not read it carefully as I had complete faith in, and relied on MacCallum's (sic) advice that it was limited to my said Attorney, Lorraine Roberts, being able to sign documents in regard to the purchase of the property at 3325 Trans Canada Highway, and for no other purpose. ... 32. ... neither the said Lorraine Roberts nor MacCallum (sic) had any authority express, ostensible or implied from me to use the Power of Attorney for the purposes of granting the said Priority Agreement such that My Mortgage would then become subject to a much large (sic) mortgage in favour of the Petitioner. ... 33. Based on the circumstances surrounding the execution and delivery of the new mortgage in favour of the Petitioner, which is the subject of these proceedings, and the Priority Agreement to effect same, and the wording of the Power of Attorney itself, the said Matthew G. Watson, as solicitor for the Petitioner, ought to have know, (sic) or been under suspicion and a duty of inquiry as to the effectiveness of the Power of Attorney and therefore the validity of the Priority Agreement. 34. Based on the wording of the Power of Attorney and its ambiguity, the Registrar of the Victoria Land Title Office should have made further inquiry and/or rejected the registration at the Land Title Office of the Power of Attorney and Priority Agreement. ... III. [14] The principal question for determination is whether Ms. Pont raises a bona fide question to be tried - that being the principle governing the relief prescribed in R. 50(5)(I) and R. 52(11)(d). [15] It is essential to Ms. Pont's position that extrinsic evidence be admitted on the power of attorney. The evidence she seeks to adduce will contradict the words of the power of attorney. In the circumstances of this case, extrinsic evidence would be admissible only if the words on the power of attorney are ambiguous. Seemingly, a subsidiary question must first be answered, namely, is there a bona fide triable issue on the ambiguity of the power of attorney. [16] Ms. Pont contends that the words are ambiguous. [17] First, the instrument is expressed as a "general Power of Attorney for all purposes" but, it is restricted to real estate. [18] Second, the power confers no authority to deal with land. [19] Third, the power confers the authority to negotiate the contract of purchase or sale; not contracts of purchase and sale. (The emphasis is Ms. Pont's). [20] Fourth, it confers power to execute purchase and sale documents; not mortgage documents. [21] Fifth, the word "including" compounds the ambiguity. If the words following "including" were not meant to further restrict the power, then the grantor would have used words such as "but not so as to restrict or limit the foregoing". (In my view, only a lawyer or legislative draftsperson could embrace that notion). [22] Counsel are agreed that R. 50(5)(c) confers a power on the court to determine issues summarily, in appropriate circumstances. I think this is such a case. [23] In my view, "real estate" is synonymous with "real property", "immovables" or "land". [24] By its express terms, the power confers authority to act in any and all matters to do with real estate. [25] Absent the extrinsic evidence, the word "the" is neutral. In the context of the clause, it is synonymous with "a". [26] Similarly, the addition of the words "executing documents with respect to buying, selling real estate" appear, on the face of it, to be unnecessary. The power to do that is implicit in the opening words of the clause. The words do not, on their face, suggest that the grantor was not extending the power to any and all matters to do with real estate. I find nothing vague, uncertain, equivocal or obscure in the clause. [27] It is only when the extrinsic evidence is considered that it could be said that there is ambiguity in the instrument. For example, Ms. Pont contends that the use of the words "the contract" restrict the power to a single real estate transaction then underway. [28] The law permits extrinsic evidence to be introduced to assist in the interpretation of an ambiguous document. The law does not permit extrinsic evidence to introduce ambiguity into the document. It is the latter which Ms. Pont seeks to accomplish. [29] In my opinion, the document is not ambiguous. The extrinsic evidence Ms. Pont seeks to introduce would not be admissible. Accordingly, her material does not raise a bona fide triable issue. Her application filed 12 October 1999, as amended 11 January 2000, is dismissed. IV. [30] The material assertions in the petitioner's petition are not in dispute. Therefore, the relief prayed for in paragraphs (a), (b), (d), (e) and (f) of the petition are granted. The amount required to redeem I find to be $91,205.69 at 10 January 2000. Interest on that sum will continue to accrue commencing 11 January 2000 at the rate of $20.54 per day. [31] On 11 January 2000, I made an order, pursuant to R. 43, of the Rules of Court, that the property be sold. [32] Costs, and any other matters not addressed in these reasons may be spoken to. "R. D. Wilson, J" The Honourable Mr. Justice R. D. Wilson