I’m not a lawyer or legal professional and am writing strictly from a lay person’s perspective. Seth Zuk of Torkin Manes Barristers and Solicitors forwarded me his article “Ontario Divisional Court Reviews Priorities Among Mortgagees that were Victims of Mortgage Fraud’. The article discusses a legal case in Ontario in which the CIBC was defrauded out of its first position mortgage. To my surprise, the Divisional Court judge ruled that the CIBC are the fwas not entitled to its first mortgage position.
In Short, Zuk states that “In CIBC Mortgage Inc. v Computershare Trust Co. of Canada (2015 ONSC 543), the application judge held that Computershare’s mortgage would be reinstated in first priority and that the CIBC and Secure Capital mortgages ranked second and third, respectively.”
Zuk goes on to explain, “The Divisional Court disagreed with the application judge’s findings and concluded that CIBC held the first priority mortgage. Accordingly, CIBC was entitled to the first proceeds distributed from the sale of the property. ”
For a lay person, the outstanding point is, as explained by Zuk – that while the Divisional Court acknowledged that the Lowtans perpetrated a fraud on CIBC and Secure Capital by concealing the existence of the Computershare mortgage, this did not make the Lowtans “fraudulent persons”.
That’s where I got a bit confused. Am I understanding this correctly, someone who conceals information that puts a lender at financial loss are not “fraudulent persons”? I must be misunderstanding this. Can someone please clarify this isn’t the case. Otherwise, wouldn’t it be open season on all lenders?
Furthermore, why wasn’t the onus put on the CIBC or Secure Capital to verify with Computershare that in fact the mortgage had been discarged, especially after such a short period? I’d like to hear your comments about this.
Confused? Zuk does a great job at explaining the decisions in his article “Ontario Divisional Court Reviews Priorities Among Mortgagees that were Victims of Mortgage Fraud”
Disclaimer: I’m not a lawyer, legal professional or consider myself competent in law. Please read the original article yourself and consult a lawyer for guidance in dealing with matters such as these. Any understanding I have from reading the article is as a lay person and only reflects my own opinions, thoughts (or questions) and no one else’s.