CMB MAGAZINE cmba-achc.ca winter 2017 | 63
decision relies on who knew what about the
title being inaccurate.
BMO knew it had two mortgages: Its file is
organized by debtor, not by transaction, and
so contained documentation for both the 2004
and 2006 mortgages. Further, the employee at
BMO who gave the discharge was involved in
both the 2004 and 2006 loan transactions. As
well, another of BMO's employees at the same
branch, who was involved in the purchaser's
transaction, was also involved in the owner's
2004 and 2006 mortgage transactions.
When BMO gave the payout statement, it
knew:
n
the property was being sold;
n
the closing date for the sale;
n
it had two mortgages secured on title
(although BMO didn;t know that one had been
deleted from the Parcel Register in error); and
n
if the property was sold and the purchaser
did not assume the other of BMO's
two mortgages, it might lose its security. (BMO
knew the mortgage was not being assumed
because it was funding a first mortgage for the
purchaser of the property.)
At the time that BMO gave its payout
statement, it was the only entity with the
needed knowledge to avoid the problem
the parties later faced. It could have done so
with a two-word response to Mr. Mohan's
request for a mortgage payout statement:
"Which mortgage?"
e 2006 mortgage is discharged and the
land registry is to correct its title by removing
it from title.
e owner is liable to BMO for the amount
owing on the line of credit. e error was as to
the discharge of the security; no one said the
unregistered debt had been satisfied. He knew
that he had a line of credit. Presumably, he
knew it was secured by a collateral mortgage,
as he had been making payments on it.
