Judge rejects bid to remove Maple Ridge mortgage, despite fraud allegations

A BC Supreme Court judge has dismissed an attempt by the owner of a Maple Ridge commercial property to remove a disputed $200,000 mortgage from its title, ruling that allegations of fraud against his former business associates must first be proven.

In a June 25 decision, Justice Matthew Taylor here was not enough evidence at this early stage of the lawsuit to cancel the mortgage registered against the property at 11920 228 Street.

“The court is only being presented with one side of the story,” Taylor said. “Taken alone, this in my view is a very thin evidentiary basis for the remedy sought and far from the ‘clear and cogent’ evidence required.”

The plaintiffs, which include 1341242 B.C. Ltd. and its director, Malkit Singh Jhand, allege the mortgage was fraudulently obtained by former partners who no longer had authority to act on the company’s behalf.

They argue the mortgage should be declared void because it was executed by an individual who had ceased being a director and shareholder nearly a year earlier.

According to the ruling, the company purchased the Maple Ridge property in May 2022. At the time, Jhand and three other men — Devinder Singh, Gurmeet Singh Sumal and Sameer Sharma — were all directors and shareholders of the company.

In March 2023, the group arranged a two-month, $220,000 mortgage through Century 21 Coastal Realty Ltd., with the proceeds allegedly used by a separate company controlled by the three men to purchase property in Kelowna, according to the allegations made in court.

Jhand claims he was unaware of that mortgage and that neither he nor his company received any of the proceeds.

He alleged the three men later left the company without disclosing the first mortgage, further claiming that in March 2024, after one of the former directors had already left, they signed a second $200,000 mortgage against the Maple Ridge property without authorization.

Although the replacement mortgage was signed in March 2024, it was not registered on title until May 2025

Jhand argued the mortgage was invalid because the former director lacked both actual and apparent authority to bind the company. He also claimed the registration prevented them from renewing financing with Prospera Credit Union, causing financial hardship.

Justice Taylor, however, concluded the application was premature because the broader lawsuit had only recently been filed and no examinations for discovery had yet taken place.

He noted that none of the former directors or the two notary corporations involved in the transactions had provided evidence on the application.

Justice Taylor warned that deciding the issue now risked “litigating in slices” before the full evidence is available.

The judge also found the plaintiffs had not produced the evidence required to establish fraud or prove the former director lacked authority.

Among the missing evidence, Taylor noted there were no shareholder agreements, corporate governance documents, affidavits from the former directors explaining their understanding of their authority, or evidence from the notaries who handled the mortgage transactions.

Taylor also pointed to conflicting evidence over whether Jhand knew about the disputed mortgage before it was registered.

In addition, Century 21 appeared to be acting as an innocent third party, according to the judge.

The brokerage’s representative testified he believed the individuals still had authority because they had previously acted on behalf of the company during the first mortgage transaction and had not informed him of any changes. Century 21 had relied on legal professionals to complete the transaction properly, according to the testimony.

Taylor rejected the argument that Century 21 should have discovered the change in corporate directors by conducting a corporate search, noting B.C.’s Business Corporations Act specifically prevents parties from being deemed to have constructive notice simply because corporate records are publicly filed.

Taylor also found the evidence of financial harm was limited. While an email from Prospera suggested renewing the company’s loan would be “difficult” because of the disputed mortgage, it did not establish the company was suffering irreparable damage.

The application to remove the mortgage was dismissed, with costs awarded to the defendants.

However, Taylor emphasized the ruling does not prevent the plaintiffs from bringing a similar application later in the case if additional evidence emerges through discoveries or at trial.