Caisse populaire Restigouche Est Ltée Applicant v. Daniel Joseph Pitre, 2023 NBKB 59

Caisse populaire v. Pitre – 2023 NBKB 059 CM-11-2022 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF CAMPBELLTON BETWEEN: Caisse populaire Restigouche Est Ltée Applicant -and- Daniel Joseph Pitre Respondent Subject: Rectification of the Title Register BEFORE: The Honourable Mr. Justice Larry Landry AT: Campbellton, N.B. DATE OF HEARING: March 24, 2023 DATE OF DECISION: April 14, 2023 APPEARANCES: Ashley Arbour, on behalf of Caisse populaire Restigouche Est Ltée Daniel Pitre, per se DECISION [TRANSLATION] Landry, J.:

[ 1 ] Caisse populaire Restigouche Est Ltée seeks an order directing the Registrar of Land Titles to add and register its mortgage on a second parcel owned by Daniel Pitre. [ 2 ] The mortgage signed by Mr. Pitre to the Caisse in 2007 and renewed in 2012 charges just one parcel of land even though the house is located only in part on the parcel in question. Most of it sits on the adjacent parcel, which has not been mortgaged to the Caisse. [ 3 ] The evidence clearly establishes that an error was made at some point, as one cannot generally mortgage only part of a house.

The Caisse therefore applies to have the situation rectified to reflect what it considers to be the original intention of the parties to the contract. [ 4 ] Such an application is governed by ss. 70 , 72 and 79 of the Land Titles Act . [1]

Section 70 authorizes the Court to direct the registrar to rectify the title register and s. 79 explains how to apply to the Court. Paragraph 72(2)(

b) allows the rectification of the register to have retroactive effect. Here, the Caisse effectively seeks that the mortgage on the parcel in question be deemed to have been registered when the mortgage on the neighbouring parcel was registered. [ 5 ] Daniel Pitre owns two parcels with parcel identifiers (PIDs) 50149038 and 50152479. He bought them from his uncle Gilles Bernard and aunt Suzanne Bernard in 2007.

Two transfers were signed: the first by Gilles and Suzanne Bernard, who stated that the transfer was for the marital home, and the second by Gilles alone, who stated that the transferred land had not been occupied as a marital home. [ 6 ] There is a barn on this second parcel and the evidence, which I accept, shows that a business was once located there. Nevertheless, the undisputed evidence also establishes that a large part of the Pitre house also lies on this parcel. Based on the evidence I have accepted, no one realized this problem when Mr.

Pitre bought the house from the Bernards. [ 7 ] The house and the barn have two separate addresses, 1183 and 1187 Des Pionniers Avenue in Balmoral (now part of the new village of Bois-Joli as of January 1, 2023). The two parcels of land have two separate property assessment accounts.

The information about the parcels retrieved from Service New Brunswick’s Registry and Mapping Services [2] indicates that the assessment account assigned to PID 50149038 covers a lot and residence assessed at $74,500 located at 1183 Des Pionniers Avenue, while the account assigned to PID 50152479 covers the lot and barn located at 1187, which are assessed at $13,800. [ 8 ] It bears repeating that when Daniel Pitre bought the parcels in 2007, he was approved by the Caisse populaire for a mortgage.

However, the Caisse did not present any documentation or other evidence as to the intention of the parties at that time. In fact, according to its counsel, the Caisse simply does not have any employees with knowledge of the circumstances in 2007. [ 9 ] Mr. Pitre’s evidence is clear and unambiguous. In 2007, the intention was that the mortgage would charge only the house and the parcel on which it sits. The Caisse, the sellers and the buyer were all represented by the same lawyer. Mr.

Pitre also acknowledges that the intention was for the entire house to be mortgaged, but he did not know at the time that it straddled the two parcels. In fact, he only found out when the Caisse filed this application to have the Registry of Land Titles rectified. [ 10 ] Between these two events, i.e., the registration of the original mortgage in 2007 and the filing of this application in 2022, the parties entered into a new mortgage agreement in 2012. Only PID 50149038 was part of the signed and registered mortgage. Mr.

Pitre testified that this new mortgage was to increase his loan by $30,000 so that he could make some renovations to the house. [ 11 ] Then, in February 2020, Daniel Pitre stopped making the mortgage payments and the Caisse took steps to exercise its rights under the mortgage. Shortly thereafter, the Caisse noticed that the mortgage appeared to charge only a portion of Mr. Pitre’s house. A building location survey was prepared in November 2021 [3] and it confirmed that almost the entire house is located on the barn lot identified by PID 50152479.

Seven months later, the Caisse filed its application for rectification of title. [ 12 ] The Caisse now claims that there was a unilateral or mutual error in the preparation of the documents from the

outset and that the parties’ intention was without question that the mortgage should cover the entire house. According to the Caisse, the mortgage should therefore have included both PIDs from the start. [ 13 ] Daniel Pitre, being unrepresented, thought that the purpose of this proceeding was to resolve the whole dispute surrounding his mortgage. He first explained that he realized after he bought the house that it should have been condemned because of its poor condition. He added that he was forced to move into an apartment because the house was no longer habitable.

The Caisse then told him that one had to live in a house when it was mortgaged. This is when he says he was forced to borrow the additional $30,000 in 2012 in order to make the renovations required by the Caisse. [ 14 ] An inspector appointed by the Caisse made a list of the issues to be addressed and the Caisse controlled everything. In addition, Mr. Pitre could not get the property insured because of the condition of the house. The Caisse therefore took out an insurance policy to protect itself, but Mr.

Pitre’s contents and interests were not included in the coverage offered by the insurer. [ 15 ] There is no documentation to support these allegations. That said, I accept Daniel Pitre’s testimony. Indeed, s. 79(8) of the Land Titles Act invites the Court to be more flexible with respect to evidence when hearing an application such as the one brought by the Caisse. [ 16 ] In truth, Mr. Pitre’s complaints are not really relevant in this matter, as they have no impact on the issue to be decided by the Court.

However, his testimony does help me to make certain findings of fact that will assist me in making a determination. I considered the totality of his testimony in assessing his credibility. [ 17 ] On balance, I find that the Caisse has failed to show that the parties intended the mortgage to include both PIDs. On the contrary, in the absence of the Caisse’s records from 2007 and with very little information about those from 2012, I accept Daniel Pitre’s evidence that there was never any question of the barn lot (PID 50152479) being mortgaged. Moreover, while Mr.

Pitre no longer lives in the house at 1183 Des Pionniers Avenue, he still occupies the barn at 1187 with items in storage there. [ 18 ] If I were to allow the Caisse populaire’s application and order the Registrar of Land Titles to rectify the land register by adding a mortgage on PID 50152479, it would result in the Caisse Populaire having rights in a parcel that was not included in the contract. [ 19 ] The situation may seem unfair to the Caisse because this Court cannot recognize a right (on the whole house) that it thought it had and that Daniel Pitre also thought he had assigned to it.

There may be other ways to have such a right recognized, including through partition-of-land proceedings under Rule 67 of the Rules of Court . In fact, Mr. Pitre has indicated that he is prepared to convey a parcel which would result in the entire house being charged by the mortgage. This would require a subdivision plan and if it were done on consent, there would probably be no need to return to court. [ 20 ] Obviously, this situation would have been avoided if the building location survey obtained in 2021 had been drawn up in 2007.

However, with the advent of land title insurers in New Brunswick, these surveyor’s certificates are no longer routinely required by banking institutions, which now generally rely on the protection afforded by title insurance. [ 21 ] I reject the Caisse’s contentions that Mr.

Pitre had long known the house had been built on both parcels and that it is he who should have approached the Caisse to correct the situation when he was notified of it upon receiving service of the Notice of Application. [ 22 ] The application brought by Caisse populaire Restigouche Est is therefore dismissed for the reasons explained above. No costs will be awarded, as the respondent is not represented. Effect of Failure to Comply with Procedure

[ 23 ] I pointed out to the applicant at the beginning of the hearing that I did not have any evidence before me that the procedure outlined in s. 79 of the Land Titles Act had been followed. [ 24 ] Subsections 79(4) and (5) require an applicant to give notice to the Registrar General before making an application to the court for a rectification of title. A notation of the notice must then be made in the title register against the parcel to which the application relates.

The applicant then has 30 days to file the application with the court, or longer if the court permits. [ 25 ] Here, the applicant admits that it did not follow the procedure. However, it argued that this did not result in any prejudice to the respondent and requested that the application be heard anyway.

In addition, it informed the Court that the Notice of Application had been served on the Registrar four days before the hearing and filed proof of service after the hearing. [ 26 ] Daniel Pitre requested that the application be heard anyway, as the matter had been dragging on for too long. [ 27 ] The Caisse cited the decision of my colleague Justice Terrence Morrison in 665399 N.B. Inc. v.

Connors . 4 In a similar situation, Morrison, J. noted that the documents had not been served on the Registrar General within the prescribed time or in the prescribed form, but that nothing turned on it and there was no prejudice to the respondents. He therefore heard the application.

He also noted that the Registrar had received the documents more than four months before the hearing, whereas in this case it was only four days prior. [ 28 ] Despite the late and improper notice, the Registrar acknowledged receipt of the documents served on him by the applicant and did not signal any intention to intervene in this matter. The requirements of s. 79 appear to me to be compulsory 5 in order for the Court to have jurisdiction over an application such as the one before me.

Section 79 does not speak to the assessment of any prejudice when considering the issue of compliance with the prescribed procedure. [ 29 ] That said, Rule 2.02 of the Rules of Court provides that failure to comply with the procedure prescribed by

an Act for the conduct of a proceeding shall be treated as an irregularity and shall not render the proceeding a nullity. _______________________________________ 4 2015 NBQB 236 . 5 The English version of ss. 79(4) and (5) uses the word “shall.” [ 30 ] As I have dismissed the application on other grounds, I leave the issue of the compulsory nature of the procedural requirements for another more appropriate occasion. Application dismissed Dated April 14, 2023 ____________________ Campbellton, N.B. Larry Landry, J.C.K.B.