Justice for Victim's of Mortgage Fraud
From The Globe and Mail
It takes a big person to admit he's wrong. Thankfully, there were enough big people on the Ontario Court of Appeal to admit the court was "incorrect" when it held an innocent homeowner responsible for paying for a mortgage registered fraudulently in the homeowner's name. The judges might have also said their colleagues who made the earlier ruling had turned justice on its head, failed to glimpse the forest in the confusion of trees and generally had a bad day at the office. It doesn't really matter, however. In the end, they cast aside a terrible precedent and made a sensible decision.
Susan Lawrence of Toronto went to her bank one day to inquire about selling her home. Ah, the bank said, you already have! We have the documents right here to prove it. Alas, the documents were forged. A woman posing as Ms. Lawrence had created a phony $318,000 sale agreement involving another imposter, Thomas Wright. Mr. Wright asked for and obtained a $291,000 mortgage from Maple Trust.
As Madam Justice Eileen Gillese summarized the legal question, "In a contest between the two innocent parties -- the homeowner and the> lender of mortgage monies -- who wins?"
That sounds like a provocative question for a law-school exam. Might be fun in a counterintuitive way to argue for the lender. But the Ontario Court of Appeal ruled in a different case two years ago that the lender wins. All three judges who heard the case agreed on that. In that case, a woman fraudulently obtained a mortgage on her husband's share of their house by forging her husband's signature on a power of attorney. She defaulted on the mortgage payments. The husband was held responsible for the mortgage fraudulently registered against him. Why? Because a home sale was valid once the land title was registered, fraud or no fraud.
This was law without justice. A lower-court judge said as much, not in so many words, when a similar case came before him in Ontario Superior Court last November. In an age when identity theft is increasingly common, said Mr. Justice Randall Echlin, "a homeowner's rights ought to be at least equal to the rights of commercial lenders."
For the new case, the Ontario Court of Appeal used a five-judge panel instead of the usual three. It brought out the heavyweights, including Chief Justice Roy McMurtry, and borrowed one judge, Mr. Justice James MacPherson, from the previous panel. Maple Trust, said the five judges unanimously, "had an opportunity to avoid the fraud. It did not take from a registered owner. Therefore, despite registering its charge, Maple Trust loses in a contest with the true registered owner." Justice delayed is better than no justice.
It takes a big person to admit he's wrong. Thankfully, there were enough big people on the Ontario Court of Appeal to admit the court was "incorrect" when it held an innocent homeowner responsible for paying for a mortgage registered fraudulently in the homeowner's name. The judges might have also said their colleagues who made the earlier ruling had turned justice on its head, failed to glimpse the forest in the confusion of trees and generally had a bad day at the office. It doesn't really matter, however. In the end, they cast aside a terrible precedent and made a sensible decision.
Susan Lawrence of Toronto went to her bank one day to inquire about selling her home. Ah, the bank said, you already have! We have the documents right here to prove it. Alas, the documents were forged. A woman posing as Ms. Lawrence had created a phony $318,000 sale agreement involving another imposter, Thomas Wright. Mr. Wright asked for and obtained a $291,000 mortgage from Maple Trust.
As Madam Justice Eileen Gillese summarized the legal question, "In a contest between the two innocent parties -- the homeowner and the> lender of mortgage monies -- who wins?"
That sounds like a provocative question for a law-school exam. Might be fun in a counterintuitive way to argue for the lender. But the Ontario Court of Appeal ruled in a different case two years ago that the lender wins. All three judges who heard the case agreed on that. In that case, a woman fraudulently obtained a mortgage on her husband's share of their house by forging her husband's signature on a power of attorney. She defaulted on the mortgage payments. The husband was held responsible for the mortgage fraudulently registered against him. Why? Because a home sale was valid once the land title was registered, fraud or no fraud.
This was law without justice. A lower-court judge said as much, not in so many words, when a similar case came before him in Ontario Superior Court last November. In an age when identity theft is increasingly common, said Mr. Justice Randall Echlin, "a homeowner's rights ought to be at least equal to the rights of commercial lenders."
For the new case, the Ontario Court of Appeal used a five-judge panel instead of the usual three. It brought out the heavyweights, including Chief Justice Roy McMurtry, and borrowed one judge, Mr. Justice James MacPherson, from the previous panel. Maple Trust, said the five judges unanimously, "had an opportunity to avoid the fraud. It did not take from a registered owner. Therefore, despite registering its charge, Maple Trust loses in a contest with the true registered owner." Justice delayed is better than no justice.
