COURT OF APPEAL FOR BRITISH COLUMBIA  
Citation:  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.,  
2022 BCCA 237  
Date: 20220708  
Docket: CA46448  
Between:  
0941187 B.C. Ltd.  
0927613 B.C. Ltd.  
Appellant  
Respondent on Cross Appeal  
(Petitioner)  
And  
Respondent  
Appellant on Cross Appeal  
(Respondent)  
Before:  
The Honourable Madam Justice Fenlon  
The Honourable Mr. Justice Grauer  
The Honourable Mr. Justice Voith  
On appeal from: An order of the Supreme Court of British Columbia, dated  
September 27, 2019 (0941187 B.C. Ltd. v. 0927613 B.C. Ltd., 2019 BCSC 1649,  
New Westminster Docket S147793).  
Counsel for the Appellant:  
S.K. Sheena-Nakai  
C. Holloway  
Counsel for Crowe MacKay & Company in  
its capacity as Trustee in Bankruptcy for  
Jaswant Sangha and representative of  
0927613 B.C. Ltd.:  
J.P. Sullivan  
F. Ravanbakhsh  
Counsel for Piara Johal:  
S.A. Turner  
B.S. Khatra  
Self-represented for 0941185 B.C. Ltd.:  
Place and Date of Hearing:  
M. Bhamrah  
Vancouver, British Columbia  
March 17–18, 2022  
Place and Date of Judgment:  
Vancouver, British Columbia  
July 8, 2022  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 2  
Written Reasons by:  
The Honourable Madam Justice Fenlon  
Concurred in by:  
The Honourable Mr. Justice Grauer  
The Honourable Mr. Justice Voith  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Summary:  
Page 3  
In complex proceedings arising from a failed joint venture, several orders were made  
concerning disposition of funds held in trust, and the parties’ obligations to contribute  
to certain mortgage payments. The appellant appeals from an order declaring a third  
party’s mortgage valid and enforceable, which depleted the trust funds and defeated  
the appellant’s claim for recovery. The respondent cross-appeals the judge’s order  
refusing to compel the appellant to share in the burden of mortgage payments made  
by a company associated with the respondent.  
Held: Appeal and cross-appeal allowed. The judge erred in finding that, even though  
the limitation period had expired, the mortgage was enforceable because it was  
open to the mortgagee to apply to join his claim to extant proceedings. The  
mortgagee had not taken any steps to enforce the mortgage or to add himself to  
extant proceedings. Further, an order allowing all claimants to assert claims in the  
underlying proceeding was procedural, and did not affect the expiry of the limitation  
period. The judge erred in finding that the joint venturers were not liable for  
mortgage payments made on their behalf by a third party; having agreed to be  
responsible for the mortgage liability, they were required to share in the expenses  
regardless of who acted to satisfy their liabilities.  
Reasons for Judgment of the Honourable Madam Justice Fenlon:  
Introduction  
[1]  
In a complex proceeding related to a failed joint venture between the  
appellant, 0941187 B.C. Ltd. (“187”), the respondent, 0927613 B.C. Ltd. (“613”) and  
another company, the managing judge made an order allowing the parties to apply  
in chambers to determine their entitlement to disputed funds. 187 made such an  
application, seeking a declaration that enforcement of a certain mortgage was  
barred by the Limitation Act, S.B.C. 2012, c. 13, and should not be paid out ahead of  
187’s claim. The judge declared the mortgage to be valid and enforceable and  
refused to address other relief sought by 187 because payment of the disputed  
mortgage depleted the remaining funds. 187 appeals those orders.  
[2]  
The respondent 613 cross-appeals the judge’s order refusing to compel 187  
to share the burden of other mortgage obligations incurred on behalf of the joint  
venture.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 4  
Background  
[3]  
In May 2012, three closely held companies, 187, 613 and 0941185 B.C. Ltd.  
(“185”), entered into a joint venture agreement to acquire three properties—referred  
to as Lots 1, 2 and 3—and develop townhouses for sale (“the Project”). 613 was  
controlled by Jaswant Sangha who, prior to declaring personal bankruptcy, was its  
sole shareholder, officer and director. Under the joint venture agreement (the “JVA”)  
Mr. Sangha was to be the manager of the Project, and each of 613, 187 and 185  
was to hold title to the three properties in a percentage reflecting their contribution to  
the Project.  
[4]  
Lots 1 and 2 were acquired in May and July 2012, using both mortgage  
financing and funds provided by the three joint venturers. Given the disproportionate  
share of funds contributed by each of the joint venturers, the JVA was amended in  
August 2012. The parties also entered into an option agreement by which 613 was  
to make certain payments to 187, and if it failed to do so, 187 could forgive the  
amount due and become entitled to a percentage of 613’s interest in the lots. 613  
did not make the required payments, so 187 sought to have the percentage interest  
transferred; 613 refused.  
[5]  
In December 2012, 187 commenced the proceeding underlying this appeal.  
At the outset, the issues raised in the proceeding concerned 187’s entitlement to an  
increased percentage interest in the properties as a result of 613’s failure to make  
required payments. An arbitrator confirmed that 187 was entitled to a 56.1% interest  
in each of Lot 1 and 2; Lot 3 was not in issue because it had not yet been acquired.  
The arbitrator’s decision was overturned by the BC Supreme Court but eventually  
reinstated by this Court in September 2015.  
[6]  
The acquisition of Lot 3 was essential to the Project because it provided  
access to the other two lots. For reasons the parties do not agree on—each blaming  
the other—the purchase of Lot 3 by the joint venture fell through. Thereafter, on  
June 3, 2013, Mr. Sangha and Makhan Bhandal purchased Lot 3 in their own names  
as tenants in common. The vendor gave Mr. Sangha and Mr. Bhandal a credit for  
the $500,000 deposit put up by the joint venturers as part of their failed offer—a  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 5  
deposit Mr. Sangha says would otherwise have been forfeited. 187 and 185 took the  
view that Mr. Sangha had improperly used their money to purchase Lot 3 for his own  
benefit. In August 2014, 187 commenced an action against Mr. Sangha and  
Mr. Bhandal seeking a declaration that they held the legal title in trust for the joint  
venturers.  
[7]  
To finance the acquisition of Lot 3, Mr. Sangha and Mr. Bhandal granted  
mortgages to V.W.R. Capital Corp. in the amount of $1.25 million and to Manjinder  
and Rajvinder Pooni in the amount of $165,000. Further mortgages were granted in  
November 2013 to Jagdip Janda in the amount of $60,000 (the “Janda Mortgage”)  
and to Piara Singh Johal in the amount of $460,000 (the “Johal Mortgage”). It is the  
Johal Mortgage that 187 sought to have declared invalid and unenforceable in the  
hearing below. The Johal Mortgage was granted as partial security for loan  
advances totaling $765,000 made by Mr. Johal and his wife to Mr. Sangha and  
another company he controlled, Panorama Park View (“Panorama”), between  
February 2013 and January 2014. It appears that those advances were used by  
Mr. Sangha and Panorama primarily in connection with another development project  
he was involved in, but at least some of that money was used to fund the Project.  
[8]  
No payments were made on the Lot 3 mortgages. In March 2014, the first  
mortgagee, V.W.R. Capital, commenced foreclosure proceedings on Lot 3. Shortly  
thereafter, the second mortgagees, Manjinder and Rajvinder Pooni, followed suit,  
commencing separate foreclosure proceedings. At about the same time, foreclosure  
proceedings were filed against Lots 1 and 2. Neither Mr. Janda nor Mr. Johal  
commenced foreclosure proceedings or an action in debt in relation to their  
mortgage loans. Eventually orders nisi of foreclosure were granted in respect of all  
three lots. In June 2014, the Poonis, as second mortgagees on Lot 3, obtained an  
order for conduct of sale of that property.  
[9]  
Ultimately, all three lots were sold by private sale to a single purchaser on  
December 5, 2014. After discharging the undisputed mortgage charges on all three  
lots, the proceeds of approximately $1.67 million were retained in a lawyer’s trust  
account.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 6  
[10] The Janda Mortgage and the Johal Mortgage were not paid out. The many  
parties claiming an interest in the proceeds of the three lots agreed that the  
proceeds should continue to be held in the law firm’s trust account on the condition  
that they would not be released except pursuant to court order or agreement. By the  
time of the hearing below, approximately $320,000 remained in trust from the sale of  
Lot 3. It was evident to all concerned that there would be nothing left for 187 and 185  
if Mr. Johal’s $460,000 mortgage were to be paid out.  
[11] Mr. Sangha was assigned into bankruptcy in August 2015. His other closely  
held company, Panorama, was assigned into bankruptcy in April 2016. Both estates  
are being administered by Crowe MacKay & Company (the “Trustee”). Although 613  
has not been declared bankrupt, Mr. Sangha could no longer act as its director and  
officer, and control of that company, too, lies with the Trustee. I will accordingly refer  
to the Trustee in these reasons interchangeably with 613.  
[12] In June 2017, 187 filed an application seeking leave to amend its pleading in  
this proceeding, to pursue its claim to entitlement to the proceeds of Lots 1 and 2,  
and to resolve the remaining issues between the parties by way of arbitration in  
accordance with the JVA. The Trustee filed an application response on behalf of 613  
opposing the arbitration relief sought by 187 and proposing, instead, that all matters  
relating to the parties’ entitlement to the disputed funds, including the proceeds from  
the sale of Lot 3, be resolved in a single proceeding.  
[13] On September 21, 2017, the judge issued an order releasing some of the Lot  
1 and Lot 2 sale proceeds to 187, the Trustee, and two parties who had held  
mortgages over Lots 1 and 2. In that same order the judge directed that the Lot 3  
fund remain in trust with the law firm pending further order of the court. He directed  
that 187 and 613 were at liberty to bring an application before him to determine  
entitlement to disputed funds, including the Lot 3 funds, and provided that any party  
claiming an interest in the disputed funds was entitled to file a response to such  
application (the “September 2017 Order”).  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 7  
[14] On October 10, 2017, the judge made an order by consent that Mr. Janda’s  
mortgage was valid and enforceable, and ordered a payment to him from the Lot 3  
funds held in trust in the amount of $106,000.  
The Hearing Below  
[15] In accordance with the September 2017 Order, 187 applied to establish its  
entitlement to proceeds from Lots 1, 2 and 3. More particularly, 187 sought:  
1.  
2.  
A declaration that it was a beneficial owner of 56.1% of Lot 3;  
A declaration that the Johal Mortgage against Lot 3 was invalid and  
unenforceable; and  
3.  
Payment out of the remaining Lot 3 fund to 187.  
[16] The Trustee opposed the relief sought by 187 in respect of the Lot 3 fund,  
taking the position that the Johal Mortgage was valid, enforceable, and should be  
paid first, which would entirely deplete the Lot 3 proceeds. The Trustee also sought  
repayment of certain expenses incurred by 613 on behalf of the joint venture.  
Mr. Johal filed an application response adopting the submissions of the Trustee with  
respect to the validity and enforceability of his mortgage; this marked the first time  
Mr. Johal had asserted his claim in a legal proceeding.  
[17] In a nine-page decision, the judge found the Johals had advanced $765,000  
to Mr. Sangha and Panorama, which constituted consideration for the Johal  
Mortgage. He therefore concluded that the mortgage was valid. Although the  
limitation period for action on the Johal Mortgage had expired, the judge accepted  
the Trustee’s submission that there were a number of extant proceedings in which  
Mr. Johal could obtain a declaration as to the validity of his mortgage and concluded  
it was therefore enforceable. Because all of the proceeds from the sale of Lot 3  
would be required to partially satisfy the Johal Mortgage, the judge declined to make  
a determination as to the beneficial ownership of Lot 3.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 8  
[18] Turning to the Trustee’s claim for a contribution from 187 for mortgage  
payments made on Lots 1 and 2, the judge found that 187 and 185 should be  
responsible only for payments made by 613 directly to the mortgagees; he  
concluded they were not responsible for payments Mr. Sangha had caused  
Panorama to make directly to the mortgagees because Panorama was not a joint  
venture party and there was no evidence that 613 had authorized Panorama to  
make payments on its behalf.  
On Appeal  
[19] The appellant challenges the judge’s finding that the Johal Mortgage was  
both valid and enforceable. If the mortgage is found to be unenforceable, 187 seeks  
a ruling on its unresolved beneficial interest claim. If the judge’s conclusion on the  
enforceability of the Johal Mortgage is upheld, 187 seeks a ruling on its claim to be  
reimbursed by Mr. Sangha for 56.1% of the Johal Mortgage, which 187 argues  
should not have been registered against Lot 3 because the money advanced was  
not used for the Project. 187 also seeks recovery of 56.1% of the payment out on  
the Janda Mortgage.  
[20] The Trustee cross-appeals from the judge’s refusal to compel 187 to  
contribute to the mortgage payments made by Panorama to pay down the  
mortgages on Lots 1 and 2. I will deal with each appeal in turn.  
1.  
187’s appeal  
[21] I begin by noting that 187’s standing to challenge the Johal Mortgage is  
based on its unresolved claim to a beneficial 56.1% interest in Lot 3, and thus the  
proceeds of sale. The judge did not decide that claim, but it was raised first in  
sequence in the notice of application before him. On appeal, Mr. Johal  
acknowledges that no party raised an objection to 187’s standing to challenge the  
Johal Mortgage given their shared interest in resolving all outstanding matters  
expediently, as reflected in the September 2017 Order. In short, it made sense for  
the judge to first decide whether the Johal Mortgage was valid and enforceable: if it  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 9  
were, there would be nothing left for 187 to recover and no reason for it to pursue a  
beneficial interest in the proceeds.  
[22] As noted above, Mr. Johal was self represented in the hearing below. It was  
the Trustee, standing in for 613, who opposed 187’s application for a declaration that  
the Johal Mortgage was invalid and unenforceable, with Mr. Johal adopting the  
Trustee’s submissions. The Trustee explained that it supported payment of the Johal  
Mortgage because doing so benefitted creditors in the Panorama bankruptcy. That  
was so because the Trustee had accepted Mrs. Johal’s claims against the estates of  
Mr. Sangha and Panorama for $205,542 and $716,709 respectively. Those claims  
reflected advances made jointly by the Johals and secured in part by the mortgage  
against Lot 3. If Mr. Johal could recover the mortgage of $460,000 from the Lot 3  
proceeds, that would result in a corresponding decrease in the Johals’ claim against  
the assets of Panorama, leaving more money for the creditors of that company.  
[23] 187 argues that, as a neutral administrator, the Trustee should not have  
acknowledged the Johal Mortgage given that the limitation period had expired. It  
submits the Trustee should not prefer the creditors and claimants in one bankruptcy  
over claimants in other proceedings. Fundamentally, 187 says it was not open to the  
Trustee to accept a claim that is statute barred, relying on Roberts v. E. Sands &  
Associates Inc., 2014 BCCA 122 at para. 49 and Asian Concepts Franchising  
Corporation (Re), 2018 BCSC 1022 at para. 115.  
[24] I agree that it is not open to the Trustee as a matter of expediency to validate  
claims without regard to the Limitation Act. At the hearing below, the Trustee  
acknowledged that Mr. Johal had not pursued his claim within the limitation period,  
but supported its position on the basis that under s. 22(1) of the Limitation Act, a  
related claim can be added to a proceeding even after a limitation period has  
expired. The Trustee argued that Mr. Johal’s claim could have been added to a  
number of extant proceedings, including the present one, thereby avoiding the  
limitation bar. Mr. Johal adopted those submissions.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 10  
[25] On appeal, Mr. Johal advanced an argument not made at the hearing below.  
Supported by the Trustee, he asserted that the Trustee had formally acknowledged  
the Johal Mortgage before the expiry of the limitation period, thereby extending the  
limitation period under s. 24 of the Limitation Act and removing any bar to its  
enforcement. This argument rested on the limitation period beginning to run in  
December 2014, the date on which the principal was due under the terms of the  
Johal Mortgage, and expiring two years later, in December 2016. The Trustee had  
acknowledged the Johal Mortgage as a valid claim against Mr. Sangha’s estate in  
June 2016 in response to an application brought by 187 to declare it invalid. (I note  
here that the judge stated, at para. 33 of his reasons, that the earliest the limitation  
period could have started to run was December 2015, but all parties agree this is an  
error with no basis in the evidence.)  
[26] However, the argument based on s. 24 of the Limitation Act was withdrawn at  
the end of the appeal submissions in response to a question from the Court. On  
review of the mortgage terms, Mr. Johal and the Trustee conceded that under an  
acceleration clause in the standard mortgage terms, the entire principal had become  
due on the first default of payment of interest which occurred in December 2013. It is  
now common ground that the limitation period for enforcement of the Johal Mortgage  
expired in December 2015, before the Trustee acknowledged the claim. In the result,  
s. 24 of the Limitation Act has no application and the Trustee and Mr. Johal are left  
to support the enforceability of the mortgage on the basis of the submissions made  
in the court below, having unfortunately spent little time addressing those arguments  
on appeal.  
[27] The Trustee’s response to 187’s application succinctly describes its  
submission that the expiry of the limitation period was not a bar to the enforceability  
of the Johal Mortgage:  
8.  
Finally, although the limitation period has expired for initiating a  
proceeding to enforce the Johal Mortgage, it remains open to Mr. Johal  
to either: (a) be added as a party to these or the other extant  
proceedings that seek relief in respect of the proceeds from the sale of  
Lot 3; or (b) bring an application in these proceedings as a party  
“claiming an interest” in same.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
9. Under section 22(1) of the Limitation Act, S.B.C. 2012, c. 13 (the  
Page 11  
“Limitation Act”), despite the expiry of an applicable limitation period,  
new parties may be added to claims commenced within the limitation  
period if the new parties’ claims relate to, or are connected with the  
extant proceedings.  
10. Rule 6-2(7) of the Supreme Court Civil Rules provides that at any stage  
of a proceeding any person may apply to be added as a party if there  
exists between that person and any party an issue relating to, or  
connected with, any relief claimed in the proceeding.  
[28] The Trustee identified three extant proceedings to which s. 22(1) of the  
Limitation Act could apply:  
i.  
The V.W.R. foreclosure petition in relation to Lot 3 commenced March  
19, 2014 (the “V.W.R. Foreclosure”);  
ii.  
187’s action commenced in August 2014 against Mr. Sangha and  
Mr. Bhandal seeking a declaration that they held Lot 3 in trust for the joint  
venturers (“the Trust Proceeding”); and  
iii.  
The proceeding started by 187 in December 2012 to obtain a greater  
percentage of the properties and which underlies this appeal (“the Underlying  
Proceeding”).  
[29] For the reasons that follow, I conclude, with respect, that the judge fell into  
error in adopting the Trustee’s submissions on this point and concluding that the  
expiry of the limitation period did not bar recovery of the Johal Mortgage.  
[30] First, the judge declared the Johal Mortgage to be valid based on the  
potential for Mr. Johal to overcome the limitation bar by being allowed to advance his  
mortgage claim in an extant proceeding. However, Mr. Johal had not applied to be  
added to any of the proceedings identified by the Trustee. Section 22(1) provides:  
22 (1) If a court proceeding has been commenced in relation to a claim  
within the basic limitation period and ultimate limitation period applicable to  
the claim and there is another claim (the "related claim") relating to or  
connected with the first mentioned claim, the following may, in the court  
proceeding, be done with respect to the related claim even though a limitation  
period applicable to either or both of the claims has expired:  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
(a) proceedings by counterclaim may be brought, including the  
Page 12  
addition of a new party as a defendant by counterclaim;  
(b) third party proceedings may be brought;  
(c) claims by way of set off may be advanced;  
(d) new parties may be added or substituted as plaintiffs or  
defendants.  
[Emphasis added.]  
Rule 6-2(7) of the Supreme Court Civil Rules, B.C. Reg 168/2009 provides:  
(7) At any stage of a proceeding, the court, on application by any person,  
may, subject to subrules (9) and (10),  
(a) order that a person cease to be party if that person is not, or has  
ceased to be, a proper or necessary party,  
(b) order that a person be added or substituted as a party if  
(i) that person ought to have been joined as a party, or  
(ii) that person's participation in the proceeding is necessary  
to ensure that all matters in the proceeding may be effectually  
adjudicated on, and  
(c) order that a person be added as a party if there may exist,  
between the person and any party to the proceeding, a question or  
issue relating to or connected with  
(i) any relief claimed in the proceeding, or  
(ii) the subject matter of the proceeding  
that, in the opinion of the court, it would be just and convenient to determine  
as between the person and that party.  
[Emphasis added.]  
[31] The underlined portions demonstrate, as one would expect, that a person  
wishing to add, or be added as, a party must take steps to do so. Mr. Johal did not  
take any steps to be added to another proceeding. It was an error for the judge to  
treat the potential for an application to be brought as equivalent to an application  
having been brought and granted, with the substantive claim for payment ultimately  
being resolved in the proceeding in Mr. Johal’s favour.  
[32] Second, the judge did not consider the legal and practical obstacles to the  
joinder of Mr. Johal’s claim to one of the extant proceedings. Had Mr. Johal applied  
to be added as a party, the judge hearing the application would have had to exercise  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 13  
the court’s discretion to allow a party whose claim is otherwise barred by the  
Limitation Act, to proceed, considering the factors set out in The Owners, Strata Plan  
No. VIS3578 v. John A. Neilson Architects Inc., 2010 BCCA 329 at para. 46, which  
include:  
1.  
Extent of the delay between the expired limitation period and the date  
of the application: In the present case no application had been made, but the  
limitation period had expired almost four years prior to the hearing;  
2.  
Reasons for the delay: 187 asserts the Johals had intentionally chosen  
not to pursue the mortgage debt initially, opting instead to pursue recovery in  
the Panorama proceedings under contractual rights they had in relation to  
that company’s project;  
3.  
Prejudice due to the delay in pursuing the claim: 187 had continued to  
oppose the mortgage and incurred costs to pursue its trust claim to Lot 3; and  
4.  
Whether it is just and convenient to add the claim to the proceedings:  
here, quite apart from the problem of trying to add claims to a petition  
proceeding (see Edward Chapman, Limited v. FS Property Inc., 2022 BCCA  
213), the V.W.R. Foreclosure had ended with the sale of Lot 3 and arguably  
was no longer extant. In the Trust Proceeding, the beneficial interest claim  
was independent of the existence of the Johal Mortgage. Further, 187 was  
the plaintiff and Mr. Sangha and Mr. Bhandal were the defendants; 187 says  
that none of the counterclaim, set-off or third-party routes would be open to  
Mr. Johal who would effectively have to be added as another plaintiff. 187  
says the Underlying Proceeding is between 187 and 613, while Mr. Johal’s  
claim is against Mr. Sangha and Mr. Bhandal.  
[33] It is not necessary for this Court to determine whether, in the face of these  
obstacles, Mr. Johal would have succeeded in being added to one of the three  
claims the Trustee asserts were extant and related. However, the difficulties  
identified above serve to demonstrate that it was not patently obvious that Mr. Johal  
would have succeeded had such an application been made. It was a clear error for  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 14  
the judge to ignore both the need for an application and for judicial assessment of  
the propriety of adding Mr. Johal’s claim to any of the extant proceedings—quite  
apart from the further requirement that Mr. Johal actually prove his entitlement to  
collect on the mortgage in those proceedings. In effect, the judge disregarded all of  
the procedural and substantive requirements necessary for Mr. Johal to establish the  
enforceability of his mortgage, saying only:  
[38]  
I accept 613’s position that a declaration that the Johal Mortgage is  
valid in this proceeding does not give any substantive rights to Mr. Johal that  
he otherwise did not have because of the extant proceedings in which he was  
involved in relation to the claim against the Lot 3 proceeds.  
[34] If the judge was relying on Mr. Johal’s rights under the September 2017  
Order, I conclude that he erred in so doing. The relevant paragraph of the order  
reads:  
The Petitioner or the Respondent shall be entitled to bring an application  
before Mr. Justice Bowden to determine the entitlement to the Disputed  
Funds, and any party claiming an interest in the Disputed Funds shall be  
entitled to file a Response. The Rules of Court shall apply to these  
proceedings.  
[35] I agree that this order gave Mr. Johal the right to assert a claim to payment of  
the mortgage debt. But it gave no substantive rights to Mr. Johal or to any other  
party claiming an interest in the disputed funds. The order was made to avoid a  
multiplicity of proceedings, allowing all interested parties to address their claims to  
the proceeds at one time. It is self-evident that the court would be required to sort  
out which of those claims were valid. In other words, the right to make a claim says  
nothing about whether the claim will ultimately be found to be a valid and  
enforceable one.  
[36] In my respectful view, the judge erred in assuming that declaring the Johal  
Mortgage valid would not give Mr. Johal substantive rights he did not already have:  
at para. 38. When the judge made the September 2017 Order, the limitation period  
for enforcing the mortgage had expired almost two years earlier. The September  
2017 Order compelling all interested parties to pursue their claims before him did not  
alter the legal status of the Johal Mortgage. Put another way, the judge’s procedural  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 15  
order could neither extend the running of the limitation period nor negate defences  
available to those opposing any claim to be asserted.  
[37] In short, 187 was before the court almost four years after the limitation period  
had expired, seeking a declaration that the debt was therefore unenforceable.  
Mr. Johal had taken no steps to enforce the mortgage or the debt and had not  
applied to be added to any extant proceeding under s. 22-1 or Rule 6-2(7). Nor was  
such an application before the judge. It was not open to the court in these  
circumstances to identify a potential avenue that Mr. Johal could have taken to try to  
overcome the limitation bar but had not, and on that basis to deny 187 a declaration  
that was otherwise available to it on the existing record.  
[38] The third reason I conclude the judge fell into error is his reliance on 187’s  
and 613’s decision to consent to the payment out of Mr. Janda’s mortgage as  
support for the validity and enforceability of the Johal Mortgage, saying:  
[37]  
In this proceeding, this court has previously declared the Janda  
Mortgage to be valid when Mr. Janda was not added as a party and ordered  
that anyone, including Mr. Johal, claiming an interest in the proceeds from the  
sale of Lot 3, could advance their claim in this proceeding.  
[39] Because Mr. Janda was experiencing serious health issues, 613 and 187 had  
consented on compassionate grounds to the payment out of his mortgage claim,  
although 187 did so without prejudice to its asserted right to recover 56.1% of the  
Lot 3 fund calculated prior to that payment. While the Janda order supported the  
flexibility of allowing persons not named as parties in the current proceeding to  
assert claims in the proceeding, 187’s abandonment of its opposition to Mr. Janda’s  
mortgage in these circumstances did not amount to support for the validity and  
enforceability of the Johal Mortgage, which remained very much in dispute.  
[40] I turn now to the trust agreement Mr. Johal relies on to support the  
enforceability of his mortgage. He submits that, following the sale of Lot 3, all  
interested parties entered into a trust agreement which preserved his right to pursue  
his claim. The agreement consists of an email sent by a lawyer for one of the  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 16  
interested parties on December 22, 2014, just after the three lots were sold, and  
reads:  
All,  
I confirm that the mortgages, taxes, legal fees and disbursements cheques  
have been or will be paid out today and I am holding the balance in trust. Our  
accounting and conveyancing department are still updating their systems so I  
will provide the final numbers as soon as they can get it to me (and of course  
we are short staffed now too for the holidays but hopefully by the end of the  
day).  
941187 BC Ltd request that the proceeds be moved to Sanghera Law Group  
after closing.  
I attach the following undertaking letters from Ms. Zheng (for J. Virk) and  
Mr. Deol (for Poonis) that are placed upon me.  
I have confirmed verbally with Jagdip Janda that he consents to the funds  
being held at Sanghera law group provided they cannot be released without  
his consent or a court order. I understand he is in the process of obtaining  
counsel. He is being blind copied on this email and I will facilitate  
communication with him until he has a lawyer.  
Each of you and/or your clients have claimed an interest in the proceeds and  
I believe I need consent from the following parties or their respective counsel  
in order to move the funds:  
941185 BC Ltd (self-representing)  
927613 BC Ltd (George Sourisseau)  
Jaswant Sangha (George Sourisseau)  
941187 BC Ltd and Ms. Kular (Susanne Sheena-Nakai)  
Makhan Singh Bandhal (Rav Uppal)  
Piara Singh Johal (Manpriya Sarang)  
Manjinder Singh Pooni and Rajvinder Kaur Pooni (Raj Deol)  
Jagdip Janda (self-representing)  
Please review the attached letters and confirm your consent. Upon receipt of  
consent from all, we will forward the proceeds to Sanghera Law Group.  
[Emphasis added.]  
(I note that the letters referred to at para. 3 of this email are not relevant to  
Mr. Johal’s argument).  
[41] Mr. Johal submits that the agreement documented in this email—to hold the  
proceeds from the sale until court order or agreement of the various claimants—had  
the effect of tolling the running of the limitation period. I cannot accede to this  
submission. It is a bare agreement to hold disputed funds in a lawyer’s trust account.  
There is, certainly, an acknowledgement that various parties are asserting an  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 17  
interest in the proceeds and that those will have to be determined. But nothing  
suggests that any of the parties have agreed to suspend the running of limitation  
periods or to forgo any rights and remedies they may have.  
[42] Mr. Johal argues further that he was under no obligation to move on his claim  
because the trust agreement did not require the parties to bring their claims within  
any particular period of time. But that is to grab the wrong end of the stick and to  
ignore the statutory framework; the Limitation Act continued to apply absent an  
acknowledgement of Mr. Johal’s claim by the mortgagor or an agreement by the  
parties to toll the limitation period.  
[43] Mr. Johal says, at a minimum, that the holding of the proceeds in this manner  
left him unaware that he needed to take steps to pursue this claim. He says further  
that no one told him they were disputing his mortgage. I see no merit to this  
submission. The very email he relies on confirms that a number of mortgages were  
paid out that day, December 22, 2014. It should have been apparent to Mr. Johal  
that, unlike the first and second mortgages on Lot 3, his mortgage, like Mr. Janda’s,  
had not been paid out of the sale proceeds, and that he was in the category of  
“someone claiming an interest.” Nor was it incumbent on those opposing his claim to  
encourage him to take steps to enforce his rights before the limitation period expired.  
[44] In summary on the appeal, I conclude that the appeal must be allowed, the  
declaration of validity set aside, and the Johal Mortgage declared to be  
unenforceable. In light of that conclusion it is not necessary to consider 187’s  
alternative argument that the mortgage was invalid from the outset for lack of  
consideration.  
[45] It is, however, necessary to address 187’s application for a declaration that  
Mr. Sangha and Mr. Bhandal held Lot 3 in trust for the joint venturers. 187 contends  
it is not necessary to remit the question to the trial court because, in discovery,  
Mr. Sangha made an admission that he held Lot 3 in trust. The Trustee maintains  
that the matter remains a live issue, that Mr. Sangha’s answer, when read in context,  
is not conclusive, and that the record before this Court is insufficient to determine the  
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Page 18  
issue. Without making any comment on the significance of the discovery transcript  
relied on by 187, I agree that this Court is not in a position to decide the question  
and that it must be remitted to the trial court for determination.  
[46] I would also remit to the trial court 187’s application for 56.1% of the payment  
made to Mr. Janda to satisfy his mortgage.  
2.  
613’s cross-appeal  
[47] In the hearing below, 613 sought contribution from 187 and 185 for mortgage  
payments made by 613 on mortgages registered against Lots 1 and 2. Under the  
terms of the JVA, each of the joint venturers agreed to be responsible for a  
proportionate share of both the benefits and the burdens associated with the joint  
venture. The relevant portions of the JVA are set out below:  
3.3  
Revenues, Benefits, Obligations, Liabilities  
Unless this Agreement otherwise provides, all revenues and benefits derived  
from, and all obligations and liabilities incurred in respect of the Project will be  
received or borne, as the case may be, by the Joint Venturers in the ratio of  
their Ownership Percentages.  
…
3.5  
Scope of Authority  
The Joint Venturers will be responsible for the liabilities and obligations of the  
Project in accordance with their respective Proportionate Shares, except that  
any liability or obligation incurred by one Joint Venturer without the written  
consent of the others or as otherwise provided in this Agreement will be the  
sole liability or obligation of the Joint Venturer incurring the same, without any  
rights to contribution from or indemnity by the other Joint Venturers. Each  
Joint Venturer will indemnify and hold harmless the other Joint Venturers  
from and against all costs, claims, demands and any liability whatsoever  
arising out or relate to a breach of this provision. The provisions of this  
paragraph will survive any termination of this Agreement or the Joint Venture.  
…
5.2  
Responsibilities  
0927613. 0941l87 and 0941185 will be responsible for the following:  
…
(c) The Joint Venturers will advance to the Joint Venture, in the ratio  
of its Proportionate Share, all amounts of money required from  
time to time associated with payment of any and all mortgages  
registered against the Lands and for the payment in full of the  
principal and interest upon sale. [Emphasis added.]  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 19  
[48] The judge found as a fact that the joint venturers agreed, in writing, to the  
mortgage liabilities granted to Pacific Coast Mortgage Investment Corporation  
(“PCMC”) for Lot 1, and the Greyfriars Mortgage Investment Corporation  
(“Greyfriars”) and Westminster Savings Credit Union (“WSCU”) mortgages granted  
over Lot 2. He also found that 187 and 185 had not made any payments on account  
of those mortgages: at paras. 5, 17 and 25. All of the payments on the approved  
mortgages were made by Mr. Sangha through 613 and Panorama. At the time, he  
was the manager of the joint venture and the sole shareholder and director of each  
of 613 and Panorama. Panorama funded a number of the Joint Venturers’ mortgage  
payments. Some of those payments were made indirectly by lending the money to  
613, which then paid the mortgagees. Panorama also made some of the mortgage  
payments directly to the mortgagees, without the funds passing through 613.  
[49] From July 2012 until February 2013, 613 made payments on the mortgages  
totaling $86,490. 613 also made payments on the WSCU mortgage totaling $48,150,  
using funds borrowed from Panorama. During that same period Panorama made  
payments directly towards the PCMC and Greyfriars mortgages in the amount of  
$108,554.  
[50] The judge found 187 was required to contribute to any payments made  
directly by 613, whether those funds were borrowed from Panorama or paid directly  
from 613’s funds, but declined to order 187 to contribute to mortgage payments  
made by Panorama directly, saying:  
[27]  
In my view, the distribution of 187’s share of the balance of sale  
proceeds is subject only to the deduction of the payments made by 613 in  
respect of the PCMC Mortgage and Greyfriars Mortgage of $86,490 as well  
as the payments made in respect of the WSCU Mortgage totaling $48,150.  
The fact that the source of the funds used by 613 was a loan to 613 from  
Panorama does not alter the obligation of 187 to contribute its share of those  
expenses provided that 613 used those funds to pay the expenses. However,  
without evidence showing that 613 authorized Panorama to make the  
payments on its behalf, any expenses paid directly by Panorama do not give  
rise to a claim of contribution against 187.  
[Emphasis added.]  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 20  
[51] It is 187’s responsibility for its share of the $108,554 paid by Panorama  
directly that is in issue in the cross-appeal. The Trustee contends the judge made  
two errors. First, 187 says the judge erred in finding there was a lack of evidence to  
show that 613 requested and authorized Panorama to make these payments on its  
behalf, given that Mr. Sangha was the sole directing mind of both corporations and  
therefore necessarily requested and authorized such payments. Second, 187 says  
the judge erred in finding that the JVA did not require the joint venturers to contribute  
to payments made by a non-joint venture party.  
[52] Although I acknowledge there may be merit to the first ground of appeal, I will  
begin with the second, as it is, in my view, determinative.  
[53] The judge appears to have differentiated between the incurring of the  
mortgage liability and the making of payments to service or pay down that liability,  
finding consent of the joint venturers was required for both. However, no further  
liability or obligation was incurred when Panorama paid the $108,554 towards the  
PCMC and Greyfriars mortgages. The joint venturers already owed those funds and  
had agreed that they were expenses of the joint venture. No further authorizations  
were required to make 187 responsible for those debts.  
[54] Put another way, clause 3.5 provides that “the Joint Venturers will be  
responsible for the liabilities and obligations of the Project in accordance with their  
respective Proportionate Shares” as long as those liabilities and obligations were  
agreed to in writing. Since the mortgage obligations were agreed to by the joint  
venturers, all of them were required to share in those expenses. Nothing in the JVA  
limits the requirement to pay their share of such obligations to payments made only  
by one of the joint venturers. In effect, the judge rewrote the JVA, restricting it to  
expenses paid down by one of the joint venturers directly. Having authorized the  
mortgages to be paid, 187 and 185 are liable to contribute to the payment of those  
mortgages, no matter who acted to satisfy the Joint Venturers’ liabilities, whether  
Mr. Sangha personally or one of his companies. That interpretation of the relevant  
clauses is consistent with a reading of the contract as a whole, giving the words their  
ordinary and grammatical meaning.  
0941187 B.C. Ltd. v. 0927613 B.C. Ltd.  
Page 21  
[55] In summary, the joint venturers are responsible for those mortgage  
obligations paid down by Panorama directly to the mortgagees in the amount of  
$108,554, in addition to the $134,640 that 613 paid directly from its accounts.  
Disposition  
[56] I would allow the appeal by setting aside the declaration that the Johal  
Mortgage is valid and enforceable, and declaring that the Johal Mortgage is  
unenforceable. I would remit to the trial court for determination 187’s applications for  
a declaration that Lot 3 was held in trust for the joint venture by Mr. Sangha and  
Mr. Bhandal, and for 56.1% of the payment made to Mr. Janda.  
[57] I would allow the cross-appeal and order that the joint venturers are also  
responsible for the $108,554 paid directly by Panorama to the mortgagees of Lots 1  
and 2.  
“The Honourable Madam Justice Fenlon”  
I AGREE:  
“The Honourable Mr. Justice Grauer”  
I AGREE:  
“The Honourable Mr. Justice Voith”  


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