Pubdate: Wed, 02 Aug 2017
Source: National Post (Canada)
Copyright: 2017 Canwest Publishing Inc.
Author: Julius Melnitzer
Page: FP5


Mortgage dispute with Bank of Nova Scotia

The Federal Court has ordered the Canadian Human Rights Commission to
reconsider a discrimination claim by a licensed medical marijuana
grower after the Bank of Nova Scotia called in his up-to-date mortgage.

Wendy Hulton of Dickinson Wright LLP said last week's ruling reflects
the evolution of popular and judicial attitudes to marijuana,
particularly with its impending legalization for recreational use less
than a year off.

"The facts is this case arose in 2009, which was three sets of
regulations ago," she said. "Justice ( Keith) Boswell recognized this,
and bent over backwards to send off signals that things have changed
since then."

Boswell found the commission had not reviewed "obviously crucial
information" in making its decision. Its investigator did not
determine whether the bank had a pre-existing policy for homeowners
with grow ops, and failed to consider the import of internal bank
emails referring to the grow-op as an issue and questioning its
legality despite the existence of the license.

"A reasonable person would agree that this evidence was crucial
because it lends credence to the applicant's position that his son's
growing of medical marijuana may have been a factor in the bank's
decision to call in the mortgage," Boswell wrote.

Boswell's decision came some seven years after Robert McIlvenna of
Sudbury applied for a line of credit increase for renovations to the
home where his son, his daughter-in-law, and their three children resided.

After the work began, an appraiser attended the premises and learned
that the son had a licence to grow and consume medical marijuana. The
second story addition to the house, he also discovered, was to
accommodate the marijuana plants required in the treatment of the
son's disabilities.

Not only did the bank deny the increase, but it demanded immediate
repayment of the mortgage because McIlvenna had violated its terms. To
accommodate the cannabis, McIlvenna had made extensive renovations to
the home, which were 40 per cent complete at the time the bank re-
appraised the property. The terms of the mortgage required McIlvenna
to keep the property in good condition, inform the bank of planned
improvements, provide a plan and not deviate from the plan. The Bank
alleged that McIlvenna had breached these conditions, reducing the
value of the house by $ 47,000, or $ 8,900 less than the balance owing.

McIlvenna countered that the bank had called the mortgage only because
"it learned that there is cannabis growing on the property." He filed
a complaint with the commission. In 2012, the commission dismissed the
complaint, but ultimately the Federal Court of Appeal quashed the
decision and referred the case back to the commission.

In a 2016 ruling, the commission again dismissed McIlvenna's complaint
without a hearing, reiterating its view that the bank's "decision to
call in the mortgage was not based on a prohibited ground of

But Boswell concluded that the investigation on which the commission's
ruling was "unreasonable" because the investigator had failed to
address the issue of the bank's pre-existing policies and the issues
raised by the internal emails in determining whether the presence of
marijuana had been a factor in calling the mortgage.

"The Commission's decision dated June 16, 2016, is set aside and the
matter is returned to the commission for re-determination and, if
necessary, further investigation in accordance with the reasons for
this judgment," Boswell ordered. The judge also awarded McIlvenna costs.
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