In a case involving a mortgage fraud, the property at issue was a residence jointly owned by a husband and wife. The couple’s son, who lived in the basement, had the same name as his father, and he arranged for a mortgage in his father’s name. The son persuaded his mother to sign the mortgage, and the mother and son executed a statutory declaration that they were the owners of the property and it was their principal residence. The property was subsequently mortgaged 12 times over in the same fashion in ever-increasing amounts. The mortgage went into default, and the Plaintiff mortgagee, Inland Financial, applied for Foreclosure, and in the alternative, for Judgment in personam. The husband and wife cross-applied to have the Action dismissed against them.

One of the bases of the dismissal Application was whether the Dower Act, RSA 2000, c D-15 could be used to invalidate Inland’s mortgage, as the father had not given consent to the mortgage disposition. Master Schlosser noted that this reading of the Dower Act would result in, ironically, the perfection of a fraud. Master Schlosser also noted that reliance on the Dower Act had not been pled, which was likely to result in surprise to the Plaintiff and therefore a contravention of Rule 13.6. The Case Management Judge had attempted to point the Defendants toward an amendment to cure the imperfection, but as of the date of the Applications, no such amendment had been made. The Plaintiff had admitted that it was not in fact surprised by the reliance on the Dower Act. Master Schlosser noted that the Court could make a “housekeeping” amendment to the Pleadings to permit this portion of the Application to go ahead.

The Court granted the Plaintiff Judgment in personam against the son, discharged the mortgage, and dismissed the Plaintiff’s claims as against the mother and father.