Trust company does not have to forfeit drug house

A trust company that financed a Surrey house later used for a sophisticated marijuana grow operation did their due diligence before providing the mortgage, the B. C. Supreme Court has ruled.

Justice Brian Joyce said this week that the Maple Trust Company should not have to forfeit its interest in the house at 1173 — 160th Street to the government.

Federal Crown prosecutors had argued that Maple Trust should have checked into claims by Kien Tam Nguyen and his wife Nga Thuy Nguyen that they earned $ 95,000 a year as mushroom farmers before helping the couple buy the house.

Tax records found in the residence during an RCMP raid in 2003 showed the couple’s annual income was less than $ 10,500 at the time.

The Nguyens were convicted of producing marijuana and received a conditional sentence of 18 months in March 2006. They were also ordered to forfeit their equity in the property.

The Crown had also served Maple Trust with a notice of forfeiture of its interest in the house. The lender had provided a mortgage of $ 281,250 when the Nguyens bought the $ 375,000 house in late 2002.

Maple Trust fought back in B. C. Supreme Court, arguing that it shouldn’t have to hand over its interest in the property.

The case was heard in the spring of 2012, with Joyce issuing his ruling Wednesday. He accepted evidence from witnesses for Maple Trust who testified the procedures used by the company for “non- income- qualified mortgage loans” like that obtained by the Nguyens were those of other financial institutions at the time.

Maple Trust underwriter Sannie Fisher testified that “it was not Maple Trust’s policy to independently verify income, perform corporate searches or obtain criminal record checks with regard to borrowers.”

“Ms. Fisher had not been cautioned in any way, in 2002, that marijuana grow ops in residential properties were a significant problem in British Columbia,” Joyce said.

He ruled “the steps taken by Maple Trust were reasonable in the circumstances, particularly when viewed from the perspective of a reasonable mortgage lender for the acquisition of residential property in 2002.”