215 Registration Of Certificate Of Pending Litigation In Same Manner As Charge

FORMS

Approved Forms 31, 32, 33, and 34

The director has approved the use of Forms 31, 32, 33, and 34. The forms are available for download at https://ltsa.ca/professionals/land-title-practice/land-title-forms/.

Submissions

On the Form 17 Charge, Notation or Filing, select Nature of Interest, Certificate of Pending Litigation, and attach an image of the original Form 31, 32, 33, or 34 and the applicable originating process (for example, a petition, notice of civil claim, counterclaim, or notice of application).

The Certificate of Pending Litigation receives preliminary examination prior to receiving an application number, date, and time.

Registering Certificate of Pending Litigation in Family Matters, Form 33

The director has approved two versions of Form 33 for registering a certificate of pending litigation in family matters. Proceedings commenced after the coming into force of the Family Law Act, S.B.C. 2011, c. 25 must use Form 33 (Family Law Act). Proceedings to enforce, set aside, or replace an agreement respecting a property division made before March 18, 2013 and proceedings respecting a property division started under the Family Relations Act, R.S.B.C. 1996, c. 128 (repealed March 18, 2013 by B.C. Reg. 131/2012) must use Form 33 (Family Relations Act). See the transitional provisions in s. 252 of the Family Law Act at chapter 42 (Family Matters).

Form 33 has been amended to refer to Supreme Court Family Rule 22-8 and, consistent with the terms used in the Notice of Family Claim, refers to the parties as “Claimant” and “Respondent”.

Registering Certificate of Pending Litigation in Variation of Wills, Form 34

The director has approved two versions of Form 34 for registering a certificate of pending litigation in proceedings to vary a will. The Wills Variation Act, R.S.B.C. 1996, c. 490 was repealed on March 31, 2014 by B.C. Reg. 148/2013, and replaced by corresponding provisions in Part 4, Division 6 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13. The Wills Variation Act applies to deaths occurring before March 31, 2014, and the Wills, Estates and Succession Act applies to deaths occurring on or after March 31, 2014. Proceedings to vary a will in relation to a death that occurred before March 31, 2014 must use Form 34 (Wills Variation Act); proceedings to vary a will in relation to a death that occurred on or after March 31, 2014 must use Form 34 (Wills, Estates and Succession Act). See the provisions and commentary for the Wills, Estates and Succession Act at chapter 64 (Trustees, Personal Representatives, and Trustees in Bankruptcy).

PRACTICE

Originating Process Must Claim Interest in Land

The originating process appended to an application under s. 215(1) (for example, a petition, notice of civil claim, counterclaim, or notice of application) must claim an interest in land. Claims for debt for the price of an automobile or for a real estate commission are examples of claims that do not claim an interest in land.

Statute under Which a Right of Action Is Given

As contemplated by s. 215(1), the registrar may require a statement from:

1. the claimant stating, in the claim document, that a specific statute gives the claimant a cause of action; or
2. a solicitor certifying that a specific statute gives the claimant a cause of action.

Modification of Certificate of Pending Litigation

To apply to modify a certificate of pending litigation under s. 215(4) given a change of parties, an applicant must:

1. file a Form 17 application; and
2. file a certificate of pending litigation showing the new parties; and
3. denote in the “Additional Information” field in item 1 of the Form 17 “Modification pursuant to s. 215(4)”.

Because s. 215(4) requires that an application for a new certificate of pending application that reflects a change of parties be registered “in the same manner as a modification of a charge”, the original certificate of pending litigation is endorsed with “Modified by [document number of modification CPL]”, and the new certificate of pending litigation is endorsed with “Modification of [document number of original CPL]”.

Filing Against an Interest in a Lease or Right to Purchase

To apply toregister a certificate of pending litigation against an interest in a lease or Right to Purchase charge, an applicant must enter “As to ” in the Additional Information field. By including the registration number of the charge, the registered owner of the lease or Right to Purchase charge will be sent a Notice of Involuntary Charge relating to the registration of the certificate of pending litigation.

Notice of Security Interest under Personal Property Security Act

The registrar rejects an application to register a certificate of pending litigation based on a notice of a security interest under the Personal Property Security Act on the grounds that, should the applicant succeed in the action, the applicant is not entitled to an interest in land that is registrable under the Land Title Act.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Certificate of Pending Litigation to Be Examined Immediately

See s. 168(4) of the Act which provides as follows:

• 168 (4) Every application received must be examined without delay and, except for an application to register a certificate of pending litigation or to lodge a caveat, must be given consideration in order of its receipt.

Detachment of Originating Process for Section 215(6) Applications

See s. 25.1 of the Land Title Act Regulation, B.C. Reg. 334/79, which authorizes the detachment of an originating process presented for filing with a certificate of pending litigation under s. 215(6) of the Act. A document detached under the regulation is not part of the record.

Effect of Certificate of Pending Litigation

On registration, a certificate of pending litigation effectively freezes the register against all further registrations unless a further registration is effected:

1. in accordance with the exceptions set out in s. 216 of the Act; or
2. in accordance with the “Rudland rule” set out in s. 217 of the Act.

Priority of Certificate of Pending Litigation

See ss. 30 and 31 of the Act regarding a plaintiff’s entitlement to claim priority based on the registration of a certificate of pending litigation.

Cancellation of Certificate of Pending Litigation

See ss. 252 to 258 of the Act and s. 25 of the Land Title Act Regulation, B.C. Reg. 334/79, regarding cancellation of a certificate of pending litigation.

Filing of Certificate of Pending Litigation Authorized under Other Statutes

Fraudulent Conveyance Act

Section 215(8) deals specifically with a certificate of pending litigation under the Fraudulent Preference Act, R.S.B.C. 1996, c. 164. The section makes no reference to the Fraudulent Conveyance Act, R.S.B.C. 1996, c. 163. However, a certificate of pending litigation under the Fraudulent Conveyance Act is covered by s. 215(1)(b) of the Act as a proceeding in which a person is given, by an enactment, a right of action in respect of land. Under the Fraudulent Conveyance Act, creditors are given a right of action for a declaration and, as such, a certificate of pending litigation is registrable in respect of an action under that Act. These Acts are reproduced at chapter 43 (Fraudulent Conveyance and Fraudulent Preference Acts).

Action to Vary a Will

Section 61(5) of the Wills, Estates and Succession Act provides statutory authority for filing a certificate of pending litigation in an action to vary a will.

• Time limit and service
• 61
• (1) A proceeding commenced by a person claiming the benefit of this Division must not be heard by the court unless

• (a) the proceeding is commenced within 180 days from the date the representation grant is issued in British Columbia,
• (b) a copy of the initiating pleading has been served on the executor of the will no later than 30 days after the expiry of the 180 day period referred to in paragraph (a) unless the court, before or after the expiration of the 30 days, extends the time for service, and
• (c) if there are minor children of the will-maker, or if the spouse or a child of the will-maker is mentally incapable, a copy of the initiating pleading has been served on the Public Guardian and Trustee.

• (2) A proceeding in respect of the will of a Nisga’a citizen or a treaty first nation member must not be heard by the court at the instance of a party claiming the benefit of this Division unless a copy of the initiating pleading has been served on the Nisga’a Lisims Government or the treaty first nation, as applicable.
• (3) If the Public Guardian and Trustee is served with a copy of the initiating pleading under subsection (1), the Public Guardian and Trustee is entitled to appear, to be heard and to any costs that the court orders.
• (4) If a proceeding has been commenced on behalf of a person under this Division, it may be treated by the court as, and so far as regards the question of limitation is conclusively deemed to be, a proceeding on behalf of all persons who might apply.
• (5) Within 10 days from the date of the issue of the initiating pleading, a plaintiff in a proceeding under this Division may register, in the land title office in which the title to land sought to be affected is registered, a certificate of pending litigation against the land in a form approved under the Land Title Act.

2009-13-61, effective March 31, 2014 (B.C. Reg. 148/2013); 2011-6-23 and 25; 2019-4-5.

Other Statutes

See also chapter 68 (Registration of Instruments) for a summary of other statutory provisions that authorize the filing of certificates of pending litigation or other instruments having similar effect.

Secondary Sources

See Di Castri, Registration of Title to Land, vol. 1, §5:28 and §9:19, and vol. 2, §15:1 to §15:14.

CASE LAW

Notes on Case Law: The cases annotated generally fall into one of two categories:

1. cases outlining general principles regarding the registration and effect of certificates of pending litigation; and
2. cases examining whether a registered certificate of pending litigation is properly founded on a claim for an estate or interest in land.

The annotations included with respect to paragraph 2 represent only a small sample of cases that address the merits of the certificate of pending litigation. Additional annotations can be found under s. 257 of the Act (Power of the court to order cancellation). While a relatively thorough review has been conducted of the extensive case law dealing with both ss. 215 and 257, the case coverage is not exhaustive.

Note that legislative amendments brought into force on October 1, 1994, changed the name of a “lis pendens” or “certificate of lis pendens” to “certificate of pending litigation”. Accordingly, the cases annotated below that were decided before that date all refer to the former terms. Annotations for cases decided after that date typically use the language adopted by the court in each case.

CONTENTS

Form of Certificate of Pending Litigation

Nature of Certificate of Pending Litigation

Estate or Interest Must Be Registrable

Registration Must Be against Entire Parcel of Land

Inherent Jurisdiction of Court to Cancel CPL where Pleading Fails to Meet Section 215 Requirements

Foundations for Claiming an Estate or Interest in Land

• Nuisance
• Negligence
• Breach of Contract
• Use of Confidential Information
• Purchaser’s Lien
• Vendor’s Lien
• Real Estate Commissions
• Fraud or Breach of Trust
• Collateral or Improper Purpose
• Partnership Interests
• Unjust Enrichment
• Tenant’s or Occupant’s Interest in Strata Property

Claims in Family Matters

Claims under the Fraudulent Conveyance Act

Effect of Determination of Originating Process

Appeals

• Leave to Appeal
• Appeal Not “Proceeding” for s. 215 Purposes

Form of Certificate of Pending Litigation

The claimant issued a writ of summons claiming a builders lien and incorrectly filed a Form 34, Certificate of Lis Pendens, under s. 215(7) which certified that an action had been commenced under the Wills Variation Act. The applicant was not entitled to have the lis pendens set aside. Section 33 of the Builders Lien Act, S.B.C. 1997, c. 45 does not specify which form of lis pendens a claimant is to file. This case fell within s. 28(1) of the Interpretation Act, R.S.B.C. 1996, c. 238 as the incorrect form did not mislead. There was substantial compliance (Thorcon Enterprises Ltd. v. Guest (1986), 4 B.C.L.R. (2d) 54 (Co. Ct.)).

Nature of Certificate of Pending Litigation

A lis pendens does not create “an estate or interest” but is simply a notice that the party bringing the action claims an estate or interest (Robinson v. Holmes, 1914 CanLII 378 (BC SC)).

A person who seeks judgment against a third party and who has no interest in the third party’s land is not entitled to file a certificate of pending litigation against the third party’s land until that person has obtained judgment and commenced enforcement proceedings under the Court Order Enforcement Act. A judgment must be renewed if it is to continue to form a lien or charge on the third party’s land. A certificate of pending litigation does not keep a lien or charge alive if the judgment is not renewed. Once the judgment expires, the interest in land ceases to exist and there is no longer any right to maintain the certificate of pending litigation (McFarlane Travel Service Ltd. v. Godlonton, 2006 BCSC 286). See also s. 91 of the Court Order Enforcement Act in chapter 38 (Court Order Enforcement Act, R.S.B.C. 1996, c. 78).

The conditions described under s. 215(1)(a) or (b) are preconditions to the right to register a certificate of pending litigation. At the time the plaintiff commenced its action, the claim was for money and not land. A subsequent amendment to the statement of claim reveals a sustainable basis for a certificate. However, the original certificate must be discharged and a new one filed (RCG Forex Service Corp. v. Lin, 1997 CanLII 3482 (BC SC)). In subsequent related proceedings, the Court of Appeal upheld the new certificate of pending litigation on the basis of the amended statement of claim (RCG Forex Service Corp. v. Lin, 1999 BCCA 644).

A certificate of pending litigation must be based on a proprietary claim against land, not merely a claim for damages even if related to a proprietary interest. In earlier proceedings, the court found that lease agreements between the parties were void and unenforceable under s. 73 of the Act. Because the respondent’s pleadings raised no other claim to an estate or interest in land, the respondent’s claim for damages no longer had any proprietary connection to the land sufficient to support a certificate of pending litigation or a caveat (Layton Bryson Outfitting and Trailriding Ltd. v. R & R Ginseng Enterprises Ltd., 1998 CanLII 5895 (BC SC)). For a discussion of the earlier proceedings, see the annotation for R & R Ginseng Enterprises Ltd. v. Layton Bryson Outfitting & Trailriding Ltd., 1997 CanLII 3824 (BC SC), under s. 73 of this Act.

See also the annotation for Tymira Holdings Ltd. v. Whittaker, 2004 BCSC 905 under s. 257 of this Act.

The plaintiff obtained a judgment for unpaid legal fees in a U.S. court and commenced an action in British Columbia to enforce the U.S. court order. The U.S. court order enjoined the defendant from disposing of any interest in land. The plaintiff filed a certificate of pending litigation against title to a property in British Columbia owned by the defendant. On this application, the defendant sought an order cancelling the certificate. The court found that the plaintiff had no claim to any proprietary or ownership interest in the defendant’s land and that, even if the plaintiff were successful in its action to enforce the U.S. court order, the plaintiff could not force the defendant to divest himself of any interest in the land. Therefore, the court ordered cancellation of the certificate (Rissman v. Chen, 2012 BCSC 715).

The applicant and the respondent entered into a memorandum of understanding (MOU) whereby the applicant agreed to purchase a residential property and the respondent agreed to provide the general contracting services necessary to renovate the existing house. The MOU also contemplated that the property would be sold and that the profits, if any, would be shared equally between the parties. In this proceeding, the respondent sought specific performance of the profit share agreement but did not seek a declaration that he was entitled to an interest in the land. The court distinguished Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2014 BCCA 388 (see the commentary to “249 Power of court to order cancellation of charge” in chapter 17 (Land Title Act Part 16 (ss. 241 to 259)—Cancellation of Charges) where a claim for specific performance of an agreement for sale of property by a putative purchaser created an entitlement to file a certificate of pending litigation. In the present case, the entitlement did not arise because the respondent sought specific performance of an agreement to sell property in the market place and claimed a portion of the resulting profit (RodRozen Designs Inc. v. 0977168 B.C. Ltd., 2016 BCSC 834).

Estate or Interest Must Be Registrable

The argument that the estate or interest in land for which a lis pendens can be registered under s. 215(1) need not be registrable fails (Uukw v. British Columbia, 1987 CanLII 2630 (BC CA), reversing 1986 CanLII 935 (BC SC)).

The appeals concerned the appellant’s efforts to unwind an order issued for the sale of his former matrimonial home. The order for sale had been later overturned on appeal, but not before the property had vested in arm’s length purchasers. The registrar refused the appellant’s several attempts to register a certificate of pending litigation after the property vested in the purchasers. The appellant’s various attempts to challenge the registrar’s refusals were unsuccessful. The court dismissed the appeals from the registrar’s decisions as moot. A certificate of pending litigation cannot affect an interest transferred under a vesting order that is made in favour of independent third parties, and not stayed, before the certificate of pending litigation is registered (Berthin v. British Columbia (Registrar of Land Titles), 2017 BCCA 181).

See also the annotation for Skeetchestn Indian Band v. British Columbia (Registrar of Land Titles), 2000 BCSC 118, affirmed 2000 BCCA 525, under ss. 1, 23(2)(a), 197, and 282 of the Act.

Registration Must Be against Entire Parcel of Land

The plaintiffs paid the purchase price for a lot in a subdivision that was not yet registered. Subsequently, they registered a certificate of pending litigation against all of the land comprising the proposed subdivision. A reference to “land” in s. 215 of the Act is the land as registered in the land title office. Even though the plaintiffs’ claim is the right to purchase only a portion of the registered land, it is not possible to register a certificate against only a portion of that land. Therefore, it is appropriate and proper to register the certificate against the entire parcel because to hold otherwise would deprive the plaintiffs of the protection that s. 215 is intended to provide (Chen v. Inland Log Brokerage Ltd., 1996 CanLII 3599 (BC SC); see also the annotation for this decision under s. 257 of this Act).

Only a “Person” Is Entitled to a Certificate of Pending Litigation

Following the test and the procedure in Xiao v. Fan, 2018 BCCA 143 to determine whether to cancel a certification of pending litigation (“CPL”) alleged to be non-compliant with s. 215 of the Land Title Act, the court in Max Power Security Ltd. v. Donley, 2021 BCSC 1479 (Master) considered a summary judgment application under Supreme Court Civil Rule 9-6. The court found that, on the pleadings as currently framed, there was no bona fide triable issue as to an interest in land (at para. 44). Valid registration under s. 215 is a threshold issue for a CPL registration to be sustained (at para. 47, citing Nouhi v. Pourtaghi, 2019 BCSC 794 at para. 9 and Bilin v. Sidhu, 2017 BCCA 429 at para. 55). At the time the pleadings were filed and the CPL registered, the plaintiff was not a valid legal entity and therefore not a “person” as required under s. 215 and accordingly had no entitlement to a CPL.

Pleading Requirements for Constructive Trust Claims to Maintain a Certificate of Pending Litigation

In Zou v. Rai, 2021 BCSC 1931 (Master), the court clarified inconsistencies regarding the pleading requirements for constructive trust claims in order to maintain a valid CPL. In addition to pleading the cause of action upon which the constructive trust claim is based, the plaintiff must plead material facts in support of the two requirements to establish a constructive trust: (1) there is a substantial and direct link, a causal connection, or a nexus between the claim and a property upon which the constructive trust is to be impressed; and (2) a monetary award is inadequate, insufficient, or inappropriate in the circumstances (citing Nouhi v. Pourtaghi, 2019 BCSC 794 at para. 26 and Beijing Tian Zi Property Group Trading Ltd. v. Jia, 2021 BCSC 423 at paras. 45 to 47).

Court Refuses Cancellation of CPL at Early Stage with Limited Evidence, Orders Security of $400,000

In Zhong v. Alan Hu Personal Real Estate Corp., 2022 BCSC 1964, the defendants Alan Hu Personal Real Estate Corporation (“Hu PREC”) and Mr. Alan Hu (“Hu”) applied for cancellation of a CPL pursuant to s. 215 of the Land Title Act on an urgent basis because the property subject to the CPL had sold and closing was imminent. Hu PREC and Hu said the plaintiff Zhong’s notice of civil claim claimed no estate or interest in the property as s. 215 required.

In the alternative, Hu PREC and Hu sought striking or dismissal of Zhong’s claim for a constructive trust over the property or, in the further alternative, cancellation of the CPL on the basis of hardship or inconvenience pursuant to ss. 256 and 257 of the LTA.

The case involved a listing agreement entered into in December 2017 between the parties, and the plaintiff’s claim that the defendants had breached their duty of care and acted in their own interests while representing him in real estate transactions. The plaintiff had offered $2.1 million on a Surrey acreage subject to financing, which he failed to obtain. The defendant alleged that by the time the selling realtor had approached him about assignment of an accepted offer from a competing offeror, the plaintiff had already decided to alter his search to purchase a less expensive investment property without the need to sell his own home. The defendant purchased the property and later sold it at a higher price, leading the plaintiff to allege a constructive trust and dishonest conduct.

The court, after considering the limited evidence available at the early stage of the proceedings, dismissed the application to cancel the CPL. The plaintiff’s claim pleaded a nexus between the facts alleged and the interest in the property that, if proven, could support the plaintiff’s claim that he had an interest in the property. An order to cancel a CPL is discretionary, however, and orders can be made requiring an applicant to post security before the CPL is cancelled. The probability of the plaintiff’s success in the action, based on limited evidence at an early stage in the proceedings, was contemplated in determining that appropriate security to discharge the CPL was a sum of $400,000. This figure was reached considering the difference between the 2018 purchase price and the 2022 sale price, the existing mortgage, and the defendant’s limitation defence.

Inherent Jurisdiction of Court to Cancel CPL where Pleading Fails to Meet Section 215 Requirements

In Wang v. Cai, 2022 BCSC 1312, the court ordered removal of the plaintiff's CPL against property owned by the defendant because the plaintiff's notice of civil claim did not disclose a valid claim for an interest in the property.

The plaintiff's action was based on an alleged agreement made in April 2019, where she was supposed to pay the defendant CNY ¥5.04 million in exchange for CAD $1 million. According to the plaintiff, she paid the CNY ¥5.04 million, but the defendant transferred only CAD $100,000 back to her and promised to pay the remaining CAD $900,000 within two months. The plaintiff claimed that despite her repeated demands, she never received the rest of the payment.

The defendants alleged that the property in question was purchased by YZ in May 2016, but it was transferred to the defendant JC in May 2017 for a nominal amount and other good and valuable consideration. The defendants maintained that although JC held legal title to the property, beneficial ownership remained with YZ throughout the relevant period until June 2021, when YZ retook title to the property.

Section 215 of the Land Title Act provides that a person who has commenced a proceeding and who is claiming an estate or interest in land may register a CPL against the land. The court has inherent jurisdiction to cancel a CPL where a pleading fails to meet the pre-condition of a claim for an interest in land as required by s. 215. The test to be applied on application to cancel a CPL that is alleged not to meet the preconditions of s. 215 is whether the facts pleaded, assuming them to be true, are capable of supporting a claim to an interest in land.

The court determined that the plaintiff's claim did not establish any basis for an interest in the property. The plaintiff did not allege that the funds she paid to JC were used to purchase or maintain the property, nor did she present any facts that could give rise to an interest in the property, such as a remedial constructive trust. Instead, the plaintiff asserted that the transfer of the property from JC to YZ in June 2021 was a fraudulent conveyance or preference to defeat her claim. However, even if successful, this claim would not grant her an interest in the property or change its title in her favour.

The court concluded that the plaintiff was essentially attempting to use the CPL as a way to enforce her unproven debt claim against the property before the conclusion of the underlying legal proceeding on its merits. Since the plaintiff’s claim did not meet the necessary requirements to establish an interest in the property, the court allowed the application to cancel the CPL.

Foundations for Claiming an Estate or Interest in Land

Nuisance

Land owners who bring a claim in, among other things, nuisance against another land owner do not claim “an estate or interest in land”. Furthermore, the common law action of nuisance is not “given” by an enactment (Zukowski v. Thyer, [1981] B.C.J. No. 69 (QL) (S.C.)).

Negligence

Neither the Strata Property Act, S.B.C. 1998, c. 43 nor the Condominium Act, R.S.B.C. 1996, c. 64 grants a strata corporation a proprietary interest in, or a right of action in respect of, the owner developer’s unsold strata lots. The following case, decided under the Condominium Act, illustrates this point.

In an action by a strata corporation for damages for negligence or breach of contract against the condominium developer, the strata corporation was not entitled to register a lis pendens against unsold strata lots held by the developer. The strata corporation did not claim a proprietary interest in the unsold lots, nor did the Condominium Act give the strata corporation a right of action in respect of the lots (Strata Plan VR 741 v. Fore Development Corp., 1982 CanLII 711 (BC SC)).

Breach of Contract

Where a party does not assert a proprietary claim with respect to a mortgage, but rather claims a right of setoff of money owing under a mortgage, the party does not claim “an estate or interest in land” and is not entitled to register a lis pendens (Capital Builders Ltd. v. Woodbine Management, 1983 CanLII 596 (BC SC)).

A vendor sold property to a developer. The vendor claimed that the developer agreed that it would not transfer the property until it had completed construction, that it would construct a highrise itself, and that it would give the vendor a free suite. Following application by a third party for registration of its transfer of the property from the developer, the vendor launched an action against the developer, claiming rescission and, alternatively, damages, and filed a lis pendens against the property. In the third party’s application to obtain cancellation of the lis pendens, the vendor made (for the first time) a claim for specific performance. However, because the statement of claim disclosed no such plea for specific performance, and because the validity of the filing of a lis pendens must be determined on claims disclosed in the pleadings in the underlying action, the vendor could not then advance such a claim to validate the lis pendens. The vendor’s claims against the developer were of a personal nature, being for breach of contract only, and did not support continuation of the filing of the lis pendens. Even if an agreement creates an enforceable restraint on alienation, a general restriction on alienation is void as a condition on the absolute sale of land and cannot create a charge on land. The vendor based her claim to entitlement to a free suite on an oral collateral agreement. The written agreement was silent on this point. Thus, under s. 59 of the Law and Equity Act, the oral agreement was unenforceable. Evidence of it was also likely inadmissible under the parol evidence rule. Accordingly, the claim for a free suite was not one that established an arguable case or triable issue so as to support a lis pendens. The vendor’s claim that the developer would construct a highrise was either a personal covenant or a restriction on use forming a negative covenant. But because the restriction did not meet the requirements for a negative covenant, the vendor was not entitled to a lis pendens on that basis either (No. 393 Dynamic Endeavours Inc. v. Lee, [1989] B.C.J. No. 115 (QL) (S.C.)).

The plaintiffs invested in three corporate defendants that owned and operated three hotels in northern British Columbia. The personal defendant, KT, was the sole director of the corporate defendants. The plaintiffs claimed KT promised them an annual return based on a percentage of the hotels’ revenues. In 2023, the plaintiffs complained to the defendants about how the defendant companies were operated and demanded that their interest be bought out by way of a share purchase. When negotiations stalled, the plaintiffs sued and filed CPLs against various properties owned by the defendant companies including but not limited to the three hotel properties. The essence of the plaintiffs’ claims was that KT promised a guaranteed rate of return as an inducement for their investments and that the guaranteed returns had never been paid. The registration of the CPLs was a breach of the loan agreements between the defendant companies and the private lender that had financed the construction of the newest hotel. The defendants applied to cancel the CPLs on the grounds that the plaintiffs did not assert an interest in land as required under s. 215 of the Land Title Act, or that the CPLs created hardship and inconvenience. Held, application granted; CPLs cancelled. The plaintiffs’ claim was in its essence an oppression claim. They did not buy fractional interests in pieces of real estate but rather purchased shares in the defendant companies. A shareholder does not have a proprietary interest in the assets of the company. As for the unjust enrichment claim, it was not properly pleaded against the defendant companies. The plaintiffs did not assert an interest in any specific property but rather alleged wrongs, without detail, specificity, or material facts, and sought a broad remedy. The pleadings did not contain sufficient material facts to support a claim for unjust enrichment and could not support the CPLs, because to the extent that a claim of unjust enrichment was made, it was against KT personally, not against the companies. The CPLs were nothing more than an attempt by the plaintiffs to tie up the defendants’ properties pending determination of their claims (Biggar v. Tran, 2024 BCSC 50).

Use of Confidential Information

The plaintiffs wanted to purchase certain land for the construction of condominiums. Architect’s plans for the development were in existence. Not having sufficient money to do this purchase themselves, the plaintiffs approached the defendants and proposed that they purchase the land and provide all the money to construct the buildings on the basis that the plaintiffs undertake construction for a fee and take 50% of the proceeds on sale of the property. The defendants were not interested in the plaintiffs’ deal, but bought the property and proceeded to develop it themselves. The plaintiffs were not entitled to claim “an interest in land” and obtain a lis pendens on the basis that the defendants used “confidential” information (Buksa v. Giant Bay Resources Ltd., [1989] B.C.J. No. 265 (QL) (S.C.)).

Purchaser’s Lien

A purchaser who claims a purchaser’s lien arising from a deposit paid to a vendor for a purchase of property that did not complete on account of the vendor has a consequent claim to an estate or interest in land and may file a lis pendens (Rogowski v. Griffin Development Co. Ltd., [1990] B.C.J. No. 1763 (QL) (S.C. Master), following Capital Plaza Developments Ltd. v. Counterpoint Enterprises Ltd., [1985] B.C.J. No. 321 (QL) (S.C.)).

Vendor’s Lien

An option agreement required the purchaser to pursue a rezoning application, in the vendor’s name, with due diligence, and provided that the vendor would receive a higher purchase price if the purchaser obtained rezoning by a certain date. The purchaser did not obtain rezoning. It exercised the option and obtained the property at the lower price contemplated. The vendor commenced an action, claiming a vendor’s lien for the difference between the minimum and maximum prices, and filed a lis pendens. The vendor alleged lack of due diligence. The purchaser’s promise to use due diligence was part of the consideration and supported the vendor’s lien claim and a lis pendens (Indevco Properties Ltd. v. J.B. Franks Management Co., 1989 CanLII 5188 (BC CA)).

Real Estate Commissions

A real estate agent negotiated a contract for the sale of the vendor’s land. The proposed purchaser paid a non-refundable deposit to the agent, who in turn released it to the vendor, but the transaction did not complete. The agent alleged that the transaction did not complete because the vendor and purchaser altered contract terms, and thus caused the collapse of the purchaser’s financing. The agent claimed that he was entitled to either a 3% commission or an interest in the land amounting to 3% of its value. The court found that there was a triable issue with respect to the agent’s claim to have an interest in land properly the subject of a lis pendens and accordingly dismissed the vendor’s application to have the lis pendens dismissed except on payment into court of the value of the commission (A.E. LePage Real Estate Services Ltd. v. Goodland Developments Ltd., [1984] B.C.J. No. 1114 (QL) (S.C.)).

Fraud or Breach of Trust

A solicitor committed a breach of trust by misappropriating his clients’ investment funds. The clients were entitled to trace these funds to mortgages his company obtained. The clients had an equitable charge against the mortgages and were therefore entitled to a lis pendens (Lament v. Constantini, 1985 CanLII 267 (BC SC)).

The plaintiff obtained default judgment against two defendants for fraudulent operation of their stock trading account. The plaintiff also filed a lis pendens against the property of a third defendant who received substantial amounts of money from the stock trading account and used the money to make payments on a mortgage against her property. The master ordered the lis pendens cancelled upon posting of security. The property was sold and the proceeds were used to post the security and to discharge the mortgage. The third defendant unsuccessfully applied for an order releasing the security. The right to register a lis pendens arises when a person who has commenced a proceeding is “claiming an estate or interest in land”. The test of a proprietary interest is not to be narrowly construed; it embraces an equitable as well as a legal interest (Wood Gundy Inc. v. Saleem, 1993 CanLII 2805 (BC SC)).

The petitioner invested a sum of money in a company owned by the defendants. Part of the investment was diverted to make mortgage payments on a residence belonging to one of the defendants. The court found that the petitioner was justified in filing a certificate of pending litigation against the residence and that the petitioner was entitled to a share in the proceeds of sale equal to the amount of the mortgage payments (Lin v. Hsieh, 2002 BCSC 1187).

The defendants appealed from an order dismissing their application to cancel two certificates of pending litigation. The plaintiffs alleged fraud against the defendants NB and RB; alleged conversion by the defendant ICGS Co.; and sought a tracing order against the two other corporate defendants. The notice of civil claim pled that NB and RB used $100,000 they obtained fraudulently from the plaintiff to acquire or increase their equity in their lands, and that through ICGS, a corporation they controlled, they used the $100,000 to acquire or increase the equity in the ICGS property. The defendants had applied, without success, for discharge of two CPLs the plaintiff registered against a property owned by NB and RB and a property owned by ICGS Co., arguing that the notice of civil claim did not plead an interest in land as required by s. 215(1) of the Land Title Act. Held, appeal dismissed. Read as a whole, the notice of civil claim disclosed a claim to an interest in the properties sufficient to support the filing of the CPLs. The plaintiff alleged that he paid money based on fraudulent misrepresentation, and that money was wrongly used towards the acquisition of, or increasing the equity in, the subject properties. The plaintiff sought a tracing of the loan funds and any profits made from wrongful use of those funds, and that the defendants would be unable to pay monetary damages. If the pleaded facts were assumed to be true, they supported the substantive constructive trust claim (Batth v. Sharma, 2024 BCCA 29).

Collateral or Improper Purpose

The plaintiffs and defendants owned adjacent properties that they were attempting to subdivide. The parties entered into negotiations with the municipality with respect to road access. Although negotiations were unsuccessful and the plaintiffs refused to dedicate land necessary for the road, the plaintiffs’ subdivision application was approved. The defendants filed a petition against the municipality and the plaintiffs, and they registered a certificate of pending litigation against all of the plaintiffs’ lots. The court ordered that the certificate be discharged on the grounds that the defendants’ claim had absolutely no merit and no chance of success. The plaintiffs then sought damages. The certificate was designed solely to tie up the plaintiffs’ lands and prevent a sale of any properties. By registering the certificate, the defendants attempted to force the municipality’s hand concerning the proposed road alignment. This attempt amounted to a collateral or improper purpose and constituted evidence of malice. Accordingly, the wrongful filing of the certificate of pending litigation established a cause of action, and the defendants were liable to pay damages in an amount to be assessed (Viva Developments Inc. v. Icarus Properties Ltd., 1999 CanLII 5933 (BC SC)).

The insureds’ mobile home was destroyed by fire. At their direction, the insurer paid the claim to the insureds’ mortgagee who gave a discharge of mortgage to the insureds. When the insurer learned that an arsonist had set fire to the mobile home, it commenced an action against the insureds for fraud. Assuming the insureds had obtained the insurance money by fraud, the insurer would have an “estate or interest in land” entitling it to a lis pendens when the insureds got their discharge of mortgage. They got an estate or interest in land as a “substitute replacing the money” paid to the mortgagee by the insurer. That estate or interest therefore was beneficially owned by the insurer and remained in its beneficial ownership at the time when it obtained the lis pendens (Co-operators General Insurance v. Porteous, 1986 CanLII 846 (BC SC)).

Partnership Interests

A partnership was dissolved by the death of one of the partners. The estate of the deceased partner filed a lis pendens against lands held by the remaining partner. The estate was entitled to file a lis pendens because, on dissolution of a partnership, a partner has an equitable lien against all the partnership’s assets. Alternatively, the deceased’s claim that the surviving party holds the property in trust for the deceased entitled his estate to the lis pendens (Re Vancouver Lot 1, Except that Part Included in Plans 12713 and 13050, Block 19, District Lot 302, Plan 12150, 1985 CanLII 450 (BC SC)).

The appellant filed a certificate of pending litigation and a caveat against lands owned by a bare trustee for the benefit of a partnership in which the appellant claimed a beneficial interest. On an appeal from an order under Rule 18A (now Rule 9-7, Supreme Court Civil Rules) cancelling the certificate and the caveat, the Court of Appeal found that the trial judge erred in failing to consider whether the various agreements between the parties supported the appellant’s claim for an interest in the lands. The appellant’s relationship to the other parties was at the root of his claim to an interest in the lands owned by the bare trustee. Without evidence on this issue, the trial judge had to make assumptions of fact and law, and draw conclusions that were premature and potentially prejudicial to the appellant and to other parties. In finding that the affidavit evidence was lacking in context and detail, the Court of Appeal set aside the order of the trial judge, striking out the certificate and the caveat (Ferguson v. 569244 British Columbia Ltd., 2002 BCCA 193, reversing 2001 BCSC 1298 (Chambers)).

Shareholders’ Interests

A shareholder dispute arose, and the plaintiffs commenced an action against the defendants for oppression. The plaintiffs then filed certificates of pending litigation against 23 development properties. The defendants applied for an order cancelling the certificates of pending litigation, claiming the plaintiffs had failed to plead a reasonable claim to an interest in land and that the true claims were for a share of profits or money damages and not an interest in land. The court concluded that, while a shareholder has no proprietary interest in the assets of the corporation, an oppressed shareholder may file a certificate of pending litigation on behalf of the corporation. The court was unable to conclude that there was no triable issue to support the claims for an interest in land. While the defendants established significant hardship and inconvenience, those were matters that could be addressed other than by cancellation of the certificates of pending litigation. The court ordered that the plaintiffs enter into an undertaking with respect to damages in the event they were unsuccessful and to post security in the amount of $5 million (0832643 B.C. Ltd. v. Mitchell Group Investments Inc., 2018 BCSC 628).

Unjust Enrichment

A party who alleges unjust enrichment regarding free labour on a farm and claims an interest in the farm is entitled to register a lis pendens. A court may relieve against unjust enrichment by either an in personam or an in rem remedy. Accordingly, the party claims an interest in land (Degroot v. Kotowick, [1989] B.C.J. No. 61 (QL) (S.C.)).

The plaintiff filed a certificate of pending litigation against the defendant’s property in an action for unjust enrichment arising from the plaintiff’s loan of monies to enable the defendant to purchase property. The chambers judge cancelled the certificate of pending litigation, finding that the action sounded in debt, that the unjust enrichment claim was without foundation, and that for purposes of s. 215(1), the plaintiff was unable to assert an interest in land based on a constructive trust. The judge also imposed a stay of proceedings. The Court of Appeal affirmed the chambers judge’s ruling that the plaintiff’s pleading in support of the certificate of pending litigation did not disclose a claim to an interest in land. However, the chambers judge erred in imposing a stay of proceedings. Where a certificate of pending litigation is cancelled, a party is entitled to refile a certificate of pending litigation based on an amended notice of civil claim (Bilin v. Sidhu, 2017 BCCA 429).

Tenant’s or Occupant’s Interest in Strata Property

The following case, decided under s. 46 of the Condominium Act, is relevant to the attornment of a tenant to a strata corporation. See also s. 146 of the Strata Property Act at chapter 58 (Strata Property Act, S.B.C. 1998, c. 43).

To establish a tenancy enforceable against a strata corporation, an occupant of a strata lot must “attorn” to the strata corporation in accordance with s. 46 of the Condominium Act. Where an occupant has failed to attorn to the strata corporation, there is an insufficient tenancy to provide the occupant with an interest or estate in land to support registration of a certificate of lis pendens against title to the occupied strata lot. Accordingly, a lis pendens filed against a strata lot by its occupant to prevent the strata corporation from proceeding with a court-approved sale of the lot was ordered cancelled in this case (Strata Plan VR 149 v. Berezowsky [1986 CanLII 952 (BC CA)]).

Claims in Family Matters

Notes on Case Law: The following cases were decided under the Family Relations Act (repealed March 18, 2013 by B.C. Reg. 131/2012). See the transitional provisions in s. 252 of the Family Law Act at chapter 42 (Family Matters) to determine whether the Family Relations Act or the Family Law Act applies in specific circumstances.

The word “share” in s. 58(3)(a)(i) of the Family Relations Act refers to a share in a corporation as envisaged by Part 3 of the Company Act (now Part 3 of the Business Corporations Act) and does not include assets of a corporation in which a spouse holds shares. Therefore, a spouse claiming a share of another spouse’s assets cannot file a lis pendens against lands owned by a company in which that spouse holds shares (Davidson v. Davidson, [1983] B.C.J. No. 646 (QL) (C.A.), reversing 1983 CanLII 443 (BC SC); see also Webber v. Webber, 1989 CanLII 2939 (BC SC)).

A wife filed a lis pendens under s. 215(6) of the Act against her husband’s interest in land which was held jointly by them and subsequently obtained an order against her husband for maintenance, compensation for family assets, and costs. Before she registered the judgment against her husband’s interest in the land, a judgment creditor of the husband registered a judgment against the husband’s interest. The wife was not able to claim priority for the amount of her judgment based on the prior filing of the lis pendens under s. 215(6). The type of order under the Family Relations Act to which s. 215(6) is directed is one that changes the title to the land in question. The orders the wife obtained did not effect a “change” of title to land as that term is used in s. 215(6). The maintenance provisions of the order did, however, have priority under s. 64(1) of the Family Relations Act, R.S.B.C. 1979, c. 121 because the judgment creditor, the husband’s solicitor, was privy to them before he took his judgment (Misic v. Misic, 1989 CanLII 2784 (BC CA)).

The petitioner in matrimonial proceedings applied to cancel a lis pendens registered against his property by the respondent under s. 215(6) of the Act. Family assets had already been divided by the parties under the terms of a separation agreement, but the respondent claimed that the agreement was unfair for inadequate disclosure of assets by the petitioner. Although the respondent submitted that the court had discretion under s. 65 of the Family Relations Act to reapportion family assets, she did not mention the section in her pleadings and had not referred to the subject property. The court ordered the lis pendens cancelled. Without reference to the specific property or to s. 65 of the Family Relations Act, the registrar does not have any basis upon which to accept a lis pendens (Hrad v. Hrad, 1993 CanLII 1851 (BC SC) (Chambers)).

See also the annotations for Berthin v. Berthin, 2018 BCCA 57 and related proceedings under s. 310 of the Act.

Claims under the Fraudulent Conveyance Act

An applicant was not entitled to an order cancelling a certificate of lis pendens issued by the registrar to a party seeking a declaration under the Fraudulent Conveyance Act. In trying to obtain a declaration under that Act, a party seeks to have title revert to its original or predisposition status and thereby attempts to establish a proprietary or other interest in property (Cressey Development Corporation v. Western Canada Hydraulic Laboratories Ltd., [1984] B.C.J. No. 1230 (QL) (S.C.)).

Effect of Determination of Originating Process

The defendant succeeded on a Rule 18A (now Rule 9-7, Supreme Court Civil Rules) application in having the plaintiff’s claims for specific performance and return of deposit monies with respect to a real estate transaction dismissed. In the result, the court concluded that the plaintiff’s certificate of pending litigation, filed against the property which was the subject of the transaction, should be cancelled. Even assuming that an equitable charge, or purchaser’s lien, could have arisen for the amount paid by the plaintiff as a deposit, it could not continue to exist in the circumstances once the plaintiff’s contractual rights had been determined by trial (Arbutus Garden Homes Ltd. v. Arbutus Garden Apartments Corp., 1996 CanLII 2294 (BC SC)).

Appeals

Leave to Appeal

If a court struck out a lis pendens because there was no a claim in the statement of claim for an interest in land, the order would probably be interlocutory. On the other hand, if the court struck out a lis pendens because there was no entitlement to an interest in land, then the order would probably be final. The decisions indicate that the test is whether the order finally disposes of the rights of the parties. In this case, involving an application under Rules 18 and 18A, the court held that the plaintiff was not entitled to an interest in land and therefore not entitled to a lis pendens. The court’s order was not interlocutory and therefore did not require leave to appeal (W.C.D.C. Information Services Ltd. v. Brechert, [1987] B.C.J. No. 538 (QL) (C.A.)). Note that Rules 18 and 18A have been repealed and replaced by Rule 9-6 (Summary Judgment) and Rule 9-7 (Summary Trial). See the Supreme Court Civil Rules, B.C. Reg. 168/2009, effective July 1, 2010.

Appeal Not “Proceeding” for Section 215 Purposes

The registrar allowed an appellant to register a lis pendens based on the appeal of an order obtained by the respondent under s. 257 of the Act for cancellation of an earlier lis pendens registered by the appellant. The Court of Appeal held that the registrar had no authority to register the second lis pendens because the word “proceeding” in s. 215(1) refers to the trial level and not the appeal level. A party appealing an order for cancellation of a lis pendens under s. 257 can prevent the other party from dealing with the property only by obtaining an order staying the proceeding pending determination of the appeal. The court ordered that the second lis pendens be set aside and cancelled (H.K. Floors Ltd. v. Canam Western Ventures Ltd., 1984 CanLII 784 (BC CA); applied in Richards v. Ricard, 1985 CanLII 582 (BC CA)).

The respondent in foreclosure proceedings applied to set aside an order absolute of foreclosure. The application was dismissed and the respondent appealed, claiming entitlement to a lis pendens in the notice of appeal. The respondent then obtained a certificate of lis pendens against the property at issue. The petitioner applied for cancellation of the certificate and the Court of Appeal held that a party cannot create a lis pendens by merely filing a notice of appeal claiming an entitlement to the lis pendens. The word “proceeding” in s. 215(1) refers to the trial level and not the appeal level. Accordingly, the Supreme Court had no power to issue a certificate of lis pendens in the circumstances. The lis pendens was ordered cancelled. The proper remedy in cases of this kind is to apply to the Court of Appeal for a stay of proceedings (Richards v. Ricard).

The respondents applied for an order discharging a second certificate of pending litigation filed by the appellants in conjunction with their appeal from a trial court decision dismissing the appellants’ claim for an interest in the respondents’ property and ordering the removal of their initial certificate of pending litigation. The trial court expressly ordered the discharge of the initial certificate and the discharge occurred without challenge. In opposing the respondents’ application, the appellants argued that the court’s decision in H.K. Floors Ltd. v. Canam Western Ventures Ltd. was no longer binding because recent amendments to the Court of Appeal Rules incorporated a definition of “proceeding” which should now be imported into the Land Title Act. The Court of Appeal declared the second certificate of pending litigation a nullity and held that, while provisions in one statute may be used as an aid in interpreting provisions in another statute, the same influence is not exerted by a regulation under one statute on a provision in another statute. Consequently, a new definition in the Court of Appeal Rules (which have the character of regulations) has little impact on the meaning of a term in the Land Title Act that has long existed and that has been the subject of judicial interpretation. Section 1 of the Supreme Court Act [at the time of this case] defined a proceeding to include an “action, suit, cause, matter, appeal or originating application”. The reference to “appeal” in that definition has been interpreted to mean an appeal to the Supreme Court. It does not refer to any process other than a process in the Supreme Court. The Supreme Court Rules [at the time of this case] defined “originating process” as a document that commences a proceeding (former Rule 1(8)). Section 215 of the Land Title Act required that the registrar attach a copy of the originating process to a certificate of pending litigation. Accordingly, an appeal to the Court of Appeal was not a “proceeding” as defined in the Supreme Court Act and the notice of appeal is not an “originating process” within the meaning of s. 215 of the Land Title Act. The second certificate of pending litigation was therefore a nullity and must be cancelled (Ravnyshyn v. Drys, 2006 BCCA 20). Note that the Supreme Court Rules have been repealed and replaced by the Supreme Court Civil Rules, B.C. Reg. 168/2009, effective July 1, 2010. Rule 1-1(1) defines an “originating pleading” as a notice of civil claim, counterclaim, third party notice or any document, other than a petition, that starts a proceeding.

The defendant owned a 25/100 undivided interest in the subject property, which was to be subdivided. It offered to sell a 50% interest in its 25/100 undivided interest (“Lot 4”) to the plaintiff. The plaintiff paid a $10,000 deposit. On June 25, 2018, the parties entered into two contracts of purchase and sale. Under the first contract, the defendant would sell half of Lot 4 to the plaintiff for $410,000 on June 26, 2018. Under the second contract, the defendant would buy back half of Lot 4 from the plaintiff for $460,000 on December 31, 2018. On the first contract’s completion date of June 26, the plaintiff paid the remaining $400,000 of the purchase price to the defendant’s solicitors. He was not registered on title. On the second contract’s completion date of December 31, the defendant did not pay the plaintiff the $460,000 owing under that contract. In July 2019, the plaintiff filed a Notice of Civil Claim alleging that the two contracts effectively constituted a loan agreement, and that the defendant had breached the second contract by failing to pay the purchase price by the completion date, or in the alternative, had breached it by failing to repay the loan principal plus the $50,000 increase. He sought, inter alia, specific performance and damages for breach of contract. He filed a certificate of pending litigation. The defendant’s position was that the parties agreed that the defendant would pay the plaintiff $460,000 upon the subdivision of the lands and the creation of a registrable interest in Lot 4 in lieu of the transfer of any legal or beneficial interest therein. The defendant applied, inter alia, for an order cancelling the CPL pursuant to either s. 215 or ss. 256 and 257 of the Land Title Act. The defendant said the plaintiff had failed to advance a proprietary interest in the lands, a threshold criterion for continued registration of the CPL. The defendant also claimed hardship and inconvenience under s. 256, submitting that registration of the CPL was standing in the way of subdivision. Meanwhile, the plaintiff filed an amended Notice of Civil Claim, pleading that the defendant had failed to register him as an owner of an undivided interest in the property, and that it had breached and repudiated that contract. He deleted the paragraph that characterized the two contracts as essentially a loan agreement. Held, CPL cancelled on filing of security. The court declined to cancel the CPL under s. 215 on its finding that the plaintiff had advanced a claim to an interest in the lands, meeting the necessary precondition for registration under s. 215(1). However, the court found the defendant had met the s. 256 requirement by establishing hardship and inconvenience as a result of the CPL; there was no doubt that the parties had entered into the contracts in furtherance of the defendant’s plan to subdivide the property, and it was likely that the CPL was standing in the way of fulfilling that plan. Finding under s. 257 that damages would provide an adequate remedy, the court ordered cancellation of the CPL upon the defendant posting security of $460,000 (Qaddoura v. Lumina Developments Ltd., 2020 BCSC 1504).

When the plaintiff was incorporated, its sole directors, officers, and shareholders were the defendant and ZLS. The next month, ZLS transferred his shares to his son RS, and RS was appointed as a director and officer in place of ZLS. The defendant ceased to be a director in 2017. The plaintiff filed a Notice of Civil Claim against the defendant seeking to recover $1 million it alleged he misappropriated from the plaintiff’s bank account while he was a director. In his response, the defendant said he was entitled to the funds because they were a portion of the purchase price for the sale of his shares to the plaintiff. In his counterclaim, he sought judgment for $1,452,077, the alleged remainder of the purchase price owing for his shares. In May 2020, the plaintiff amended its Notice of Civil Claim and filed an application for summary judgment. The defendant filed an application response and an affidavit in which he stated that, in fact, the monies owed to him were in payment of an interest-free loan he had made to the plaintiff. He filed an amended Response to Civil Claim, an amended Counterclaim, and a Claim of Pending Litigation against the titles to three properties owned by plaintiff. In the amended Counterclaim, he sought judgment against ZLS and RS and a declaration that he held an equitable interest in the form of a constructive trust in the properties. He applied to add ZLS and RS as defendants by counterclaim. The plaintiff applied to cancel the CPLs pursuant to s. 215(1) of the Land Title Act. Held, application allowed; CPLs cancelled. The pleadings were not sufficient to demonstrate a substantial and direct link, a causal connection, or a nexus between the claim and the properties upon which the remedial constructive trust was sought to be imposed. The defendant pleaded breach of contract and unjust enrichment. He claimed an interest on the basis that the loan was used to acquire and improve the properties, and that he held an equitable interest in them in the form of a constructive trust. The primary relief sought was a monetary judgment. There were no facts pled to support the claims for unjust enrichment, only broad statements and assertions. There was no connection pled between the funds and the properties. Providing a loan where those funds may then be used to purchase land does not establish an interest in land. The defendant also did not plead that a monetary award would be inadequate, insufficient, or inappropriate, which was necessary to support a CPL. The threshold requirement for a valid CPL to be registered was not established (Beijing Tian Zi Property Group Trading Ltd. v. Jia, 2021 BCSC 423).

The plaintiff brought an action alleging she loaned money to two of the defendants, and the funds were used to renovate a house owned by one of those defendants as a tenant in common with his brother. The plaintiff asserted claims in unjust enrichment and constructive trust, seeking a tracing remedy and filing a CPL against the house. The defendants applied to dismiss the action by way of summary judgment under Supreme Court Civil Rule 9-6 or summary trial under Rule 9-7. The court found the conflicting affidavit evidence insufficient to allow judgment to be given on either basis. At the same time, the chambers judge cancelled the CPL, finding the action sounded in debt and for purposes of s. 215(1) of the Land Title Act, the plaintiff was unable to assert an interest in land based on constructive trust (Gill v. Gill, 2021 BCSC 143).

The plaintiff, age 64, and the defendant, age 62, were brothers. In 1997, using his savings and assisted by his parents, the defendant purchased a strata lot, of which he was the registered owner. In 2010, the defendant met KS at a community church. After the death of the parties’ father in 2011, KS moved into the strata lot. The defendant went missing in 2011, and the plaintiff found KS’s son at the strata lot, which had been emptied of anything of value. The plaintiff cleaned the strata lot and paid the strata fees and levies while the defendant was missing. He turned up in 2013. The plaintiff’s wife stated the defendant said he would transfer the strata lot to them, but when they attended a lawyer’s office to make the transfer, the lawyer did not think the defendant was sufficiently competent to make the transfer. The defendant disappeared again. When the plaintiff’s son needed a place to live in 2014, he moved into the strata lot. The plaintiff said he and his son paid all the strata fees, property taxes, and maintenance of the strata lot, including $30,000 in levies for building remediation. In 2020, the defendant and KS returned and moved into the strata lot. The son continued to reside there and pay rent until the defendant evicted him. The defendant now owed the strata corporation more than $18,500 for fines, repair costs, and interest accumulated in large part over the time he was absent. The plaintiff filed a Notice of Civil Claim alleging that since 2011, he had provided all work and funds for the strata lot’s upkeep, and sought, inter alia, a 50% interest in the strata lot in the form of a constructive trust. He filed a certificate of pending litigation against the property. The defendant applied for dismissal of the plaintiff’s claim under Supreme Court Civil Rule 9-6(4) and for cancellation of the CPL. Held, application to dismiss dismissed; CPL cancelled. The plaintiff’s Notice of Civil Claim was deficient because, while it showed a causal connection between his contributions and the property, it was silent as to why a monetary award would be inadequate, and failed to disclose an interest in land to support the CPL. The CPL would be cancelled because it did not comply with s. 215 of the Land Title Act. However, the defendant failed to establish that it was “manifestly clear” that there was no bona fide triable issue with respect to the plaintiff’s constructive trust claim. Finally, it was in the interests of justice to grant leave to the plaintiff to amend his pleadings to address the deficiencies regarding the claim to an interest in property should he choose to do so, in which case he would be at liberty to refile a CPL (Neufeld v. Neufeld, 2021 BCSC 1271).

Proper Test and Procedure to Determine Whether to Cancel a Certificate of Pending Litigation for Section 215 Non-compliance

In Xiao v. Fan, 2018 BCCA 143, the court clarified the proper test and procedure to be used to determine whether to cancel a CPL alleged to be non-compliant with s. 215 of the Land Title Act. The appellants brought an appeal from an order cancelling two CPLs on the basis that they were not properly based on a claim for an interest in land as required by s. 215(1). The underlying claim sought damages for various causes of action; declarations that the respondents had been unjustly enriched and held monies received in trust; and orders for the return of monies, an accounting, and equitable tracing. The pleadings alleged that the respondents had applied monies they had “received or otherwise obtained” from the appellants “in whole or in part, to purchase, maintain and/or improve” their own properties. The chambers judge ordered the CPLs cancelled, noting the plaintiffs had argued the merits rather than providing evidence or argument about a nexus between the properties and the claims.

On appeal, the appellants contended that the chambers judge had applied the wrong test. The appellate court requested further written submissions as to the proper test to be applied arising from Bilin v. Sidhu, 2017 BCCA 429 and Berthin v. Berthin, 2018 BCCA 57, both decisions made since that of the chambers judge in the present case.

Following such further submissions, the appellate court held that the test and the procedure used had now been confirmed to be incorrect (although neither the parties nor the chambers judge could be faulted, given the state of the case law at the time). The court in Xiao said (at para. 27):

[T]he correct test to be applied in an application to cancel a CPL that is alleged to be non-compliant with s. 215 of the Land Title Act is simply whether the pleadings disclose a claim for an interest in land. In such an application, no evidence is to be considered. If the merits of the claim for an interest in land are challenged, a defendant should apply for a summary dismissal of that part of the claim under [Supreme Court Civil] Rule 9-6(4), where evidence may be considered, and the test to be applied is whether there is a bona fide triable issue of fact or law. If that part of the claim is dismissed, a defendant may then apply to have the CPL cancelled under s. 254.

No Question of Whether Pleadings Can Be Salvaged through Amendments

In dismissing an application for a stay of an order for cancellation of a CPL under s. 215 on the basis that the appellants had failed to claim an interest in land, the court said that an application to cancel a CPL simply asks the question “whether the pleadings disclose a claim for an interest in land” (Xiao v. Fan, 2018 BCCA 143 at para. 27). No elevated standard is brought to bear on this issue, as might occur in an application to strike pleadings brought under Supreme Court Civil Rule 9-5(1)(a). Further, the question of whether a party’s existing pleadings can be salvaged through further amendments does not arise (Goel v. Dhaliwal, 2022 BCCA 87 (Chambers)).