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In This Volume

  • 252 (1) If a certificate of pending litigation has been registered and no step has been taken in the proceeding for one year, any person who is the registered owner of or claims to be entitled to an estate or interest in land against which the certificate has been registered may apply for an order that the registration of the certificate be cancelled.
  • (2) An application under subsection (1) must be made to the court in which the proceeding was commenced and must be brought
  • (a) as an application in that proceeding, if the applicant is a party to the proceeding, or
  • (b) by petition, if the applicant is not a party.
  • (3) The registrar must, on application and on production of a certified copy of the order of the court directing cancellation under subsection (1), cancel the registration of the certificate of pending litigation.

1979-219-231; 1989-69-27, effective April 1, 1990 (B.C. Reg. 53/90); 1992-55-1, effective October 1, 1994 (B.C. Reg. 300/94; 2010-6-65, effective July 1, 2010).

FORMS

Forms of Application for Cancellation of a Certificate of Pending Litigation

Submissions

On the Form 17 Cancellation of Charge, Notation or Filing, select Nature of Interest, Certificate of Pending Litigation, and attach an image of the original court certified court order.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

See Di Castri, Registration of Title to Land, vol. 2, paras. 655, 665, and 668.

CASE LAW

Notes on Case Law: The 1989 re-enactment of this section provides that an applicant must apply to court by interlocutory application if the applicant is a party to the proceeding. For a sample of case law interpreting this section when the interlocutory procedure was not available, see Boicey v. Boicey, 1964 CanLII 781 (BC SC); Hugh M. Fraser Ltd. v. Midburn Holdings Ltd., 1970 CanLII 758 (BC CA); Manatec Enterprises Ltd. v. Rikki’s Investments Ltd., [1975] W.W.D. 142 (B.C. Co. Ct.); Janzen v. Maselli, 1977 CanLII 364 (BC SC); Saunders v. Multi Builders Ltd., 1981 CanLII 768 (BC SC); and Pacific Savings and Mortgage Corp. v. Can-Corp Development Ltd., 1982 CanLII 463 (BC CA).

Note: The case annotations that follow, many of which predate the 1989 re-enactment, are only a sample of a decisions made under s. 252. They are not intended to be a comprehensive review of decisions made under this section.

Interpretation

Within the context of s. 252, an examination for discovery is a “proceeding” (Anchor Ventures Inc. v. Doney, [1984] B.C.D. Civ. 2203-02, [1984] B.C.W.L.D. 2202 (S.C.)).

Court’s Discretion

There is nothing in s. 252 that takes away a judge’s discretion to do what is fair and equitable as between the parties. The court in this case refused to order cancellation of a lis pendens filed in fraudulent conveyance proceedings which commenced two and a half years earlier. The holder of the lis pendens had obtained judgment against the defendant in other actions, had been endeavouring to realize on property by other means, and had discussed settlement of all outstanding matters in the process of an examination in aid of execution (Tomczyk v. Toronto-Dominion Bank, 1982 CanLII 546 (BC SC)).

Section 252 clearly provides for the exercise of judicial discretion through the use of the word “may” in subsection (1). The court exercised that discretion in favour of the lis pendens holder, even though the holder commenced the action founded on a claim of fraudulent conveyance more than three years before the date of the s. 252 application. There was no evidence that the delay was prejudicial to either party in prosecuting their actions (Surfwood Developments Ltd. v. Auzin, [1985] B.C.J. No. 1471 (QL) (S.C.)).

Under a separation agreement, a husband agreed to pay his wife cash for her interest in the matrimonial home in settlement of their matrimonial dispute on the condition, among others, that she release her lis pendens. When he failed to make the final payment contemplated in the settlement, she filed new certificates of lis pendens against the matrimonial property and some business properties. The husband sought removal of the certificates 17 months later. As to the business properties, the separation agreement governed, and the wife no longer had an interest in them. With respect to the matrimonial home, the separation agreement contemplated that the lis pendens filed against it would remain until the husband made final payment. This indicated that the wife might still have an interest in the matrimonial property. Section 252(1) gives a court discretionary power to cancel a lis pendens. Accordingly, the court ordered removal of the lis pendens against the business properties but not those registered against the matrimonial home (Baker v. Baker, 1985 CanLII 840 (BC SC)).

The court exercised its discretion under s. 252 and allowed an application for cancellation. Six years had passed between the time the holder filed the lis pendens and the time of the application. During that time, there had been some correspondence between counsel, but there had been no communication for a year and a half (Tod Mountain Development Ltd. v. Candido, [1982] B.C.J. No. 2360 (QL) (S.C.)).

Trust Claims Incapable of Summary Disposition, Certificates Cancelled

The parties resided together in a marriage-like relationship from early 2016 until November 2017. During that time, the respondent stated she paid all the parties’ common living expenses including utilities, day-to-day living costs, and food. Further, she asserted that it was her, not the claimant, who provided a benefit to the other by working as bookkeeper without pay for the claimant’s construction company. The respondent had sold her home in Burnaby. With the sale proceeds, she purchased two properties near Fernie (Cedar Bowl #18 and #20) in July 2016 from the claimant’s former spouse, JE (#18), and from JE and the claimant (#20). The former was bare land. The respondent purchased a third property, a vacant lot (Black Rock), in December 2016, with the intention of building a house and selling for profit. She contributed the entirety of the purchase price. The claimant asserted, and the respondent denied, that the parties had an express agreement that entitled the claimant to an equity interest in both of the Cedar Bowl properties based upon the difference in the price paid by the respondent and the assessed values of each at the time of acquisition—a difference of approximately $300,000. The respondent applied for a summary trial pursuant to Supreme Court Family Rule 11-3(2) and sought dismissal of the major portions, but not the entirety, of the action. Specifically, she sought: a declaration that the parties were not spouses pursuant to the Family Law Act followed by a dismissal of the claims for relief under the FLA; a declaratory order that she did not hold property in trust for the claimant; and the removal of CPLs placed on three properties. The CPL against Black Rock had been discharged as a condition of the court granting the claimant an adjournment. Held, application allowed in part. The court found the parties were never spouses within the meaning of the FLA and dismissed claims thereunder. However, the court was unable to conclude that the claimant’s claims in trust were capable of summary resolution given the conflict in the evidence. On first blush, it would appear that the claimant’s assertion of trust was premised wholly on contributions made by him financially and otherwise to the betterment of the properties; particularly his work in overseeing construction on Black Rock. He also said that he provided improvements to 20 Cedar Bowl, which was the home in which the parties cohabited from the early stages of 2017 until separation. However, in his evidence, he deposed that he was instrumental in the acquisition of at least two of the properties, the Cedar Bowl properties, at discounted prices below their assessed value and that the parties orally agreed that he would gain an equity position in each based upon the difference between the purchase price and the assessed values. The claimant had not pleaded an express trust, but the pleadings were still capable of amendment. The respondent denied any such arrangement, but that was a matter of credibility incapable of resolution on documentary evidence. Finally, after balancing the prejudice faced by both parties, the court ordered the CPLs registered against the two Cedar Bowl properties be removed. The respondent was presumptively prejudiced by the continued impediment to enjoy the properties. The last step in the litigation prior to the respondent’s application was in July 2018. The claimant had not asserted an acceptable reason for failing to progress with the litigation or provided any prejudice that he would face if the CPLs were removed (Rizzuto v. Grover, 2020 BCSC 1564).

Cancellation on Terms

The parties, who cohabited in a marriage-like relationship for eight years and had two children, separated in February 2016. The respondent owned the former family home in which he continued to reside. In January 2017, the claimant commenced an action claiming an interest in the home and registered a CPL against title. The parties were litigating their parenting issues in Provincial Court. The only substantive steps taken in this proceeding were two judicial case conferences. At the second, the parties agreed to jointly retain an appraiser to provide market values of the home in 2008 and 2016, with the cost to be shared equally, and to share equally the increase in the equity in the home. The respondent deposed that he obtained the appraisals in January 2020, provided them to the claimant’s lawyer, and proposed that the CPL be removed. The claimant did not respond. In August 2020, the respondent applied pursuant to s. 252 of the Land Title Act for an order cancelling the CPL. Held, application allowed on terms. The preconditions to an application under s. 252(1) were satisfied: the CPL had been registered, and no steps had been taken in the proceeding for more than one year. A CPL is an exceptional remedy offering pre-judgment security in respect of a claim for an interest in real property. It does not provide security for a claimant’s other claims, such as those asserted in Provincial Court. Prejudice to a landowner from a CPL is presumed where the preconditions under s. 252 are satisfied, and, here, the claimant failed to satisfy the onus upon her to show that the prejudice was not serious or was outweighed by other factors. She offered no explanation for her failure to address the respondent’s January 2020 proposal or to take other steps to complete the division of property. In addition, the respondent had suffered actual prejudice from the CPL on title because it hampered his ability to borrow money against his equity in the home. On the other hand, there could be prejudice to the claimant if the CPL were simply cancelled. She had an indisputable interest in the home. Therefore, the CPL would be cancelled on terms, after the respondent paid to the claimant the net value of her interest in the home determined according to the consent order less her agreed contribution to the cost of a Hear the Child Report, and the costs of this application (Lebarr v. Pearl, 2020 BCSC 1638 (Chambers)).

Rights Claimed in Proceeding Extinguished by Limitation Act

In 1915, the respondent took an assignment of mortgage covering several lots. The mortgagor subsequently conveyed portions of the lots to a railway company as rights of way. The respondent foreclosed on the mortgage, filed a lis pendens and commenced separate proceedings against the railway company. The final order of foreclosure expressly excepted all but one of the rights of way. Title to the land affected by that right of way was still subject to the assignment and lis pendens. The petitioner sought an order cancelling the assignment and lis pendens. The petitioner had no notice of the foreclosure proceedings, was not a party to them, and was therefore unaffected by the foreclosure order. Under the Limitation Act, rights under the assignment of mortgage were extinguished. The lis pendens was cancelled (B.C. Rail Co. v. Dalton, 1993 CanLII 1302 (BC SC), application for stay pending appeal refused 1993 CanLII 617 (BC CA)).

No Steps Taken within One Year

This appeal from a master’s order concerned releasing a certificate of pending litigation and cancelling two caveats. The mere filing of a certificate of pending litigation was prejudicial, and the onus was on the plaintiff to show that this prejudice was somehow outweighed by other factors. The defendants satisfied the court that no proceedings had been taken for more than one year. In the absence of further assertions from the plaintiff, the master was correct in releasing the certificate and cancelling the caveats (Kal West Mechanical Inc. v. Bush, 1999 CanLII 6941 (BC SC)).

The defendants sought an order cancelling a certificate of pending litigation on the grounds that the plaintiff had taken no steps in the proceeding for more than one year. In granting the defendants’ application, the court affirmed that, as an extraordinary legislated interim remedy which permits a plaintiff to secure a claim before it is proven, a certificate of pending litigation is prejudicial per se. The plaintiff argued without authority that the term “step” includes an informal step a solicitor or party might take in relation to an action. The court found that such a broad definition would be inconsistent with the purpose of s. 252 and that it would put the defendant in an untenable position in regard to proof of the factual underpinnings for its remedy. The court considered the plaintiff’s explanation that the matter was left in the hands of legal assistants who failed in various ways to take actions over a two-year time frame. In exercising its discretion to cancel the certificate, the court found that the plaintiff’s lapses and entirely unsatisfactory explanations were so compelling that the strength of the plaintiff’s case ought to be accorded little, if any, weight. In contrast, the defendants provided substantial evidence that the certificate was impeding their ability to obtain financing for development purposes. On these facts, the court ordered cancellation of the certificate (Khan v. Johal, 2006 BCSC 1547).

Standard on Appeal

The refusal of the court to order cancellation of a lis pendens is a decision that is interlocutory in nature. On an appeal, the test to be applied is whether the master was clearly wrong in refusing to order the cancellation (Johl v. Modar Developments Ltd., 1991 CanLII 1750 (BC SC)).