289 Proceedings For Discharge Of Caveat

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

See Di Castri, Registration of Title to Land, vol. 1, para. 115, and vol. 2, paras. 571 and 624 to 626.

CASE LAW

Burden of Proof

The onus in a s. 289 application is on the party seeking to remove a caveat to satisfy the court that it should be removed. Where there is a reasonable question to argue, the court should not set aside a caveat; the summary procedure available under s. 289 is proper only where it is patently clear there was no valid ground for the lodging of a caveat in the first place. In this case, the court refused the application to discharge the caveat without prejudice to the caveatee to make a new application to discharge the caveat if the caveator did not pursue its action to establish its interest in land diligently (In Re Land Registry Act; In Re Caveat filed by Ellett, [1973] B.C.J. No. 229 (QL) (S.C.)).

Regardless of the wording of the section, the onus in a s. 289 application is on the party seeking to remove a caveat. In this case, the applicant was able to satisfy the court that the caveat should be removed because the purchase and sale agreement upon which the caveator based its claim was not binding (Canada Trustco Mortgage Co. v. 77-11 Properties Inc., [1986] B.C.J. No. 1550 (QL) (S.C.)).

Validity of Grounds

A caveator, the vendor under a purchase and sale agreement who had delivered executed transfers to the purchaser on various undertakings, lodged caveats against the property to prevent the registration of title in the name of the purchaser. The court, after noting the law established by Canada Trustco Mortgage Co. v. 77-11 Properties Inc. and Re Ellett, found that the caveator had no valid ground for lodging the caveats and accordingly ordered them discharged (Ledingham McAllister Properties Ltd. v. First Canadian Plaza Ltd., [1989] B.C.J. No. 2540 (QL) (S.C.)).

The petitioner had a right of first refusal (RFR) registered against the property of a third party. The petitioner and the respondent entered into negotiations regarding the possible transfer of the RFR to the respondent, but a formal agreement was never concluded. The respondent lodged a caveat against the RFR and the petitioner then applied to have the caveat discharged. With respect to whether an agreement had been reached and a contract concluded, the court found that the petitioner had met its onus of establishing there were no triable issues between the parties. On the evidence, it was patently clear there were no grounds for lodging the caveat in the first place as there were no facts in issue and no denial of those facts in the affidavit material filed by the respondent. Accordingly, the court directed that the caveat be discharged (Rotherham Holdings Ltd. v. Vancouver Island Entertainment Inc., 2004 BCSC 1124, application for extension of time to appeal dismissed 2004 BCCA 564 (Chambers) and 2005 BCCA 281).

Cancellation to Allow Subdivision

The petitioners owned a parcel of bare land that they intended to subdivide and sell to the two respondents, M and A. There were lengthy delays in obtaining subdivision approvals and then disputes about the contracts between the petitioners and the respondent M, who filed a caveat against the entire unsubdivided parcel. The petitioners applied to have the caveat removed so the subdivision and the sale of Lot 1 to the respondent A could proceed. The court found there might be a triable issue between the petitioners and the respondent M and therefore, that the petitioners had not succeeded in persuading the court the caveat should be discharged without terms. However, the court also found that the caveat could not properly charge the whole undivided property because the respondent M had no interest in Lot 1, the parcel promised to the respondent A. Accordingly, the court ordered cancellation of the caveat and the certificate of pending litigation against the whole property. It granted the respondent M the right to re-register the caveat and certificate of pending litigation against Lot 2, thus giving M security over the exact piece of property it had bargained to buy (P & D Logging Ltd. v. Mill Creek Developments Ltd., 2006 BCSC 371).