294 Compensation If Caveat Lodged Wrongfully

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

See Di Castri, Registration of Title to Land, vol. 1, paras. 114 and 117, and vol. 2, para. 630.

CASE LAW

Proper Purpose for Loding Caveat

A caveator lodges a caveat properly and for a proper purpose where the caveator asserts a right which it could easily have thought would justify the bringing of proceedings and the prevention of any further dealing with the title in the meantime. In this case, the court found that the caveator had a reasonable claim to assert and had no malicious motive at the time that the claim was asserted through the lodging of a caveat (First Canadian Land Corp. Ltd. v. Rosinante Holdings Ltd., 1985 CanLII 431 (BC CA)).

Collateral or Improper Purpose

Section 294(1) does not provide a statutory cause of action for damages in respect of caveats without proof of malice. A purchaser is entitled to use the legal process of filing a caveat if the purchaser had a reasonable basis for believing that they had concluded a contract of purchase and sale with a vendor and the purchaser’s solicitor acted on the basis of facts known to the solicitor for the purpose of protecting the purchaser’s legal rights. To found a claim for abuse of process, there must be a collateral or improper purpose and a definitive act or threat in furtherance of a purpose that is not a legitimate use of the process. In dismissing the plaintiff’s claim for damages, the court in this case found that the plaintiffs failed to prove that the purchaser had any collateral purpose in filing the caveat or that the plaintiff’s solicitor acted recklessly or with willful blindness (Voorhis v. Fifteenth Avenue Properties Ltd., 1999 CanLII 3657 (BC SC)).