Land Title Practice Manual

296 Remedies Of Person Deprived Of Land

In This Volume

  • 296 (1) In this Part, “court” means the Supreme Court.
  • (2) A person, in this Part referred to as the “claimant”,
  • (a) who is deprived of any estate or interest in land
    • (i) because of the conclusiveness of the register, in circumstances where, if this Act had not been passed, the claimant would have been entitled to recover the land from the present owner, and
    • (ii) in consequence of fraud or a wrongful act in respect of the registration of a person other than the claimant as owner of the land, and
  • (b) who is barred by this Act or by any other Act, or otherwise precluded from bringing an action
    • (i) for possession, or any other remedy for the recovery of land, or
    • (ii) for rectification of the register,
  • may, subject to subsections (3) and (4), proceed in court for the recovery of damages against the person by whose fraud or wrongful act the claimant has been deprived of the land.
  • (3) In a proceeding under subsection (2), the minister must be joined as a nominal party defendant as a condition of recovering damages and costs from the assurance fund, and the minister has the right in the proceedings to all the defences available to the minister or any other person for the purpose of protecting the assurance fund.
  • (4) If the person liable for damages is dead, or cannot be found in British Columbia, a claimant may, instead of proceeding against that person, proceed in court for the recovery of damages and costs against the minister as nominal defendant and recovering the amount of the damages and costs from the assurance fund, and the minister has in the proceedings all the rights and defences under subsection (3).
  • (5) If
  • (a) final judgment has been given against the person liable for damages under subsection (2) in a proceeding in which the minister has been joined as a party defendant, and
  • (b) the court, on the application of the plaintiff supported by evidence satisfactory to the court, certifies to the minister charged with the administration of the Financial Administration Act that the plaintiff has taken all reasonable steps to recover the amount of damages and costs awarded by the judgment from the person so liable, but the plaintiff has been unable to recover all or part of them,
  • on receipt of a certified copy of the judgment and the certificate of the court, the minister charged with the administration of the Financial Administration Act must
  • (c) pay the amount of the damages and costs so awarded or the unrecovered balance of them, as the case may be, on account of the person liable for the damages or the person’s personal representatives, and
  • (d) charge the amount to the assurance fund.
  • (6) If the person bringing an action under subsection (4) recovers final judgment against the minister, the registrar of the court must certify to the minister charged with the administration of the Financial Administration Act the fact of the judgment and the amount of the damages and costs recovered.
  • (7) On receipt of a certificate under subsection (6), the minister charged with the administration of the Financial Administration Act must pay the amount of the damages and costs on account of the person liable for the damages or the person’s personal representative, and must charge the amount to the assurance fund.
  • (8) A proceeding for the recovery of damages sustained through the deprivation of land may not be brought under this section
  • (a) against the minister, or
  • (b) against the person by whose fraud or wrongful act the person entitled to the land has been deprived of it,
  • unless the proceeding is commenced within 3 years after the deprivation is discovered by the claimant.

    (9) If a person is under a disability, the Limitation Act applies to this section.

1979-219-276; 2003-66-35, 45, 46.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Limitation Act

See ss. 10, 11, 18, and 19 of the Limitation Act regarding the running of time with respect to limitation periods for minors and persons under disability.

Secondary Sources

See Di Castri, Registration of Title to Land, vol. 3, paras. 974, 977 to 979, 983, 987, 990, 992, 995, 996, 998, and 1001.

CASE LAW

Claimant Must Be Deprived of Interest by Operation of Act

A vendor sold his land to a third party when his land was subject to an executed interim agreement with the purchasers. The purchasers were entitled to damages for breach of contract from the vendor but were not entitled to recover from the assurance fund. The purchasers were not deprived of their interest by operation of the Act; rather, they were deprived of their interest in the vendor’s land by the vendor’s act of selling to a third party, who was not a party to the breach of contract (Schweickardt v. Thorne, 1976 CanLII 1498 (BC SC)).

The plaintiff company sold land to the defendant R, who gave the plaintiff company an unregistered option back. The plaintiff company in turn assigned the unregistered option to the individual plaintiff. R then sold the property to the defendant society which was aware of the unregistered option and promised to honour it. The defendant society subsequently sold the land to a third party without informing it of the unregistered option. The third party was a bona fide purchaser for value who took title free of the individual plaintiff’s interest. The plaintiff was not entitled to compensation from the assurance fund. He was deprived of his interest by the breach of contract of the defendant R and the fraud of the defendant society and not by operation of the Act (McCaig v. Reys, 1978 CanLII 381 (BC CA)).

Fraudulent Transactions

The plaintiff and the defendant Brown purchased a property as tenants-in-common and lived there together until their relationship ended and the plaintiff moved off the property. Several years later, the plaintiff and Brown signed an agreement in which the plaintiff would transfer her share of the property to Brown upon receipt of a payment from Brown and upon receipt of her release from liability under two mortgages. Although the plaintiff received the payment from Brown, the holders of a second mortgage refused to release the plaintiff and the agreement was never finalized or registered in the land title office. Eight years later, Brown, without the knowledge of the plaintiff, had the defendant notary public prepare a transfer for the property which included the legal description but which left the name of the purchaser and the purchase price blank. Brown brought the transfer back with the forged signatures of the plaintiff and her solicitor. In preparing the vendor’s statement of adjustments, the notary public did not contact the plaintiff or her solicitor, although the plaintiff’s name was clearly on title and specifically referred to in the document. The plaintiff brought a claim against Brown for damages for fraud and forgery, a claim against the notary public for a breach of duty of care, and a claim against the assurance fund. The trial judge awarded damages against Brown, found that the notary public had breached her duty of care to the plaintiff, and dismissed the plaintiff’s claim against the assurance fund. On this appeal by the notary public, the court found that the notary public owed no duty of care to the plaintiff, a person she had never met and for whom she did not act. As such, the notary public and the plaintiff were not in the kind of “close and direct” relationship said to be necessary to ground a duty of care. Although a property interest was involved, the plaintiff had no expectations of the notary public, the plaintiff did not rely upon her, and the notary public made no representations to the plaintiff. The Court of Appeal found that the notary public proceeded reasonably in the belief that the plaintiff’s interests had been taken care of by her solicitor and that the trial judge made a clear and palpable error in drawing from so-called warning signs the inference that the notary public did not live up to that standard of care. Accordingly, the appeal court allowed the notary public’s appeal, allowed the plaintiff’s cross-appeal from the trial court’s dismissal of her claim against the Attorney General, and left it open to the plaintiff to proceed under s. 296(5) of the Act against the assurance fund (Esser v. Luoma, 2004 BCCA 359).