Xie v Lai 2017 BCSC 2035 involved an application to cancel a certificate of pending litigation and the law re same was reviewed.
The Legal Framework
31 The legal framework respecting the cancellation of CPLs was set out in Jacobs v. Yehia, 2015 BCSC 267. The principles can be summarized as follows:
1. A party to a proceeding who claims “an estate or interest in land” may register a CPL against the land: Land Title Act, R.S.B.C. 1996, c. 250 (the “Act”), s. 215(1). But if the party is unable to demonstrate an arguable or prima facie case for an interest in land, the CPL will be cancelled: 0861695 B.C. Ltd. v. Meola, 2013 BCSC 121.
2. A CPL will also be cancelled if the action in which it has been registered has been dismissed and no appeal from the dismissal has been registered: s. 245 of the Act.
3. “An estate or interest in land” may include both legal and equitable interests. The test is not to be narrowly defined. A claim for a proprietary interest is more than the mere fact that a claim relates to land.
4. Where funds are obtained through wrongful means, and can be traced to the acquisition or improvement in land, the court may impose a remedial constructive trust: Jacobs v. Yehia at para. 25. Moreover, the claim for tracing may, in and of itself, justify an equitable charge on land for purposes of supporting a CPL.
5. A constructive trust is an equitable remedy available for circumstances such as fraud and unjust enrichment.
6. A plaintiff must show that a monetary award would be insufficient before a constructive trust will be imposed. A significant factor for consideration is whether a monetary award will be paid.
7. Where an interest in land is claimed based on a constructive trust, the question on an application to cancel it is whether a constructive trust is a possible remedy. If so, that is enough to sustain it. The test is not whether the plaintiff will be successful.
8. Tracing of funds may take place before or after legal or equitable rights have been established. In Jacobs v. Yehia at para. 30, Dickson J. (as she then was) quoted from Drucker, Inc. v. Hong, 2011 BCSC 905. In that case, Masuhara J. stated that tracing is a process, not a claim or remedy. He said the following at paras. 37 to 39:
 Hence, if the plaintiff successfully establishes a proprietary entitlement to the misappropriated funds in the hands of the defendant, it may trace or follow those funds from there into other property. The question is then whether or not the Property held by the defendant is sufficiently connected to those misappropriated funds to satisfy the requirements for a constructive trust. If it is, the plaintiff will then be entitled to assert a constructive trust against that property without the exercise of any further discretion by the court (Tracy at para. 33).
 In regard to tracing, it is neither a claim nor a remedy. It is merely a process by which a claimant demonstrates what has happened to his or her property so as to justify his or her claim that those proceeds can properly be regarded as representing his or her property: Foskett v. McKeown,  3 All E.R. 97 (H.L.). There are three conditions which must be met:
(i) the property must be traceable;
(ii) there must be an equity to trace; and
(iii) tracing must not produce an inequitable result.
See: Snell’s Equity, 29th ed. (London: Sweet & Maxwell, 1990) at p. 299.
 Based on the following facts, I accept the position of the plaintiff that there is an arguable case for a remedial constructive trust in the Property or in the misappropriated funds which might be traced to the Property, either of which could sustain the CPL on the Property. This is sufficient to establish a claim for interest in land within the meaning of s. 215(1) of the Land Title Act.
9. Finally, the test for an interim injunction preventing the disposal of the property is more stringent than the test for entitlement to a CPL. It requires an assessment of the merits of the case and of the balance of convenience. Moreover, unless a court otherwise orders, the plaintiff will be required to swear an undertaking as to damages: see Evergreen Building Ltd. v. IBI Leaseholds Ltd., 2005 BCSC 1161.
10. In order to apply for cancellation of registration, the applicant must show that “… hardship and inconvenience are experienced or are likely to be experienced by the registration”: Land Title Act, s. 256 (1).
11. The court is not required to be “exacting” in its assessment of hardship and inconvenience: Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2014 BCCA 388.