Removal of a Certificate of Pending Litigation (CPL)

Removal of a Certificate of Pending Litigation (CPL)

Instafund Management Mortgage Corp. v Garrow 2020 BCSC 1017 outlines the law relating to an application for the removal of a certificate of pending litigation (CPL).

The court held that the first step on such an application is to determine whether the pleadings disclose an interest in the land. (Land Title Act S. 215)

If the pleadings failed to disclose an interest in the land, then the certificate of pending litigation must be canceled. Yi Teng Investments v Keltic Developments 2019 BCCA 357.

In Bilan Xiao and Berthin v Berthin 2018 BC CA 57 the appeal court confirmed an application to cancel a certificate of pending litigation for noncompliance with section 215 Land title act, finding that section 215 does not permit an analysis of the merits of the underlying claim, thus the court must consider only whether the pleadings contain a claim for an interest in land.

It is not open to a judge to cancel a certificate of pending litigation on the basis of claim to an interest in land is weak or where there is no triable issue. Bilan paras. 53-55.

If an applicant does not succeed in establishing that there is no claim for an interest in land under section 215, the court may still cancel a certificate of pending litigation.

If the applicant can establish “hardship and inconvenience” caused by the presence of the filed CPL. ( S. 256-257 Land Title Act) . The onus is on the applicant to establish that they are suffering hardship and inconvenience. The evidentiary threshold was discussed by the Court of Appeal in Youyi Group Holdings (Canada) , LTD,. v Brentwood lanes Canada 2014 BCCA 388 .

As a preliminary matter, the applicant may show that he/she/ it is experiencing or likely to experience hardship and inconvenience as a result of the registration of the CPL.

Some judges have proceeded on the basis that the hardship need not be significant, while others have required severe suffering.

The court in Instafund stated that the legislature could not have intended that the threshold under section 256 could be surmounted by proof of hardship that is only “trifling”, while on the other hand, the court said it should not be “exacting” in its analysis of hardship and inconvenience.

The applicant must provide particulars that demonstrate hardship. Generalizations and unsupported by specific proof of hardship and inconvenience are insufficient, as discussed in Grant v Sandhu 2009 BC SC 2236

Speculation about potential business opportunities or sales is insufficient. Kaur V Chandler 2018 BCSC 1283 at paras. 46-48

The alleged hardship must be caused by the registration of the CPL. Liquor Barn Income Fund v Mather 2011 BC CA 141 at paras. 23 and 37.

Even if an applicant has established hardship and inconvenience, it does not follow as a matter of course that the CPL will be canceled. The court retains a residual discretion. This discretion allows for other factors, including equitable principles to be considered. Youyi at paragraph 29.

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