Certificate of Pending Litigation (CPL)

Certificate of Pending Litigation (CPL) | Disinherited Estate Litigation

Blackhall v Andrusko 2018 BCSC 140 discusses the law relating to the cancellation of a certificate of pending litigation (CPL) filed against property.

The application was made by the respondent under section 215(1) of the Land Title act who argued that the certificate of pending litigation must be canceled because the claimant did not have a claim to the land.

Section 215 of the Land Title act provides the following:

1) a person who is commenced there is a party to a proceeding, and who is:
a) claiming an estate or interest in land

b) given by another enactment a right of action respective land may register certificate of pending litigation against the land in the same manner as a charges registered, and the registrar of the court in which the proceeding is commenced must attach to the certificate a copy of the pleading or petition by which the proceeding was commenced, or in the case of a certificate of pending litigation under part five of the Court Order Enforcement act, a copy of the notice of application or other document which the claim is made.

The leading case on applications to discharge certificates of pending litigation is Bilin v Sidhu 2017 BCCA 429 where the Court of Appeal reviewed the jurisprudence and concluded that the cases fall into two categories:

a) Where there is no triable issue to support the claim for an interest in land;

b) where the pleadings filed in support of the certificate of pending litigation are incapable of supporting a claim to an interest in land.

Bajwa v Singh 2016 BCSC 916 at para 20 stated that if the claim could not give rise to an interest in land, the certificate of pending litigation will be ordered to be canceled because, essentially, it was improperly registered from the start.

The appeal court in Bilin held the following with regard to whether or not there is a triable issue to support a claim for an interest in land:

“The proper approach in this situation is to bring an application under Rule 9-6(4) for the summary dismissal of the part of the claim that relates to land.

De Cotiis v De Cotiis 2004 BCSC 1658 held the following after reviewing the relevant sections of the Land Title act:

35. To maintain a certificate of pending litigation are to succeed in its application to refile the certificate, the plaintiff must advance a claim to an interest in land.

Where it is shown that there is no serious question to be tried, or put another way, there is no merit to the claim, or stated yet another way, no triable issue, the certificate of pending litigation may be struck, or in circumstances such as these, not reinstated.

Subject to Financing Conditions

Subject to Financing Conditions

The BC Court of Appeal upheld the trial judge in Gordon Nelson Inc v Cameron 2018 BCCA 304 when it refused to imply a term in a real estate contract that the purchaser use “best efforts” to find suitable financing to remove the condition for its benefit to complete the purchase of a certain real estate contract.

The Court of Appeal agreed with the trial judge that the contract require only an “honest effort” to find suitable financing, an obligation, she concluded that the purchaser had satisfied when it refused to complete the transaction.

The vendor had refused to return the deposit and the court ordered that it be returned to the purchaser.

The court agreed with the purchaser that by seeking to have a best efforts term implied in relation to the financing condition, the vendors were seeking to have the court rewrite the contract in a manner that is contrary to the express terms in the addendum.

The subject to financing term in question was:

“Subject to purchaser being able to arrange satisfactory financing on or before Friday, May 31, 1985 at 6 PM. The subject is for the benefit of the purchaser, and shall be removed in writing on or before 6 PM, May 31, otherwise this offer is null and void”

The appeal court stated that it is not the function of the courts to set interim agreements aside for uncertainty because they contain a clause that is not precisely expressed. If such a clause has an ascertainable meaning, then the court should strive to find it. As long as an agreement is not being constructed by the court, to the surprise of the parties, authorities to one of them, the court should try to retain and give effect to the agreement of the parties have created themselves.

The court referred to MJB Enterprises LTD v people’s food market LTD ( 1979) BCCA 11 BCLR 130, which said the following about the word satisfactory financing:

“Such a meeting could of been expressed as financing satisfactory to him, that is to the purchaser, and that means turns the interim agreement into an option. There is no mutuality of intention to support that construction.

In the result, the judge concluded that the case law did not support a general proposition that regardless of the express terms of the contract, a best efforts term must always be implied in relation to subject conditions. The appeal court agreed with the trial judge that the respondent was under only an obligation to use “honest efforts” to arrange satisfactory financing, which is a different matter from best efforts.

The court stated that the most that can be said as a general proposition is that the principle of good faith imposes a general duty of honest performance and all contracts, and whether it implies anything further depends on the language in context of the contract itself—Bhasin v Htynew 2014 SCC 71 at paragraphs 89 and 93.

The appeal court agreed that the judge was correct to treat the contractual obligation as defined by the express language of the contract. It was not a case about implying a contractual term in the absence of a term being expressly stipulated in the contract. To imply a term in these circumstances would be impermissibly to construct an agreement for the parties, contrary to the agreement. The objectively made.

The trial judge was correct to conclude that in any event, implying a term was not necessary to give the contract business efficacy. Making an honest effort to find suitable financing and honestly, concluding having tested the market, that suitable financing was not available is an efficacious business arrangement.

The judge found the purchaser honestly concluded that the market would not provide suitable financing further searching for financing would be pointless.

Partition and Sale of Property Refused

Partition and Sale of Property Refused

In Kane v. Hanslo 2017 BCSC 2393 a claim for Partition and Sale of property was referred to the trial list rather than being decided at a summary trial.

In 2011 the deceased transferred a 50% interest in a 42 acre property he owned to the respondent in joint tenancy.

The respondent claimed that he received the interest in exchange for a promise to assist the deceased with his troubled financial situation by converting the property into a farm.

In 2013 the deceased changed his mind and transferred his remaining half interest to himself, thereby severing the joint tenancy and creating a tenancy in common.

The deceased then commenced an action seeking a declaration that the respondent held his interest in trust, and for an order that the respondent’s 50% interest be re-conveyed to the deceased.

The deceased claimed that he never intended to convey the beneficial ownership of the property and that he was manipulated in doing so through the respondent’s exercise of undue influence.

The court action was still pending with the deceased died intestate in 2014.

Legal title to the half interest of the deceased was conveyed to the petitioner in his capacity as administrator of the estate of the deceased. This property was the primary asset of the estate and distribution of the asset could not be effected until the property was sold.

The petitioner applied for an order for partition and sale, but the petition was dismissed and the matter referred to the trial list.

The court held that the pending trial of the action constituted “good reason” within the meaning of section 6 of the Partition of Property act not to order a partition and sale at this stage. It was therefore neither “necessary nor expedient” for the property be sold at this time.

The court held that it was necessary for the matter to proceed to trial to clarify the rights of the parties before it was determined what the property should be sold and if so, on what terms.

The court followed the reasoning in Lagoski v Shano 37 ETR (3d) 141 that had many parallels to the subject case. The court had ordered partition and sale of property that had been transferred back and forth between the donor and donee, on the basis that the allegations raised the triable issue that should not have been decided summarily, given the conflicts in the evidence.

The Lagoski case raised issues of mental capacity and undue influence with respect to the transfer of the property into joint tenancy that was subsequently severed.

If the party was to succeed in establishing that the transaction severing the joint tenancy was the product of undue influence or lack of mental capacity, such a finding would rebut the presumption of indefeasible title under the land title act.