Law360 Canada (September 21, 2026, 1:32 PM EDT) --
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| Balvinder Kumar |
Civil litigation relating to real estate has its limitations and it cannot be used to abuse the process. A British Columbia Court of Appeal case led to this conclusion (
1316215 BC Ltd. v. Davis, 2026 BCCA 338).
The proceedings in this case arise from a dispute between the plaintiff, Jessica Ashley Davis, and 14 defendants including 1316215 BC Ltd. Davis had been in a personal relationship with one of the defendants, Edward Archibald. According to Davis, she and Archibald purchased property (Property A). The title to this property was registered in the name of a company incorporated by Archibald in which Davis expected to be an equal shareholder and a director.
Archibald sold Property A below market value without Davis. The purchaser of this property, 1316215 BC Ltd., had knowledge that Archibald lacked authority to sell and that the purchase price was below market value. Archibald used the sale proceeds from the sale of Property A to purchase Property B with the title registered in the name of one of Archibald’s alter ego companies. Davis filed two separate actions in the Supreme Court of British Columbia. Davis also registered a certificate of pending litigation (CPL 1) against Property A and Property B. 1316215 BC Ltd., applied twice to cancel CPL 1. Prior to determination of these cancellation applications filed by 1316215 BC Ltd., Davis filed a second action naming all the defendants in the first action along with the additional defendants.
Jiri Studnicky
Davis also registered fresh CPLs against the titles on Property A and Property B (CPL 2). Davis removed CPL 1 from the titles of the two properties, leaving CPL 2 on the title. In the second action, many defendants sought cancellation of the CPL 2. The issues before the chambers judge were whether the CPL 2 should be cancelled as an abuse of the process and whether CPL 2 should be cancelled on the basis that it did not meet the legal requirements for issuance of CPL under s. 215 of the
Land Titles Act (LTA).
The chambers judge dismissed the application of 1316215 BC Ltd. to cancel the CPL. The judge held that this is not an abuse of process as there was a valid protective purpose for commencing duplicative action (initiating a second claim and then registering a second CPL). The intention of Davis for the second claim is a protective action. The appeal filed by 1316215 BC Ltd. was allowed, and the matter was remitted to the Supreme Court for reconsideration under s. 252 of the LTA.
While hearing the appeal, the Court of Appeal considered the statutory requirements governing CPLs, registration and canceling CPLs. The court discussed the nature and effect of a CPL under Part 14, Division 3, ss. 215 and 216 of the LTA and its cancellation under Part 16, ss. 252-258. The court analyzed, summarized and reiterated these sections and the abuse of process as below:
1. Section 215 allows anyone who has commenced a proceeding, or is a party to proceedings, and who claims an estate or interest in land, or has a statutory right to an action in respect of land, to register a CPL against title to the land.
2. Section 216(1) provides that once a CPL is registered against the title to a property, the registrar must not make any entry in the register that has the effect of charging, transferring or otherwise affecting the property until the CPL is cancelled in accordance with the LTA.
3. Once a CPL has been registered, the property owner can only remove it by having it cancelled in accordance with the LTA, s. 216(1).
4. The property owner can apply to have a CPL cancelled.
5. Under s. 255 of the LTA, a property owner can also achieve removal of a CPL by securing some form of settlement or consent arrangement with the CPL claimant, leading the claimant to seek its cancellation.
6. Section 252(1) provides that if “no step has been taken in the proceeding for one year,” the owner of the property, or any other person with an interest in it, may apply to cancel the CPL.
7. The “one year” in s. 252(1) refers to “the year immediately preceding” service of the notice of application to cancel the CPL. This means that where no step has been taken for a period of one year, a party’s right to seek cancellation under s. 252(1) crystallizes upon filing the application to cancel and cannot be overcome or undone by the party seeking to preserve the CPL subsequently taking a step in the litigation.
8. The test for cancelling the CPL has been explained. The court will presume the CPL prejudices the property owner where the applicant demonstrates that no step has been taken in a proceeding for a year or more. The court will use its discretion to refuse to cancel the CPL where the party seeking to preserve the CPL proves that the presumed prejudice is not serious or is outweighed by other factors that would make it unjust to cancel the CPL. In deciding whether to exercise this discretion, the court will consider (a) whether the party seeking to preserve the CPL has given an acceptable explanation for the delay in prosecuting the claim; (b) whether, despite the presumed prejudice, no actual prejudice would be suffered by the applicant if the CPL was not cancelled; and (c) whether the claim for an interest in the land has at least a reasonable prospect of succeeding.
9. The court will use its inherent discretionary jurisdiction where the court is satisfied that the pleadings are incapable of supporting a claim to an “estate or interest in land” such that the CPL did not meet the statutory requirements in s. 215 of the LTA at the time of its registration.
10. Abuse of process and its effect:
a. A litigant who chooses to initiate a potentially duplicative proceeding must “take steps as and when necessary to prevent a proper protective action from becoming abusive.”
b. The true concerns of abuse of process are with the integrity and the coherence of the administration of justice.
c. The court must consider the interests at stake and prejudicial effect of the abuse of process that s. 252 of LTA is meant to protect.
Balvinder Kumar practises real estate law (residential and commercial) and is a freelance writer and author with LexisNexis.
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