Executive Summary: Key Legal and Evidentiary Issues

• Central issue is whether the plaintiffs have an interest in land sufficient to support a certificate of pending litigation (CPL).

• The interpretation and effect of the Participating Loan Agreement, including Schedule “B”, are contested.

• The existence of a bare trust or constructive trust in favor of the plaintiffs is disputed.

• The defendants challenge the CPL based on alleged lack of merit, improper pleading, and procedural delay.

• The sufficiency of evidence regarding the plaintiffs’ entitlement to an interest in land is examined.

• The court addresses whether costs should be awarded following the outcome of the application.

Facts and outcome of the case

Background and parties

The plaintiffs are Lakeshore Ventures Ltd., Dockside Management Ltd., Beau-Fort Industries Ltd., 0733354 B.C. Ltd., B.F. McLaren Ltd., Lasco Holdings Ltd., 574215 B.C. Ltd., Bob Plowright Realty, 613459 B.C. Ltd., 390697 B.C. Ltd., R. Craig Barton, James S. Barton, Harry Geddes, David Moon, Jeffrey Reimer, Darlene Wenham, and Kathleen Renwick. The defendants are Trackside Holdings Ltd. and 0720305 B.C. Ltd. In 2022, the plaintiffs filed a notice of civil claim and a certificate of pending litigation (CPL) against the title to a property located in Chilliwack, British Columbia. The property is held by 0720305 B.C. Ltd. as bare trustee for Trackside Holdings Ltd.

Nature of the dispute

The plaintiffs allege that they invested funds with Trackside Holdings Ltd. under a Participating Loan Agreement for the acquisition and development of properties in Chilliwack. They claim that the agreement and its Schedule “B” provide that 0720305 B.C. Ltd. holds the property in trust as bare trustee on behalf of Trackside Holdings Ltd. and the plaintiffs as capital investors. The plaintiffs seek, among other relief, a declaration that 0720305 B.C. Ltd. holds the lands in trust, a judgment in the amount of $3,500,000, an accounting for the proceeds of any sale by the defendants of the lands, and a CPL. The defendants argue that the agreement does not grant the plaintiffs any interest in the property and seek to cancel the CPL by challenging the merits of the claim, asserting that the pleading does not claim an interest in land, and citing delay.

Key legal issues

The court considers whether the pleadings and evidence disclose a bona fide triable issue of fact or law regarding the plaintiffs’ alleged interest in land. The court reviews the terms of the Participating Loan Agreement, including provisions related to the purpose of the loan, the role of the parties, the holding of legal title, the distribution of project income, and the risks of investment. The court also examines whether the procedural delay in the case justifies cancellation of the CPL under section 252(1) of the Land Title Act.

Court’s analysis

The court finds that the claim and the agreement, particularly the organizational chart in Schedule “B”, allow for some ambiguity as to whether the plaintiffs have an entitlement to the project and the property. The court notes that the agreement does not state that investors have no recourse against the property and that 0720305 B.C. Ltd. is described as holding legal title as bare trustee. The court concludes that there is a genuine triable issue regarding the plaintiffs’ interest in the property. Regarding delay, the court finds that while there was a period of inactivity, the plaintiffs provided some explanation, and there is no evidence of actual prejudice to the defendants. The court determines that cancellation of the CPL is not justified.

Outcome

The court dismisses the defendants’ application for summary judgment and the alternative ground of relief seeking to cancel the CPL. The court finds that there is no basis to grant summary judgment or to strike out the claim on the basis that the pleading does not assert an interest in land. The CPL remains in place.

Costs and damages

Costs are awarded to the plaintiffs in the cause. No damages are awarded at this stage, as the judgment addresses only the procedural applications before the court.