Executive Summary: Key Legal and Evidentiary Issues

• The existence and scope of Montaigne Group Ltd.’s equitable interest in Alcuin College’s property under a bespoke construction contract were contested.

• The enforceability and cancellation of a certificate of pending litigation (CPL) under the Land Title Act was central to the dispute.

• Interpretation of complex contract terms, including remedies for breach and conditions for property transfer, was required.

• The applicability of section 73 of the Land Title Act to contingent interests in land was debated.

• The threshold for summary judgment and whether a genuine issue for trial existed was analyzed.

• The court considered whether hardship and inconvenience justified cancellation of the CPL.

Factual background

Alcuin College, a private school in North Vancouver, acquired property to construct a new school building. In late 2020, it entered into a unique construction contract with Montaigne Group Ltd. The contract provided that Montaigne would build the school for a fixed price of $6.8 million, with its remuneration to be the transfer of a stratified fourth floor—referred to as the Montaigne Amenity Space—upon completion. The contract included provisions for cooperation, cost allocation, and detailed steps for subdivision and transfer of the Amenity Space. Notably, clause 9.11 denied the existence of a partnership or joint venture, despite the contract’s title.

Construction progressed until early 2023, when cost overruns and disputes arose. Alcuin claimed Montaigne breached the contract, while Montaigne attributed overruns to Alcuin’s extra-contractual demands. With the project stalled and the fourth floor unbuilt, Montaigne sued and registered a certificate of pending litigation (CPL) against the property, preventing Alcuin from securing further financing. Alcuin attempted to remove the CPL, arguing Montaigne had no valid claim to an interest in land, and also sought summary judgment to dismiss Montaigne’s claims. These applications were dismissed at first instance.

Policy terms and contract clauses at issue

The contract, though styled as a joint venture agreement, expressly denied creating such a relationship. Key clauses included mutual cooperation (clause 3.1), fixed construction budget and allocation of overruns (clause 3.7), procedures for subdivision and stratification (clauses 3.11–3.12, 3.15.2, 4.2–4.3), and detailed termination provisions (clause 5.3.1). Clause 5.3.1, in particular, set out Montaigne’s rights to the Amenity Space post-termination, subject to conditions such as the passage of 180 days and the nature of the breach.

Proceedings and legal issues

Alcuin’s applications for summary judgment and cancellation of the CPL were dismissed by the Supreme Court of British Columbia. The chambers judge found that Montaigne’s claim to an equitable interest in the Amenity Space, while contingent on subdivision, was not bound to fail. The judge also held that specific performance might be available and that hardship justifying CPL cancellation had not been sufficiently demonstrated.

On appeal, the British Columbia Court of Appeal reviewed whether Montaigne was entitled to specific performance or any equitable interest, and whether section 73 of the Land Title Act barred Montaigne’s claim. The Court concluded that specific performance was not available because it would impose obligations not contemplated by the contract and require ongoing court supervision. However, the Court agreed that a contingent equitable interest could exist, as the contract promised Montaigne the Amenity Space under certain conditions, and subdivision was not a true condition precedent under section 73.

Ruling and outcome

The Court of Appeal allowed Alcuin’s appeal only to the limited extent of granting it liberty to reapply in the Supreme Court, on fresh evidence, to cancel the CPL under section 256 of the Land Title Act. Otherwise, the appeal was dismissed. The Court held that Montaigne’s claim for a contingent equitable interest could not be summarily dismissed, and the CPL would remain unless a further application succeeded. Montaigne Group Ltd. was the substantially successful party on appeal and was awarded its costs in the Court of Appeal, though the specific amount was not stated and would be determined according to the applicable rules or by further agreement or assessment. No damages or other monetary awards were granted.