Executive Summary: Key Legal and Evidentiary Issues

• Central issue is whether the plaintiffs have a proprietary interest in the Property or its sale proceeds sufficient to justify a preservation order under Rule 10-1.

• Plaintiffs allege breach of contract, dishonoured cheques, and seek remedies including tracing and constructive trust.

• Defendants argue there is no proprietary claim to the Property or its proceeds, asserting the application is an attempt to secure funds before judgment.

• Court focuses on the threshold requirement of evidence supporting a proprietary interest, finding none in the plaintiffs’ materials.

• Application for a preservation order is dismissed for failure to meet the evidentiary threshold.

• Defendants are awarded costs of the application in the cause, with no specific amount determined.

Facts of the case

Amrit Pal Singh Gill and Harpreet Kaur, as plaintiffs, applied for a preservation order under Rule 10-1 of the Supreme Court Civil Rules, BC Reg 168/2009, in the Supreme Court of British Columbia. The application sought that, upon the sale of certain property located on 148 Street in Surrey, BC (the “Property”), the net proceeds of up to $67,500 be paid into court pending further court order or written agreement of the parties. The plaintiffs’ main claim is for an alleged debt of $67,500. They allege that they delivered 15 units of gold to Sandeep Sharma, who they say was the agent of Taaj Jewellers Ltd. (“TJL”), for sale by TJL. Mr. Sharma provided the plaintiffs with two TJL cheques totaling $67,500, which were dishonoured for insufficient funds. Despite demands, the plaintiffs have not been paid the $67,500. The notice of civil claim alleges breach of contract, breach of the duty of good faith, negligence, unjust enrichment, breach of fiduciary duty, knowing assistance in breach of trust, conversion, civil conspiracy, fraudulent and negligent misrepresentation, vicarious liability, and seeks the remedy of tracing.

The Property is registered in the names of Sandeep Sharma and Meghna Kumar, who are separated and have an ongoing family law proceeding. A foreclosure petition was commenced on September 4, 2025, and the Property is listed for sale. The plaintiffs assert that the sale of the Property is an attempt by Mr. Sharma and Ms. Meghna Kumar to liquidate their primary known asset in British Columbia to frustrate the enforcement of any judgment the plaintiffs may obtain in this action. The plaintiffs argue that if the net sale proceeds are not preserved, there is a serious risk that the funds will be dissipated, rendering any potential judgment hollow.

Legal framework and policy terms

The application was made under Rule 10-1 of the Supreme Court Civil Rules. The relevant portions of Rule 10-1 allow the court to make an order for the detention, custody, or preservation of any property that is the subject matter of a proceeding or as to which a question may arise. The court may also order a disputed fund to be paid into court or otherwise secured. The test for a preservation order under Rule 10-1(1), as set out in Osooli-Talesh v. Emami, 2003 BCSC 1924 at para. 43, includes: (a) whether there is a claim on the evidence to a proprietary interest in property; (b) whether there is evidence to render reasonable the belief that the property is threatened with disposition or transfer outside the jurisdiction; (c) whether there is a substantial question to be decided as to the plaintiff’s entitlement to the property; and (d) whether the balance of convenience favours the granting of the order. The court identified the first requirement—evidence of a proprietary interest—as a threshold issue.

The notice of civil claim does not mention the Property specifically, but alleges an equitable proprietary interest in the gold and in any property, account, or asset into which the gold or its proceeds were converted. The claim further alleges that proceeds from the disposition of the gold have been converted, mixed, or commingled into other property, which is said to be “business inventory, accounts, or real property” associated with all the defendants. The remedy of tracing and a constructive trust are claimed.

Court’s analysis and outcome

Justice Norell reviewed the evidence provided by the plaintiffs, including an affidavit from Mr. Gill, but found nothing showing a basis for a proprietary claim to the Property or to a specific fund in dispute. The only other evidence was from Ms. Meghna Kumar, who stated that neither she nor her company ever received, possessed, or benefitted from the gold, and that the Property was purchased in October 2024 with funds unrelated to the plaintiffs. The Property was never used as a storefront or place of business, and TJL was not a gold bullion retailer. The court found that the plaintiffs’ evidence did not establish a proprietary interest in the Property or its proceeds. The court referenced Wong v. Grewal, 2015 BCSC 2394, and Penner v. Williamson, [1990] B.C.J. No. 2217 (S.C.), holding that Rule 10-1(1) does not authorize the court to grant an order tantamount to requiring the defendants to furnish security before judgment.

Ruling and overall outcome

The application for a preservation order was dismissed, as the plaintiffs failed to establish the threshold requirement for a Rule 10-1(1) and (2) preservation order. The defendants were awarded costs of the application in the cause. No specific amount was determined for costs, and no damages were awarded at this stage.