Executive Summary: Key Legal and Evidentiary Issues

• Plaintiffs loaned $600,000 to the Borrowers, who defaulted, resulting in a foreclosure judgment of $560,082 with no recovery from the mortgaged properties.

• Allegations of conspiracy claim that the Borrowers diverted mortgage funds to purchase four properties in their son Kevin Sidhu's name to defeat the plaintiffs' remedies.

• Certificates of pending litigation (CPLs) were filed against the four properties, and the defendants applied to discharge them under s. 215 or s. 256 of the Land Title Act.

• The court found the notice of civil claim included a validly pleaded constructive trust claim sufficient to sustain the CPLs, grounded in predominant purpose conspiracy.

• Hardship was established for two properties (University Drive and Kelowna), leading to CPL removal conditioned on payment of net sale proceeds into court, capped at $100,000.

• Kevin Sidhu failed to prove the CPLs caused his inability to secure financing on the two Project Properties, as no evidence of prospective lenders, equity, or debt-servicing capacity was provided.

Background of the loan and default

In or about June 2022, the plaintiffs — Gurwinder Singh, Sukhpreet Kaur, Manjit Kaur Sangha, and Jerry Brar Mortgages Inc. — loaned $600,000 (the "Mortgage Funds") to the defendants Raghbir Singh Sidhu and Karmjit Kaur Sidhu (together, the "Borrowers"). The loan was secured by a mortgage over two properties. The Borrowers subsequently defaulted on the mortgage. The two mortgaged properties were sold in foreclosure at a shortfall by other mortgagees that were positioned in priority to the plaintiffs, and the plaintiffs recovered nothing from those sales. On June 14, 2023, an order nisi in the foreclosure proceeding granted the plaintiffs judgment against the Borrowers for $560,082.

Allegations of conspiracy and the purchase of four properties

On July 28, 2025, the plaintiffs filed a notice of civil claim ("NOCC") alleging that the Borrowers conspired with their son, Kevin Charnjeev Sidhu, to divert the Mortgage Funds to purchase four properties in Kevin Sidhu's name. These properties included the University Drive Property (purchased October 19, 2023), the 45A Avenue Property (purchased March 14, 2024), the Kelowna Property (purchased October 8, 2024, jointly by Kevin Sidhu and Raghbir Sidhu), and the Grade Cres Property (purchased March 28, 2025). The plaintiffs filed certificates of pending litigation ("CPLs") against all four properties on July 29, 2025. An amended notice of civil claim was filed on September 16, 2025. The NOCC alleged the properties were purchased in Kevin Sidhu's name to "defeat, delay or hinder the lawful remedies of the Plaintiffs" and that the defendants hold the four properties in trust for the benefit of the plaintiffs. The plaintiffs sought a declaration that they are the actual owners of the four properties, a constructive trust or, in the alternative, a resulting trust over the properties, and an accounting and tracing of the Mortgage Funds.

The defendants' application to discharge the CPLs

The defendants applied for an order pursuant to s. 215 or s. 256 of the Land Title Act, R.S.B.C. 1996, c. 250, discharging the CPLs. They also sought an order requiring the plaintiffs to obtain leave before filing further CPLs on the four properties and an order for special costs on the basis that the plaintiffs filed the CPLs strategically. The court, presided over by the Honourable Justice Lamb, addressed two main questions: whether the NOCC disclosed a valid interest in land, and whether the CPLs should be removed on the basis of hardship and inconvenience.

Validity of the pleaded interest in land

The court found that the NOCC, read as a whole, included a properly pleaded claim to an interest in land owned by Kevin Sidhu. The plaintiffs alleged a constructive trust over the four properties arising from predominant purpose conspiracy — that is, a concerted agreement among the defendants with the primary objective of harming the plaintiffs through the diversion of the Mortgage Funds. The court accepted that predominant purpose conspiracy is a wrongful act that may give rise to a constructive trust in favour of the plaintiffs in respect of the four properties, which is sufficient to sustain the registration of the CPLs. However, the court noted that although the NOCC uses the terms "unjust enrichment" and "misappropriation," the plaintiffs had not pleaded material facts to maintain such causes of action.

Hardship analysis for the University Drive and Kelowna properties

Turning to the hardship question, the court was satisfied that Kevin Sidhu demonstrated hardship in respect of the University Drive Property and the Kelowna Property. To succeed on such an application, Kevin Sidhu was required to demonstrate that he suffered or would likely suffer hardship and inconvenience caused by the registration of the CPLs that is more than trifling or insignificant. The CPLs on these two properties had prevented the closing of their sales, which Kevin Sidhu described as bad investments, and foreclosure proceedings had been filed by the mortgagees of both properties. The court noted unusual circumstances surrounding these properties: the University Drive Property was set to sell for $510,000 while the mortgagee had advanced a principal sum of $1,300,000, with the principal owing on the mortgage exceeding $1,000,000 as of May 13, 2025. The court observed it was unclear how Kevin Sidhu secured a mortgage in October 2024 for more than twice the price he paid to acquire the property in October 2023. As for the Kelowna Property, it was purchased for $610,000 but carried a mortgage of $1,800,000, which Kevin Sidhu understood was due to fraudulent actions on behalf of the mortgage broker involved. Kevin Sidhu deposed that he returned all excess funds to the mortgagee, and the principal owing on that mortgage exceeded $660,000 as of May 13, 2025. The court ordered the CPLs removed from these two properties, subject to net proceeds of sale up to $100,000 being paid into court, subject to agreement between the parties or further court order.

Hardship analysis for the Project Properties

The situation was different for the 45A Avenue Property and the Grade Cres Property (the "Project Properties"), which Kevin Sidhu purchased to develop — a fourplex home on the 45A Avenue Property and a single-family home on the Grade Cres Property. Kevin Sidhu purchased the 45A Avenue Property for just over $1,000,000 in March 2024 with mortgage proceeds of more than $900,000 from two different mortgagees, and foreclosure proceedings had been filed by the mortgagee. He purchased the Grade Cres Property in March 2025 for $820,000, with $40,000 advanced by a "silent partner" and mortgage proceeds of $755,000. Although Kevin Sidhu deposed that he was unable to obtain further financing on the Project Properties to continue their development due to the CPLs, the court was not satisfied on the evidence that his inability to obtain further financing was caused by the CPLs. There was no evidence that there are prospective lenders willing to extend financing if the CPLs were removed, no evidence that there is equity in either of the Project Properties, and no evidence that Kevin Sidhu would be able to service any additional financing — which the court noted seems to be an obvious potential barrier given the three foreclosure proceedings that had been filed. The court therefore declined to cancel the CPLs on the Project Properties, although Kevin Sidhu was left at liberty to reapply with further and better evidence of hardship and inconvenience.

Ruling and outcome

Justice Lamb delivered a mixed result. The CPLs on the University Drive Property and the Kelowna Property were ordered discharged upon payment into court of net proceeds of sale, not to exceed $100,000, subject to agreement between the parties or further court order. The CPLs on the Grade Cres Property and the 45A Avenue Property were maintained. Success having been mixed on the application, the parties were ordered to bear their own costs. No exact monetary award was determined in favour of either party beyond the security terms, as the proprietary claims underlying the action were not adjudicated on their merits in this application.