Executive Summary: Key Legal and Evidentiary Issues

• Michco Investments Ltd. sought summary dismissal of a claim to an interest in the Gibsons Property under Rule 9-6 of the Supreme Court Civil Rules.
   
• A consent order from a related family law proceeding, known as the Davies Order, formed the central basis for the plaintiffs' claim to the property.
   
• The company argued it could not be bound by the Davies Order because it was not a party to the family law action from which it arose.
   
• Justice Chan found it was not plain and obvious that the order was unenforceable against Michco or that the transfer obligation it imposed was contingent on unfinished conditions.
   
• An alternative application sought cancellation of the certificate of pending litigation under section 215 of the Land Title Act.
   
• The court dismissed both applications, concluding the amended pleadings disclosed a triable interest in land.
   

Facts of the case

C & W Salvage Ltd. and Christopher Danroth ("Danroth Sr.") sued Grammas Marine Inn Ltd. and Michco Investments Ltd., with Tofino Air Lines Ltd. named as a defendant by counterclaim. The plaintiffs filed their notice of civil claim on July 24, 2025, advancing claims in debt for loans made between the plaintiffs and defendants from 1984 to 2023 totalling approximately $2.6 million. The defendants filed a response and a counterclaim against Tofino Air Lines on November 12, 2025.

The plaintiffs amended their claim on March 16, 2026, introducing allegations tied to a family law action between Danroth Sr. and his ex-spouse, Michele Alameda Whiting. That family law action concerned a group of nine companies known as the "All Sports Group," which included C & W, Gramma's, and Michco. It ended in a consent order pronounced by Justice Davies on January 7, 2019 (the "Davies Order"). Under that order, Michco was to repay an intercompany loan to C & W by transferring land, shares, and debt assignments, including a property on North Road in Gibsons, B.C. (the "Gibsons Property"). The amended claim alleges Cody Danroth became sole director of Michco upon turning 21, and that Michco never transferred the property, remaining its registered owner. C & W sought a declaration of legal interest in the property, a finding that Michco holds it in trust, registration of a certificate of pending litigation ("CPL"), and an order vesting title in C & W.

The plaintiffs registered the CPL on March 24, 2026, and filed a response to the counterclaim on May 8, 2026. No document exchange or discovery had taken place by the time of the hearing. Affidavits from Cody (May 12, 2026) and Danroth Sr. (May 27, 2026) offered conflicting accounts of share ownership, control of the companies, and the reasons the wind-up contemplated by the Davies Order was never completed. Michco applied under Rule 9-6 of the Supreme Court Civil Rules for summary dismissal of the claim to the Gibsons Property, or alternatively for cancellation of the CPL.

Policy and legislative provisions at issue

Rule 9-6(4) permits a defendant to apply for summary judgment on all or part of a claim, and Rule 9-6(5) directs the court to dismiss a claim where satisfied there is no genuine issue for trial. Two terms of the Davies Order were central to the dispute. Term 14 directed the parents, "in their capacity as directors" of several listed companies including Michco, to undertake an orderly wind-up of those companies for the ultimate benefit of their children. Term 15 provided that, as part of that wind-up, "the Parents will cause Michco to repay the intercorporate balance owed to C&W" of $2,702,142, including transfer of the North Road Property at its appraised value of $1,670,000 less an existing mortgage of $201,824. Michco separately invoked section 215 of the Land Title Act, which requires that pleadings disclose an interest in land to support registration of a CPL, and C & W relied on section 37 of the Law and Equity Act in support of its claim.

Reasoning and analysis

Justice Chan applied the established test for summary dismissal: the applicant must show beyond a reasonable doubt that there is no genuine issue for trial, with uncontested facts taken as true and inferences drawn in favour of the responding party. Michco argued the Davies Order could not bind it because it was not a party to the family law proceeding, that the order did not direct Michco itself to act, and that any transfer obligation was contingent on completing the broader wind-up, which never occurred.

The court found none of these propositions was plain and obvious. The only directors of Michco at the time of the Davies Order were Danroth Sr. and Ms. Whiting, and both the Supreme Court Family Rules and the Supreme Court Civil Rules permit an order to be enforced against a non-party. Reading term 14's reference to the parents acting "in their capacity as directors" alongside term 15's direction that the parents "cause Michco to repay" the debt, the judge held it could be argued the obligation belonged to Michco rather than to the parents personally. The Davies Order also set no timeline for completing the wind-up and did not state that the property transfer depended on every other step being finished first, so contingency was not obvious either. Given the lack of discovery and unresolved evidentiary gaps about the family action's background and the companies' history of control and debt, the judge concluded Michco's application was premature and that a genuine issue for trial existed.

On the alternative application, the court applied the test for whether pleadings disclose an interest in land, which considers only the pleadings and no evidence. The amended claim alleged the Davies Order required Michco to transfer title to the Gibsons Property, that the transfer never occurred, that Michco remains the registered owner, and that C & W continues to hold a legal interest in the property. The judge found these allegations sufficient to disclose an interest in land supporting the CPL, and treated Michco's substantive objections as going to the merits rather than to the adequacy of the pleadings themselves.

Ruling and overall outcome

Justice Chan dismissed Michco's application for summary dismissal of C & W's claim to the Gibsons Property and its alternative application to cancel the CPL, allowing C & W's claim to proceed toward trial. Costs of the application were ordered to be in the cause, meaning no specific amount was fixed at this stage; the decision does not state a determined monetary award.