Executive Summary: Key Legal and Evidentiary Issues

• Coast Mountain Aviation Inc. sought a declaration that it held an equitable mortgage over Helga Carter's interest in the Richmond Lands based on a Loan and Security Agreement (LSA).
   
• Helga Carter applied under Rule 9-6(4) of the Supreme Court Civil Rules to summarily dismiss the plaintiff's claim to an interest in the Richmond Lands and to cancel the related certificate of pending litigation (CPL).
   
• Justice Stephens found the LSA itself expressed no common intention to create a charge over the Richmond Lands, referring to those lands only as the source of a $700,000 lump-sum payment upon sale.
   
• Whether Steven Carter, the defendant's husband, acted as her agent in pre-contractual negotiations became central to the plaintiff's fallback argument based on factual matrix evidence.
   
• Unpleaded agency allegations could not be relied upon, and even if considered, no evidence supported either actual or apparent authority.
   
• The court concluded no genuine issue for trial existed on the interest-in-land claim, resulting in summary dismissal and costs against the plaintiff.
   

Facts of the case

Coast Mountain Aviation Inc. loaned money to Steven Carter and two related companies, with Steven's wife, Helga Carter, providing security. Helga signed a Guarantee on July 5, 2022, guaranteeing her husband's debts, and — concurrently, as part of the same transaction — executed a Loan and Security Agreement (LSA) dated for reference June 30, 2022. Coast Mountain registered a certificate of pending litigation (CPL) against lands in Richmond, British Columbia (the "Richmond Lands"), which Helga co-owns with her sister and mother, based on an amended notice of civil claim (ANOCC) alleging she held the Richmond Lands as security for the guarantee. Helga applied for summary judgment under Rule 9-6(4) to dismiss the interest-in-land portion of the claim and, consequently, to cancel the CPL under section 254 of the Land Title Act.

Policy and legislative provisions at issue

The LSA specified that a "Mortgage Debt of $980,000" would be retired partly through a "[l]ump Sum payment of $700,000 upon the sale of [the Richmond Lands]." Separately, the LSA granted a mortgage as security over different property — the "Langley Lands" — not the Richmond Lands. Section 215(1) of the Land Title Act permits registration of a CPL where a claimant asserts an interest in land, while section 254 allows cancellation of a CPL once the underlying claim is dismissed. The application also engaged Rule 9-6, which permits summary dismissal where no genuine issue for trial exists, and the equitable doctrine requiring a "common intention" between parties to make property security for a debt before an equitable mortgage can arise.

Reasoning and analysis

Justice Stephens held that the LSA's only reference to the Richmond Lands concerned payment of sale proceeds, not the creation of a security interest, and that the document expressed no common intention to charge those lands. The plaintiff argued that surrounding circumstances — including pre-contractual text messages between its representative and Steven Carter, and a claimed "compromise" to protect its interest in the Richmond Lands without registering an immediate mortgage — formed part of the factual matrix relevant to interpreting the LSA. The court found this evidence relied on an unpleaded agency relationship between Steven Carter and his wife, which could not be raised for the first time on this application. Even considering it, the court found no evidence of actual or apparent authority: Mr. Malamas never dealt directly with Helga Carter, and there was no representation from her that her husband could bind her. The court also rejected arguments based on other contemporaneously signed documents — an acknowledgment of indebtedness and a mortgage over the Langley Lands — finding neither evidenced any intention to grant security over the Richmond Lands specifically.

Ruling and overall outcome

Justice Stephens granted summary judgment in Helga Carter's favour, dismissing the portion of Coast Mountain's claim asserting an interest in the Richmond Lands, on the basis that no genuine issue for trial existed. This clears the way for Carter to apply for cancellation of the CPL under section 254 of the Land Title Act. Given the outcome, the court found it unnecessary to address Carter's alternative argument concerning hardship and inconvenience under section 256(1), or the extent of her fractional ownership interest in the Richmond Lands. Costs of the application were ordered payable by Coast Mountain to Helga Carter, though the judgment does not specify a dollar amount for those costs.