Executive Summary: Key Legal and Evidentiary Issues

• The Court approved the sale of the Westfield Business Centre and related Surrey lands for $56.5 million to 1262066 B.C. Ltd., finding that the marketing by Colliers through Bill Randall was proper and that the sale price was provident in the circumstances.

• The owners’ application to extend the redemption period to March 17, 2025 to pursue a strata development and presale strategy was dismissed because they did not establish a reasonably probable prospect of repayment within the extended period, despite pointing to presale “deposits,” late higher offers, appraisals, a letter of intent for financing, and BC Assessment figures.

• The Court placed weight on the owners’ history of non-payment of taxes and insurance, the lack of progress in completing the building, and prior findings that their adjournment attempts were efforts to delay and prejudice the first mortgagee, and it rejected their attacks on the marketing and sales process ordered by the Court.

• After the Order Approving Sale (OAS) was filed in the Land Title Office on May 20, 2025, the owners attempted to lodge a caveat asserting that the OAS could not be used to extend the closing date and was inoperative to transfer title, but the Registrar rejected the caveat and the sale closed, with GC Capital being fully repaid and approximately $9.4 million paid to the second mortgagee.

• The owners’ subsequent appeal under the Land Title Act from the Registrar’s rejection of the caveat was procedurally flawed because they used the wrong form of notice of appeal and did not serve the Registrar or all other persons who might be affected, including National Bank, contrary to s. 309 of the Land Title Act and Rule 18-3 of the Supreme Court Civil Rules.

• The Court ordered that the appeal be reset and heard afresh only after proper service on the Registrar, National Bank, and other relevant chargeholders, directed that a complete record be filed, and awarded special costs to GC Capital and the purchaser for the abortive October 2025 hearing, payable by the appellants before they may reset the appeal (no specific amount was fixed in the reasons).

Background and foreclosure context

GC Capital Inc. and Kismet Capital Ltd. began this foreclosure proceeding in August 2023 as first mortgagees over two Surrey properties called the “TDP Lands” and the “622 Lands” (together, the “Lands”). The 622 Lands consisted of an unfinished vacant commercial building named the Westfield Business Centre, and the TDP Lands consisted of vacant lands across the street intended for surplus parking. An order nisi was granted in November 2023. The original six-month redemption period expired on May 2, 2024, about eight months before the January 15, 2025 decision, and the owners had been in default of their loan obligations “for some time.” GC Capital was owed approximately $42 million as first mortgagee, and the third-position mortgagee was owed about $5.7 million but had additional collateral on other properties and assets sufficient to cover its outstanding amount.

The current owners had purchased the property in April 2022 for $55 million with substantial funding under first, second, and third mortgages. They had a one-year term that matured in the spring of 2023. The Court noted that the owners had not made any out-of-pocket payments on the mortgage since inception, and that interest was funded from a reserve created as part of the original financing. The Westfield Business Centre is a four-storey unfinished vacant building taking up an entire city block near Surrey Town Centre and has been vacant for over 26 years. The building was said not to be up to current building code, although there was an indication that it had been grandfathered under the existing permit. The Court also recorded that the property had received considerable media coverage because of the marketing efforts.

Conduct of sale and marketing of the property

In May 2024, the Court granted conduct of sale for three months to 0938080 B.C. Ltd., the second mortgagee, with GC Capital to assume conduct of sale effective August 27, 2024. By the time of the January 2025 hearing, conduct of sale was with GC Capital as first mortgagee. The property was marketed by Colliers through its executive vice-president, Bill Randall, who has extensive commercial real estate experience in the Lower Mainland and had been involved with this property for over 20 years, having listed it several times. The Court described “considerable marketing activities” by Colliers and noted that the subject purchase agreement arose from that process.

Mr. Randall’s affidavit was described as setting out how the property was exposed to the market and giving his view that the offer received represented fair value in the circumstances. The Court accepted that a proper marketing process had been undertaken by an experienced and well-qualified marketer, and that listing the property on MLS was not a significant feature in marketing a significant commercial property.

Purchase agreement and approval of sale

In October 2024, GC Capital entered into a purchase agreement for the Lands with 1262066 B.C. Ltd. at a price of $56.5 million. The purchase agreement was subject-free. The final price resulted from a series of offers and counteroffers. The materials described the purchaser as a “well-known and respected company” with a deposit structure and closing dates within market parameters. The agreement also included a break fee of $80,000 payable if the offer was not successful, amounting to 0.14% of the purchase price.

At the January 2025 hearing before Justice Masuhara, GC Capital applied for approval of this sale, while the owners (or some of them) applied for an extension of the redemption period to March 17, 2025. GC Capital, as first mortgagee owed about $42 million, supported the sale. The second-position mortgagee took no position on approval of the sale but expressed the view that if the Court found it appropriate, it would support the higher value offer of $77 million. The third-position mortgagee opposed approval of the sale, arguing that the price was too low and relying in particular on the 2024 BC Assessment.

The legal test for approving the sale was not disputed: the applicant had to show that (a) the sale was conducted in a business-like manner; and (b) the sale was provident in all of the circumstances. The Court concluded that these requirements were met. It was satisfied that the marketing process was proper, that the agreed price was within the relevant range, and that the purchaser had the ability to complete.

Owners’ extension application and proposed strata development

The owners’ competing application sought to extend the redemption period to March 17, 2025 to allow them to pursue a strata development strategy. Until the conduct of sale hearing, their intention had been to develop the property as a leasing project, but this changed to a strata development concept around August 2024 after GC Capital obtained conduct of sale. Their plan was to create a strata plan for 202 units, presell the units, and then refinance the property based on those presales.

The owners advanced several elements to support their request:

• They pointed to presale “deposits” of $540,000 and asserted that once full payment of all units was received, it would amount to $43.4 million. The Court noted controversy over whether these deposit agreements were binding or non-binding, that Mr. Bansal (the owners’ representative) had not signed the sales documents, and that about nine of them had not been signed by purchasers.

• They relied on a late offer for $77.7 million that was non-compliant and submitted after the stated deadline. After the first day of the January 2025 hearing, a $1 million deposit was submitted in relation to this offer, but an “appendix-A letter” had not been provided. The owners cited this late offer as signaling the property’s value.

• They advised the Court at the end of the hearing that a further offer of $64.5 million had been submitted, but no deposit had been tendered.

• They referred to earlier appraisals, though the Court observed that they were based on hypothetical assumptions, and to a fourth appraisal which premised a hypothetical value on a 6- to 12-month exposure to the market.

• They relied on BC Assessment values of $32 million for 2023, $114 million for 2024, and $62.3 million for 2025 as further indication of value.

The owners also tendered, through a legal assistant, a document described as a letter of intent from a firm offering a loan of $66,204,245 based on an “as-is” appraised value of $153,933,125. The Court noted that there were no underlying commitment letters or other information validating the ability or financing needed to complete, that it was not clear whether a required $700,000 retainer fee under this highly conditional letter of intent had been paid by the owners, and that there was little information about the background of the company offering the capital beyond what was attached as an exhibit.

Court’s assessment of credibility, delay, and evidentiary weight

The Court’s analysis of the two applications was influenced by both evidentiary and conduct-related factors. It referred to “less-than-honourable steps” taken by Mr. Bansal toward the principal of the proposed purchaser, articulated in detail in submissions by counsel. The Court concluded that the extent of this negative behaviour, which included efforts to malign the purchaser’s principal with unfounded accusations, diminished the weight to be placed on the owners’ evidence and supported the petitioners’ position that the owners’ steps were aimed at hampering, disrupting, and delaying the process.

The Court viewed the owners’ actions as an attack on the court-ordered marketing and sales process and as demonstrating a lack of respect for the integrity of the Court’s process. It also referenced Associate Judge Robertson’s earlier comment, made on a conduct-of-sale adjournment application, that the owners’ adjournment effort was an attempt at delay to improve their position at the prejudice of the petitioner.

In addition, the Court noted that the owners had allowed property insurance to lapse and had failed to pay property taxes, thereby putting the property in jeopardy. GC Capital had to pay $1.8 million in delinquent taxes and $489,000 in property insurance, a total of $2.3 million, to protect the property from tax sale and to maintain insurance coverage.

Reasoning on value, timing, and feasibility of redemption

On the extension application, the governing test required the owners to show that the property had sufficient value by way of security for the amount outstanding and that there was a reasonable prospect of repayment within the extended redemption period, with that prospect being reasonably probable rather than merely possible. The onus was on the owners.

The Court concluded that the recent steps and documents offered by the owners did not meet this threshold and appeared more directed at buying time than achieving redemption. It emphasized that merely showing sufficient equity is not enough; repayment within the extended redemption period must also be established.

The Court referred to authority that a “provident price” is not the best possible price in a non-forced sale scenario and to a case confirming there is no obligation on a petitioner to wait for whatever time might be required to obtain approvals, create lots, perform site works and then find purchasers. While this case involved evidence of about 40 presales, the project contemplated 202 units.

The Court also cited Mr. Randall’s reservations about the market for stratification. It noted the wide difference between the parties’ estimates of cost to complete the project and a discrepancy regarding total rentable area. It found that the building was “nowhere complete,” that the stratification plan was at a pre-stage based on an incomplete drawing, and that there was little current evidence from a general contractor or qualified cost consultant providing a construction and development budget.

Statutory constraints were also identified. Under the Strata Property Act and the Land Title Act, a strata plan is a subdivision that requires the signatures of mortgagees. While those signatures can be dispensed with by the Registrar of Land Titles, if that process were contested, it would delay and extend matters further.

Taking all of this together, the Court held that it was unlikely that the critical targets necessary for redemption could be achieved within the proposed extension. It found that the owners had not established a reasonable prospect of repayment within the extended redemption period and expressed reservations about the property values advanced by the owners. Accordingly, the application for an extension was denied and the sale to 1262066 B.C. Ltd. was approved.

Registration of the Order Approving Sale and the caveat

The Order Approving Sale (OAS) that embodied the approved purchase agreement contained provisions about the closing date and addressed extensions of closing. A dispute later arose between GC Capital, the purchaser, and the owners over whether the closing date could be extended beyond what was set out in the purchase agreement without further court order. On the morning of May 20, 2025, with notice to the owners, GC Capital acted on the OAS by filing it at the Land Title Office to effect a transfer of title to the purchaser at closing.

That same morning, the owners, still shown as registered owners of the Lands, filed a caveat with the Registrar. The caveat alleged that GC Capital lacked authority to extend the closing date, that the OAS did not permit any extension of the closing date, and that the OAS was therefore inoperative to transfer title at the Land Title Office. The caveat was filed after the OAS had been submitted for registration.

The Registrar refused to accept the caveat and issued brief written reasons in a rejection notice that morning. As a result, the OAS was fully registered, the sale closed, 1262066 B.C. Ltd. became the registered owner of the Lands, and the purchaser paid the required purchase monies to GC Capital. GC Capital received full repayment of its loans. The balance of the net funds, approximately $9.4 million, was paid to the second mortgagee, which was not enough to fully repay its loans.

Appeal from the Registrar’s rejection of the caveat

On May 29, 2025, the owners (now referred to as the Appellants) filed an appeal in the foreclosure proceeding from the Registrar’s rejection of the caveat. In July 2025, GC Capital, the second mortgagee, and the purchaser filed responses. A hearing date was eventually scheduled, and on October 29, 2025, the Court (Madam Justice Fitzpatrick) heard the appeal. Only GC Capital and the purchaser appeared to oppose the appeal.

The Appellants’ notice of appeal referred to s. 309 of the Land Title Act as the basis for challenging the Registrar’s refusal to file the caveat, and relied on s. 309(5) as the source of the Court’s jurisdiction to grant relief. Sections 309 and 311 of the Land Title Act require, among other things, that within 21 days of receiving the Registrar’s notice of refusal, the applicant may apply to the Supreme Court by way of an application in the nature of an appeal, supported by affidavit evidence, and that “all parties affected or interested, including the registrar” must be served with the court application and supporting materials.

At the October 2025 hearing, the Court questioned why the Registrar was not present or had not filed materials. Appellants’ counsel assured the Court that the Registrar had been served but had simply chosen not to participate. The judge reserved her decision and directed that an affidavit of service be filed to confirm that the Registrar had in fact been served.

Discovery of non-service and the Registrar’s response

On October 31, 2025, an associate at the Appellants’ counsel’s firm filed an affidavit stating that, contrary to counsel’s belief, they had “inadvertently” not served the Registrar. The following sequence then occurred:

• On October 30, 2025 (the day after the hearing), Appellants’ counsel emailed the Registrar with the notice of appeal, advising that the hearing had already taken place and that the Court had reserved and asking whether the Registrar wished to take a position.

• Within hours, the Registrar replied by email stating “Yes” and indicating on a preliminary basis that there were “multiple issues” with the appeal, both procedural and substantive. The Registrar said that, if he had been served, he would have retained counsel.

• Through November and December 2025, the Court sent memoranda to counsel and convened a judicial management conference to determine how to proceed. The Court directed the Appellants to respond and to file affidavits detailing service.

• An affidavit of service sworn November 19, 2025 confirmed that only GC Capital, the purchaser, and the second and third mortgagees had been served with the appeal materials in May and August 2025. The Registrar had not been served.

• On December 17, 2025, counsel for the Registrar, JFK Law, wrote to the Court stating that, on preliminary review, there were substantial procedural issues with the appeal, including that there was “no appeal pending” due to the Appellants’ failure to comply with the procedures in ss. 309 and 311 of the Land Title Act. JFK also stated that, even if a valid appeal existed or errors were cured, the Registrar intended to make substantive submissions about the rejection of the caveat and the Appellants’ arguments.

• On December 19, 2025, JFK sent a further letter outlining various procedural issues, principally that the appeal had not been properly commenced. On December 29, 2025, Appellants’ counsel responded, disagreeing with JFK’s position and identifying potential arguments aimed at maintaining the appeal as valid.

Errors in procedure and form under the Land Title Act and Civil Rules

In her reasons, Justice Fitzpatrick identified several procedural defects. The Appellants had not complied with the express requirement in s. 309(2) of the Land Title Act that the Registrar and all parties affected or interested be served with the application and materials. Further, they had not followed the correct procedure under Rule 18-3 of the Supreme Court Civil Rules, which governs appeals or applications in the nature of appeals authorized by statute.

Instead of using the forms prescribed by Rule 18-3 (Forms 73 or 74), the Appellants used Form 121—the form for a “Notice of Appeal from Associate Judge, Registrar or Special Referee” under Rule 23-6(8.1). The Court noted that the Land Title Office Registrar is not an “associate judge,” “registrar,” or “special referee” as those terms are used in the Civil Rules. Justice Fitzpatrick held that the proper form would have alerted the Appellants to the need to identify and serve “all other persons who may be affected by the order sought,” as those forms require.

Rule 18-3(6) also reinforces that, unless the Court orders otherwise, a notice of appeal must be served on the person or body that made the decision being appealed (here, the Registrar) and all other persons who may be affected by the order sought.

Scope of the remedy sought and additional parties affected

The remedy sought by the Appellants under s. 309(5) of the Land Title Act was an order directing the Registrar to cancel the registration of the Lands to the purchaser. In substance, the Appellants sought to have the current title in the purchaser’s name cancelled and the title restored to its prior state before the transfer.

At the time of Justice Fitzpatrick’s reasons, the purchaser’s title was subject to a first mortgage in favour of National Bank and a second mortgage in favour of GC Capital Inc. and Kismet Capital Inc. An affidavit filed at the Court’s direction confirmed these mortgages. The purchaser’s counsel advised that the purchaser had obtained financing from National Bank for its acquisition of the Lands, said to be in an amount over $29 million.

The earlier service affidavit confirmed that National Bank had not been served with the appeal. The Court observed that the remedy sought could directly affect National Bank’s mortgage security and that it was imperative that the appeal proceed only after proper notice to all interested parties, particularly the Bank and all other prior chargeholders whose registrations the Appellants sought to “restore.”

Directions for a fresh hearing of the appeal

In light of these issues, the Court concluded that it would be inappropriate simply to “re-open” and “carry on” with the appeal hearing held in October 2025. The Registrar and his counsel had not been involved in that hearing and would have no knowledge of the submissions or positions taken. The Registrar intended to raise arguments on both procedural and substantive grounds, and GC Capital and the purchaser had already made numerous submissions about the interpretation of the OAS, the Land Title Act caveat provisions, and the case law on whether a caveat can affect a pending registration.

Justice Fitzpatrick therefore directed that:

• The Appellants must reset the appeal to be heard afresh once all proper persons have been served and all court filings have been completed.

• Appellants’ counsel must file an affidavit attaching all post-October 29, 2025 correspondence between the Court and counsel.

• The Appellants must serve National Bank and all other holders of registrations and charges that appeared on title prior to the transfer to the purchaser with all appeal materials and these reasons, and an updated affidavit of service must be filed.

• A copy of the “prior” title (showing the state of title before the transfer) should, if possible, be placed on the appeal record.

• Given the apparent complexity of the issues, counsel should prepare written submissions for the rehearing, and should confer on an appropriate time estimate for the new hearing, taking into account that the Registrar and possibly others now intend to participate.

Justice Fitzpatrick expressly stated that nothing in her reasons should be taken as deciding any of the legal issues—procedural or substantive—that will arise on the appeal.

Costs and conditions on proceeding with the appeal

The Court then addressed costs. It found that the need to essentially recommence the hearing lay entirely with the Appellants and their failure to comply with the statutory provisions under which their appeal was brought. Although this failure was not necessarily labeled “misconduct,” the Court held that it clearly warranted rebuke, despite the apology offered. GC Capital and the purchaser had incurred legal costs in preparing for and attending a hearing that was now of little assistance in advancing the appeal.

Justice Fitzpatrick ordered that GC Capital and the purchaser are entitled to special costs for their legal costs in preparing for and attending the October 2025 hearing. Those special costs are payable by the Appellants forthwith. She also noted that during that hearing, counsel for GC Capital and the purchaser had expressed concerns about being paid for a previous costs award owing by the debtors, and Appellants’ counsel had assured them that he held funds in trust and would pay them.

The Court further ordered that the Appellants may not reset the appeal until they have paid GC Capital and the purchaser their special costs. If there is a dispute about the amount of those costs, the Appellants must place sufficient monies in trust to secure the claimed costs until an assessment can be held, in which case the amount will include an estimate of the costs of the assessment, also on a special-costs basis. The judgment did not set a specific dollar figure for these special costs.

Combined significance of both decisions

Read together, the January 15, 2025 reasons of Justice Masuhara and the January 26, 2026 reasons of Justice Fitzpatrick show:

• that the Court approved a $56.5 million sale of the Westfield Business Centre and related lands to 1262066 B.C. Ltd. after finding that the marketing was proper and that the price was provident in all the circumstances, and

• that the owners’ later attempt to block or undo that sale through a caveat and an appeal under the Land Title Act was beset by procedural errors, including failure to serve the Registrar and key affected parties such as National Bank, leading the Court to require a fresh properly constituted hearing and to impose special costs as a consequence of the missteps.