Case comment: RodRozen Designs Inc. v. 0977198 B.C. Ltd., 2016 BCSC 834

In the recent case of RodRozen Designs Inc. v. 0977198 B.C. Ltd., 2016 BCSC 834, Mr. Justice Bowden of the Supreme Court of British Columbia considered whether RodRozen Designs Inc. (“RodRozen”) was entitled to register a Certificate of Pending Litigation (“CPL”) against a parcel of land in West Vancouver, BC (the “Property”).

The dispute arose out of a Memorandum of Understanding (“MOU”) entered into between RodRozen and B.C. Ltd., whereby B.C. Ltd. agreed to purchase the Property and finance the construction of a house on the Property and RodRozen agreed to design and manage the construction. The Property would then be sold and any profits would be split equally between them. The MOU was set to expire on September 7, 2015.

The construction was completed on June 10, 2015 and the Property was listed the following month. However, no offers were received. The parties agreed to extend the MOU until the end of September 2015. The price was reduced but still no offers were received. The Property was delisted so that a new home warranty could be purchased, and the MOU expired.

RodRozen commenced an action seeking an order that the Property be sold and the profits split. RodRozen filed a CPL against the Property. B.C. Ltd. challenged RodRozen’s right to file the CPL.

Justice Bowden reviewed s. 215(1) of the Land Title Act, R.S.B.C. 1996, c. 250 (“LTA”) which reads:

    215(1)  A person who has commenced or is a party to a proceeding, and who is
    (a) claiming an estate or interest in land, or
    (b) given by another enactment a right of action in respect of land,
    may register a certificate of pending litigation against the land in the same manner as a charge is registered.

Justice Bowden quoted from the recent decision of Jacobs v. Yehia, 2015 BCSC 267 where it was stated that “the mere fact that a claim relates to land does not convert it into a claim for a proprietary interest” in the land for the purposes of s. 215(1) of the LTA. Justice Bowden drew a distinction between cases where a would-be purchaser seeks to enforce the sale of property, and the present situation where the order sought is for the property to be sold in the marketplace. In the former situation, the would-be purchaser is seeking a proprietary interest in the real property, whereas in the latter case only the profits of sale are being sought. On this basis, Justice Bowden found that RodRozen was not entitled to the CPL and ordered it cancelled under s. 256 and s. 257 of the LTA.