AMLC Legal Insights - Certificates of Pending Litigation - to file or not to file

By Bryan Hicks & Noah Faust-Robinson

The recent decision by Supreme Court of British Columbia (the “Court”) in Boston Development Corp. v Takhar, 2026 BCSC 784 (“Boston Development”) is the most recent example of the Court ordering that a certificate of pending litigation (“CPL”) be cancelled because the plaintiff failed to properly claim an interest to land, which is a requirement for filing a CPL under the British Columbia Land Title Act (the “LTA”). 

This case highlights the importance for plaintiffs to properly consider and frame their claim when they intend to tie-up lands by registering a CPL. The decision also provides a useful example of how a CPL may be attacked at an early stage.

Background​

The CPL at issue in Boston Development was filed by Gurdip Takhar as part of an action he and his company commenced against Dave Sidhu, the director of Boston Development Corp. (“BDC”), and others, regarding an alleged business venture to pursue development projects in Surrey and Kelowna (the “CPL Action”). The CPL was registered against lands owned by BDC in Kelowna (the “Kelowna Lands”).  BDC was not named as a defendant in the CPL Action. 

 Mr. Takhar’s primary allegation is that he never received his share of the profits derived from a development project in Surrey, and that Mr. Sidhu used those funds to acquire and improve the Kelowna Lands.  At the hearing to cancel the CPL, Mr. Takhar clarified that he was relying on a claim of substantive constructive trust over the Kelowna Lands as the basis for the CPL. 

 BDC argued that Mr. Takhar’s Notice of Civil Claim is deficient, does not properly set out a claim to an interest in the Kelowna Lands, and the CPL should therefore be canceled.  BDC also argued that, in the alternative, even if the Court found that Mr. Takhar’s pleading met the threshold requirements under the LTA, the CPL should nevertheless be canceled on the basis of hardship and inconvenience upon providing replacement security. 

 The Court agreed with BDC and found that Mr. Takhar had failed to properly claim an interest to the Kelowna Lands and therefore he did not meet the requirements under s. 215 of the LTA for filing a CPL.  The Court decided it was unnecessary to consider BDC’s alternative argument on hardship and inconvenience given the deficient pleading.  In particular, the Court found the Notice of Civil Claim was deficient because it: 

a) did not address legal or beneficial ownership of the Kelowna Lands – Mr. Takhar did not plead that BDC held title in trust for him, or that any of the named defendants had any legal or beneficial interest in the property; 

b) did not contain a pleading that any of Mr. Takhar’s funds were used in the purchase or improvement of the Kelowna Lands; 

c) did not contain any allegation of wrongdoing on the part of BDC, and therefore relief could not be granted against BDC; and 

d) title to the Kelowna Lands could not change as an outcome of the CPL Action since BDC was not named as a defendant. 

​Takeaways

CPLs are an effective and efficient way for plaintiffs to gain leverage since the practical effect of a CPL is to tie-up land and prevent the owner from dealing with the property while the CPL is in place.  CPLs are especially attractive for plaintiffs since they are available at the outset of litigation without the plaintiff having to first prove its claim. 

The ease with which a CPL may be initially obtained creates the opportunity for abuse through the improper registration to stifle an imminent transaction in the hopes of gaining short term tactical advantage.  The risk for such abuse is mitigated by the strict statutory requirements for filing a CPL and the Court’s ability to order that a CPL be immediately canceled where it was improperly filed. 

It is well established that CPLs are an extraordinary pre-trial mechanism to preserve a valid claim to an interest in land.  Courts have held that CPLs should not be used as a method of pre-trial enforcement of a financial claim.  Above all else, a CPL is only available where there is a viable claim to an interest in land, and not merely a claim that relates to land.  Where no such claim is pleaded, the CPL is said to be a “nullity” and should be cancelled. 

The Boston Construction decision is a good illustration of why parties should seek legal advice on the extent to which their claim may support the registration of a CPL, and if so, ensure the originating pleading properly sets out a claim to an interest in land so the CPL will survive scrutiny.  Conversely, property owners facing a CPL should consider whether there is a basis to have the CPL canceled at an early stage of the litigation. 


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AMLC Legal Insights are intended for informational purposes only and do not constitute legal advice or opinion.