Executive Summary: Key legal and evidentiary issues

• Boston Development Corp. petitioned to cancel a certificate of pending litigation (CPL) filed by Gurdip Takhar against a Kelowna four-plex property under s. 215 of the Land Title Act

• Takhar's notice of civil claim failed to name the petitioner (the registered property owner) as a defendant in the underlying action

• No pleading established that any defendant held a legal or beneficial interest in the Property, nor that funds were actually used to purchase it

• Reliance on the doctrine of substantive constructive trust was undermined by the absence of any wrongful acquisition alleged against the petitioner

• Pleading deficiencies at the date of CPL filing could not be cured by subsequent amendments, per Batth v. Sharma, 2024 BCCA 29

• The Court ordered cancellation of the CPL and awarded fixed costs of $2,000 payable forthwith to the successful petitioner

Background and the parties' relationship

This case arose from a business relationship between Gurdip Takhar (also known as Gary Takhar) and Devinder Singh Sidhu (also known as Dave Sidhu), the director of Boston Development Corp. The relationship is alleged to have been a close, longstanding one giving rise to extensive reliance. One of the ventures at issue was the "3 Lot Surrey Project," in which Takhar, Senghera, and Sidhu agreed in or around 2018 to purchase bare land and develop residential properties in Surrey, British Columbia. Under the oral agreement, the three would each contribute equally to the purchase of lots 12, 13, and 14 located at 2058 165 Street, Surrey, British Columbia. Boston Construction would develop and construct residential homes on the Surrey Property, and the homes would be sold once completed. Takhar was to receive one-third of the profits from the sale of the homes from Sidhu, or a company over which Sidhu has control. In accordance with the agreement, Takhar provided a draft cheque in the amount of CDN $250,000 to Sidhu, to be held in trust by Sidhu's lawyers and pooled for the purpose of purchasing the Surrey Property. Boston Construction developed and constructed residential homes on the Surrey Property, and these homes were sold.

The Surrey Project profits and the Kelowna connection

On or around October 2019, Sidhu represented to Takhar that the profits owing to Takhar were CDN $1,000,000 (the "Surrey Project Profit"). At the same time, Sidhu advised Takhar that the Surrey Project Profit should remain with Sidhu so that it could be used to purchase two four-plexes and a 30-lot subdivision in Kelowna, British Columbia, for the purpose of developing and selling residential homes. Takhar trusted and relied on this representation. On or about April 23, 2023, Takhar learned that Lovely Sidhu owns a Lot 12 Home and that he was not provided the full amount he is entitled to from the sale of the 3 Lot Surrey Project. Takhar also learned that two four-plexes and at least one home in Kelowna had been sold and that he did not receive his share of profits from the same. The NOCC identifies a specific Kelowna property — a four-plex at 867 Morrison Avenue, Kelowna, BC V1Y 5E6 (PID 007-574-797) — registered in the name of Boston Development Corp. This property is the subject of the proceeding.

The CPL filing and the petition to cancel

On January 10, 2024, Takhar filed a certificate of pending litigation against the Kelowna property in the Kamloops Land Title Office under registration number CB 1110376. The CPL was filed in connection with a separate action commenced by Takhar by way of notice of civil claim in the Vancouver registry of the Supreme Court of British Columbia, action number S240036 (the "Takhar Action"). Mr. Takhar and his corporate entity are the plaintiffs in the Takhar Action; however, only Mr. Takhar is named on the CPL filing. Critically, Boston Development Corp. — the registered owner of the property — was not named as a defendant in the Takhar Action. Because of this, the relief sought was brought by petition rather than by notice of application in the existing Takhar Action. Boston Development Corp. petitioned for cancellation of the CPL, arguing under s. 215 of the Land Title Act, R.S.B.C. 1996, c. 250, that Takhar had failed to plead an interest in the Property. In the alternative, the petitioner argued under s. 256 of the Land Title Act that the CPL should be cancelled because it was causing hardship and inconvenience.

The legal framework: certificates of pending litigation

Under s. 215 of the Land Title Act, a person who has commenced a proceeding and who is claiming an estate or interest in land may register a CPL against the land. The Court noted that a CPL is an extraordinary pre-judgment mechanism to preserve a valid claim to an interest in land until the issues in dispute can be resolved, citing Sagebrush Golf Course Holdings Ltd. v. Craig, 2026 BCSC 529. A CPL is not to be used as a pre-judgment execution for a purely financial claim, as stated in Lipskaya v. Guo, 2022 BCCA 118. The test on an application to cancel a CPL under s. 215 is whether the facts pleaded, assuming them to be true, are capable of supporting a claim to an interest in land. In such an application, no evidence is to be considered and no weighing of evidence or assessment of the strength of the claim is involved — the court only considers whether such a claim is pleaded. Furthermore, the adequacy of the pleadings must be assessed on the date on which the CPL was filed, and any deficiency in those pleadings cannot be salvaged by subsequent amendments, per Batth v. Sharma, 2024 BCCA 29.

The respondent's constructive trust argument

Takhar's submission in opposing cancellation hinged on a claim of substantive constructive trust. In his petition response, the respondent summarized his position as follows: Mr. Takhar alleges that some or all of the funds advanced by him and misappropriated by Mr. Sidhu were used to acquire and/or improve the lands such that the lands or a portion of their value are held on constructive trust for him. The Court reviewed the law on substantive constructive trust as articulated in Mayer v. Mayer, 2018 BCSC 8, noting that a substantive constructive trust arises by operation of law from the date of the circumstances that give rise to it, and its purpose is to hold persons to high standards of trust and probity and prevent them from retaining property which in "good conscience" they should not be permitted to retain. The emphasis is on a wrongful acquisition as opposed to unjust enrichment.

Fatal deficiencies in the pleadings and the ruling

Justice Latimer identified several fatal difficulties with Takhar's submission. First, part one of the NOCC, which sets out the statement of facts upon which the claim is based, does not address legal or beneficial ownership of the Property. The petitioner is the registered owner but is not named as a party. There is no pleading that the petitioner holds any portion of its registered interest in the Property in trust for Sidhu or for the plaintiffs, nor is there any pleading that Sidhu has any beneficial interest in the Property or holds any type of interest in trust for the plaintiffs. Second, the plaintiffs did not plead that any funds were actually used to purchase the Property. Rather, the NOCC alleges only that Sidhu advised Takhar that the Surrey Project Profit should remain with Sidhu so that it "could be used" to purchase two four-plexes and a 30-lot subdivision in Kelowna. Third, although the plaintiff relies on the doctrine of substantive constructive trust, no wrongful acquisition or other wrongful act is asserted as against the petitioner, meaning there would be no basis to make a declaration of substantive constructive trust against the petitioner either in favour of Sidhu or in favour of the respondent. Finally, the title to the Property could not change as an outcome of the Takhar Action because the registered owners are not named as parties to the proceeding; the relief sought is purely against the defendants. Justice Latimer concluded that the NOCC in the Takhar Action does not plead facts which, if proven, disclose a claim for an interest in the Property as required to support the filing of a CPL under s. 215 of the Land Title Act. The Court ordered the CPL (registration number CB 1110376) cancelled against the Kelowna property. In light of this finding, the Court did not need to consider the alternative issue of whether the petitioner had established hardship or inconvenience under s. 256. The Court declined to make any orders restraining Takhar from filing further CPLs against the Property, acknowledging it is open to the respondent to amend his pleadings and/or apply to add a party to the Takhar Action. Boston Development Corp., as the successful petitioner, was awarded fixed costs in the amount of $2,000, payable forthwith.