Case information

Property — Real property — Crown grant — Contracts — Contract of purchase and sale for commercial real estate — Parties disputing whether vendor was required to remove encumbrances registered against title as condition of closing — Whether registered interests in land, granted by private parties and registered on title to real property but not identified in any Crown grant, can nonetheless be “contained in” a grant from Crown, as that language is used in s. 23(2)(a) of the B.C. Land Title Act, R.S.B.C. 1996, c. 250, and equivalent legislation in other provinces, and as incorporated into Canadian Bar Association standard form of contract of purchase and sale for commercial real estate — Whether standard of review applicable to interpretation of standard form of contract that incorporates language of a mandatory statutory provision is correctness or some other standard.

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This case arises out of a failed real estate transaction involving several tracts of farmland located in northeastern British Columbia. The parties disputed whether the vendor was required to remove a number of encumbrances registered against title to the subject properties as a condition of closing, causing the transaction to collapse. The vendor declined to do so on the basis that the encumbrances were contemplated by the terms of the contract for purchase and sale.

The trial judge agreed with the vendor and found that the purchaser was in breach by failing to complete the transaction. Based on an interpretation of the operative clause in the contract and the language of the encumbrances, the judge found that the contract did not require that the disputed encumbrances be removed. The judge ordered that the purchaser forfeit its deposit of over $1 million.

The purchaser appealed to the Court of Appeal. It dismissed the appeal.