Background: 1138270 BC Ltd. and M.J.R. Holdings Ltd. (Plaintiffs) filed a lawsuit against DB Services of Victoria Inc. (DBS), DB Land Acquisitions Inc. (DBLA), and others (Defendants), concerning a residential development project at 647 Goldstream Avenue, Langford, BC.

Legal Arguments/Issues: The defendants sought to vary a consent order to cancel a certificate of pending litigation (CPL) against the Goldstream Avenue property and to reduce the required security from $2,500,000 to $192,287.37. Plaintiffs alleged the use of fraudulently-sworn statutory declarations by DBS to obtain progress payments, claiming unpaid subcontractors despite the declarations. Plaintiffs asserted that progress payments were misappropriated to preserve DBLA properties, and they sought a constructive trust over these properties. Defendants contended that the security amount of $2,500,000 was excessive and argued for a reduction based on hardship and inconvenience, paying $51,000 per month in mortgage interest and other expenses.

Court's Decision: The court interpreted the consent order to allow the sale of the Goldstream Avenue property with $2,500,000 from the sale proceeds to be held in trust. The court found no immediate evidence of hardship or inconvenience from the CPL registration and did not reduce the security amount. The court permitted the plaintiffs to examine financial records (Sage 300 accounting system) for further clarity on intercorporate transactions.

Costs and Award: The application was dismissed with liberty for defendants to re-apply after 45 days. Costs were to be determined in the cause. No specific amount of costs or award was granted to either party at this stage.