2361841 Alberta Ltd. sought priority of its mortgage on land ("Cunningham Lands") over certificates of lis pendens (CLPs) registered by BPPC and Lee. The question was whether funds advanced by 2361841 after the discharge of the CLPs gave its mortgage priority over the CLPs.
Background:
BPPC and Lee invested in a real estate project in 2018. They later sued the developers and registered CLPs against the project lands in 2020.
In March 2021, a court discharged the CLPs despite an appeal. 2361841 advanced $275,000 to Cunningham based on assurances that its mortgage would have second priority, behind the first mortgage.
Key Events:
2361841 registered its mortgage in November 2021 after the CLPs were improperly discharged.
The court later restored the CLPs in March 2022, creating a conflict between the mortgage and CLPs.
Decision:
The court ruled that the funds held in court from the sale of the land should remain until the validity of the mortgages and CLPs is determined in separate litigation.
The application by 2361841 to have the funds paid out was dismissed.
Amount for costs was not specified in the decision.
Reasoning:
The court found that 2361841 could not claim priority as it was aware of the CLPs at the time of advancing the funds, even though they were later discharged improperly.
