The Importance of Pleading Certificates of Pending Litigation

In the recently released decision of Zwiers v. Thompson, the BC Supreme Court looked at the priority ranking of charges registered against the family residence. There were three charges filed: the wife filed a certificate of pending litigation in May 2010, the Family Maintenance Enforcement Program registered a charge in June 2011, and the husband’s lawyer filed a charge for his fees in July 2011. The husband’s share of the sale proceeds was held in trust until the determination of these charges was made.

Subsequent to the sale of the family residence, the wife claimed repayment from the husband’s share of the net sale proceeds for child support arrears, mortgage payments, property taxes, utility payments and renovation expenses.

The issue before the Court was whether the wife’s certificate of pending litigation, filed before the husband’s lawyer’s charge, provided authority for paying additional funds to her even though she had already received her share of the net sale proceeds.  The lawyer’s position was that the wife’s CPL provided no further security beyond her one half share of the net sale proceeds.

The Court ruled in the wife’s favour, finding that the CPL had been pleaded broadly enough to encompass her one half share of the proceeds and potentially any claims for additional sale proceeds.

The Court looked at the wife’s statement of claim to determine what relief was sought in the language asking for a CPL. In particular, the Court found that because her pleadings stated that she asserted an interest in “all or part” of the husband’s interest to the residence (and all other family assets) by way of a trust claim she claimed, effectively, an interest in the entire family residence. That statement was enough to grant her priority over the husband’s lawyer’s charge.

The Court declined to determine whether the monies claimed by the wife were legitimate charges, however, as it required further evidence to do so.

This case tells us that the manner in which pleadings are written is of the utmost importance – as they may be referred to in any stage of the action. Making a claim for a share of family assets should include a trust claim over all, or part, of the assets.