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CIVIL PROCEDURE - Lis pendens (certificate of pending litigation) - Vacating of

Tuesday, March 13, 2018 @ 8:41 AM  

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Appeal by Sun Wave and CGR from the dismissal of their claims against Xu et al for want of prosecution, and from the cancellation of certain certificates of pending litigation (CPL). Sun Wave and CGR alleged that they hired Xu to manage and obtain permits to purchase a pulp mill, and that Xu, her family and her companies engaged in the torts of conspiracy, fraud and misappropriation in the course of this endeavour. Xu alleged that the pulp mill transaction itself was a fraud, undertaken to inflate the mill’s value on a security document to obtain a loan. Xu counterclaimed for damages for wrongful dismissal. Sun Wave and CGR filed their claim on May 15, 2008, while Xu filed her defence and counterclaim on July 9, 2008. Sun Wave and CGR filed CPLs against several of Xu’s properties. Xu applied in September 2015 to have the CPLs cancelled, because no steps had been taken in the litigation for one year. The application was adjourned based on affidavit evidence from Ni, the principal of Sun Wave and CGR, to the effect that he had been detained in China since 2012 but had since returned to BC. Since September 2015, Ni had been refused admission to Canada. The judge dismissed the claim because the delay in prosecuting it had been inordinate, because Sun Wave and CGR provided no reason for failing to move the litigation along since 2015, and because the delay was causing prejudice to Xu.

HELD: Appeal allowed in part. It was reasonable to characterize the delay as inordinate. Ni failed to provide a satisfactory explanation for the post-2015 delay in advancing the action, after committing in September 2015 to do so. The judge was entitled to consider not only Xu, but her family and companies in finding that prejudice had resulted from the delay. The interests of justice weighed in favour of dismissing the claim for delay, given the injurious nature of the allegations of fraud and corruption levelled against Xu. Because the appeal period had yet to pass, the judge erred in cancelling the CPLs at the time the action was dismissed.

Sun Wave Forest Products Ltd. v. Xu, [2018] B.C.J. No. 286, British Columbia Court of Appeal, M.E. Saunders, R. Goepel and L. Fenlon JJ.A., February 16, 2018. Digest No. TLD-Mar122018003