Introduction
Recent Alberta court decisions have dealt with disputes over priority, indefeasibility of title, and claims against the Registrar of Land Titles. This post reviews these cases.
ATB Financial v. Kilpatrick, 2023 ABKB 657
Facts
- ATB Financial registered a mortgage on a parcel of land, which was later subdivided
- ATB submitted a partial discharge of the mortgage as against one of the parcels, however due to a clerical error, the mortgage was mistakenly discharged as against both parcels
- Later a mortgage for Olympia Trust was registered.
- The Registrar reinstated the ATB mortgage, but it was now after the Olympia Trust mortgage.
Issue
- The question was whether ATB’s reinstated mortgage has priority over the Olympia Trust mortgage, and what effect a correction by the Registrar has on priority.
Decision
- The Court held that the ATB mortgage, being reinstated, did not gain priority, despite ATB’s argument that s.188 of the Land Titles Act says that “Every correction …has the … effect as if the error has not been made …”.
- The court referred to Manor Investments v. Ross 2000 ABQB 317, which says that while the Registrar has the authority to correct errors “so far as practical without prejudicing rights conferred for value.”
- The correction could not be used to defeat a right of Olympia which had been made indefeasible under the Act
Main Takeaway
- The case illustrates that clerical errors by the Registrar do not necessarily alter the priority of registered instruments.
2361841 Alberta Ltd v Cunningham High Performance Execution Team Corp, 2023 ABKB 711
Facts
- There were 2 mortgages registered on title followed by 2 Certificates of lis pendens (CLPs)
- 2361841 Alberta Ltd. provided a loan to be secured by a mortgage, which they wanted registered in 2nd priority
- Court Order discharging the CLPs was sent for registration prior to advance of funds
- Mortgage is registered
- Order discharging CLP subsequently registered
- Order discharging CLP was successfully appealed to CA, and CLP restored
- 2361841 Alberta Ltd. sought to establish priority over these CLPs.
Issue
- Whether the mortgage has priority if CLPs are discharged and later restored.
Decision
- The Court ruled that the mortgagee did not rely on the state of title when funds were advanced, but on the representation that the CLP would be discharged
- Maintained the CLPs’ priority over the mortgage.
Main Takeaway
- The status of the title at the time of loan advancement is important for establishing priority.
St Pierre v North Alberta Land Registry District (Registrar), 2023 ABCA 153
Facts
- St. Pierre filed a caveat to protect a loan secured by a promissory note and a security agreement.
- The documents underlying the caveat were found to be fraudulent.
- This was an appeal of a decision that found that the act of registering a Caveat does not legitimize the underlying document, and distinguishes a Caveat from a mortgage which secures an indefeasible interest in the land
- St. Pierre filed a new claim, and Chambers said it was an unreasonable claim
Issue
- St. Pierre sought damages from the Registrar for the loss due to the fraudulent documents.
Decision
- The Court dismissed the claim, stating no legal basis for liability against the Registrar in these circumstances, in that the St. Pierre was not deprived of an interest in land pursuant to s. 168 of the LTA, and no loss or damages by reason of omission, mistake or misfeasance of the Registrar
- Claim was against the estate of the fraudulent party
Main Takeaway
- This case underscores the limitations of claims against the Registrar under the Land Titles Act.
Claims Against the Registrar of Land Titles
These cases collectively emphasize the challenges in asserting claims against the Registrar of Land Titles. Key points include:
- Liability arises only when there is a statutory basis under the Land Titles Act.
- Clerical errors by the Registrar do not automatically alter the priority of registered instruments.
- Claims related to fraudulent documents, where the Registrar is not at fault, are unlikely to succeed.
Section 62 of the Alberta Land Titles Act
Understanding Section 62 also provides a framework for interpreting these cases.
Certificate as Evidence of Title: Section 62 of the Alberta Land Titles Act asserts that every certificate of title, barring instances of fraud involving the owner, is conclusive proof of entitlement to the land described therein.
Exceptions and Limitations: The title is subject to exceptions and reservations outlined in Section 61 and does not apply to portions of land incorrectly described or to claims under a prior certificate of title.
Conclusion
Understanding the nuances of real estate law in Alberta, particularly in cases involving priority disputes and the indefeasibility of title, is essential. These cases illustrate the importance of accurately assessing the state of the title and the challenges in pursuing claims against the Registrar.
