A B.C. lawyer, acting on forged documents, fraudulently transferred a property located in Victoria from its rightful owner, Mr. Thompson, to an innocent purchaser, Ms. Chan. Ms. Chan purchased the property at fair market value and registered her transfer of ownership at the Land Title Office. Discovering the fraud, Mr. Thompson seeks to have his ownership reinstated. What is the most likely outcome under the Land Title Act?

Question: A B.C. lawyer, acting on forged documents, fraudulently transferred a property located in Victoria from its rightful owner, Mr. Thompson, to an innocent purchaser, Ms. Chan. Ms. Chan purchased the property at fair market value and registered her transfer of ownership at the Land Title Office. Discovering the fraud, Mr. Thompson seeks to have his ownership reinstated. What is the most likely outcome under the Land Title Act?

Answer options:

• Mr. Thompson will automatically have his title reinstated, and Ms. Chan will lose her investment.
• Ms. Chan's title will be indefeasible because she is an innocent purchaser for value who successfully registered her interest.
• Both Mr. Thompson and Ms. Chan will be considered joint owners until a court decides the matter. ✅ The Land Title Office will compensate Mr. Thompson for his loss, but Ms. Chan's registered title will remain valid.

Correct answer: The Land Title Office will compensate Mr. Thompson for his loss, but Ms. Chan's registered title will remain valid.

Explanation: This scenario highlights a key exception to indefeasibility. While Ms. Chan's registered title as an innocent purchaser would generally be indefeasible, the Land Title Act provides mechanisms, such as the assurance fund, for compensating a rightful owner who has been deprived of their land through fraud, while upholding the indefeasibility of the registered title of the innocent purchaser.