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Certificate of Pending Litigation

In Safarloo v. COR-C Corp., 2020 ONSC 6535 (CanLII), Justice Kurz Summarized the law and the application of the principles in this area. I have increasingly been asked by clients about the certificate for pending litigation and how to put in place such a certificate. In some cases, clients want to know how to put a lien on the property that they would trust clean over. It’s the same thing whether a lien or a certificate for pending litigation. As this case shows, it can be a hit and miss. One has to be very careful. The principles are not absolutely straightforward and are clearly tailored to the circumstances of each case. The upside is that if a particular case fulfils the principles laid out below, it’s all well and good. The downside is that if the principles don’t fit to the case at hand, and if the party moving for it loses, there can be serious cost consequences. Law [20] The jurisdiction to grant a CPL is found in s. 103(1) and (2) of the Courts of Justice Act, which states:

Certificate of pending litigation 103 (1) The commencement of a proceeding in which an interest in land is in question is not notice of the proceeding to a person who is not a party until a CPL is issued by the court and the certificate is registered in the proper land registry office under subsection (2).

Registration (2) Where a CPL is issued under subsection (1) it may be registered whether the land is registered under the Land Titles Act or the Registry Act. [21] Under r. 42.01(1) of the Rules of Civil Procedure, a CPL under s. 103 of the Courts of Justice Act may be issued by a registrar only under order of the court. [22] As Peterson J. stated in 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003, at para. 21: “[t]he Court may only grant leave to register a CPL where it is satisfied that there is a triable issue in respect of the moving party's claim to an interest in the land… The threshold test to be applied in a contested Motion for a CPL is the same as if it were a Motion to discharge a CPL under s.103(6) of the Courts of Justice Act, namely whether the party seeking the CPL has a "reasonable claim to the interest in the land". [Citations removed] [23] Even if the moving party demonstrates a reasonable claim to an interest in the land, the court has the discretion, in considering the equities, to refuse to grant the CPL under s. 103(6). Peterson J. set out a non-exhaustive list of factors to consider in the granting of a CPL in 2254069 Ontario Inc. v. Kim at para. 30.

They include: i) whether the land in question is unique, ii) whether there is an alternative claim for damages, iii) the ease or difficulty of calculating damages, iv) whether damages would be a satisfactory remedy, v) the presence or absence of a willing purchaser, vi) the balance of convenience, or potential harm to each party, if the CPL is or is not granted, vii) whether the CPL appears to be for an improper purpose, viii) whether the interests of the party seeking the CPL can be adequately protected by another form of security, and ix) whether the moving party has prosecuted the proceeding with reasonable diligence. (See: Interrant International Properties Inc. v. 1167750 Ontario Inc., [2013] O.J. No. 3385, at para. 15).

Application of the Test for a CPL to the Facts of this Case [24] Here, there is no question of the Plaintiff’s entitlement to a CPL on property no. 2. They have an equitable interest in title to the property. However that is not the case with regard to property no. 1. I say this because: a. They signed a release four years ago regarding their claims arising out of their attempt to purchase an interest in property no. 1. b. The limitation period with regard to any claim with regard to property no. 1 is likely expired; c. There is no evidence that property no. 1 is unique; d. The essence of the Plaintiff’s claim is a return of a deposit that was given over four years ago. It is not for specific performance; e. In any event, the Plaintiffs make a claim for those damages as an alternative to a certificate of pending litigation. f. The equities do not favour a second CPL in regard to what is in essence one set of transactions, where the claim regarding property no. 1 was transferred to a claim regarding property no. 2. The Plaintiffs are already entitled to a CPL in regard to property no. 2., a property in which there is at least $100,000 in equity.

Conclusion[25] For the reasons set out above, I grant a CPL regarding property no. 2 but dismiss the balance of this motion.


Clearly each case is different. It is important to tailor the facts and circumstances of each case to the principles mentioned above. It takes two hands to clap. Just as we as a moving party might want a certificate of pending litigation to be inserted, the opposing party will vigourously oppose it. In that sense, it is important to be realistic and to constantly evaluate whether it is worth bringing this type of motion or if there are alternatives.

For example, an alternative could be for the funds from the sale of the property to be put into a trust account pending litigation. The other alternative could be to suggest a certificate of pending litigation and to seek an alternate relief of holding funds in trust.

The reader can be assured that at Shankar Law, we will give you straightforward and transparent advice for you to make your final decision and give us instructions based on quality legal advice. It may well be that our advice could be not to rush into filing a motion for certificate of pending litigation but to look for alternatives or to attempt to resolve the case outside of court if that is possible. Litigants need to be aware of the cost consequences of losing a case.

At Shankar Law, we are happy to assist and guide you through whatever challenges you have in your spousal and matrimonial life. We work in three counties: Huron, Bruce, and Grey and span several cities (Southampton, Kincardine, Goderich, Wiarton, Hanover, Dundalk, Walkerton, Meaford, Markdale, Chatsworth), through our 3 locations in Port Elgin, Wiarton and in Owen Sound.



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