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Certificate of Pending Litigation

Is Seeking A Certificate of Pending Litigation Without Notice Worth The Risk?


Justice Kurz’s recent decision, McNeil v. Kaloustian, highlights some of the risks associated with obtaining a Certificate of Pending Litigation (commonly known as a “CPL”) without notice.1

A CPL is a document registered on title to a property to provide a notice and warning to the public that the property is subject to a court dispute. Registering a CPL has the practical effect of restraining all dealings with the property (financing, mortgaging, sale, etc.).2

Given that a CPL is often sought in urgent circumstances where a property is purportedly at risk of being disposed of improperly, the law recognizes that moving without notice for a CPL is the norm.3 In many cases, providing notice to the defendant would defeat the purpose of the CPL in that it would allow the defendant an opportunity to dispose of the property prior to the motion actually being heard.

That said, without notice motions are an exception to our system of civil justice, which is premised on being adversarial. When only one side is heard, the assurances of mutual, competitive advocacy by professionals committed to the fairness of the process are missing.4

The court therefore tries to balance the need for motions that proceed without notice to the opposing side, with the need for fairness by imposing additional rules and protections for without notice motions generally and ex parte CPL motions more particularly.

Specifically, Rule 39.01(6) requires the moving party to make “full and fair disclosure of all material facts” and further provides that the failure to make “full and fair disclosure of all material facts” is itself a basis to set aside an order obtained without notice regardless of the merits of the request for relief.

In McNeil, the plaintiff obtained an ex parte order granting leave to register a CPL against the defendant’s property. The defendants’ motion to discharge the CPL was also heard by Kurz J. who granted the relief sought and ordered that the CPL be discharged immediately.

At paragraph 50 of the decision, His Honour highlights that the plaintiff chose to bring his motion for a CPL without notice and that although he was entitled to do so, he would have done better if he had put the defendants on notice.

His Honour explains that the plaintiff’s evidentiary approach may have been appropriate had he moved with notice for the CPL, but because he moved without notice and failed to meet his duty of candour, the appropriate remedy was to discharge the CPL.

Justice Kurz’s decision highlights that the parties who move without notice will be held to a rigorous standard and the stringent remedy of vacating the CPL is the price the plaintiff must pay for the failure to live up to the duties imposed by the law. “Were it otherwise, the duty would be empty, and the law would be powerless to protect the absent party”.5

  1.   McNeil v. Kaloustian, 2022 ONSC 118 (CanLII)
  2.   G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CanLII 6832 (ON CA) at para. 16
  3.   Petgrave v. Merlin, 2022 ONSC 3570 (CanLII) at para. 17
  4.   Moses v. Metro Hardware and Maintenance Inc., 2020 ONSC 6684 (CanLII) at para. 23
  5.   McNeil at para. 56

The authors of this blog are Bradley Phillips and David Wagner. Brad and David are both partners at Wagner Sidlofsky LLP.

David is a member of the firm’s Estate and Commercial Litigation Groups. He received his TEP designation from STEP and he deals with will challenges, dependants support, guardianship and applications to compel an accounting.

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This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
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