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What is a Certificate of Pending Litigation and when is it useful? - Ross Barristers Professional Corporation

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What is a Certificate of Pending Litigation and when is it useful?

in Commercial Practice Real Estate by Jeremy Lum-Danson / September 29,2015

A certificate of pending litigation (“CPL”) serves as a notice to the public that the interest and/or title to a certain piece of land are currently subject to a court dispute. CPLs are time limited.  They are registered against the land, and are discharged once the litigation is resolved.

In order to get a CPL the party who wishes to have the benefit of the CPL must show that there is a triable issue as to whether it has “reasonable claim to an interest in the land.”

The onus is on the party opposing the CPL to demonstrate that there is no triable issue against  the party seeking the CPL and whether that party has a reasonable claim to an interest in land  (see: Perruzza, at para. 20; G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CarswellOnt 219 at para. 20 (Ont. C.A.).

Given the threshold, it is irrelevant whether or not the party seeking the CPL is likely to succeed on that issue (see: Perruzza v. Spatone, 2010 ONSC 841).

The existence of an Agreement of Purchase and Sale or a potential entitlement to specific performance may be considered a reasonable claim to an interest in land (see: Starwood Acquisition Inc. v. 267 O’Connor Ltd., 2014 ONSC 4400, [2014] O.J. No. 3526 at para. 14; Re Willoughby et al. and Knight (1974), 1 O.R. (2d) 184 at 195-96 (H.C.J.); 2039903 Ontario Inc. v. Parktrail Estates Inc., 2008 CanLII 61232 at paras. 36-37 (Ont. Sup. Ct.).

In addition to having a triable issue, the court will generally consider equity in light of all relevant matters between the parties including:

  • whether the plaintiff is a shell corporation;
  • whether the land is unique;
  • the intent of the parties in acquiring the land;
  • whether there is an alternative claim for damages;
  • the ease or difficulty in calculating damages;
  • whether damages would be a satisfactory remedy;
  • the presence or absence of a willing purchase; and
  • the harm to each party if the CPL is, or is not, removed with, or without, security.

See: Perruzza v. Spatone, 2010 ONSC 841, G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CarswellOnt 219, Starwood Acquisition Inc. v. 267 O’Connor Ltd., 2014 ONSC 4400, Re Willoughby et al. and Knight (1974), 1 O.R. (2d) 184, 2039903 Ontario Inc. v. Parktrail Estates Inc., 2008 CanLII 61232.