Tag: certificate of pending litigation
A Certificate of Pending Litigation is common in estate litigation, where claims often involve an interest in land.
In order to obtain a Certificate of Pending Litigation (“CPL”), the moving party must demonstrate a triable issue as to whether the party has a reasonable claim to an interest in the land. The threshold is a low one: the moving party does not have to show that they are likely to succeed. See Natalia Angelini’s blog on CPLs, here.
Rule 42.01(3) of the Rules of Civil Procedure provides that a motion for an Order granting a CPL may be made without notice. Having said that, the question becomes should the motion be brought without notice. The recent decision of Justice Myers in Moses v. Metro Hardware and Maintenance Inc., 2020 ONSC 6684 (CanLII) suggests that parties should strongly consider bringing the motion on notice.
There, the plaintiffs moved for and obtained a CPL without notice. The defendants moved to set it aside. They were successful.
In setting aside the CPL, Myers J. found that the plaintiffs failed to make full and fair disclosure of all material facts, did not identify any of the defendants’ likely responses, and relied improperly on inadmissible evidence.
Myers J. observed that the plaintiffs did not need to bring the motion without notice. There was no urgency. However, by proceeding without notice, the plaintiffs voluntarily and knowingly undertook the extra obligation to make full and fair disclosure of facts and law to the court. Myers J. referred to Rule 39.01(6), which provides that “Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.”
Myers J. noted that ex parte motions are an exception to the adversarial system and require special considerations. “The regular zeal that is perfectly appropriate in the face of an equally zealous adversary does not apply when a party chooses to go before a judicial officer without anyone else present to keep his or her zealousness in check.” The duty to make full and fair disclosure replaces the checks and balances of the adversarial system. As another judge observed, “There is no situation more fraught with potential injustice and abuse of the Court’s powers than an application for an ex parte injunction.”
In concluding, Myers J. stated:
I wish to be clear as well that I am not undermining in the least the law that accepts that moving without notice for a CPL is the norm. However, parties must be mindful of the nature of the enhanced and exacting duties that they undertake when they decide to do so. Sometimes, in face of true urgency, one has no practical alternative. However, parties often do have a choice as to whether they truly need to proceed ex parte. If they do not really need to do so, they may wish to consider whether it is worth the risk.
The test for a CPL is not a difficult test to meet. A plaintiff starts from the position of an aggrieved party seeking the court’s protection. That is a favourable strategic position to occupy. However, on a motion to set aside an order obtained without notice due to a breach of the duties to make full and fair disclosure, the plaintiff is no longer seen as the aggrieved party facing a light test. Rather, it becomes the alleged wrongdoer facing a very high standard of performance. While it may be tempting to move without notice to obtain an order without opposition, in my view, it is a questionable strategy to voluntarily undertake the exacting duties of full disclosure and fair disclosure where it is not absolutely necessary to do so.
The consideration of whether to bring a motion without notice applies to other types of motions in addition to motions for CPLs. For example, Orders for Assistance under rule 74.15 can be made without notice. However, the court has cautioned that just because you can, doesn’t mean you should. See our blog on these types of motions, here.
Thank you for reading.
In our estate litigation practice, we commonly seek orders permitting registration of a Certificate of Pending Litigation (CPL) against title to property that is, for instance, an estate asset that a client is seeking to preserve until the litigation is concluded.
In order to obtain a CPL, one needs to demonstrate that an interest in land is in question, and in determining whether to order the issuance of a CPL, the following legal principles ought to be considered, as highlighted in Perruzza v Spatone:
- the threshold in respect of the “interest in land” is “whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed”;
- the onus is on the party opposing the order for a CPL to demonstrate that there is no triable issue with respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed”; and
- the governing test is that the Court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL ought to be granted.
We can see from the above that the threshold to obtain a CPL is not high; presumably the rationale being that it is more favourable to have a property in dispute secured during litigation than risk it being dissipated to the prejudice of a litigant.
Once a CPL is obtained it is prudent to assess the circumstances throughout the life of the litigation so that it is discharged at the appropriate time. As noted in Perruzza, factors the court can consider to discharge a CPL include whether the land is unique, whether there is an alternative claim for damages, whether there is or is not a willing purchaser and the harm if the CPL is or is not removed.
If the litigation stagnates, without reminders in place it is possible for the registered CPL to be left unaddressed. These were the circumstances in Novia v. Saccoia Estate (Trustee of). The CPL had remained on title for more than 20 years and even after the defendant’s death, ultimately forcing the defendant’s executor to obtain an order dismissing the action and discharging the CPL.
Thanks for reading and have a great day,
This week on Hull on Estates, Jonathon Kappy and Rebecca Rauws discuss the recent decision of Sach v Viola, 2018 CarswellOnt 1824, and under what circumstances a certificate of pending litigation is appropriate.
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.