Law360 Canada (August 14, 2026, 10:31 AM EDT) --

Balvinder Kumar

A certificate of pending litigation (CPL) is issued under the Courts of Justice Act, R.S.O. 1990 c. c.43 (CJA) by the court in which an interest in land is in question (s. 103(1) of the CJA).

Where a certificate of pending litigation is issued under s. 103 (1), it may be registered against the land under the Land Titles Act (LTA) or the Registry Act (s. 103 (2) of the CJA). The court may make an order discharging a certificate under s. 103(6) (c). There are specific grounds to discharge. The case of MCAN Home Mortgage Corporation v. Broad, 2026 ONCA 21 is all about the scope of the discretion under the provisions of s. 106(6) of the CJA.

In this case, MCAN Home Mortgage Corporation (the appellant, also the applicant), is a mortgagee. Its mortgage went in default. The mortgagee proceeded to sell the mortgaged property under the provisions of power of sale. They entered into an agreement of purchase and sale under which they had to deliver clear title to the purchaser. A CPL was registered on title by Melissa Lacey Broad (the respondent) against the mortgagor who is the respondent’s former common law spouse. The respondent is claiming an interest in the mortgaged property.

The appellant wanted to close its sale and in their application before the application judge was seeking an order to discharge the CPL. The application judge rejected their application stating that the court had no jurisdiction to order the discharge of a CPL and their remedy lay under s. 35 of the Mortgages Act, R.S.O. 1990, c. M.40. Section 35 of the Mortgages Act details which documents qualify as evidence of a mortgagee’s compliance with the prerequisites to exercise a power of sale, sufficient to give a “good title” to a purchaser. This section provides that a mortgagee who has complied with the statutory requirements for exercising power of sale can convey clear title of the subordinate ranking interests. But this section does not mandate the actual deletion of a CPL from the parcel page. The deletion of the CPL can only be done with the consent of the person who obtained the CPL court order. The appellant’s prospective sale has aborted.

In this case, the court discusses and highlights the statutory provisions of the CJA, the Mortgages Act and the LTA. The purpose of a CPL is to give notice that an interest in land is in question in a litigation matter which prevents the claimed interest from being defeated by a transfer or any other dealing with the land.

Thus, the CPL gains priority.  A CPL may only be issued and registered with permission of the court where an interest in land is in question in an action. Section 103(6) of the CJA gives the court discretion to discharge a CPL, with or without terms, in various circumstances, including where the party who obtained the CPL does not have a reasonable claim to the interest in land claimed, where they could be protected by another form of security, or “on any other ground that is considered just.” The court maintains jurisdiction to ensure that the CPL’s continued presence on title does not work an injustice. Section 103(7) stipulates that the effect of a discharge is to free up the land to be dealt with as though the CPL had not been registered.

The court explains in detail part three of the Mortgages Act and the LTA. The existence of a power under s. 103(6)(c) of the CJA to discharge a CPL at the request of a mortgagee, where it is just to do so, is consistent with the relevant provisions of the Mortgages Act and the LTA.

Section 35 of the Mortgages Act specifies the documentation that evidences compliance by a mortgagee in regard to a power of sale and that is “sufficient to give a good title to the purchaser.” Nothing in that section conflicts with the court’s jurisdiction under s.103(6)(c) to discharge the CPL at the request of a mortgagee where it is necessary to give practical effect to the purchaser’s “good title.”

The court very analytically describes that part three of the Mortgages Act governs power of sale. Section 31(1) provides that a mortgagee, before exercising a power of sale of land registered under the LTA, must first give a prescribed notice to those whose interests will be cut out by a sale. Section 32 provides that the notice may only be given after default has continued for at least fifteen days, and a sale may not be made until at least 35 days after the notice. Sections 33 and 34 provide for the manner in which the notice is to be given and when it is considered effective.

Section 35 of the Mortgages Act describes the evidence of statutory compliance that is sufficient to give good title to a person purchasing from a mortgagee who is exercising its power of sale. The LTA also provides for provisions where a mortgagee is selling land under power of sale. Section 35 of the Mortgages Act is subject to the LTA.

According to the provisions of the LTA, a land registrar may delete “an instrument or writ” appearing to rank subsequent to the mortgage, but the practice is not to do so, if the registered instrument is a CPL, without consent of the person who obtained it or a court order. A CPL may not be deleted unless a court order authorizing the deletion, or the consent of the person who registered the certificate, has been obtained.

Sections 99(1) and (1.1) of the LTA allow the director of titles to specify the evidence necessary to show compliance with the Mortgages Act and stipulate that such evidence and the registration of a transfer by the mortgagee to the purchaser is “sufficient to give good title to the purchaser. According to s. 99(2), upon the transfer being registered and satisfactory evidence being produced, the land registrar may delete from the register the entry of an instrument or writ appearing to rank subsequent to the charge under which the land is sold, and thereupon the interest of every person claiming under such subsequent instrument or writ ceases to affect the land.

Going back to the case, the appellate court held that the application judge erred in holding that there is no power in the court to discharge a validly registered CPL at the instance of a mortgagee in the process of completing a mortgage power of sale proceeding. The court held that a discretion exists under s. 103(6)(c) of the CJA to discharge a CPL on the application of a mortgagee exercising its power of sale under a mortgage.

This discretion may be exercised where the mortgagee provides evidence of compliance with the Mortgages Act, as stipulated in s. 99 of the LTA, where, in law, good title is being conveyed to the purchaser, and it is necessary for the court to grant a discharge so that the register reflects that title.

The court allowed the appeal and set aside the order of the application judge. Conclusively, the court read all the relevant provisions of all the legislations together to build the gap between the three acts and come out with the best interpretation of same. The analyses of said provisions will emerge as practical know-how and will serve as the best example in future matters of similar nature.

Balvinder Kumar practises real estate law (residential and commercial) and is a freelance writer and author with LexisNexis.

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