September 22, 2026

By Nick Melchiorre 

Involved in a family dispute? Whether it is a spousal dispute, or estate litigation, keep an eye on the status of the mortgage on any property in which you might have or want to claim an interest. 

Unfortunately, the stress, expense and confusion that often arise during disputes might result in the mortgage going into default. 

THE ISSUE 

How do you protect your interest in the land in the event of a default while there is a lawsuit pending? 

Where a mortgage goes into default, the lender may take steps to enforce their rights against the property either through foreclosure or power of sale.  

A Plaintiff or Applicant claiming an interest in land through a Superior Court proceeding may bring a motion to have a Certificate of Pending Litigation (CPL) registered against title. This gives notice to any potential buyer of the property, or potential future lender, of the claim, and may affect the priority of title. So usually, nobody will buy or lend more money while the CPL is on title. 

To deal with the property, it becomes necessary to get an order to discharge the certificate.  

However, until recently, it was unclear about how the Mortgages Acthttps://canlii.ca/t/55cvg powers of the prior lender interacted with the registration of the CPL, so that the prior lender could give good title to a new buyer. 

THE CASE 

The Ontario Court of Appeal addresses this, at least in part, in MCAN Home Mortgage Corporation v. Broad. How far this decision goes to fill the gap between the conflicting laws may depending upon future cases, since other fact situations might lead to a different result, but for now, we have a better idea about the answer to the question of how to protect yourself. 

Simply registering a CPL often will not be good enough to protect  you from having the property sold before you prove your interest exists.  

To better understand that takeaway, first consider the tale of Melissa Broad. It is not a pretty story.  

In MCAN, the parties were the lender and the applicant in a family law proceeding, Ms. Broad.  

Ms. Broad was not a registered owner of the property. She claimed to be the true or beneficial owner of the property in that proceeding, based on her contributions to the down payment, mortgage payments, and renovations to the property. She obtained a CPL.  

MCAN was the lender with a first mortgage on the property granted by Ms. Broad’s common law spouse. Legal title was in the spouse’s name only, thus Ms. Broad was not named on the mortgage, or on the title to the property.  

The mortgage went into default. 

MCAN served a Notice of Sale under Power of Sale. This notice was served on Ms. Broad as well as the spouse.  

Ms. Broad attempted to negotiate with MCAN to bring the mortgage into good standing but was unsuccessful. 

Ms. Broad brought a motion under the Mortgages Act  in her family law proceeding to be declared to have an interest in the property as an “encumbrancer”, which would allow her to redeem the mortgage, bringing it into good standing under that Act.  That motion was not successful.  

MCAN found a buyer and applied to the Superior Court to discharge the CPL so that they could give good title to the purchaser. There is no specific provision in the Courts of Justice Act, which governs CPLs, for a mortgage lender to obtain a discharge. There is however, a discretionary power to discharge the CPL “on any other ground that is considered just”. 

The Superior Court judge hearing the application held that the court had no power to discharge a CPL at the request of MCAN to of complete a power of sale. She said that MCAN had to rely on section 35 of the Mortgages Act to give good title. 

MCAN did not believe that would work to complete the sale, because without the order discharging, the CPL would remain on title, so they appealed.  

The Court of Appeal granted MCAN’s appeal. 

The court said that: 

• The court maintains jurisdiction to ensure that the CPL’s continued presence on title does not work an injustice. 

• A power to discharge a CPL at the request of a mortgage lender, where it is just to do so, is consistent with the relevant provisions of the Mortgages Act and the Land Titles Act. 

• Even though under the Mortgages Act the purchaser receives “good title”, the state of the Land Titles register is still critical. The parcel register in the Land Titles system is a supposed to be a “perfect mirror of the state of title”: 

• There can be a difference between what, in law, constitutes the transfer of good title, and what must be done to ensure that the parcel register reflects that good title. 

• Granting a discharge of a CPL would facilitate the removal from the Land Titles register of a document that does not affect that purchaser’s title and negate any concern that a person claiming under the CPL continues to have an interest that affects the land. 

• So, it may be discharging the CPL to give effect to the purchaser’s good title is appropriate. 

 

The Court of Appeal did not exercise the discretion under the Courts of Justice Act to actually order the discharge. It sent the case back to Superior Court for a further fresh hearing. More time, expense and delay. 

And we don’t know the ultimate fate of poor Ms. Broad. 

In addition to the complication of not being on title, this case does not say how the situation might differ if Ms. Broad had been a married spouse. Married spouses have rights in a matrimonial home different from unmarried spouses.  

“Common law” is NOT the same in law as being married, as some people believe.  

It is also not clear how this decision might impact estate litigation where the mortgage goes into default. 

At the time of writing, we know of two Superior Court decisions have considered the MCAN decision in deciding how to exercise their discretion to discharge a CPL in different situations not involving family law or estate claims. One case, involving an alleged fraudulent conveyance, refused to discharge the CPL. The other case, also seeking to trace money into a property, discharged the CPL on the basis that other security could be posted. 

Taken together with MCAN , these decisions show that, as with other discretionary issues, each dispute will be decided mainly on the facts of that particular case.   

TAKEAWAYS 

• You do not want to end up like Ms. Broad. Even if she ultimately wins the lawsuits, she suffers because of the time, inconvenience, expense and stress.   

• Early action to protect your interests is almost always a good investment. 

• Most importantly, you want to make sure that the mortgage remains in good standing if at all possible. 

• The first and best thing is do is to make sure your interest is registered on title, but even that is not enough. 

• If your interest is not registered on title, a CPL may not be enough to protect you from having the property sold while your claim is being decided.  

• If you believe that you have a claim to an interest in land, sound legal advice as soon as practical is important to protect your rights.  

 

HOW WEILERS LLP CAN HELP YOU  

Weilers can advise and represent you with an eye on protecting all of your rights.  

You can benefit from the knowledge gained through almost 80 years of our lawyers advising and representing clients to protect their rights in property.  

We have experienced lawyers in both family law and estate litigation who work seamlessly with our real estate lawyers. Some of them are even the same people.  

Our objective is always the best, most cost-effective solution to any legal issue. 

If you need advice or representation to protecting your rights in property, give us a call and see if we are the right lawyers for you.