The Importance of Certificates of Pending Litigation in Property Disputes

Introduction

A Certificate of Pending Litigation (CPL) is a legal tool utilized in proceedings involving disputes over an interest in land. Often, its value isn't fully recognized or is understated; however, understanding its role and implications can be pivotal in safeguarding your interests. This blog post aims to delve into the authority that underpins a CPL, the implications it carries, and the risks that come with it. By doing so, we hope to shed light on the importance of a CPL in property disputes.

The Authority for a Certificate of Pending Litigation

The authority for a certificate of pending litigation is derived from a specific legal provision, s. 103 of the Courts of Justice Act, R.S.O. 1990, c. C.43. According to s. 103(1), the commencement of a proceeding that involves an interest in land does not automatically equate to the proceeding being noticeable to a person who is not part of the dispute. The notice of such a proceeding only becomes effective once a CPL is formally issued by the court and registered in the appropriate land registry office. This process underscores the critical importance of obtaining a CPL in any legal proceedings that revolve around land disputes.

Implications of a Certificate of Pending Litigation

A CPL carries with it some significant implications. One of the most critical is that without it, there's a real risk that the land in question might not be available or could be encumbered by the time a final judgment is obtained. If a lawsuit is being brought where an interest in land is in dispute, obtaining a CPL becomes an essential step to ensure that the land is preserved intact until the dispute is fully resolved. It's important to note that the Family Law Rules, O. Reg. 114/99, do not directly address CPLs. As such, legal counsel must refer to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and specifically r. 42, which outlines in detail the procedural requirements for obtaining a CPL.

Risks Associated with a Certificate of Pending Litigation

While a CPL is a potent and effective tool in property disputes, it is not without its own set of risks. Among these, CPLs stand as the most burdensome mechanism to preserve real property. They require a court order to be obtained and similarly, a court order to be discharged. This dual requirement can add to the complexity and length of the legal process. Moreover, there is a potential liability that comes with obtaining a CPL. As per s. 103(4) of the Courts of Justice Act, a party can be held accountable for damages where a CPL is registered without a reasonable claim. This risk factor adds another layer of consideration before deciding to pursue a CPL.

Conclusion

In conclusion, a Certificate of Pending Litigation serves as an indispensable tool in preserving an interest in land during a dispute. However, the decision to obtain a CPL should not be taken lightly. It is a significant step that carries with it an onerous nature and potential risks. Therefore, it is always advisable to seek legal counsel to navigate the complexities and potential liabilities associated with a CPL in property disputes. Understanding the ins and outs of a CPL can be instrumental in protecting your interests during a land dispute.

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