Yang v. Lei
2026 ONSC | Court File No. CV-25-00004085-0000 | Ontario Superior Court of Justice (Chozik J.)
A Certificate of Pending Litigation had been registered against the title to our client’s property, freezing it from sale or refinance. We did not move to remove the CPL on its merits. We brought a security-for-costs motion under Rule 56.01. The applicant abandoned the CPL on receipt — and Justice Chozik awarded our client $9,000 in costs thrown away, payable forthwith.
The Commercial Problem
Our client was the respondent in a civil action arising in a landlord-tenant context, where the applicant claimed an interest in the property and registered a Certificate of Pending Litigation (CPL) against title under s. 103 of the Courts of Justice Act.
A CPL is a public notice on title. While registered, the property cannot be sold or refinanced without addressing the underlying claim. It is the asset-immobilization weapon in any civil litigation that touches real property: it freezes the respondent’s ability to deal with the asset until the litigation resolves — or until a court orders the CPL discharged. That timeline can run 6–12 months.
For a property owner in this position, the standard advice is to fight the CPL on its substantive grounds — file responding affidavits, schedule cross-examinations, and bring a motion to discharge the CPL under s. 103(6). On a fact pattern with weak applicant finances, that route can run 6–12 months and $40,000–$80,000 in legal fees, with no guarantee that the eventual cost award will be collectable. The commercial concern was simple: was there a faster, cheaper way to free the title than relitigating the underlying claim?
Strategic Decisions
Decision 1: Bring security for costs — not a CPL discharge motion
The conventional response to a CPL on weak grounds is to move to discharge under s. 103(6) of the Courts of Justice Act. That route requires the applicant to defend the CPL on the merits — to show, on evidence, a “reasonable claim” to an interest in the land. It is the “direct attack” route. It is also slow and expensive.
We took a procedural route instead. We brought a motion for security for costs under Rule 56.01. Security for costs requires the applicant to deposit money with the court to cover future cost awards, on grounds such as non-residency or insufficient assets in Ontario. The strategic logic: this turned the situation into a binary choice for the applicant. Either commit money to continue, or abandon. We had assessed the applicant’s financial posture and judged that committing security would be unattractive to them.
Critically, this did not require us to litigate the merits of the CPL. The security-for-costs frame is independent of the underlying claim. That kept the motion narrow and procedurally sharp.
Decision 2: Anchor on Rule 56.01 elements — do not engage the CPL’s substantive grounds
The temptation in any defensive posture is to attack the underlying claim — to put the merits in front of the court at every opportunity. That instinct, applied to a security-for-costs motion, is a mistake.
We declined to engage on the CPL’s substantive grounds in the security motion. The motion was anchored entirely on the Rule 56.01 elements: the applicant’s asset position and the prospect of an unrecoverable cost award if the action ultimately failed. By keeping the motion narrow, we made it procedurally hard to oppose without committing money. Engaging on the merits would have given the applicant a longer foothold to relitigate the underlying CPL through the security motion — the opposite of what we wanted.
Decision 3: Pursue costs thrown away — do not stop at the abandonment
When the applicant abandoned the CPL on receipt of our motion, the immediate win was clear: the title was freed. The natural temptation is to take the win and move on. But the security-for-costs motion was a real expenditure of legal fees, and the applicant could re-file via Statement of Claim and bring a fresh proceeding.
We pursued costs thrown away under Rule 57. The principle: when a party causes a procedural step to be wasted by their conduct, they pay for that step — regardless of the merits of the rest of the litigation. Justice Chozik adopted that frame directly (para. 2): “The Respondent is entitled to the costs thrown away in the step of litigation rendered unnecessary by the Applicant’s conduct. This is so regardless of the merits of the balance of the litigation.”
The applicant tried to argue that the costs award should be reduced because the security-for-costs motion might need to be re-litigated if a Statement of Claim were later issued. Justice Chozik rejected that (para. 3): future cost considerations are speculative; the present cost has already been incurred and must be compensated now. That reasoning is the part of this endorsement worth keeping.
Outcome
The CPL was abandoned within weeks of our motion being served. The title was freed without a contested merits hearing.
On the costs motion, Justice Chozik awarded $9,000 to our client, payable forthwith: $8,500 for costs thrown away on the abandoned security-for-costs motion, plus $500 for the costs hearing itself, all-inclusive of disbursements and HST.
If we had taken the conventional CPL-discharge route, the realistic timeline would have been 6–12 months of discoveries, cross-examinations, and a contested motion under s. 103(6). Legal fees in the $40,000–$80,000 range, with the CPL remaining on title throughout. Even if successful, the cost award would have been against an applicant whose financial posture was already in question. The security-for-costs route compressed that to a single motion that was procedurally decided in weeks, with the applicant’s abandonment producing a present-day cost award. The $9,000 is meaningful here not because it is a large sum, but because it demonstrates that the “abandon now, re-file later” tactic does not avoid present-day cost consequences.
Three Takeaways for Property Owners Facing a CPL
1. A security-for-costs motion under Rule 56.01 is the most efficient counter to a CPL on a thin financial record. It forces the applicant to commit real money before the CPL can be tested on the merits. If the applicant cannot or will not commit, the CPL collapses without a merits adjudication. This is faster and cheaper than a discharge motion under s. 103(6). It does not work on every fact pattern — the applicant must be a non-resident or have insufficient Ontario assets — but on the right pattern, it is decisive.
2. Costs thrown away are recoverable even when the underlying litigation may continue or restart. Rule 57 and Justice Chozik’s reasoning: each wasted procedural step is its own cost-recovery moment. Don’t wait for “final” disposition of the action; pursue cost recovery on each abandoned step as it arises. The argument that “the same motion may need to be brought again” is not a reason to discount today’s cost award.
3. An applicant who abandons after being served with security for costs is signaling that the litigation was leverage-focused, not merits-focused. That signal is useful information for the next stage. If the applicant re-files via Statement of Claim, the same Rule 56.01 frame applies again — and a second cost-thrown-away award is available if they abandon a second time. The pattern is self-reinforcing.
Has a CPL been registered against your property?
CPLs are routinely used as leverage in real estate, landlord-tenant, and shareholder disputes. The strongest counter-move depends on the applicant’s financial posture and the strength of the underlying claim — not on the merits of the dispute itself.
We recommend a 60-minute legal posture assessment to evaluate the applicant’s asset position, the realistic fit between the case and a Rule 56.01 security-for-costs motion, and the most efficient path to free the title. This is a litigation-focused diagnostic, not a sales meeting.
Legal Foundation
This case engaged the following procedural framework:
- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 103 — Certificate of Pending Litigation
- Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194 — Rule 42 (CPL procedure), Rule 56.01 (security for costs), Rule 57 (costs, including costs thrown away)
- Court File No. CV-25-00004085-0000 (Ontario Superior Court of Justice, Milton, ON) — endorsement released by Justice E. Chozik on January 28, 2026
This page describes a case handled by Starkman & Zhang Lawyers. To protect the parties’ privacy, certain non-essential details about the underlying dispute have been generalized. The procedural framework, court’s reasoning, and cost outcome described above are taken directly from Justice Chozik’s endorsement. This page does not constitute legal advice. Each CPL situation depends on the applicant’s asset position, the pleaded interest in land, and the surrounding procedural posture. Contact us to discuss a specific matter.
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