MCAN Home Mortgage Corporation v. Broad, 2025 ONSC 3489

CITATION: MCAN Home Mortgage Corporation v Broad, 2025 ONSC 3489

COURT FILE NO.: CV-24-00003618

DATE: 2025/06/11

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MCAN HOME MORTGAGE CORPORATION

Applicant

– and –

MELISSA LACEY BROAD

Respondent

L. Guarino for the Applicant

M. Broad, for Self

HEARD: December 6, 2024

judgment on APPLICATION

Justice M.A. COOK

1The Applicant, MCAN Home Mortgage Corporation, applies under section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C43 as amended, and Rule 14.05(3)(h) of the Rules of Civil Procedure for an order lifting a certificate of pending litigation (“CPL”) that was registered by the Respondent, Melissa Lacey Broad, against title to real property known as 1117 Byron Baseline Road, London, Ontario (the “Property”).

2For the reasons set out below, the application is dismissed.

Background

3The Applicant was given a first mortgage (the “Mortgage”) by the Respondent’s former spouse, Steven Andrew Nurse (“Nurse”), which was registered on title to the Property in the principal amount of $410,000.00.

4The Respondent and Nurse lived together from October 2019 until the Respondent ended the relationship on or about May 3, 2023. The relationship was marked by Nurse’s physical, emotional, sexual, and financial abuse of the Respondent.

5In February 2021, Nurse and the Respondent decided to jointly purchase the Property. Nurse qualified for a mortgage with the Applicant only after the Respondent paid Nurse’s derogatory debts, provided the down payment for the purchase from her own resources, and used her income as “contributory income” on the mortgage application.

6With respect to the Respondent’s contribution to the down payment on the Property, the Respondent used $25,000.00 of her own funds towards the down payment, and her grandmother, Mary Nuxoll, contributed $65,000.00 toward the down payment. Ms Nuxoll has confirmed that the Respondent repaid the $65,000.00 advance in full, making the Respondent’s initial contribution to the purchase of the Property $90,000.00.

7Despite the Respondent’s very substantial contributions to the purchase price of the Property, legal title to the Property was registered in Nurse’s name alone when the transaction closed.

8After Nurse and the Respondent took possession of the Property in March 2021, they completed renovations at the Property. The Respondent paid for the renovations, including drywall, lights, cabinetry, flooring, and electrical improvements. The Respondent and her family invested substantial time and effort on the Property renovations.

9The Respondent gave Nurse the funds to pay the mortgage payments on the Property. Between January 3, 2022 and January 3, 2023, the Respondent advanced $40,077.87 to Nurse, who remitted the funds to MCAN to pay the mortgage.

10The relationship between the Respondent and Nurse deteriorated. There was a brief separation in January 2023. The Respondent sought support and guidance from the London Abused Women’s Centre. There was a second separation in late February 2023. The parties finally separated on May 3, 2023 following an intense argument about the Property. The Respondent vacated the matrimonial Property.

11Nurse defaulted on the Mortgage payments on May 1, 2023. The Respondent was not aware of Nurse’s default, and had no access to the Mortgage information.

12In early June 2023, Nurse was charged with multiple criminal offences involving the Respondent, including harassment, uttering threats, property damage to the Property, assault, forcible confinement, sexual assault, and assault with a weapon. He retained possession of the Property.

13The Respondent retained legal counsel to help her secure her interest in the Property. The Applicant declined to provide information to the Respondent because she was not on the Mortgage or title to the Property.

14On August 9, 2023, the Respondent initiated matrimonial proceedings in the matter of Broad v Nurse, Court File No. FC-23-901-0000 (London). In her application, the Respondent claimed an equitable ownership interest in the Property by virtue of her various contributions to it.

15On August 10, 2023, Justice Tobin granted the Respondent leave to issue and register a CPL against title to the Property to prevent the Property from being sold. The CPL was registered on title as Instrument Number ER1539257 on August 11, 2023.

16Nurse apparently attempted to list the Property for sale but the marketing ceased after Nurse’s realtor was made aware of the CPL.

17As a result of Nurse’s default on the Mortgage, the Applicant issued and served a Notice of Sale Under Mortgage dated October 13, 2023. The Respondent, as Nurse’s spouse, received service of the Applicant’s Notice of Intention to Enforce Security and Notice of Sale under the Mortgage Act.

18In the weeks that followed, the Respondent, through her legal counsel, attempted to negotiate with the Applicant to pay the Mortgage arrears and bring the Mortgage back into good standing. However, the Applicant took the position that the Respondent had no standing to redeem the Mortgage. The Applicant, by its counsel, suggested that if the Respondent secured an order from a family court judge declaring the Respondent to be an encumbrancer, the Applicant could transfer the Mortgage into the Respondent’s name and allow her to put the Mortgage back into good standing.

19On November 1, 2023, the Applicant advised the Respondent that the Mortgage matured on June 1, 2023 and was not renewed. The full amount of the matured Mortgage, in the amount of $424,399.41 was due and payable. The Respondent sought an extension of time to finalize financing to purchase the Property; she had a mortgage pre-approval in hand at the time of her request.

20On November 20, 2023, the Respondent received correspondence from the Applicant’s lawyer indicating that the redemption period under the Notice of Sale had passed, and that the Applicant would proceed with its power of sale proceeding.

21The Applicant commenced a power of sale proceeding against Nurse bearing Court File No. CV-23-2003-00. The power of sale proceeding resulted in default judgment against Nurse dated December 29, 2023 granting the Applicant an order for possession of the Property and an order for the payment of $428,583.07 plus costs.

22On December 12, 2023, the Respondent brought a motion within the family law proceeding seeking an interim order declaring her to be an encumbrancer of the Property pursuant to section 2 of the Mortgages Act, and an order permitting the Respondent access to the Property to collect her personal belongings. By order dated December 20, 2023, Justice Howie granted an order permitting the Respondent access to the Property to retrieve her personal belongings, but he denied the Respondent’s request for declaratory relief. As a result, the Respondent could not satisfy the Applicant that she was an encumbrancer with rights to redeem the Mortgage.

23On April 17, 2024, the Applicant exercised its rights of possession, secured the Property, and provided the Respondent access to the Property to remove her personal belongings. The parties agree that the Property was in a state of disrepair, including broken doors, broken tiles, missing/removed electrical components, and other serious damage almost certainly caused by Nurse.

24In furtherance of its power of sale, the Applicant entered into an agreement of purchase and sale to sell the Property to a third party for $399,900.00, with a closing date of December 16, 2024. Prior to entering into the APS, the Applicant obtained two appraisals which placed an estimated market value on the Property of $450,000.00 and $495,000.00. There is no evidence of how the Applicant marketed the Property (beyond that it was sold through a real estate broker) or how it arrived at the sale price of $399,900 in light of the appraised market value of the Property and the prior offer from the Respondent.

25On July 30, 2024, Justice Tobin ordered that the family law application proceed to an uncontested trial on September 5, 2024. The Respondent alerted the Applicant to the uncontested trial date and a representative for the Applicant attended the trial. However, the trial was not reached because the Court ran out of time to hear the Respondent’s case. The uncontested trial was adjourned to March 2025.

26By Notice of Application dated November 26, 2024, the Applicant seeks an order lifting the Respondent’s certificate of pending litigation so that it may transfer title to the Property to the third party purchaser for the purchase price of $399,000.00.

The Law

27The Applicant submits that its Mortgage is in clear priority to the Respondent’s CPL and that the priority of the Mortgage over the CPL should be sufficient to discharge the CPL.

28An application to discharge a CPL is governed by section 103(6)(c) of the Courts of Justice Act, RSO 1990, c. C43 which provides:

Order discharging certificate

(6) The court may make an order discharging a certificate,

(a) where the party at whose instance it was issued,

(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other ground that is considered just,

and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just. R.S.O. 1990, c. C.43, s. 103 (6).

29Subsection 78(5) of the Land Titles Act, RSO 1990 c. L.5 (as amended) sets out the priority of competing instruments registered in the land titles system. Section 78(5) of the Land Titles Act provides:

Priorities

78 (5) Subject to any entry to the contrary in the register and subject to this Act, instruments registered in respect of or affecting the same estate or interest in the same parcel of registered land as between themselves rank according to the order in which they are entered in the register and not according to the order in which they were created, and, despite any express, implied or constructive notice, are entitled to priority according to the time of registration. R.S.O. 1990, c. L.5, s. 78 (5).

30The Applicant submits that, because the Mortgage was registered before the CPL at issue, it enjoys priority and the Applicant is entitled to an order discharging the CPL from title to the Property.

31Counsel for the Applicant did not refer me to the factually similar and highly instructive case of Royal Canadian Mortgage Investment Corp v Mendes, [2019] OJ No 5329, 2019 ONSC 6039, [2019] OJ No 5329. In that case, the mortgagee brought an application for orders lifting certificates of pending litigation so that it could complete the sale of property to a third party under power of sale, and pay surplus proceeds into court. Justice P. Perell held that that the court had no jurisdiction to vacate a registered instrument at the instance of a mortgagee during the process of completing a mortgage power of sale proceeding. Justice Perell wrote, at paras. 34-38:

34 In accordance with the Mortgages Act that governs mortgage power of sale proceedings, Royal Canadian Mtg's Application to vacate these instruments against the Seneca Hill Dr. Property is unnecessary because of the operation of s. 35 of the Act. Section 35 states:

35. Subject to the Land Titles Act and except where an order is made under section 39, a statutory declaration by the mortgagee, or the mortgagee's solicitor or agent as to default, a statutory declaration proving service, including production of the post office receipt of registration, if any, and a statutory declaration by the mortgagee or the mortgagee's solicitor that the sale complies with this Part and, where applicable, with Part II, is conclusive evidence of compliance with this Part and, where applicable, with Part II, sufficient to give a good title to the purchaser.

35 This section enables a mortgagee (or his or her lawyer or agent) to prove by means of a statutory declaration, that a power of sale was properly exercised and to give effect to the power of sale. The concluding words of s. 35 give effect to the power of sale by making the statutory declarations "sufficient to give a good title to the purchaser". This section forecloses or extinguishes the equities of redemption of those persons who were given notice of the exercise of the power of sale. It does not, however, expunge the registered Instruments; that is not necessary. If the mortgagee forecloses or if the mortgagee exercises a power of sale, then the equities of redemption, if any, of the subsequent encumbrancers, claimants, or owners will be extinguished by operation of law.

36 I am not aware of any jurisdiction that would empower the court to vacate Instruments Nos. AT5094578 and AT5095131 at the instance of a mortgagee during the process of completing a mortgage power of sale proceeding. Royal Canadian Mtg. relies on the law about vacating a certificate of pending litigation, but that law concerns the parties to a dispute about the ownership of land; i.e., in the immediate case, it concerns whether Myra could have the Certificate of Pending Litigation vacated. Royal Canadian Mtg is not a party to that litigation.

37 Myles was legally entitled to register the various Instruments that he registered. As a result of his registration of those Instruments, he was given notice of the power of sale proceedings, which provided him with an opportunity to redeem, which he did not exercise.

38 Royal Canadian Mtg. ought not to have brought this Application, and it ought rather to have responded to Mr. Chen's requisition letter by advising him that good title would be conveyed pursuant to s. 35 of the Mortgages Act.

32I adopt and rely on Justice Perell’s analysis in Royal Canadian Mortgage, which is apposite here. 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 Applicant’s remedy lies in section 35 of the Mortgages Act, RSO 1990, c. M40 (as amended) which now provides:

35 Subject to the Land Titles Act and except where an order is made under section 39, a document that contains all of the following is conclusive evidence of compliance with this Part and, where applicable, with Part II, and is sufficient to give a good title to the purchaser:

1. A statutory declaration by the mortgagee or the mortgagee’s solicitor or agent as to default.

2. A statutory declaration proving service, including production of the original or a notarial copy of the post office receipt of registration, if any.

3. A statutory declaration by the mortgagee or the mortgagee’s solicitor that the sale complies with this Part and, where applicable, with Part II.

33While the language of section 35 of the Mortgages Act has been amended since Royal Canadian Mortgage, the implication is the same. The Applicant can pass good title to a purchaser if it satisfies the statutory requirements. This application is unnecessary.

34At the same time, I am not satisfied, as Perell J. was in Royal Canadian Mortgage, that the Respondent has lost her right to redeem the Mortgage. Since Nurse first defaulted on the Mortgage, the Applicant has steadfastly refused to recognize the Respondent as an encumbrancer on the Property or otherwise as an individual with an equitable right to redeem the Mortgage. In the circumstances, it is unclear whether Applicant can lawfully avail itself of section 35 of the Mortgages Act without first giving the Respondent a meaningful opportunity to redeem the Mortgage. But that is not a question I need to decide.

35The application to lift the CPL is dismissed, without prejudice to the Applicant’s rights under sections 35 and 36 of the Mortgages Act.

36As a practical matter, I observe that it is has always been an option for the Applicant to just sell the Property to the Respondent. The Respondent arranged financing in 2023 and sought to purchase the Property in November 2023 for $424,000 before the Applicant sold the Property to a third party for substantially less. If the Property is sold to a third party for less than the assessed fair market value of the Property, or even what the Respondent was willing and able to pay, one can easily anticipate a future improvident sale claim. The Applicant is entitled to terminate the agreement of purchase and sale with the third party “in its sole discretion without liability of any kind to the Buyer and the deposit returned to the Buyer without interest, penalty or deduction.” The Applicant is urged to be pragmatic and fair-minded in choosing its next step.

37The Respondent is entitled to her costs of the Application. If the parties are unable to resolve the issue of costs between them, I will receive the Respondent’s costs submissions, not to exceed five pages, double spaced, excluding a bill of costs and attachments, by not later than June 24, 2025 by email to my judicial assistant at angela.luckach@ontario.ca. I will receive the Applicant’s responding costs submissions, not to exceed five pages, double spaced, excluding a bill of costs and attachments, also by email to my judicial assistant, by not later than July 8, 2025. There shall be no reply submissions in the absence of leave of the Court.

Justice M.A. Cook

Released: June 11, 2025

CITATION: MCAN Home Mortgage Corporation v Broad, 2025 ONSC 3489