Case Comment: Luo et al. v. Wang et al., 2026 ONSC 2939 (released May 20, 2026)
Private lenders who advance large sums on a handshake and later try to claw security out of the borrower’s family real estate received a firm message from the court in this decision. A certificate of pending litigation (CPL) is not a substitute for taking proper security at the time of the loan, and registering an improper notice on title can poison a later request for equitable relief.
The Facts
Two private lenders, Luo and Zhou, who are common-law partners, brought the lawsuit. They are seasoned in the business, having lent money since 2018. They sued a married couple, Wang and Qiu, together with three companies tied to the husband’s car business, among them the luxury used-car dealer SG Auto.
The lenders claimed they had advanced large sums to the couple and the companies and were now seeking repayment of more than $2.5 million in principal, plus over $2.2 million in interest. They framed their claim broadly, raising breach of contract, breach of trust, deceit, conversion, unjust enrichment, and constructive trust. To protect their position, they also sought leave to register certificates of pending litigation against two properties held in Qiu’s name.
The defendants told a different story. Wang maintained that the money was never a personal loan to him or his wife but a capital investment in SG Auto under an oral profit-sharing arrangement, with the lenders to share in the dealership’s profits. He pointed out that one of the plaintiffs, Luo, had herself become a certified salesperson and later a director of SG Auto. Qiu, who solely owned the two properties the lenders were targeting, denied receiving any of their funds at all, and the plaintiffs’ own counsel ultimately conceded there was no evidence she had.
The Improper Land Titles Act Notice
In July 2025, one of the plaintiffs registered a notice on title to the Aurora home under s. 71 of the Land Titles Act, claiming an unregistered interest in the land, and did so without notice to Qiu. The court found the notice clearly improper and ordered it removed. It rested on a constructive trust claim, and s. 62(1) of the LTA expressly bars registering notice of any express, implied, or constructive trust. The plaintiffs’ decision to register without notice, and their refusal to remove the notice despite repeated requests, also counted against them on their own motion, since a CPL is a form of equitable relief and the moving party’s conduct matters.
The CPL Test and Why the Plaintiffs Failed It
The threshold question on a contested CPL motion is whether there is a triable issue as to a reasonable claim to an interest in the land. While a constructive trust claim can ground a CPL, the plaintiff must have some evidence enabling the inference that the funds went into the property. Merely alleging that monies were used to fund improvements or acquisitions is not enough, and beliefs and speculation cannot sustain a triable issue. Here, the court found the claims rested on timing and speculation alone, and the plaintiffs’ request was, in substance, an attempt to secure execution before judgment, which is not the purpose of a CPL. Even if a triable issue had existed, the court would have exercised its discretion against a CPL. The harm to the defendants and the innocent third party purchaser was extreme, the properties were not unique to the plaintiffs, damages remained available, and the plaintiffs’ conduct with the improper notice told against equitable relief.
Takeaways for Real Estate and Lending Practices
For lawyers acting for private lenders, the message is to paper the loan and take real security at the outset, whether a mortgage, a guarantee from the spouse on title, or at minimum documented terms identifying what the funds are for. A lender who waits until default to assert an interest in family real estate will need actual tracing evidence, not coincidental timing. For lawyers acting on purchases and sales, this decision is a reminder to search for and take seriously s. 71 notices, and to know that a notice asserting a constructive trust is prohibited by s. 62(1) and vulnerable to swift removal. Finally, for anyone tempted to register first and litigate later, improper registrations are not free. The court treated the unilateral notice as disentitling conduct, and it may well influence the costs disposition still to come.
Luo v. Wang is a tidy illustration of a hard truth in lending. The time to secure a loan is when the money goes out the door, not when it fails to come back. The plaintiffs advanced substantial sums, took no registered security, and were left trying to convert a damages claim into an interest in someone else’s home. The court declined to let them, and their improper notice on title only deepened the hole. A CPL guards a genuine stake in land. It is not a lever for pressuring a borrower’s family, nor a remedy for the security a lender neglected to take. Lenders who remember that at the outset will rarely find themselves litigating it at the end.
