Executive Summary: Key Legal and Evidentiary Issues

• Urgent, ex parte motion for a Certificate of Pending Litigation (CPL) over investment property at 2991 Petawawa Boulevard based on an alleged equitable and beneficial interest.
• Core factual dispute over alleged misrepresentations by intermediary Tarvinder Sobti regarding the property’s ownership, impending power-of-sale purchase, and structuring of the deal as a share purchase to avoid taxes.
• Evidentiary concerns arising from the plaintiff’s heavy reliance on hearsay from Mr. Sobti, with little or no direct evidence of communications or dealings with the corporate defendants or Mr. Dhaliwal.
• Legal test for a CPL under s. 103 Courts of Justice Act and related caselaw, including whether there is a triable issue supporting a constructive trust claim and whether it is equitable to tie up the property.
• Discretionary factors weighing against a CPL: plaintiff’s status as a shell corporation, absence of evidence that the property is unique, availability and adequacy of damages (including return of the $250,000 deposit and punitive damages), and speculative evidence of a pending sale.
• Prejudice analysis found to be neutral, as the court inferred potential prejudice to both sides but had no direct evidence from the defendants due to the ex parte nature of the motion.

Background and parties

This case arises from an aborted commercial real estate investment involving the property municipally known as 2991 Petawawa Boulevard in Petawawa, Ontario. The plaintiff, 1561178 BC Ltd., is a corporation incorporated for the sole purpose of acquiring this property and owns no other assets. It is therefore a classic “single-purpose” or shell company. The defendants include two Ontario numbered corporations—1001215695 Ontario Ltd. (“10012”) and 1001433633 Ontario Corporation (“10014”)—along with individuals Baljit Singh Dhaliwal and Tarvinder Sobti, and a U.S. entity, Vitolos LLC. The motion before the court was brought by the plaintiff against all defendants seeking leave to register a Certificate of Pending Litigation (CPL) on title to the property.

Facts leading to the dispute

According to the affidavit of Jatinder Singh, the plaintiff’s representative, in October 2025 he was approached by defendant Tarvinder Sobti with what was presented as an attractive investment opportunity. Mr. Sobti allegedly represented that the property was for sale, that he knew the owner—Mr. Dhaliwal—and that his own employer was aware of potential tenants for the property, making it, in Mr. Singh’s view, a safe investment. He also offered to act as an intermediary or broker in exchange for a facilitation fee to be built into the purchase price.
On 13 November 2025, the plaintiff entered into an Agreement of Purchase and Sale (APS) with 1001215695 Ontario Ltd. (10012) for a purchase price of $2,350,000 with a closing date of 21 January 2026. Before entering the APS, Mr. Sobti told Mr. Singh that 10012 was not yet the registered owner but was in the process of acquiring the property under power-of-sale proceedings. Mr. Singh maintained that, relying on those representations, the plaintiff was nonetheless willing to contract with 10012 even though it did not yet hold legal title.
Mr. Singh further stated that the transaction was explained by Mr. Sobti as being structured as a share purchase to avoid land transfer tax and to reduce tax implications and fees. On that basis, following execution of the APS, the plaintiff became concerned about paying the deposit directly to 10012, rather than to a real estate brokerage or to the seller’s lawyer in trust. Relying again on Mr. Sobti’s assurances—including his statement that the deposit would be held in trust by 10012 until it completed its own purchase of the property—the plaintiff wired a $250,000 deposit to 10012 on 13 November 2025.
Because of the proposed share-sale structure, Mr. Singh asked for financial disclosure from 10012 after signing the APS. When 10012 allegedly refused to provide that disclosure, Mr. Singh informed them that the plaintiff no longer wished to proceed and asked for the return of the $250,000 deposit. In December 2025 and early January 2026, Mr. Singh engaged in further communications with Mr. Sobti concerning the return of the funds, but the deposit was never repaid.

Subsequent developments regarding ownership

In January 2026, Mr. Singh learned that another corporation owned by Mr. Dhaliwal, 1001433633 Ontario Corporation (10014), had completed the purchase of the property via the power-of-sale proceedings. He further alleged that, through information again provided by Mr. Sobti, one of the corporations that owned the property before the power of sale intended to repurchase it from 10014 and that this resale was imminent.
The plaintiff registered a caution on title to the property on 4 February 2026, but that caution later expired. The plaintiff then commenced the present action, seeking, among other relief, a declaration that it held an equitable and beneficial interest in the property and that the defendants had misused its deposit. It brought an urgent motion—initially challenged as to whether it could proceed ex parte—for leave to register a CPL against the property to preserve its alleged constructive trust interest and to prevent any transfer that might defeat its claims.

Procedural posture and relief sought on the motion

The court initially declined to hear the motion as an urgent ex parte matter because the plaintiff’s scheduling letter suggested that some defendants had counsel. After plaintiff’s counsel clarified that none of the defendants had counsel of record and alleged that they were evading service, the court allowed the motion to proceed on an urgent ex parte basis under Rule 42.01(3) of the Rules of Civil Procedure.
The immediate procedural relief sought was permission to register a CPL on the title to 2991 Petawawa Boulevard. Substantively, in its action the plaintiff claimed, among other things, judgment in the amount of $250,000 for return of the deposit plus $100,000 in punitive damages, along with other heads of loss such as lost profits. It also claimed a constructive trust or other equitable interest in the land itself, contending that its deposit monies were applied toward the acquisition of the property by the Dhaliwal-controlled corporations.

Legal framework for a certificate of pending litigation

The court reviewed the test for granting a CPL under section 103 of the Courts of Justice Act. The first requirement is that the plaintiff establish a “reasonable” claim to an interest in the land, often framed as whether there is a triable issue about that interest, rather than whether the plaintiff is likely to succeed at trial. Where the interest claimed is an equitable interest or constructive trust, the threshold remains the same: the plaintiff need only demonstrate that a genuine issue exists regarding that claimed interest, not that it will ultimately win.
Once that threshold is met, the court’s decision to order or refuse a CPL is discretionary and requires consideration of a range of factors. These include whether the plaintiff is a shell corporation, whether the property is unique, whether there is an alternative claim for damages and whether damages would be a satisfactory remedy, the presence or absence of a willing purchaser, and the comparative prejudice to each party if a CPL is or is not granted. These factors come from leading Ontario authorities and guide the equitable balancing under section 103.

Application of the test: interest in land

On the first part of the test, the court was prepared to accept that the plaintiff had shown a reasonable claim to an interest in the property. It had entered into an APS to purchase the property, and if its allegations of misrepresentation and misuse of the deposit funds against the defendants were ultimately proven, a constructive trust over the land might be an available remedy. The court emphasized that it was not making findings on credibility or the truth of the allegations at this stage but concluded that, based on the APS and the affidavit material, the plaintiff met the initial threshold for a triable claim to an interest in land.

Application of discretionary factors against issuing a CPL

Even though the threshold interest in land requirement was satisfied, the court found that almost all of the discretionary factors weighed against granting the CPL.
First, the plaintiff conceded during the hearing, in response to a direct question from the court, that it was indeed a shell corporation. It was incorporated solely to acquire this property and had no other assets. The plaintiff suggested that some of the defendant corporations were also shells, but there was no evidence to support that assertion, so it carried no weight. The plaintiff’s status as a shell corporation weighed against tying up the property with a CPL.
Second, there was no evidence that the property was unique. The plaintiff described it as an investment property and did not seek specific performance of the APS, instead acknowledging that the APS had been breached and that it no longer wished to close the transaction. These facts further undermined any claim that the land was unique in a way that would justify a CPL.
Third, the plaintiff had a straightforward alternative remedy in damages. Its primary claims were for a money judgment for the $250,000 deposit and $100,000 in punitive damages, along with other losses such as lost profits. Because the plaintiff no longer wanted specific performance and was fundamentally seeking monetary compensation, the court concluded that the CPL’s primary function would be to aid future enforcement of any judgment, rather than to protect a truly irreplaceable interest in land. This factor also weighed against granting the CPL.
Fourth, the court found that damages would be an adequate remedy. The deposit amount is fixed and easily quantifiable; any punitive damages would be quantified by the court at trial, and the lost-profit claim, while less straightforward, could still be assessed, especially in light of a letter of intent concerning potential tenancies that might provide objective evidence. Overall, the court determined that the plaintiff’s loss could be addressed through monetary compensation if liability were established.

Evidence of a pending sale and prejudice analysis

The plaintiff contended that 10014 was attempting to sell the property and relied on hearsay statements attributed to Mr. Sobti to suggest that a prior owner intended to repurchase the property from 10014. Plaintiff’s counsel also asserted that 10014 and Mr. Dhaliwal had a history of misconduct and that there were other judgments against him; however, none of this was supported by admissible evidence in the motion record. The court regarded the evidence of a pending sale or intention to sell as speculative and found this factor essentially neutral.
On the question of prejudice, Mr. Singh stated that without a CPL there was a real risk the property might be sold or transferred, undermining the plaintiff’s equitable interest and impairing its ability to recover the monies advanced. He further claimed to be unaware of any prejudice that defendants might suffer from the registration of a CPL. The court did not accept the latter assertion at face value. Given the ex parte nature of the motion, there was no direct evidence from the defendants about potential prejudice to them. At the same time, the court could infer that a CPL would restrict 10014’s ability to deal with its property, particularly if the plaintiff’s allegations were later found not to be made out. The judge therefore found that both sides could face prejudice—plaintiff if the land were sold and enforcing a judgment became more difficult, and defendants if their property rights were restricted by a CPL that might ultimately be unjustified. With no reliable, detailed evidence of prejudice from either side, this factor was treated as neutral.

Evidentiary concerns and the role of hearsay

A notable feature of the court’s reasoning was its concern that, at this early stage, the plaintiff’s case rested heavily on hearsay evidence attributed to intermediary Mr. Sobti. The record contained little or no direct communication between the plaintiff and 10012, 10014, or Mr. Dhaliwal himself. This raised concerns about the reliability and weight of the allegations for the purposes of granting a significant interlocutory remedy that would burden the property and affect third-party interests in the land registration system. Although the court still accepted that a triable issue existed, these evidentiary limitations reinforced the view that an intrusive remedy like a CPL was not justified at this point.

Outcome and implications

Balancing all the factors, the court concluded that, while the plaintiff had demonstrated a reasonable interest in the property sufficient to clear the initial threshold, it had not shown that it was equitable or appropriate to grant a CPL in the circumstances. The plaintiff’s shell-corporation status, the non-unique nature of the property, the clear availability and adequacy of monetary damages, the speculative evidence of a pending sale, and the largely hearsay-based evidentiary record all pointed away from granting the requested relief.
Accordingly, the motion for a Certificate of Pending Litigation was dismissed. The successful parties on this motion were the defendants, who avoided the registration of a CPL against the property. The endorsement does not specify any monetary award, costs, or damages ordered in favour of the defendants in connection with this motion, and based on the decision as provided, the total amount of any such award or costs cannot be determined from this document.