Sometimes the hardest advice to give a client is also the most important: “Sounds good, but you can’t do that.”
After nearly 20 years as a litigator, I can say that conversation still doesn’t come easily. But one of the most important parts of litigation is making sure the remedy matches the legal interest that can actually be established.
A recent decision of the Ontario Superior Court of Justice is a good example.
In Hassan v. Hassan and Stratford Esso Inc., Justice J. Mills considered a motion for a Certificate of Pending Litigation (“CPL”) involving an Esso gas station and convenience store in Stratford, Ontario.
I acted for the defendants.
The dispute
The property was registered solely in the name of Stratford Esso Inc. The plaintiff alleged that he had invested approximately $2.3 million in the company and toward the purchase and improvement of the property.
He claimed an equitable interest in the property based on constructive trust and unjust enrichment and sought a CPL while his underlying claims were being litigated.
The motion was dismissed.
An investment in a corporation is not necessarily an interest in its property
The key issue was the distinction between an interest in a corporation and an interest in property owned by that corporation.
Justice Mills noted that the plaintiff might have a claim relating to his interest in Stratford — as a shareholder, if he could establish that status, or potentially as a creditor.
That did not mean he had an interest in Stratford’s property.
As Justice Mills explained:
“The shareholders can assert an ownership interest in the shares of Stratford, but not the property owned by Stratford, whether it is real or personal property.”
The Court also considered the plaintiff’s constructive-trust and unjust-enrichment arguments. Ultimately, it found that those claims did not establish the necessary interest in the land for purposes of a CPL.
The Court noted that the plaintiff’s claim was, in substance, seeking to protect his investment so that it would remain available to satisfy a potential judgment. A CPL, however, is not simply a mechanism for securing a future monetary judgment.
Because the plaintiff could not establish the required interest in the property, the Court did not need to consider the additional factors applicable to a CPL motion.
The defendants were awarded $12,090.24 in partial-indemnity costs, inclusive of fees and HST.
The takeaway
The decision is a useful reminder that the remedy has to match the legal interest you can actually prove.
A substantial investment in a corporation does not, by itself, create an ownership interest in the corporation’s real estate. Before seeking a CPL, the important question is whether the claimant can establish a reasonable claim to an actual interest in the land.
Case: Hassan v. Hassan and Stratford Esso Inc., Ontario Superior Court of Justice, September 2, 2026, Court File No. CV-25-00003637-0000.
