Most title searches turn up nothing. 2628793 Ontario Corporation v. Stolp, 2026 ONSC 3881, released July 6, 2026, asks whether a purchaser has any obligation to check further when the register does not tell the whole story — and gives a rare judicial account of what adequate diligence on a corporate vendor looks like.
The transaction
In 2016, Stacy and Lisette Stolp bought a 37-acre rural property at Sauble Beach for $374,000, intending to develop it. Title went into 2546603 Ontario Corporation (“254”), of which Mr. Stolp was sole director and shareholder; Ms. Stolp says her signature on the direction was forged. The couple separated in 2018, and Ms. Stolp knew by September of that year that 254 held the property. In May 2020 she obtained a non-depletion order against Mr. Stolp in the family proceeding. She registered nothing — no caution, no certificate of pending litigation.
The plaintiff numbered company, through its principal Nitin Jain and realtor Ted Russell, bought the property from 254 for a final price of $385,000, closing on November 26, 2021 with no encumbrances or instruments on title. Ms. Stolp learned of the sale in January 2022 and registered a restriction referencing the non-depletion order the following month. The parties agreed the conveyance engaged s. 2 of the Fraudulent Conveyances Act and was void as against her unless the purchaser could bring itself within the s. 3 exception.
Who can complain about the paperwork
Ms. Stolp first attacked the agreement of purchase and sale, arguing it was accepted after the irrevocable date and void under the Statute of Frauds. Coats J. assumed the defect but held it made no difference: both parties treated the agreement as binding, amended it twice and closed, which ratified it. Critically, Ms. Stolp was not a party:
Ms. Stolp has no standing to challenge the APS on the basis of the timing of the signatures. She was not a party to the contract. (para. 85)
The rule the court applied is that only parties may rely on such defects, and third parties lack standing unless the defect engages fraud or illegality affecting their rights (para. 61). Here it did not — useful reassurance for anyone whose file holds an offer accepted just past the irrevocable date.
Good consideration means “not grossly inadequate”
The good-consideration branch of s. 3 was fought between two appraisers. As Coats J. set out at para. 65, adequacy turns on whether the consideration is grossly inadequate, not on whether it reflects the highest possible value: Makwana v. Bishnu, 2019 ONCA 543. Good consideration is consideration “which is arguably in the range of fair market value.”
The court preferred the purchaser’s expert, who valued the unserviced, unrezoned parcel at $339,000 to $415,000, over the defendant’s estimate of roughly $1.25 million. The $375,000 offer fell squarely within that range (para. 135).
What counted as diligence
This is where the decision earns its place in a solicitor’s file. The purchaser argued it had done everything the market expects: a corporate profile search, a parcel register confirming 254 as owner since January 2017, and title and GeoWarehouse searches showing no encumbrances or cautions.
The court’s own findings, however, rested on three documents. First, the Seller Customer Service Agreement, in which Mr. Stolp warranted sole and exclusive authority to offer the property for sale. Second, clause 22 of the agreement of purchase and sale, the standard Family Law Act warranty that spousal consent was not necessary. Third, the certificate and articles of incorporation of 254, naming Mr. Stolp as its only incorporator and only director, with nothing to suggest his authority was subject to anyone’s approval. On those documents, Coats J. held:
It was reasonable for Mr. Russell to rely on these three documents. It is not reasonable to expect an agent for a purchaser to go behind these documents and inquire as to whether the seller has a spouse who might have an interest in the Property. (para. 214)
Mr. Stolp had in fact told the realtor several times that he was going through a divorce, including that his trial was days away. That still did not taint the purchase. Knowledge of a divorce, the court held at para. 216, is not knowledge that the vendor is alleged to have acquired the property fraudulently — and here nothing was done with the information. The deal was not sped up or steered around the family trial.
Land titles, the curtain, and the indoor management rule
Ms. Stolp also invoked s. 78 of the Land Titles Act, arguing that because 254 acquired title through a forged direction, its transfer onward could be set aside. Coats J. left the forgery question to the family trial and held the argument failed regardless: no forged instrument was ever registered on title, and s. 78(4.2) expressly preserves subsequent registered instruments that are not themselves fraudulent. Applying Froom v. Lafontaine, 2023 ONCA 519, the court held the purchaser could rely on the register and on the corporate records establishing Mr. Stolp’s authority — the curtain principle, and the indoor management rule codified in s. 19 of the Business Corporations Act. Ms. Stolp was ordered to delete her registration.
For your file
Three things travel from this decision to the ordinary transaction.
First, the clause 22 spousal warranty is not boilerplate. Together with the vendor’s warranty of authority and the corporate records, it is what defeated a fraudulent conveyance claim here. Get all three, and keep them in the file.
Second, a vendor’s marital difficulties are not, by themselves, a title problem, and knowing about them does not oblige you to investigate the vendor’s family law affairs. What mattered is that nothing in the transaction’s timing or structure responded to that knowledge.
Third, the losing party held an unregistered equitable claim she knew about for more than three years. If you act for a client with a claim against property registered in someone else’s name — a separating spouse, a beneficiary, a partner — the caution or CPL is the cheapest insurance on the file. The register is what the market reads.
