COURT FILE NOS.: CV-19-2644 and CV-20-624 DATE: 20200629 SUPERIOR COURT OF JUSTICE– ONTARIO

BETWEEN:

2235209 ONTARIO INC.

Plaintiff

-and-

SEDONA LIFESTYLES (ROMETOWN) INC., CLAUDIO POSOCCO, DIVERSIFIED CAPITAL INC., RUSSELL GIANNOTTA a.k.a. russ giannotta a.k.a. oreste giannotta and 2596095 ONTARIO INC.

Defendants

AND BETWEEN:

GUY SALT

Plaintiff

-and-

SEDONA LIFESTYLES (ROMETOWN) INC., CLAUDIO POSOCCO, DIVERSIFIED CAPITAL INC., RUSSELL GIANNOTTA a.k.a. russ giannotta a.k.a. oreste giannotta and 2596095 ONTARIO INC.

Defendants

BEFORE: Ricchetti, RSJ.

COUNSEL:

M. Ross for Guy Salt M. Solmon and S. Morris for 2235209 Ontario Inc. J. Preece for 2596095 Ontario Inc. and Sandor Balla D. Michaud and S. Mosonyi for Diversified Capital Inc. and Russell Giannotta S. Price for Sedona Lifestyles (Rometown) Inc. and Claudio Posocco

HEARD: June 15, 2020 by Videoconference on consent

ENDORSEMENT

Contents

THE MOTIONS . 2 THE PARTIES . 3 THE BACKGROUND .. 4 The Purchasers’ First Proceeding . 4 The Appeal in the First Proceeding . 5 The Sale to 259/Balla . 7 The 2019 Sedona Proceeding . 8 The Actions of Salt and 223 leading up to these Motions . 9 The Position Of 223 And Salt 10 THE ANALYSIS . 11 INJUNCTION .. 11 A Serious Issue to be Tried? . 11 Irreparable Harm .. 16 Balance of Convenience . 17 Conclusion on the Interim Injunction . 19 THE MAREVA INJUNCTION .. 20 CPL .. 20 CONCLUSION .. 21 COSTS . 21

THE MOTIONS

[1] These are motions brought by 2235209 Ontario Inc. ("223") and Guy Salt ("Salt") seeking various interim orders essentially requiring the Defendants, Oreste (Russell) Giannotta and Diversified Capital Inc. ("Diversified"), to:

a) hold the proceeds from the sale of Lot 13 in trust; and b) an injunction prohibiting any dealings with Lot 5 and a CPL on Lot 5; and c) a Mareva Order.

THE PARTIES

[2] Sedona Lifestyles (Rometown) Inc. (“Sedona”) was the real estate developer and owner of the Lots (“Development”). Claudio Posocco is the president of Sedona (“Posocco”).

[3] On February 22, 2013, Salt entered into an agreement of purchase and sale (“APS”) for Lot 5 in the Development.

[4] On February 15, 2013, 2235209 Ontario Inc. in trust (“223”) entered into an APS for Lot 13 in the Development.

[5] Diversified is a lender. Russell Giannotta is the principle of Diversified (“Giannotta”).

[6] 2596095 Ontario Inc. (“259”) was the purchaser of certain lots including Lots 5 and 13 from Sedona in August 2017. Sandor Balla (“Balla”) is the principle of 259. 259 is the current owner of Lot 13.

[7] 223 commenced its action in June 2019.

[8] Salt commenced his action in February 2020.

[9] The Plaintiffs, in these actions, seek a judgment setting aside the sale by Sedona to 259, setting aside the mortgage between 259 Inc. and Diversified, and requiring Sedona to sell the Lots to the Plaintiffs after an accounting.

THE BACKGROUND

The Purchasers’ First Proceeding

[10] Many of the necessary background facts are set out in 2575105 Ontario Inc. v Diversified Capital Inc., 2017 ONSC 3809. I will not repeat them here in detail, but, for the purpose of these motions, the following summary of facts is relevant:

• The Development went into financial difficulties. Additional financing was necessary in an attempt to save the Development.
• Eventually, Construction Liens were filed against the Development. The registered mortgages on title to the Development went into default.
• By 2017 most of the Lots had been sold. Three remained.
• At the time, there were two mortgages on title. The first mortgage – the Morrison mortgage – was relatively small. The second mortgage was held by Diversified. The Diversified mortgage was for a substantial amount of money.
• Notices of Power of Sale were issued by both Morrison and Diversified.
• Salt and 223 Inc., as part of a group of purchasers who had entered into agreements to buy lots in the Development, came up with a plan - to pay out/acquire the Morrison Mortgage and once purchased, to sell to themselves their lots, thereby “cutting” out the very large Diversified Mortgage and any construction liens.
• However, before these purchasers could effect their plan, Diversified acquired, by paying out the amount outstanding, the Morrison Mortgage to protect its second mortgage, a right which it was entitled to take.
• Diversified issued a number of Notices of Power of Sale, the last Notice of Power of Sale included the amounts owed under the Morrison Mortgage and the Diversified Mortgage (“Diversified Mortgages”). Diversified claimed the amount owing under the Diversified Mortgages was $5,266,951.
• Salt and 223, along with another purchaser, brought an action in 2017. These purchases sought various orders to grant them the right to purchase the Morrison Mortgage. The parties to this proceeding included Salt, 223, Diversified and Sedona.
• In the motion materials, the Plaintiffs (including Salt and 223) alleged there was collusion between Sedona and Diversified and disputed the amounts owing under the Morrison and Diversified Mortgages. By the time the motion was heard, no one contested the amounts claimed under both the Diversified Mortgages. The issue of collusion was not pursued in oral submissions.
• For the reasons set out, in July 2017, this court dismissed the motion by the purchasers (which included Salt and 223) and awarded costs against Salt and 223.

The Appeal in the First Proceeding

[11] After this court dismissed the motion, the Plaintiffs in the First Proceeding (including Salt and 223) sought to appeal this court’s dismissal order.

[12] Eventually, both Salt and 223 settled the appeal and their claims.

[13] 223 agreed to abandon its appeal by Minutes of Settlement dated August 24, 2017. The settlement provided that:

a. 223 “agree to abandon the Appeal and deliver a Notice of Abandonment in respect of the Appeal by August 25, 2017 on without costs basis.” b. 223 “agrees that the agreement of purchase and sale with Sedona dated February 15, 2013 in respect of Lot 13 (the "Lot 13 APS") is hereby terminated and of no force and effect. The termination of the Lot 13 APS is without prejudice to [223's] right to pursue any future claims against Sedona in damages.” c. “Diversified and Sedona agree that upon satisfaction of the terms of settlement set out in paragraphs 1 and 2 above that: a. Diversified will enter into a mutual full and final release in respect of the issues raised in the Application in a form acceptable to Diversified acting reasonably; and b. Diversified will agree to forego the enforcement of the costs award owing to it against [223] in respect of the Application pursuant to the Costs Endorsement of Justice Ricchetti dated August 14, 2017.”

[14] Salt executed similar Minutes of Settlement on August 18, 2017. Simply, the Salt settlement also provided that:

1. Salt agreed to abandon the Appeal;
2. Salt agreed to terminate his APS with Sedona; and
3. Salt agrees to provide a full and final release in respect of the claims made in the First Proceeding and his purchase agreement with Sedona.

[15] Given the essentially identical minutes of settlement, I will refer to them as the settlements.

[16] The submission in the Salt factum that “There was no formal settlement.” belies what really occurred. Releases were never formally executed. However, in my view, this makes no difference since there is no dispute a written settlement was agreed to and executed by all parties.

[17] As a result of the settlements, the appeal was abandoned, Diversified waived the costs it had been awarded, and the 223 and Salt APS for their respective Lots were terminated.

The Sale to 259/Balla

[18] In August 2017, after this court’s decision and around the time of the settlements, Diversified approached Balla to acquire the remaining unsold Lots.

[19] Balla agreed to buy the remaining lots through 2596095 Ontario Inc. (259) for $3,650,000 from Sedona, with the agreement of Diversified. In other words, the sale was not by Diversified under its outstanding Power of Sale but rather by Sedona, with Diversified’s approval since the sale was less than the amount claimed outstanding by Diversified under the Diversified Mortgages and because there was collateral security from Sedona and Posocco. It is important to note that proceeding in this manner was agreed to by Posocco (who had guaranteed the amounts owing under the Diversified Mortgages), by Sedona which was the primary debtor, and this sale occurred after Salt and 223 had terminated their APS and agreed to provide releases.

[20] The Diversified Mortgages were discharged on closing. Diversified agreed to finance Balla’s purchase through a new “purchase money” mortgage (“Diversified New Mortgage”) for substantially the entire purchase price.

[21] The sale to 259 was completed on September 11, 2017. The evidence on this motion establishes that this was a bona fide, arm’s length purchase. I reject the Plaintiff’s submission that there is something nefarious or “stinks” in the surrounding circumstances of the sale and the financing. The fact that Balla knew Diversified’s principal does not make this a non-arm’s length transaction. It should be noted that Diversified and Posocco were free to deal with the Lots as they saw fit since, Salt and 223 no longer had an interest in the Lots, having already executed the settlements. I will deal with some of the “circumstances” below.

[22] 259 sold Lot 9 in 2018.

[23] 259 entered into an APS to sell Lot 13 on January 26, 2020. Again, the only evidence is that this was an arm’s length, bona fide, purchase. This sale was completed on May 28, 2020. I reject the submission that 259 did anything wrong in law, by completing the sale three days after the Plaintiffs sought a date for this injunction application. At the time of completing the sale, there was no injunction or other order preventing the sale. Most importantly, 259 had an agreement of purchase and sale with an innocent third party and it had a contractual obligation to complete the sale or face a claim for damages or a motion to compel the completion of the transaction. The action by 259 to complete the sale was commercially reasonable and lawful.

[24] 259 has not yet sold Lot 5 but it is nearly complete and very close to being ready for marketing for sale.

The 2019 Sedona Proceeding

[25] In March 2019, Sedona brought an action against Diversified claiming that it over-recovered on its mortgages. Sedona alleged fraud. Posocco, in an affidavit, alleged that certain mortgage documents relied on by Diversified were fraudulent, containing his forged signatures. Diversified disputed the allegations. Sedona suggested that the amount of the Diversified’s claim as outstanding under the mortgages was overstated by approximately $2,000,000.

[26] Sedona brought a motion for a CPL against 259 and Diversified. The motion was heard on January 22, 2020. On February 6, 2020 this court dismissed the Sedona motion. See the reasons for details of the allegations and this court’s decision at Sedona Lifestyles (Rometown Inc.) v. Diversified Capital Inc., 2020 ONSC 750. There were several reasons the motion was dismissed, but the court stated the following regarding the allegations of forgery:

[82] However, I note for the purpose of this motion, the Plaintiffs have not put forward any evidence, expert or otherwise, to support this claim. The Plaintiffs rely on bald statements. I note that, at the commencement of the hearing, the Plaintiffs had proffered a secretary's affidavit which attached a letter from a handwriting person. After objection, the Plaintiffs chose not to proceed to seek to admit this document. In any event, this issue is best left for trial.

The Actions of Salt and 223 leading up to these Motions

[27] Both Plaintiffs became aware of the Posocco’s allegations in 2019. However, they chose not to seek an injunction. They simply decided to observe the Sedona proceedings – until January 2020.

[28] 223 commenced this action in the middle of 2019.

[29] Salt commenced this action shortly after this court’s decision in the Sedona proceeding.

[30] On January 20, 2020, several days prior to the motion being heard in the Sedona proceeding, in January 2020, the Plaintiffs registered a Caution on title to the Lots despite the fact:

a) The court had previously dismissed their motion for an injunction and a CPL to prevent Diversified from dealing with the Lots; b) Salt and 223 had executed the settlements which terminated their APS; and c) The APS prohibited the registration of a Caution.

[31] The Sedona motion was dismissed, and the Caution expired (Cautions are time limited).

[32] Salt and 223 then sought to register another Caution, but this was rejected by the Land Registry Office.

[33] Salt and 223 then sought to register a Notice of a Pending Claim. This registration was also rejected by the Land Registry Office.

[34] Salt and 223 then took no immediate steps to bring this motion. Several months went by.

[35] In May 24, 2020, Salt and 223 sought a date for an interlocutory motion. A date of August 2020 was provided with a timetable for the various steps to be completed.

[36] When interim terms could not be agreed upon between the parties, the Plaintiffs brought this motion for interim relief.

The Position Of 223 And Salt

[37] Essentially, 223 and Salt now seek to set aside their settlements and require Sedona to transfer the Lots to them. The position of Salt and 223 is that the alleged amount owing to Diversified mortgages was a “fraud” (relying on the allegations by Posocco of forgery in the Sedona Proceeding) thereby vitiating the settlements. Salt and 223 seek an accounting to ascertain the amount owing under the Diversified Mortgages.

[38] In these motions, the Plaintiffs seek an interim order to “freeze” monies from the sale of the Lot 13 and prevent any dealings with Lot 5 until the motion for an interlocutory order is heard.

THE ANALYSIS

[39] Essentially, the motions seek an interim injunction, a CPL, and a Mareva Order until the application is heard in August 2020. For the reasons set out herein, the motions are dismissed.

[40] The test for an injunction (including a Mareva injunction) is not in dispute.

[41] The test for a CPL is not in dispute.

INJUNCTION

A Serious Issue to be Tried?

[42] As stated in RJR – MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311:

What then are the indicators of "a serious question to be tried"? There are no specific requirements which must be met in order to satisfy this test. The threshold is a low one. The judge on the application must make a preliminary assessment of the merits of the case.

Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and third tests, even if of the opinion that the plaintiff is unlikely to succeed at trial. A prolonged examination of the merits is generally neither necessary nor desirable.

[43] Despite the low threshold, I am not persuaded that the Plaintiffs have met this part of the test.

[44] The Plaintiffs’ claim relies on fraud – the alleged forgery and circumstances of fraud. There are a number of serious problems to such a claim based on the evidence in this motion:

a) These Plaintiffs took no steps to ascertain the amount owing under the Diversified mortgages prior to the motion in the First Proceeding and prior to executing the settlements. Given their equitable interest in the Lots, Salt and 223 could have taken steps to ascertain the amount Diversified claimed under the Notice of Power of Sale by seeking a reference to determine the amount outstanding under the Diversified Mortgages. They did not do so. Despite not having chosen to seek any judicial determination of the amount outstanding under the Diversified Mortgages, Salt and 223 nevertheless agreed to terminate their APS and execute the settlements. It is now difficult to challenge the amounts owing under the Diversified Mortgages.

I am not persuaded the “concession” in the First Proceeding, that Salt and 223 took no issue with respect to the amount owing under the Diversified Mortgages, amounts to issue estoppel. It was not a finding of fact. It was not made on a full record but rather on an interlocutory motion. However, the submission that Salt and his fellow purchasers “would have paid out the true balance outstanding on the mortgages” falls woefully short given their prior concession as to the amount owing under the Diversified Mortgage and their lack of steps to ascertain the “true balance” on the Diversified Mortgages. In any event, they did not care what the outstanding amount was on the Diversified Mortgage since their plan was NOT to pay the Diversified Mortgages but was to only pay the Morrison mortgage (a mortgage of which there is no dispute as to the amount that was owing).

b) The evidence of fraud is nothing more than bald allegations of a third party. The fundamental basis for the fraud allegation by these Plaintiffs is Posocco’s statements in his affidavit in the Sedona Proceeding. Posocco’s affidavit in the Sedona Proceeding is simply attached as an exhibit to this motion. There is no new affidavit by Posocco in this proceeding. Diversified denies the alleged forgery. Parties were cross-examined in the Sedona Proceeding. Yet, in these proceedings, there is nothing more added to the evidentiary record on the issue of fraud or forgery in this motion. As set out in my reasons in the Sedona Proceeding, and continue to be the case, Posocco’s allegations of forgery were unsupported bald statements made three years after he had confirmed to the court that the amounts claimed outstanding under the Diversified Mortgages were accurate. This court rejected that Posocco’s statements raised a serious issue to be tried because, among other reasons, the surrounding circumstances suggested this was nothing more than Posocco trying to avoid or reduce his or Sedona’s liability to Diversified. Salt and 223 add no further credible direct or circumstantial evidence.

The calculations put forward by the Plaintiffs as to what was outstanding under the Diversified Mortgages starts with the assumption that Posocco’s allegations of forgery are true. Such calculations do not assist to establish a serious issue to be tried.

c) The alleged “badges” of fraud are mere speculation. The Plaintiffs submit that their “further investigation” (beyond the Posocco allegations) discovered “badges of fraud”. In my view, the circumstances raised by the Plaintiffs are nothing more than pure speculation – as submitted the circumstances “stink”. A few examples demonstrate why these submissions do not raise an inference of fraud:

i. The Plaintiffs point to the fact that the Lots were not listed for sale by Diversified and that the Lots were not sold under the Power of Sale. The difficulty with this “circumstance” is that Sedona agreed to sell the Lots for $3,650,000. If there was a shortfall in the amount recovered by Diversified under its Mortgages, that is between Sedona and Diversified. At the time of the sale to 259, Salt and 223 had relinquished their APS and claims against Diversified and Sedona. Diversified and Sedona could sell the Lots in any manner they agreed. I find there was no obligation to list or sell under the Power of Sale if the mortgagor and mortgagee agree to pursue a particular manner of proceeding to maximize the sale price. ii. The Plaintiffs point to the fact there was no real estate agent in the sale to 259. So what? Diversified introduced Balla and Diversified received a fee for the introductions. But again, so what? Sedona agreed to the “commission”. iii. The Plaintiffs point to the fact the same lawyer acted for all parties in the sale to 259. So what? iv. The Plaintiffs point to Diversified having other collateral security for the loan secured by its mortgage. Again, so what? All the parties agreed to the sale including the creditors Sedona and Posocco. v. The Plaintiffs point to the Lot 13 sale on May 28, 2020, a few days after this motion date was chosen. For the reasons set out above, I find nothing improper or suggestive of fraud in the completing this sale to an innocent third party. vi. The Plaintiffs point to documents missing from 259/Balla such as no proof of payment of the deposit for the purchase. I am not persuaded that the identified “missing” documents are significant, and I note that the materials questioning the “missing” documents was filed only 3 days before this hearing. vii. The Plaintiffs say the amount of the sale to 259 was grossly inadequate, yet, the evidence does not demonstrate this. Again, the submission by Salt that “There was no consideration for the transfer, or the consideration was grossly inadequate.” This submission belies what really happened regarding 259’s purchase of the Lots in 2017 and Diversified’s New Mortgage. In any event, what should be remembered is that the sale of the Lots to 259 was a sale in a Development that had essentially gone “under”. viii. I do not find that the sale by Sedona to 259 was “commercial absurdity”. Diversified wanted to maximize its recovery on its mortgages, Sedona wanted the Lots sold to reduce it and Posocco’s financial exposure, and Balla was a willing purchaser at a price well below the amount claimed outstanding by Diversified under its Mortgages.

I have considered the alleged circumstantial evidence of fraud and am not persuaded that these circumstances give rise to a credible inference of fraud.

d) The Plaintiffs are prohibited by contract from registering a CPL or Caution. Even if the Plaintiffs are successful in their claim to set aside the settlements and resurrect their APS, the terms of the APS prohibit both Plaintiffs from registering a CPL or Caution. Section 10.02 of the APS stated: "The Purchaser covenants and agrees not to register …a caution [or] certificate of pending litigation … against title to the Property." The Plaintiffs also consented, by section 10.02, to a court order removing any cautions or CPLs registered on title to these Lots. The prior registration of a Caution and the CPL now sought would be a breach of the APS, if the APS remained in force. Further, Section 10.02 of the APS gives the "Vendor … the right to declare this Agreement null and void" if a CPL or caution is registered on title. Notwithstanding this term, the Plaintiffs nevertheless registered a Caution, tried to register a second Caution and tried to register a Notice of Pending Claim. This court’s prior order dismissing their motion was simply ignored.

e) The reduction of the Diversified Mortgages must be significant. One of the other hurdles faced by the Plaintiffs is that the Notice of Power of Sale was approximately 5.5 million dollars. The sale to 259 was for approximately 3.65 million dollars. Unless the Plaintiffs are successful in establishing a fraud and establish the amount owing to Diversified under the Mortgages is less than $3,600,000, Diversified was entitled to allow Sedona to sell the Lots (given that the Diversified Mortgages had matured and were in default) and agree to provide the New Mortgage.

[45] Based on the evidence before me and recognizing that I am not to conduct a full analysis on the merits of the action at this stage, I am not persuaded that the Plaintiffs have established a serious issue to be tried.

Irreparable Harm

[46] Given that Salt and 223 now seek the same relief that was dismissed in 2017, in part, because the court found in 2017 that they would not suffer irreparable harm if the injunction was not granted, it is difficult to imagine how Salt and/or 223 could now establish irreparable harm without new, credible and convincing evidence. There is nothing new that would establish they would suffer irreparable harm unless the interim relief is ordered.

[47] On the other hand, the interim relief would seriously impact 259 and Balla, both of whom, based on the evidence on this motion, are a bona fide third-party purchaser of the Lots. They paid the Diversified New Mortgage over the years. They have improved the Lots. They have sold two of the Lots. The Diversified New Mortgage has matured. The evidence is that they have constructed on the Lot 5 and Lot 5 will soon be ready for marketing for sale.

[48] Similarly, Diversified would be prohibited from taking any steps to enforce or deal with the Diversified New Mortgage. Diversified would be prohibited from using the proceeds of sale from Lot 13 - essentially prohibiting it from using money paid to it to partially repay the Diversified New Mortgage and reinvest it into the market. I repeat, the injunction sought would enjoin a new mortgage granted by 259 to Diversified – not granted by Sedona, the vendor of the Lots to Salt and 223.

[49] I am satisfied that this factors favours denying the injunctions sought.

Balance of Convenience

[50] There is only one Lot left. Salt purchased that Lot seven years ago. Much has changed including work done on Lot 5 by 259. It is difficult to imagine any serious impact to Salt if he was entitled to damages, if successful in this action. There is nothing unique with respect to the Lot. It is a lot in a development.

[51] As for the proceeds of sale of Lot 13, there is no evidence that if 223 is successful, Diversified, 259, Balla, and/or Sedona would not be able to satisfy a monetary judgment. The Lot has been sold. It is now a claim to money, nothing more. Money is not unique.

[52] Diversified's security on the Lot 5, if enjoined, could be negatively impacted by market conditions. Diversified is and has been a mortgage lender for some time. Its mortgage security on the remaining Lot 5 (which mortgage has matured) would be impaired and prohibiting its use of the repayment monies from the sold Lot 13, would impair its mortgage lending business.

[53] 259 bought and has improved Lot 5. This is not in the same condition that Salt purchased it in 2013. 259 may need to refinance the Diversified New Mortgage (which has matured) and would be prevented from doing so if the order is granted. The impact to 259 is set out in paragraph 22 of the Balla affidavit of June 12, 2020. I accept that the harm to 259 is very significant if the injunctions were granted.

[54] The balance of convenience does not favour granting the injunctions sought.

[55] Before considering the remaining RJR factors, let me deal with some other equitable factors which impact on this court’s ultimate decision to dismiss these motions.

The Lack of Clean Hands

[56] Both Salt and 223 attempted to do an “end run” around Diversified in 2017. They failed.

[57] In early 2020, despite the fact that Salt and 223 had settled the purchasers First Proceeding on the basis their APS were terminated and took the benefit of the settlements, nevertheless they proceeded to register a Caution on title, effectively doing exactly what they had attempted to do in 2017 and was rejected by the court.

[58] But it did not end there. Salt and 223 attempted to re-register a further Caution, which was rejected by the Land Registry Office. When that did not work, they attempted to register a Notice of Pending Action, which was also rejected by the Land Registry Office. Effectively Salt and 223 attempted to “tie up” the Lots by using a Caution or other registration rather than return to court to vary its order and only did so when other avenues to tie up Diversified and Lots had failed.

[59] The propriety of the conduct of Salt and 223 raises serious questions.

Delay

[60] Salt and 223 became aware of Posocco’s allegations of forgery in 2019 (223 early in 2019). Yet, they did nothing. Instead they preferred to await the results of the Sedona proceeding. And then, trying to protect their position by registering the Caution.

[61] Even after the Sedona motion was dismissed in January 2020, the Plaintiffs waited months until May 25, 2020 before bringing this motion.

[62] There is no explanation for this delay.

Undertakings

[63] Neither Salt nor 223 have provided any evidence to assess their undertakings and whether they could satisfy any damages awarded if the injunction was granted and they were unsuccessful at trial.

[64] Salt simply says he undertakes to abide by any order of the court concerning damages. That does not say much about his financial situation to date.

[65] Despite the last minute filing of an affidavit after Diversified raised the issue of a “meaningful” undertaking, 223 simply states it has been in business since 2010 and “has assets”. There is simply no other information regarding 223’s financial situation.

[66] The lack of meaningful undertakings from Salt and 223 favour against granting the interim injunctions sought.

Conclusion on the Interim Injunction

[67] Considering and balancing the above factors, I decline to grant either Plaintiff an interim injunction.

THE MAREVA INJUNCTION

[68] In my view, I do not need to deal in detail with the claim for a Mareva injunction given that the Plaintiffs have failed to show a “serious issue to be tried” and, as such, have not demonstrated a prima facie case (strong or otherwise). Further, there is no evidence of dissipation or that there exist circumstances to establish that the defendants will attempt to dissipate their assets or put their assets out of the reach of the Plaintiffs.

[69] In addition, the equitable factors referred to above, also favour not granting the Mareva Order.

CPL

[70] Granting a CPL, even an interim CPL, is an equitable remedy. Some of the factors to be considered include:

(i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security.

See 572383 Ontario Inc. v. Dhunna (1987), 24 C.P.C. (2d) 287 (Master)

[71] A number of these factors, in addition to the factors set out above, strongly favour NOT granting an interim CPL:

a) The Lot 5 or the proceeds from the sale of Lot 13 are not unique; b) There is an alternative remedy of damages; c) Damages would be a satisfactory remedy; d) An innocent third party would be harmed by granting the CPL; and e) There is greater harm to the defendants than there would be to the Plaintiffs if the CPL is granted.

CONCLUSION

[72] On consent, an order shall issue setting aside the noting in default of 259 and Balla. These Defendants shall have 30 days from the release of these reasons to file their Defences.

[73] The Plaintiffs’ motion for interim relief is hereby dismissed.

COSTS

[74] If the parties cannot resolve the issue of costs, the following applies.

[75] Any party seeking costs shall serve and file written submission on entitlement and quantum within two weeks of the release of these reasons. Written submissions shall be limited to 3 pages, with attached Costs Outline, any Offers to Settle and any authorities.

[76] Any responding party shall have one week thereafter to serve and file responding submissions. Written submissions shall be limited to 3 pages with attached any Offers to Settle and authorities relied on.

[77] There shall be no reply submissions without leave.

Ricchetti, RSJ.

Date: June 29, 2020