ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-13-116647-00

DATE: 20131205

BETWEEN:

Zubeda Inc.

Plaintiff

– and –

2180129 Ontario Inc., Pace Developments Inc. and David Chong

Defendants

Yadvinder S. Toor, for the Plaintiff

Patrick K. Martin

HEARD: November 22, 2013

REASONS FOR DECISION

EDWARDS j.:

Overview

[1] The plaintiff seeks injunctive relief to prevent the distribution of funds from the sale of certain townhouses that are the subject matter of an agreement between the parties. Alternatively, the plaintiff seeks an order under Rule 45.02 of the Rules of Civil Procedure (the “Rules”) requiring the defendants to deposit $600,000 to the credit of the within action into court.

The Law

[2] In order to obtain injunctive relief, the plaintiff must establish that there is a serious issue to be tried; that the plaintiff will suffer irreparable harm if the injunctive relief is not granted; and that the balance of convenience favours the granting of the relief sought.

[3] With respect to the alternative relief under Rule 45.02, the plaintiff must establish that it has a claim to a specific fund referable to the litigation; that the claim is proprietary in nature; and that there is a serious issue to be tried respecting the proprietary claim. As well, the plaintiff must establish that the balance of convenience favours the granting of the order – see Kotzer v. Ackerman[^1].

[4] Dealing first of all with the claim for injunctive relief and, specifically, that aspect of the test requiring the plaintiff to establish irreparable harm, the evidence in this regard, in my view, is weak and highly speculative. In the plaintiff’s affidavit, sworn in support of this motion, Mr. Mohammad Ali, who is one of the directors and officers of the plaintiff, deposed as follows:

Further, the funds from the closing of the transactions which are due to Zubeda, in all likelihood, will be disbursed to parties other than Zubeda, and that the funds are likely to disappear beyond the reach of Zubeda.

If the funds are not held in trust and/or deposited in the honourable court, they are likely to disappear beyond the reach of Zubeda, and will be an irreparable loss to it. The potential of irreparable loss is also apparent from the conduct of Dino, his associates and related corporations, relating to and arising from the development of the Property in three phases, as briefly described below. (my emphasis)

[5] When he was cross-examined on his affidavit, Mr. Ali was asked the following question:

Q: Mr. Ali, I am asking you what do you fear is going to happen to the money if you do not get your injunction?

A: Based on the history of the defendants, it’s not going to come to me.

Q: Where is it going to go?

A: I can’t answer for them.

[6] I am not satisfied from a review of the evidence placed before me on this motion, and specifically the evidence quoted above with respect to irreparable harm, that the plaintiff has come anywhere close to meeting the test for the granting of injunctive relief insofar as establishing that there is a real risk that if the injunctive relief sought is not granted that the plaintiff will suffer irreparable harm.

[7] Fundamentally what the plaintiff is seeking in its motion is execution before judgment.

[8] With respect to the motion under Rule 45.02 of the Rules, the leading case under this rule is Sadie Moranis Realty Corp. v. 1667038 Ontario Inc., 2012 ONCA 475. The test to obtain an order under Rule 45.02 requires that the plaintiff establish the following:

(a) That it has a claim to a specific fund reparable to the litigation and that its claim is proprietary in nature;

(b) There is a serious issue to be tried respecting the proprietary claims; and

(c) The balance of convenience favours the granting of the order.

[9] The nature of the relief that is being sought by the plaintiff in this motion, while not specifically entitled a mareva injunction, effectively amounts to specifically that. As I indicated in Kotzer, while Rule 45.02 of the Rules is not like a mareva injunction, I remain of the view that to satisfy the balance of convenience test, the moving party has an obligation to put some evidence before the court that would raise concerns that the defendants will in fact take, or has taken, steps to make execution impossible. As I further indicated in Kotzer, the type of evidence that could be put before this court in that regard would include evidence that the defendant intends to leave the jurisdiction; intends to take action to frustrate the plaintiff’s recovery, if successful at trial; or is insolvent and will discontinue carrying on business.

[10] I am not satisfied that any of the aforementioned types of evidence have been placed before the court and, as such, the plaintiff’s motion seeking injunctive relief, as well as relief under Rule 45.02 is dismissed.

[11] If the parties cannot agree upon costs, I am prepared to entertain receiving submissions from the parties limited to two pages in length to be received and filed with this court no later than ten days from the receipt of these reasons. If submissions are not received in that regard, the court will assume that the issue of costs has been resolved.

Justice M.L. Edwards

Released: December 5, 2013

[^1]: 2013 Carswell 9325.