Fatahi-Ghandehari v. Wilson, 2016 ONSC 6863

CITATION: Fatahi-Ghandehari v. Wilson, 2016 ONSC 6863 COURT FILE NO.: FS-15-83320-00 DATE: 2016-11-03

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SARA FATAHI-GHANDEHARI Applicant (Self-represented)

• and -

STEWART WILSON Respondent (Paul Robson, for the Respondent)

HEARD: October 26, 2016, at Brampton, Ontario

Price J.

Reasons For Order

NATURE OF MOTION

[1] Sara Fatahi-Ghandehari seeks financial disclosure from her former spouse, Stewart Wilson, that she submits will establish her entitlement to an equalization payment arising from their seven year marriage. To that end, she obtained orders from this court on July 23, 2015 and July 7, 2016, (collectively, “the disclosure orders”), requiring Mr. Wilson to disclose financial information to her. She later moved for a finding that Mr. Wilson was in contempt of the disclosure orders.

[2] Ms. Fatahi-Ghandehari’s contempt motion was adjourned from August 4, 2016 to October 18, 2016, to give her an opportunity to bring a motion for the examination of non-parties, including Mr. Wilson’s mother, Elizabeth Wilson, and Jason Bradimore, a friend and business associate of Wilson’s in an exotic car rental business which Mr. Wilson operated.

[3] On October 18, 2016, Ms. Fatahi-Ghandehari made her motion for examination of the non-parties. The court ordered that the parties and non-parties attend on October 31, 2016, to be examined. On October 26, 2016, Ms. Fatahi-Ghandehari moved for directions in connection with the forthcoming examinations, as Mr. Wilson’s lawyer had advised her that owing to her failure to adhere strictly to the procedural rules governing the service of a Notice of Examination, the witnesses would not be attending to be examined.

BACKGROUND FACTS

History of the marriage and separation

[4] Ms. Fatahi-Ghandehari is 36 years old. Mr. Wilson is 43. They were married on August 12, 2007, and separated seven years later, on December 4, 2014.

[5] At the time of the parties’ marriage, Mr. Wilson operated an exotic car rental business under the name GTA Exotic Car Rental. On June 8, 2010, he entered into a trust agreement with Ms. Fatahi-Ghandehari’s mother, Farzaneh Yaghinali, (“the trust agreement”), to operate a new exotic car rental business, Exotic Car Tours, in trust for him, through a corporation established for that purpose, 2246519 Ontario Inc. (“224”).

[6] Mr. Wilson made an assignment in bankruptcy on April 29, 2011, in which he failed to disclose the trust agreement or his beneficial interest in the Gray Order exotic cars.

History of the judicial proceeding

(a) Commencement of the Family Law proceeding

[7] Ms. Fatahi-Ghandehari began the present proceeding by an Application issued on April 23, 2015, in which she claims, among other relief, equalization of the parties’ net family property or, in the alternative, an unequal division of net family property, pursuant to section 5(6) of the Family Law Act. Additionally, she claims an order declaring that the parties’ marriage contract, dated July 24, 2009, is valid and in force and effect.

(b) The civil action between the parties, and Justice Gray’s Order

[8] In a related civil action between the parties in the Superior Court of Justice in Milton, Ontario, Justice Gray made an order on March 3, 2015, in which he held that the exotic cars that 224 was leasing (“the Gray Order exotic cars”) were owned by Mr. Wilson. Justice Gray’s order states:

2. THIS COURT DECLARES that the Plaintiff [Stewart Wilson] is the owner of the vehicles in issue, namely:

• 2006 Aston Martin VIN SCFBBO3BX6GC01781; • 2005 Aston Martin – VIN SCFA001A55GA01955, 2008; • Audi – VIN WUAAU34218N001634l • 2005 Bentley – VIN SCBCR63W55C024227; • 2005 Chevrolet Corvette VIN 1G1YY24U755126217; • 2005 Ferrari VIN ZFFEW58A35014302, 2002 Ferrari VIN ZFFYT53AX20128178; • 2000 GMC VIN 1GKDM19W1YB502524; • 2004 Lamborghini VIN ZHWGU11S84LA00299; • 2003 Lamborghini VIN ZA98BC10U13LA12517; • 2009 Nissan VIN JN1AR54F49M250405; • 2008 Porsche VIN WPOC029928S78788150; • 2001 Suzuki VIN JS1GW71A112100069,

and he is entitled to do with them what he wishes. Any orders that prevent him from doing so are discharged.

3. THIS COURT ORDERS that the vehicles be transferred to him, as well as any other corporate assets.

4. THIS COURT ORDERS that the sum of $100,000.00, paid into court by the Plaintiff, is to be paid out to him forthwith.

5. THIS COURT ORDERS that a CPL may be registered on the title of the matrimonial home, namely, the property municipally located 3329 Delhi Road, Mississauga and registered under the Land Titles Act, as PCL 14-3 SEC M24; PT LT 14 PL M24; PTS 4 & 9 43 R2281; Mississauga. PIN No. 13392-0019 LT.

6. The motion for a Mareva injunction is dismissed.

[9] The parties agree that the motion for a Mareva injunction referred to in Justice Gray’s order was a motion brought by Mr. Wilson, not by Ms. Fatahi-Ghandehari.

[10] An appeal by Ms. Fatahi-Ghandehari, her mother, and 224, from Justice Gray’s order was dismissed by the Court of Appeal a year later, on April 5, 2016.

(c) Mr. Wilson’s transfer of the cars to Jason Bradimore’s company

[11] On April 4, 2015, a month after Justice Gray made his Order, Mr. Wilson transferred the Gray Order exotic cars from 224 to a company, Straightforward Auto Services Inc., owned by Mr. Wilson’s friend and business associate, Jason Bradimore.

(d) The preservation order in the bankruptcy proceeding

[12] On April 10, 2015, Justice Pattillo of this court made a preservation order, requiring Mr. Wilson to deliver up possession of certain of the Gray Order exotic cars to Mr. Wilson’s trustee in bankruptcy or, if he no longer had possession of the cars, requiring him to deliver up particulars of their sale and of any bank accounts into which any monies received for their sale were deposited. Justice Pattillo additionally ordered that Mr. Wilson’s bank accounts be frozen, but provided that he could return to court to rescind or vary that order once he provided the trustee with the requested information.

[13] Mr. Wilson appealed to the Court of Appeal from Justice Pattillo’s order, arguing that the motion judge had erred in finding that Mr. Wilson had a beneficial interest in the cars at the time of his bankruptcy. In his appeal, he argued that the trust agreement provided that 224, the registered owner of the vehicles, was to be owned by Ms. Fatahi-Ghandehari’s mother. The Court of Appeal rejected that argument. In a decision dated November 19, 2015, the Court noted that the trust agreement provided that the assets of 224 were “the sole and exclusive ownership of [Mr. Wilson] and although held in the name of [224] has no right or ownership of the said assets.”

[14] The Court of Appeal noted that Justice Gray, in his decision dated March 3, 2015, held that the trust agreement was valid and that Mr. Wilson was the beneficial owner of the cars. The Court further noted that Justice Gray directed that a copy of his endorsement be sent to the Trustee, who then brought the motion before Justice Pattillo for preservation of the cars and ancillary relief. The Court of Appeal found that Justice Pattillo’s finding that Mr. Wilson had a beneficial interest in the cars at the time of his bankruptcy was unassailable.

(e) The Disclosure Orders

[15] Mr. Wilson failed to deliver his Answer and Financial Statement in the present proceeding in a timely manner. On June 10, 2015, Ms. Fatahi-Ghandehari moved for an order requiring him to deliver those documents, to pay spousal support, and requiring him to obtain and produce a valuation of the business, Exotic Cars.

[16] A month and a half after Ms. Fatahi-Ghandehari brought her motion, Mr. Wilson still had not delivered his Answer or Financial Statement. At a Case Conference on July 23, 2015, Justice Miller made an Order requiring Mr. Wilson to do the following:

• Deliver his Answer and Financial Statement within 45 days, that is, by September 6, 2015; • To produce his bank statements, within 45 days, for an account at TD Canada Trust from January 2012 to the date of the order.

[17] Additionally, Justice Miller ordered both parties to produce their Income Tax Returns and Notices of Assessment for 2012, 2013, and 2014.

[18] Justice Miller noted, in her endorsement, that there was a dispute as to the whereabouts of documents required for a valuation of Mr. Wilson’s business, Exotic Car Tours, and that a contempt motion in relation to the production of those records was to be heard on August 26, 2015. She granted the parties leave to bring motions for disclosure and for business valuations in respect of Exotic Car Tours, once the contempt motion was heard and determined.

[19] At an initial appearance of the parties for the contempt motion on July 7, 2016, I noted that Mr. Wilson was the beneficial owner of the exotic car rental business and that, as such, he was presumptively obliged to produce a valuation of the business. I further noted that, as Mr. Wilson’s income was approximately twice that of Ms. Fatahi-Ghandehari, he was better resourced to obtain the valuation.

[20] In my Order dated July 7, 2016, I ordered Mr. Wilson to retain a chartered business valuator by August 7, 2016, the selection of, and the terms of reference of whom, the parties were to agree upon. I directed Mr. Wilson, initially, to pay the costs of the valuation, without prejudice to his right to seek re-apportionment of the costs at the trial of the proceeding.

[21] Additionally, on July 7, 2016, and on the consent of the parties, I ordered Mr. Wilson to produce to Ms. Fatahi-Ghandehari, within 14 days, a number of documents, including the following:

• His agreement to purchase his residential property at 1360 Niels Avenue, Burlington, which Ms. Fatahi-Ghandehari asserted was purchased with family property; • The trust ledger statement for the purchase of 1360 Niels Avenue, Burlington.

(f) The contempt motion

[22] Mr. Wilson delivered his Answer and Financial Statement on July 18, 2016. He acknowledges that he failed to produce the Agreement of Purchase and Sale for 1360 Niels Avenue, Burlington, and the valuation of his exotic car rental business.

[23] On July 26, 2016, Ms. Fatahi-Ghandehari, who was then, and is now, self-represented, made a motion for a finding that Mr. Wilson was in contempt of court by reason of his failure to comply with the Order of Justice Miller dated July 23, 2015, and with my Order dated July 7, 2016 (“the contempt motion”).

[24] In her supporting affidavit sworn July 26, 2016, Ms. Fatahi-Ghandehari asserts that:

a) Mr. Wilson failed to deliver his Answer and Financial Statement, or to produce his Income Tax Returns and Notices of Assessment for 2012, 2013, and 2014, or his statements from the TD account 63462 from January 2012 to the date of the order, within 45 days, or at all, in breach of Justice Miller’s order.

b) Mr. Wilson failed to deliver his Notices of Assessment within five days of receipt, and to deliver his Answer and up-dated Financial Statement within 10 days, and to produce the statements for his TD Canada Trust account 634627, the Agreement of Purchase and Sale for 1360 Niels Avenue, Burlington, and the tracing of the funds used to purchase that property, within 14 days, in breach of my order dated July 7, 2016, made with the consent of the parties.

[25] The contempt motion was initially returnable August 4, 2016. Mr. Wilson delivered an affidavit sworn August 2, 2016, in which he stated that my Order had dealt with his failure to comply with Justice Miller’s Order, and that he had fully complied with my Order, except that he had not been able to produce a copy of the Agreement of Purchase and Sale for 1360 Niels Avenue, Burlington, as he had not been able to locate it, but that he had produced a copy of the lawyer’s reporting letter and trust ledger. Additionally, he stated that he had filed his tax returns and was awaiting his Notices of Assessment, which he would produce within five days after receiving them. He did not mention the valuation of his exotic car business, which he had also been ordered to obtain and produce.

[26] In a further affidavit sworn August 9, 2016, Ms. Fatahi-Ghandehari asserted that Mr. Wilson had not, in fact, complied with the timetable set out in my Order dated July 7, 2016, for the production of his Notices of Assessment, or the delivery of his Answer and Financial Statement, or the production of his statements for the TD Canada Trust Account, or his PayPal Statements, or the Agreement of Purchase and Sale for 1360 Niels Avenue, Burlington, or the tracing of funds used to purchase that property. She noted that the Family Law Rules required the production of Mr. Wilson’s credit card statements, which she had requested, together with proof of payment of certain personal property listed in Mr. Wilson’s Financial Statement, including “all the vehicles that were owned by GTA Exotic Cars at the time of marriage and a valuation of those vehicles on that date.”

[27] In a further affidavit sworn August 10, 2016, Ms. Fatahi-Ghandehari asserts that her civil litigation lawyer in a proceeding in Milton had advised her that he had received what purported to be Mr. Wilson’s tax returns for 2012, 2013, 2014 and 2015 from Mr. Wilson’s lawyer, but that the returns, which were all dated July 2, 2016, were not, in fact, copies of the returns filed with the Canada Revenue Agency (“CRA”), as required. They were unsigned and bore no stamps of the CRA nor proof of transmission to the CRA.

[28] On August 17, 2016, I adjourned Ms. Fatahi-Ghandehari’s motion to October 26, 2016, on the following terms, consented to by Mr. Wilson:

a) The CRA was to produce Mr. Wilson’s tax returns and Notices of Assessment to Ms. Fatahi-Ghandehari;

b) Ms. Fatahi-Ghandehari was granted leave to bring a motion, on notice to Elizabeth Wilson, Gregory Wilson, and Jason Bradimore, for examination of them as non-parties and for production of records from them, and to deliver further evidence with regard to the ownership of Exotic Car Tours and the funds used to purchase the property at 1360 Niels Avenue, Burlington.

(g) The motions for examination of non-parties and for preservation of assets

[29] On October 7, 2016, Ms. Fatahi-Ghandehari moved for leave to examine Mr. Wilson’s mother, Elizabeth Wilson, his brother, Gregory Wilson, and his friend and business associate, Jason Bradimore, and for production of documents from them, in order to “ascertain Stewart Wilson’s real net family property along with his personal and business assets and/or income….”

[30] Additionally, Ms. Fatahi-Ghandehari made a motion for preservation of assets pursuant to s. 12 of the Family Law Act. In that motion, she requests the following relief:

a) An order instructing the Registrar of Personal Property Security to remove financing change statements;

b) A “Mareva injunction” to preserve certain business records of Elizabeth Wilson, Gregory Wilson, Jason Bradimore, 224, and Straight Forward Auto Service Inc.;

c) Disclosure of information from the owners or managers of 9860 Highway 20, Hamilton regarding arrangements that have allowed Stewart Wilson to reside there; and

d) An order for the sale of certain cars owned by Exotic Car Tours, GTA Exotic Cars, 224, or Mr. Wilson personally, or owned by Jason Bradimore or his company, Straight Forward Auto Service Inc., and to pay the proceeds into court to the credit of the present proceeding.

[31] Ms. Fatahi-Ghandehari filed a supporting affidavit in which she states the following:

a) Mr. Wilson funded the purchase of the property at 1360 Niels Avenue, Burlington with $120,000 of the parties’ money. She denies that the money came from Mr. Wilson’s mother, Elizabeth Wilson, as Mr. Wilson alleges, and states that Ms. Wilson’s bank statements disclose that she had minimal balances in her accounts at the time of the purchase.

b) On July 12, 2016, Mr. Wilson’s brother, Gregory Wilson, and his mother, Elizabeth Wilson, sold the Niels Avenue property without notice to Ms. Fatahi-Ghandehari for $465,000.

c) Mr. Wilson and his mother know the whereabouts of Gregory Wilson but have failed to disclose that information to her.

d) The documentation for the sale of the Niels Avenue property contained misrepresentations, in that Gregory Wilson had falsely declared that he was not a spouse.

e) Since the parties’ separation, the car rental business was “switched and sheltered” between Stewart Wilson, Elizabeth Wilson, Jay Bradimore, and Mr. Bradimore’s company, Straight Forward Auto Service Inc.

f) The disclosure provided by Stewart Wilson to Ms. Fatahi-Ghandehari was incomplete.

g) Ms. Fatahi-Ghandehari registered liens on the Gray Order exotic cars, which are “tied up in litigation in both civil and family court.” Nevertheless, Mr. Wilson transferred the cars to Jay Bradimore and his company, Straight Forward Auto Service Inc.

h) Mr. Wilson’s lawyer improperly registered a discharge of the liens on September 29 and 30, and October 6, 2016.

[32] At the hearing on October 18, 2016, of Ms. Fatahi-Ghandehari’s motions for leave to examine non-parties, I granted her leave to examine Elizabeth Wilson and Jason Bradimore. Additionally, at the request of Mr. Wilson, I granted the parties leave to cross-examine each other on their affidavits on October 31, 2016.

[33] Mr. Wilson’s lawyer, Mr. Robson, advised the court, after consulting with Ms. Wilson and Mr. Bradimore, that Ms. Fatahi-Ghandehari’s Notice of Examination could be served on them by being sent to his office. Mr. Robson further advised the court that he wished to examine Ms. Fatahi-Ghandehari on her affidavits, and proposed that the cross-examination of the parties take place at the same time and place as the examination of Ms. Wilson and Mr. Bradimore, and that one hour be allocated to each examination. He asked that the examinations take place in Oshawa, where Mr. Bradimore resides, and proposed that Ms. Fatahi-Ghandehari provide conduct money for Ms. Wilson to travel there. I incorporated those terms into my endorsement.

[34] In my endorsement of October 18, 2016, I indicated that I had not directed that the contempt motion be heard by me. However, Ms. Fatahi-Ghandehari then brought a further motion for directions, for hearing on October 28, 2016, alleging that Mr. Robson had refused to accept her Notice of Examination, stating that it did not comply with the Family Law Rules, having been served an hour beyond the time required by the Rules and without the conduct money having been delivered to the parties (as it was delivered, instead, to Mr. Robson’s office).

[35] At the hearing on October 18, 2016, I advised the parties that Ms. Fatahi-Ghandehari’s motion for preservation of assets was being adjourned to be heard with the contempt motion. The contempt motion was next to be before the court on October 26, 2016.

(h) The motion for directions

[36] After serving her Notice of Examination on Mr. Wilson’s lawyer, Mr. Robson, Ms. Fatahi-Ghandehari was notified by Mr. Robson that, owing to her failure to comply strictly with the procedural rules governing the service of a Notice of Examination, the witnesses would not be attending to be examined on October 31, 2016. Ms. Fatahi-Ghandahari thereupon made the present motion for directions, which was heard October 26, 2016, upon the return of Ms. Fatahi-Ghandehari’s contempt motion and motion for preservation of assets.

ISSUES

[37] The court must ultimately determine whether Mr. Wilson wilfully breached my order dated July 7, 2016, for the production of records and the valuation of his business. For purposes of the present motion for directions, the court must determine whether the examinations previously ordered to take place on October 31, 2016, should proceed on that date, notwithstanding Ms. Fatahi-Ghandehari’s failure to comply strictly with the procedural rules governing service of a Notice of Examination.

[38] With regard to the motion for preservation of assets, the court must determine whether it is necessary to make an order for preservation of the exotic cars pending the determination of her claim for an equalization payment or unequal division of assets, or, at least, of her contempt motion.

PARTIES’ POSITIONS

[39] Mr. Wilson did not argue that the examinations should not take place on October 31, 2016.

[40] With regard to the motion for preservation of assets, Ms. Fatahi-Ghandehari submits that her entitlement to an equalization payment from Mr. Wilson will be undermined by Mr. Wilson’s disposal of the exotic cars which were the principal asset of 224 when the parties separated. She argues that Mr. Wilson, in failing to make the disclosure of the value of his beneficial interest in 224, and in misrepresenting the facts that are the basis of her entitlement to equalization, seeks to delay the determination of her entitlement until he has disposed of the assets which could satisfy an order for equalization payment.

[41] Mr. Wilson argues that Ms. Fatahi-Ghandehari is not entitled to an equalization payment, as she drained 224 of its value by withdrawing large sums of money which she used to purchase her home. He denies that he has intentionally delayed disclosing, or failed to disclose, his financial information or misrepresented the facts. He attributes his delay in making disclosure to the control that Ms. Fatahi-Ghandehari exercised over his financial information both while they were together and after the parties separated.

ANALYSIS AND EVIDENCE

(a) The examination of parties and non-parties

EXAMINATION OF THE PARTIES AND NON-PARTIES

[42] Ms. Fatahi-Ghandehari moved to cross-examine Mr. Wilson, his mother, and his business associate, Jason Bradimore. The Court made an order granting leave to Ms. Fatahi-Ghandehari to conduct those examinations in accordance with a Notice of Examination to be served on Mr. Wilson’s lawyer, Mr. Robson, in accordance with the Rules.

[43] Following service of the Notice of Examination on him, Mr. Robson informed Ms. Fatahi-Ghandehari, who is self-represented, that she had failed to comply strictly with the Rules governing service of a Notice of Examination and that the witnesses would not be attending.

[44] Ms. Fatahi-Ghandehari served her Notice of Examination by 4:51 p.m. instead of 4:00 p.m. as provided for by the Rules. The conduct money, which was sent to Mr. Robson’s office in accordance with my Order dated October 18, 2016, was refused at 4:51 p.m.

[45] The Family Law Rules provide, in part:

1(7) If these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Court of Justice Act and the Act governing the case and, if the courts considers it appropriate, by reference to the Rules of Civil Procedure.[^1]

[46] The Rules of Civil Procedure provide, in part:

1.04(1) These Rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

2.01(1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document t or order in a proceeding a nullity, and the court,

(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or

(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part.[^2]

[47] The Court may, where appropriate, grant some latitude to self-represented litigants in their efforts to comply with the court’s procedural rules. In this case, the non-compliance was not significant and caused no prejudice to the parties or non-parties. The parties and non-parties were aware, as a result of Mr. Robson’s attendance on October 18, 2016, of the requirement that they attend on October 31, 2016, and of the place and time of that attendance. The delivery of conduct money for Ms. Wilson to Mr. Robson was in accordance with my Order dated October 18, 2016, and achieves the objectives of the Rules governing the facilitating of a witness’ attendance for examination. It was in the interests of both parties that the examinations be completed prior to the departure of Mr. Wilson’s mother from Ontario.

[48] For these reasons, the provisions of Rule 2.01 were applied and on October 26, the parties and non-parties were directed to attend on October 31, 2016, to be examined. Mr. Robson undertook to bring the Order to the witnesses’ attention.

[49] I noted on October 26 that the examination should be permitted to explore the issues touching on the parties’ property and its acquisition and disposition, as this was the intent of the disclosure orders made on July 7, 2016. The parties were therefore not to be restricted in their examinations to these aspects of the disclosure in respect of which the contempt motion relates, as it was necessary that those be viewed in the overall context of the parties’ disclosure obligations.

(b) Motion for Preservation of Assets

The Legislative framework

[50] The Family Law Act provides, in s. 12:

12. In an application under section 7 [applications for determination of a spouse’s entitlement to an equalization payment under s. 5] or 10 [determinations of questions of title between spouses], if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) For the possession, delivering up, safekeeping, and preservation of the property.

The Jurisprudence Interpreting s. 12

[51] Justice Timms, in Price v. Price, in 2016, described the test to be applied in a motion for a preservation order under s. 12 of the Family Law Act:

Having reviewed quite a number of judgments, I am satisfied that the correct test to be applied is as follows:

• The onus lies on the party asserting that a preservation order is necessary to protect his or her interests under Part I of the FLA, or that his or her claim for support under Part III of the Act would be impaired or defeated unless a preservation order was made, to demonstrate that on the balance of probabilities.

• The standard that the court should apply is not the high threshold required for the granting of a Mareva injunction.

• Different decisions apply different standards. Some consider whether there is "a real risk that assets could be dissipated before the equalization claim is determined"[^3] ; others suggest that an order should be made "out of an abundance of caution".[^4]The correct standard is the same one to be applied when determining whether to grant an interim injunction:

1. Is there a serious issue to be tried?

2. Will the moving party suffer irreparable harm if relief is not granted? And

3. Which party will suffer the greater harm from granting or refusing the remedy pending a decision of the merits? [^5] [Emphasis added]

[52] In determining whether there is a serious issue to be tried, the court should consider whether it is likely that the party moving for the preservation order will receive an equalization payment.[^6] Justice McGee stated, in Benvenuto:

As discussed by Justice Sachs in Bronfman v. Bronfman, 2000 22710 (ON SC), 2000 22710 (Ont. S.C.J.), there are certain cases in which the trier of fact has a clear record with respect to the payment of an equalization, and others in which it is far less certain. Within the latter category, the court will give serious consideration to the other factors, such as the balance of convenience and the risk of dissipation prior to trial.[^7]

[53] In Taus v. Harry, in 2016, Gauthier J. stated:

The purpose of a s. 12 preservation order is to ensure that if an equalization payment is found to be owing, there are sufficient assets available to satisfy that payment. Lasch v. Lasch (1988), 1988 4581 (ON SC), 64 O.R. (2d) 464 (Ont. H.C.).

There must be some evidence to establish that an order pursuant to s. 12 of the Family Law Act is necessary for the preservation of the other party's property in order to protect the moving party's interest in an equalization payment. In other words, a prima facie case in favour of a preservation order must be made for such relief to be granted.[^8] [Emphasis added]

[54] A party seeking a preservation order, or a restraining (non-dissipation) order, is in a stronger position if equalization has been determined and ordered. However, interim preservation and restraining (non-dissipation) orders are commonly made in family law proceedings to protect an equalization payment that has been claimed but not yet determined.[^9]

[55] Before making a preservation order, the court must find that such an order is necessary to protect a party's claim to an equalization payment and to prevent the claim from being defeated. However, the very high legal threshold required for the granting of a Mareva injunction is not the applicable standard.[^10]

Applying the legal principles to the facts of the present case

(a) Ms. Fatahi-Ghandehari’s entitlement to Equalization Payment

[56] For the reasons that follow, I find, based on the evidence tendered to this point, that Ms. Fatahi-Ghandehari has established that she will be found at trial to be entitled to an equalization payment.

(i) The parties’ Marriage Contract

[57] Mr. Wilson argues that Ms. Fatahi-Ghandehari will not be successful in asserting a claim to an equalization payment because the parties’ marriage agreement states that she is to remain the owner of her home and that he is to remain the owner of his business. He additionally relies on Justice Gray’s determination that the exotic cars are owned by him.

[58] The marriage contract deals with a house and a corporation that the parties no longer own. Additionally, I find that the Marriage Contract is not applicable for the following reasons:

a) Mr. Wilson has registered a Certificate of Pending Litigation for claims he makes against the Delfi property.

b) Exotic Cars Touring, or 224, was formed after the marriage contract was entered into, and the exotic cars that were held in the name of 224 have now been transferred to Straightforward.

[59] The parties’ Marriage Contract provided that they would divide equally their matrimonial home at Unit #211, 3400 Lakeshore Boulevard West, Toronto. Ms. Fatahi-Ghandehari states that in July 2009, the parties sold that home. The trust ledger produced by Mr. Wilson discloses that $15,122.33 of the net proceeds were paid to Ms. Fatahi-Ghandehari for the purchase of 4429 Delfi Road, and that $37,122.33 was paid to Mr. Wilson.

[60] Ms. Fatahi-Ghandehari states that the entire net proceeds were paid to Mr. Wilson, and were used by him to purchase a car.

(ii) The Delfi property

[61] Ms. Fatahi-Ghandehari states that she purchased the home at 3329 Delfi Road in Mississauga for $385,000. She says that she made a down payment of $200,000 derived from a $400,000 gift to her by her father, and a mortgage, which she later paid off. Although Ms. Fatahi-Ghandehari transferred the Delfi property, which she estimates has a fair market value of $500,000, to her sister in June 2014 to protect it from creditors, Mr. Wilson has registered a Certificate of Pending Litigation against that property.

(iii) The exotic cars

[62] Ms. Fatahi-Ghandehari states that during the course of the marriage, she bought a 2006 Lamborghini Gallardo for $118,250, with funds she had received before the marriage from an ex-boyfriend. She loaned the car to Exotic Car Tours when she became a shareholder of the company. She states that Mr. Wilson used the car for his business, but now seeks to put it and the other cars once held by 224 in the name of Straightforward, in order to dispose of them and thereby to put them beyond her reach.

[63] Mr. Wilson’s financial statement sworn June 5, 2016, attached as Exhibit “D” to his affidavit sworn August 15, 2016, states that the value of 224’s vehicles is $372,000.

[64] Mr. Wilson stated in court that because he no longer had control of 224 following his bankruptcy, it was necessary for him to transfer the exotic cars that were listed in Justice Gray’s Order from 224 to Mr. Bradimore’s company, which he re-organized for the purpose of disposing of the cars.

[65] An Ontario Verification Statement, attached as Exhibit “P” to Ms. Fatahi-Ghandahari’s affidavit sworn October 7, 2016, and a Used Vehicle Information Package dated October 3, 2016, attached as Exhibit “Q” to the same affidavit, assigns a “nil” value to one of the vehicles, a 12 cylinder 2003 Lamborghini Murcielago with an odometer reading of 40,000 kilometers on April 4, 2015, and 47,689 kilometers on September 30, 2016, for purposes of the registration of 224’s sale/transfer of the vehicle to Mr. Bradimore’s company, Straight Forward Auto Service Inc. (“Straightforward”) on April 4, 2015.

[66] The court, by its order dated July 7, 2016, directed Mr. Wilson to obtain and produce a business valuation of his exotic car business. Mr. Wilson was to retain the valuator within 30 days. Mr. Wilson acknowledges that he has not complied, and justifies his non-compliance by asserting that he does not own the exotic car business.

[67] In Mr. Wilson’s affidavit sworn August 15, 2016, he states, at paragraph 2:

I have fully complied with the Order except that I have not proceeded to value 2246517 Ontario Inc. as required by the Order because my counsel, Paul Robson, has advised that I have grounds to bring a Rule 59 motion to vary the Order and I intend to do so. [Emphasis added]

[68] Mr. Wilson states, at paragraph 15 of his affidavit sworn August 15, 2016, “Contrary to the Order, I have never been the registered owner of the business.” This statement is not supported by the weight of the evidence.

[69] Mr. Wilson acknowledged to the court at the hearing of the present motion that he caused Straightforward to be re-organized and obtained a license for it to operate as a car dealer so that he could transfer the exotic cars previously held by 244 to Straightforward for sale. This was necessary, he explained, because Ms. Fatahi-Ghandehari, through her mother, was controlling the operation of 244.

[70] Straightforward’s corporate profile report, attached as Exhibit “M” to Ms. Fatari-Ghandehari’s affidavit sworn October 7, 2016, discloses that Jason Bradimore is President of that corporation. The profile discloses that Straightforward was incorporated on August 20, 1999, filed an initial return on September 24, 1999, and annual returns beginning April 15, 2001 and ending August 13, 2005.

[71] Straightforward resumed its corporate filings on November 10, 2015. Its filing on that date identified the person authorizing the filing (PAF) as Richard K. Watson, a lawyer Mr. Robson authorized to act as his agent for the purpose of arguing a motion on behalf of Mr. Wilson in the criminal proceeding against him. This appears from page 24 of the transcript of that proceedings on July 5, 2016, which was entered as exhibit 1(D) at the hearing of the present motion.

[72] As noted in paragraph 10, above, Mr. Wilson transferred one of the exotic cars, a 2003, Lamborghini, from 244 to Straightforward for a “nil” value on April 4, 2015. This is consistent with Mr. Wilson’s assertion that he has been transferring the exotic cars from 224 to Straightforward in order to dispose of them.

[73] Justice Gray held in his decision dated March 3, 2015, in the civil proceeding, affirmed by the Court of Appeal, that Mr. Wilson is the beneficial owner of the exotic cars, and of the business, 244, which held title to them, and it is clear from the evidence referred to above that he continues to be the beneficial owner of the Gray Order exotic cars, or of the cars which have been substituted for them, in respect of which Ms. Fatahi-Ghandehari currently seeks a preservation order. It is also clear from the evidence that Mr. Wilson controls Straightforward and has been transferring the exotic cars from 244 to that corporation for the purpose of disposing of them.

[74] In Mr. Wilson’s affidavit sworn January 5, 2015, in court file no. 118/15, attached as exhibit “C” to his affidavit sworn October 11, 2016, in the present proceeding, he states, at paragraph 3:

3. In June 2003, I started GTA Exotic Car Rentals Inc. I was the Company’s sole owner and operator. From an original inventory of one car and two bikes, over the next three years, I grew the Company’s inventory to approximately 30 vehicles, thirty percent (30%) of which were Company owned and seventy percent (70%) leased.

4. I developed the idea to create a new company which would operate seasonally and would allow me to maximize Search Engine Optimization (SEO) opportunities on the Internet. I started developing the exotic tour business during the 2009 season and made the decision to set up a new corporation in the late Spring of 2010. I did not want the company to be incorporated in my name; Sara [Ms. Fatahi-Ghandehari] did not want it in her name because she owned our home. Sara’s mother then offered to hold the shares of the new company in trust for me. Not Sara and me. Just me.

5. The new company – ECT – [Exotic Cars Touring] was incorporated on June 8, 2010, and a trust agreement was signed. That agreement reflected the agreement between Sara, her mother Farzanneh Yaghinali, and me. The agreement explicitly provided that:

6. The assets of Ontario [244], are the sole and exclusive ownership of Wilson and although held in the name of Ontario, Ontario has no right or ownership of the said assets.

7. The assets of Ontario are the sole and exclusive ownership of Wilson and although held in the name of Ontario, the owner of Ontario, Yaghinali, has no right or ownership of the said assets. [Emphasis added]

[75] It is clear from the foregoing that Mr. Wilson is and always has been the beneficial owner of the exotic cars and the directing mind of the corporations in whose name their title is nominally held. He has failed, to this point, to have the cars, and the business which holds title to them, valued, as required by the Order made on July 7, 2016. It appears, from Mr. Wilson’s own statements to the court at the hearing, and the evidence filed, that he is transferring the cars to Straightforward for the purpose of disposing of them.

(iv) Mr. Wilson’s tax returns

[76] Mr. Wilson has suggested that his tax returns did not need to be signed because they had already been submitted. However, the tax returns he produced differ from copies of the same returns produced by his book-keeper, Joanne Boyce. All of the returns were purportedly filed in July 2016. As a result of the deficiencies and discrepancies in the copies Mr. Wilson produced, directly or indirectly, Ms. Fatahi-Ghandehari submits that he still has not complied with the order that directed him to produce the returns for 2012 and 2013, as filed with the Canada Revenue Agency (“CRA”). She points to the following discrepancies:

• Contrary to the statement Mr. Wilson made in his affidavit sworn August 15, 2016, the tax returns that Mr. Wilson’s lawyer produced to Ms. Fatahi-Ghandehari’s lawyer are not signed. Mr. Wilson states in paragraph 4(b) of his affidavit sworn October 11, 2016, that at the time he swore his earlier affidavit, on August 15, 2016, he had no knowledge that he had previously filed his tax returns for 2012 and 2014. He states that on August 18, 2015, upon following up with White Gold Financial to confirm that the returns had been filed, he was advised by them that, contrary to his strict instruction to them and what they had previously led him to believe, his returns for 2012, 2013, 2014, and 2015, which they had prepared, had not, in fact, been filed.

• In Mr. Wilson’s affidavit sworn August 15, 2016, at tab B, he attaches an e-mail that Jade, at White Gold Financial, had sent to Mr. Wilson at 7:38 a.m. on July 25, 2016, in which she asked Mr. Wilson to sign the return. The evidence discloses that Mr. Robson later sent the returns, unsigned, to Ms. Fatahi-Ghandehari’s lawyer in the civil action in Milton, Mr. Sidiqui.

• In Ms. Fatahi-Ghandehari’s affidavit sworn October 7, 2016, at tab H, she attaches what purports to be Mr. Wilson’s tax return for 2013, with a confirmation that it was electronically transmitted. The total income shown on page 3 is stated to be $7,333.00. Yet, in Mr. Wilson’s affidavit sworn August 15, 2016, a copy of what purports to be the same tax return, attached at Tab C, shows total income of $7,749.00.

• In Ms. Fatahi-Ghandehari’s affidavit sworn October 7, 2016, she notes at paragraph 11 that Mr. Wilson’s tax return for 2012, which White Gold Financial apparently prepared and Mr. Robson sent to Ms. Fatahi-Ghandehari in purported compliance with the court’s orders, and which she attaches as exhibit “C” of her affidavit sworn August 15, 2016, shows total income in the amount of $7,541. The copy of the same return, produced to Ms. Fatahi-Ghandehari by Joanne Boyce pursuant to Justice Gray’s order dated January 6, 2015, in the civil action in Milton, shows total income in the amount of $19,217.29. It is referred to as part of exhibit H to Ms. Fatahi-Ghandehari’s affidavit sworn October 7, 2016, but appears to have been misplaced from the copy of the affidavit in the court file. Mr. Wilson acknowledges that it was attached to the copy served on him, and accordingly, was entered as exhibit 1(A) at the hearing of the present motion.

(v) Mr. Wilson’s bank accounts

[77] The bank statement from Mr. Wilson’s TD Canada Trust account discloses the following:

• $108,906.25 flowed through the account in 2011; • $8,070 was deposited in 2012, when Mr. Wilson declared bankruptcy; • $16,192.14 was deposited in 2013; • $136,057.58 was deposited in 2014; • $249,172.35 was deposited in 2015. • $4,336 was deposited in the first six months of 2016.

[78] Ms. Fatahi-Ghandehari argues that the precipitous decline in the deposits to Mr. Wilson’s account demonstrates that he is diverting his income elsewhere. She notes that none of the tax records produced by Mr. Wilson correspond to his bank statements, or to the amounts he sets out in his financial statement. She further notes that Mr. Wilson has not yet disclosed his expenses, either in his tax records or financial statement and, in particular, he has not yet produced his Pay Pal Statements.

[79] Mr. Wilson argues that he was “shut out” of 224 after he declared bankruptcy. Mr. Robson states that “He was treated like a dog and acted like a dog.” He submits that Ms. Fatahi-Ghandehari drained money from 224, but he has not provided evidence, even in general terms, that would substantiate his allegation. He argues that he is unable to produce his records because his book-keeper, Ms. Boyce, will not give them to him and he is unable to obtain them from the bank.

[80] Mr. Wilson argues that the reason why his personal account had $136,000 in it on the date of separation was that he had no business account for 224. He therefore was required to deposit the $100,000 which the court refunded to him pursuant to Justice Gray’s Order into that account. The proceeds of sale of cars also went into his personal account and into Mr. Bradimore’s business account.

[81] Ms. Fatahi-Ghandehari responds that the $136,000 was in the bank from 2014, $38,000 was deposited on August 18, 2014, and that the parties separated on December 4, 2014.

(vi) The parties’ calculation of net family property

[82] Ms. Fatahi-Ghandehari calculates that the property owned by her when the parties separated, less the property she owned on the date of marriage, consisting of real estate worth $82,948.18 and the $118,250 cash which she had received from her ex-boyfriend, and the $400,000 gift from her father, which was excluded property, left her with no net family property on the date of separation.

[83] Mr. Wilson, in his Financial Statement sworn June 5, 2016, states that he owned 50% of the Delfi Road property, having a value of $226,000, and household items and vehicles, chiefly a Lamborghini, having a value of $136,000, less debts of $62,600 and $330,000 being the net value of the vehicles of GTA Exotic Car Rentals Inc., which he says he owned on the date of marriage, also left him with no net family property on the date of separation. However, if, as Ms. Fatahi-Ghandehari assets, the net value of the Lamborghini owned on the date of marriage was hers, he owes her an equalization payment of approximately $165,000.

[84] While Justice Gray’s order in the civil action permitted Mr. Wilson to dispose of the exotic cars held listed in the Order, that does not preclude the court today, a year and a half later, from making an order pursuant to s. 12 of the Family Law Act for preservation of those cars, or the cars that Mr. Wilson has acquired in substitution for them, in order to protect Ms. Fatahi-Ghandahari’s interests in an equalization payment, or in the property to which the funds from the parties’ family property can be traced. This preservation is required as a temporary means of maintaining the status quo, at least until Mr. Wilson’s disclosure obligations are found to be complied with.

(vii) The effect of Mr. Wilson’s non-disclosure

[85] Mr. Wilson has not provided an adequate explanation for why he has been unable to obtain, by means of a motion for non-party records, if necessary, the records he requires from the bank or from Ms. Boyce.

[86] Ms. Fatahi-Ghandahari asserts a claim for equalization payment. That claim cannot ultimately be determined until Mr. Wilson has complied with his disclosure obligations pursuant to the Rules and pursuant to the orders made by the court. By his own admission, he has not fully done so. The extent of his non-compliance, and the reasons for it, have yet to be determined in the contempt motion currently before the court. However, an adverse inference can be drawn from his failure to make timely disclosure of his financial information.

[87] Mr. Wilson has not tendered the financial disclosure that might have substantiated his position. While the court has not yet ruled on Ms. Fatahi-Ghandehari’s contempt motion, the court can and does draw an adverse inference from Mr. Wilson’s failure to produce the valuation of his exotic car business that the court ordered him to obtain and the banking records he was ordered to produce. A business valuator should have been retained and the terms of reference agreed upon by August 7, 2016. The valuation should have been obtained and produced by now.

(b) The necessity for a preservation order

[88] I make the following findings relevant to the issues raised in this motion:

a) There are discrepancies in the taxpayer information that Mr. Wilson has produced, and the taxpayer information for Mr. Wilson that Ms. Fatahi-Ghandehari has received from non-parties.

b) The deposits to Mr. Wilson’s personal account, which amounted to over $100,000 per year in 2014 and 2015, even after deducting the $100,000 refunded to him pursuant to Justice Gray’s Order dated March 3, 2015.

c) The proceeds of disposition of the exotic cars listed in Justice Gray’s Order, or the cars which have been substituted for them, have been diverted to put them beyond the reach of Ms. Fatahi-Ghandahari.

[89] In Sibley & Associates LP v. Ross, in 2011, Strathy J., as he then was, granted a motion for an interim Mareva injunction in an action against a former employee and his mother for damages for conversion and fraud. He stated:

From Chitel v. Rothbart to the present day, the law has sought to draw a fair balance between leaving the plaintiff with a “paper judgment” and the entitlement of the defendant to deal with his or her property until judgment has issued after a trial. In my respectful view, a plaintiff with a strong prima facie case of fraud should be in no more favoured position than, say, a plaintiff with a claim for libel, battery, or spousal support. On the other hand, there may be circumstances of a particular fraud that give rise to a reasonable inference that the perpetrator will attempt to perfect the deception by making it impossible for the plaintiff to trace or recover the embezzled property. To this extent, it seems to me that cases of fraud may merit the special treatment they have received in the case law.

Rather than carve out an “exception” for fraud, however, it seems to me that in cases of fraud, as in any case, the Mareva requirement that there be a risk of removal or dissipation can be established by inference, as opposed to direct evidence, and that inference can arise from the circumstances of the fraud itself, taken in the context of all the surrounding circumstances. It is not necessary to show that the defendant has bought an air ticket to Switzerland, has sold his house and has cleared out his bank accounts. It should be sufficient to show that all the circumstances, including the circumstances of the fraud itself, demonstrate a serious risk that the defendant will attempt to dissipate assets or put them beyond the reach of the plaintiff.[^11] [Emphasis added]

[90] As noted above, the test under s. 12 of the Family Law Act is lower than the test for a Mareva Injunction. It requires only a finding that the moving party is likely to be entitled to an equalization payment and that a preservation order is necessary to prevent the responding party from dissipating his assets and putting them beyond the reach of the moving party, thereby depriving the moving party of their rightful share in what was net family property or the property into which it has been converted.

(c) Costs of the Motion for Directions

[91] Costs, if not agreed upon, shall be determined following written submissions following the release of the typed reasons.

CONCLUSION AND ORDER

[92] For the foregoing reasons, it is ordered that:

1. All assets listed in this Order shall forthwith be delivered up to a bailiff named by the Applicant and be stored in a storage facility without access for preservation until the Family Law proceedings comes to a close, or periodic further order of this court.

2. The Respondent and Jay Bradimore shall forthwith identify the whereabouts of the assets and facilitate the implementation of this Order.

3. List of Cars:

ASTO DBC 2005 VIN# SCFAD01A55GA01955 ASTO VVT 2006 VIN# SCFBB03BX6GC01781 AUDI R8 2008 VIN# WUAAU34218N001634 ARIEL ATOM – RACE CAR SRA0009 BENT CGT 2005 VIN# SCBCR63W55C024227 CHEV CVT 2005 VIN# 1G1YY24U75512617 DODGE CHARGER 2007 VIN# 2B3KA43H87H751062 DODGE STI 2003 VIN# 1BJR65Z33V501302 FERR 43C 2005 VIN# ZFFEW58A350143032 FERR SPI 2002 VIN# ZFFYT53AX20128178 FERR 360 2001 VIN# ZFFYT53A010123635 FERR 458 2010 VIN# ZFF67NFA5A0174541 GMC SAF 2000 VIN# 1GKDM19W1YB502524 LAMO GAL 2004 VIN# ZHWGU11S84LA00299 LAMO GAL 2006 VIN# ZHWGU12N36LA02991 LAMO MUR 2003 VIN# ZA9BC1OU13LA12517 NISS GTP 2009 VIN# JN1AR54F49M250405 PORS 9TB 2008 VIN# WP0CD29928S788150

4. List of Bikes:

KAWK EX6 2007 VIN# JKAEXEA137A028170 SUZI GXR 2001 VIN# JS1GW71A112100069 SUZI DL6 2004 VIN# JS1VP54A942101270

5. List of Boats:

One Boat

6. Justice Price is seized of the Applicant’s motion to have the Respondent found in contempt.

7. The proceeds of sale of cars of the above vehicles or any other vehicles once owned by 2446519 Ontario Inc. if sold previously shall forthwith be paid into court to the credit of this proceeding and the Respondent and Mr. Bradimore shall provide evidence that this has been done.

8. The parties and Elizabeth Wilson, Jay Bradimore shall attend for examination on October 31, 2016, at the time and place specified in the Notice of Examination that has been received by Mr. Robson’s office.

9. The contempt motion is adjourned to November 23, 2016, at 9:00 am before me.

Price J.

Released: November 3, 2016

[^1]: Family Law Rules, O.Reg. 114/99, as am. [^2]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [^3]: Davis v. Tangredi, 2006 44269 (ON SC), at para. 23. [^4]: Barbini v. Edwards, 2014 ONSC 6762, [2014] O.J. No. 5601, at para. 91. [^5]: Price v. Price, 2016 ONSC 728, at paras. 6-7 [^6]: Bronfman v. Bronfman, 2000 22710 (ON SC), 51 O.R. (3d) 336 and Benvenuto v. Whitman, 2012 ONSC 2696, [2012] O.J. No. 2019. [^7]: Benvenuto v. Whitman, 2012 ONSC 2696, [2012] O.J. No. 2019, at para. 30 [^8]: Taus v. Harry, 2016 ONSC 219 at paras. 30-33 [^9]: LeVan v. LeVan, 2006 63733 (ON SC), [2006] O.J. No. 4599, 32 R.F.L. (6th) 359 (Ont. S.C.J.) [^10]: Radosavljevic v. Radosavljevic (1986), 1986 2529 (ON SC), 57 O.R. (2d) 51 (Ont. H.C.). [^11]: Sibley & Associates LP v. Ross, 2011 ONSC 2951, at pages 62 - 63