Fatahi-Ghandehari v. Wilson, 2018 ONSC 5587

COURT FILE NO.: FS-15-83320 DATE: 2018-09-21 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SARA FATAHI-GHANDEHARI Self-represented Applicant

• and -

STEWART WILSON Paul Robson for the Respondent Respondent

Richard Watson for the non-parties, Jason Bradimore and Straight Forward Auto Service Inc.

HEARD: July 12, 25, and 27, 2017, at Brampton, Ontario

Price J.

Reasons For Order

NATURE OF MOTION

[1] The non-party, Jason Bradimore, states that Mr. Wilson entered into a joint venture with him in the midst of litigation between Mr. Wilson and his wife, Sara Fatahi-Ghandehari. He states that pursuant to the joint venture agreement, Mr. Wilson transferred several exotic cars to him and his company. Mr. Wilson and Ms. Fatahi-Ghandehari had previously rented the cars to customers for short periods of time in a business they operated together until their separation. Mr. Bradimore says that in entering into the joint venture, he relied on an order made by Gray J. in a civil proceeding between Mr. Wilson and Ms. Fatahi-Ghandehari in Milton, Ontario, in which Gray J. held that the cars, or some of them, were beneficially owned by Mr. Wilson.

[2] During the family law proceeding that ensued between Ms. Fatahi-Ghandehari and Mr. Wilson, Ms. Fatahi-Ghandehari obtained two orders from this court requiring Mr. Wilson to disclose information about his assets, including his exotic car business. The orders required Mr. Wilson to obtain and produce, among other things, a valuation of the exotic car business.

[3] While the contempt motion was pending, Ms. Fatahi-Ghandehari obtained an order from this court enjoining the disposition of the cars (“the preservation order”). The order required Mr. Wilson and Mr. Bradimore to identify the whereabouts of the cars and facilitate the implementation of the order, which required that all assets listed in the order be delivered up to a bailiff named by Ms. Fatahi-Ghandehari, to be stored in a storage facility, without access, for preservation until the family law proceedings come to a close or this court made a further order.

[4] Ms. Fatahi-Ghandehari eventually obtained a further order from this court finding Mr. Wilson in contempt of the disclosure orders. As a result of his continuing contempt, this court has now struck Mr. Wilson’s pleadings in the family law proceeding and granted leave to Ms. Fatahi-Ghandehari to proceed to an uncontested trial.

[5] Mr. Bradimore moves to set aside the preservation order on the ground that he was not given notice of the motion to obtain that order, and on the ground that there was no basis for making the order, having regard to the fact that Ms. Fatahi-Ghandehari did not assert any claim to the cars in her Application, and that the cars are owned by Mr. Wilson’s Trustee in Bankruptcy, or the joint venture, and not by Mr. Wilson.

[6] Ms. Fatahi-Ghandehari moved to have Mr. Bradimore found in contempt of the preservation order. This court heard Mr. Bradimore’s motion, but reserved judgment until it had disposed of Ms. Fatahi-Ghandehari’s contempt motion against Mr. Wilson. As a final order has now been made in the contempt proceeding, the court now turns to Mr. Bradimore’s motion.

BACKGROUND FACTS

Events that preceded the judicial proceeding

[7] Sara Fatahi-Ghandehari and Stewart Wilson met each other in 2005, when she was 25 and he was 42. At the time, Mr. Wilson operated a business under the name GTA Exotic Car Rental and owned a home at Unit 211, 3400 Lakeshore Boulevard West, Toronto (“the Lakeshore home”), which he says he bought with his own funds.

[8] The parties were married on August 12, 2007. Ms. Fatahi-Ghandehari asserts that prior to the marriage, Mr. Wilson asked her to enter into a marriage contract, which provided that in the event they separated, he would have no obligation to support their children. She states that the terms were unacceptable to her, but that on August 9, 2007, three days before their wedding, she caused her lawyer to send a letter to Mr. Wilson, agreeing to some of the terms he had requested. The lawyer stated that the agreement could not be finalized in time for the wedding, but that Ms. Fatahi-Ghandehari had instructed him to prepare an agreement afterward on her behalf with the terms she was prepared to accept.

[9] Ms. Fatahi-Ghandehari’s letter, which she and her lawyer signed, stipulated that she would not make any claim against Mr. Wilson’s businesses, GTA Exotic Car Rental Inc. and GTA Motorcycle Rental, or 2126818 Ontario Inc., or the physical assets used in the businesses. It additionally stipulated that each of the parties would continue to own, as their own property, all of the property that he or she owned before they married, or acquired during their marriage, and would not be required to share that property upon a termination of their marriage. The letter further stated:

The only property that would be divided would be any asset acquired jointly, including the current intended Matrimonial home at 3400 Lakeshore Boulevard West, Toronto, and any replacement thereof.

[10] Mr. Wilson says that he sold the Lakeshore home in 2009, when the parties had been married for two years, realizing a profit of $80,000. He says that Ms. Fatahi-Ghandehari matched that amount, and they used the combined amount to purchase a new home at 3329 Delfi Road in Mississauga (“the Delfi property”).

[11] Ms. Fatahi-Ghandehari states that when the Lakeshore home was sold, she wanted to buy another home, and used money gifted to her by her family to make that purchase. In her Application, she states that since she was the only one contributing money towards the purchase of the Delfi home, and because she did not trust Mr. Wilson, she asked that the parties enter into a Marriage Contract protecting her interest in the Delfi property and documenting that in the event of the breakdown of the marriage, the parties would not equalize their net family properties but, instead, would divide their properties in accordance with title ownership.

[12] Ms. Fatahi-Ghandehari relies on a Trust Ledger from a lawyer, Lawrence Shapiro, who assisted the parties in the sale of the Lakeshore home, to prove that she was purchasing the Delfi property on her own. The ledger, apparently part of a reporting letter Mr. Shapiro sent to Mr. Wilson, shows that of the $224,307.05 realized from the sale,

(a) $165,925.52 was used to discharge the first mortgage, presumably on the Lakeshore home.

(b) $5,677.50 was paid to the Real Estate Broker;

(c) $15,122.33 was allocated as “funds used towards Sara Fatahi-Ghandehari’s purchase of 3329 Delfi Road, Mississauga”; and

(d) $37,188.50 was “Paid to you following closing”.

[13] Ms. Fatahi-Ghandehari states that on July 24, 2009, the parties entered into a marriage contract. Mr. Wilson refused to obtain independent legal advice with respect to the contract, and initialed the bottom of each page and signed the end of the contract, without a witness.

[14] Mr. Wilson states that he never signed the marriage contract, and received no financial disclosure or independent legal advice in connection with it. He relies on the fact that his signature on the contract is not witnessed and the contract is undated.

[15] On July 31, 2009, Ms. Fatahi-Ghandehari bought the Delfi property for $385,000. In her application, she states that she made a down payment of $200,000, and obtained a mortgage in her own name for $184,000.

[16] A corporation, 2246519 Ontario Inc. (“224”), was registered on June 8, 2010, to operate as Exotic Car Tours. 224 was registered in the name of Ms. Fatahi-Ghandehari’s mother, Farzaneh Yaghinali, who Ms. Fatahi-Ghandehari says financed the purchase of the cars the business rented to the public. Ms. Fatahi-Ghandehari says that she operated 224’s bank accounts under bank powers of attorney from her mother. Mr. Wilson acknowledges that Ms. Fatahi-Ghandehari bought one of the cars, a Lamborghini, for approximately $85,000, with funds she received in settlement of claims arising from an earlier relationship.

[17] Mr. Wilson alleges that Ms. Yaghinali owned 224 in trust for him, pursuant to a trust agreement of the same date between him and Ms. Yaghinali (“the trust agreement”). Fatahi-Ghandehari and her mother say that Ms. Yaghinali’s signature on the trust agreement was forged.

[18] The parties separated after 7 years, on December 4, 2014. Ms. Fatahi-Ghandehari asserts that Mr. Wilson returned from a trip to Montreal, accused her of infidelity with an employee of their business, and physically assaulted her. The police charged Mr. Wilson with assault and removed him from the business. The Crown withdrew the assault charge eight months later, on August 14, 2015.

[19] There is a dispute between the parties as to what became of 224’s financial records and a computer on which its financial information was stored. Ms. Fatahi-Ghandehari asserts that she turned them over to Mr. Wilson, pursuant to an order made by the court in the civil action in Milton. Mr. Wilson asserts that Ms. Fatahi-Ghandehari disposed of the records. This court at the hearing of the contempt motion heard evidence of non-parties, including the business’ bookkeeper and a police officer who escorted Ms. Fatahi-Ghandehari when she delivered the records to Mr. Wilson’s business premises, and concluded that the records were returned to Mr. Wilson.

[20] Ms. Fatahi-Ghandehari says that her mother returned from Europe prior to Mr. Wilson’s assault, saw the assault on a security video, and resumed control of 224, as Ms. Fatahi-Ghandehari was in and out of hospital and in shock. She further states that her mother removed her powers of attorney and, with them, Ms. Fatahi-Ghandehari’s signing authority over 224’s bank accounts.

[21] Mr. Wilson alleges that Ms. Fatahi-Ghandehari staged the reported assault on her in order to remove him from the business. He says that on the following day, Ms. Fatahi-Ghandehari tried to sell 224’s entire 13 car inventory. Ms. Fatahi-Ghandehari asserts that she ceased to be involved in the business when Mr. Wilson assaulted her on December 4, 2014, and did not try to sell any of the vehicles, although she applied to the court, on her mother’s behalf, for leave to have them sold.

The judicial proceedings

(i) The Milton action

[22] Mr. Wilson retained a lawyer, Mr. Robson, who began a civil action on his behalf in Milton against Ms. Fatahi-Ghandehari, her mother and sister, and 224, under court file no. 118/15 (“the Milton action”). Mr. Robson obtained an injunction in the Milton action, preventing the sale of the cars. Gray J. later made an order dated March 3, 2015, in the Milton action, in which he held that certain exotic cars that 224 had leased to customers, (“the Gray cars”), were beneficially owned by Mr. Wilson. Gray J.’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 WUAAU34218N001634,

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.

[23] The motion for a Mareva injunction that Gray J. refers to in paragraph 6 of his order, and which he dismissed, was made by Mr. Wilson, not by Ms. Fatahi-Ghandehari.

[24] Ms. Fatahi-Ghandehari, her mother, and 224, appealed unsuccessfully from Gray J.’s order. The Court of Appeal dismissed their appeal on April 5, 2016.

Transfer of the cars to Jason Bradimore’s company

[25] On March 4, 2015, one day after Gray J.’s Order, Mr. Wilson transferred the cars, for no consideration, to Straight Forward Auto Service Inc., a company that his friend and business associate, Jason Bradimore, has owned since 1995. A month later, the licence plates for all the cars were registered in the name of another of Mr. Bradimore’s companies, 2448083 Ontario Inc.

(ii) Mr. Wilson’s bankruptcy proceeding

[26] Mr. Wilson made an assignment in bankruptcy on April 29, 2011. He failed to disclose the trust agreement, or his beneficial interest in the exotic cars listed in Gray J.’s Order, to the Trustee or to his creditors. At a hearing on April 10, 2015, in the bankruptcy proceeding, Pattillo J. made the following finding:

In my view the evidence clearly establishes that through the June 8, 2010 Trust Agreement, Mr. Wilson had a beneficial interest in some of [the Gray exotic] vehicles; that his interest remained as of the date of bankruptcy on April 29, 2011, and that he failed to disclose his interest in his statement of affairs. Further the remaining vehicles were acquired on his behalf between the date of the bankruptcy and his discharge .

[Emphasis added]

[27] Pattillo J. made a preservation order on April 10, 2015, requiring Mr. Wilson to deliver up possession of certain of the Gray cars to Mr. Wilson’s trustee in bankruptcy or, if he no longer had possession of them, to deliver up particulars of their sale and of any bank accounts into which any monies received from the sale were deposited. Pattillo J. ordered Mr. Wilson’s bank accounts frozen, and provided that he could return to court to rescind or vary that order once he provided the trustee with the requested information.

[28] In his endorsement accompanying the order of April 10, 2015, Pattillo J. made the following comment:

This motion was scheduled by me at a 9:30 a.m. appointment with counsel on March 27, 2015. Mr. Robson was present. In his affidavit filed in response to the Trustee’s motion, Mr. Wilson says, at paragraph 15, “In any event on or about April 4, 2015, I disposed of my interest in all vehicles awarded as permitted by Justice Gray’s order.” Mr. Wilson’s actions in selling the vehicles, if in fact he has, in the face of a scheduled motion by the Trustee to preserve them, smacks of contempt . It is consistent, in my view, with his actions in failing to disclose his interest in the vehicles at the time of his assignment in bankruptcy.

[Emphasis added.]

[29] Mr. Wilson appealed Pattillo J.’s order unsuccessfully to the Court of Appeal, arguing that Pattillo J. had erred in finding, based on the June 8, 2010, trust agreement, that Mr. Wilson had a beneficial interest in the vehicles at the time of his bankruptcy. The Court of Appeal rejected his 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], [224] has no right or ownership of the said assets.”

[30] The Court of Appeal further noted that Gray J. had found, on March 3, 2015, that the trust agreement was valid, and that Mr. Wilson was the beneficial owner of the vehicles, that he had directed, in his endorsement, that a copy of the endorsement be sent to the trustee, who then brought the motion before the motion judge for preservation of the vehicles and ancillary relief. The Court of Appeal found that the motion judge’s finding that Mr. Wilson had a beneficial interest in the vehicles at the time of his bankruptcy was “unassailable”.

(iii) The family law proceeding

[31] Ms. Fatahi-Ghandehari began the present proceeding against Mr. Wilson by Application issued on April 23, 2015 (“the Family Law proceeding”). In her Application, she claimed a divorce, spousal support, equalization of net family property, and exclusive possession of the matrimonial home and its contents. She additionally requested a freezing of assets, and a declaration that the Marriage Contract dated July 24, 2009, is valid or, in the alternative, an Order for unequal division of the net family property in her favour.

[32] Mr. Wilson failed to deliver his Answer and Financial Statement in the Family Law proceeding in a timely manner. On June 10, 2015, Ms. Fatahi-Ghandehari moved for an order, among other relief, requiring him to deliver his Answer and Financial Statement, and to obtain and produce a valuation of the business, Exotic Cars.

a. Miller J.’s Order dated July 23, 2015

[33] At a case conference on July 23, 2015, Miller J. ordered Mr. Wilson, within 45 days, or by September 6, 2015, to deliver his Answer and Financial Statement and to provide certain of the financial disclosure Ms. Fatahi-Ghandehari was seeking. In her endorsement, Miller J. noted 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 disclosure of those records would 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.

b. This Court’s Order dated July 7, 2016

[34] On June 10, 2016, more than 9 months after the deadline that Miller J. imposed, Ms. Fatahi-Ghandehari brought a motion, to be heard June 17, 2016, for an order requiring Mr. Wilson to comply with Miller J.’s order. Among the relief that Ms. Fatahi-Ghandehari sought was:

(a) an order requiring Mr. Wilson to obtain an income report for spousal support purposes and “a business valuation of the value of his business, Exotic Car Tours and any other business interests owned by him on the date of separation”; and

(b) an order restraining Mr. Wilson from dissipating, depleting, or disposing of any assets of Exotic Car Tours or any other business owned by him.

[35] Ms. Fatahi-Ghandehari’s motion was heard on July 7, 2017. In my endorsement of that date, I noted that Mr. Wilson was the owner of the Exotic Cars business and that, as such, was presumptively obliged to produce a valuation of the business. Additionally, as his income was approximately twice that of Ms. Fatahi-Ghandehari, I found that he was better resourced to obtain the valuation.

[36] The order made on July 7, 2016, required Mr. Wilson, by August 7, 2016, to retain a Chartered Business Valuator, whose selection and terms of reference the parties were to agree upon, t o be paid initially by Mr. Wilson, who could later seek re-apportionment of those costs at the end of the trial. It additionally ordered both parties, by Monday, July 18, 2016, to produce to the other a signed direction to all of Canada’s Chartered Banks, authorizing and directing them to identify all accounts held in the name of the either of the parties. The balance of the motion was adjourned, to be returned on five days’ notice, to be arranged by either party, in consultation with the other as to availability.

c. Ms. Fatahi-Ghandehari’s contempt motion

[37] Mr. Wilson delivered his Answer and Financial Statement on July 18, 2016. He failed to produce all of the disclosure ordered, including the Agreement of Purchase and Sale for his property on Niels Avenue in Burlington or the valuation of his exotic car rental business.

[38] Mr. Wilson produced directions to the Chartered Banks authorizing them to provide Ms. Fatahi-Ghandehari’s lawyer with a list of his bank accounts, but did so on the very day that the lawyer delivered a Notice of Ms. Fatahi-Ghandehari’s Intention to represent herself. He was asked to provide replacement authorizations to Ms. Fatahi-Ghandehari, but failed to do so.

[39] On July 26, 2016, Ms. Fatahi-Ghandehari, who was then, and is now, self-represented, although assisted by lawyers providing “unbundled legal services”, made a motion for a finding that Mr. Wilson was in contempt of the disclosure orders of Miller J. dated July 23, 2015, and of this Court dated July 7, 2016 (“the contempt motion”).

[40] On August 17, 2016, this court adjourned Ms. Fatahi-Ghandehari’s contempt motion to October 26, 2016, on terms by which she was granted leave to bring a motion, on notice to Mr. Wilson’s mother, Elizabeth Wilson, his brother, Gregory Wilson, and his friend and business associate, 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. The court wrote, in its endorsement:

It is appropriate, given the recent service of responding material on Ms. Ghandehari, that she be given an opportunity to deliver reply evidence. Some of that evidence can only reasonably be obtained from non-parties. Mr. Wilson has indicated that he has no objection to an order directing the CRA to produce his tax records/file directly to Ms. Ghandehari. Mr. Wilson and his lawyer also consent to an order that a motion for production of records from Mr. Wilson’s mother be served on Mr. Robson on the mother’s behalf. Ms. Ghandehari says that she has an address for service of Mr. Bradimore.

Based on the foregoing, it is ordered that:

1. This motion is adjourned to October 26, 2016, at 8:30 a.m. before me in Brampton.

2. Ms. Fatahi-Ghandehari has leave to bring a motion for production of records from and/or question of Mr. Wilson’s mother, Karen Elizabeth Wilson and his brother, Gregory Wilson, and Jason Bradimore. Service of the motion on Mr. Wilson’s mother may be made by delivery of the material to Mr. Robson .

3. Ms. Fatahi-Ghandehari has leave, as does Mr. Wilson, to deliver further evidence with regard to the ownership of Exotic Cars and the funds used to purchase the home at 1360 Niels Ave., Burlington.

[Emphasis added.]

[41] Mr. Wilson did not deliver further evidence regarding the ownership of the cars. Ms. Fatahi-Ghandehari delivered evidence regarding their purchase, showing that the funds had come from her. Mr. Wilson asserts that he obtained those funds from the business.

d. Ms. Fatahi-Ghandehari’s motions to examine non-parties and for preservation order

[42] On October 7, 2016, Ms. Fatahi-Ghandehari made a motion, for hearing October 18, 2018, at 9:00 a.m., for leave to examine Mr. Wilson’s mother, Elizabeth Wilson, his brother, Gregory Wilson, and his friend and business associate, Jason Bradimore, as non-parties, 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….”

[43] Additionally, on October 17, 2016, Ms. Fatahi-Ghandehari made a motion, for hearing October 18, 2016, at 9:00 a.m., for preservation of assets pursuant to s. 12 of the Family Law Act. In that motion, she requested the following relief, among others:

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) 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.

[44] Ms. Fatahi-Ghandehari filed a supporting affidavit in which she states, among other things, the following:

a) 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.

b) Ms. Fatahi-Ghandehari registered liens on the Gray Order exotic cars, which Mr. Wilson had transferred to Jay Bradimore and his company, Straight Forward Auto Service Inc. She stated that the cars were “tied up in litigation in both civil and family court”. Mr. Wilson’s lawyer registered a discharge of the liens on September 29 and 30, and October 6, 2016.

[45] At the October 18, 2016, hearing of Ms. Fatahi-Ghandehari’s motion for leave to examine non-parties, Mr. Wilson’s lawyer, Mr. Robson, stated that he was representing the non-parties for the purpose of the motion. He stated that the non-parties did not oppose the order sought, and advised the court, after consulting with both Ms. Wilson and Mr. Bradimore, that Ms. Fatahi-Ghandehari’s Notice of Examination could be served on them by being sent to his office. He 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.

[46] I incorporated those terms into my endorsement, which states:

I am satisfied that the non-parties, Elizabeth Wilson and Jason Bradimore, in his own right and as representative of Straight Forward Auto Service Inc., have evidence relevant to Ms. Fatahi-Ghandehari’s motion to have Stewart Wilson found in contempt of my Order dated July 7, 2016, and may have relevant documents in their possession power or control.

Mr. Robson, on behalf of the said non-parties, does not oppose the Order , and indicates that both witnesses can attend at Durham Reporting and Mediation Services in Oshawa on October 31, 2016, at 10 a.m. to be examined and to produce documents .

Ms Fatahi-Ghandehari has not set out, in her Notice of Motion, a proper identification of the documents she needs produced. Accordingly, she asks to be permitted to set those out in a Notice of Examination to be served on the non-parties, by e-mail to Mr. Robson, by October 25, 2016. Any conduct money required by the Rules shall be delivered to Mr. Robson’s office by the same date….

[47] The order stated:

1. The Applicant Ms. Fatahi-Ghandehari has leave to examine the non-parties Elizabeth Wilson and Jason Bradimore, who shall attend at the Offices of Durham Reporting on October 31/16 at 10 a.m. in accordance with a Notice of Examination to be served by e-mail on them c/o Mr. Robson’s office, with conduct money as required by the rules to be delivered to the non-parties at the office of Paul Robson.

[48] As the court finished dealing with the motion to examine non-parties at 11:30 a.m., and the regular motions list had already been delayed by 1 ½ hours, the court adjourned Ms. Fatahi-Ghandehari’s motion for a preservation order to October 26, 2016, for either a hearing or to be spoken to. It noted that the contempt motion had been adjourned to that date, when it would likely not be heard, pending completion of examinations, but would only be spoken to.

[49] After Ms. Fatahi-Ghandehari served her Notice of Examination on Mr. Wilson’s lawyer, Mr. Robson, Mr. Robson notified her 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-Ghandehari thereupon made a motion for directions, to be heard on October 26, 2016, upon the return of her motions to have Mr. Wilson found in contempt and her motion for preservation of assets.

[50] On October 26, 2016, Ms. Fatahi-Ghandehari attended, but Mr. Wilson, his lawyer, and the non-parties did not. Because both the contempt motion and the motion for preservation order had been adjourned to October 26, and because Ms. Fatahi-Ghandehari’s motion for directions regarding the examinations ordered on October 18 to take place October 31 had also been brought for hearing on October 26, I notified Mr. Robson that he must attend. He did attend, and the court heard lengthy arguments from him and from Ms. Fatahi-Ghandehari, chiefly on the motion for preservation, from 2:30 p.m. until 7:00 p.m.

[51] With regard to the motion for directions regarding examinations of the parties and non-parties, the court directed that the examinations proceed on October 31, as ordered on October 18. The court then turned to Ms. Fatahi-Ghandehari’s motion for preservation order. During the course of the hearing of that motion, Mr. Robson stated explicitly that he was representing the non-parties. I cannot comment on Mr. Robson’s communications with Mr. Bradimore concerning the motion, but Mr. Robson certainly had been given notice of the motion on October 18, and had a full opportunity to make submissions on behalf of both Mr. Wilson and Mr. Bradimore and his company on October 26, 2016.

[52] After hearing argument on October 26, 2016, the court made an endorsement which stated that reasons would follow elaborating on those stated in the endorsement. The endorsement then continued:

Ms. Fatahi-Ghandehari asserts a claim for equalization payment. That claim cannot be determined until Mr. Wilson has complied with the disclosure obligations he has pursuant to the Rules and the Orders made by this Court, which, by his own admission, he has not fully done . The extent of his non-compliance and the reasons for it have yet to be determined in the contempt proceeding currently before the court.

Mr. Wilson seeks to rely on a marriage contract between the parties which he says was intended to leave Ms. Fatahi-Ghandehari with ownership of the matrimonial home on Delhi [sic] Ave. in Mississauga and to leave him with ownership of GTA Exotic Cars. However, as Ms. Fatahi-Ghandehari asserts, and Mr. Wilson acknowledges, Mr. Wilson has registered a CPL for claims he makes against the Delhi [sic] property and the company, Exotic Cars Touring, or 2246519 Ontario Inc. was formed after the marriage contract was entered into.

The evidence before me discloses discrepancies in the taxpayer information of Mr. Wilson that has been produced. It also discloses that the deposits to Mr. Wilson’s personal account , which amounted to over $100,000 per year in 2014 and 2015 (even apart from the return of his security of $100,000 pursuant to Justice Gray’s Order of March 3, 2015), have ceased and the proceeds of the cars which Justice Gray found to be beneficially owned by him have been diverted, I find, to put them beyond the reach of Ms. Fatahi-Ghandehari. Mr. Wilson acknowledges as much in court, stating that it was necessary for him to transfer the cars from 2246519 Ontario Inc. to Mr. Bradimore’s company, re-organized for the purpose of disposing of the vehicles, because Mr. Wilson had no more control of 2246519 Ontario Inc.

While Justice Gray’s Order in the civil action permitted Mr. Wilson to dispose of the exotic cars held at that time by 2246519 Ontario Inc., this 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 the property in order to protect Ms. Fatahi-Ghandehari’s interests in an equalization payment, or in 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 can be found to be complied with .

[Emphasis added.]

[53] On November 3, 2016, the court released more detailed reasons, which I adopt for the purpose of this motion. The court noted that in Sibley & Associates LP v. Ross, 2011 ONSC 2951, (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. Strathy J. reasoned that cases of fraud “may merit the special treatment they have received in the case law.” In fraud cases, courts may establish by inference the risk of removal or dissipation factor in a Mareva inquiry. Furthermore, the inferences need not be the result of clear markers of avoidance, rather than all the circumstances, including of the fraud itself, “demonstrate a serious risk” of the defendant dissipating assets or shielding them from the plaintiff. [1]

[54] This court noted, in its reasons on November 3, 2016, that the test under s.12 of the Family Law Act is less strenuous 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.

[55] For the foregoing reasons, this court made the following order:

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.

f. Non-parties’ motion to set aside preservation order

[56] On October 31, 2016, when Mr. Bradimore attended at Durham Reporting & Mediation Services pursuant to the orders made by this court on October 18 and 26, 2016, the following exchange took place at the outset of the examination:

MR. ROBSON: All right. Madame Reporter, I came today prepared to act for Mr. Bradimore . Mr. Bradimore has just advised me that he does not feel comfortable going forward with the examination today . He only received the notice, it was sent to him by my office on, I believe, Thursday morning; he didn’t have a chance to look at it ‘til Thursday night. He has not had the opportunity to put everything together but more importantly, I think he wants to make a statement as to what he feels is going on and he wishes to consult and retain independent counsel . And I will let Mr. Bradimore make his statement for the record.

MR. SIDIQUI: Q. All right, Mr. Bradimore, what do you have to say about that?

A. From what I was told originally, was that I was coming here to be asked some questions by Sara and that was that, that Sara’s representing herself. And I disagree that two people are coming to discuss whatever questions she has for me. I get here, and she has two people at her disposal that I’m not aware that she can afford, never mind that they’re going to be here. So considering that she’s got people in her corner that know the law, essentially, I feel ambushed . I came here in good faith, and I feel ambushed.

Q. Is Mr. Robson representing you in the $700,000 claim that Sara’s brought against you in the civil courts?

A. At this point in time, quite the way I read it, I’m an – I don’t’ understand what non-party is.

MR. ROBSON: I, I, I think that that’s not relevant. There’s a – I, I don’t mind going on the record to say that I am under retainer to bring a motion to quash that action and that’s what I’ve indicated to you that I will because I regard it as abuse of process but I don’t think it’s fair to Mr. Bradimore to have to say anymore about my retainer .

MR. SIDIQUI: Okay, in any event…

MR. ROBSON: I’d ask, I’d ask you to restrict your comments to this situation, where obviously – Mr. Bradimore is, wants to consult independent counsel and reschedule these examinations.

MR. SIDDIQUI: Q. What – when is the first time that you were advised of this examination, Mr. Bradimore?

A. I was asked what date I’d be available to come and ask, for questions, I believe a couple weeks ago . Give or take. You guys were in court somewhere, I received a phone call what day would I be able to come and ask.

Q. And so your only contention with today is that Sara is represented by counsel and therefore you’d like to consult independent counsel, is that right?

A. I was – from what I understood, mentally, was that Sara was going to be here, and it was for her discovery for something and that I was to be here to answer whatever questions. I had zero problem with that, none at all .

MR. SIDDIQUI: Oh, by the way, Mr. Robson did advise the judge that you were…represented by him. Like, he was your counsel .

MR. ROBSON: For the purpose of – that, that’s true. That’s very true .

MR. MOHAMMED: Yes, as of…

MR. ROBSON: He’s, he’s changed his mind in view of developments .

[Emphasis added.]

[57] On November 9, 2016, Mr. Bradimore and his company, Straight Forward Auto Service Inc., moved, pursuant to Rules 2.03, 3.02(1), and 37.14(1)(a) and (b) of the Rules of Civil Procedure to permit short service and filing of the motion, to validate service of the motion by e-mail and by fax to Ms. Fatahi-Ghandehari’s de facto lawyer, and to set aside or vary this court’s order dated October 27, 2016.

[58] On November 23, 2016, the parties attended court again for the scheduled hearing of the contempt motion, which again had to be adjourned because the non-parties had refused to be examined pursuant to the court’s order of October 26, 2016. The court ordered Mr. Bradimore, Elizabeth Wilson, and Stewart Wilson to re-attend for examination on December 12, 2016, and adjourned the contempt motion to January 17, 2017. It stated, in its endorsement, in part:

Additionally, Mr. Bradimore and Elizabeth Wilson have attended today, at the court’s direction, as a result of their failure to be examined on October 31, 2016, pursuant to the earlier order of this court. Mr. Bradimore attended on October 31, 2016, but refused to be examined, or to continue to be represented by Stewart Wilson ’s lawyer in the examination because he learned that the questioning would be conducted by a lawyer for Ms. Ghandehari, and not by Ms. Ghandehari personally. Mr. Bradimore stated to the court today that he is prepared to re-attend to be examined, and has retained a separate lawyer of his own, Mr. Watson, to represent him at the examination. He retained Mr. Watson immediately following the attendance on October 31 st .

While it was, arguably, incumbent on Mr. Bradimore to arrange representation for his examination on October 31, 2016, if he required it, and not to have refused to be examined based on who would be asking the questions, that also is an issue to be addressed in relation to the costs of the adjournment and re-attendance. Mr. Bradimore is available to re-attend on December 12, 2016, to be examined and Mr. Watson’s secretary, whom Mr. Bradimore telephoned from court today, advises that Mr. Watson also appears to be available on that day.

[59] Mr. Bradimore and Straight Forward Auto Service Inc. made a motion on December 20, 2016, to set aside the preservation order that this court made on November 3, 2016. Andre J. declined to set aside the order on the ground that the court had lacked jurisdiction and adjourned the motion to be heard by this court on January 17, 2017, when the contempt motion was next before the court.

[60] On January 17, 2017, the contempt motion could not proceed by reason of the volume of cases on the regular motion list that day. The court therefore adjourned it to February 6, 2017. The court noted that André J.’s endorsement adjourning Mr. Bradimore’s motion from December 20, 2016, was before the court but the motion record was not. In any event, Ms. Fatahi-Ghandehari stated that she had not received the motion material. The court therefore ordered Mr. Bradimore, if he wished to proceed with the motion, to re-serve the material on Ms. Fatahi-Ghandehari, and appointed a time and place for him to do so. The court adjourned the hearing of the contempt motion to February 6, 2017, for hearing, and adjourned Mr. Bradimore’s motion to that date to have a later date set for the hearing of it.

[61] On February 6, 2017, the court began hearing the contempt motion against Mr. Wilson, and adjourned that motion to March 3 and 20, 2017 for continuation. The court adjourned Mr. Bradimore’s motion to March 3, 2017, at 9 a.m. for one hour. In the meantime, Mr. Bradimore delivered an affidavit on February 24, 2017, and filed a further affidavit of Mr. Watson’s law clerk sworn March 2, 2017. Ms. Fatahi-Ghandehari requested an adjournment for the purpose of cross-examining Mr. Bradimore on his affidavit, and the parties now estimated that the hearing of the motion would require more than an hour for oral argument. The court therefore adjourned the motion for cross-examinations on March 16, 2017, and for hearing on April 27, 2017. I noted that either party had leave to write to the Regional Senior Justice to request the assignment of a Case Management Judge for the family proceeding and/or for the related civil action in Milton and to request an earlier hearing date for the motion before another judge.

[62] On March 20, 2017, the continuation of the contempt motion against Mr. Wilson was adjourned to March 27, 2017, owing to a scheduling error. The hearing continued on March 27 and on April 27, 2017. The contempt motion continued on April 27, 2017, and was adjourned for further continuation to July 12 and 14, 2017. The court ordered:

2. The Sheriff of Peel shall enforce the Order for the seizure of vehicles referred to in my Order dated November 3, 2016, paragraphs 1,2,3, and 7 (Schedule A) with the exception of those listed in the Order of Master Jean dated January 31, 2017.

[63] Master Jean’s order, made in Mr. Wilson’s bankruptcy proceeding in Toronto on January 31, 2017, authorized the Trustee in Bankruptcy, Paddon & Yorke Inc., to sell his title to certain of the exotic cars to Elizabeth Wilson for $80,100 including HST, namely:

Mr. Wilson’s interest in 2246519 Ontario Inc.

2001 Ferrari 360 VIN: ZFFYT53A010123635

2002 Ferrari Spider VIN: ZFFYT53AX20128178

2003 Lamborghini Murcielago VIN: ZA9BC1OU13LA12517

2004 Lamborghini Gallardo VIN: ZHWGU11S84LA00299

2006 Lamborghini Gallardo VIN: ZHWGU12N36LA02991

2006 Aston Martin V8 Vantage VIN: SCFBB03BX6GC01781

2008 Audi R8 VIN: WUAAU34218N001634

2009 Nissan GT-R VIN: JN1AR54F49M250405

[64] On April 27, 2017, the court noted that Mr. Bradimore’s motion had been adjourned to that date to permit Ms. Fatahi-Ghandehari to cross-examine Mr. Bradimore on his affidavit. That cross-examination, which was scheduled to take place March 16, 2017, did not proceed as Mr. Bradimore’s lawyer, Mr. Watson, advised Ms. Fatahi-Ghandehari on March 14 that Mr. Bradimore was unable to attend on March 16 owing to the fact that he was ill with the flu.

[65] Ms. Fatahi-Ghandehari wrote on March 15, 2017, asking for the earliest Thursday when Mr. Bradimore and Mr. Watson were available, but Mr. Watson did not reply until April 13, when he proposed that the cross-examination take place one week hence, on April 20, 2017, only one week before the scheduled hearing of the motion on April 27. This did not give Ms. Fatahi-Ghandehari a reasonable opportunity to deal effectively with the results of the cross-examination, as Mr. Bradimore was relying on facta at the hearing. The court’s endorsement of that date stated:

I have reviewed the e-mail correspondence tendered by each party. I find that they disclose unreasonable delay by Mr. Bradimore which resulted in the necessity of adjourning the hearing of this motion today. Mr. Bradimore, who has not attended today and who was not accessible by phone for Mr. Watson until 10:20 a.m., has now advised, through Mr. Watson, that he is available to attend on any date for cross-examination. The earliest date now available to Ms. Fatahi-Ghandehari is May 4, 2017. The first available date to the court and the parties for a return of the motion was June 22, 2017.

[66] Based on the foregoing, the Court ordered both parties to attend for cross-examination on May 4, 2017, and adjourned the hearing of the motion to June 22, 2017.

[67] On June 22, 2017, Mr. Bradimore’s motion was returned for hearing. The court was advised that Mr. Bradimore had been cross-examined on May 11, 2017, had not answered questions asked by Ms. Fatahi-Ghandehari. The court found that Ms. Fatahi-Ghandehari’s questions were relevant and should be answered. It therefore ordered Mr. Bradimore to answer the outstanding questions by July 4, 2017, granted Ms. Fatahi-Ghandehari leave to respond by July 7, 2017, and adjourned the hearing to July 12, 2017.

[68] Mr. Bradimore’s motion was heard in part on July 12, 2017, and was adjourned to July 25 and July 27, 2017, when it was completed. Judgment was then reserved.

g. Outcome of contempt motion against Mr. Wilson

[69] The contempt motion against Mr. Wilson was adjourned from time to time until October 10, 2017, when this court found Mr. Wilson in contempt. The court adjourned the proceeding for a determination as to what penalty to impose on Mr. Wilson, and to give him an opportunity to purge his contempt.

[70] Following further hearings, the court imposed fines of $2,000 and $10,000 on Mr. Wilson. He paid the first fine but not the second. The court adjourned the proceeding further, to give Mr. Wilson a further opportunity to purge his contempt. On January 26, 2018, the court ordered him to pay Ms. Fatahi-Ghandehari’s costs of the contempt motion to November 16, 2017, in the amount of $94,439.75. He failed to pay those costs.

[71] The Court of Appeal, in reasons issued August 29, 2018, quashed four appeals that Mr. Wilson brought from the decisions of this court in the contempt proceeding. The court stated:

[10] The record amply shows that the appellant has made a procedural morass of this case. The record of non-compliance with customary practice and the rules is so egregious that there is no explanation that the appellant or Mr. Robson could provide that would excuse it. On this basis we refused the adjournment.

[11] Given the history of this proceeding, we would quash the appeal even if the order under appeal were final, in the exercise of our inherent jurisdiction to control the process of the court and to prevent its abuse: see Oelbaum v. Oelbaum, 2011 ONCA 300, 94 R.F.L. (6th) 251 . This jurisdiction is also recognized in s. 140(5) of the Courts of Justice Act. [2]

[72] On September 17, 2018, this court struck Mr. Wilson’s pleadings in the family law proceeding and granted Ms. Fatahi-Ghandehari the ability to proceed to an uncontested hearing.

ISSUES

[73] The court must determine whether Mr. Bradimore had notice of the motion for the preservation order and whether the order should be set aside on the ground that Mr. Wilson was not shown to be the owner of the cars that were ordered preserved.

PARTIES’ POSITIONS

The Non-Parties’ position

[74] Mr. Bradimore and Straight Forward Auto Service Inc. submit that the Order of this Court dated October 27, 2016, should be set aside pursuant to Rules 2.03, 3.02, 37.07(1) and 37.14(1)(a) and (b) of the Rules of Civil Procedure. They argue that:

(a) The Preservation Order was based on the erroneous premise that:

(i) The cars were owned by Mr. Wilson when, in fact, they were owned at all relevant times by Mr. Wilson’s Trustee in Bankruptcy;

(ii) The Joint Venture was a sham designed to allow Mr. Wilson to sell the cars free of any claims by Ms. Fatahi-Ghandehari.

(b) The Preservation Order has had the crippling effect of impounding a fleet of vehicles that Mr. Bradimore and Straight Forward require for their business.

Ms. Fatahi-Ghandehari’s position

[75] Ms. Fatahi-Ghandehari argues that the non-parties’ motion should be dismissed and that she should be granted the relief provided for by Rule 25(4)(b) [sic] of the Family Law Rules.

ANALYSIS AND EVIDENCE

Legislative Framework

[76] Rule 25(19) of the Family Law Rules authorizes the Court to change an order made without notice. It provides:

25. (19) The court may, on motion, change an order that,

(d) was made without notice; or

(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.

[Emphasis added.]

[77] Mr. Bradimore and Straight Forward Auto Service Inc. rely on Rule 37.14 of the Rules of Civil Procedure as authorizing the court to vary the preservation order. That Rule provides:

37.14(1) A party or other person who,

(a) is affected by an order obtained on motion without notice;

(b) fails to appear on a motion through accident, mistake or insufficient notice; or

(c) is affected by an order of a registrar,

may move to set aside or vary the order, by notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

(2) On a motion under sub-rule (1), the court may set aside or vary the order on such terms as are just.

(4) A motion under sub-rule (1) or any other rule to set aside, vary or amend an order of a judge may be made ,

(a) to the judge who made it, at any place; or

(b) to any other judge, at a place determined in accordance with rule 37.03 (place of hearing of motions).

[78] While Rule 1(7) of the Family Law Rules permits this court to apply the Rules of Civil Procedure by analogy, “If these rules do not cover a matter adequately,” it is my view that Rule 25(19) covers the matter adequately.

[79] As there is no Rule 25(4)(b) in the Family Law Rules, I interpret Ms. Fatahi-Ghandehari’s position to be that she relies on Rule 25(5)(b) of the Family Law Rules, which provides:

25 (5) Unless the court orders otherwise, a party who disagrees with the form or content of a draft order shall serve, on every party who was served under subrule (4) and on the party who served the draft order,

(a) a notice disputing approval (Form 25E);

(b) a copy of the order, redrafted as proposed; and

(c) notice of a time and date at which the clerk will settle the order by telephone conference.

Applying the legal principles to the facts of this case

a) Did Mr. Bradimore and his company, Straight Forward Auto Service Inc., have notice of the motion for preservation?

[80] I find that Mr. Bradimore, in his personal capacity and as a representative of Straightforward Auto Service Inc., was given proper notice of the motion for preservation order. Mr. Robson, who apparently represented Mr. Bradimore in a civil action by Ms. Fatahi-Ghandehari in Milton, advised the court that he was representing Mr. Bradimore and his company on October 18, 2016, when the motion to require him to attend for examination was before the court.

[81] The motion to attend for examination had been served on Mr. Bradimore personally on October 10, 2016, as appears from the affidavit of Mohammed Aslam Lesanya, sworn October 11, 2016. Mr. Robson was representing him and his company at the hearing of that motion, and received the motion for preservation order that day, if not the previous day. He was representing Mr. Bradimore and his company when the court adjourned the motion for preservation order to October 26, 2016, for hearing.

[82] Mr. Bradimore confirmed when he attended to be examined on October 31, 2016, that Mr. Robson had consulted him when at court two weeks earlier. Mr. Robson confirmed that he had come to the examination prepared to represent Mr. Bradimore and his company. It was only when Mr. Bradimore discovered that Ms. Fatahi-Ghandehari had two lawyers assisting her in the examination that he “changed his mind” and decided to retain counsel independent of Mr. Wilson.

[83] Mr. Robson stated explicitly at the hearing of the motion for preservation on October 26, 2016, that he represented the non-parties. I find that, at that point, Mr. Bradimore and his company had received sufficient notice through Mr. Robson, who was representing them at the hearing, and was content to have Mr. Robson attend on his behalf to oppose the motion.

[84] Rule 37.14(1) of the Rules of Civil Procedure, which Mr. Bradimore relies on, cannot be used where a party decides not to attend the hearing of a motion for his own reasons. See: Zsoldos v. Ontario Assn. of Architects, [2004] O.J. No. 309 (C.A.). [3] Rule 25(5) of the Family Law Rules should also not be used in such circumstances.

b) Should the preservation order be set aside?

[85] For the reasons that follow, I have concluded that the preservation order should not be set aside at this time.

[86] A preservation order pursuant to Rule 12 may not be employed to trammel the property of non-parties to a family law proceeding. See Ho v. Ho, 2003 ONSC 2315. [4] In the present case, however, I find that the cars are the property of Mr. Bradimore or in company in name only.

[87] Mr. Bradimore acknowledged that he paid nothing for the cars:

Q. How did Straight Forward pay for the acquisition of the cars into the joint venture?

A. There was no cash. It’s clearly laid out in the joint venture.

Q. So, there’s no cash; nobody collected money on the transfer of those cars?

A. No.

[88] Mr. Bradimore acknowledged, of his examination, “Initially, the vehicles in there are deemed to be his [Mr. Wilson’s] assets, I guess I would say.” (Page 11, Q. 19).

[89] Mr. Bradimore acknowledged that there were no witnesses to the joint venture agreement. (Page 37, Q. 95). When asked who his lawyer was when he signed the agreement, he replied, “I just did it on my own.” When asked, “You had no lawyer?” He replied, “No.” (P. 67, Q. 201). Mr. Bradimore stated that he never instructed Mr. Robson to remove the liens from the cars. (P. 80, Q. 239). When asked why Mr. Robson removed the liens, he replied, “If you want to know why Mr. Robson has done anything, you’ll need to ask Mr. Robson.” (P. 239, Q. 80 to 89).

[90] Mr. Bradimore stated, in his affidavit sworn November 17, 2016, at paras. 10 to 11, “I am involved in the selling, maintaining, repairing of cars.” He was not involved in the business of renting cars. Mr. Bradimore stated that in the “joint venture”, Mr. Wilson was managing the rental of the cars:

Q. So, he’s helping you ---

A. You’d have to refer to the exact wording on the joint venture, but initially that’s it.

Q. Well, what’s your understanding? Is Stewart helping you manage the rental of his cars?

A. He’s managing.

[91] He later stated, “And as far as on a day-to-day basis who rents them, on a day-to-day basis at Straight Forward, I don’t know who’s purchased vehicles. I don’t know where they’re going. I don’t know until the money comes in, nor do I care.” (P. 33, Q. 83).

[92] When asked where the cars were that were the subject of this Court’s preservation order, Mr. Bradimore was evasive. He replied, “They would either be at the shop in Oakville, at the house we do business out of, or at a garage being repaired at any given time.” (p. 25, Q. 68). When asked if he could give the addresses of those three places, he replied, “Not off the top of my head, no.” When asked what he means by the shop in Oakville, he acknowledged that he was referring to the Exotic Car Tours Shop. (p. 25, Q. 70). When asked whose house it is, he replied, “Elizabeth Wilson’s” (p. 30, Q. 71). When asked to undertake to provide the address, he replied, “No. I don’t know it. I know how to get there; I don’t know the address.” When asked, at q. 73, to go there and get the address, Mr. Watson replied, “Well, we’ll take it under consideration”. When asked for the location of the garage, he replied, “different garages that we repair vehicles.” (P. 31, Q. 74). When asked to provide the addresses, or to undertake to do so, he replied, “No, I don’t know it.” (p. 31, Q. 75)

[93] When asked about income earned from the rental of cars, Mr. Bradimore was also evasive. He stated, “So, right now, there’s no number to go to to say we’ve made $5,000. We’ve made $105,000, we’ve lost $25,000. As of right now in this moment, I don’t know.” (Page 44, Q. 120).

[94] Mr. Bradimore agreed that Mr. Wilson can terminate their agreement on 30 days’ notice. (Page 48, Q. 136). In that event, Mr. Wilson gets the cars back, at depreciated book value. (Page 48, Q. 137 and Page 51, Q. 148).

[95] In its reasons released October 10, 2017, this court stated:

[139] The justification that Mr. Wilson offers for failing to retain a Business Valuator is that in 2015, the exotic cars, which were his business’ principal assets, were no longer owned by him, because he had transferred them to the joint venture or, through it, to Mr. Bradimore and his company. He states that he owns 10% of the new [joint venture] company. He states that he has not valued the company because it is not Exotic Car Tours and was not the subject of the Order. As he put it, “New company, new life. The only thing the same is the vehicles.”

[140] I do not accept Mr. Wilson’s justifications for not retaining a Business Valuator. I find that he had access to 224’s financial records and could have provided them to a Valuator for the purpose of valuing his business on the date of separation. I also find that, after transferring the cars to the corporation by which he operated his joint venture with Mr. Bradimore, Mr. Wilson had access to the records of that company, whether his interest in the venture was 10% or a greater percentage, and could have provided them to the Valuator for the purpose of valuing the present value of his interest.

[141] I find, beyond a reasonable doubt, that Mr. Wilson deliberately and wilfully breached my Order of July 7, 2016, requiring him to retain a Business Valuator to value the exotic cars business.

[96] With regard to the PayPal account by which the payments for the rental of cars from the “joint venture” are made, this Court noted in its reasons for the contempt order against Mr. Wilson:

[155] Mr. Wilson states that he transferred the Pay Pal account to a corporation owned by his friend and business associate, Mr. Bradimore. He stated that he did not know the number of the corporation. He stated, “I had to get Jay to register a business in order to be a dealer. In order to operate a car rental business legally, you have to be dealer. I got fined in the past. I had no way to get business insurance. I was on street with nothing in the bank. In order to continue the business, I had to put the business in Jay’s name.”

[156] Mr. Wilson explained that he had been charged in the past for selling vehicles without a dealer’s license, which he said is also required in Ontario for operating a car rental business. Mr. Bradimore had a car dealership license and business insurance.

[157] Mr. Wilson initially testified that he opened the Pay Pal account for Mr. Bradimore. When asked why his own name and address appear on the Profile, he replied that the Pay Pal web site asks for information when the account is set up, so Mr. Wilson provided his own information. Later, he stated that he set up the Pay Pal account in January 2015 and that Mr. Bradimore “came on” in March 2015.

[158] At the examination by Ms. Fatahi-Ghandehari’s lawyer, Mr. Siddiqui, on May 11, 2017, Mr. Bradimore, who has known Mr. Wilson for 16 years, and attended his and Ms. Fatahi-Ghandehari’s wedding, was asked about the Pay Pal account and gave the following testimony:

271. Q. Okay. What about the Pay Pal account? That’s in Stewart’s name with his address and his phone number and at the top of the paper account, it says “info at gtaexotics.ca.” Why is that?

A. I believe it had probably because he’s always had – I actually don’t know how Pay Pal works. I don’t use Pay Pal.

272. Q. So, does he have full control on the Pay Pal?

A. The money goes into the numbered company.

273. Q. Okay. But it’s all run through Stewart Wilson?

A. I believe it’s the way it was originally set up. I haven’t ventured into it.

274. Q. Do you have any control over the Pay Pal?

A. We have all the statements and I have Erin, who is my bookkeeper, looking through things, and she has been for quite a while now, to try to get our taxes up to date and caught up.

275. Q. Does the Pay Pal statement still have all of Stewart’s personal information on it?

A. I cannot tell you what it does or doesn’t have.

276. Q. What protections do you have as far as the Pay Pal account is concerned from Stewart taking that money and running?

A. I guess at this point in time probably none other than blind trust that the money goes into the account as we make sales. When those numbers start to come out of balance, then I would have a serious concern.

[159] When asked, at the hearing of the motion, about the evidence Mr. Bradimore had given at his examination, Mr. Wilson replied, “I don’t know what he’s saying. It [the Pay Pal account] belongs to the numbered company that was set up after we separated, and transferred to Jason.”

[160] I reject Mr. Wilson’s explanation for not producing copies of the Pay Pal statements to Ms. Fatahi-Ghandehari. It is evident from Mr. Bradimore’s testimony that Mr. Wilson controls the Pay Pal account, operates it freely and exclusively, and that Mr. Bradimore, at best, has a copy of the statements for the purpose only of having his bookkeeper review them for tax purposes. It is clear that Mr. Wilson has access to the statements, Mr. Bradimore has not prevented him from producing them, and that he is using Mr. Bradimore and his company simply as a means of concealing the requested information.

[97] This court was not called upon, in making the preservation order, to determine whether the transfer for the cars to Mr. Bradimore should be set aside as a fraudulent conveyance, and it is not called upon to do so now. However, in deciding whether Mr. Bradimore has an interest in the cars that should have prevented the court from making a preservation order, it is relevant to consider the “badges of fraud” that normally justify setting aside a conveyance as fraudulent. In Prodigy Graphics Group Inc. v. Fitz-Andrews, [2000] O.J. No. 1203 (Sup. Ct.), (2000), Cameron J. draws from the 1602 English Star Chamber’s Twyne’s Case, and provides a non-exhaustive list of the “badges of fraud”:

(1) Transfer to a non-arm’s length person.

(2) Grossly inadequate consideration.

(3) The transferor remains in possession on occupation of the property for his own use after the transfer.

(4) The transferee is holding the property in trust for the transferor.

(5) There are actual or potential liabilities facing the transferor or he is about to enter upon a risky undertaking.

(6) The transferor has few remaining assets after the transfer.

(7) The transfer was effected with unusual haste.

(8) The transaction was secret.

(9) The absence of a sound business or tax reason for the transaction.

(10) Destruction or loss of relevant papers or inaccurate documents supporting the transaction.

(11) Cash is taken in payment instead of a cheque.

(12) The deed contains false statements as to the consideration.

(13) The deed gives the grantor a general power to revoke the conveyance.

(14) The deed contains the self-serving and unusual provision "that the gift was made honestly, truly and bona fide ". [5]

[98] In the present case, Mr. Bradimore is not an arm’s length person. While Mr. Bradimore characterizes Mr. Wilson as a “casual acquaintance”, he acknowledges, in his affidavit sworn February 24, 2017, that he has known him for approximately 15 years, and that they have mutual business activities trading in cars, trucks, motorcycles, and “ancillary activities”.

[99] There was no consideration for the conveyance of the cars to Mr. Bradimore. Mr. Wilson remains effectively in possession of the cars, which are apparently housed at his mother’s home, and elsewhere without Mr. Bradimore’s knowledge of their whereabouts. Mr. Wilson has few, if any, tangible assets apart from the cars, and made an assignment in bankruptcy. The transfer was made in haste, after Gray J.’s order, and the agreement gives Mr. Wilson the power to revoke arrangement and receive the return of the cars.

[100] The presence of these badges of fraud will create an inference of fraudulent intent. [6] The Court of Appeal for Ontario further held that such suspicious circumstances will create an evidentiary presumption of fraud that must be rebutted by the parties to the transaction. [7]

[101] In Purcaru v. Seliverstova, 2015 ONSC 6679, (2015), Myers J. granted an ex-wife’s application to have the court set aside transactions between her ex-husband and his new wife (and their related companies and relatives) for fraudulent purposes. [8] The court reviewed the new wife’s evidence, and determined it was a “pack of lies” because the new wife’s explanations for certain financial transactions “lacked common sense.” [9]

[102] The Court of Appeal for Ontario has held that the Fraudulent Conveyances Act and the Family Law Act may work together to invalidate fraudulent transactions, even where the claimant spouse is not a judgment creditor. In Purcaru v. Seliverstova, 2015 ONSC 6679, the Court upheld the invalidating of a transaction between the respondent husband and other parties as fraudulent, and the naming of those parties and affiliated companies in the action. The Court of Appeal affirmed this right in Mikhail v. Cole (2017). [10]

[103] The Court of Appeal has also permitted a claimant spouse to use the FCA and FLA together to invalidate transactions entered into for the purpose of shielding assets from equalization. [11] In Stone v. Stone, 2001 ONCA 24110, (2001), Feldman J.A. noted the Supreme Court of Canada held that in determining matrimonial property rights, courts should not view the Family Law Act as a restrictive code. [12]

[104] Feldman J.A. further considered whether spouses were included in the definition of “creditors or others” within s. 2 of the Fraudulent Conveyances Act. She held that:

… in order for a spouse to qualify as a person who is intended to be protected from conveyances of property made with intent to defeat her interest, she must have had an existing claim against her husband at the time of the impugned conveyances, that is a right which she could have asserted in an action. [13]

[105] Thus, the spouse must have an existing claim, but need not be a “judgment creditor” to access the benefit of the Fraudulent Conveyances Act to invalidate a transfer. [14] Feldman J.A.’s analysis indicates that courts must be able to set aside transfers under the Fraudulent Conveyances Act in order to properly calculate equalization payments. [15] To allow otherwise would result in an inaccurate equalization payment. She concludes:

[W]here on the facts, the Fraudulent Conveyances Act can apply, there is nothing in the Family Law Act which ousts the operation of the Fraudulent Conveyances Act as part of the process to determine the net family property of each spouse as of the applicable valuation date. [16]

[106] On the evidence before me, Ms. Fatahi-Ghandehari can reasonably be regarded as a person whose claim for an equalization payment, or unequal division of family property, is entitled to protection by a preservation order under s. 12 of the Family Law Act.

Costs

[107] Ms. Fatahi-Ghandehari has been successful in opposing the motion to set aside the preservation order and is presumptively entitled to her costs. I find no basis, in the case of Mr. Bradimore and his company, for departing from the presumption that costs are to be awarded on a partial indemnity scale, notwithstanding the questionable nature of the “joint venture” that was the basis for his claim in relation to the cars. I also find no basis for concluding that the costs of the motion were caused or increased by unreasonable conduct on the part of Mr. Watson, notwithstanding Ms. Fatahi-Ghandehari’s assertions regarding his relationship with Mr. Robson and the issues raised in the motion regarding notice.

[108] I find the $4,840 plus H.S.T. which Ms. Fatahi-Ghandehari claims as her costs on a partial indemnity scale, as set out in her Costs Outline, to be reasonable. The motion was important, having regard to the fact that a setting aside of the preservation order could have deprived Ms. Fatahi-Ghandehari of her right to pursue her right to equalization of Net Family Property or unequal division of family property effectively.

[109] The motion was relatively complex, owing the intertwining of the issues with those of the other proceedings in which Ms. Fatahi-Ghandehari and Mr. Wilson are engaged, and of the contempt motion in the family law proceeding.

[110] Although there is no certification of the time spent from the lawyers who assisted Ms. Fatahi-Ghandehari, the time is consistent with the nature and volume of material that Ms. Fatahi-Ghandehari filed, which reflected the involvement of her lawyers, and with the time her counsel spent in court on April 13, 2018, based on the court reporter’s notes.

[111] Mr. Siddiqui was called to the Bar in 2003 and Mr. Mohammed was called in 2016. The time was apportioned between them in an economical manner, based on their hourly rates. In 2017, Mr. Siddiqui’s maximum partial indemnity rate, adjusted for inflation, was $360. It is now $376.19. I find the $360 hourly rate claimed for him to be reasonable.

[112] In 2017, Mr. Mohammed’s maximum partial indemnity hourly rate, based on the 2005 Costs Bulletin, adjusted for inflation, was $273.95. I find the $200 hourly rate claimed for him to be reasonable.

[113] I find that the amount of $4,840 plus H.S.T. claimed, on a partial indemnity scale, to be consistent with the amount that Mr. Bradimore and his company should reasonably have expected to pay in costs if unsuccessful in their motion. The amount is modest in relation to the amounts that were at stake in the motion.

CONCLUSION AND ORDER

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

1. The motion by Jason Bradimore and Straight Forward Auto Service Inc. to set aside the preservation order dated October 26 and November 3, 2016, is dismissed.

2. Jason Bradimore and Straight Forward Auto Service Inc. shall, jointly and severally, pay Ms. Fatahi-Ghandehari’s costs of their motion, on a partial indemnity scale, fixed in the amount of $4,840 plus H.S.T. of 13%, based on the Costs Outline filed by Ms. Fatahi-Ghandehari.

Price J.

Released: September 21, 2018

[1] Sibley & Associates LP v. Ross, 2011 ONSC 2951 at paras. 62-63 .

[2] Wilson v. Fatahi-Ghandehari, 2018 ONCA 728.

[3] Zsoldos v. Ontario Assn. of Architects, [2004] O.J. No. 309, 128 A.C.W.S. (3d) 1051 (C.A.) at para. 4 , leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 170.

[4] Ho v. Ho, 2003 ONSC 2315, [2003] O.J. No. 2784, 41 R.F.L. (5th) 84 (Sup. Ct.) at paras. 10-11 .

[5] Prodigy Graphics Group Inc. v. Fitz-Andrews, [2000] O.J. No. 1203 (Sup. Ct.) at para. 152 .

[6] Ibid at para. 154.

[7] Shoukralla v. Dumolong, 2016 ONCA 128 at para. 25, citing to Conte Estate v. Alessandro, [2002] O.J. No. 5080 (Sup. Ct.) at paras. 20-24 , affirmed [2004] O.J. No. 3275 (C.A.). In this case, the Court of Appeal upheld the motions judge’s finding of a fraudulent conveyance to a non-arm’s length home purchaser.

[8] Purcaru v. Seliverstova, 2015 ONSC 6679, affirmed 2016 ONCA 610.

[9] Purcaru at paras. 20-21.

[10] Mikhail v. Cole, 2017 ONCA 262 at para. 5 .

[11] Stone v. Stone, 2001 ONCA 24110, [2001] 55 O.R. (3d) 491 (C.A.) at paras. 36-39 .

[12] Stone at para. 43 , citing Rawluk v. Rawluk, [1990] 1 S.C.R. 70 .

[13] Stone at para. 26 .

[14] Stone at para. 41 .

[15] Stone at para. 40 .

[16] Stone at para. 44 .