Court File and Parties

Court File No.: CV-19-623015 Date: 14022020 Superior Court of Justice - Ontario

Re: Vahid Mehdizadeh Asiyaban, Plaintiff And: Halime Khatoun Aghdasi, Defendant

Before: Master P. Tamara Sugunasiri

Counsel: McGuire, G., Counsel for the Defendant/Moving Party (gmcguire@agbllp.com) Marcovitch, D., counsel for the Plaintiff/Responding Party (dmm@law-in-to.com)

Heard: February 13, 2020

Reasons for Decision

[1] The Defendant is the legal owner of 123 Ellis Avenue in Nobleton. In July of 2017, she and the Plaintiff separated. According to the Defendant, the Plaintiff signed two handwritten agreements, relinquishing any interest in the Property. Notwithstanding this, he issued a Claim on July 3, 2019 seeking sole beneficial ownership. The Plaintiff is a contractor. The Claim is based on his allegation that he paid for the property, made improvements to it, and only had legal title in the Defendant’s name for financing and other purposes. Nowhere in the Claim does the Plaintiff raise the two agreements. Nowhere does he allege that he was coerced into signing them or did not know what he was signing.

[2] The minimalist theme continues when the Plaintiff brought an ex parte motion before Master Muir for a certificate of pending litigation. In support of that motion, the Plaintiff swore that he purchased the property, made all payments, and extensively renovated it with his own funds and labour. Master Muir was not satisfied with the Plaintiff’s bald statements and denied the motion without prejudice to bringing it back on a without notice basis.

[3] On July 25, 2019, the motion returned before Master Jolley. The Plaintiff swore a second affidavit explaining that most of his documentation was still at the Property. He did attest, however, that “I was able to contact a number of the trades that provided services to the Property. The trades provided me with copies of the invoices they had available.” He attached the invoices as an exhibit. He also swore that he made the payments on the invoices. Based on these invoices, Master Jolley granted the CPL finding that the Plaintiff had established a reasonable claim to an interest in land.

[4] The Defendant moves to discharge the CPL on three bases: a. The Plaintiff’s failure to make full and fair disclosure to Master Jolley; b. The Plaintiff’s reliance on a fraudulent invoice; and c. Lack of prejudice to the Plaintiff.

[5] Rule 42.02(1) gives the court discretion to discharge a certificate of pending litigation with or without terms. When a CPL is brought without notice, r. 39.01(6) requires that the moving party make full and fair disclosure of all material facts. Kimmel, J. recently reminds us in B.K . v York Condo that if a party moving ex parte deprives the court of an opportunity to know about all the material facts known to him, that in and of itself is sufficient grounds to set the order aside. [1] A material fact is one which could be relevant to the court’s decision. Said differently, a fact is material if it might have had an impact on the previous court’s deliberations.

The Plaintiff failed to make full and frank disclosure

[6] In the present case, the undisclosed fact is the existence of the two agreements between the parties that run contrary to the Plaintiff’s affidavit evidence before Master Jolley. Clearly these are material to the Plaintiff’s claim to the Property and might have impacted on her deliberations. The Plaintiff argues, however, that he did not know what these agreements meant and therefore their contents were not facts known to him. He attests that while he can speak and understand English, and read it (albeit slowly), he cannot write very well nor “read hand written script.” He explains that the Defendant “read” the documents to him and explained that they allowed her to lease the Property except for the basement.

[7] Without making any findings of facts with respect to the underlying agreements (which I properly leave to a trier of fact in the underlying action), I do not accept the Plaintiff’s explanation. First, he has signed and sworn to several affidavits in these proceedings, with no caveat about his inability to read or understand English, or formal certification in the jurat of the assistance of a translator as set out in r. 4.06(8). If I accept that he has trouble reading English, it casts doubt on the reliability of all his affidavits. Second, it is unclear why he can read English but not handwritten script. On balance, I find the Plaintiff’s evidence unreliable. He has not persuaded me that he had no knowledge that the agreements addressed his rights to the Property. He failed to make full and frank disclosure to Master Jolley.

The Plaintiff relied on a fraudulent invoice

[8] Even if I am incorrect in my analysis above, the Plaintiff’s reliance on a fraudulent invoice is fatal. Prior to the Defendant’s motion, the Plaintiff unequivocally attested that most of his documents were still at the Property but he was able to obtain invoices directly from some of the trades. One invoice was from Keluxe Cabinetry Inc. for $35,000 which he claims to have paid. In response, the Defendant produced the proverbial smoking gun. She tendered an affidavit from Keluxe’s principal who attests that since July of 2019 (remembering that the motion before Master Jolley was July 25, 2019), the Plaintiff was repeatedly calling to ask him to produce an invoice to support him in the litigation. Mr. Peighambari states that he did not provide an invoice. He then reviewed the invoice that the Plaintiff had provided to Master Jolley and swore that neither he, nor anyone in his company, created it. He also noted that he did not receive any funds from the Plaintiff for his work at the property but was paid by the Defendant. If, as the Plaintiff now asserts, the Defendant paid but he was the source of the funds, this is the type of detail that he should have disclosed to Master Jolley.

[9] The Plaintiff did not cross-examine or contradict Mr. Peighambari’s evidence. [2] The Plaintiff’s responding evidence in this motion is that he found the invoice at his store. He does not explain why he might have made a mistake in his previous evidence submitted to Master Jolley, or who generated the invoice that he ultimately found at his store. There was no attempt to discount Mr. Peighambari’s evidence that neither his company nor he generated the invoice put before Master Jolley. All of this leads me to infer that the Plaintiff knowingly placed a fraudulent receipt before Master Jolley; a receipt that she then clearly relied on to make her decision. The court cannot condone such misrepresentation, especially in an ex parte motion where the court is at the mercy of the Plaintiff and his materials. For this reason alone, I would set aside Master Jolley’s order and discharge the CPL.

There are other reasons to discharge the CPL

[10] Even if I am incorrect in my analysis and the Plaintiff did not mislead Master Jolley, there are other bases to discharge the CPL. On a motion to discharge a CPL, the Plaintiff must establish that there is a triable issue in a claim to an interest in land. Here, the Plaintiff claims a constructive trust against the Property. Regardless of what uphill battle he may have, he has tendered enough evidence to meet that threshold. Having met his burden, the court considers all the circumstances of the case to determine if a CPL would be just. Some of the established factors to consider are the intent of the parties in acquiring the land; whether damages would be a satisfactory remedy, the presence or absence of a willing purchaser and the harm to each party. [3]

[11] Neither party provided any evidence on why the Defendant purchased the property. The focus of the motion was on the failure to make full and frank disclosure and the fraudulent invoice. I glean from the record that they bought the home for them to live in. This factor is neutral.

[12] While the Plaintiff does not claim damages per se, this is not determinative. He does seek payment through judicial sale as alternative relief. I asked counsel for submissions on why damages or monetary recovery would not be satisfactory to the Plaintiff. There is nothing in his affidavit that suggests any interest in the Property other than for monetary recovery and gain. The Plaintiff provided no reason. In my view, damages or other monetary award would be an adequate alternative remedy. There is insufficient evidence that the Defendant would or could not pay a judgment such that I would require the Defendant to post security in lieu or hold monies from the sale of her property in court pending resolution of the action.

[13] In the recent past there have been prospective buyers. The Defendant’s evidence is, however, that she has consulted with real estate agents and has been advised that cannot successfully list her property with a CPL attached to it. She attempted a potentially improvident private sale to solve the problem, but without success. She is now at least two months in arrears of the mortgage and has been in touch with the mortgagee to stave off foreclosure or power of sale. Her ability to sell the property, is crucial. Her intent to sell, is clear.

There is no prejudice to the Plaintiff

[14] On the other hand, there is little or no prejudice to the Plaintiff. He appears to have no interest in the land other than to realize on his alleged equitable interest. Counsel advises me that the Plaintiff also wishes to sell the property at the highest possible sale price - a goal shared by the Defendant. Removing the CPL will allow the parties to achieve this mutual goal. In so doing, the Plaintiff will be in the same position as most other plaintiffs; he will have to obtain judgment before execution and take steps to execute if the Defendant debtor fails to pay. There is no evidence that the Defendant has or will purposely dissipate assets to avoid paying a potential judgment – a fact that may warrant some protection. In the circumstances of this case, the Plaintiff has not persuaded me that he is prejudiced by a discharge of the CPL or should receive security for a potential judgment. This was the Plaintiff’s opportunity to tender the appropriate evidence to support such a position. He failed to do so.

The Plaintiff did not go to the Court with clean hands

[15] In considering if and how the court should exercise its broad discretion to grant or discharge a CPL, the court also considers the equities of the case. It is a long- standing doctrine that a party seeking favour in equity must come to the court with clean hands. In my view, the Plaintiff did not move before Master Jolley with clean hands. His evidence even in this motion, is questionable.

Disposition

[16] Having considered the totality of the circumstances, the Plaintiff shall discharge the CPL registered against PIN 03351-0141 LT, municipally known as 123 Ellis Avenue, Nobleton, Ontario, within two business days of today.

Miscellaneous

[17] The Plaintiff argued at the start of the hearing that the two-hour slot booked by the Defendant was insufficient. I logged the times carefully. The Plaintiff had one hour to make it submissions having already provided a factum and book of authorities as prescribed by the rules. The Plaintiff completed his submissions including answering questions from the court, with time to spare. If anything, it was the Defendant who was short on time and had to truncate her submissions, a fair result given that the two-hour slot was booked on the Defendant’s insistence.

Costs

[18] The Defendant is presumptively entitled to her partial indemnity costs. If the parties cannot agree, the Defendant may deliver her costs outline along with three-pages, double-spaced of submissions by February 28, 2020. The Plaintiff may respond with the same parameters by March 13, 2020. All materials shall be filed with the Masters’ Administration.

Original signed Master Sugunasiri Date: February 14, 2020

[1] B.K. v York Region Standard Condominium Corporation No… , 2019 ONSC 4552 at para38. [2] The Plaintiff argued that due to the alleged urgency of this motion, he was unable to test the Defendant’s evidence. This is contradicted by a letter from defence counsel sent at least one month prior to the motion, inviting cross-examination. [3] These are the Dhunna factors most relevant to the present case; see 572383 Ontario Inc. v Dhunna , 1987 CarswellOnt 551at paras. 10-18 .