Court File and Parties

COURT FILE NO.: CV-19-00623814 DATE: 2020-05-15 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARYAM REZAEE, Plaintiff AND: RAYMOND ZAR, ROEHAMPTON CAPITAL CORPORATION, 30 ROE INVESTMENTS CORPORATION, MARY-AM HOSPITALITY CORPORATION, MARYAM TRAVEL INC., MARY-AM CORPORATION, MARYAM MAIDS INC., 170 WILLOWDALE INVESTMENTS CORPORATION, ZAR ADVISORY GROUP and ZAR GROUP, Defendants

BEFORE: Sossin J.

COUNSEL: Gwendolyn L. Adrian and Micheal G. Simaan, Counsel, for the Plaintiff Lawrence E. Thacker and Vinayak Mishra, Counsel, for the Defendants

HEARD: April 24, 2020 (via videoconference)

REASONS FOR JUDGMENT

OVERVIEW

[1] Maryam Rezaee (“Maryam”) brings this motion for injunctive relief against her youngest son Raymond Zar (“Zar”) and several corporate defendants which are controlled by Zar. The subject of the dispute is a business involving several, related corporate entities providing hospitality and short-term rental accommodation in the Greater Toronto Area (the “Business”).

[2] As a result of a restructuring of the corporate ownership in 2017-2018, Maryam gave up control over the Business to Zar. She has brought this action to gain back control over the Business. On this motion, she argues she should be restored to control over the Business until the merits of her claim can be determined.

[3] Maryam founded the Business in 2001, and over the years as it grew, she employed her five children in different roles. Zar began working in the Business in 2009, and took on a greater role in 2013-2014 when Maryam was absent for a significant period of time.

[4] In 2014, Maryam and Zar had a falling-out, and Zar left he Business to take a position with another real estate management company.

[5] By 2016, Zar was again assisting with various Business ventures. Subsequently, Maryam asked Zar to obtain information on how to improve the Business’ tax position through restructuring the corporate ownership.

[6] Through a series of transactions in December, 2017 and February, 2018, Zar and Maryam executed certain documents which restructured the corporate ownership of the Business and transferred effective control of the Business from Maryam to Zar.

[7] Following the restructuring, the main holding company for the Business is now the defendant, Roehampton Capital Corporation (“Roehampton Capital”). Roehampton Capital is a federal corporation and the sole shareholder of:

a. The defendant, Mary-Am Hospitality Corporation, a federal corporation in the business of furnished apartment rentals under the trade name “Mary-Am Suites”. b. The defendant, 30 Roe Investment Corporation, a federal corporation that owns condominium apartments at 30 Roehampton Avenue in Toronto, Ontario. c. The defendant, 170 Willowdale Investments Corporation, an Ontario corporation that owns and operates the hotel located at 170 Willowdale Avenue in Toronto, Ontario.

[8] Zar is the 60% majority shareholder, sole director, and president and CEO of Roehampton Capital. Maryam holds a 40% minority interest in Roehampton Capital.

[9] The relationship between Maryam and Zar deteriorated after the restructuring.

[10] On July 18, 2019, Maryam issued a notice of action and moved ex parte for Certificates of Pending Litigation (“CPL”) against several properties owned by the Business.

[11] That ex parte motion was heard by Master McGraw on July 18, 2019. Master McGraw did not provide the CPL but granted an interim order preventing the sale or further encumbrance of the properties pending the motion returning to be resolved on notice (the “interim order”). That motion was adjourned sine die and remains outstanding.

[12] Maryam failed to file a statement of claim by August 15, 2019, the filing deadline set out in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules of Civil Procedure”).

[13] While accepting service of Maryam’s statement of claim on September 12, 2019, Zar clarified in a letter to Maryam, dated September 20, 2019, that the statement of claim was not in compliance with the filing deadline.

[14] With the CPL motion adjourned and the dispute regarding late filing of the statement of claim unresolved, Maryam served notice that she intended to move for an injunction removing Zar from the management of the Business, and restoring her as manager.

[15] This development led to a case conference call before Master McGraw on September 20, 2019.

[16] On October 18, 2019, the parties appeared at Civil Practice Court to schedule the hearing of the motion for the injunction.

[17] Subsequently, on October 18, 2019, Master McGraw conducted a further case conference call with the parties. He reiterated that he remained available to deal with any matters within his jurisdiction, and set out that the parties had agreed that, given the overlap of issues, the injunction motion and the CPL motion should be heard together by the same Judge.

[18] On October 25, 2019, the defendants filed their notice of intent to defend.

[19] By endorsement dated April 7, 2020, Justice Myers determined that this motion met the threshold for urgent matters to be heard pursuant to the Notice to the Profession dated March 15, 2020, in relation to the COVID-19 emergency.

[20] On this motion, Maryam seeks mandatory injunctive relief which would remove Zar from his current role and restore Maryam as manager of the Business. In the alternative, Maryam seeks an order that certain properties be encumbered to preserve the assets of the Business until the trial of this action, and preventing Zar from funding this litigation from proceeds of the Business.

[21] Against this procedural backdrop, I now turn to the question of whether Maryam has met the threshold for injunctive relief.

[22] I also consider Zar’s cross motion to have the interim order of Master McGraw removed.

ANALYSIS

[23] Maryam argues this injunction is necessary to preserve the Business she spent years building, and which she alleges her youngest son Zar took from her through the restructuring of the corporate ownership in 2018.

[24] She argues that she never read the documents which effected the restructuring, as they were in English and she reads only Farsi.

[25] Maryam acknowledges that she received independent legal advice (“ILA”) from a lawyer, Email Mehrabi (“Mehrabi”), prior to signing the restructuring documents, and that this advice was provided to her in Farsi. Maryam’s evidence is that she understood the transaction was intended only to affect the tax position of the Business, and that she was unaware that she would be giving up control of the Business to Zar. She states that she would not have agreed to the restructuring if she were aware of these consequences.

[26] Mehrabi’s counsel attended the hearing of this motion, and advised that he is a defendant in a separate action which Maryam has brought in relation to the ILA.

[27] Zar argues that Maryam agreed to the restructuring of the Business. Zar characterized this restructuring as a “rescue” to deal with the Business’ serious financial problems, and to facilitate the purchase of properties by the Business, for which Zar provided personal guarantees.

[28] Zar rejects the allegation that Maryam was “duped,” and relies on the ILA Maryam received from Mehrabi, which included an account of the change in corporate ownership structure, prior to her signing the restructuring documents.

[29] Zar also takes issue with the remedy Maryam seeks of being restored as the manager of the Business. He alleges this remedy is vague. In light of the restructuring of the Business, Zar now occupies a management role which Maryam never had.

[30] With these differing accounts of the restructuring of the Business in mind, the key question that must be addressed in this motion is whether Maryam has met the test for injunctive relief.

[31] The test for injunctive relief is well-settled and not in dispute. An interlocutory injunction may be granted by the Court where it appears to be just and convenient to do so; Courts of Justice Act, R.S.O. 1990, Chap. C.43, s. 101.

[32] As the Supreme Court set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (RJR-MacDonald), at para. 48, in deciding whether it is just and convenient to grant an injunction, the court must address three questions:

a. Is there a serious issue to be tried?; b. Will the moving party suffer irreparable harm if the relief is not granted?; and c. Which party will suffer the greater harm from granting or refusing the remedy pending a decision on the merits?

[33] I address each question below.

Is there a serious issue to be tried?

[34] A serious issue to be tried will be established if the moving party satisfies the court that the claim is not frivolous or vexatious.

[35] Where a mandatory injunction is sought, as here, the moving party must establish that she has a “strong prima facie case.”

[36] In Quizno’s Canada Restaurant Corporation v. 1450987 Ontario Corp., 2009 ONSC 20708, Perell J. described this standard as follows:

[39] The strong prima facie case standard involves a more intensive examination of the merits of the plaintiff’s case. Since a “prima facie case” is established when on the balance of probabilities it is likely that the plaintiff will succeed, I understand a “strong prima facie case” to involve a higher level of assurance at the interlocutory stage that it is likely that the plaintiff will succeed at the trial. In the context of claims for mandatory injunctions, a strong prima facie case has been interpreted to mean that the plaintiff must satisfy the court that he or she is clearly right and is almost certain to be successful at trial. Given the very intrusive nature of a mandatory injunction, there must be a high assurance that the injunction would be rightly granted. See Barton-Reid Canada Ltd. v. Alfresh Beverages Canada, [2002] O.J. No. 4116 (S.C.J.), 2002 ONSC 34862 at para. 9; Benjamin v. The Toronto-Dominion Bank (2006), 80 O.R. (3d) 424 (S.C.J.), 2006 ONSC 9960 at para. 27. (Emphasis added.)

[37] As Morawetz J. (as he then was) stated in Hennigar v. The Target Corporation, 2011 ONSC 2271, at para. 33, “In order to meet the first part of the test, the Plaintiffs must not only show that there is a serious issue to be tried, but because the injunction is a mandatory one, must show that they are clearly right and almost certain to be successful at trial.”

[38] Therefore, the question I must answer is whether, on the basis of the record before me, Maryam is almost certain to be successful on her claims at trial.

[39] Certain key facts underlying Maryam’s claim are not in dispute.

[40] There is no dispute that the restructuring was Zar’s idea, or that the effect of the restructuring was to remove control over the Business from Maryam in favour of Zar.

[41] There is also no dispute that a memorandum on the tax advantages of a restructuring of the corporate ownership of the Business was provided by the firm of Stern Cohen, whom Zar retained (the “Stern Cohen Memo”).

[42] There is no dispute that Maryam entered into the restructuring after receiving ILA from Mehrabi, and signed an ILA Certificate, on February 25, 2018. The ILA Certificate confirmed that Maryam understood the effects and consequences of entering into the transaction and that she had made a free and fully informed decision without any undue influence to enter into the transaction.

[43] That is where the agreement as to what transpired in relation to the restructuring ends.

[44] Maryam raises two main grounds in her claim; first, that the restructuring documents are unenforceable due to the doctrine of non est factum; and second, that Zar’s conduct has been oppressive within the meaning of the oppression remedy under s.248 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”).

[45] I examine each aspect of the claim below.

Non est factum

[46] While Maryam does not dispute signing the documents which resulted in the restructuring of the Business, Maryam argues the doctrine of non est factum applies in this case. Non est factum may be pleaded as a defence to the enforcement of an agreement where the document signed is of a different nature from that which the signor intended to execute; Marvco Colour Research Ltd. v. Harris, [1982] 2 S.C.R. 774.

[47] Non est factum requires that the party signing a document must have a fundamental misunderstanding as to the nature or effect of the document, and does not apply where a party is guilty of carelessness in signing the document without being aware of its contents; Belchevski v. Milka Dziemianko, 2014 ONSC 6353, at para. 18.

[48] In this case, Maryam submits that she executed numerous documents believing that she was restructuring the Business in order to redistribute certain tax losses within the corporate structure, as recommended by the Stern Cohen Memo.

[49] Maryam states that she believed that, in exchange for executing these documents, she would be receiving substantial consideration, and that she would remain in control and a director of the Business that she had built and operated for years.

[50] Maryam has not produced evidence to substantiate the claim that she was told she would remain in control after the restructuring.

[51] She has produced evidence to substantiate the claim that she would receive consideration. The consideration alleged by Maryam was a cheque for $200,000, which Zar presented to her at the time of the restructuring. The memo line on the cheque stated “Full and Final Payment for Roehampton Capital Restructuring.”

[52] Zar states the purpose of this cheque related to a separate potential credit to Maryam for the purchase of one of the properties owned by the Business, and was unrelated to Maryam’s agreement to the restructuring itself. Zar’s characterization is supported by the affidavit evidence of Mehrabi.

[53] Based on the record before the Court, it is not possible to reach a conclusion with respect to the precise purpose of this $200,000 cheque, which was never cashed.

[54] With no conclusive evidence as to whose account of the restructuring is accurate, Maryam’s argument will turn on the scope and nature of the ILA provided by Mehrabi, which is disputed by the parties.

[55] In her factum, Maryam characterizes the scope of Mehrabi’s advice as follows (at para. 41):

Mehrabi insists that he provided advise [sic] solely with respect to whether certain documents, provided by Zar, implemented a plan set out in the Stern Cohen Memo which had been created for the Zar Group. Mehrabi did not advise Maryam regarding whether the Consideration was adequate for the Restructuring or whether any steps had been taken to ensure that the Consideration would be paid. Mehrabi did not advise Maryam that failure to execute a shareholder agreement prior to executing the documents and becoming a minority shareholder would essentially negate all of her bargaining power regarding the shareholder agreement. Finally, Mehrabi did not advise that the practical effect of the restructuring meant that Zar as sole director of RCC could issue dividends to himself while excluding Maryam from receiving dividends, thereby diverting all assets and income from RCC to himself.

[56] The defendants’ factum characterizes Mehrabi’s affidavit evidence in starkly different terms (at para. 50):

• Mr. Mehrabi’s testified under oath that he fully informed Ms. Rezaee as to the content of the Restructuring Agreement on February 25, 2018 and she voluntarily executed said agreement in his presence. All of his recollections were confirmed by detailed contemporaneous notes he made. During this meeting, Mr. Mehrabi:
• Explained to Ms. Rezaee in Farsi how 30 Roe Corp and the Mary-Am Group would be reorganized under the Stern Cohen Memorandum.
• Expressly advised Ms. Rezaee that Mr. Zar would be the sole director of Roehampton Capital, the new holding company and would be running the corporation and making all of the day-to-day operating decisions.
• Was satisfied that Ms. Rezaee understood Mr. Zar would be the sole director of Roehampton Capital and in complete control of Roehampton Capital.
• Witnessed Ms. Rezaee execute the unsigned documents on February 25, 2018, which he received from Mr. Zar on February 23, 2018, that enacted the Restructuring Agreement effective December 22, 2017. (Footnotes omitted)

[57] Mehrabi’s affidavit evidence appears to provide some support for both sides of this dispute. On the one hand, Mehrabi confirms that he saw his role as limited to giving advice on the Stern Cohen tax memo, not the entire restructuring and all of its implications, which supports Maryam’s position. On the other hand, he states that Maryam was aware that the whole plan was for Zar to become the sole director of the holding company which would run the Business, so as to manage it in a proper and professional way, which supports Zar’s position.

[58] In Adelaide Capital Corp. v. Kaludis, 1997 CarswellOnt 3313 (“Adelaide”), the Ontario Court of Appeal considered the interaction between ILA and the doctrine of non est factum. In that case, the Court of Appeal overturned the summary judgment ruling that held the guarantee was enforceable because the guarantor had independent legal advice. Rather the Court ruled that the role of the guarantor’s son, who attended the solicitor’s office with the guarantor and acted as translator, together with the evidence that the son “might have misled her” created a genuine issue for trial.

[59] What is missing in this case, however, is clear evidence that Zar misled Maryam. While Maryam does not speak or read English, Mehrabi’s evidence is that he explained to her in Farsi the consequences of her signing the corporate documents for the restructuring and that she understood those consequences.

[60] This situation also differs from Adelaide where the lawyer providing the ILA did not speak the same language as the client receiving the advice, and so both the lawyer and the client relied instead on the client’s son to translate. In this case, Mehrabi is fluent both in English and Farsi and therefore was able to explain the documents directly to Maryam in Farsi.

[61] Additionally, in this case, the question is not whether there is a genuine issue for trial as to whether non est factum may apply, but rather whether the record can support the conclusion that Maryam is almost certain to succeed on this issue at trial for purposes of the mandatory injunction she seeks on this motion.

[62] It is apparent that the resolution of the issue of non est factum will turn, to some extent, on the credibility of Mehrabi’s account of the scope of the ILA.

[63] Maryam gave evidence, for example, that Mehrabi tried to convince her to go along with Zar acquiring majority ownership. Mehrabi denies he attempted to pressure Maryam to agree to the restructuring.

[64] Maryam may or may not prevail on the question of the application of non est factum to the restructuring in light of the ILA, but in these circumstances, but I cannot find that her likelihood of success on this point meets the threshold of near certainty required for a mandatory injunction.

The oppression remedy

[65] Maryam also argues that the injunction is warranted based on an oppression remedy in light of her minority interest in the holding company of the Business.

[66] The oppression remedy is governed by s.248 of the OBCA, which requires that the party claiming oppression must demonstrate (a) there been a breach of a reasonable expectation of a stakeholder and (b) the failure to meet the reasonable expectations of the stakeholder involved unfair conduct that led to prejudicial consequences.

[67] Under an oppression action, a court will enforce a fair outcome, taking into consideration the reasonable expectations of the parties. In BCE Inc., Re, [2008] 3 S.C.R. 560, 2008 SCC 69, at paras. 58-9, the Supreme Court of Canada stated:

[58] First, oppression is an equitable remedy. It seeks to ensure fairness — what is “just and equitable”. It gives a court broad, equitable jurisdiction to enforce not just what is legal but what is fair: Wright v. Donald S. Montgomery Holdings Ltd. (1998), 39 B.L.R. (2d) 266 (Ont. Ct. (Gen. Div.)), 1998 ONSC 14805, at p. 273; Re Keho Holdings Ltd. and Noble (1987), 38 D.L.R. (4th) 368 (Alta. C.A.), 1987 ABCA 84, at p. 374; see, more generally, Koehnen, at pp. 78-79. It follows that courts considering claims for oppression should look at business realities, not merely narrow legalities: Scottish Co-operative Wholesale Society, at p. 343.

[59] Second, like many equitable remedies, oppression is fact-specific. What is just and equitable is judged by the reasonable expectations of the stakeholders in the context and in regard to the relationships at play. Conduct that may be oppressive in one situation may not be in another.

[68] Maryam argues that she spent almost two decades building establishing a viable business which was branded upon her personal name and reputation. She states that she believed the restructuring that was to occur was to offset losses between the corporations for the purposes of taxes. She expected that she would experience a minor decrease in her shareholdings but would remain in charge and managing the Business.

[69] Maryam claims that the restructuring was done in a way that deprived Maryam of assured repayment of shareholder loans in excess of $1.5 million that she made to the Business.

[70] Further, Maryam states that she has been excluded from the business and physically barred from the business locations. According to Maryam, she also has been financially cut off from the business, which was the sole support for her and her family for almost two decades, and is now dependent on the support and good will of family members.

[71] As set out in the non est factum argument, Maryam argues that she was duped into agreeing to the restructuring, which deprived Maryam of her majority shareholdings (and thus control of the Business).

[72] Zar’s position is that Maryam had no reasonable expectation to stay in management of the Business after agreeing to transfer her controlling interest to Roehampton Capital. Further, Zar argues there is no evidence for the claim that he would not repay Maryam’s shareholder loan of $1.5 million.

[73] Further, notwithstanding Maryam’s claim that Zar has the authority to withhold dividends from Maryam, there is no evidence in the record that Mr. Zar actually has paid himself any dividends or has unequally distributed or withheld any dividends.

[74] Zar submits that Maryam’s claims with respect to the oppression remedy do not justify a mandatory injunction.

[75] It is clear that the oppression claim, like the non est factum claim, will turn on issues of credibility which cannot be resolved on record before me.

[76] Based on this record, I do not find a basis to conclude that Maryam is nearly certain to succeed on her oppression claims.

[77] Therefore, while Maryam’s action raises a serious issue, I am unable to find that Maryam is almost certain to be successful at trial on either of the grounds for her claim.

Will Maryam suffer irreparable harm if the relief is not granted?

[78] Even if Maryam were able to demonstrate that she was almost certain to be successful at trial on her claim, it would still be necessary to show that she would suffer irreparable harm if the injunction is not granted.

[79] Irreparable harm is harm that cannot be quantified in monetary terms or which cannot be cured such as where one party will suffer permanent market loss or damage to business reputation; RJR-MacDonald, at para. 64.

[80] In this case, Maryam argues that the irreparable harm flows from the loss of prospective tenants for the Business as well as more general reputational harm to the Business.

[81] Maryam relies on 1107051 Ontario Limited v. Bloke & 4th Inc. et al., 2012 ONSC 4204 at para. 14 for the proposition that in the context of a commercial tenancy, loss of tenants has been found to constitute irreparable harm as it is impossible to identify or quantify.

[82] Maryam submits that “stakeholder relationships are breaking down and have broken down under Zar’s management.” She states that Zar is antagonizing residential landlords by non-payment or untimely payment of rent, non-responsiveness and, poor communications practices in which Zar accuses the stakeholder of colluding with Maryam against him.

[83] According to Zar, however, the landlords referred to by Maryam reflect an unrepresentative sample of the total landlords in leases with Mary-Am Hospitality, and that virtually all of these landlords who provided affidavits on behalf of Maryam have personal connections with her.

[84] Zar submits that in some cases, these landlords improperly raised the rent on their condominium units to create a false record of rental arrears. Zar further states that the other landlords have refused to make any allegations of non-payment of rent under oath.

[85] It is not necessary to resolve the competing accounts of the landlord evidence in each instance. At its highest, these landlord affidavits call into question the conduct of Zar with respect to a modest portion of the Business which is not, in and of itself, sufficient to generate a situation of harm which could not be addressed through damages.

[86] The record on this motion does not disclose significant transactions or events on the horizon which could justify the conclusion that the Business is being harmed by Zar in a way that cannot be reversed if Maryam succeeds in her action.

[87] Maryam also highlighted Zar’s efforts to rebrand the Business, forsaking Maryam in the title of the associated companies in the Business in favour of Roehampton Capital. While this shift may or may not cause harm to the Business, it does not amount to irreparable harm within the meaning of the RJR-MacDonald.

[88] Maryam also alleges that Zar has disparaged the landlords and accused them of colluding with Maryam. Maryam argues that, “such behavior cannot be beneficial to the reputation of the Maryam Companies.” (Maryam factum, at para. 67)

[89] While the internal dispute between Maryam and Zar no doubt may have negative effects on the reputation of the Business and relations with specific landlords, I do not see this factor as constituting irreparable harm if the mandatory injunction sought is not granted.

[90] The fact that Maryam remains a significant minority shareholder means that her interests remains aligned with the Business, just as Zar’s interests rise or fall with the Business. Maryam presented no scenario in which her interests in the Business would be harmed while Zar’s interests are helped.

[91] In light of these circumstances, I find that no irreparable harm will flow from Zar remaining in his current role while the litigation is conducted.

Does the balance of convenience favour granting or refusing to grant the injunction?

[92] The final element of the threshold for an injunction is the balance of convenience. This element involves a determination of which of the two parties will suffer the greater harm of granting or refusing the interlocutory injunction pending a decision on the merits; RJR-MacDonald, at para 80.

[93] Maryam submits that if she is prevented from managing the Business but ultimately successful at trial, “the enterprise she spent a significant part of her adult life building will be returned to her in, at best, a decidedly different form.” (Maryam factum, at para. 51).

[94] Zar argues that the balance of convenience favours the defendants and preserving the status quo. Zar submits that Maryam has never been responsible for management of the Business under the present structure, and the risk to the operations of the Business would be substantial.

[95] The risks associated with a change in management at the present time, in my view, outweigh the broader concern that if successful, Maryam would eventually be returned to control over a Business in a “decidedly different” form.

[96] I am unable to conclude that the balance of convenience favours the disruption to the leadership of the Business sought by Maryam through a mandatory injunction.

[97] For these reasons, that Maryam has not met the RJR-MacDonald test for the mandatory injunction she seeks.

Zar’s cross motion

[98] In a cross-motion, Zar argues that the interim order of Master McGraw should be treated as invalid ab initio, on the basis that Maryam failed to disclose the existence of the ILA at her ex parte appearance before Master McGraw, which led to the interim order.

[99] Rule 39.01(6) of the Rules of Civil Procedure requires full and fair disclosure of all material facts on the part of parties who move for ex parte relief.

[100] Zar submits that failing to disclose the ILA during the ex parte motion before Master McGraw constituted a “material misrepresentation” and rendered the interim order invalid from the start.

[101] The ILA is clearly relevant to Maryam’s claim that she was misled into agreeing to the restructuring, for the reasons set out above. That said, Maryam’s “serious allegations” of having been misled, referred to as a basis for the interim order by Master McGraw in his July, 2019 endorsement remain unresolved, notwithstanding the ILA.

[102] Master McGraw’s interim order sets out that it is to remain in place until the final disposition of the CPL motion.

[103] Zar characterizes the CPL motion as having been abandoned by Maryam.

[104] Maryam, however, disputes this characterization.

[105] While the October 18, 2019 endorsement of Master McGraw refers to a potential agreement between the parties that the CPL motion could be argued at the same time as the injunction motion, the parties apparently did not follow through to finalize such an agreement.

[106] In any event, the substantive issues relating to the CPL threshold were not argued before me, and I decline to reach any finding in relation to the CPL.

CONCLUSION

[107] For the reasons given above, I have found that Maryam is not entitled to a mandatory injunction restoring her as manager of the Business, and therefore this motion must be dismissed.

[108] As alternative relief, Maryam seeks an interim interlocutory motion restraining Zar from transferring, encumbering assigning or otherwise dealing with any or all of the properties or portions thereof; and restraining Zar from using any of the proceeds from the Business to fund the within litigation.

[109] I do not find a basis for a prohibitory injunction restraining Zar from using any proceeds from the Business to fund this litigation or restraining the sale or encumbrance of properties owned by the Business.

[110] While the initial threshold for prohibitive injunctions is the lower standard of showing a prima facie case, rather than near certainty of success, the requirement of demonstrating irreparable harm remains a barrier to Maryam obtaining injunctive relief.

[111] That said, I also find no basis to remove or alter Master McGraw’s interim order regarding the properties at issue in the CPL litigation, which prevents those properties from being sold or otherwise subject to encumbrances, pending the outcome of the CPL motion.

[112] Therefore, the cross motion by Zar is also dismissed.

[113] For this reason, the interim order remains in effect.

[114] If relief is required in relation to Master McGraw’s order, the parties are free to seek a variation of that interim order before Master McGraw, or otherwise proceed with the CPL motion.

[115] Costs’ outlines were provided by counsel after the hearing of this motion. At the close of the hearing, I stated that the parties would have an opportunity to address costs by way of written submissions after this decision was released, if necessary.

[116] While the result of this motion is mixed, I find Zar is entitled to a portion of his costs given that Maryam was not successful in obtaining injunctive relief.

[117] If the parties cannot reach agreement on costs, each may provide written submissions of no more than three pages in length, within 30 days of this judgment, via email to jessica.perri@ontario.ca.

Sossin J. Released: May 15, 2020