Court File and Parties

COURT FILE NO.: FS-19-10012 DATE: 20200529 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: SAMIA EL MOR Applicant – and – SARWAT HANNA DIEF Respondent

Counsel: Ryan Zigler lawyer for the applicant Jaret Moldaver and Martine Ordon lawyers for the respondent

HEARD: May 28, 2020

Endorsement

DIAMOND J. :

[1] By Endorsement dated May 21, 2020 of Justice Hood, I was designated to conduct a telephone hearing with the parties to address the applicant’s motion seeking relief relating to the respondent’s alleged breach of a consent preservation order dated October 9, 2019 of Justice Horkins (and continued by order dated December 18, 2019 of Justice Monahan).

[2] In accordance with the Chief Justice’s Notice to the Profession dated March 15, 2020 and subsequently updated on April 2, 2020 and May 13, 2020 (“the Notice”), Justice Hood reviewed the applicant’s motion materials and found that the specific relief relating to the alleged breach of the preservation order presumptively fit the “urgency requirement” as set out in the Notice. Justice Hood then set a timetable for the service of the applicant’s motion materials, and the exchange and filing of any responding and reply motion materials.

[3] The respondent served his own cross-motion seeking an order clarifying that the preservation order permits him to sell any real property owned by him and/or any company controlled by him, provided the proceeds are preserved in trust by the respondent’s lawyer.

[4] The hearing proceeded by telephone conference before me on May 28, 2020. While the respondent’s cross-motion was not ordered to proceed before me by Justice Hood, the parties did nevertheless address the relief sought by the respondent during the course of argument of the applicant’s motion.

[5] Some of the issues in dispute were either resolved on consent of the parties, or are able to be ordered on an unopposed basis.

The Sale Proceeds

[6] To begin, the respondent is the sole owner of two corporations: Dief Investments Inc. (“DI”) and Dief Medicine Professional Corporation (“DM”). DI has recently sold two Toronto properties (20 Hargrave Lane Unit 14, and 23 Lorraine Drive PH 17). Both transactions have yet to close.

[7] While the respondent takes the position that the terms of the preservation order do not apply to DI, he has (previously) agreed to maintain the net sale proceeds from both properties in trust pending further court order or agreement between the parties, all without prejudice to the respondent’s right to bring a motion seeking an order varying or setting aside the preservation order, and/or seeking summary judgment dismissing this proceeding. I thus make that order.

[8] I note that the solicitors who have been retained by the respondent to act on the sale of the properties were not given notice of the applicant’s motion. As such, a copy of this Endorsement shall be served upon those solicitors to ensure that they have no objection to holding the net sale proceeds in trust as ordered above.

Further Disclosure

[9] Justice Hood refused to grant the applicant leave to proceed today with her motion seeking a contempt order, as such relief was found not to be presumptively urgent. The substantive grounds listed in support of the applicant’s request for a finding of contempt is the respondent’s alleged failure to deliver a complete Financial Statement in accordance with the terms of the order dated March 9, 2020 of Justice Faieta.

[10] During the telephone hearing, the applicant sought to pursue “ancillary relief” against the respondent, namely an order that the respondent deliver a sworn affidavit providing particulars of all assets currently owned by DI and DM. The applicant submits that the respondent’s current Financial Statement is incomplete and in order to “police” the preservation order, the respondent ought to be ordered to produce the sworn affidavit.

[11] The respondent is correct that the Court never granted the applicant leave to seek any relief over and above what is set out in Justice Hood’s Endorsement, and the specific relief that the applicant now seeks is not set out in her Notice of Motion. That said, the particulars being sought by the applicant would presumably be relevant if such inquiries were made on questioning of the respondent.

[12] In the end, the respondent did not oppose delivering a list of the assets currently owned by DI and DM, so long as a list of assets is being provided on a “macro” and not “micro” basis (ie. a list of each asset and its current value, if available). As an example, if either corporation owns marketable securities, the value of the investment vehicle or portfolio is sufficient and not a detailed list of every investment.

[13] Accordingly, I order the respondent to deliver such a list of the assets currently owned by DI and DM within the next 10 days.

The Current Listings

[14] The respondent has also listed the following additional properties for sale: 29 Brule Lakeway, Jackson’s Point, Ontario (owned by DI) and 522 Bay Isle Circle, Clearwater, Florida (owned by the respondent). The record discloses that to date, neither property has been sold.

[15] The applicant submits that the listing of the two above properties constitutes a breach of the preservation order, and as such she requests an order that the two listings be suspended. Such a request was not part and parcel of the applicant’s Notice of Motion, although the applicant claims that she did not know about these listings until after the delivery of her motion materials.

[16] For his part, the respondent submits that he is being forced to “pay thousands of dollars a month” to maintain properties (although he does not specifically reference the Jackson’s Point or Clearwater properties in his responding affidavit), and by seeking to sell the two properties and keep the net sale proceeds in trust, he is not breaching the preservation order.

[17] The issue for the Court’s determination is the interpretation of the preservation order. Paragraph two of the order of Justice Horkins states “on a without prejudice basis, and pending the Case Conference, the respondent shall preserve assets.” There is no additional language in the preservation order requiring the respondent to refrain from selling, pledging, encumbering or transferring any of his assets, although the applicant argues that such restrictions are, at a minimum, implied.

[18] The respondent argues that by converting the net equity in the two properties into cash, especially in light of the volatile market in the midst of the current COVID-19 pandemic, he is in fact expressly preserving assets before the value of both properties risks being further depleted through potential market forces or necessary debt financing.

[19] The respondent seeks to pursue only potential provident sale transactions, and he has undertaken to maintain any net sale proceeds in trust pending further court order or agreement between the parties. Even so, as the issue of the listing of these two properties did not arise until after the respondent’s motion materials were delivered, in my view the record before me is insufficient to decide the issue of whether the listing of the two properties is, in and of itself, a breach of the preservation order. Like the applicant, I am unable to conclude whether the two properties are being listed for sale for the reasons argued by the respondent, as the necessary evidence was not proffered (although the original scope of the applicant’s Notice of Motion was more narrow than ultimately argued). The applicant may very well not oppose the sale of the two properties upon being provided with further evidence that their value risks being depleted.

[20] In the circumstances, I am not prepared to suspend the listings at this time. I expect the parties to work together in a transparent fashion so that the respondent’s decision to sell the two properties (or any additional properties) is properly explained and substantiated with supporting evidence. In the event that the parties cannot reach an agreement on the listing of properties for sale, then the respondent shall recast his cross-motion as a motion seeking leave of the Court to sell the properties on the basis that such transactions do not amount to a breach of the preservation order. I am seized of that motion if same proves necessary, and the parties can schedule the respondent’s motion before me through the Family Scheduling Office.

[21] This Endorsement is an Order of the Court enforceable by law from the moment it is released.

Costs

[22] Absent an agreement between the parties, if either party wishes to seek costs of the motion, they may serve and file costs submissions, which shall total no more than five pages (including a Costs Outline) and be delivered in accordance with the following schedule:

a) the applicant’s costs submissions shall be served and filed within 7 business days of the release of this Endorsement; and, b) the respondent shall thereafter have an additional 7 business days from the receipt of the applicant’s costs submissions to serve and file his responding costs submissions.

Diamond J. Released: May 29, 2020