OVERVIEW

[1] Silver Armour Contracting Inc. is a general contracting company that was incorporated on October 25, 2019. The Directors of the corporation are Hassan Aydin and Faith Ahiskalioglu. There has been a breakdown in the relationship between the two Directors.

[2] One of the issues of the dispute arises out of an application made by Mr. Ahiskalioglu for a Canadian Emergency Business Assistance (CEBA) loan in the amount of $40,000. The Plaintiffs take the position that Mr. Ahiskalioglu was not authorized to apply for the loan.

[3] The CEBA loan was approved and $40,000 was deposited into the Silver Armour account on May 28, 2020. Mr. Aydin argues that Mr. Ahiskalioglu did not use the loan for the benefit of Silver Armour but instead used the money to pay his personal expenses. Mr. Ahiskalioglu denies that he transferred any part of the loan proceeds. He states that the funds remain in the Silver Armour bank account. He concedes however that on June 8, 2020 after a customer had made a payment of $49,030.98, he transferred $40,000 from the Silver Armour account into his personal account. He states that he used $12,000 to pay the expenses of Silver Armour and paid the balance of $28,000 to himself as a shareholder’s loan which he used to pay his personal expenses.

[4] Mr. Aydin states that Silver Armour did not authorize the transfer of $40,000 to Mr. Ahiskalioglu. Mr. Aydin also states that the Plaintiffs did not authorize a shareholder’s loan or agree that the loan proceeds could be used to pay his personal expenses. Mr. Ahiskalioglu denies that he acted improperly. He states that Mr. Aydin also took funds out of the company to pay his personal expenses without authorization.

[5] The Plaintiffs bring this motion for the following injunctive relief:

i) an interim order prohibiting the Defendant from acting as a Director of Silver Armour Contracting;

ii) an order prohibiting the Defendant from exercising control over the corporate funds of Silver Armour;

iii) an order prohibiting the Defendant from moving or transferring any monies or assets in personal/family/business to other accounts in Canada or overseas;

iv) an injunction from leaving the country; and

v) to refrain from deleting any e-mails or records of Silver Armour.

[6] In addition to the injunctive relief, the Plaintiffs seek an order directing the Defendant to do the following:

i) Provide an accounting of the $40,000 received by Silver Armour;

ii) Provide copies of all bank accounts, savings account, and investment accounts in his possession, in Canada and abroad including account number 07012/84-68281;

iii) Deliver any cheques in his possession collected from Silver Armour clients;

iv) Surrender to the Plaintiffs all corporate and accounting records of Silver Armour;

v) Provide all records related to the CEBA application;

vi) Provide access to the Silver Armour e-mail system;

vii) Provide access to the Plaintiffs of all deleted e-mails from the Silver Armour e-mail system; and

viii) Deposit with the court his Canadian and Turkish passports.

[7] The Plaintiffs also seek an order allowing the Plaintiffs to pay Silver Armour’s accounts payable in the approximate amount of $50,000.

[8] The Defendant did not bring a cross-motion. In his affidavit, Mr. Ahiskalioglu seeks the following orders:

a. Declaring that Mr. Aydin is permanently or temporarily removed/suspended as a Director of Silver Armour;

b. That Mr. Aydin is to cease and desist from contacting any of Silver Armour’s past, present or future clients;

c. That Mr. Aydin is to cease and desist from further damaging Mr. Ahiskalioglu’s reputation;

d. An order that Mr. Aydin return the company vehicle to Mr. Ahiskalioglu;

e. An order declaring that Mr. Aydin is to have no direct or indirect contact with Mr. Ahiskalioglu or his family, for a period of 5 years; and

f. An order that Mr. Aydin return all personal belongings.

[9] In his factum, Mr. Ahiskalioglu also seeks an order removing Plaintiffs’ counsel as counsel of record because he was retained to represent Silver Armor in the past and had met with Mr. Ahiskalioglu without counsel present.

BACKGROUND FACTS

[10] Silver Armour is a general contracting company. Mr. Aydin and Mr. Ahiskalioglu are the Directors of the company. Mr. Aydin primarily worked at the construction sites and Mr. Ahiskalioglu was responsible for the back office. Mr. Aydin states that he was the only person to invest cash and capital in Silver Armour. He states that he invested $20,000-25,000 at the time of incorporation. On cross examination, Mr. Aydin stated that he did not invest $25,000 on the date of incorporation but instead made payments totaling this amount over the course of several months. Mr. Aydin takes the position that at the time the company was started, Mr. Ahiskalioglu was emerging from personal financial difficulties and could not invest into the new company. This is denied by Mr. Ahiskalioglu. He states that at the time of the incorporation he invested $5,000 which was used to retain an accountant and to develop the website. The money was also used as a down payment for a Ford F150 pickup truck which was to be used for the business.

[11] Mr. Ahiskalioglu states that at the time they started the company, he had resigned from his previous occupation and was able to devote himself full time to the new business. Mr. Aydin continued to work as a full-time employee with JMX Environmental and was unable to actively participate in Silver Armour until mid-January 2020.

[12] The company did not have any sales in 2019 and did not file a corporate income tax return for 2019. Silver Armour started making sales in January 2020 and some construction projects started at that time. The business was adversely affected by the shutdown imposed in response to the COVID-19 pandemic in March 2020. In May 2020, Mr. Ahiskalioglu applied for a $40,000 loan through the CEBA program. The CEBA program was to assist businesses affected by the pandemic. The loans were available to Canadian businesses that had total employee income between $50,000 and $1,000,000, and that had filed an income tax return for 2019.

[13] Mr. Ahiskalioglu states that he had discussed applying for the CEBA loan with Mr. Aydin. Mr. Aydin initially took the position that Mr. Ahiskalioglu did not tell him about the CEBA loan. He admitted during his cross-examination that Mr. Ahiskalioglu mentioned the loan but did not say he was applying for it. On April 8, 2020, Mr. Ahiskalioglu sent an e-mail to Mr. Aydin which set out the CEBA loan requirements. Mr. Aydin states that the e-mail dated April 8, 2020 only provides general information about the CEBA program and does not state that Mr. Ahiskalioglu was going to apply for the CEBA loan on behalf of the company.

[14] The CEBA loan was approved and $40,000 was deposited into the Silver Armour account on May 28, 2020. Mr. Ahiskalioglu takes the position that this amount remains in the Silver Armour bank account. According to Mr. Ahiskalioglu, a client of Silver Armour made a payment of $49,030.98 on June 8, 2020. This was deposited into the Silver Armour’s bank account. On the same day Mr. Ahiskalioglu transferred $40,0000 from the Silver Armour account to his personal account; account number 07012/84-68281 (the “68281 Account”). Mr. Ahiskalioglu states that after this amount was transferred to his personal account, he distributed $12,000 to pay business expenses of Silver Armour and/or Mr. Aydin. Mr. Ahiskalioglu concedes that there is no text or e-mail message to Mr. Aydin advising that he was using the money to pay the expenses. Mr. Ahiskalioglu has refused to provide his personal banking information with respect to the payment of the business expenses.

[15] Mr. Ahiskalioglu states that the balance of $28,000 was paid to himself as a personal loan and has been spent on personal expenses. Mr. Ahiskalioglu concedes that there is no text or e mail message in which he advises Mr. Aydin that he was taking a personal loan in the amount of $28,000. There is no written loan agreement between Silver Armour and Mr. Ahiskalioglu. There is also no corporate resolution of Silver Armour authorizing the loan. Mr. Ahiskalioglu states that some of this amount was used to make a payment to pay expenses incurred by Mr. Aydin’s brother, Hussain. There is no text or e-mail messages to Mr. Aydin confirming that a payment was made on behalf of his brother.

[16] Mr. Aydin takes the position that Mr. Ahiskalioglu was not authorized to apply for the CEBA loan. There are no corporate resolutions authorizing the application for the CEBA loan. Mr. Aydin also takes the position that the loan was not used for any legitimate business purpose. He states there was no agreement that the loan proceeds could be transferred to Mr. Ahiskalioglu or that he could pay business expenses from his personal account. Mr. Ahiskalioglu states that he paid the Silver Armour expenses after he transferred the money into his account, because he wanted to improve his personal credit rating. Mr. Aydin did not agree that Mr. Ahiskalioglu could use the proceeds of the loan for this purpose and takes the position that this is not a valid reason for transferring the money into his personal account.

[17] Mr. Aydin argues that Mr. Ahiskalioglu hid the transactions and withdrawals from him. He refers to cheque no. 7 dated June 15, 2020. The cheque stub in the cheque book states that the cheque was for $3,254.58. The cancelled cheque was in the amount of $28,289.80. Mr. Aydin admits he signed the cheque but states that he was busy and did not notice the discrepancy. Mr. Ahiskalioglu states that he made no attempt to hide the transactions from Mr. Aydin. He states that the amount on the cheque stub was an error. The cheque was provided to Mr. Aydin in the amount of $28,289.89. Mr. Aydin signed the cheque and used the cheque to pay Notion Construction. Mr. Ahiskalioglu states Mr. Aydin had access to the bank accounts of Silver Armour and the payment to Notion Construction is set out in the records. Mr. Aydin confirmed on his cross-examination that he had access to Silver Armour’s finances.

[18] Mr. Ahiskalioglu has an expired Turkish passport and a current Canadian passport. Between November 2020 and January 2021, Mr. Ahiskalioglu was in Turkey. When he returned to Canada he was required to quarantine until January 28, 2021. Mr. Ahiskalioglu concedes he was unable to personally attend construction sites over this period of time. On January 29, 2021, Mr. Aydin and Mr. Ahiskalioglu met to discuss Silver Armour. According to Mr. Ahiskalioglu, Mr. Aydin wanted to end the business. Mr. Ahiskalioglu offered to purchase his ownership or have Mr. Aydin purchase his ownership interest. Mr. Aydin declined the offers.

[19] Mr. Aydin states that he discovered the CEBA loan when he was reviewing the Silver Armour bank accounts with CIBC. On February 2, 2021, Mr. Aydin confronted Mr. Ahiskalioglu about the CEBA loan. According to Mr. Aydin, Mr. Ahiskalioglu admitted he used the CEBA loan to pay for his personal household expenses and rent. At that time, Mr. Ahiskalioglu did not state that any part of the CEBA loan had been used to pay business expenses, or that a payment had been made on behalf of Mr. Aydin’s brother.

[20] On February 2, 2021, after confronting Mr. Ahiskalioglu about the loan, Mr. Aydin states that he withdrew $14,000 from the Silver Armour account. He kept the funds in a newly opened personal account. He states that he used approximately $12,000 of this amount to pay subtrades. Mr. Ahiskalioglu states that the amount withdrawn by Mr. Aydin from the Silver Armour account was actually $24,000 and $3,500 of this amount was paid to the trades. The balance of $20,500 remains in his possession or has been spent for non-business purposes.

[21] Mr. Ahiskalioglu states that Mr. Aydin also removed funds in December 2020. In cross-examination, Mr. Aydin conceded that he removed $3,000 from the Silver Armour account for his personal use. He admitted there was no loan agreement with Silver Armour or prior authorization to transfer the funds. On cross-examination he stated that the “money is not coming back to Silver Armour.”

[22] On February 6, 2021, Mr. Ahiskalioglu locked Mr. Aydin out of his Silver Armour e-mail address. According to Mr. Ahiskalioglu, he locked Mr. Aydin out of the e-mail because Mr. Aydin had contacted Silver Armour’s clients and was defaming both Silver Armour and Mr. Ahiskalioglu. Mr. Ahiskalioglu states that as a result of Mr. Aydin’s actions, Silver Armour lost four projects. On February 11, 2021, Mr. Ahiskalioglu restored Mr. Aydin’s e-mail access after he agreed to stop making negative statements to customers.

[23] In February 2021, Mr. Ahiskalioglu asked that CIBC change the signing authority to provide that the signatures of both Directors was required for withdrawals and transfers. On February 11, 2021, Ms. Gagliardi of CIBC advised that before the signing authority could be changed, it was necessary to provide a court order stating who the officers are, and a mutual direction from both directors that the signing authority is to be changed. Mr. Aydin states in his affidavit that the signing authority for the Silver Armour account was changed to require the signature of both Directors for any withdrawals from the account.

[24] On February 26, 2021, Mr. Aydin, through his lawyer, notified the CRA about the CEBA loan. Mr. Aydin also reported the matter to the Ontario Provincial Police. The police advised Mr. Aydin that this was a civil matter and that no criminal charges would be laid against Mr. Ahiskalioglu.

[25] Mr. Aydin and Mr. Ahiskalioglu both leased vehicles through the Silver Armour account. Mr. Aydin was the sole guarantor for both vehicles. Mr. Aydin made an arrangement to return the vehicles to Ford in February 2021. According to Mr. Aydin, Mr. Ahiskalioglu did not agree to return his vehicle. Mr. Ahiskalioglu denies that he refused to return the vehicle and states that he told Mr. Aydin that he needed the vehicle to complete Silver Armour’s work and would return the vehicle at the end of March 2021. Mr. Ahiskalioglu states that on March 5, 2021, Mr. Aydin agreed not to take the vehicle. Mr. Aydin conceded on cross-examination that he agreed not to take the company vehicle, but on March 9, 2021, Mr. Aydin used Ford Roadside assistance to locate Mr. Ahiskalioglu’s vehicle. He retained a locksmith to access the vehicle. He has maintained all personal items in the vehicle. Mr. Aydin admits that he kept the vehicle and has used it as his own.

[26] On March 29, 2021, counsel for Mr. Aydin wrote to CIBC advising of the dispute and asking that the Silver Armour account be frozen. On March 30, 2021, CIBC agreed to freeze the account. As of March 31, 2021, Silver Armour had $68,511.47 in its account. Mr. Ahiskalioglu states that because he is concerned about Mr. Aydin’s actions, he has not deposited outstanding cheques in his possession into Silver Armour’s bank account. He states he is safeguarding the cheques. Mr. Ahiskalioglu has $81,622.79 in accounts receivables that has not been deposited into the Silver Armour account.

THE ISSUES

[27] The following issues are to be determined on this motion:

i) Is the Plaintiff entitled to an injunctive relief?

ii) Is the Plaintiff entitled to an accounting? and

iii) Are directions required with respect to the management of Silver Armour?

ANALYSIS

Is the Plaintiff entitled to an Injunctive Relief?

[28] The Plaintiffs seek a Mareva injunction prohibiting the Defendant from moving or transferring any monies or assets in personal/family/business to other accounts in Canada or overseas.

[29] To obtain a Mareva injunction, the Plaintiffs must satisfy the following criteria:

a. A strong prima facie case;

b. The Defendant has assets in the jurisdiction;

c. There is a serious risk that the Defendant will remove property or dissipate assets before judgment so that the Plaintiff will be unable to satisfy a judgment awarded to him or her;

d. The Plaintiffs would suffer irreparable harm if the injunction is not granted;

e. The balance of convenience favours the granting of the injunction; and

f. Absent unusual circumstances, the Plaintiffs must provide an undertaking as to damages: 1910878 Ontario Inc. v. 2551204 Ontario Inc., 2020 ONSC 3415, at para. 17.

[30] The Plaintiffs argue that Mr. Ahiskalioglu acted fraudulently in applying for the CEBA loan without authorization and by transferring funds from the Silver Armour account to his personal account. The Plaintiffs argue that in cases of fraud the requirement that the Plaintiffs show a risk of assets being removed or dissipated can be established by inference; Sibley & Associates LP v. Ross, 2011 ONSC 2951, at para. 63.

[31] The Plaintiffs argue that they have established a strong prima facie case against the Defendant. The Plaintiffs rely on the fact that Mr. Ahiskalioglu applied for a CEBA loan without authorization, that he covered up the use of the funds and that he failed to provide the banking records from his personal account to establish that he used some of the money to pay Silver Armour’s expenses.

[32] Mr. Ahiskalioglu states that he advised Mr. Aydin that he intended to apply for the CEBA loan and sent an e-mail to him on April 8, 2020 setting out the loan requirements. The fact the loan was approved supports his position that Silver Armour qualified for the loan. He also states that he did not cover up the fact that the loan was approved, and the proceeds deposited into the Silver Armour account. Mr. Aydin had access to the financial documentation of Silver Armour and would have seen the deposit if he had looked. Mr. Ahiskalioglu also states that the amount of the loan continues to be in the Silver Armour account.

[33] Mr. Ahiskalioglu admits that he transferred $40,000 into his personal account on June 8, 2020. He states that the amount transferred was not the CEBA loan but instead was after a client of Silver Armour made a payment of $49,030.98. I am of the view that nothing turns on whether the money was from the CEBA loan or from a receivable. There is no evidence that the Plaintiffs authorized the transfer of $40,000 from the Silver Armour account to Mr. Ahiskalioglu’s personal account. There is no documentation which provides that the transfer was discussed or approved. There is also no shareholders loan agreement. Mr. Ahiskalioglu admits the money transferred into his account has been dissipated.

[34] Although the transfer was without authorization, I am not prepared to find there is strong evidence of fraud. The Directors had a history of using the funds in the Silver Armour account for their own purposes. In argument, counsel for the Plaintiffs conceded that both Directors withdrew amounts from the Silver Armour account but states that before Mr. Ahiskalioglu’s withdrawal, the amounts were small. Mr. Aydin admits to removing $3,000 without authorization in December 2020 and using the funds to pay his rent. After he learned of the CEBA loan in February 2021, Mr. Aydin states that he transferred $14,000 from Silver Armour to his personal account. Mr. Ahiskalioglu states that the amount Mr. Aydin transferred to himself was $24,000.

[35] There is no evidence that Mr. Ahiskalioglu tried to hide the fact that the CEBA loan had been approved and paid into the Silver Armour account. The CEBA loan proceeds were deposited on May 28, 2020. Mr. Ahiskalioglu did not immediately transfer the funds. Mr. Aydin had access to the financial records of Silver Armour.

[36] I am not satisfied that Mr. Ahiskalioglu’s conduct is consistent with fraud. In February 2021, he contacted CIBC for the purpose of sharing signing authority even though he could make withdrawals from the Silver Armour account without Mr. Aydin’s signature. Mr. Ahiskalioglu states that he has received $81,622,79 in accounts receivables, which he continues to have in his possession. Also, if Mr. Ahiskalioglu intended to flee the country, he would not have returned from Turkey in January 2021.

[37] In determining the balance of convenience, I must consider which party will suffer greater harm from the granting or refusal of the injunction. I am satisfied that the balance of convenience favours the Defendant. The Plaintiffs’ claim is for money damages. If the injunction is not granted, the Plaintiffs will not suffer irreparable harm. If the injunction is granted, Mr. Ahiskalioglu would suffer significant harm from the inability to access his bank accounts.

[38] I conclude that the Plaintiffs failed to establish the test for a Mareva injunction.

[39] The Plaintiffs seek an order restraining Mr. Ahiskalioglu from acting as a Director of Silver Armour. The Plaintiffs state that there is evidence that Mr. Ahiskalioglu acted dishonestly and in breach of his legal obligation as a Director of Silver Armour. The Plaintiffs argue that if Mr. Ahiskalioglu is not removed as a Director, there is a risk that he may carry out further dishonest acts pending trial that will negatively impact the Plaintiffs. It is Mr. Aydin’s position that he should be the sole Director of Silver Armour.

[40] I am not satisfied that Mr. Ahiskalioglu’s conduct justifies his removal as a Director of Silver Armour. I am also unable to conclude that it would be in the best interests of the parties that exclusive control of Silver Armour be provided to Mr. Aydin. As noted above, both Directors transferred money from the Silver Armour account to pay their personal expenses in the past. I am also of the view that there is no risk of any unauthorized withdrawals from the Silver Armour bank accounts because of the change in signing authority which requires both Directors’ signatures.

[41] The Plaintiffs seek an injunction to prevent Mr. Ahiskalioglu from leaving the country. I am not satisfied that Mr. Ahiskalioglu is a flight risk. He was in Turkey from November 2020 until January 2021 when he returned to Canada. Although his family is in Turkey, Mr. Ahiskalioglu has remained in Canada to respond to this motion.

Are the Plaintiffs entitled to an accounting and other relief?

[42] There is evidence that there has been a breakdown in the relationship between the two Directors of Silver Armour. Both Directors have withdrawn funds from the Silver Armour account without the authorization of the other. There is an issue as to whether cheques from the customers have been deposited. There is an issue as to whether creditors of Silver Armour have been paid.

[43] The Plaintiffs are seeking alternative relief including an accounting of the $40,000 that Mr. Ahiskalioglu transferred from Silver Armour to his personal account on June 8, 2020. There is no dispute that Mr. Ahiskalioglu transferred the funds. He states that he used $12,000 to pay Silver Armour’s expenses. He has not provided any proof of the payments that were made. He has not provided any information as to what creditors were paid or when. In addition, Mr. Ahiskalioglu has $81,622.79 in receivables that has not been deposited to the Silver Armour account.

[44] Mr. Ahiskalioglu takes the position that his personal banking information is not required for the Plaintiffs to ascertain the location of the CEBA funds. He states that the CEBA funds were not withdrawn from the Silver Armour account. Whether or not the CEBA funds were withdrawn or transferred from the Silver Armour account, it is clear that Mr. Ahiskalioglu transferred $40,000 to his personal account on June 8, 2020, without authorization. Mr. Ahiskalioglu has refused to produce the records with respect to that account. He argues that his personal bank statements are not relevant. I disagree.

[45] Mr. Ahiskalioglu states that he made payments of $12,000 from his account for the benefit of Silver Armour but has refused to provide the bank statements which sets out which creditors of Silver Armour were paid and the amount of the payments. I find that the Plaintiffs are entitled to this information. I order Mr. Ahiskalioglu to provide the bank records for Account 68281, for the period from June 8, 2020 to present.

[46] Mr. Ahiskalioglu states that he has $81,622.79 in receivables that has not been deposited into the Silver Armour account. He states that he did not make the deposit because he was concerned that the funds may be dissipated by Mr. Aydin. I am not satisfied that the evidence supports a finding that Mr. Aydin will dissipate the funds. The signing authority for the bank account requires the signatures of both Directors. I order Mr. Ahiskalioglu to provide an accounting of the customers who paid this amount. He is also ordered to pay this amount into the Silver Armour account.

[47] The Plaintiffs seek an order that Mr. Ahiskalioglu provide all corporate and accounting records of Silver Armour. Mr. Aydin conceded on his cross-examination that he has access to the financial records of Silver Armour. As a result, this order is not necessary.

[48] The Plaintiffs seek an order that Mr. Ahiskalioglu provide the records related to the CEBA application. Mr. Ahiskalioglu states that the application was an online questionnaire which was not saved. I am of the view that the Plaintiffs are entitled to the application for the loan made on behalf of Silver Armour. Mr. Ahiskalioglu is to produce any documentation, electronic or hard copy he may have in his possession that relates to the application for the CEBA loan.

[49] The Plaintiffs seek an order that Mr. Ahiskalioglu refrain from deleting any e-mails from the Silver Armour system and to provide access to the Plaintiffs of all deleted e-mails. The e mails are the property of Silver Armour and it is entitled to access to all e-mails, deleted or otherwise. Mr. Ahiskalioglu is ordered to provide access to the Plaintiffs of all deleted e-mails from the Silver Armour e-mail system.

[50] The Plaintiffs seek an order that Mr. Ahiskalioglu deposit with the court his Canadian and Turkish passports. I do not consider Mr. Ahiskalioglu to be a flight risk. I do not order Mr. Ahiskalioglu to deposit his passports with the court.

Are directions required with respect to the management of Silver Armour?

[51] Mr. Aydin takes the position that because of the restrictions on the Silver Armour bank account, running the corporation is very difficult, especially in paying the various trades, subtrades and accounts payable. At the time of the motion, the following amounts were owing:

i) Notion Constructions Management $33,343.00

ii) Zeal Construction $ 6,780,00

iii) Accurate Insulation Ltd. $ 1,977.00

iv) Alba Painting & Mechanical Ltd. $ 1,525.50

v) Senoz Electric Inc. $ 1,128.25

vi) Ontario Complete Construction $ 5,537.00

vii) Alex Painters $ 4,500.23

viii) Omer Vilmaz $ 1,900.10

TOTAL $55,681.08

[52] As set out in paragraph 46 above, Mr. Ahiskalioglu is ordered to pay $81,090.78 in receivables that he has in his possession. Once the payment is made, Mr. Aydin and Mr. Ahiskalioglu are directed to sign the cheques necessary to make the payments set out in paragraph 51.

[53] I direct both Directors to provide information as to the amounts which have been withdrawn from the Silver Armour bank account. If the Directors used the funds to make payments on behalf of Silver Armor, the Directors are to provide an accounting of the payments made, to whom and when. The amounts transferred or withdrawn from Silver Armour, which were used for non-business-related reasons, are to be repaid to the company. If the parties are unable to agree on the amounts to be repaid or the terms of repayment, a further motion can be brought before me.

[54] In his responding motion records, the Defendant seeks various relief including an order that Mr. Aydin be removed as a Director of Silver Armour, that he not contact any of Silver Armour’s clients, that he not damage Mr. Ahiskalioglu’s reputation, that he return the company vehicle and personal property to Mr. Ahiskalioglu, and that he not have any direct or indirect contact with Mr. Ahiskalioglu or his family, for a period of five years. The Defendant did not bring a formal motion or cross-motion. In the absence of a formal motion, I am not prepared to make an order with respect to the relief sought by the Defendants. This is without prejudice to the Defendant bringing a formal motion at a later date.

DISPOSITION

[55] The Plaintiffs failed to establish the elements necessary for a Mareva injunction. The Plaintiffs’ motion for injunctive relief is dismissed.

[56] The Plaintiffs’ motion for an accounting and other relief is allowed in part. I make the following order:

i) Mr. Ahiskalioglu shall provide a full accounting of the $40,000 transferred from the Silver Armour account on June 8, 2020. The accounting is to provide the names of the creditors paid, the amounts and dates of payment;

ii) Mr. Ahiskalioglu shall produce the banking records of Account 68281 from June 8, 2020 to the present;

iii) Mr. Ahiskalioglu shall deposit with Silver Armour all cheques he has in his possession collected from Silver Armour’s clients and shall provide a full accounting of the amounts he received from Silver Armour’s clients and when;

iv) Mr. Ahiskalioglu shall provide any documentation in his possession, electronic or hard copy with respect to the application for the CEBA loan; and,

v) Mr. Ahiskalioglu shall provide all deleted e-mails from the Silver Armour account.

[57] After Mr. Ahiskalioglu deposits all cheques he has in his possession from Silver Armour’s customers, the Directors shall sign the cheques necessary to make the payments set out in paragraph 51.

[58] Both Directors are ordered to provide information as to the amounts they have withdrawn from Silver Armour’s bank account. The amounts transferred or withdrawn from Silver Armour, which were used for non-business-related reasons, are to be repaid to the company. If the parties are unable to agree on the amounts to be repaid or the terms of repayment, a further motion can be brought before me.

[59] With respect to the ongoing management of Silver Armour, all transfers, payments and withdrawals from the Silver Armour account will require the signatures and approvals of both Directors. If the Directors are unable to agree with respect to the operation of Silver Armour, either party may bring a motion before me for further directions.

[60] There was divided success on the motion and I make no order as to costs.

DATE: MAY 18, 2021

Silver Armour v. Ahiskalioglu, 2021 ONSC 3786

Case Summary

OVERVIEW

BACKGROUND FACTS

THE ISSUES

ANALYSIS

Is the Plaintiff entitled to an Injunctive Relief?

Are the Plaintiffs entitled to an accounting and other relief?

Are directions required with respect to the management of Silver Armour?

DISPOSITION

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues