Court File and Parties
COURT FILE NO.: FS-22-29055 DATE: 20231101 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Shabnam Shokoufimoghiman, Applicant AND: Amir Ebrahim Bozorgi, Respondent AND: Payam Bozorgi, Respondent (third-party)
BEFORE: M. Kraft, J.
COUNSEL: Ash Mazinani, for the Applicant Chelsea Hooper, for the Respondent, A. Bozorgi Neil Paris & Alessandra Dassios, for the Respondent, P. Bozorgi
HEARD: October 26th, 2023
Endorsement
Overview
1There were three motions for inter-related relief heard by the Court as a long motion, as follows:
a. The applicant, Shabnam Shokoufimoghiman (“Shabnam”) brought a motion to receive her 50% share of the net proceeds of sale from the parties’ jointly-owned investment property located at 1011-75 The Donway West, Toronto Ontario (the “Donway Property”), with the balance of the net proceeds to remain in trust pending further court order or agreement of the parties. Alternatively, Shabnam seeks to receive any sum of net proceeds of sale from the Donway Property that the Court deems appropriate. Shabnam argues that she needs her share of the Donway Property sale proceeds to close the purchase of a pre-construction condominium, located at 1000 Elgin Avenue, East, Unit 17, Suite 917 (the “Elgin Condo”) in December and she needs funds to pay her legal fees.
b. The respondent, Amir Ebrahim Bozorgi, (“Amir”), asks the Court not to release any proceeds of sale from the Donway Property to Shabnam because he submits that these funds should be preserved as security for his claims for an equalization of net family property. Alternatively, Amir argues that if an amount is to be released to Shabnam, that it not be more than $68,000 since that is all she would need to close the purchase of the Elgin Condo. In addition, Amir seeks a preservation order relating to Shabnam’s Elgin Condo once the transaction closes.
c. The third-party respondent, Payam Bozorgi (“Payam”), Amir’s brother, seeks an order requiring Shabnam to pay security for costs in the sum of $90,000, with $50,000 to be paid within 30 days of the release of this Endorsement and $40,000 to be paid within 90 days before the first day of the trial. Shabnam named him as a respondent to the matrimonial case seeking a declaration that he holds a corporation and a piece of real property owned by the corporation, in trust for Amir and, that such assets should form part of the calculation of Amir’s net family property and be subject to equalization. Payam is the owner of the company and maintains he has injected his own capital into this company and is solely responsible for its profitability. Payam argues pursuant to the Family Law Rules, O. Reg. 114/99 (“FLRs”), he is entitled to seek security for costs because Shabnam’s claims against him are a nuisance, waste of time and she does not have sufficient assets in Ontario if an adverse costs award were made.
Factual History
2By way of brief history, Shabnam and Amir were married on December 25, 2014. They separated on March 21, 2022. They have one child, H. who is 5 years old. Shabnam issued this Application in April 2022, just after separation. She amended her Application in April 2023, adding Payam as a third-party respondent. As set out above, in terms of Payam, Shabnam seeks a declaration that he holds a company known as AppliedTech Ltd. (AppliedTech) and 185 Cottonwood Drive (“Cottonwood”), which is owned by AppliedTech, in trust for Amir and these assets be subject to equalization.
3The parties have not resolved the parenting issues, which have been bifurcated from the financial issues. The parenting trial is scheduled to proceed for 10-days in June 2024. At issue is the decision-making responsibility for important decision affecting H. and the parenting schedule for H.
4All financial issues between the parties are outstanding.
5At the date of separation, Shabnam and Amir jointly owned the Donway Property as an investment property. The Donway Property sold in May 2023 for $617,689.15. Pursuant to the consent order of Pinto, J., dated October 20, 2022 (the “Pinto Order”), the parties agreed that the proceeds of the Donway Property would be applied to discharge the existing mortgage, pay outstanding condo fees, taxes, utilities, legal fees and real estate commission and that each of them would receive a disbursement of $55,000. In addition, Shabnam paid Amir the sum of $2,947.44 from her share of the needs proceeds on account of her share of post-separation expenses Amir paid up to August 2022. The remainder of the Donway Property sale proceeds were to be held in trust by the real estate lawyer. The current balance of the Donway Property net sale proceeds is about $225,000. Shabnam’s presumptive 50% share, less $2,974.44, amounts to $109,500 not $112,603.50 as she claimed in her Notice of Motion. Shabnam agreed with this calculation during today’s motion. The remaining balance of $115,500 is presumptively Amir’s half share.
6On February 26, 2020, Shabnam entered into an Agreement of Purchase and Sale to purchase the Elgin Condo for $679,500. According to Shabnam, she has paid $101,985 to date, toward this purchase. In accordance with terms of the Agreement of Purchase and Sale, a further $33,995 must be paid on interim occupancy and the balance of the purchase price is due on the Unit Transfer date. Shabnam advises that the Elgin Condo is scheduled to close on December 19, 2023. She claims she needs her share of the net proceeds of sale from the Donway Property so she can close the sale of the Elgin Condo. Shabnam argues that she requires a total of $101,985 to close the Elgin Condo prior to the occupancy date of December 19, 2023. She submits that the balance of Shabnam’s share of the Donway Property sale proceeds are needed to pay her legal fees for the parties’ upcoming parenting trial scheduled to commence in June 2024 for ten days, and to defend recent criminal charges laid, as a result of what she claims, are false allegations by Amir. Shabnam claims that her mortgage broker has advised her that she will not qualify for a mortgage unless she puts at least 25% toward the downpayment of the Elgin Condo. However, Shabnam provided no direct evidence on the record about this requirement from the mortgage broker.
7Amir does not consent to Shabnam receiving her 50% share of the Donway Property sale proceeds. He submits that the Pinto Order requires that the balance of the Donway Property net sale proceeds remain held in trust and there has been no material change in circumstances since that order was made, justifying a change to this order. Further, he argues that Shabnam’s share of the Donway Property sale proceeds should be preserved and remain held in trust to secure his equalization claims. Further, Amir argues that if Shabnam is truly required to make a down-payment of 25% to close the Elgin Condo, he calculates this to be $169,875. Since Shabnam has already paid $101,985, he submits that the most she would need to close the Elgin Condo is approximately $68,000 and she should not receive any more than that. Finally, Amir seeks a preservation order relating to Shabnam’s Elgin Condo to secure his property claims.
8Shabnam served and filed an Amended Application on April 24, 2023, joining Payam as a respondent to the matrimonial proceedings. She argues that Payam holds AppliedTech” and Cottonwood, in trust for Amir and that both assets should be subject to equalization. Shabnam claims that both these assets are beneficially owned by Payam and held in trust for Amir. In response to Shabnam’s motion for the release of the Donway Property sale proceeds, Payam brought a cross-motion, seeking security for costs pursuant to rule 24(13) of the FLRs to protect him from what he submits is a nuisance claim and irresponsible litigation on her part. Since Shabnam does not have assets in Ontario, Payam submits he falls under one of the factors in r.24(13) entitling him to seek security for costs. He seeks security for costs under the FLRs as a remedy for the principle that court proceedings are expensive and time-consuming and ought not to be launched frivolously or without due regard to the impact on the responding party. On this basis, he seeks $90,000 as security for costs.
9Both Shabnam and Amir have claims with respect to the equalization of their net family properties. Amir’s position is that Shabnam will owe him an equalization payment (“EP”) of at least $110,000 or more. This does not include the post-separation adjustments Amir claims Shabnam owes him of $12,295.25 with respect to the expenses he paid for the Donway Property from September 2022 until it was sold. Shabnam’s position is that Amir will owe her an EP. This is based on her claim that the value of AppliedTech and Cottonwood are assets that should be placed on Amir’s side of the ledger because she believes she will be successful in her claim that Payam is holding these assets in trust for Amir.
Preliminary Issue – Payam’s Supplementary Affidavit, sworn on October 25, 2023
10At the beginning of the motion Shabnam argued that Payam’s supplementary affidavit should be struck from the record because it was sworn on October 25, 2023 (the affiant of which was his counsel’s legal assistant) and served on her the day prior to this long motion. The supplementary affidavit attaches two Exhibits which had previously been produced by Payam to Shabnam, but which had previously been more heavily redacted than the copies attached to the October 25th affidavit. Shabnam objected to Payam’s supplementary affidavit remaining on the record because the order of Vella, J., dated October 10, 2023, provided the parties with a timeline within which to deliver materials and Payam was not permitted to file a supplementary affidavit, the day prior to the long motion. Further, Shabnam argues that Payam could have provided these less redacted documents as Exhibits to his affidavit, dated October 10, 2023, since he knew of her objection to the redactions on September 29, 2023, when she filed her affidavit materials.
11Counsel for Payam acknowledged that the supplementary affidavit was served and filed the day prior to the long motion and argued that it was an oversight that these documents, with less redactions, were not provided earlier. Mr. Paris submits the supplementary affidavit was filed to respond to Shabnam’s complaints that the invoices and bank statement were so heavily redacted that the sender and receiver of funds from AppliedTech could not be identified. Payam argues that the less redacted copies prove that he paid for invoices related to AppliedTech demonstrating that he has injected his own capital into the company. Mr. Paris argued that only four lines in the attached Exhibits were unredacted and they should be allowed in to provide assistance to the Court. Shabnam’s counsel argued that the prejudice to his client in allowing the supplementary affidavit to remain on the record is that his client has not had a chance to respond to it and, more importantly, Payam should not be able to “cherry pick” the documents he is now prepared to unredact when it is helpful to him but, rather, should provide the disclosure in an unredacted manner in its entirety. I made a ruling to allow the supplementary affidavit to remain in the record but indicated that I would determine what weight, if any, I would be giving to it in my Endorsement.
Issues to be Decided
12The issues for me to decide on this motion are as follows:
a. Should Shabnam receive a release of her 50% share of the Donway Property net sale proceeds, or a release of proceeds, in any amount? i. To answer a. above, I must determine whether a material change in circumstances must be found to vary the Pinto Order? ii. If the answer to i. is no, whether all or part of Shabnam’s share of the Donway Property net proceeds of sale and/or her Elgin Condo should be subject to a preservation order to secure Amir’s equalization claims? Similarly, should Shabnam be ordered to pay security for costs in relation to the claims advanced against Amir?
b. Should Shabnam post security for costs in relation to the claims she has advanced against Payam and, if so, in what amount?
Brief Conclusion
13I have found that Shabnam should receive only the sum needed to close the Elgin Condo purchase from her share of the Donway Property net sale proceeds and that the remaining share of her Donway Property sale proceeds, if any, shall remain in trust until further agreement of the parties or court order. Based on the record before me, I am persuaded that Amir will be entitled to an EP from Shabnam that will be in the range of at least $110,000. Further, I am not able, on the record before me, to conclude that Shabnam’s claims against Payam are a waste or time, a nuisance or frivolous. While I agree that once Shabnam closes the Elgin Condo purchase, she will have equity in that property and it is in Ontario, I do not find it fair or just that either Amir or Payam should have to take the further steps necessary to seek an order that Shabnam list the Elgin Condo property for sale and wait until it is sold to be paid, if either or both are successful in their claims in this litigation. In accordance with my judicial gatekeeping function, mandated by Rules 2(2), 2(3), 2(4) and 1(8) to deal with cases justly, and the consent of Shabnam, once Shabnam closes the Elgin Condo purchase, I have ordered that she list the Elgin Condo for sale and that of those net proceeds of sale, she hold $125,000 in trust as security for Amir’s property claims under Part I of the Family Law Act, R.S.O. 1990, c.F.3 (“FLA”) and $25,000 in trust as security for the claims she is advancing against Payam. The balance of the Elgin Condo sale proceeds, if any, shall be released to Shabnam.
Issue one: Should Shabnam receive a release of her 50% share of the Donway Property net sale proceeds, or a release of proceeds, in any amount?
(a) Is a material change in circumstances necessary to vary the Pinto Order holding the balance of the Donway Property net sale proceeds in trust?
14Amir argues that the Pinto Order provided for a temporary disbursement of the Donway Property net sale proceeds of $55,000 to each party and that the balance of the remaining proceeds are to be held in trust by the real estate lawyer. The Pinto Order was made on consent and is without prejudice to the parties’ positions on an accounting of the Donway Property expenses. Amir claims that the Pinto Order cannot be varied unless there has been a material change in circumstances. He argues that Shabnam has the onus to demonstrate that such a material change in circumstances has taken place. At the time the Pinto Order was made, Shabnam had already signed the Agreement of Purchase and Sale in connection with the Elgin Condo. It was reasonably contemplated, therefore, that the closing of the Elgin Condo would take place prior to the trial of this matter. Nonetheless she agreed to the Pinto Order. On this basis, he argues that a variation to the Pinto Order ought not to be permitted.
15Shabnam argues that the Pinto Order was made on consent. There is no preservation aspect to the Pinto Order in terms of the balance of the net sale proceeds from the Donway Property. Accordingly, Shabnam does not agree that a material change in circumstances needs to be established as a precondition to the court now determining whether a further disbursement of sale proceeds should be made. However, she argues that if she is wrong, there has been a material change in circumstances since the Pinto Order, namely, that there has now been a 10-day parenting trial scheduled for June 2024, and her recent criminal charges which need to be defended, both of which require her receiving the release of her share of the Donway Property proceeds.
16I do not agree with Amir that a material change in circumstances needs to be found before a further disbursement of the Donway Property sale proceeds can be made. While the Pinto Order established an initial disbursement of net sale proceeds, it was reached on consent. There was no argument made by either party before Pinto, J., nor was there a substantive decision rendered by Pinto, J. wherein he determined there should be no further disbursements of the Donway Property proceeds between October 20, 2022 and the trial of this matter. Accordingly, a further disbursement order can be made without the need to determine a material change in circumstances since the consent Pinto Order was made.
(b) Should all or part of Shabnam’s share of the Donway Property net proceeds of sale and/or her Elgin Condo be subject to a preservation order to secure Amir’s equalization claims?
17Shabnam submits that since the Donway Property was jointly owned, she is presumptively entitled to her half-share of the net sale proceeds; Afshar v. Mahmoodie, 2016 ONSC 2875, at para. 31; Korman v. Korman, 2015 ONCA 578; Godfrey v. Godfrey, 2016 ONSC 2875, at para. 15. Shabnam argues that she requires her share of the Donway Property net sale proceeds to close the Elgin Condo on December 23, 2023, to pay for legal fees for the 10-day parenting trial scheduled to commence in April 2024, and to pay for her criminal defence counsel’s fees to address the recent criminal charges that were laid against her.
18Since Amir resists the release of funds under s.12 of the FLA, he has the onus to show why a preservation order should be made to protect his equalization claim.
19Section 12 of the FLA provides the court with jurisdiction to make an interim or final order restraining the depletion of a spouse’s property and/or a preservation order if the court considers it necessary to provide the other spouse’s property claims.
20Pursuant to s.40 of the FLA, a court may make and interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under Part III of the Act, dealing with support obligations.
21In Wright-Minnie v. Minnie, 2020 ONSC 5573, Leach, J. reviewed the principles the court considers when making orders under s.12 and s.40 of the FLA, as follows:
a. The object of sections 12 and 40 of the FLA is the protection of a spouse’s interests under the FLA by helping to ensure that there will be assets available to satisfy the entitlements of a spouse who is successful in obtaining relief under the Act. Relevant to that exercise is an assessment of the risk that assets in existence prior to trial will be dissipated; Bronfman v. Bronfman, [2000] O.J. No. 4591 (S.C.J.), at paragraph 29, and Bandyopadhyay v. Chakraborty, 2019 ONSC 802, at paragraph 44.
b. Drawing analogies to principles applied when considering to grant interim or interlocutory injunctions, but without intending to lay down explicit and/or rigid formula or guidelines for the granting of such discretionary relief, courts applying sections 12 and 40 of the FLA frequently have regard to the following factors:
i. the relative strength of a claimant’s case; ii. the balance of convenience or inconvenience; and iii. the potential for irreparable harm; Bronfman v. Bronfman, supra, at paragraphs 26-28, Both v. Both, at paragraph 16; and Bandyopadhyay v. Chakraborty, 2019 ONSC 802, at paragraph 43.
c. The court accordingly will consider how likely it is that the claimant will be entitled to an equalization payment and/or support, as well as the effect the granting or not granting of such orders will have on the parties; Bronfman v. Bronfman, supra, at paragraph 29, and Bandyopadhyay v. Chakraborty, supra, at paragraph 44.
d. Preservation and restraining orders generally should be restricted to specific assets, (as opposed to an all-encompassing order binding all of a party’s property in a general manner), and a claimant seeking such an order should show, on a prima facie basis, that he or she is likely to receive an equalization payment or support equal to the value of the specific assets; Lasch v. Lasch, [1988] O.J. No. 488 (H.C.J.), at paragraphs 16-17, cited in Barber v. McGee, [2016] O.J. No. 7140 (C.A.), at paragraph 11; and Bandyopadhyay v. Chakraborty, supra, at paragraph 42.
e. Restraining orders granted pursuant to section 40 of the FLA usually are made when there is evidence that the party obliged to pay support is not complying with a support order or there is other evidence of blameworthy conduct. The recipient spouse cannot rely on bare allegations or assumed beliefs; i.e., there must be something more than an “unsupported concern”; Keyes v. Keyes, [2015] O.J. No. 1303 (S.C.J.), at paragraph 76.
22Where there is a dispute between the parties as to which spouse is entitled to an equalization payment and in what amount, the Court should give more serious consideration to the balance of conveniences and the risk of dissipation prior to trial: Bronfman v. Bronfman, 2000 O.J. No. 1764, at para. 31.
Shabnam’s position on the Equalization Payment (“EP”)
23Shabnam takes the position that she will not owe Amir an EP. Instead, she argues that Amir will owe her an EP of at least $148,185. Shabnam submits that even if she is completely unsuccessful in her trust claim against AppliedTech and the Cottonwood property, Amir would still owe her an EP.
24Shabnam argues that if she is successful in her claim that Payam is holding AppliedTech and the Cottonwood property in trust for Amir, then there is no question that Amir will owe her an EP and it will be in a much higher sum than $148,185. On this basis, Shabnam argues there is no need for a preservation order in relation to her share of the net sale proceed from the Donway Property. Further, she submits that even if it is found at trial that she owes Amir an EP, she will have sufficient equity in the Elgin Condo to satisfy his property claims because she has at the very least, $200,000 of equity in the Condo or as much as $330,000 of equity in the Condo, if the fair market value (“FMV”) of the Elgin Condo has increased since it was purchased by her.
25In Shabnam’s sworn financial statement, she lists her equity in the Elgin Condo at $100,000, which assumes that the FMV of the Condo has not increased since the date of purchase. Shabnam obtained a letter of opinion, dated September 29, 2023, from a real estate agent which opines that the current FMV of the Elgin Condo is between $780,000 - $810,000, demonstrating the value of the Elgin Condo has increased by $100,000 to $130,000 since the date of purchase, making her equity in the property closer to $330,000.
26Shabnam asserts that her amended NFP statement shows that Amir’s “best-case” scenario is that she would owe him an EP of $63,371.15. Amir argues that this EP is based on Shabnam having equity of $101,985 in the Elgin Condo which is based on the purchase price of the Elgin Condo but is not the correct figure as to her equity in the Condo as at the date of separation.
Amir’s position on the EP
27Amir takes the position that he will be owed an EP from Shabnam of about $110,000 - $120,000, plus $12,295 in post-separation adjustments related to the Donway Property. Amir argues that Shabnam’s NFP statement is incorrect because,
a. She fails to include the correct figure for her equity in the Elgin Condo. Amir argues that Shabnam purchased the pre-construction condominium a year before the separation and the correct value of the Elgin Condo is much higher. If Shabnam’s letter of opinion is correct that the current value of the Elgin Condo is approximately $800,000, then the EP owing to him will be about double than that calculated by Shabnam.
b. She lists disposition costs of 5% for the Elgin Condo as a debt on the V-date, based on the purchase price, although she has indicated no intention to dispose of the Elgin Condo.
c. She discounts Amir’s date of marriage deductions by $166,390 because the statements he has provided about his accounts in Iran are from four months before the date of marriage, and not on the exact date of marriage.
d. She lists the value of a company she owned on the date of separation, Dana Pharmed, based on the balance of the bank account on that date. Amir argues that in addition to the cash in the Bank, there was also a shareholder’s loan owing to Shabnam which she failed to account for or include.
e. She failed to consider the post-separation adjustments she owes Amir for the carrying costs of the Donway Property for the period between September 2022 and the sale of that property, which Amir calculates at $12,295.25.
Analysis
28The facts in this case regarding who is owed an EP and in what amount are clearly disputed. If Shabnam is correct, she may be owed an EP of $148,185 from Amir. If Amir is correct, he may be owed an EP of about $120,000. The parties are apart by about $268,000.
29My analysis of the record before me is that the differences rest (a) partially on Amir’s date of marriage deductions. Amir’s sworn financial statement lists that savings in bank accounts in Iran of $422,384 as at the date of marriage. He has provided bank statement documentation to Shabnam proving he had bank accounts of $255,994 in his Ghavamin Bank account in Iran on the date of marriage in December 2014. However, he has not provided a bank statement proving he held $166,390 in his Pasargad Bank account in Iran on the date of marriage. Amir has, however, provided a bank account summary form Pasargad Bank from August 2014, four months prior to the date of marriage. Whether or not this will be sufficient as proof of Amir’s date of marriage deduction is a triable issue, which cannot be determined at this motion; and (b) partially on the FMV of the Elgin Condo and Shabnam’s equity in that property on the date of separation.
30My application of the legal principles relating to making an order under s.12 of the FLA as requested by Amir is as follows:
i. It is impossible for me on the current record to be certain that Amir will be owed an EP from Shabnam in or around the sum of $120,000. Based on Shabnam’s own evidence, it is clear that the FMV of the Elgin Condo listed in her NFP is too low and should be higher. Whether or not Amir will be able to prove the additional date of marriage deduction of $166,900 remains to be determined. However, I am persuaded on the record that Amir will be owed an EP by Shabnam, the amount of which I cannot fully determine. Accordingly, I find that as between Shabnam and Amir, the strength of Amir’s case is relatively stronger;
ii. In terms of the balance of convenience or inconvenience, if Shabnam does not receive a release of some of her share of the Donway Property net sale proceeds, she will not be able to close the Elgin Condo purchase. I find that the balance of inconvenience, therefore, is in Shabnam’s favour so she does not default on the Elgin Condo purchase; and
iii. In terms of the potential for irreparable harm, if Shabnam receives a release of the Donway Property proceeds, she will then have the Elgin Condo as an asset, meaning that the release of the proceeds does not translate into these proceeds being dissipated prior to trial. Rather, it is a matter of determining how these proceeds can be accessed from the Elgin Condo to satisfy Amir’s property claims.
31Accordingly, I find that Shabnam should receive a share of her Donway Property net sale proceeds, in an amount sufficient to enable her to close the Elgin Condo purchase only.
How much does Shabnam require to close the Elgin Condo purchase?
32The next thing I need to determine, therefore, is how much of the Donway Proceeds are needed Shabnam to close the Elgin Condo?
33Amir argues that Shabnam has not proven what amount she needs to close the Elgin Condo property. He argues that the Agreement of Purchase and Sale confirms that Shabnam needs to make an additional payment of $33,995 on interim occupancy of the unit and the balance of the purchase price on the Unit Transfer Date. The Elgin Condo was purchased for $697,000. Shabnam’s evidence is that she has paid $101,895 to date. Once the $33,995 is paid by Shabnam, then she will have paid $135,980 for the unit.
34Shabnam swears that she has been told by a mortgage broker that she must meet the 25% threshold to qualify for a mortgage because she is considered a low income earner. On this basis, she claims she needs a total of $101,985 to close the Elgin Condo purchase, being $33,995 + $67,990, so she has paid 25% of the purchase price. Amir, however, disagrees with Shabnam’s calculation. He argues that 25% of the Elgin Condo purchase price is $169,825 (25% of $679,300). Since Shabnam’s evidence is that she has paid $101,895 to date, then she would require a further sum of $67,840, not $101,985, and that includes the $33,995, it is not in addition to the $33,995. Shabnam did not file evidence disagreeing with this calculation after Amir’s affidavit, sworn on September 11, 2023 was served and filed, in which he details this calculation at paragraph 15.
35Further while Shabnam’s affidavit refers to a mortgage broker giving her advice that she must put up 25% of the purchase price to obtain financing, there is no direct evidence from a mortgage broker to confirm this is the case. Her own evidence is that she has not yet applied for a mortgage in connection with the Elgin Condo so this information is not yet known.
36Shabnam’s own evidence is that she needs the entirety of her share of the Donway Property net sale proceeds because she require funds for “adjustments and transaction costs”. Shabnam does not specify in her affidavit what the breakdown is or what the total of these costs are. Amir’s counsel requested this information from Shabnam on July 4, 2023. Neither Shabnam nor her counsel responded.
37Based on the above, I find that Shabnam has not met the onus to prove that she requires $101,985 to close the Elgin Condo purchase. Rather, I find that Amir’s evidence is more reliable, and that Shabnam requires a further $67,840 to close this purchase. In terms of other “adjustments and transaction costs” Shabnam has not provided sufficient information for me to determine what is needed to satisfy this obligation. Shabnam shall be given an opportunity to provide the court with this information, after which a sum equal to that amount shall be released to her from her share of the Donway Property net sale proceeds.
How much does Shabnam need to pay her family law lawyer’s and criminal defence lawyer’s fees?
38The final question, regarding the release of Shabnam’s share of the Donway Property sale proceeds is what amount, if any, Shabnam requires for her legal fees, both for her family law lawyer and her criminal defence counsel. Shabnam did not put forward any evidence as to an estimate of such fees, a letter from either lawyer, or a proposed Bill of Costs. Instead, she argues that the balance between what is needed to close the Elgin Condo purchase and her share of the Donway Property net sale proceeds will be used by her to pay for her future legal fees.
39Shabnam argues that she is not required to have put forward an estimate of her legal fees because she is not seeking an order for interim disbursements from Amir but, rather, is seeking the release of her own funds to fund her litigation costs.
40Amir disagrees with this position. Amir argues that when Shabnam asks for her portion of her share of the Donway Property closing costs to pay her legal fees, it is akin to her asking for interim disbursements and that she has failed to provide ample evidence as to what her legal costs will be. Amir makes this argument on the basis that some of Shabnam’s share of the Donway Property net proceeds may ultimately belong to him, if he is successful in his property claims. I do not agree with Amir’s argument on this point. Amir’s property claims can be protected by a s.12 FLA order. Shabnam’s request for a release of proceeds from the sale of the Donway Property are prima facie her funds because the property was jointly owned. If the court determines that these proceeds should be preserved as security for Amir’s claims, it may do so pursuant to s.12 of the FLA, but Shabnam does not need to meet the onus required of a litigant seeking interim disbursements to be paid by an opposing party. That would only come into play, in my view, if she were asking for funds to be released from Amir’s share of the Donway Property net sale proceeds. She has not done so.
41The concern with releasing Donway Property net sale proceeds to Shabnam to pay her legal fees is that those proceeds will be dissipated by her prior to trial. This means they will not be available as security for Amir’s property claims. Shabnam has argued that there is no need for a preservation order because her share of the Donway Property net sale proceeds will become equity in the Elgin Condo and can be accessed at a future point in time, if an order is made for her to pay Amir an EP. Putting aside the additional steps that would need to be taken to access that equity, such as Shabnam listing the Elgin Condo for sale and waiting for the property to sell in Toronto which has a saturated condominium market, Shabnam is correct in the sense that the proceeds are not being dissipated but transferred into another asset, capable of being realized if necessary. If, however, Shabnam receives the proceeds now and then uses them to pay her legal fees, those proceeds will be gone and not available to secure Amir’s property claims. For these reasons, I decline to order a portion of Shabnam’s Donway Property sale proceeds to be used to fund her family law or criminal litigation.
42However, I do find that it is appropriate in these circumstances to release to Shabnam, the sum of $67,840 plus the total of adjustment and transaction costs she needs to pay to close the Elgin Condo purchase, once she clearly provides the court with that detailed information.
Issue Two: Should Shabnam post security for costs in relation to the claims advanced against Payam?
43Rule 24(13) of the FLRs provides authority for the Court to make an order for security for costs. The rule states as follows:
Order for security for costs
(13) A judge may, on motion, make an order for security for costs that is just, based on one or more of the following factors:
- A party habitually resides outside Ontario.
- A party has an order against the other party for costs that remains unpaid, in the same case or another case.
- A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.
- There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs.
- A statute entitles the party to security for costs. O. Reg. 114/99, r. 24 (13); O. Reg. 42/21, s. 14
44Payam argues that he is entitled to security for costs because there is good reason to believe that the claims Shabnam has brought against him, namely, that he is holding AppliedTech and Cottonwood in trust for Amir, and that such assets shall be subject to equalization, is a nuisance and waste of time.
45On March 11, 2015, Shabnam incorporated a company, known as Rayan Farmed Inc. No shares were issued and there was no stated capital for this company. On April 21, 2017, while the parties were married, Shabnam transferred her interest in Rayan Farmed Inc. to Amir. On October 25, 2017, Amir changed the name of the company to AppliedTech Inc. At the time of the 2017 transfer, Amir claims that Rayan Farmed Inc. was not a profitable company.
46From April 21, 2017 onward, Amir owned and operated AppliedTech until January 2020, when he sold it to his brother, Payam. Amir has remained employed by AppliedTech once he sold it to his brother, but he has no ownership interest in the company. The sale transaction to Payam of AppliedTech took place more than two years before the parties’ separated, and more than three years after Shabnam transferred the company to Amir.
47Payam’s Answer to Shabnam’s Amended Application confirms that he purchased the shares of AppliedTech from Amir for $35,000 and continued to employ Amir as a local Director. Payam asserts that since he became the owner of AppliedTech he has invested millions of dollars into his own capital in the company and secured lucrative contracts turning the company into a profitable venture.
48The Share Purchase Agreement, dated January 21, 2020, sets out that Payam purchased Amir’s shares in AppliedTech for $35,000. This sum was based on the profits of the company in the year before. In 2019, the total revenue of AppliedTech was $249,562. The total expenses to generate the revenue was $179,796, which resulted in a net income of $28,859. Payam submits that he paid Amir the purchase price of $35,000 paid by him monthly over time.
49Shabnam argues that the purchase price Payam paid Amir for his shares of AppliedTech was $35,000 and that that sum is “nonsensical”. Payam argues that in 2017, AppliedTech was not profitable. On its 2016 Tax Return it showed nil revenues and a net income/loss of $-120. Payam’s affidavit explains that in 2018, AppliedTech’s balance sheet showed inventory purchases of $38,121 and net income of $20,572.
50According to Payam, after he purchased AppliedTech, he invested heavily into the business to help it grow and did so by purchasing clinical and industrial lab equipment from foreign suppliers to be resold by AppliedTech at a profit. After the Covid-19 pandemic hit in March of 2020, AppliedTech secured lucrative contracts with the World Health Organization and became quite profitable.
51According to Payam, he did not know that Shabnam formerly owned AppliedTech or that she had transferred it to Amir in 2017. When Amir told Payam this information, Payam deposes that he suggested that Amir obtain a Release from Shabnam before the company arranged for financing to buy property.
52On June 9, 2021, Shabnam was asked by Amir and she did sign a Full and Final Release and Covenant not to Sue Amir or AppliedTech. Shabnam obtained independent legal advice from Gian Paolo Vescio in relation to her execution of the Release. Shabnam argues that Amir “tricked” her into signing this Release and did not explain that AppliedTech had been sold to his brother or that AppliedTech had purchased Cottonwood. Shabnam also submits that she did not understand that the Release contained a family law release.
53AppliedTech purchased Cottonwood, according to Payam, as an investment property and to offer short term rentals. The Land Transfer documentation shows that the purchase of Cottonwood closed on May 17, 2021.
54Shabnam submits that she did not know Amir was not the owner of AppliedTech until after the separation when she received his Answer. In Shabnam’s Reply, she sought to set aside the share purchase agreement between Amir and Payam as a fraudulent transaction. However, in the Shabnam’s Amended Application, she seeks a declaration that Payam is holding AppliedTech and Cottonwood in trust for Amir and that these assets ought to be subject to equalization, as they form part of Amir’s net family property on the date of separation.
55Payam is of the view that Shabnam’s claims against AppliedTech are meritless. He maintains that the share purchase agreement between him and Amir was a legitimate corporate transaction, supported by a legal document. The transaction which Shabnam claims is “highly suspect” took place 26 months before the separation.
56Payam acknowledges that for him to be successful in being granted an order for security for costs, he has to show there is “good reason” that the allegations Shabnam has made against him are a waste of time. The burden is to demonstrate that there are reasonable grounds to believe the claims are a nuisance or waste of time. Payam submits that Shabnam has no theory to support her claim that the share purchase agreement between Amir and him was a fraudulent transaction. Shabnam makes the argument that there is significant evidence that Amir and Payam are conspiring with each other to conceal Amir’s interest in AppliedTech. The “significant evidence” according to Shabnam is as follows:
a. Amir said AppliedTech was mostly inoperative from 2015 to 2017 before Shabnam transferred the company to him. This is not relevant as to what the state of the business was when Amir sold it to Payam. According to Payam, AppliedTech made little profit before he purchased it.
b. Shabnam claims the fact that Amir sold the shares in AppliedTech to Payam for $35,000 is “nonsensical”. In other words, Shabnam takes issue with the price Amir charged for the shares in the company and claims Amir never received the $35,000. As outlined above, Payam’s position is that the purchase price was based on the net profits of the company the prior year in 2019. The sale of AppliedTech gave Amir a salary, Payam assumed all of the debt of the company and paid the $35,000 to him over a year on a monthly basis.
c. Shabnam makes a bald allegation that Amir lives in Cottonwood. Both Payam and Amir swear this is not true. Cottonwood is tenanted and other parts of it are used for business purposes for AppliedTech.
57Payam submits that he is entitled to an order for security for costs based on the fairness of this proceeding. Shabnam’s conduct, in his view, is irresponsible and wasteful; Shabnam wants to conduct Questioning; She has served an overreaching request for significant amounts of disclosure from him; and she added Payam as a party before knowing whether she has a legitimate claim against him. Payam submits that Shabnam should have brought a motion for third party disclosure as allowed for in the FLRs. By adding Payam as a party to the proceedings, Payam submits that Shabnam did an end run around what is necessary to determine prior to litigation being commenced. He submits that Shabnam has chosen to carry out this litigation as though she has a blank cheque. Adding Payam as a party will add weeks to this matrimonial trial. Adding a dispute over the ownership of a highly profitable corporation of a company Payam has solely built will make the matrimonial case more complicated, more expensive and add significantly more witnesses. If she insists on proceeding with her claims against Payam, he argues that she ought not to be insulated from costs consequences.
58Further, Payam submits that there is good reason to believe that Shabnam lacks funds to pay a costs award if ordered against her. Shabnam’s own evidence is that she does not have the funds to pay an adverse costs award. She describes herself as a low income earner. Shabnam’s position on this motion is that she desperately needs her share of the Donway Property net sale proceeds to pay her legal fees and closing costs of the Elgin Condo. On this basis, it is reasonable for Payam to be concerned that Shabnam will not have the funds to pay an adverse costs award. He argues that it would not be fair to force Payam to wait for Shabnam to have to sell the Elgin Condo if he were awarded costs, particularly in a saturated market of condominiums in Toronto.
59Shabnam argues that she added Payam as a party to the proceeding because she only learned that he owned AppliedTech and the Cottonwood property when Amir filed his Answer. Until then, Shabnam understood that Amir was the owner of those assets, because she transferred her company to him in 2017. Payam does not live in Toronto and Amir would not provide the disclosure she sought regarding AppliedTech or Cottonwood because he claims he is not the owner. Accordingly, Shabnam submits she had no alternative but to name Payam as a party since she is making a trust claim against a company and Cottonwood, owned solely by Payam. Further, she submits Payam also does not meet the test for security for costs set out in r.24(13) because she has sufficient equity in the Elgin Condo with which she could satisfy an adverse costs order.
60Shabnam claims that it is impossible for Payam to assert that her claims against him are a nuisance or waste of time because Payam refuses to provide financial disclosure to her and has refused to attend Questioning until this long motion was heard. Accordingly, Shabnam submits Payam’s refusal to participate thus far, in the matrimonial proceedings, make it impossible for her to fully prove her claims. Shabnam’s concerns regarding the transaction between Amir and Payam to purchase AppliedTech include,
a. The timing of the “purchase” between Amir and Payam, according to her, is very suspicious because Amir was criminally charged with assaulting her in December 2019 and based on that, he understood the separation was imminent. One month later, in January 2020, he enters into a share purchase agreement to sell AppliedTech to his brother for $35,000, about which he does not disclose to her. By the end of 2020, AppliedTech had secured a $20 million contract with the World Health Organization (WHO).
b. Amir’s insistence that he has no connection to Cottonwood, in her view is false. When Cottonwood was purchased, an Equifax Report in Amir’s name was sent by him directly to the bank regarding the mortgage for the property, as opposed to a credit report for the company, AppliedTech. Shabnam submits that she put this issue to Amir in Questioning and asked him, if the Cottonwood property is owned by AppliedTech and he has no interest or connection to it or AppliedTech, why would the mortgage company be providing the financing for the purchase of the property sent it to him in his personal name and not in the name of the company. The husband did not have an adequate answer to this question.
c. The Full and Final Release and Covenant not to Sue that Shabnam signed on June 9, 2021, does not state that Payam is the owner of AppliedTech. Further, the Release is between Shabnam, Amir and AppliedTech. If Amir had no ownership in AppliedTech and it was owned by Payam, then why was Payam was not part of the Release?
d. She believes that Amir told the police he lives at Cottonwood based on the fact that when Shabnam was charged last week with a criminal charge, her bail restrictions prohibit her from attending at Cottonwood, clearly because the Police believe Amir lives there. Amir denies this. The official address for AppliedTech is 40 Wynford Drive. Amir and Payam both submit that the Cottonwood property is partially tenanted and partially used for office space for AppliedTech.
Law and Analysis of Security for Costs
61The purpose of an order for security for costs is to protect a party from nuisance or irresponsible litigation, conducted without regard to the merits of the case or the costs likely to be incurred: Izyuk v. Bilousov, 2015 ONSC 3684, at para. 36; Blackwood v. Nichols, 2022 ONCJ 313, para. 36; and Watson v. Watson, 2023 ONCJ 435, at para. 17.
62A further purpose of an order for security for costs is to ensure the existence of a ready source of funds to which a successful litigant may look to satisfy costs of a proceeding that he or she has been compelled to incur. For this reason, security for costs is generally intended to be in a form that is readily accessible to the party ultimately awarded the costs of the relevant proceeding: Clark v. Clark, 2014 ONCA 175, at para. 43.
63Security for costs orders are not to be made routinely. Orders for security for costs are a blunt instrument. The court must ensure that an order for security for costs is not used as a litigation tactic to prevent a case from being heard on its merits; Hevey v. Hevey, 2023 ONSC 4863 a para. 22. Security for costs is not intended as a roadblock for a person who has a genuine claim. In most instances the merits of a case should not be determined by a party’s inability to post security for costs: Bragg v. Bruyere, 2007 ONCH 515 (OCJ).
64The principles that courts must apply in determining whether to order security for costs was recently reviewed by Curtis, J. in Watson v. Watson, supra, at para; 18, and set out as follows:
a. The initial onus is on the party seeking security for costs to show that the other party falls within one of the enumerated grounds in subrules 24(13)-(17); b. If the onus is met, the court has discretion to grant or refuse an order for security c. If the court orders security, it has wide discretion as to the quantum and means of payment of the order. d. The order must be “just” and be based on one or more of the factors listed in subrule 24(13), Izyuk v. Bilousov, at para. 40, Blackwood v. Nichols, para. 39.
65Whether an order for security for costs is just in any particular case is an objective determination, based on the record before the court: Krzewina v. Beaumont, 2021 ONCJ 351. Blackwood v. Nichols, supra, para. 43, Watson v. Watson, supra, at para. 19.
66The mere satisfaction of the criteria in r. 24(13) is not sufficient to merit an order for security for costs. It must also be just to make the order: Watson, supra, at para. 20 Hodgins v. Buddhu, supra. Borque v. Brokenshire, 2018 ONSC 2670.
67In Wreggbo v. Winton, 2013 ONCJ 250, Katarynych stated at paragraph 11:
In relation to the latter basis, the subrule allows either a showing of good reason to believe that there is either nuisance afoot or a wasting of the court’s time. As a matter of common sense, a nuisance claim is one so devoid of merit that it is a waste of the court’s time. It wholly undercuts the primary objective of the Rules to allow a “nuisance claim” that is by its nature a waste of time, to go forward to trial with a security for costs order “hobbling” the trial court, as Superior Court Justice Quinn characterized the dilemma in the Stefureak case. See Stefureak v. Chambers. [emphasis omitted]
68Further, the court in Wreggbo noted that whether an order for security for costs is “just” in any particular case is an objective determination, based on the record before the court, set in the context of the procedural law established by the Rules and the substantial law governing the claims for which the security is sought (para.11). Wreggbo was recently referred to in Krzewina v. Beaumont, supra, at para 30, in which Sherr, J. referred to the court stating that whether a claim has merit is not a litigant’s “take my word for it” type of consideration but rather that:
13Merit is unfolded – or not – in the quality of the disclosure of information provided about the claim to the other party. It is an information sharing that, as part of a party’s “just dealing” responsibility, positions the other party to make a responsibly informed response to the claim. It is an information-sharing that flows into the judicial conferencing process, as a matter of “just dealing” to inform the court’s opinion on the merits of competing claims, and the means by which the parties make visible their attempt to work with the case management judge to meet the primary objective of the Rules.
14Withholding of information reasonably needed by the other party or the court itself to take a responsible stance on the likely merits of any particular claim is unjust, within the meaning of the Rules.
15It skids the claim into the mischief zone. Once in the mischief zone, it is nuisance and wastes not just the court’s time and resources, but also the time and resources of the other party.
20So it is that the state of information disclosure between the parties and to the case management court over the course of the litigation is relevant to the adjudication of a security for costs motion. The underlying question is whether the claim needs a trial.
69With respect to the application of the law to this case, the first question is whether Payam has satisfied the initial onus of showing that Shabnam falls within the enumerated ground set out in r.24(13)(4) and that there is “good reason to believe” that Shabnam’s claims are a waste of time or a nuisance. An analysis under subsection (4) necessarily requires the court to embark on an inquiry into the merits of the case, including consideration of the level of disclosure: Krzewina v. Beaumont, supra, at para 35.
70In assessing the merits of Shabnam’s, Amir’s and Payam’s positions, it is important to note that the Court does not have the benefit of viva voce evidence and cross-examination, and there has not been Questioning in this manner relating to the trust claims. Further, the inquiry into the merits at this stage is not a detailed analysis akin to that at a trial or a summary judgment motion, but rather a general review of the evidentiary record to determine if there is a prima facie case, and a sufficient evidentiary basis upon which the claims may be reasonably grounded.
71I cannot, on the record before me, conclude that Shabnam’s trust claims against Payam and Amir are a waste and nuisance and she does not have sufficient assets in Ontario to pay a costs order: r.24(13). Given the concerns raised by Shabnam and the timeframe as to when Cottonwood was purchased and the Release was signed by Shabnam, I cannot find that there is a “good reason” to believe that Shabnam’s claims against Payam are a waste of time. Further, I am not persuaded that Payam has met his onus demonstrating that there are reasonable grounds to believe the trust claim is a nuisance.
72The documents on the record raise significant questions. Payam’s evidence is that he did not know that prior to Amir owning AppliedTech it was a company owned by Shabnam that she had transferred to him. He further deposes that he had suggested to Amir that he ensure Shabnam sign a Release of AppliedTech before it obtained financing to purchase Cottonwood. The Transfer/Deed of Land for Cottonwood shows the property was transferred on May 17, 2021. The Agreement of purchase and sale for Cottonwood was signed in March 2021. This means AppliedTech owned Cottonwood one month prior to when Shabnam was asked to sign the Full and Final Release and Covenant not to Sue. Nowhere in the Release document is Payam named despite being the owner of AppliedTech.
73When Shabnam signed that Release, her evidence is that she was not aware that Amir had transferred AppliedTech to his brother. The language of the Release does not identify that Amir had no ownership interest in AppliedTech. By the time Shabnam signed the Release, Cottonwood had already been purchased.
74Further, the transcripts from Amir’s Questioning show that the agreement of purchase and sale of Cottonwood was signed in March 2021, and a few days later, Amir had applied for a mortgage, personally in his name, not on behalf of AppliedTech. An Equifax report that Amir had provided a mortgage broker was in his personal name. Amir was not able to provide Shabnam’s counsel with an answer to the question why, if AppliedTech was applying for financing, Amir provided information to the mortgagee about his personal credit, if he had no ownership in AppliedTech.
75On March 6, 2021, a few days after the Agreement of Purchase and Sale was signed between AppliedTech to purchase Cottonwood, Pilrock Mortgage LT did an inquiry into Amir’s personal credit, not the credit of AppliedTech. Amir did not have a good answer to the question as to why, if he was not the owner of AppliedTech in 2021, Pilrock Mortgage LT would be looking into his personal credit application for Cottonwood.
76While these questions do not necessarily equate to Payam holding AppliedTech and Cottonwood in trust for Amir, they are questions that require answers, given the timing of the transactions and the lack of transparency about the ownership of AppliedTech to Shabnam.
77With respect to the level of disclosure, Shabnam claims that she has not received the disclosure she has requested from Amir regarding AppliedTech and Cottonwood because he simply claims he is not an owner and cannot produce the documentation. Further, Payam has provided limited disclosure regarding the share purchase agreement when he bought the shares in AppliedTech from Amir, but very redacted information on other points and he acknowledges that he has not yet answered Shabnam’s request for information. Shabnam takes the position because of the entanglement of finances between Amir and Payam, she sees both Amir’s refusal to disclose and Payam’s refusal to provide disclosure as a deliberate attempt to mislead her and that this amounts to inadequate disclosure.
78As noted by the Ontario Court of Appeal in Roberts v. Roberts, 2015 ONCA 450, the most basic obligation in family law cases is the duty to disclose financial information. This requirement is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party.
79At the very least, Payam needs to provide relevant and necessary disclosure to Shabnam to enable her to properly assess her trust claims. In spite of the obvious challenges facing Shabnam going forward with this claim, the court cannot find that her claim is “so devoid of merit” that it amounts to a waste of the court’s time or a nuisance.
80This is not a situation where Shabnam has abused the court process or created unwarranted expenses for Payam with multiple motions and repeated non-compliance with orders, leaving an order for security for costs as the only remedy to prevent further abuse. Rather, Shabnam asked Amir for the disclosure about AppliedTech and Cottonwood. Amir’s answer has been that he does not have ownership in the company and cannot provide her with the requested disclosure. As a result, Shabnam named Payam as party and sought disclosure from him. While Payam has delivered some disclosure, he has not been forthcoming with the information Shabnam needs to understand what transpired in and around the time she was asked to sign a full Release. It may well be that if that information and disclosure was forthcoming, Shabnam would be in a better position to determine if her trust claim is likely to be successful.
81The FLRs afford the courts a wide discretion to determine the amount and form of security for costs, as well as the time for paying the ordered security into court or otherwise giving the required security: r. 24 (13-17) of the FLRs. The FLRs contemplate that the form of security to be provided is to be crafted on a case-specific basis, to meet the particular exigencies of the case. Neither the Rules of Civil Procedure or the FLRs requires that security for costs be in the form of a payment into court or the posting of a letter of credit, in all cases: Clark v. Clark, supra, at para. 46.
82The impact of the security for costs order Payam seeks of $90,000 would be profound. It would require Shabnam to pay $90,000 into court and until she does so, she would not be able to take further steps in the proceedings until she does so. She requires access to her own funds to close the Elgin Condo purchase. Once she closes that purchase, she will have equity in that property. While I do not find, on the record before me, that I can reasonably say the claims against Payam are a nuisance and waste, I do believe naming Payam as a party without setting out the elements of the trust claim being made is not in line with r. 2(3) because is does not ensure that the procedure is fair to all parties, it does not save expense and time, and it simply does not promote the primary objective of the FLRs, namely, to deal with cases justly. Accordingly, in my judicial gatekeeping role, and my mandate to enable the court to deal with cases justly, I find that Shabnam ought to preserve the sum of $25,000 from the Elgin Condo proceeds of sale as security for Payam’s claims, pursuant to s.12 of the Family Law Act.
Shabnam’s New Proposal
83At the very end of Shabnam’s counsel’s oral submissions, for the first time, she agreed to an order whereby the Court would release her share of the Donway Property net sale proceeds to allow her to close the Elgin Condo purchase, along with an order requiring her to sell the Elgin Condo once it closes so that the equity she has in the Elgin Condo would be held in trust, pending the determination of these issues at trial, as security for Amir’s property claims. Upon Mr. Mazinani being asked by the Court as to whether he had made this proposal to counsel for Amir or Payam prior to the motion being heard, Mr. Mazinani confirmed he did not. That is regrettable, as it may have made the motion unnecessary and the three parties may have well agreed to resolve the issues put before the Court.
84I agree that the best way to approach Shabnam providing security for both Amir’s property claims and Payam’s claims, is to order her to sell the Elgin Condo once it closes and to preserve a sum of money as security for both claims pending the trial of this matter.
ORDER
85Accordingly, I make the following order,
a. Within five days of the release of this Endorsement, Shabnam shall provide the details and calculations of the adjustments and transaction fees estimated by the real estate lawyer who will be representing her in connection with the Elgin Condo purchase. Upon being provided with this information, the total sum of the adjustments and transaction fees plus $67,840, from Shabnam’s share of the Donway Property net sale proceeds shall be released to Shabnam to enable her to close the Elgin Condo purchase. The balance of the Donway Property net sale proceeds shall remain held in trust pending further court order or agreement of the parties.
b. If there is a dispute about the sum needed by Shabnam to close the Elgin Condo purchase, the parties shall arrange a conference call before me at 9:00 a.m. on a weekday to conference this issue on an urgent basis, and on a date agreeable to all three parties.
c. Both parties shall execute an Authorization and Direction to the real estate lawyer holding the Donway Property net sale proceeds in trust to release the total of the funds referred to in (a.) above to Shabnam.
d. Upon the closing of the Elgin Condo purchase, Shabnam shall have thirty days within which to list the Elgin Condo for sale. Upon the closing of the sale of the Elgin Condo to an arm’s length third-party, the sum of $125,000 of the net sale proceeds shall be held in trust by the real estate lawyer as security for Amir’s property claims under Part I of the Family Law Act, and the further sum of $25,000 shall be held in trust by the real estate lawyer as security for costs for Payam’s claims, making a total of $150,000 to be held in trust pending further court order or agreement of the parties. Shabnam shall be at liberty to receive the balance of any remaining net proceeds from the sale of the Elgin Condo.
e. If the parties cannot agree on costs, the parties shall file costs submissions of no more than three pages, not including offers to settle and bills of costs within 21 days. Each party may file a reply of no more than 1 page within three days of receiving costs submissions from each party.
M. Kraft, J. Release Date: November 1, 2023