COURT FILE NO.: FS-22-00029138
DATE: 20231106
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Golnaz Amirmoezi, Applicant
AND:
Saman Motieenia, Respondent
Elaheh Amirmoezi, Respondent
Mohsen Morshedi, Moving Non-Party
BEFORE: Justice M. Sharma
HEARD: October 19, 2023
COUNSEL: Adam Jaffer for Applicant, G. Amirmoezi
Eiman Sharifpour for Respondent, S. Motieenia
Eric D. Freedman for Respondent, E. Amirmoezi
Justin W. Anisman for Moving Non-Party, M. Morshedi
ENDORSEMENT
[1] This was a long motion brought by Mr. Mohsen Morshedi, a non-party to this family proceeding. He seeks the release of funds held in trust in relation to proceeds of sale of a home he owned jointly with the Respondent Husband, Mr. Saman Motieenia. The other parties to this motion are the Applicant Wife, Ms. Golnaz Amirmoezi, and her mother, Ms. Elaheh Amirmoezi, the mother of the Applicant Wife.
[2] With no disrespect to any of the parties, I refer to them by their first name. This will reduce confusion in trying to identify parties, some of whom share the same surname. This was also how they were referred to in the parties’ affidavits.
Overview
[3] The Applicant, Golnaz, and the Respondent, Saman, were married and have separated. Parenting and financial issues are in dispute.
[4] The issue that is the subject of this motion is the value of Saman’s interest in a property, located at 35 Viewmount Avenue, North York, Ontario (the “Property”), and the value of the moving non-party, Mohsen’s, interest in the same Property.
Property and Dispute between Saman and Mohsen
[5] In January 2017, Saman and Mohsen made equal contributions towards the downpayment of the Property. Initially, title to the Property was in Saman’s sole name, but a trust agreement was signed identifying Mohsen as having a 50% beneficial ownership. The intention was for both to have equal ownership in the Property. They would ultimately demolish and build a new home. After applying rent received from tenants, Mohsen and Saman contributed equally to the Property’s mortgage payments and costs (although Saman admitted he was late with two payments, and Saman alleges other deficient payments). On March 11, 2019, Mohsen’s name was added to title as a joint owner with Saman.
[6] The first mortgage was solely in Saman’s name. However, as indicated, Mohsen contributed equally to the mortgage costs.
[7] In June 2017, after the Property was purchased, Saman asked Mohsen to take a second mortgage on the property for $220,000 to fund a different renovation project Saman had undertaken at 110 Carmichael Ave. Mohsen agreed on the condition that Saman was responsible for all costs with this second mortgage. This agreement was not in writing. The second mortgage was registered on title on June 9, 2017. A central issue on this motion is whether Mohsen was responsible for the costs associated with the second mortgage.
[8] By April 2021, the parties had discussions about Saman buying Mohsen’s interest in the Property. They disagree on who initiated those discussions. However, Saman and Mohsen agree that by July 6, 2021, they had an oral agreement whereby Saman would buy Mohsen’s 50% interest in the Property for $300,000 and title to the Property would be in Saman’s sole name. Because of this agreement, Mohsen understood he was no longer responsible for paying his 50% share of the mortgage or carrying costs. He stopped making these payments around July 6, 2021. The parties’ agreement was never put to writing.
[9] On September 14, 2021, Saman paid $100,000 to Mohsen towards the $300,000 he owed pursuant to their agreement. He received no further payments. Mohsen became angry and frustrated. He believed Saman was refusing to communicate with him to avoid paying the remaining $200,000, and his relationship with Saman was broken. Saman denies that he refused to communicate with Mohsen.
[10] Saman explains, around this time, he was seeking funding to pay the balance due to Mohsen, but he had expenses in relation to the two mortgages on the Property. Saman said he tried to get funds from his mother-in-law, Elaheh, who is now a party to this proceeding. He was having disputes with his wife, Golnaz, leading to their separation. Additionally, he had defaulted on the first mortgage on the Property.
[11] There is a dispute as to what happened next. Between December 2021 and January 2022, there was evidence of texts exchanged between Mohsen and Saman. Of the texts that appear in English, Mohsen was asking when he would be paid the balance; Saman was reporting that once he gets a funding commitment from a lender, Mohsen would have to sign papers to remove his name from title to the Property and cancel the trust agreement. Mohsen was asking how certain Saman was that he would get financing to cover his first mortgage, second mortgage and the amount owed to Mohsen. On December 16, 2021, Saman assured Mohsen he would have a final answer within 24 hours.
[12] On December 19, 2021, Mohsen followed up. He had not received an update from Saman by text since December 16, 2021. Mohsen said “[T]he situation is getting very complicated. there is no time. We have only 2 weeks. Prices in real estate market rose up dramatically. that property is worth 1.9 1.95 right now. It’s a good time to sell it before it gets too late. I’m very worried about my family INTEREST.”
[13] According to Saman, by January 14, 2022, Saman had finally obtained approval from a private lender. He messaged Mohsen to arrange for paying the remaining amount owed to him and to have him removed from title. These messages in evidence were not translated to English. Nor did Saman introduce evidence from the private lender evidencing that funding was in fact available. There was an English text message sent by Saman on January 14, 2022 at 20:19 proposing that Mohsen “sell his share” pursuant to a payment schedule that would see payments made to Mohsen over the following six months. Mohsen responded “I AM NOT SELLING THE HOUSE…”
[14] Then, Saman says Mohsen reneged on their prior agreement; he was not willing to sell his share of the Property to Saman anymore based on their July 6, 2021 oral agreement. He believes Mohsen did so because “the housing market was very hot at the time” and the Property was worth a couple hundred thousand more as compared to when he agreed to sell his share. He says that because Mohsen refused to remove his name from title and sell his 50% share to Saman, the only choice was to put the Property up for sale.
[15] Mohsen has a different recollection. He says that because Saman had no money, was having serious problems paying the first and second mortgages and was faced with threats by the second mortgagee to foreclose on the Property, alternative arrangements were needed to deal with the Property. He says the parties agreed to call off their previous agreement in which Saman would buy Mohsen’s interest for $300,000, and instead they would sell the Property and split the proceeds on a 50/50 basis, subject to Saman being solely responsible for the costs associated with the second mortgage and Mohsen being credited with already having received $100,000.
[16] Regardless of which version is true, it is not disputed that both parties agreed, on February 16, 2022, to list the Property for sale. On February 23, 2022, parties entered into an Agreement of Purchase and Sale for the Property for $2,035,000. The sale transaction closed on June 1, 2022.
[17] The crux of the dispute between Saman and Mohsen is whether or not Mohsen is bound by the July 6, 2021 agreement to only receive $300,000, or whether Mohsen is entitled to an equal division of the net proceeds of sale. After factoring amounts paid out to Mohsen, including from an Order of Steele J., Mohsen says he is entitled to a further $150,360.26, and Saman says he is only entitled to $44,983.31.
Procedural History
[18] Golnaz issued her Application on April 11, 2022. Saman was the Respondent although Elaheh was later named as a further Respondent.
[19] On May 16, 2022, Golnaz brought a motion that was heard by Pinto J. She sought an order preserving the net proceeds of sale of the Property, to be held in trust. Saman and Elaheh consented to the entire proceeds of sale being held in trust. Mohsen opposed this relief and requested that his share of the proceeds be released to him. Pinto J. was not satisfied with Mohsen’s evidence at that time. Pinto J. ordered that all net proceeds be held in trust.
[20] On August 11, 2022, Steele J. heard a motion, also brought by Mohsen, for an order varying the Order of Justice Pinto, requesting the release of a portion of the funds held in trust. In paragraphs 15 to 17 of her Endorsement, Justice Steele considered that there was no claim against Mohsen for civil fraud, the compelling evidence that Mohsen had a 50% interest to this Property, and Golnaz’s admission that she had no reason to believe Mohsen’s evidence on the motion was false. At paragraph 18, Steele J. stated:
I cannot see any reason at law for [Mohsen’s] proceeds of sale of the Property to continue to be held. This execution before judgment and in this case there is not even a claim against [Mohsen]. He clearly owned half of the Property. He is entitled to his share of the proceeds.
[21] However, Steele J. was not able to quantify Mohsen’s 50% share of the proceeds. She reasoned at paras 19 to 21 that because there was a second mortgage on the Property, and there was a question as to whether Mohsen was responsible for repayment of the principal, interest and associated costs on the second mortgage, “at this time” she treated the second mortgage as a debt of both parties “until there is further and better evidence on this issue.” She ordered the release to Mohsen of $153,427.73 from the net proceeds of sale. This amount represented half of the total net proceeds of sale, less the $100,000 he already received.
Position of Mohsen
[22] Based on Steele J.’s Endorsement, Mohsen argues it is not open to the parties to argue that Mohsen’s proceeds of sale of the Property should continue to be frozen. That issue has been decided. It is res judicata. He says the only outstanding issue for this motion is whether, on a balance of probabilities, the second mortgage is a joint debt of Mohsen and Saman, or whether it is a sole debt of Saman.
Position of Saman
[23] It is Saman’s position that the oral agreement of July 6, 2021 binds the parties, namely that Mohsen is only entitled to $300,000 (less certain costs identified), of which Mohsen already received $100,000, plus the $153,427 as ordered by Steele J. He argues Mohsen is not entitled to 50% of the net sale proceeds of the Property.
Position of Golnaz
[24] Golnaz argues no further funds should be dispersed to Mohsen. She argues the second mortgage debt should be distributed equally as between both Mohsen and Saman. She states Mohsen has already received more than 50% of the equity in the Property because of payments made to him by Saman and the Order of Steele J. Golnaz seeks an order that the remaining proceeds held in trust should be preserved under s. 12 of the Family Law Act to protect her entitlement to equalization. She recognizes that in cases where property is owned by a third party, the applicant must satisfy the higher test for a Mareva injunction to have that property preserved: Dimartino v. Dimartino, 2016 ONSC 7461 at paras. 32-33. She argues she has met this test.
Position of Elaheh
[25] Elaheh takes a similar position as Golnaz. She argues she loaned $620,000 to Saman. She says these funds were first advanced in 2015 so Saman could build a house at 110 Carmichael, Toronto, but that Saman sold that house without returning funds to her. This debt is not registered on title as a mortgage or charge on the Property. However, on June 11, 2021, Elaheh and Saman signed a Trust Agreement. The Trust Agreement specifies that Elaheh (and Saman’s mother) have provided funds to Saman, and that the parties intend for Elaheh (and Saman’s mother) to be the beneficial owners of the 50% interest that Saman has in the Property. There are restrictions that prevent Saman from selling or mortgaging the Property without Elaheh’s consent.
[26] Elaheh has not commenced a separate civil action against Mohsen or Saman. She was added as a Respondent to this Application. She has not amended her pleadings to set out a claim against Saman. Golnaz and Elaheh were represented by the same lawyer at the motion before Steele J.
[27] Elaheh’s position is that the alleged debt owed to Mohsen should not be paid out until she receives repayment of the debt owed to her. Contrary to the Trust Agreement, she argues she did not provide her consent for the sale of the Property. She alleges fraud on the part of Saman, but her affidavit makes no allegation of Mohsen having engaged in fraud.
Issues
[28] The issues are:
Are the responding parties to this motion estopped from arguing that funds should not be released to Mohsen because that issue has already been determined? If the issue has not been determined, should funds be released to Mohsen?
If funds should be released to Mohsen, what amount of funds should be released to him? This turns on whether:
(a) Mohsen is bound by the oral agreement he had with Mohsen on July 6, 2021; and
(b) Mohsen is liable under the second mortgage?
Issue 1: Are the responding parties estopped from arguing funds should not be released to Mohsen?
Legal Principles
[29] “Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel), which precludes relitigation of issues previously decided in court in another proceeding.”: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 para. 29. Cause of action estoppel precludes a person from bringing an action against another when the same cause of action has been determined in an earlier proceeding, while issue estoppel precludes the same point or issue of fact determined in an earlier proceeding from being relitigated: See Angle v. M.N.R., 1974 CanLII 168 (SCC), [1975] 2 SCR 248 at pp. 253-255.
[30] As a species of res judicata, “the doctrine of issue estoppel seeks to protect the finality of litigation by precluding the relitigation of issues that have been conclusively determined in a prior proceeding.” Penner v. Niagara (Regional Police Services Board), 2013 SCC 19 at para. 88.
[31] The preconditions to the operation of issue estopped were set out in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 at para. 25. They are:
a. That the same question has been decided;
b. That the judicial decision which is said to create the estoppel was final; and
c. That the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.
[32] If these preconditions have been met, the court must still determine as a matter of discretion whether issue estoppel ought to be applied: Danyluk, at para. 25.
[33] I am satisfied that the conditions have been met. First, this was the same issue determined by Steele J. She found there was no reason in law for Mohsen’s proceeds to continue to be frozen. She found Mohsen was entitled to his 50% share of the proceeds after finding there was compelling evidence he had a 50% ownership interest.
[34] Second, while the Order of Steele J. is marked as “temporary”, I am satisfied her decision was final with respect to Mohsen’s entitlement to his share of the funds, and that funds should be released to him. The explanation for the “temporary” nature of the order was because this was an interim motion brought by a non-party within a family proceeding that did not finally resolve the issues between the parties. Furthermore, Steele J. had not finally determined the quantum to be released to Mohsen; she invited further and better evidence on Mohsen’s liability under the second mortgage.
[35] Steele J.’s determination that Mohsen was entitled to his net proceeds of sale and that funds should be released to him were fundamental to Steele J.’s decision; she would not have released any funds to him otherwise. Her findings on these issues were not incidental in the motion before her – they were “fundamental to the decision arrived at” when the motion was heard: Angle, at p. 255. Furthermore, Mohsen is not a party to this proceeding. No claim has been made against him. Golnaz’s evidence on cross-examination was that she had no reason to believe his evidence was false. There is no reason to find that Steele J.’s decision in relation to Mohsen was not final.
[36] Third, the parties are the same. All parties had the opportunity then to make arguments as to why no funds should be released to Mohsen.
[37] In the exercise of my discretion, I am of the view that issue estoppel should apply. None of the responding parties have brought a claim against Mohsen. Steele J. considered and applied the more stringent test for injunctive relief (and not the test for preservation under s. 12 of the Family Law Act) in finding that funds should be released to Mohsen. Saman, in his affidavit material, does not dispute that some funds should be released to Mohsen. Golnaz has not offered any evidence to suggest Mohsen’s claim to a 50% ownership interest was false. She made this admission at her cross-examination. For Golnaz to assert at this motion that Mohsen had liability under the second mortgage amounts to nothing more than a bald allegation, without any supporting evidence. Neither Golnaz nor Elaheh chose to cross-examine Mohsen to substantiate any allegation against Mohsen, but they had the opportunity to do so.
[38] Finally, if Golnaz or Elaheh are arguing now for the first time that any amounts owing to them should take priority over amounts to which Mohsen is entitled, such arguments would also be precluded. This, in my view, would be asserting a new legal concept on the same facts that were before Steele J.: Hoque v. Montreal Trust Co. of Canada, 1997 NSCA 153, cited with approval in D’Addario v. EnGlobe Corp., 2012 ONSC 1918 (ONCA) at para. 265. Furthermore, neither Golnaz nor Elaheh have established facts to support a theory of liability that would enable them to have access to funds that rightly belong to Mohsen. Elaheh’s Trust Agreement with Saman only gave Elaheh an interest in Saman’s 50% interest in the Property – not the entire value of the Property.
[39] Accordingly, I find that issue estoppel prevents the parties from re-litigating the issues of whether: (a) Mohsen’s proceeds from the sale of the Property should continue to be frozen; and (b) Mohsen is entitled to his share of the proceeds.
[40] For certainty, I would come to the same conclusion reached by Steele J. if this issue were relitigated before me. I offer these brief reasons.
[41] It is not disputed that Mohsen was an owner of the Property at the time of sale. There is no claim made against him. With respect to Golnaz argument, she has offered no evidence that Mohsen had liability under the second mortgage, thereby reducing his entitlement to the net proceeds of sale. She admitted she had no reason to believe Mohsen’s evidence was false. With respect to Elaheh’s claim, the Trust Agreement she adduced into evidence supports an entitlement only to Saman’s 50% interest in the Property. While there were restrictions that prevented Saman from selling the Property, the Trust Agreement did not create any substantive rights against Mohsen. Neither Golnaz nor Elaheh have commenced a claim against Mohsen. Their claims would only be secured against Saman, and not a non-party. Finally, Saman does not dispute that Mohsen is entitled to some proceeds of sale from the Property – he disputes the quantum. For these reasons, there is not a serious issue to be tried as against Mohsen. Accordingly, I would not grant an injunctive freezing order against Mohsen, nor would I grant a preservation order under s. 12 of the Family Law Act.
Issue 2: What amount of funds should be released to Mohsen?
[42] This turns on whether Mohsen is bound by his oral agreement reached on July 6, 2021, and on whether he is responsible for the second mortgage.
a. Is Saman’s attempt to argue Mohsen is bound by the oral agreement reached on July 6, 2021 a collateral attack on the decision of Steele J.?
[43] I would dismiss Saman’s argument as a collateral attack on Steele J.’s decision. Steele J. did not address Saman’s argument that Mohsen’s recovery was limited to the July 6, 2021 oral agreement. It appears Saman did not make this argument when he appeared before her.
[44] At para. 5 of Steele J.’s decision, she considered that the July 6, 2021 agreement “was subsequently cancelled” and that the parties “decided instead to sell the Property with [Mohsen] getting a credit for the $100,000 already received.” The rest of Steele J.’s decision is based on her accepting, as fact, that the July 6, 2021 agreement was cancelled. Whether Saman made this argument or not, Mohsen had opportunity to make his argument before Steele J. Therefore, I would conclude that his attempt to make this argument now constitutes a collateral attack on Steele J.’s decision: see Hoque, D’Addario.
[45] In the event I am not correct, I still address Saman’s argument that Mohsen is bound by the oral agreement reached on July 6, 2021.
b. Is Mohsen’s recovery limited to what he agreed to pay Saman on July 6, 2021?
[46] I find that Mohsen is not bound by the oral agreement reached with Saman on July 6, 2021, thereby limiting his recovery to the amount agreed upon at that time. I make this finding for the following reasons.
[47] First, I am satisfied that the parties had an oral agreement. While they did not have an agreement as to when Saman would pay Mohsen, the absence of a time for performance is not an essential term for contract formation: See Muller v. O’Flynn, 2019 BCSC 1674 at para. 46.
[48] Second, in the absence of evidence of a specific date by which payment was to be made, I infer into the parties’ oral agreement on July 6, 2021 that payment was to be made within a reasonable time. The court may imply terms into a contract “based on the presumed intention of the parties where the implied term must be necessary ‘to give business efficacy to a contract or as otherwise meeting the ‘officious bystander’ test as a term which the parties would say, if questioned, that they had obviously assumed.’” See M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 CanLII 677 (SCC), [1999] 1 S.C.R. 619, at para. 27.
[49] It was Saman’s evidence that the parties “did not set a deadline for when [Saman] had to make the full payment to [Mohsen]”. However, to accept Saman’s position that the July 6, 2021 agreement governs, the Court would have to infer from the parties’ oral agreement that Saman could make the $300,000 payment to Mohsen at any time, or that Saman could delay full payment for as long as a year. This would not have been reasonable, having considered the evidence and surrounding circumstances. The original bargain was based on the anticipated selling price of the home when the bargain was struck. Given the hot real estate market, it would not have been commercially reasonably for Mohsen to have agreed to a significant period of delay before payment was made to him. A windfall would have resulted to Saman and a loss to Mohsen.
[50] The parties were informal in their dealings with each other. They were individuals and not corporations or lenders with extensive assets to rely upon. Saman must have appreciated that Mohsen would not be able to wait indefinitely for payment. The evidence revealed that the parties exchanged texts about the “hot” real estate market. In Mohsen’s text to Saman in December 2021, he stated that the Property was worth more. While the Court appreciates that Saman may have had limited resources and difficulty in finding funds to pay Mohsen, he entered into the bargain to pay Mohsen freely.
[51] By December 16, 2021– five months after the parties’ oral agreement – only $100,000 had been paid and the balance remained unpaid. On this day, Saman provided assurances that he would have a “final answer” as to when payment would be made within 24 hours. He did not honour that commitment. This demonstrates Saman appreciated that the time arrived or had passed to make payment to Mohsen.
[52] Third, I find that Saman did not make payment within a reasonable time. By January 14, 2022, Saman states he “had approval from a private lender”, but there was no evidence before the Court that Saman had ever secured funds sufficient to pay off the two mortgages, or to repay Mohsen. The best evidence he provided was a text message he sent to Mohsen on January 14, 2022, where he proposed making payments over the following five months – with the final payment around a year after the oral agreement was reached. An objective, reasonable bystander would not have concluded that this is what the parties bargained for, given the hot real estate market and the parties original agreement to jointly own the Property and to sell it for profit.
[53] Saman not paying the $300,000 within a reasonable time is conduct evincing an intention not to be bound by the parties’ oral agreement: see Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 SCC, [1999] 3 SCR 423, at para. 40. As a result of this repudiation of the parties’ oral agreement, it was open to Mohsen to seek damages for non-performance of the oral agreement thereby keeping the oral agreement alive, or he could have considered the oral agreement terminated: Guarantee Co., para. 40. By Mohsen and Saman’s joint decision to sell the home, there is evidence that at least Mohsen (if not Saman also), considered their prior agreement terminated, with the result that they are both discharged from their future obligations under that oral agreement: Guarantee Co., para. 40.
[54] While there is a factual dispute as to whether Mohsen forced Saman to sell the Property or whether they agreed to do so, this is not material. I am satisfied that Mohsen had a right, due to Saman’s breach of the oral agreement, to treat the oral agreement as being terminated. This would have put the parties back in the position they would have been in had they never entered the contract – namely as 50% owners of the Property, entitled to sell the Property and claim 50% of the net proceeds. The prior rights parties had (i.e., ownership rights) are not extinguished when a contract is repudiated. Guarantee Co., para. 40.
[55] Alternatively, the evidence is undisputed that both parties signed the necessary documents to have the Property sold, which supports a finding that parties jointly decided to cancel the oral agreement. Saman introduced now evidence that under this new agreement to sell the Property, Mohsen was limited to receipt of funds under their July 6, 2021 agreement.
[56] Finally, it is not disputed that as of July 6, 2021, Mohsen stopped making his monthly contributions toward the Property. Since the July 6, 2021 agreement was either cancelled by agreement, or repudiated by Saman, the parties’ prior rights and obligations continued. Therefore, Mohsen should be responsible for his 50% share of the monthly costs of the Property from July 6, 2021 onwards until the Property was sold. I determine this amount below.
[57] For these reasons, the amount to which Mohsen is entitled from the net proceeds of sale is not informed by the parties’ July 6, 2021 oral agreement.
c. Is Mohsen responsible for the second mortgage?
[58] I find that Mohsen is not responsible for any amounts owing under the second mortgage. I make this finding for the following reasons:
a. Saman has not led any evidence in his affidavit to suggest that the second mortgage was a joint liability. His own evidence suggests it was a liability of his alone. He states at paras. 10 and 11: “In June 2017, I asked Mohsen to apply for a second mortgage, and Mohsen approved. I paid the second mortgage monthly payments on my own every month.”
b. Saman led no evidence of an oral agreement or written agreement to suggest Mohsen had any liability under the second mortgage.
c. On August 10, 2022, the day prior to the motion before Steele J. and when Saman was not represented, Mohsen’s lawyer asked for a statement from Saman which was given by Saman in an email. It states, “…I do also consent that the funds of the second mortgage taken on [the Property] was solely deposited to my account with [Mohsen’s] knowledge and consent. Therefore, I am solely responsible to pay off this mortgage minus expenses paid to the first mortgage and involving interest charged only on this portion...” While Saman’s lawyer argues it was unfair and inappropriate to extract this concession from Saman, the fact remains that Saman at the motion before me did not lead evidence to suggest any oral or written agreement that would have Mohsen responsible for the second mortgage.
d. In Saman’s affidavit sworn July 19, 2023, at para. 39, he states “I used the money from the second mortgage to pay for the living expenses, and monthly mortgage payments for the 100 Carmichael Ave property and 48 Beaumont Pl. I also used the money for the construction work I was doing on the 100 Carmichael Ave property.” Therefore, there is no evidence that any of the funds from the second mortgage benefited Mohsen or were applied to any of the costs of the Property.
e. Saman’s bank statements show the entire sum of the second mortgage being deposited into his bank account.
[59] I find that Mohsen is entitled to receive from the net proceeds of sale from the Property currently held in trust the amount of $144,185.13. I have determined this amount as follows:
a. Paras. 71 and 72 of Mohsen’s affidavit, along with the Trust Ledger Statement of the real estate lawyer, Mr. Ulrich, show total Proceeds of Sale to be $506,855.45, less payment of property taxes, first and second mortgage, legal fees, real estate commission, and other credits.
b. Mohsen is entitled to 50% of the Total Proceeds of Sale ($253,427.73), subject to the following adjustments:
i. A credit of 50% of the Second Mortgage payout, in the amount of $183,285.59 (resulting in Saman being responsible for 100% of this payment).
ii. A deduction of 50% of the Second Mortgage payout which was used to pay the First Mortgage. When the First mortgage went into default, the Second Mortgage made a total payment of $65,850.66 towards the first mortgage. Mohsen is responsible for 50% of this cost because Mohsen was responsible for costs related to the first mortgage. Therefore, Mohsen is responsible for $32,925.33.
iii. A deduction of $100,000 that Saman has already paid to Mohsen in September 2021
iv. A deduction of 50% of the amounts Saman paid from July 6, 2021 until the closing of the sale of the Property on June 1, 2022 total $11,629.75. Saman has identified these costs as payments on the first mortgage ($5,753 on August 23, 2021, and $5,878.75 on September 13, 2021). Mohsen has not led evidence to suggest these amounts are not accurate. As indicated above, Mohsen is responsible for 50% of these costs of carrying the Property, in the amount of $5,814.88.
v. A deduction of $153,787.98, representing the funds released to Mohsen by Steele J.
[60] Therefore, I order that $144,185.13 from the net proceeds of sale currently held in trust by the real estate lawyer, Mr. Philip Ulrich, shall be immediately paid to Mohsen Morshedi.
Costs
[61] Mohsen was the successful litigant and is presumptively entitled to costs. Mohsen has filed a Bill of Costs identifying full indemnity costs of $13,797.20. It is unknown whether Offers to Settle were served.
[62] Parties are encouraged to settle costs. If they are unable to do so, parties shall deliver to the Family Trial Office and upload to CaseLines brief costs submissions not exceeding 3 pages double-spaced. They shall attach any offers to settle. Mohsen shall deliver cost submissions by November 20, 2023. The responding parties to this motion shall deliver cost submissions by December 4, 2023.
Justice M. Sharma
Date: November 06, 2023