Court File and Parties

COURT FILE NO.: FS-24-42956 DATE: 2024-08-02 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hoda Aryan-Pour, Applicant AND: Peyvand Jalali Moghadam, Respondent

BEFORE: M. Kraft, J.

COUNSEL: Martha McCarthy, for the Applicant Nancy Deskin, for the Respondent

HEARD: August 1, 2024

Endorsement

Nature of the Motion

[1] This is the return of an urgent ex parte motion brought by the applicant wife regarding the preservation of net proceeds of sale of a property owned by the respondent husband located at 17 Beechwood Avenue (“Beechwood property”). On June 6, 2024, Horkins, J. made an ex parte order restraining the husband from withdrawing or transferring funds from the net proceeds of sale of the Beechwood property, pending further court order, as well as a preservation order under s.40 of the Family Law Act, R.S.O., 1990 c.F.3 (“FLA”). The return of the motion was scheduled to take place on June 13, 2024.

[2] The husband’s counsel sought an adjournment of the June 13, 2024 motion date. Since the Beechwood property transaction was scheduled to close on June 26, 2024, the parties agreed to adjourn the return of the ex parte motion to June 20, 2024.

[3] On July 18, 2024, the parties reached a consent to have the husband’s real estate lawyer, Jeff Levy, hold $245,000 of the net proceeds of sale from the sale of the Beechwood property in trust pending further agreement or court order; to preserve these funds and not release them to either party until further court order or written agreement between the parties; to provide the husband until June 18, 2024 to produce a sworn financial statement and all supporting documentation to the wife; and as a one-time uncharacterized payment, the husband agreed to pay the wife $2,500 from the proceeds of sale to be credited, if necessary, at a later date. The terms of this consent were incorporated into an order of Kraft, J., dated June 24, 2024. The wife’s motion was adjourned to August 1, 2024. It is noteworthy that the husband received $397,280.40 on the closing of the Beechwood property.

[4] Now, at the return of the ex parte motion, the wife seeks to continue the terms of my order, dated June 24, 2024 pending further court order such that the $245,000 of net proceeds of sale from the Beechwood property remain held in trust and preserved by the real estate lawyer. Although, the wife amended her Notice of Motion, to also seek an order restraining the husband from withdrawing or transferring funds from his share of the net sale proceeds from 4 other properties he owns, she agreed not to pursue that relief on this motion.

[5] The husband now seeks to vary the terms of the consent order and asks that of the $245,000 from the Beechwood property sale proceeds being held, $90,000 continue to be held in trust, and the balance of $155,000 be released to him. He also seeks an extension of time to serve and file an Answer.

[6] The parties reached an agreement with respect to the timing of Questioning of both parties and a case conference date.

Issues to be Determined

[7] The issues to be determined at this motion are as follows: a) Should the preservation order of Horkins, J., dated June 6, 2024 continue? and b) Should paragraph 1 of the consent order of Kraft, J., dated June 24, 2024 be varied such that $155,000 or some other amount of the remaining Beechwood property sale proceeds be released to the husband?

The Parties’ Positions on the Motion

[8] The wife submits that if the preservation order is lifted and the husband is permitted to access the $245,000 (or some other amount) being held in trust, her child support claims will be defeated in entirety and the husband will become judgment proof. The wife argues that the husband has no other properties or assets registered in his name. His sworn financial statement shows that he has an interest in other properties, however, the nature of his interest in these properties remains unclear. The husband has registered Notices on these properties along with his business partners, however, the Notices do not specify his current ownership interest in the properties. Further, since the Notices are not registered on title as mortgages, the wife cannot obtain more information about them unless and until the husband provides the details or the wife brings a third-party motion. She argues that continuing the existing order so the $245,000 remains held in trust by the real estate lawyer is minimally invasive to the husband and protects her claims from being defeated.

[9] The husband submits that he needs to access at least $155,000 of the $245,000 being held in trust to pay unspecified debts. He states that he has had to borrow money from family and friends to make ends meet because his financial circumstances drastically changed in July 2019, due to a severe back injury he suffered, leaving him in constant pain. While the husband acknowledges that at one point he was a successful realtor, earning significant income, this came to a halt in and around Covid pandemic. He submits that while he currently has 7 active luxury listings, there has been no movement on these properties.

Conclusion

[10] I am continuing the order preserving the $245,000 being held in trust by the real estate lawyer, pending further court order or agreement of the parties. The parties shall exchange disclosure requests as soon as possible. The Questioning of each party shall be no more than one day for each party and shall take place on September 11, 2024 and September 25, 2024. The parties shall return before me for a case conference on November 5, 2024 at 12:00 p.m. The husband shall serve and file his Answer with his disclosure request and, in any event, at least 7 days before the Questioning.

Brief Background

[11] The parties were married in February 2003. According to the wife, the marriage was marked by family violence. The parties separated in May 2013 after the husband was charged with forcible confinement, assault and having a weapon dangerous to public peace.

[12] The parties have two children, ages 19 and 14. Both children currently reside with the wife.

[13] In or around June 2013, the wife issued an Application, seeking the division of net family property, spousal and child support and custody of the children.

[14] On August 8, 2014, the parties resolved their outstanding issues by way of Minutes of Settlement. Pursuant to these Minutes, the husband agreed to pay the wife child support in the fixed, non-variable sum of $2,500 a month once the matrimonial home was sold. The child support terms formed part of the divorce judgment which was granted on September 18, 2015.

[15] As of the date the wife brought this urgent ex parte motion, she deposed that the husband is in arrears of child support of over $245,000, which she claims have been accruing since 2015. This is disputed by the husband. While the husband acknowledges that he owes the wife child support, he calculates the most he could possibly owe to her to be about $90,000.

[16] The wife claims that she signed the Minutes when she had endured a year of psychological and financial pressure from the husband. The Minutes have no provisions for the division of net family property and contain spousal support releases. The matrimonial home was to be sold and the proceeds of sale to be divided equally. The wife argues that she had no disclosure from the husband when she signed the Minutes. She now seeks to set aside the support and property terms of the Minutes.

[17] The record is disputed as to whether the husband paid and/or in what quantum of child support the husband paid to the wife in 2015, 2016, 2017 and 2018. Both children resided primarily with the wife from April 1, 2016 to June 2016, one child lived with the wife from July 1, 2019 to August 2021, and both children resumed living primarily with the wife as of August 2021 to present. The wife submits that the husband paid child support to her between December 2018 and June 24, 2019 but, otherwise, has not paid any child support to her. In her first affidavit filed in support of her ex parte motion, she calculated the child support arrears at $245,000. In the wife’s reply affidavit, sworn on July 29, 2024, she deposes that the husband owes her child support arrears of $232,500.

[18] The husband does not dispute that he stopped paying child support to the wife in 2019. He argues that he paid child support to the wife between 2015 and 2018 but these payments were made in cash or by e-transfer. The husband deposes that from June 2016 to June 2019, he regularly paid child support to the wife in the sum of $2,500 a month. The husband estimates that the very most he owes the wife in child support is about $90,000. As such, he argues that of the $245,000 being held in trust from the sale of the Beechwood property, $155,000 should now be released to him.

[19] When the wife learned that the husband had recently sold the Beechwood property for $7.3 million, she brought an urgent ex parte motion prior to the closing date which was June 24, 2024. At the time the motion was brought, the wife was aware that there was a first mortgage in favour of Newland Financial Inc. for $2.5 million, a second mortgage in favour of 1000013973 Ontario Corporation, 2861641 Ontario Inc. and Mojgan Amiri for $500,000, and a caution-land registered by Firm Capital Corporation, which indicated that the husband had entered into a loan agreement on December 15, 2023 for $4,000,000.

[20] After the Horkins Order was made, the wife issued the within Application seeking, among other things, to set aside the child and spousal support terms of the Minutes of Settlement, dated August 8, 2014; spousal support; child support; preservation orders; damages for physical assault, verbal, mental and financial abuse, and the intentional infliction of mental suffering. The husband has not yet filed an Answer/Claim.

Issue One: Should the preservation order of Horkins, J., dated June 6, 2024 continue?

[21] The wife’s position that if the preservation order is not continued and/or if the $245,000 is released to husband, she will lose her only chance to recover the child support he owes to her, even if the Minutes of Settlement are not set aside.

[22] The husband claims that he has borrowed money and obtained loans from family and friends in order to survive However, his sworn financial statement does not specify the type or amount of these loans. His sworn financial statement shows debts totalling $334,263.17, not including the mortgages registered on title to the Beechwood property. The wife agreed to only hold back $245,000 from the net proceeds of sale of the Beechwood property. The husband received $397,280.40 from the Beechwood property sale. His listed debts on his financial statement are less than what he was advanced in June 2024.

The Law

[23] Pursuant to s.40 of the FLA, the court may make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under this Part. The objective of the s.40 of the FLA is to protect a spouse’s interests by ensuring that assets will be available to satisfy the entitlements of a spouse who successfully obtains relief under the FLA: Bandyopadhyay v. Chakraborty, 2019 ONSC 802, at para. 44.

[24] The factors the court considers when applying ss. 12 and 40 of the FLA are analogous to the test for an interlocutory injunction, which include, i) the relative strength of the applicant’s case and whether there are serious issues to be tried; ii) the balance of convenience or inconvenience to both parties; iii) the potential for irreparable harm if the other is not granted; and iv) d) an assessment of the risk of dissipation of the assets in existence: Wright-Minnie v. Minnie, 2020 ONSC 5573, at para. 8; Bronfman v. Bronfman, 2000 CarswellOnt 4622 (Ont. S.C.J.).

[25] A party seeking a preservation and restraining order should demonstrate on a prima facie basis, that they are likely to receive an equalization payment or support equal to the value of the specific assets they seek to preserve Barber v. McGee, [2016] O.J. No. 7140 (C.A.), at para. 11; Bandyopadhyay, supra, at para. 42.

[26] In this case, the wife has calculated that the child support arrears she is owed are about $245,000. It was on this basis, that she entered into a consent that only $245,000 of the Beechwood property sale proceeds would be held in trust and she agreed the balance could be released to the husband.

[27] In terms of the strength of the wife’s case, I find that she has demonstrated that she has a strong prima facie case for being owed child support arrears by the husband, even if her claim to set aside the Minutes of Settlement is not successful. By his own admission, the husband has not paid the wife child support since 2019. While the husband only acknowledges that he owes child support arears of $90,000, this dispute centers on whether the parties’ eldest son was living with him 40% of the time or more, a fact which is disputed by the wife. The wife calculates that since both children remain children of the marriage (a fact that is disputed by the husband), at the very least the husband owes her child support arrears of $102,500, calculated at $2,500 a month from March 2021 onward, when the son returned to live with the wife.

[28] Even if the wife’s calculations are not precise, the FLA generally does not intend for a preservation order to serve as security. The court is not required to precisely calculate the FLA claim and match it exactly to the payor’s assets: Habibi v. Aarabi, 2021 ONSC 5574, leave to appeal refused, 2021 ONSC 6586 (Ont. Div. Ct.).

[29] When assessing the balance of convenience, the court is required to assess which party will experience greater harm if the injunction is either granted or refused. This is determined on a case-by-case basis: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CarswellQue 120 (S.C.C.).

[30] In Qureshi v. Qureshi, 2021 ONSC 2750, paras 46, 51, 53-54, the court ordered a preservation order, where it found that the risk to the wife outweighed the inconvenience to the husband. The court acknowledged that while the husband had necessary transactions, such freedom could not be exercised to the extent that it prejudiced the wife under the guise of “convenience”. This was particularly relevant in that case, where it was undisputed that the husband had sold his house without the wife’s knowledge, used the proceeds to purchase a new home and pay off personal debt, and transferred funds between his bank accounts. Although these actions demonstrated that a preservation order would “inconvenience” the husband, the wife’s ability to enforce her support claims was at a significant risk if the husband was not restrained from encumbering or disposing of property.

[31] In the case at bar, the husband has clearly admitted in his affidavit that he has not been paying child support since 2019. Under these circumstances, where there is a genuine risk of asset disappearance and a real risk of harm if the preservation order is not maintained, the court favours granting the preservation order in favor of the moving party.

[32] In terms of considering irreparable harm, the court must consider whether either party will suffer significant harm if the order is not granted: Qureshi v. Qureshi, at para 55. The party requesting a preservation or non-dissipation order has the onus to demonstrate that there is a real risk the other party is either removing or about to remove assets from the jurisdiction to avoid a potential judgment or is otherwise dissipating or disposing of assets in a manner that is clearly distinct from their usual business or living practices: Hekmati v. Oliver, 2012 ONSC 3932 (Ont. S.C.J.).

[33] In Taus v. Harry, 2016 ONSC 219, at para. 35 and in Field v. Field, 2021 ONSC 8354 at para. 55, a request to continue the preservation order was granted due to the risk that the claim for retroactive support could be defeated if the order were not maintained.

[34] The husband’s own evidence shows that he has distributed funds to others and spent nearly all the money he received, neglecting his child support obligations even under the existing support provisions of the Minutes of Settlement. For example, in 2023, the Respondent spent $18,460 and then $217,000 on three watches, and he is now seeking the release of a further $155,000 to pay unspecified “debts”, despite having already received $397,280 from the net sale proceeds of the Beechwood property, which on the face it exceeds all debts the husband listed on his Financial Statement dated June 28, 2024. This must be viewed in light of the husband’s own evidence, which is that since 2019, he has not paid any child support to the wife.

[35] In his affidavit, the husband alleges that he has “no money” and is therefore not dissipating assets. I agree with the wife that there is a risk that, if the preservation order is lifted and he receives a disbursement of $155,000 from the Beechwood property sale proceeds, he may take steps to become judgment-proof. Despite his assertion of having “no money”, the evidence suggests that the husband has a beneficial interest in several properties in Ontario. None of these interests are clear, his name is not on title of these properties, and it is not known whether there is equity in the properties. Furthermore, it is not yet known if it would be possible to enforce a judgment against any of these properties.

Issue Two: Should paragraph 1 of the consent order of Kraft, J., dated June 24, 2024 be varied such that $155,000 or some other amount of the remaining Beechwood property sale proceeds be released to the husband?

[36] The husband seeks to vary paragraph 1 of my consent order so that he can receive the sum of $155,000 of the $245,000 currently being held in trust from the Beechwood property. The wife argues that when the consent order was reached, it was understood that the husband would be receiving close to $400,000 and that $245,000 was to remain held in trust as security for the wife’s claims. It was on this basis that the wife consented to the Beechwood property transaction closing. The consent order was reached by both parties with the assistance of counsel.

[37] In Gerges v. Gerges, 2023 ONSC 2662, at paras. 11 and 12, a case where a party brought motion to vary the term of consent preservation order, Justice Tzimas emphasized: “Having consented to the Preservation Order, the parties effectively conceded these principles.”

[38] In Spencer v. Spencer, 2024 ONSC 1970, at para. 64, Justice Kurz used a similar approach as Justice Tzimas finding that a party cannot reargue the propriety of the original preservation order once they have agreed to it. In other words, a party who consents to an order should, absent special circumstances, be estopped from challenging its validity.

[39] In varying the consented preservation order, Justice Tzimas looked to the practical effect of the order she was asked to make. As Justice Tzimas wrote “…the only question to be answered is whether the Respondent’s interests will remain protected if the Applicant’s requested transactions were allowed to proceed. In other words, will the purpose of s.12 of the FLA continue to be met if the court were to amend the Preservation Order to allow for the proposed transactions to go forward?” (at para. 12). Justice Tzimas found that the answer to that question was “no” based on the facts but left open the possibility of revisiting the issue should better evidence become available.

[40] Justice Kurz in Spencer, at para. 57 cited Wendy Sokoloff Professional Corp. (C.O.B. Sokoloff Lawyers) v Chorney, where Justice Dow set out the test for varying an interim injunction: 11 The legal test to vary the terms of an injunction is well summarized in Look Communications Inc. v. Bell Canada Inc., 2009 Carswell Ont. 1784 (leave to appeal denied -). As part of the court exercising its broad discretion to fashion an order pending trial that achieves justice between the parties, the variance sought should not constitute an indirect appeal. There is a very heavy onus on the party seeking the variance. 12 The relevant factors to considering include: a) whether there has been inordinate delay in advancing the claim; b) any harm to the party opposing the variance being sought; c) whether the facts presented are substantially different from those upon which the original order was granted; and d) whether the facts presently are so dramatically different that the underpinnings of the original order are no longer valid.

[41] There has not been inordinate delay in this case. There is a real possibility of harm to the wife if the husband’s motion to vary is granted. The facts of the case have not changed since the original consent Order was agreed to in late June 2024. In these circumstances, I find that there should be no variation to Paragraphs 1 and 2 of my Order dated June 24, 2024.

[42] Just as Justice Tzimas found in Gerges v. Gerges where the husband failed to demonstrate that he had sufficient security to cover his property or support obligations to the wife, which had yet to be determined, here, there is no basis to vary the preservation order made by the consent of the parties.

Disposition

[43] This court makes the following order: a) The respondent’s motion is hereby dismissed. b) The Order of Justice Kraft dated June 24, 2024 shall continue pending further Order or signed agreement between the parties. c) The parties shall exchange disclosure requests as soon as possible and in any event at least by one week before Questioning. d) The Questioning of each party shall be no more than one day for each party and shall take place on September 11, 2024 and September 25, 2024. e) The parties shall return before me for a case conference on November 5, 2024 at 12:00 p.m. f) The husband shall serve and file his Answer with his disclosure request and, in any event, at least 7 days before the Questioning. g) If the parties cannot agree on costs, the wife shall submit written costs submissions of no more than 3 pages, not including a Bill of Costs and Offers to Settle within 10 days of the release of this Endorsement. The husband shall serve and file responding costs submissions of no more than 3 pages, not including a Bill of Costs and Offers to settle within 7 days of being served with the wife’s costs submissions. The wife shall serve and file reply cost submissions, if any, of no more than 1 page in writing, within 5 days of being served with the husband’s costs submissions.

Released: August 2, 2024

M. Kraft, J.