COURT FILE NO.: CV-19-00611984-0000 DATE: 2024 1204 SUPERIOR COURT OF JUSTICE – ONTARIO (COMMERCIAL LIST)

RE: PETROCHEMICAL COMMERCIAL COMPANY INTERNATIONAL LTD, PCCI LTD and NAVAK ASIA KISH TRADING CO (PJS) Applicants

AND:

NEXUS MANAGEMENT GROUP SDN BHD, ASIAN TRADE INVESTMENT BANK LTD, MEHDI EBRAHIMIESHRATABADI (aka MIKE ROBERTSON aka MIKE ROBINSON aka TONY NEWMAN), MALEKSABET EBRAHIMI, OMID LTD, ATIB LTD, 5M INVESTMENT HOLDING LTD, KHADIJEH TAGHAVI SABZEVARI, MOHAMMAD EBRAHIMIESHRATABADI (aka EMANUELE EBRAHIMI), MEHRANEH EBRAHIMI ESHRATABADI, AMIR KARGAR NEGHAB, ALI VASHAEE, 5M CAPITAL INVESTMENT PTY LTD, 5M CAPITAL INVESTMENT PTY LTD, 5M INVESTMENT LTD, MEDIVILLE INVESTMENTS LTD, GLOBAL NEWMAN PTY LTD, HORIZON INVESTMENT HOLDING LTD, EBM CORPORATION, IMBS SDN BHD and MPO LTD. Respondents

BEFORE: Kimmel J.

COUNSEL: Jonathan Stainsby & Mary Murray, for the Applicants/Responding Parties on Motion Arkadi Bouchelev, for the Respondents/Moving Parties on Motion

HEARD: October 18, 2024

Endorsement

The Motions

[1] The Respondents Mehdi Ebrahimieshratabadi (a.k.a. Mike Robertson a.k.a. Mike Robinson a.k.a. Tony Newman), Maleksabet Ebrahimi, 5M Capital Investment Pty. Ltd. and Mohammad Ebrahimieshratabadi (a.k.a. Emanuel Ebrahimieshratabadi) seek to set aside or vary three related Orders of this court under Rule 59.06 on grounds of fraud and facts arising or discovered after the Orders were made. These prior orders relate to the implementation of the minutes of settlement between the parties dated October 19, 2020 (the "Minutes of Settlement"). These Respondents (collectively sometimes referred to as the "Ebrahimi Parties") are also asking for a declaration that the Applicants are in breach of the Minutes of Settlement and a declaration that the Minutes of Settlement are void ab initio. This motion by the Ebrahimi Parties is referred to as the "Set-Aside Motion".

[2] The prior orders and decisions that the Respondents seek to have set aside are:

a. the November 10, 2020 Consent Orders of the Honourable Justice Conway (the "Consent Implementation Orders");

b. the July 15, 2022 decision and Order of Dietrich J. dismissing the First Implementation Motion (brought by the Respondents seeking to require the Applicants to take steps beyond what they had done in furtherance of the Minutes of Settlement) and the decision of the Court of Appeal for Ontario upholding Dietrich J.; and

c. the January 30, 2024 decision and Order of Kimmel J. made on the Second Implementation Motion (by the Applicants, to enforce compliance by the Respondents with the Minutes of Settlement) and the Third Implementation Motion (by the Respondents to enforce the applicants' compliance with the Minutes of Settlement), continuing and supplementing those aspects of the Consent Implementation Orders that had not already been complied with (the "January 30 Decision").

[3] The Applicants (collectively referred to as "PCCI") have brought their own motion to enforce the court's January 30, 2024 Order regarding the implementation of the Minutes of Settlement and some ancillary relief (the "Fourth Implementation Motion").

[4] If the Respondents are successful on their motion, the Applicants' motion will become moot, as the Respondents are seeking to set aside the prior implementation orders and the Minutes of Settlement.

[5] For the reasons that follow, the Set-Aside Motion is granted (for the most part), the Fourth Implementation Motion is dismissed (for the most part). Given what has transpired since the January 30 Decision and the conduct of the parties, it is no longer appropriate for this court to make further orders to implement and enforce the Minutes of Settlement and they are declared to be no longer of any force or effect.

The Set-Aside Motion

The Fresh Evidence

[6] The Minutes of Settlement settled various criminal and/or civil proceedings initiated by PCCI in 2018 and 2019 against the Respondents in multiple jurisdictions, including Iran, Malaysia, Singapore, Cyprus, Australia, Portugal and Ontario, all arising out of the same alleged USD $71 million fraud (collectively the "International Proceedings").

[7] Pursuant to the Minutes of Settlement, the Respondents agreed to transfer various assets to PCCI, including cash, cryptocurrency, corporate shares, real property, and gold bullion. Many of those assets were frozen pursuant to a worldwide Mareva Injunction Order made by Penny J. of this court on January 8, 2019 and subsequently extended and confirmed (the "Mareva Order"), which was predicated on an order issued by the court in Malaysia on January 3, 2019. In exchange, PCCI agreed to withdraw all civil claims and support the Ebrahimi Parties' efforts to have the criminal claims being pursued against them in the various International Proceedings withdrawn or dismissed.

[8] PCCI's position on the First, Second and Third Implementation Motions, was that they were acting in good faith to fulfil their obligations under the Minutes of Settlement. On the Second Implementation Motion, PCCI sought the court's assistance to require the Ebrahimi Parties to fulfill their obligations.

[9] After the release of the January 30 Decision, the Ebrahimi Parties say they discovered two memoranda filed by the Applicants in the ongoing criminal proceedings against them in Iran (the "Fresh Evidence"). The Ebrahimi Parties maintain that this Fresh Evidence is demonstrably inconsistent with the Applicants' positions, assertions and evidence before this court on the First Implementation Motion (heard in June 2022) and on the Second and Third Implementation Motions (heard in January 2024).

[10] The first piece of Fresh Evidence that the Ebrahimi Parties seek leave to tender in support of their Set Aside Motion is a February 6, 2023 memorandum the Applicants filed in the Iranian criminal proceedings (the "February 2023 Memo") in which they:

a. asserted that the Ebrahimi Parties committed criminal acts, including fraud and money laundering;

b. opposed the Ebrahimi Parties' motion to dismiss the Iranian Criminal Proceeding and sought removal of the Ebrahimi Parties' lawyers of record for lack of standing; and

c. asked the Iranian court to proceed with the hearing and issue a verdict to convict the defendants for the committed crimes.

[11] The second piece of Fresh Evidence that the Ebrahimi Parties rely on is a February 4, 2024 memorandum filed in the Iranian criminal proceedings by the Applicants (the "February 2024 Memo"). In that memo, the Applicants continued to accuse the Ebrahimi Parties of money laundering and asked for an order of restitution in the amount of approximately USD $71 million.

The Procedural History and Prior Judicial Determinations

[12] On or about October 4, 2020, the parties executed a document in Farsi called 'mutual agreement' ("Mutual Agreement"). It was a term of the Mutual Agreement that the parties would enter into formal minutes of settlement, which would be filed with the courts in all applicable jurisdictions. They entered into the Minutes of Settlement shortly afterwards, which this court has previously held to have superseded the Mutual Agreement (see for example, Petrochemical Commercial Company International Ltd. v. Nexus Management Group SDN BHD, 2023 ONCA 308, at para. 19, affirming the July 22, 2020 decision and finding of Dietrich J).

[13] This is now the fourth set of motions relating to the implementation, and alleged breaches, of the Minutes of Settlement.

[14] Following a hearing on January 16, 2024, the January 30 Decision was released disposing of the Second and Third Implementation Motions. That decision was unreported. It contains a detailed procedural history, made some findings and provided some directions to the parties that are relevant to the present motions, which are reproduced below for convenience (the font has been changed to differentiate these extracts):

[3] The parties executed Minutes of Settlement on October 19, 2020 (the “Settlement”). The Settlement was intended to conclude all outstanding litigation in multiple jurisdictions between the applicants (referred to in the Minutes of Settlement as the “First Party”) and the respondents (referred to in the Minutes of Settlement as the “Second Party”).

[4] Pursuant to the Settlement, the respondents agreed to deliver to the applicants millions of dollars’ worth of property, including real estate, cash, cryptocurrency, private company shares, and gold bars. The applicants estimate the total value of the Settlement to be approximately $21 million, which is a fraction of what they claimed to have been defrauded of.

[5] As part of the implementation of the Settlement, the parties obtained an order on consent that was signed by Conway J. on November 10, 2020 (the “Implementation Order”). That Implementation Order, among other things, directed the transfer of certain assets by the respondents to the applicants, including the following:

4. THIS COURT ORDERS that all shares in 5M Capital Investment Pty. Ltd. held legally or beneficially by the respondents (or any of them) shall be transferred to the Applicants or as they may direct. …

5. THIS COURT ORDERS that the property known municipally as 22A Avonlea Place, Thornhill, Ontario shall be transferred to the Applicants or as they may direct, notwithstanding the Mareva order dated January 8, 2019, such transfer to be with vacant possession.

6. THIS COURT ORDERS that the respondents shall do all that is necessary to effect the transfers with full clean title without any encumbrances or claims (including, without limitation, the signing and/or execution of documents and instructions and they shall in the case of land provide all title and conveyancing documents and in the case of a company provide all of its records, and in the case of bank account shall provide up to date bank statements) and that the transfers may be effected notwithstanding the Mareva order dated January 8, 2019.

[6] The Settlement included at paragraph 37 the following provision relating to the Implementation Order:

The order for transfer of the Assets to the Receiving Party described in these Minutes of Settlement shall be deemed to be on account and on behalf and for the direct benefit of the First Party and it shall be deemed as equivalent to a transfer of ownership to the First Party.

[7] Further, various appendices to the Settlement contained authorizations and declarations with respect to the transfer of property to the applicants in satisfaction of the Settlement, including:

a. Appendix 1 with respect to the transfer of shares in 5M Capital Investment Pty (and property owned by that company) and funds held at various Canadian banks, including the Bank of Nova Scotia;

b. Appendix 2 with respect to the transfer of 22A Avonlea Place (the “Avonlea Property”) from Mohammed to the applicants; and

c. Appendix 4 with respect to the beneficial ownership of the applicants of all funds in the bank account No. 60010507100 held with Deutsche Bank in Germany.

[8] Although inelegantly worded, the Settlement contemplated that a number of steps would occur simultaneously on a date that was supposed to be no later than 30 working days from the Execution Date of October 19, 2020. This is referred to herein as the “Completion Date”. The applicants’ concern is that, now more than three years after the Settlement, they have still not received a significant portion of the agreed upon consideration for the Settlement.

[9] The respondents are also concerned that they continue to face criminal prosecutions in Portugal and Iran. The Settlement requires the applicants to cooperate in the respondents' efforts to have the criminal proceedings against them withdrawn.

[10] The respondents seek redress now for the alleged non-compliance by the applicants with their obligations under the Settlement to co-operate with efforts to have the continuing criminal prosecutions dismissed.

[12] …The respondents’ [First Settlement Implementation Motion] was dismissed and they were ordered to pay $112,178.90 in partial indemnity costs to the applicants. See Petrochemical Commercial Company International Ltd. v. Nexus Management Group SDN BHD, 2022 ONSC 3721, aff’d 2023 ONCA 308. The respondents were ordered to pay $17,500 in costs to the applicants on the appeal, which was also dismissed.

[13] Some of the findings of Dietrich J. that resulted in the dismissal of the First Settlement Implementation Motion are relevant to the issues raised on this motion. Those findings include the following:

[10] I find that the Agreement requires the applicants to make a request to the Iranian Prosecutor to withdraw the criminal proceedings in Iran commenced by him, and to make a request to Interpol to remove the Red Notices related to Mehdi Ebrahimieshratabadi and Maleksabet Ebrahimi (the said moving parties). The Agreement also requires the applicants to cooperate fully in the withdrawal of the criminal proceedings and the removal of those Interpol Red Notices, but it does not compel them to take steps beyond their capability, which would include commanding jurisdiction over the affairs and activities of the Iranian Prosecutor and of Interpol.

[14] … It took approximately a year for the applicants to provide the “co-operation” that the court eventually concluded was sufficient to fulfill their obligations [under the Minutes of Settlement] (by letters they sent to the Iranian prosecutor in October and November 2021 and by attending a meeting that was arranged and took place with the Iranian prosecutor in November 2021).

[62] While Dietrich J. found that in June 2022 the applicants had complied with their obligations under paragraphs 21, 29, 30 and 31 of the Settlement by the letters they sent to the Iranian Prosecutor in October and November 2021 and the meetings they had with the Iranian Prosecutor in November 2021, criminal proceedings were nonetheless pursued thereafter in Iran and criminal proceedings were also thereafter pursued in Portugal. These criminal proceedings are continuing. Dietrich J. found, at para. 10, that “[t] Agreement also requires the applicants to cooperate fully in the withdrawal of the criminal proceedings and the removal of those Interpol Red Notices, but it does not compel them to take steps beyond their capability, which would include commanding jurisdiction over the affairs and activities of the Iranian Prosecutor and of Interpol.”

[63] Dietrich J. further found (at para. 72) that: Reading the Agreement as a whole leads me to conclude that the applicants have an obligation to request a dismissal of the criminal proceedings in Iran, to request the removal of the Interpol Red Notices, and to act cooperatively to ensure that these things are done. This obligation does not require them to do something that they have no capability or authority to do directly. The obligation, in my view, is to make the request, and to cooperate, in ways available to them, to facilitate the withdrawal of the criminal proceedings and the removal of the Interpol Red Notices.

[65] The court’s decision on the First Implementation Motion pre-dated the indictment in Iran that the respondents are now seeking to have dismissed ... While the continued pursuit of criminal proceedings in these other jurisdictions is out of the control of the applicants, they remain obligated “to cooperate, in ways available to them, to facilitate the withdrawal of the criminal proceedings”.

[66] …The applicants’ initial position is that they have no obligation to sign anything further. But they have also indicated that the declarations that they have been asked to sign contain factually incorrect statements. For example,

b) The respondents’ lawyers in Iran would like the applicants to write a letter that can be filed with the judge presiding over the dismissal motion in the Iranian criminal proceedings. The applicants raised an initial concern that the criminal proceedings in Iran include defendants who were not party to the Settlement and they have no obligation to assist in the dismissal of the Iranian criminal prosecution against those other parties. While that is a fair position for the applicants to take, as matters currently stand, the applicants are actively opposing the motion for dismissal of the criminal charges in Iran against the respondents, and that, the respondents argue, is offside of the Settlement.

[70] Some form of declaration in Portugal and letter in Iran can and should be provided by the applicants. The applicants have the drafts provided by the respondents’ lawyers and should revise them to accord with what is factually accurate and specific to the parties to the Settlement and provide those to counsel for the respondents. That is the quid pro quo that the court is imposing on the applicants for the orders and directions that have been made in their favour on their motion (above).

[76] The applicants should be awarded a portion of their partial indemnity costs, in an amount that I have reduced to account for the fact that they were not entirely successful and have been ordered to do certain things themselves as the quid pro quo for the relief they sought. The respondents are thus ordered to pay all-inclusive partial indemnity costs to the applicants of this motion in the amount of $25,000.

[77] The respondents also remain liable for the outstanding costs awarded against them on the First Implementation Motion and appeal. They should not expect the court to be as lenient about that default if it persists and they are back seeking any relief in the future.

[15] PCCI's counsel had been sent proposed language for a further letter to be provided by PCCI to the prosecutor and the court in the Iranian proceeding long before the hearing of the January 16, 2024 Second and Third Implementation Motions. On May 9, 2023, the Ebrahimi Parties set out the points that they wanted PCCI to address and confirm in this letter, as follows:

a. It is PCCI's position that the Minutes of Settlement remain in full force and effect and PCCI remains committed to fulfilling its obligations thereunder.

b. In accordance with the Minutes of Settlement, PCCI is required to and intends to cooperate with the defendants until the Iranian criminal case is dismissed.

c. The Minutes of Settlement cover all disputes between the parties and dispose of all claims that PCCI had against Mehdi Ebrahimieshratabadi and other signatories to the Minutes of Settlement.

d. PCCI's criminal complaints have been withdrawn. PCCI is not currently accusing Mehdi Ebrahimieshratabadi and other signatories to the Minutes of Settlement of fraud, money laundering and/or any other criminal offence.

[16] As of the hearing on January 16, 2024, PCCI had not provided any comments on the proposed follow-up letter to be sent by them to the Iranian court and prosecutor. PCCI's position on that motion was that the Minutes of Settlement did not require them to send a further letter and that they had complied with their obligations under the Minutes of Settlement, to: "request, and to cooperate, in ways available to them, to facilitate the withdrawal of the criminal proceedings and the removal of the Interpol Red Notices" by their letters in October and November 2021 and their meeting with the Iranian prosecutor in November 2021sent a year after the Minutes of Settlement were entered into.

[17] The court directed otherwise in the January 30 Decision, requiring the Applicants to provide some form of letter in the Iranian criminal proceedings and directing the Applicants to revise the draft letter that they had been provided with in May 2023 to accord with what was factually accurate and specific to the parties to the Minutes of Settlement and to provide those comments to counsel for the Respondents. That was "the quid pro quo that the court imposed on the Applicants when it granted certain orders and directions in their favour on their Second Implementation Motion."

[18] The Iranian court rendered its verdict against the Ebrahimi Parties (and others) on February 14, 2024 (discussed in more detail below).

[19] Two weeks after the verdict had been rendered, by email dated February 27, 2024, counsel for PCCI transmitted to counsel for the Ebrahimi Parties draft declarations (for both the Portuguese and Iranian courts), in which counsel for PCCI stated that: "Provided the language is acceptable to you [sic] clients, these will [sic] executed and I will hold them in escrow, to be released on completion of the transfers ordered by Justice Kimmel and payment of the costs owed to my clients."

[20] PCCI's proposed wording for the declaration to (letter) be provided in Iran included the following statements:

a. The Minutes of Settlement dated 10 October 2020 are based on refunding the Plaintiffs with their outstanding funds in return for their withdrawal of all proceedings against the Defendant.

b. The Plaintiffs hereby declare that in the event the Defendants fully refund the Plaintiffs of their outstanding funds, the Plaintiffs will withdraw their claim in the above captioned case.

c. In such case, the Plaintiffs have agreed not to commence legal proceedings against the Defendants in any jurisdiction around the world.

d. The above withdrawal of claims against the said Defendant, does not in any way affect the claims and legal rights of the Plaintiffs against any other defendants apart from the said Defendants.

The Verdict and Reasons in the Iranian Criminal Proceedings

[21] The 94-page verdict of the Iranian court was released on February 14, 2024. It records that the proceeding was initiated by the filing of complaints by the Applicants against various individuals on charges of fraud and money laundering. It reviews the positions of the various parties and records that a request had been made for the examination and issuance of a verdict to penalize the accused accordingly.

[22] The Minutes of Settlement were disclosed and summarized in the verdict as follows: "A subsequent agreement was reached on 19 October 2020, stipulating that Mr. Ebrahimi was to transfer all assets derived from the crime to PCCI. In return, the client company was to declare its satisfaction with the case. Unfortunately, Mr. Ebrahimi did not fulfill his obligations."

[23] The Iranian court did not accept the defences presented by the lawyers for the Respondents based upon the Minutes of Settlement, nor was it prepared to accept any request for a declaration of final forgiveness by the plaintiffs in its ultimate verdict. This was explained in the verdict to be due to the Respondents' failure to comply with the Minutes of Settlement, as is noted in the following extracts have been taken from the English translation of the Iranian court's decision filed:

a. This is because, irrespective of the private aspects of the fraud crime and assuming the final consent of the plaintiffs, the court is obliged to investigate and provide on the public aspect of the offense.

b. The conditions set forth in that agreement [MOS] were never fully realized. Thus, a claim of final forgiveness by the plaintiff cannot negate the court's responsibility to address the broader implications of the fraud, which remain a matter of public interest and judicial scrutiny.

c. Additionally, the agreement (MOS) and its amendment stipulated that Mr. Mehdi Ebrahimi was to compensate for the damages resulting from the crime amounting to $71,200,000 to the plaintiffs. In return, the complainant company was to declare forgiveness in the private aspect of the crime and request the removal of the Red Notice. However, despite the complainant companies taking steps to announce the initial agreements and even corresponding for the removal of the Red Notice, the primary defendant, Mehdi Ebrahimi, refrained from fulfilling the terms of the agreement. In response to the lawsuit filed by the PCCI company in Canada, demanding his compliance with the MOS, he filed a counter-lawsuit seeking to annul the MOS. This lawsuit by him was subsequently dismissed by the courts in that country due to the mentioned reasons.

d. Despite the court's order to implement the memorandum of understanding (MOS) and the directives issued on 13 February 2020 by the respected Public and Revolutionary Prosecutor of Tehran, calling for necessary and essential actions by the accused Mehdi and Malek Sabet Ebrahimi for transferring the assets and properties subject to the memorandum to the PCCI and Navak Asia Kish companies, the accused have not undertaken any action to transfer all the properties concerned.

e. In line with the implementation of the revised report dated 15 January 2020, some assets have been transferred to the ownership of the PCCI company, and a list of these assets has been provided.

f. Considering the detrimental outcomes of the defendants' actions in failing to fully return the assets belonging to the plaintiffs despite the long period since the initiation of the criminal case, the court orders the first and second defendants, Mehdi and Malek Sabet Ebrahimi, to repay the amount of $51,584,700 USD to the first plaintiff NAVAK Asia Kish and $19,839,743 USD to the second plaintiff PCCI. In addition to the payment of the said amount, they are jointly responsible for paying half of the equivalent value in Iranian Rials of the highest currency amount taken, amounting to $51,584,700, based on the average exchange rate of the Central Bank during the years the crime took place (2013 to 2015), according to the inquiry response from the Central Bank of the Islamic Republic of Iran, which will be executed by the enforcement unit. Based on the commonality verdict of the Supreme Court, each of the defendants is sentenced to 6 years of imprisonment.

g. Additionally, the accused, Ms. Mehraneh Ebrahimi Eshratabadi, is ordered to repay for confirming the transfer of $43,813.77 from the criminal proceeds to her account in the Bank of Montreal, Canada. Mr. Mohammad Ebrahimi Eshratabadi is similarly ordered to repay for confirming the transfer of $106,204.8 [sic] to his account in the Bank of Montreal, Canada. Alongside the restitution of the exact amount of currency in the plaintiffs' right, they are both sentenced to pay a pecuniary fine equivalent to one-quarter of the Iranian Rial value of the currency taken, based on the average exchange rate index of the Central Bank during the years the crime occurred (2013 to 2017). This inquiry from the Central Bank of the Islamic Republic of Iran will be executed by the enforcement unit after the verdict becomes final, with the fines payable to the state treasury.

The Respondents' Discovery of the Fresh Evidence

[24] In or about early March of 2024, Mr. Ebrahimieshratabadi learned, from reading the news, that a group of Iranian "hacktivists" hacked the computer system of the Iranian judiciary and copied millions of documents, which were subsequently "leaked" on the Internet in the form of a searchable database ("Database").

[25] The February 2023 Memo was among the documents that Mr. Ebrahimieshratabadi found when he accessed the Database. This led him to instruct another lawyer in Iran to search the court file in the Iranian criminal proceedings, which then led to the discovery of the February 2024 Memo.

[26] The February 2023 Memo had been filed on behalf of PCCI in the Iranian criminal proceedings before the Second and Third Implementation Motions were heard. The Ebrahimi Parties say that, despite their requests made to the lawyer representing them (or some of them) in abstentia in the criminal proceedings in Iran, they were not provided with a copy of this memo at the time or specifically made aware of its existence. The Applicants have filed uncontradicted evidence from an expert on Iranian law indicating that the Iranian lawyer would have, at the very least, been notified of, and had access to, all documents filed and was under a professional duty to send the documents to their client upon request.

[27] The Applicants suggest that the court should not believe Mr. Ebrahimieshratabadi's testimony that the Ebrahimi Parties were not aware of the February 2023 Memo as of the January 16, 2024 motion. But, even if they were not aware of the February 2023 Memo, the Ebrahimi Parties were generally aware (and complaining to the court) at the January 16, 2024 motion that the Applicants were actively opposing the motion for dismissal of the criminal charges against the Respondents in Iran, which the Ebrahimi Parties relied upon in support of their position that the Applicants were not complying with the Minutes of Settlement.

[28] Unlike the February 2023 Memo, the February 2024 Memo did not exist at the time of the January 16, 2024 motion, and the timing of its discovery in or about March or April of 2024 is not a point of contention.

The Legal Framework for the Admission of Fresh Evidence, Setting Aside the Implementation Orders and Vitiating the Minutes of Settlement

[29] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provide a limited exception to the general principle of res judicata and finality of orders and judgments: see Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670, 391 DLR (4th) 374, at para. 13. Pursuant to r. 59.06(2)(a), a party may make a motion in the proceeding to have an order set aside or varied on the ground of fraud or facts arising or discovered after the order was made.

[30] In Maguire v. His Majesty the King et al., 2024 ONSC 2392, the test for leave to file fresh evidence on a motion to set aside an order on the grounds of newly discovered facts under r. 59.06(2) was recently described as follows (at para. 21):

a. Whether the evidence probably would have changed the result had it been presented to the court at first instance; and

b. Whether the evidence could have been obtained, by the exercise of due diligence, before the original hearing and disposition of the motion.

[31] The test dates back to the Supreme Court of Canada's decision in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 SCR 983, at para. 20, considered and by the Court of Appeal for Ontario's in Mehedi. There, the Court of Appeal observed that the court may go on to evaluate "other factors such as the cogency of the new evidence, any delay in moving to set aside the previous judgment, any difficulty in re-litigating the issues and any prejudice to other parties or persons who may have acted in reliance on the judgment" in deciding whether to admit fresh evidence and set aside or vary a prior court order: see Mehedi, at para. 13.

[32] Where the order being attacked arises from a motion as opposed to a trial, the test will generally be applied more stringently against the moving party: see Maguire, at para. 18.

[33] A summary of the factors to be considered when considering whether to set aside or vary an order under r. 59.06(2)(a) on the basis of fraud is provided in Maguire, at para. 15:

a. The fraud alleged must be proved on a reasonable balance of probability;

b. The proved fraud must be material and go to the foundation of the order;

c. The evidence of fraud must not have been known to the moving party at the time of the original proceeding;

d. The moving party must have applied reasonable or due diligence at the original hearing to obtain the evidence, applying an objective test: what did the moving party know, and what ought the moving party reasonably have known; and

e. The motion to set aside must be brought without delay.

[34] Re-opening the evidentiary record after a decision has been rendered occurs only in exceptional circumstances to avoid a very serious injustice: see Geliedan v. Rawdah, 2020 ONCA 339, at para 8; and Sagaz, at para 61.

[35] If the Applicants committed a fraud on the court (as the Ebrahimi Parties allege) by misrepresenting that they were making good faith efforts to comply with the Minutes of Settlement while they were at the same time, and thereafter, asking the Iranian court to convict the Ebrahimi Parties of fraud and money laundering and order restitution, then the Ebrahimi Parties ask the court to go further and declare the Minutes of Settlement to be void ab initio, based on the following reasoning:

a. a fraudulent representation is one that has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false: see Gregory v. Jolley (2001), 54 OR (3d) 481 (C.A.), at para. 15;

b. failure to disclose a material fact may amount to fraud: see Canadian Centre for Ethics in Sport v. Russell, 2007 ONSC 20978, at para. 47; and

c. once proven, fraud "vitiates judgments, contracts and all transactions whatsoever: see Landreville v. Town of Boucherville, [1978] 2 SCR 801 at p. 814 quoting Kuchma v. Rural Municipality of Taché, [1945] S.C.R. 234, at p. 239.

The Issues to be Decided on the Set Aside Motion

[36] The following issues must be decided on the Set Aside Motion:

a. Should leave be granted to the Respondents to file the Fresh Evidence?

b. Should the Implementation Orders be set aside under r. 59.06?

c. Was the filing of either or both of the February 2023 Memo and February 2024 Memo in the Iranian criminal proceedings a breach by the Applicants of their obligations under the Minutes of Settlement, that:

i. vitiated the Minutes of Settlement due to the irreversible consequences of the verdict in the Iranian criminal proceedings having been rendered before the Applicants sent the letter to the Iranian prosecutor that they were directed to send?

ii. rendered the Minutes of Settlement unenforceable by the Applicants?

[37] The third issue is the inverse of the Applicants' Fourth Implementation Motion by which they seek to enforce the Minutes of Settlement.

Analysis of Fresh Evidence

a) Should Leave be Granted for the Fresh Evidence to be Considered?

[38] The February 2023 Memo did not exist at the time of the Consent Implementation Orders, or at the time of the order of Dietrich J. dated July 15, 2022 on the First Implementation Motion. Until the January 30, 2024 Decision was released, PCCI's position was that it was not required to do more than it had already done back in October and November 2021 to co-operate in the efforts of the Ebrahimi Parties to have the Iranian criminal proceedings dismissed.

[39] In the meantime, the Applicants explain in their factum on this motion that they were trying to protect themselves throughout the period in which the Ebrahimi Parties were challenging the Minutes of Settlement: before Dietrich J., the Court of Appeal and then again at the return of the January 16, 2024 Second and Third Implementation Motions. While those challenges remained extant, the Applicants were concerned that they would have been deprived of the benefit of the uncompleted transfers under the Minutes of Settlement. The Iranian criminal proceedings were their fallback.

[40] The February 2023 Memo was filed in the Iranian criminal proceedings more than eighteen months after the hearing and decision on the First Implementation Motion and while the Respondents' appeal of that decision was pending. In the circumstances, I do not consider it to have been inconsistent with PCCI's positions before the Ontario courts up to that point for them to have filed the February 2023 Memo in the Iranian criminal proceedings. I take particular note of the fact that the court had ruled on the First Implementation Motion that the Applicants’ letters to and meetings with the Iranian prosecutor in the fall of 2021 were compliant with the Minutes of Settlement. I also note that in the February 2023 Memo, the Applicants acknowledged that there was a Settlement that the Respondents were challenging.

[41] The February 2023 Memo existed at the time of the Second and Third Implementation Motions heard on January 16, 2024 (resulting in the January 30 Decision).

[42] Based on the uncontested evidence of the Applicants' expert on Iranian law, it may be presumed that the Ebrahimi Parties had a copy of the February 2023 Memo prior to those motions, or at the very least could have obtained a copy of it from their Iranian counsel with reasonable diligence. Their evidence about unanswered requests for copies of materials filed is difficult to reconcile with the standard practice attested to by the Applicants' expert on Iranian law, and the Ebrahimi Parties offered no evidence directly from the counsel representing them in Iran at the time to contradict the evidence about the practice.

[43] Furthermore, even if I accept that the Ebrahimi Parties did request copies of the materials filed in the Iranian criminal proceedings in a timely manner and those requests were ignored, the main point addressed in the February 2023 Memo (that PCCI continued to support a guilty verdict against the Ebrahimi Parties in the Iranian criminal proceedings while the Ebrahimi Parties continued to challenge the Minutes of Settlement) was, in general terms, already part of what was before the court and taken into consideration in the January 30 Decision. For example, the court observed that:

While that is a fair position for the applicants to take [that they were entitled to seek a verdict in the Iranian criminal proceedings against other defendants], as matters currently stand, the applicants are actively opposing the motion for dismissal of the criminal charges in Iran against the respondents, and that, the respondents argue, is offside of the Settlement.

[44] Even if the Ebrahimi Parties did not have the February 2023 Memo, the Second and Third Implementation Motions were argued on the basis that PCCI continued to support a guilty verdict against the Ebrahimi Parties in the Iranian criminal proceedings, and had not done enough to cooperate and facilitate the withdrawal of those proceedings as against them. That was the basis for the court's further direction in the January 30 Decision that PCCI provide the requested letter to the Iranian prosecutor and court.

[45] In these circumstances, I am unable to conclude that the February 2023 Memo probably would have changed the result had it been presented to the court in the Second and Third Implementation Motions. Accordingly, the Ebrahimi Parties have not met their onus to satisfy the two-part test for leave to file the February 2023 Memo as Fresh Evidence: see Maguire, at para. 21; Sagaz, at para. 20. Leave is not granted for the February 2023 Memo to be considered as Fresh Evidence on this motion.

[46] The situation is different for the February 2024 Memo. It did not exist and could not have been put forward by the Ebrahimi Parties with any reasonable diligence at any of the prior motions. That memo is cogent because it was filed in the Iranian criminal proceedings after the January 30 Decision was rendered. That decision was predicated on the court's finding that PCCI was not, at that time, doing enough to meet its obligations under the Minutes of Settlement.

[47] The question of whether PCCI was in compliance with its own obligations under the Minutes of Settlement was directly before the court on the Second and Third Implementation Motions. In the January 30 Decision, PCCI's compliance with the Minutes of Settlement was considered to be relevant to the question of whether the Applicants could compel performance of the Minutes of Settlement if they were themselves in breach; the court held they could not and that they needed to comply if they wanted to invoke the assistance of the court to force the Respondents to comply. That was the quid pro quo for the relief sought by PCCI that the court granted.

[48] It is a fundamental principle of the law of contracts that a party to an agreement cannot demand that the other party comply with its obligations while the first party is unwilling to perform its own obligations: see Porter Airlines Inc. v. Nieuport Aviation Infrastructure Partners GP, 2022 ONSC 5922, at para. 495. This is consistent with the law of specific performance which requires the party requesting performance must not fall into breach by failing to meet their own obligations: see 117577 Ontario Ltd. v. Magna International Inc. (2000), 50 OR (3d) 579, at para. 31, citing Robert Sharpe, Injunctions and Specific Performance, 2d ed., looseleaf (Aurora, Ont.: Canada Law Book, 1992), at para. 10.750.

[49] Instead of following the court's directions and providing comments on the proposed letter to the Iranian prosecutor and court, PCCI filed the February 2024 Memo, seeking a criminal verdict of fraud against the Ebrahimi Parties (and others) and restitution. That relief was granted by the Iranian court in its verdict rendered ten days later, on February 14, 2024. I find that if this court had been apprised of the contents of the February 2024 Memo (the planned requests for findings of criminal responsibility on the part of the Ebrahimi Parties and restitution in the Iranian proceedings) at the time of the Second and Third Enforcement Motions, it probably would have changed the results of those motions (contained in the January 30 Decision).

[50] It would have cast significant doubt on the bona fides of PCCI's assertion that they were making good faith efforts to fulfill their obligations under the Minutes of Settlement by cooperating "in ways available to them, to facilitate the withdrawal of the criminal proceedings." That was the quid pro quo for the granting of the Enforcement Orders in favour of the Applicants at that time.

[51] There was no delay by the Ebrahimi Parties in bringing their Set-Aside Motion (including the request for leave to file this Fresh Evidence). The other factors under the r. 59.06 test will be further elaborated upon in the consideration of the request to set aside the Implementation Orders. For the immediate purposes, the two-part test under r. 59.06 is satisfied and leave is granted for the February 2024 Memo to be considered as Fresh Evidence on this motion.

b) Should the Implementation Orders be set aside under r. 59.06?

[52] The January 30 Decision dealing with the Second and Third Implementation Motions was an extension of the original Consent Implementation Orders, insofar as it addressed any remaining outstanding aspects of the original orders that had not yet been fulfilled during the intervening delays and provided further clarity and directions. The Consent Implementation Orders and the orders made in the January 30 Decision are collectively referred to as the "Implementation Orders".

[53] The January 30 Decision clarified PCCI's obligations under the Minutes of Settlement and directed them to provide comments on the letter that was to be sent to the prosecutor and the court in Iran in furtherance of their obligation to "request, and to cooperate, in ways available to them, to facilitate the withdrawal of the criminal proceedings." In light of that, filing the February 2024 Memo with the Iranian court that requested that the court enter a verdict of fraud and restitution undermined the integrity of this court's process. It would be tantamount to a fraud on this court if it was done intentionally or recklessly.

[54] PCCI says that this was not done intentionally. PCCI says that after receiving the January 30 Decision, they moved as quickly as possible to provide comments on the draft letter that had been sent to them in May 2023 regarding what the Ebrahimi Parties wanted PCCI to tell the prosecutors in Iran (and in Portugal). However, they only sent their comments back on February 28, 2024, after the Iranian criminal judgment for restitution had already been rendered on February 14, 2024.

[55] Counsel for PCCI conceded he has no explanation for why the February 2024 Memo was filed in the Iranian criminal proceedings after the January 30 Decision had been released. It was suggested that it was due to the lawyers acting in the criminal proceedings in Iran not sharing the February 2024 Memo that they intended to file with Canadian counsel or with the person instructing them on behalf of PCCI before they filed it. However, there is no direct evidence from the persons involved in the filing of the February 2024 Memo in Iran about what they knew at the time or who they shared it with in advance of it being filed.

[56] The facts that have been established disclose that:

a. The January 30 Decision was sent to PCCI's then in-house legal advisor in Iran on January 30, 2024.

b. That legal advisor says he forwarded the January 30 Decision to PCCI managers from whom he took instructions on Feb 3, 2024 (although not in evidence, it was suggested that February 1 and 2 were a weekend in Iran).

c. The advisor was not able to arrange to meet with the managers until February 13, 2024, because they were away and then there were national holidays in Iran during the second week of February.

d. In the meantime, the February 2024 Memo was filed on February 4, 2024 in the Iranian criminal proceedings, seeking judgment against the Respondents for amounts alleged to have been "laundered" by them and restitution for those entire amounts. This memo mentions the Minutes of Settlement but accuses the Ebrahimi Parties of not complying and effectively asks the Iranian court to ignore the Minutes of Settlement when making its findings, which the Iranian court did in the verdict later rendered for that very reason (namely, that the Respondents had not complied with the Minutes of Settlement).

e. After the February 13, 2024 meeting, the PCCI managers in Iran did not provide instructions with comments on the draft letter (declaration) to be sent to the Iranian prosecutor and court until February 27, 2024.

f. In the meantime, the verdict was rendered in the Iranian criminal proceedings on February 14, 2024. PCCI claims to have been surprised when the verdict was rendered in Iran, and says that it had no prior warning that it would be coming.

g. PCCI's proposed changes to the wording of a declaration to be filed in the Iranian criminal proceedings were not provided to Canadian counsel for the Ebrahimi Parties until February 28, 2024, two weeks after the criminal verdict had already been rendered. The proposed wording was watered down from what had been requested. It did not re-affirm that the Minutes of Settlement remained in full force and effect or that PCCI remained committed to fulfilling its obligations thereunder (including its obligations to cooperate, in ways available to them, to facilitate the withdrawal of the criminal proceedings). What PCCI proposed to say was that they will withdraw their claims in Iran against the Ebrahimi Parties if the Respondents fully refund all outstanding funds. The wording of this declaration was never finalized and it was never submitted to the Iranian prosecutor or the Iranian court because the verdict of the Iranian court had already been rendered.

[57] The failure to effectively communicate within PCCI may explain how it happened that the February 2024 Memo was filed in Iran after the January 30 Decision was rendered in Ontario, but this sequence of events does not paint the picture of a diligent effort to comply with the Minutes of Settlement by PCCI after they received the January 30 Decision. Their delay has now made their compliance (e.g. sending a letter or declaration to the prosecutors and the court in Iran) futile since a verdict was rendered in the Iranian criminal proceedings in the meantime.

[58] I do not accept PCCI's submission that its only obligation under the Minutes of Settlement was to provide comments on the draft letter/declaration to be sent to the Iranian prosecutor and court. The comments also had to align with the Minutes of Settlement and the comments needed to be provided in a timely manner. The delay in providing the comments and the intervening verdict in the Iranian criminal proceedings has negated the intended purpose of the fulfillment of those obligations.

[59] PCCI points to earlier decisions in this case in which the court clearly recognized that the Minutes of Settlement did not require them to assure the withdrawal of criminal proceedings (which was never guaranteed or required under the Minutes of Settlement). They argue that even if they had provided their comments in a timely manner and the declaration had been delivered to the Iranian prosecutor and court prior to February 14, 2024, it might not have made any difference to the verdict. That is not something that I need to decide on this motion.

[60] The court has recognized that PCCI had no ability to control the outcome of the Iranian criminal proceedings and that the Minutes of Settlement did not require them to do something that they had no capability or authority to do directly. However, the contention they face now is that they failed to do something that they could have done, namely finalize the proposed draft letter (or declaration) so that it could be sent to the Iranian prosecutor and court. What is significant for the immediate issue to be decided is that PCCI failed to comply with their obligations under the Minutes of Settlement which was the quid pro quo for the court granting the Second Implementation Motion and order that they sought in the January 30 Decision. A finding of fraud is not necessary in these circumstances.

[61] Having regard to the factors to be considered (summarized in Maguire, at para. 15), I am satisfied that the Ebrahimi Parties have met their onus and find that the Implementation Orders should be set aside in the circumstances of this case:

a. It has been established on a balance of probabilities that PCCI took the overt step of filing the February 2024 Memo that directly contradicted the good faith efforts that PCCI had represented to the court at the January 16, 2024 motion that it was making to fulfill its own obligations under the Minutes of Settlement.

b. The statements in the February 2024 Memo were inconsistent with the court's further directions in the January 30 Decision to make good on PCCI's efforts to fulfill their obligations under the Minutes of Settlement, which were part of the foundation, or quid pro quo, of the January 30 Decision.

c. The Ebrahimi Parties could not have known that PCCI would file the February 2024 Memo and delay providing comments on the draft letters after the January 30 Decision was released.

d. The Set-Aside Motion was brought without delay. It was first raised for scheduling purposes shortly after the Ebrahimi Parties discovered the Fresh Evidence, and it was timetabled shortly after that, although adjourned to accommodate a medical issue involving counsel for the Applicants.

[62] PCCI asked the court to consider some other factors that it argued should have led the court to decline to grant the extraordinary relief of setting aside the Implementation Orders (see Mehedi, at para. 13). They assert they will be prejudiced if the Implementation Orders are set aside. The court recognizes the obvious consequence, that if the Implementation Orders are set aside PCCI will no longer have the benefit of the Implementation Orders requiring the transfer of specific assets by the Ebrahimi Parties to PCCI. However, as I understand it, the prejudice that the court should be concerned with when considering whether to set aside prior court orders must arise from PCCI's reliance upon those orders.

[63] The circumstances of this case do not support a finding of such reliance. According to their own submissions on this motion, since shortly after the Minutes of Settlement were signed in October 2020 and throughout the entire period that the Ebrahimi Parties were challenging the Minutes of Settlement, PCCI have been trying to protect themselves. While those challenges remained extant, the Applicants were concerned that they would be deprived of the benefit of the uncompleted transfers under the Minutes of Settlement. They assert that they were not willing to face that risk without protecting their position before the Iranian court which they did by continuing to pursue the Respondents in that proceeding.

[64] In other words, they admit that they were hedging their bets by keeping open both the option of enforcing the Minutes of Settlement through the proceedings in Canada and pursuing the criminal proceedings in Iran predicated on the Minutes of Settlement not being fulfilled. In these circumstances, it cannot be said that PCCI was relying to their prejudice upon the Implementation Orders or the Minutes of Settlement while they were continuing to pursue the verdict in the criminal proceedings in Iran.

[65] PCCI further contends that the court should not grant any relief now to the Ebrahimi Parties on the Set-Aside Motion because they are still in breach of Minutes of Settlement themselves. For example, they have not transferred certain shares and assets in Germany and certain real property in Ontario. In response to this, the Ebrahimi Parties explain that these transfers have been impeded by legal technicalities and requirements in Germany and Canada. Their position now is bolstered by PCCI's failure to abide by the January 30 Decision in the lead-up to the verdict in the Iranian criminal proceedings and their contention that the Minutes of Settlement have been vitiated and should not be enforced (discussed in more detail later in this endorsement).

[66] In terms of the Set-Aside Motion, I have determined that this is one of those extraordinary cases in which the Implementation Orders should be set aside under r. 59.06 to avoid a serious injustice of the Ebrahimi Parties having lost the last chance for PCCI re-affirm their support for the implementation of the Minutes of Settlement (after all that had transpired) and to re-affirm their request for the dismissal of the Iranian criminal proceedings against the Ebrahimi Parties before the verdict was rendered (see Geliedan v. Rawdah, 2020 ONCA 339, at para 8; and Sagaz, at para 61).

[67] This court cannot predict what the Iranian court would have done if that support had been provided. Although the verdict in the criminal proceedings distinguishes between what the Applicants were seeking and what the court was concerned with as a matter of public policy, the verdict (including not only criminal penalties and an order for incarceration but also restitution to be made to the Applicants) was predicated upon the Minutes of Settlement not having been fulfilled and transfers of assets not having been made pending challenges to the Minutes of Settlement that had been advanced by the Ebrahimi Parties prior to the January 30 Decision.

[68] Having determined that the last Implementation Order should be set aside, it follows that the two prior Consent Implementation Orders should also be set aside. The July 15, 2022 order of Dietrich J. on the First Implementation Motion that was upheld by the Court of Appeal simply dismissed the motion by the Ebrahimi Parties for an order based on the court's interpretation of the Minutes of Settlement. That interpretation is not being set aside.

[69] However, for the reasons detailed in the next section of this endorsement, I have also determined that the Minutes of Settlement are no longer capable of performance and have been superseded by the verdict in Iran. Accordingly, they have been vitiated and this cycle of alleged non-performance by both sides is at an end.

Should the Minutes of Settlement be Vitiated or Ordered Unenforceable?

[70] The Ebrahimi Parties first argued that a fraud was committed by PCCI and the Minutes of Settlement should be declared to be void because PCCI knowingly or recklessly misrepresented to the court that they were complying with the Minutes of Settlement at the Second and Third Implementation Motions and failed to disclose that they had filed the February 2023 Memo in the Iranian criminal proceedings requesting a verdict against the Ebrahimi Parties. The court denied them leave to tender the February 2023 Memo as Fresh Evidence. Even if leave had been granted for it to be filed, the content and timing of the February 2023 Memo and its alignment, or misalignment, with PCCI's obligations under the Minutes of Settlement have been found not to amount to fraud in the circumstances of this case.

[71] The Respondents further contend that PCCI committed their final, irreversible act of repudiation, which amounts to a fundamental breach of the Minutes of Settlement, when they filed the February 2024 Memo. Several days later, the Iranian court issued a judgment finding the Ebrahimi Parties guilty of criminal offences in Iran and awarding PCCI over USD $71 million in restitution.

[72] In the previous section of this endorsement, it was determined that PCCI failed to fulfill its obligation under the Minutes of Settlement to provide a further letter to the Iranian prosecutor and court, as directed by the court's January 30 Decision, and acted in a manner contrary to those obligations by instead filing the February 2024 Memo in the Iranian criminal proceedings. In these circumstances, the court must decide whether that act:

a. vitiated the Minutes of Settlement due to the irreversible consequences of the verdict in the Iranian criminal proceedings having been rendered before the letter that the Applicants were directed to send to the Iranian prosecutor and court had been sent; and/or

b. rendered the Minutes of Settlement unenforceable by the Applicants.

[73] It is open to the court to find the Minutes of Settlement, which are a contract, to be null and void on the basis of the Applicants' fundamental breach in having filed the February 2024 Memo after the January 30 Decision, seeking a verdict of fraud and an order of restitution in the Iranian criminal proceedings that was inconsistent with the quid pro quo for the Enforcement Order that it had sought and been granted in the January 30 Decision: see Suddaby v. 864226 Ontario Inc., 2003 ONSC 43000, at para. 66.

[74] When PCCI brought its Second Implementation Motion (that it was largely successful on in the January 30 Decision), it affirmed the Minutes of Settlement. When PCCI asked the Iranian court to find the Ebrahimi Parties guilty and to order them to pay restitution, it acted in a manner that was contrary to its obligations under the Minutes of Settlement, which required PCCI to discontinue all monetary claims they were making in the International Proceedings and make good faith efforts to assist the Ebrahimi Parties with the dismissal of the International Proceedings, including the Iranian criminal proceeding. PCCI cannot both affirm and disaffirm their contractual obligations under the Minutes of Settlement, to suit the particular position they wish to assert in a given proceeding: see Rothwell Corp. v. Amstel Brewery Canada Ltd., 1991 ONSC 7296.

[75] Faced with the prospect of now having to rely solely on the verdict in the Iranian criminal proceedings, PCCI says they would rather maintain the ability to enforce the Minutes of Settlement through the Implementation Orders in Ontario then having to commence proceedings in multiple jurisdictions to enforce a verdict rendered by the Iranian court.

[76] To avoid the possibility of double recovery, during the hearing of these motions PCCI offered to provide the following undertaking:

They will take no steps to enforce the Iranian judgment against the Ebrahimi Parties pending the transfer of the remaining assets agreed to under the Minutes of Settlement, including the Thornhill house, the funds held by the prosecutor in Germany and the $5M in shares, provided that occurs within two months. If they do receive those amounts, the undertaking will become permanent and they will never take any steps to enforce the Iranian judgment.

[77] The Ebrahimi Parties are not satisfied with this undertaking. First because they cannot control what happens in Germany, where funds have been paid into court and there is an ongoing money laundering investigation and no guarantee that those funds will be released. Second because there is a legislative restriction in Ontario that prevents the transfer of the Thornhill house to PCCI (foreign nationals) and the work-around of a court supervised sale (previously approved in the January 30 Decision) is not likely to result in a transfer within the specified two-month timeframe. Third, they have concerns about whether the undertaking that PCCI proposes would be enforceable outside of Canada.

[78] I agree that the undertaking offered by PCCI is not sufficient to address the concerns that are created by the verdict in Iran. It is not even consistent with the release language in the Minutes of Settlement because the Minutes of Settlement require that all claims be released upon payment of all funds and transfer of all assets specifically provided for therein, whereas this undertaking would not stop PCCI from collecting more under the verdict in the Iranian proceedings if the remaining assets to be transferred under the Minutes of Settlement have not all been transferred within two months.

[79] I find the Minutes of Settlement were vitiated by the filing of the February 2024 Memo in the Iranian criminal proceedings and the verdict rendered thereafter. The Minutes of Settlement are no longer capable of performance and have been superseded by the verdict in Iran.

[80] Having disavowed the Minutes of Settlement through the continued pursuit of the verdict in the criminal proceedings in Iran, and given that the Ebrahimi Parties are not seeking to enforce or rely upon the Minutes of Settlement themselves, the time has come for the Minutes of Settlement to be declared null and void and of no further force and effect.

[81] That said, the Settlement need not be unwound. The Applicants shall give credit against the order for restitution in the Iranian criminal proceedings for any assets or sums of money that they have received to date under the Minutes of Settlement.

Relief Sought on Set-Aside Motion

[82] The following relief is granted in favour of the Ebrahimi Parties on their Set-Aside Motion:

a. An Order granting the Ebrahimi Parties leave to file the February 2024 Memo as Fresh Evidence on this motion.

b. An Order declaring that the Minutes of Settlement (which have been previously found by this court to have replaced the Mutual Agreement dated October 4, 2020) have been vitiated, are null and void and of no further force and effect.

c. An Order setting aside or varying the November 10, 2020 Consent Implementation Orders of Conway J., which were incorporated into and continued under the January 30, 2024 Decision and Orders contained therein.

d. An Order setting aside or varying the January 30, 2024 Decision and the Orders and Directions contained therein regarding the implementation of the Minutes of Settlement and the costs award made against the Ebrahimi Parties therein.

[83] The following relief sought on the Set-Aside Motion is not granted:

a. No order is made to set aside or vary the July 15, 2022 decision and/or Order of The Honourable Justice Dietrich, or the decision of the Court of Appeal affirming that order, nor the costs awards associated with those decisions.

b. No order is made directing the land registrar to delete registrations of any and all Orders registered at the behest of PCCI against title to any property owned by the Ebrahimi Parties in Ontario. In the course of this motion, the court was not directed to a complete listing of all orders that have been registered on title. A Mareva Order was made in this proceeding, predicated an order made in proceedings in Malaysia freezing the Respondents' worldwide assets, well before the Implementation Orders were made. As far as I am aware, the Mareva Order remains in place.

c. The requested order directing that the funds currently held in trust by the Ebrahimi Parties' lawyers, Bouchelev Law Professional Corporation, in the amount of $154,678.90 be released to the Ebrahimi Parties is not made. The accounting and reconciliation of this amount (representing outstanding costs awards in favour of PCCI) with other costs awards in this endorsement, is addressed in the costs section of this endorsement (below).

[84] As long as the Applicants account for what they have received thus far under the Minutes of Settlement towards any enforcement of the restitution order made in their favour in Iran, they will not be required to return the assets and funds they have received under the Minutes of Settlement.

The Fourth Implementation Motion

[85] The Fourth Implementation Motion was brought by PCCI to compel the Respondents to fulfill their obligations under the Minutes of Settlement, because they:

a. have not transferred the shares in 5M Capital Investment Pty. Ltd. to the Applicants;

b. have not transferred 22A Avonlea Place to the Applicants, and cannot now do so due to the impact of the Federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, S.C. 2022, c. 10, s. 235 ("PPRPNCA"), enacted by ss. 235-237 of the Budget Implementation Act, 2022, No. 1, S.C. 2022, c. 10, which came into force at the beginning of 2023. The PPRPNCA was originally set to expire on January 1, 2025, but the expiry was subsequently extended to January 1, 2027; and

c. have not co-operated in the arrangements for the transfer of approximately €8.6 million being held in trust by the court in Frankfurt, Germany ("German funds").

[86] As was noted at the outset of this endorsement, because the Respondents were successful in their Set Aside Motion in having the Implementation Orders set aside and because the Applicants were found to have disavowed the Minutes of Settlement, they cannot continue to rely upon and seek to enforce them. The Fourth Implementation Motion has been rendered moot by the court's decision on the Set-Aside Motion.

[87] In the circumstances of this case detailed in the previous sections of this endorsement, it would result of a serious injustice to allow the Applicants to enforce the Minutes of Settlement now that they have the benefit of the verdict in the Iranian criminal proceedings

[88] PCCI's failure to fully embrace the Minutes of Settlement and ensure that they remained at all times in compliance with their obligations thereunder, and their continued pursuit of the verdict in the Iranian criminal proceedings against the Ebrahimi Parties, disentitles the Applicants from the continued assistance of this court in upholding and implementing the Minutes of Settlement.

[89] The balance of the relief sought by the Applicants on their Fourth Implementation Motion is denied and the motion is dismissed. The only exception to this is the order requiring the Respondents to direct their counsel to release the funds they placed in trust with their counsel on May 24, 2024 on account of the unsatisfied prior costs awards. This is addressed fully in the costs reconciliation in the next section of this endorsement.

Costs

[90] Both sides seek substantial indemnity costs of both motions from the other on the basis of the others' conduct and the nature of the allegations. Each side uploaded a Costs Outline. The total costs of the Applicants are $136,604.62, comprised of fees of $127,787.50, estimated lawyer's fee for appearance of $5,400 and disbursements (inclusive of taxes) of $3,417.12. The total costs of the Respondents are $79,372.94 (inclusive of all applicable taxes and disbursements of $1,339).

[91] The Ebrahimi Parties asked the court to consider reducing costs, if awarded in favour of the Applicants, on the basis that the Applicants costs were significantly higher due to both significantly higher hourly rates for the lead counsel and more total hours spent on the motions by the Applicants' counsel. Given the outcome of these motions, there will be no award of costs in favour of the Applicants. The amount the Applicants claimed does, however, provide some guidance to the court as to the reasonableness and proportionality of the lower quantum of costs claimed by the Respondents. The issues on these motions were important to both sides, and they were complicated by the long procedural history.

[92] Since the Respondents' Set-Aside Motion was for the most part successful and the Applicants' Fourth Enforcement Motion was for the most part not successful, the Respondents are the overall successful parties and entitled to their costs of these motions. Costs are discretionary.

[93] There is no justification for an award of substantial indemnity costs in favour of the Respondents. No finding of fraud was made against the Applicants. The Respondents' claimed partial indemnity fees, including HST, totalling $51,256.80, plus disbursements of $1,339, bringing their total partial indemnity costs to $52,595.80.

[94] In the exercise of my discretion under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and having regard to the relevant factors under r. 57, I am awarding the Respondents their partial indemnity costs of these motions fixed in the all-inclusive amount of $52,595.80.

[95] The sum of $154,678.90 is being held in trust by counsel for the Respondents. This represents the costs of the Second and Third Implementation Motions awarded in favour of PCCI in the January 30 Decision in the amount of $25,000, which has now been set aside, and the costs awards of Dietrich J. and the Court of Appeal in favour of PCCI in the aggregate all-inclusive amount of $129,678.90 which have not been set aside.

[96] The costs now payable by PCCI to the Respondents of $52,595.80 and the $25,000 in costs awarded to PCCI and now set aside should be deducted from the trust funds. The sum of $77,083.10 shall be paid from the cost monies held in trust by counsel for the Respondents to counsel for PCCI in trust for PCCI. This represents the net costs that the Applicants are entitled to from the various motions relating to the interpretation and enforcement of the Minutes of Settlement that have not been set aside. If my math or assumptions are incorrect in terms of how this net costs amount has been calculated the parties may request a case conference for further directions about this.

[97] This endorsement and the orders and directions contained in it shall have the immediate effect of a court order without the necessity of a formal order being taken out. Any party may draft and present an order for signing, issuance and entry by the court by following the procedure under the rules for settling, issuing and entering orders.

Kimmel J. Date: December 4, 2024