Shokoufimoghiman v. Bozorgi, 2025 ONSC 1620
Court File No.: FS-22-00029055-0000
Date: 2025-03-13
Ontario Superior Court of Justice
Between:
Shabnam Shokoufimoghiman, Applicant (Responding Party in Summary Judgment Motion)
– and –
Amir Ebrahim Bozorgi, Respondent
– and –
Payam Bozorgi, Added Respondent (Moving Party in Summary Judgment Motion)
Appearances:
A. Mazinani, for the Applicant
C. Hooper, for the Respondent
N. Paris and A. Dassios, for the Added Respondent
Heard: December 17, 2024
Released: March 13, 2025
Mathen, J.
Introduction
[1] The parties in this case are Shabnam, Amir and Payam. Shabnam and Amir were married. Payam is Amir’s brother. All are originally from Iran.
[2] Shabnam added Payam as a party to her application against Amir. Payam brings a motion for summary judgment to dismiss her claims against him and to be removed as a party. Amir supports the motion. Shabnam objects.
Background
[3] Shabnam and Amir married in 2014 and settled in Canada in 2016. Their child was born in 2018.
[4] In 2009, Shabnam established an Iranian healthcare products company. In 2015, she says, she incorporated a Canadian branch called “Rayan Farmed”. Amir disputes this account. What is not disputed is that Shabnam transferred ownership of Rayan Farmed in 2017 to Amir, who renamed it “Appliedtech LTD”.
[5] In 2018, Amir was criminally charged with assault against Shabnam. The charges were later withdrawn. The parties separated for a time but reconciled.
[6] On January 21, 2020, Amir transferred his Appliedtech shares to Payam.
[7] The parties separated for a final time on or about March 21, 2022. Shabnam commenced proceedings shortly thereafter.
[8] Shabnam added Payam as a party on April 24, 2023. She claims that Amir sold Appliedtech to Payam to “shield himself from financial liability” in the parties’ “imminent separation”. She argued that Payam was holding Appliedtech in trust for Amir. She also claimed that (a) the transfer was a fraudulent conveyance and (b) Amir has a beneficial interest in Appliedtech that is subject to equalization.
[9] The three parties filed affidavits with exhibits. Questioning took place prior to this motion, in October and December of 2024. On virtually every material point, the parties are in stark disagreement.
The Law
Summary Judgment
[10] Under Rule 16 of the Family Law Rules, a party can move for summary judgment “for a final order without a trial on all or part of any claim made or any defence presented in a case.” Summary judgment is “a significant alternative model of adjudication, available to improve access to justice”: Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, at para. 83.
[11] The moving party shall set out “specific facts showing that there is no genuine issue requiring a trial”. The responding party “may not rest on mere allegations or denials but shall set out, in an affidavit or other evidence, specific facts showing that there is a genuine issue for trial”: Rule 16(4), (5).
[12] The Supreme Court of Canada states that there is no genuine issue requiring a trial “when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment”: Hryniak v. Mauldin, 2014 SCC 7, at para. 49. Such a determination is warranted if the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[13] In determining whether there is a genuine issue for trial, a court may weigh the evidence; evaluate credibility; and draw reasonable inferences from that evidence: Rule 16(6.1).
[14] A motion for summary judgment involves two steps. The judge should first determine, based only on the evidence before them and without using the new fact-finding powers, if there is a genuine issue requiring trial. If there is, the judge should then determine if a trial can be avoided by using those fact-finding powers, at their discretion, provided that their use is not against the interest of justice: Hryniak, at paras. 66-68.
[15] The moving party must establish a prima facie case that there is no genuine issue for trial. Then the onus shifts to the responding party to prove that their claim has a real chance of success: Sanzone v. Schechter, 2016 ONCA 566, at para. 30. Consistent with Rule 16(5), above, that party must “put their best foot forward”. The court is entitled to assume that the record contains all the evidence the parties would present if the matter proceeded to trial.
Vicarious Trust Claims
[16] In Karatzoglou v. Commisso, 2023 ONCA 738, the Court of Appeal held that “a person does not have standing to advance a trust claim on behalf of a former spouse for equalization purposes” because an equalization claim is, “at best, an indirect legal interest”. A claim “that a third person holds property in trust for a non-titled spouse, or that a non-titled spouse has a beneficial interest in property…can only arise from the personal, direct deprivation of the non-titled spouse”: ibid.
[17] The Court of Appeal did allow for the possibility that, “where a meritorious trust claim is not advanced by a non-titled spouse”, the other spouse “could seek to vary the equalization between he and the non-titled spouse if the resulting payment is found to be unconscionable” per section 5(6) of the Family Law Act: Karatzoglou, ibid.
Fraudulent Conveyance
[18] Section 2 of the Fraudulent Conveyances Act, RSO 1990, c F.29 provides:
- Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.
[19] The term “creditors” in the FCA includes spouses who had “an existing claim” at the time of the conveyance: Goldman v. Kudelya, 2015 ONSC 4674 at paras. 69-70; Stone v. Stone, at para. 25.
[20] A person claiming a fraudulent conveyance can point to “badges of fraud” such as:
- the transferor has few remaining assets after the transfer;
- the transfer was made to a non-arm’s length person;
- there were actual or potential liabilities facing the transferor, he was insolvent, or he was about to enter upon a risky undertaking;
- the consideration for the transaction was grossly inadequate;
- the transferor remained in possession or occupation of the property for his own use after the transfer;
- the deed of transfer contained a self-serving and unusual provision;
- the transfer was effected with unusual haste; or,
- the transaction was made in the face of an outstanding judgment against the debtor.
(Purcaru v. Seliverstova, 2016 ONCA 610, at para. 5; DBDC Spadina Ltd. v. Walton, 2014 ONSC 3052 at para. 67)
[21] Badges of fraud must not be applied “mechanically”, but with a view to all of the facts: Indcondo v. Sloan, 2014 ONSC 4018 at paras. 50-55, aff'd 2015 ONCA 752.
[22] The burden of proof remains on the party alleging a fraudulent conveyance. However, if a party raises evidence of a badge of fraud that gives rise to an inference of an intent to defraud, “the evidential burden then falls on those defending the transaction to adduce evidence showing the absence of fraudulent intent”: Fancy, Re; Nuove Ceramiche Ricchetti S.p.A. v. Mastrogiovanni, [1988] O.J. No. 2569 (Ont. H.C.).
Removing a Party
[23] Rule 7(3)(b)(i) of the Family Law Rules states that a person starting a case shall name as a respondent “every other person who should be a party to enable the court to decide all the issues in the case.”
Issues and Brief Conclusion
[24] The issues on this motion are:
a. Is there a genuine issue for trial on fraudulent conveyance?
b. Is there a genuine issue for trial on whether Shabnam may argue that Amir has a beneficial interest in Appliedtech and other property subject to equalization?
c. If the answers to (a) and (b) are “yes”, should Payam nevertheless be removed as a party?
d. Are costs owing to any party?
[25] Payam’s motion is granted in part. There is no genuine issue for trial on Amir’s alleged beneficial interest in Appliedtech and other property. However, there is a genuine issue for trial on fraudulent conveyance, that cannot be resolved using the fact-finding powers available for summary judgment. Payam’s request to be removed as a party fails. The parties shall bear their own costs.
Analysis
Issue One: Is there a genuine issue for trial on the fraudulent conveyance?
[26] In support of a prima facie case that there is no genuine issue on the question of fraudulent conveyance, Payam argues that:
a. Shabnam’s claim is strategic, not genuine;
b. Shabnam is not a “creditor”; and
c. There are no badges of fraud.
[27] I will examine whether there is a prima facie case for any of these points. If there is, the analysis will then shift to whether Shabnam has demonstrated that she has a “real chance” of success on the fraudulent conveyance claim as a whole.
Shabnam’s claim is strategic
[28] Payam argues that when she added him as a party in April 2023, Shabnam did not amend her application to allege that he was a party to a fraudulent conveyance. She had already made a fraudulent conveyance claim against Amir for his transfer of Appliedtech shares to Payam. Payam says Shabnam added him for strategic reasons only, because she admits that it was to force him to disclose information about the transaction which she could not get from Amir.
[29] I am not persuaded that the state of the pleadings is relevant. Shabnam did not specifically plead relief relating to fraudulent conveyance in her Application, but she says that is because she only knew about the Appliedtech’s sale on reading Amir’s Answer. In her Reply, Shabnam stated that “the transfer of [Appliedtech] to [Payam] was a fraudulent conveyance and that [Amir] remains the true owner of [Appliedtech].”
[30] Payam argues that Shabnam ought to have brought a third-party motion for disclosure instead of adding him as party. I find that this question is better addressed under the third issue which is whether Payam was properly added under the Family Law Rules.
[31] Therefore, this issue does not support Payam’s prima facie case for summary judgment. It is not helpful to use the court’s fact-finding powers and I decline to consider the issue further.
Shabnam is not a “creditor”
[32] A spouse may claim that a fraudulent conveyance took place before separation. However, the marriage must have been strained and a separation, and subsequent equalization claim, “impending”: Goldman v. Kudelya, 2015 ONSC 4674, at paras. 69-72.
[33] Payam, supported by Amir, argues that, at the time of the conveyance, Shabnam did not have an existing claim against Amir. This is because, Payam and Amir say, there is no evidence that either spouse was contemplating a separation in January 2020. Nor is there any evidence, at that time, of an intention by Amir to defeat an equalization claim.
[34] Amir deposes that, while the parties had briefly separated in 2018, they reconciled three months later.
[35] Shabnam deposes that the parties’ marriage was under strain in January 2020. She does not contest that the parties previously separated and reconciled. However, she says that the parties were contemplating separation in 2020.
[36] I acknowledge the length of time between the parties’ initial separation in 2018, the conveyance in January 2020 and their separation in 2022.
[37] I also acknowledge that, during questioning in the fall of 2024, Shabnam appears to avoid a question about the state of the marriage in January 2020. However, the parties do not dispute that they were in counselling.
[38] Neither party cited cases indicating a time limit between a fraudulent conveyance and subsequent separation. The length of time would clearly be a factor in evaluating the strength of a case. That said, incorporating a bright line rule is not consistent with the caselaw which looks to the particular circumstances and context in which a fraud may have occurred. A bright line also ignores the possibility that a party effected a fraudulent conveyance at a time that they anticipated that a separation would occur, but the separation simply took longer to manifest.
[39] If there had not already been a separation in this case, including a criminal charge against Amir, I would be more confident ruling for Payam on this issue. Here, though, that past context is important. In addition, the fact that the parties were undergoing couples’ counselling in January is ambiguous: it could suggest either that the marriage was under strain and possibly heading to a separation, or that the parties were committed to strengthening their relationship.
[40] I agree with the Applicant that, at a minimum, Shabnam’s eligibility as a creditor under the FCA is a triable issue.
[41] Moving to the second stage of the test, the parties’ evidence on the state of the marriage in January 2020 is contested. The transcript from questioning is insufficient to determine who is more credible on this question: Shabnam or Amir.
[42] Payam points out that, in 2021, Shabnam released both Amir and Appliedtech from any actions regarding the company, its corporate shares or its property. Payam argues that “it strains belief that the Applicant would sign such a document at a time she says the collapse of the marriage was imminent”.
[43] Shabnam was questioned about the circumstances of signing the release. She said that Amir simply told her that he needed the release to get a loan for his business because “I [Amir] am the only breadwinner of the home and if you don’t sign this contract we lose everything.” She claimed she did not know the broader context, including that she was agreeing not to sue Appliedtech. She said Amir suggested the lawyer who provided her with legal advice and the lawyer did not give her any real information. She added that she signed the release “[a] month after Amir threatened me for bodily harm.”
[44] The release does not mention Payam.
[45] The relevant date for determining whether Shabnam is a creditor is the time of the conveyance: January, 2020. I do not find the later release to be determinative of the state of the parties’ marriage at that time.
[46] The key question is whether Amir anticipated a separation at the time he executed the conveyance. I find that this question requires a trial as it rests on core findings of credibility which are not determinable on the evidence before the court.
[47] Therefore, there is a genuine issue for trial about whether Shabnam is a creditor under the FCA.
The badges of fraud are absent
[48] Payam argues that the badges of fraud necessary to make out fraudulent conveyance are absent:
a. While Amir and Payam are not arms-length from each other, this is insufficient to permit the claim to go forward.
b. The transaction was not secret.
c. Appliedtech was sold for fair market value.
d. Amir did not remain in possession or occupation of the property for his own use after the transfer;
e. Amir did not retain a benefit after the conveyance. To the extent that he did, it was without Payam’s consent.
Analysis of the badges of fraud
[49] Based on the record, I find that there is a genuine triable issue with regard to more than one badge of fraud that cannot be resolved using the fact-finding powers available on summary judgement.
i. Arms-length
[50] The fact that Payam and Amir are brothers is an acknowledged badge of fraud.
[51] Payam argues that a single badge of fraud is insufficient to make out fraudulent conveyance. Shabnam argues that it is. Given my finding that there is evidence of more than one badge of fraud, it is not necessary to decide this question.
ii. Secrecy
[52] Shabnam has deposed that she did not learn of the sale until after she read Amir’s Answer. She then amended her pleadings to include a claim that Payam holds Appliedtech for the benefit of Amir. Eventually, she added him as a party.
[53] Amir invites the court to infer that Shabnam knew of the sale because she would have seen the relevant deposits into their joint bank account. I do not find this persuasive. First, there is no evidence of how the parties monitored their account. Second, Payam and Amir argue that the fair consideration in this case totalled around $35,000. These monies were not transferred at once, but folded into Amir’s compensation after Payam made him CEO. Therefore, there is no evidence suggesting that the transactions in the joint account would have been so large or unusual that Shabnam was likely to notice them, let alone connect them to the sale of Appliedtech.
[54] On the facts before me, there is a serious question of whether the sale was kept secret from Shabnam.
iii. Consideration
[55] Both Payam and Amir argue that the sale price for Appliedtech of $35,000 was fair consideration given the company’s net income in 2019. Amir was kept on as an employee and was repaid $200,000 in shareholder loans. Payam insists that Appliedtech’s current, much higher value is due entirely to his efforts and has nothing to do with Amir.
[56] Shabnam relies on different financial indicators. She says that Amir’s large shareholder loan does not make sense for a company with such a low valuation. She also faults Payam for not obtaining a retroactive business valuation to establish Appliedtech’s value at the time.
[57] I find that this badge of fraud is weaker than the others. However, I find that there is a genuine issue for trial with respect to the true value of Appliedtech.
[58] Moving to the fact-finding stage, the question of valuation is hotly contested by the parties each of whom faults the other for not putting “their best foot forward”.
[59] Amir deposes that he initially was looking to have Payam come on as an investor in Appliedtech. This became an entirely different arrangement where Amir sold the company outright for an employee position. The narrative is puzzling, which raises questions as to its plausibility.
[60] I find that neither party has put their best foot forward on this issue.
[61] In the circumstances, while it is a close call, I find that there remains a genuine issue for trial about whether Appliedtech was fairly valued.
iv. Retaining Possession
[62] Payam and Amir argue that Amir became an employee of Appliedtech, namely its CEO, but had no further ownership role in it.
[63] After the transfer, Payam decided that Appliedtech would purchase a residential property located at 185 Cottonwood Drive, Toronto, “as an investment, to use as office space and to use as short-term rentals”. The sale occurred on May 17, 2021. It was while preparing for this transaction, Payam says, that he first became aware that Shabnam had previously owned Appliedtech.
[64] Amir, not Payam, signed the Agreement of Purchase and Sale for 185 Cottonwood Drive. Payam and Amir say that Amir did so as an authorized officer of the company. The APS was later amended to indicate Appliedtech as the purchaser.
[65] It is difficult to make sense of Payam’s explanation for buying 185 Cottonwood Drive. Appliedtech is a medical services company that secured multi-million-dollar contracts with the World Health Organization during the COVID-19 Pandemic. The idea that Payam would want to “diversify” such a company by purchasing a single residential home for office space and short-term rentals strains credulity. There is no evidence that 185 Cottonwood was ever used for short-term rentals.
[66] After Amir contacted a mortgage broker on behalf of Appliedtech, he says the company unexpectedly ran a personal credit check on him. Amir deposes that for a brief period around the time of the parties’ separation in 2022, he “temporarily changed his mailing address to the Cottonwood property on some documents due to the difficulties around the parties’ separation and Shabnam’s behaviours.” Amir’s account and explanations are vague.
[67] I find that there is a genuine issue for trial about this badge of fraud. The nature of Amir’s connection with 185 Cottonwood Drive is a fair question. A trial is necessary to determine whether his account is credible.
v. Enjoying benefits
[68] The final relevant badge of fraud is whether Amir retained benefits after the transfer.
[69] Shabnam alleges that after the transfer Amir continued to use the Appliedtech credit cards for his personal use.
[70] Payam points to three emails where he called out Amir about such personal use. He says any such use was, essentially, improper action by Amir.
[71] However, all of Payam’s emails post-date Amir and Shabnam’s separation on March 22, 2022. This raises the question whether Payam only started to document his objections once it became clear that Amir would be involved in a family law dispute in which his link to Appliedtech was relevant.
[72] The wording of these emails raises additional concerns. For example, on March 28, 2022, Payam sends Amir the following message:
“Amir,
While reviewing the Appliedtech credit card statements this week, I noticed a couple of charges that seem to be for personal use:
- A charge of $724.08 as shown in the attached screenshot.
- A hotel booking for $648.74 dated March 20th, which also appears to be for personal use.
These charges are not authorized for personal use, and I need you to dispute them immediately. Please make arrangements to reimburse the company for the total amount out of your pocket as soon as possible[.]”
[73] Given that it is between brothers, the formal tone and precise wording of the above message is odd. I cannot discount the possibility that this and the other messages were crafted to create an impression of a strictly business-like relationship. There is no other evidence of how the brothers communicated with each other.
[74] I find that there remains a genuine issue for trial whether Amir benefitted personally from Appliedtech after its sale to Payam, and that he did so with Payam’s acquiescence.
[75] In conclusion, Payam has not made out a prima facie case on the question of fraudulent conveyance. Deciding whether Shabnam was a creditor in January, 2020 raises core issues of credibility that can only be determined following a trial where all the parties are subject to extensive cross-examination. Credibility findings are also essential to resolving the question of fraudulent conveyance. I am persuaded that Shabnam has a real chance of success on more than one badge of fraud. Therefore, Payam’s claim for summary judgment on this claim is dismissed.
Issue Two: Is there a genuine issue for trial on Shabnam’s claim that Amir has a beneficial interest in Appliedtech and other property subject to equalization?
[76] Shabnam initially added Payam to the proceedings on the basis that: Payam “holds Appliedtech LTD., Ontario Corporation Number 2457343, in trust for the Respondent, Amir”; Payam and the company “hold title to the property located at the address municipally known as 185 Cottonwood Dr, Toronto, M3C2B3 (‘Property’), in trust for the Respondent, Amir”; and that she would be “seeking an order that the company and property be subject to equalization”.
[77] Payam argues that a claim that he holds property in trust for Amir, or that Amir has a beneficial interest in property, “can only arise from the personal, direct deprivation of Amir”. Thus, Shabnam’s equalization claim is, at its highest, an indirect legal interest, which is insufficient to confer standing for a trust claim on behalf of Amir.
[78] The Ontario Court of Appeal has held that a person does not have standing to advance a trust claim on behalf of a former spouse for equalization purposes: Karatzoglou.
[79] Against this argument, Shabnam relies on her fraudulent conveyance claim. She argues that she can seek to vary the equalization claim between her and Amir if any resulting payment is found to be unconscionable.
[80] This issue raises a pure question of law. The law is clear that Shabnam cannot assert a trust claim on Amir’s behalf. In addition, Shabnam’s equalization claim can only be against Amir. Nothing in Karatzoglou suggests that the spouse claiming equalization can extend that claim against a non-spouse who is party to the alleged trust relationship.
[81] Shabnam has no real chance of success on this issue. Payam’s request for summary judgment is granted.
Issue Three: If the answers to the first two issues are “yes”, should Payam nevertheless be removed as a party?
[82] Payam argues that, even if he does not succeed in obtaining summary judgment on the above issues, the court can and should remove him as a party under Rule 7(3) of the Family Law Rules because he never should have been added to these proceedings.
[83] Payam argues that he already has been questioned, provided disclosure and will be a witness at trial. He says that his continued participation as a party is unnecessary and is only increasing his expenses.
[84] Payam alleges that Shabnam only added him for evidentiary purposes, as evidenced by statements in her Amended Application. He argues that Shabnam has demonstrated bad faith throughout these proceedings as evidenced by:
a. several appearances before To Be Spoken To Court that were a “misuse” of court proceedings;
b. a prior motion for release of funds based on false information, leading to an order to Shabnam to return part of those released funds;
c. her unwarranted attacks on Payam’s character;
d. her sending emails, under another name, to obtain information about Payam; and
e. her unjustified refusal to answer questions.
[85] It is important to keep Payam’s complaints separate. Several of them, such as Shabnam’s alleged attacks on Payam’s character, are more properly an issue for costs at the end of trial. They are not relevant to whether Payam should remain as a party.
[86] Rule 7(3) states that a person starting a case “shall name every other person who should be a party to enable the court to decide all the issues in the case.” The focus of the rule is to ensure that a court has the necessary parties before it in order to finally resolve the dispute.
[87] The rule does not specifically address removing a party.
[88] Payam cites a single case, Kapila v. Chhina, 2023 ONSC 2270. There, this court removed the wife’s father-in-law. The wife had added him on the basis that he: aided the husband in abusing her; was trespassing; was holding property in trust for the husband; and improperly diverted funds. The court determined that the wife’s claims disclosed no reasonable cause of action. The wife’s pleadings contained “clear misapprehensions of what constitutes family property and how an equalization payment is determined.” Consequently, the father-in-law was removed.
[89] I find the current case to be distinguishable from Kapila. Shabnam’s pleadings are not deficient or void of merit. As I have concluded, there is a genuine issue for trial on her fraudulent conveyance claim.
[90] It may be that Payam could provide any additional information as a witness, not a party. But, given the issues in dispute, I am not persuaded that this is the only consideration in whether to remove him. The claims against Payam also touch on the remedies available to the court. Rule 7(3) states that a party shall be added if necessary to decide “all the issues”. There is nothing before the court to suggest that “all the issues” excludes questions of remedy. The provision’s broad wording, and the primary objective of the Family Law Rules to deal with cases “justly”, would suggest the opposite.
[91] Shabnam’s claims involve Payam. Should she succeed in her claim of fraudulent conveyance, the court would have to craft a responsive remedy. A trial judge would be disadvantaged without Payam’s involvement, as a party, to speak to any remedy that might affect him and Appliedtech.
[92] Therefore, I find that Payam’s request to be removed fails.
Issue Four: Costs
[93] The parties had divided success. On the evidence before me, I decline to find on a balance of probabilities that Shabnam acted in bad faith in adding Payam as a party.
[94] The parties shall bear their own costs.
Order
[95] In conclusion, I make the following order:
a. The Applicant, Shabnam Shokoufimoghiman’s, trust claims made against Payam Bozorgi in her Amended Application, dated April 24, 2023, are dismissed for lack of standing.
b. Payam Bozorgi’s claim for summary judgment in the Applicant’s fraudulent conveyance claim is dismissed.
c. Payam Bozorgi’s request to be removed as a party is dismissed.
d. The parties shall bear their own costs for this motion.
Mathen, J.
Released: March 13, 2025