Endorsement Sheet for Civil Motion/Application

Short Title of Proceedings: Wang et al v. Jazzar Holdings Inc. et al
Court File No.: CV-25-00099053-0000
Before: Associate Justice I. Kamal
Heard On: March 12, 2025
Counsel: David Cutler for the moving parties (plaintiffs)
No one appearing for the defendants, motion brought without notice

Relief Requested:
An order that a Certificate of Pending Litigation be issued by the Registrar against the property described in Schedule “A” (“PIN 0182”) attached to the Notice of Motion, in accordance with the Certificate of Pending Litigation attached at Schedule “B” to the Notice of Motion;
An order that a Certificate of Pending Litigation be issued by the Registrar against the property described in Schedule “C” (“PIN 0217”) attached to the Notice of Motion, in accordance with the Certificate of Pending Litigation attached to the Notice of Motion as Schedule “D”.

☐ ORDER SIGNED ☐ ON CONSENT
☐ UNOPPOSED ☐ NO ONE APPEARED
☐ ADJOURNED TO Click here to enter a date.

Endorsement

Overview of This Motion and Statement of Claim

1. This is a motion by the Plaintiffs seeking an order granting leave to issue a certificate of pending litigation (“CPL”) as against the land and premises municipally known as 105 Halladay Creek Drive, Greater Madawska, ON, K0G 1J0. The Property consists of 239 acres of land fronting onto the Madawaska River, near the Village of Calabogie. There are two legal descriptions for this property:

   • PT LT 20, CON 6, BEING THE E 1/2 ; BAGOT ; S/T BG2745; TOWNSHIP OF GREATER MADAWASKA
     PIN: 57355 - 0182 LT

   • PT LTS 19 & 20, CON 5 AS IN R400989 EXCEPT BG428; BAGOT; S/T BG2615, BG2631, BG2632, BG2635; TOWNSHIP OF GREATER MADAWASKA
     PIN: 57355 - 0217 LT

2. The motion was brought without notice, in writing, and on an urgent basis. I required further submissions and convened an oral hearing on an expedited basis.

3. On January 29, 2025, Jazzar Holdings Inc. and its principal, Samer Al-Jazzar, were facing a $525,000 lawsuit and a pending undertakings motion brought by the Plaintiffs in relation to the Main Action, further detailed below.

4. On that date, Jazzar Holdings Inc. transferred an Ontario property that it had purchased for $1,950,000 in August 2022, to two residents of Amman, Jordan, ages 72 and 81, who are believed to be Samer Al-Jazzar’s parents. The consideration for that transfer was $2.00.

5. Three weeks later, on or about February 18, 2025, the property was listed for sale at a price of $2,400,000. The property remains listed for sale.

6. Jazzar Holdings purchased the Property on August 5, 2022, for a purchase price of $1,950,000.

7. The Plaintiffs’ position is that the above transaction was fraudulent and that the transfer was made by the Defendants with the intent to defeat, hinder, delay or defraud the claims of the Plaintiffs.

8. Because of this alleged fraudulent conveyance and the fact that the property is now listed for sale, the Plaintiffs ask the Court to issue certificates of pending litigation over the two parcels that comprise the property.

9. The Plaintiffs’ position is that granting certificates of pending litigation will prevent the sale of the fraudulently conveyed property and will provide an equitable means for the Plaintiffs’ interests to be protected.

10. The Plaintiffs submit that if certificates of pending litigation are not granted, the Defendants’ fraudulent transfer of the property will likely defeat the Plaintiffs’ claims against Jazzar Holdings and Al-Jazzar, as those parties’ assets will be long gone by the time that the Plaintiffs obtain judgment.

11. For the reasons that follow, I find that the Plaintiffs have satisfied the test for granting certificates of pending litigation and the interest of justice requires it.

The Main Action

12. On March 23, 2021, the Plaintiffs (as Purchasers) and Jazzar Holdings (as Vendors) entered into an agreement of purchase and sale pursuant to which Jazzar Holdings would construct a single-family home at 84 Kenins Avenue, in the City of Ottawa, and upon completion, the home would be transferred to the Plaintiffs.

13. On or about August 23, 2021, the Plaintiffs and Jazzar Holdings terminated their agreement of purchase and sale, which was replaced by a new contractual arrangement, described as “the Cost Plus Agreement”, which was entered into by the Plaintiffs and Elevate Luxury Homes Ltd. (“Elevate”), another corporation controlled and directed solely by Al-Jazzar.

14. The construction of 84 Kenins Avenue did not progress in a timely or cost-effective manner, and the cost of construction significantly exceeded the initial construction budget provided by Elevate to the Plaintiffs.

15. On or about June 19, 2023, the Plaintiffs commenced an action in relation to the Kenins Avenue transaction against Jazzar Holdings, Elevate and Al-Jazzar alleging breach of contract, breach of the duty of honest contractual performance, and misrepresentation, seeking an accounting of all monies paid by the Plaintiffs to those Defendants, rescission of the Cost Plus Agreement, and/or damages in the amount of $525,000. This is the underlying action and I will refer to it as the “Main Action” in these reasons.

16. In the Main Action, pleadings have closed and examinations for discovery have been conducted. Transcripts from the examinations for discovery were included in the motion materials.

17. The defendants in the Main Action did not produce, as part of the documentary discovery process, many of the documents that would support or justify the invoices rendered to the Plaintiffs during the construction of the 84 Kenins home, and paid by the Plaintiffs.

18. During the examinations for discovery of the defendants in the Main Action, the Plaintiffs requested numerous undertakings, including many undertakings requested with respect to the documents and information to support the amounts paid by the Plaintiffs for the construction of the 84 Kenins home. The defendants in the Main Action failed to answer many of the discovery undertakings given by them. A motion with respect to undertaking is outstanding.

Analysis

Statutory Framework

19. Section 103 of the Courts of Justice Act provides as follows:

The commencement of a proceeding in which an interest in land is in question is not notice of the proceeding to a person who is not a party until a certificate of pending litigation is issued by the court and the certificate is registered in the proper land registry office under subsection (2).

20. Rule 42.01 of the Rules of Civil Procedure provides as follows:

42.01 (1) A certificate of pending litigation (Form 42A) under section 103 of the Courts of Justice Act may be issued by a registrar only under an order of the court.

(2) A party who seeks a certificate of pending litigation shall include a claim for it in the originating process or pleading that commences the proceeding, together with a description of the land in question sufficient for registration.

(3) A motion for an order under subrule (1) may be made without notice.

(4) A party who obtains an order under subrule (1) shall forthwith serve it, together with a copy of the notice of motion and all affidavits and other documents used at the hearing of the motion, on all parties against whom an interest in land is claimed in the proceeding.

21. The Plaintiffs have brought their motion without notice, as permitted by subrule 42.01(3) of the Rules of Civil Procedure.

22. Motions for the issuance of certificates of pending litigation are regularly brought on an ex parte basis and are permitted to proceed in that manner: Interrent International Properties Inc. v. 1167750 Ontario Inc., 2013 ONSC 4746, paras 12, 14. In this case, it is appropriate to proceed on an ex parte basis.

23. The Plaintiffs have included a claim for a certificate of pending litigation in their Statement of Claim, together with a description of the land in question.

24. In order to obtain a Certificate Pending Litigation, the moving party must demonstrate that an interest in land is in question in the proceeding. An action to set aside a fraudulent conveyance is a proceeding in which an interest in land is brought into question: Fernandes v. Khalid, 2021 ONSC 190, para 33 citing, among other cases, Bank of Montreal v. Ewing (1982).

25. A plaintiff may obtain a CPL even if the plaintiff has not yet obtained judgment. In the circumstances, the applicable test is summarized as follows:

…in order to obtain a CPL in an action claiming to set aside an alleged fraudulent transfer pursuant to the Fraudulent Conveyances Act, (i) before obtaining judgment in the main action, and (ii) where the claim in the main action does not concern an interest in the land allegedly fraudulently transferred, the following legal tests should be met:

(i) The claimant must satisfy the court that there is high probability that they would successfully recover judgment in the main action;

(ii) The claimant must introduce evidence demonstrating that the transfer was made with the intent to defeat or delay creditors; evidence that the transfer was for less than fair market value lightens the burden; and

(iii) The claimant must demonstrate that the balance of convenience favours issuing a CPL in the circumstances of the particular case.

(Grefford v. Fielding, para 26)

26. This test was also recently discussed in Jiujias v. Lau, 2024 ONSC 3926, para 7.

High Probability that the Plaintiffs Will Recover Judgment in the Main Action

27. The Plaintiffs say that there is a high probability that the Plaintiffs will recover judgment against Jazzar Holdings and Al-Jazzar in the Main Action, on one or more of the following claims:

a. the Plaintiffs’ claim that they were tricked into moving from the initial agreement of purchase and sale to the Cost Plus Agreement, on the basis of misrepresentations;
b. the Plaintiffs did not receive Tarion warranty coverage;
c. the Plaintiffs were overcharged for the charges passed on to them originating with the various subcontractors and tradespeople, and no updated budget was provided;
d. the Plaintiffs were overcharged by being charged tax on the tax components of the charges of the subcontractors and tradespeople;
e. the Defendants in the Main Action are responsible for various construction deficiencies associated with the 84 Kenins Avenue home.

28. There is limited case law to assist in determining what is meant by “high probability”.

29. I asked Plaintiffs’ counsel for their submissions on how this should be interpreted. Counsel’s submission was that they believe it is higher than 51% (being a balance of probabilities), but not as high as the criminal standard. Counsel also submitted “high probability” should be interpreted to be around the threshold for summary judgement, being no genuine issue requiring a trial.

30. I agree that “high probability” is higher than the balance of probabilities and not as high as the criminal standard of beyond a reasonable doubt.

31. In my view, the interpretation of "high probability" in this context suggests a strong likelihood of success, going beyond a prima facie case but stopping short of an absolute certainty. Of course, there can be no guarantee of the outcome of the action at this stage and none of us have a crystal ball.

32. “High probability” has also been described as high chance of success, based on the evidence before the Court on the motion: The Bank of Nova Scotia v. McCallen, 2015 ONSC 5438, para 5.

33. “High probability” also does not require the motions court to be certain of specific amount that will be recovered. There just needs to be sufficient evidence before the motion judge to demonstrate that there is a high probability of success that some amounts will be found to be owing: Hands-On Capital Investments Inc. v. Matharoo, 2023 ONSC 7181, para 11; Jennifer Horrocks v. Bruce McConville et al, 2020 ONSC 4645, para 10.

34. The “high probability” prong of the test can be satisfied even when the underlying claim has its own high threshold: Edey v. Beccati, 2023 ONSC 3447, para 80.

35. In my view, the Plaintiffs must provide compelling evidence that their claim is well-founded.

36. In order to determine whether there is a high probability that the Plaintiffs will recover judgment, the Court will assess:

a. The Strength of the Evidence: The Plaintiffs must present credible, detailed, and persuasive evidence supporting the claim of fraud.
b. The Legal and Factual Basis: The Plaintiffs’ position needs to have a solid legal foundation, demonstrating that if the evidence is accepted, it is highly likely to result in a favorable judgment.
c. Defenses and Counterclaims: If defences and counterclaims have been advanced (as in this case), the court will consider the Defendants’ potential responses. If there are strong defences, this may lower the probability assessment.

37. Essentially"high probability" implies a strong, well-substantiated case with a real prospect of success, rather than just a plausible argument.

38. The evidence on this motion includes the Statement of Claim, the Statement of Defence and Counterclaim and the Reply and Defence to Counterclaim.

39. This is not a case where the Defendant has not defended, as was the case in Jiujias v. Lau, 2024 ONSC 3926, para 9.

40. Counsel provided ample legal authorities with respect to the legal issues in the Main Action to satisfy me that there is a high probability that the Plaintiffs will recover judgment.

41. One example is with respect to the overcharges claim. The law on cost-plus agreement is summarized in Infinity Construction Inc. v. Skyline Executive Acquisitions Inc. et al., 2020 ONSC 77, para 114. With respect to the cost-plus agreement, where a contractor is seeking to recover on a cost-plus basis the evidentiary burden of proving these costs is a heavy one. It is not necessary that the accounts be kept in any particular manner or to a high standard, but well enough to show proof of the contractor’s charges. Once a contractor proves that he has kept proper accounts and is able to show supporting documentation, the onus shifts to the opposing party to adduce evidence to show that the amounts claimed, or the accounts are incorrect or unreliable. Once doubt is cast upon the accounts the onus shifts back to the contractor to satisfy the court that his accounts are accurate and support his claim. If the court is left in doubt, the contractor fails.

42. In this case, the evidence before me is that Defendants have not provided the evidence about the overcharges. This was not provided in productions or in answers to undertaking. The Court is permitted to draw adverse inference on these motions in order to determine the high probability of success: Edey v. Beccati, 2023 ONSC 3447, para 99.

43. The evidence also shows that at times the Defendants are unable to prove the charges.

44. The evidence also shows that at times the Defendants made up the amount of the charges.

45. Another example is that the contract included the following term:

The Builder shall enroll the Dwelling under the Ontario New Home Warranties Plan Act and regulations thereunder and the Purchaser shall be entitled to the benefit of the warranties provided under the terms and conditions of Tarion (the "Warranties"). The cost of enrollment of the Dwelling under Tarion shall form part of the Project Cost.

46. The evidence is undisputed the Defendants did not enroll the Dwelling under the Ontario New Home Warranties Plan Act and regulations thereunder.

47. It is appropriate for the Court to consider the legislative regime and case law relating to the main action as well as the evidence relating to the main action in order to determine whether there is a high probability that the Plaintiff will recover judgement: Hassoun v. Molu, 2018 ONSC 6781, para 20.

48. Accordingly, it seems likely that the Plaintiffs will recover judgment against Jazzar Holdings and Al-Jazzar in the Main Action.

49. In my view, based on the evidence before me on this motion, there is a high probability that the Plaintiffs will recover judgment against Jazzar Holdings and Al-Jazzar in the Main Action on at least some of the grounds above. While there may be an issue of the specific amount owing, or some defences, I am satisfied that this prong of the test is met as there is a high probability that the Plaintiffs will recover some judgment in the Main Action.

The Transfer Was Made with the Intent to Defeat or Delay Creditors

50. Unlike the first branch of the test which requires a higher onus of proof (“high probability”), the second branch of the test merely requires one to lead “evidence to show the existence of a triable issue”: Jennifer Horrocks v. Bruce McConville et al, 2020 ONSC 4645, para 11; Jodi L Feldman Professional Corp v. Foulidis, 2018 ONSC 7766, para 17.

51. The Plaintiffs have introduced sufficient evidence demonstrating that the Transfer of the Property was made with the intent to defeat or delay creditors.

52. The following evidence indicates to me that the transfer was made with the intent to defeat or delay creditors:

a. Though the Property had been purchased for $1,950,000 in August 2022, the Transfer was for nominal consideration of $2.00.
b. The Transferees are residents of Amman, Jordan, with no connection to Ontario.
c. The Transferees are likely Al-Jazzar’s parents, or alternatively, they are likely family or friends of Al-Jazzar.
d. There is no evidence of any legitimate business purpose for the Transfer.

53. All that is necessary to satisfy the second part of the Grefford test is to demonstrate that a triable issue exists that the impugned transaction was carried out with the intent to defeat or delay creditors, including the Plaintiffs: Tibollo v. Robinson, 2023 ONSC 3492 (Div Ct), para 24.

54. In the circumstances, it appears that the Transfer was not made for good consideration or in good faith but rather was intended to divest Jazzar Holdings and Al-Jazzar – who are Defendants in the underlying Action – of a substantial portion or all of their assets in Ontario and/or Canada.

The Balance of Convenience Favours Issuing Certificates of Pending Litigation

55. The Court has a broad discretion when examining the equities between the parties to determine the balance of convenience: Fewson v. Bansavatar et al., 2021 ONSC 6697, para 27; Tibollo v. Robinson, 2023 ONSC 3492 (Div Ct), para 28.

56. The badges of fraud and all of the circumstances identified above weigh heavily in favour of granting certificates of pending litigation.

57. I agree with the Plaintiffs’ submissions that if certificates of pending litigation are not granted, it is likely that the Property will be sold, and it may then be too late for the Plaintiffs to set aside the fraudulent conveyance of the Property and therefore impossible to obtain recovery against the Defendants upon obtaining a judgment in the underlying Action.

58. Though the Defendants may be prejudiced to some extent by the issuance of the requested certificates of pending litigation, given that they would likely impede any sale of the Property, equity stands in favour of the remedy sought by the Plaintiffs: Jiujias v. Lau, 2024 ONSC 3926, para 12.

59. In that regard, the risk of injustice is high if the certificates are not granted, as the Property would likely sell, with the sale proceeds finding their way to Jordan, far out of reach of the Plaintiffs in the context of their meritorious lawsuit.

60. In these circumstances, I find that the balance of convenience favours the granting of a CPL.

Conclusion

61. I am satisfied on the record that leave should be granted to issue certificates of pending litigation with respect to the Property. I have signed the draft order filed electronically.

62. The Plaintiffs shall serve the Defendants with the motion record, this endorsement and the order signed. The Plaintiffs shall also serve those materials on any party registered on title to the Property who may be affected by the certificate of pending litigation.

Date: March 13, 2025
Associate Justice I. Kamal