Court File and Parties

Court File No.: FS-22-00029055-0000 Date: 2025-09-29 Superior Court of Justice - Ontario

Re: Shabnam Shokoufimoghiman, Applicant

And: Amir Ebrahim Bozorgi / Payam Bozorgi

Before: Mathen J.

Counsel:

• Ash Mazinani, for the Applicant
• Chelsea Hooper, for the Respondent Amir Bozorgi
• Herschel Fogelman, for the Respondent Payam Bozorgi

Heard: September 18, 2025

Decision on Long Motion

Introduction

[1] This is a motion to vary an interim order holding funds in trust, and cross-motions for disclosure and other relief.

[2] In 2022, the Applicant, Shabnam, started a family law claim against her husband, Amir. In 2023, Shabnam added as a party Amir's brother Payam.

[3] In November 2023, Justice Kraft ordered Shabnam to pay $125,000 as security for her husband Amir's property claims, and $25,000 as security for costs for her claim against her brother-in-law Payam. Shabnam wants those funds released.

[4] Amir argues that the funds should not be released. In his cross-motion, he requests disclosure and an accounting.

[5] Payam objects to the release on the basis that Shabnam is in breach of court orders. He asks for the funds to be transferred to a different law firm.

[6] At the motion, all parties agreed that, subject to my decision on whether to release the funds, anything being held in trust could be transferred to Payam's lawyer.

[7] This matter has a long history. There have been many regular and long motions, conferences, and TBST appearances. There is no trial date.

Issues and Brief Conclusion

[8] This long motion raises the following issues:

a. Is Shabnam in breach of prior court orders and, thus, disentitled to relief?

b. If Shabnam is not in breach, is she entitled to the release of funds?

c. Is Amir entitled to the disclosure and other relief that he seeks?

[9] I dismiss Shabnam's claim, because I find that Shabnam has not fully complied with Justice Kraft's and Justice Pinto's orders. In the alternative, I would dismiss her claims because I am not persuaded that Shabnam has satisfied the test to vary an interim order pre-trial. Amir's disclosure requests are granted. His request for compliance with the prior orders is included but not exactly as he worded it. Amir and Payam are entitled to costs.

Background

[10] Shabnam and Amir married in Iran in 2014 and settled in Canada in 2016. The couple separated for a final time in March 2022.

[11] In 2009, prior to the marriage, Shabnam established an Iranian healthcare products company. Shabnam says that in 2015 she incorporated a Canadian branch called "Rayan Farmed". Shabnam transferred ownership of Rayan Farmed to Amir in 2017. Amir renamed the company "Appliedtech LTD".

[12] In January 2020, well before the parties separated for a final time, Amir sold Appliedtech to his brother, Payam.

[13] Shabnam says she did not discover the sale until after she filed her family law claim against Amir in March 2022. She added Payam to the claim in 2023, on the basis that Payam was holding Appliedtech in trust for Amir which should count towards equalization. Shabnam later argued that the Appliedtech transfer was a fraudulent conveyance intended to lessen Amir's equalization payment to her.

[14] Shabnam and Amir bifurcated their parenting and property claims. A 10-day parenting trial was vacated after Shabnam and Amir settled related issues on May 2, 2024.

[15] On the date of separation, Shabnam and Amir co-owned an investment property located at 1011-75 The Donway West, Toronto. It sold in May 2023 for $617,689.15. The parties' real estate solicitor was Vakili Law.

[16] Shabnam and Amir already had a consent agreement for the Donway sale. On October 10, 2022, Justice Pinto issued an order whereby:

a. Shabnam and Amir were entitled to an initial disbursement of $55,000;

b. Shabnam's disbursement would be reduced by $2,974 for post-separation expenses; and

c. The remaining net balance of proceeds would be held in trust.[1]

[17] In the fall of 2023, Shabnam brought a motion before Justice Kraft to vary the Pinto order and release Shabnam's remaining share of Donway. Shabnam argued that she needed funds to close on a pre-construction condominium located at 1000 Elgin Avenue East, Toronto; and for her litigation.

[18] At the time, Shabnam claimed that Elgin was scheduled to close on December 19, 2023.

[19] Amir objected to any release. In the alternative, he argued that Shabnam needed, at most, $68,000 for the Elgin condo against which he also sought a preservation order. Payam brought a cross-motion for security for costs against Shabnam in the amount of $90,000.

[20] Justice Kraft released her endorsement on November 1, 2023. She found that there was $225,000 remaining from the sale of Donway.

[21] In her endorsement, Justice Kraft:

a. rejected Shabnam's request to receive all her remaining Donway proceeds;

b. found it more likely that Shabnam would owe an equalization payment to Amir than the other way around;

c. decided that Shabnam should receive sufficient funds to close on the Elgin condo;

d. ordered Shabnam to list Elgin for sale (something Shabnam had proposed); and

e. determined that Payam should have some security for costs, though not $90,000.

[22] Consequently, Justice Kraft ordered that:

a. Within five days of the release of this Endorsement, Shabnam shall provide the details and calculations of the adjustments and transaction fees estimated by the real estate lawyer who will be representing her in connection with the Elgin Condo purchase. Upon being provided with this information, the total sum of the adjustments and transaction fees plus $67,840, from Shabnam's share of the Donway Property net sale proceeds shall be released to Shabnam to enable her to close the Elgin Condo purchase. The balance of the Donway Property net sale proceeds shall remain held in trust pending further court order or agreement of the parties.

b. Upon the closing of the Elgin Condo purchase, Shabnam shall have thirty days within which to list the Elgin Condo for sale. Upon the closing of the sale of the Elgin Condo to an arm's length third-party, the sum of $125,000 of the net sale proceeds shall be held in trust by the real estate lawyer as security for Amir's property claims under Part I of the Family Law Act, and the further sum of $25,000 shall be held in trust by the real estate lawyer as security for costs for Payam's claims, making a total of $150,000 to be held in trust pending further court order or agreement of the parties. Shabnam shall be at liberty to receive the balance of any remaining net proceeds from the sale of the Elgin Condo. [emphasis added]

[23] As it turned out, the Elgin closing was not final, but interim. And, that interim closing did not occur until March 12, 2024. A few days before the interim closing, Amir consented to the release of $68,122.50, as per the Kraft order.

[24] Following a case conference on March 15, 2024, Justice Kraft wrote that: "The applicant acknowledged to the court that she advised the court that there was a final closing of the Elgin condo in December 2023 as opposed to explaining that it was actually an interim closing." Justice Kraft added that the court "was advised today that the final closing of the Elgin condo may not now happen for another 6-12 months" – information "that was not before the court" when Justice Kraft made her November order for security for costs. Justice Kraft further noted that the interim closing had not required all of the funds released to Shabnam.

[25] Justice Kraft then issued her second order in this matter, on consent, which included the following terms:

a. The applicant shall take immediate steps to list the Elgin condo for sale by assignment. The applicant shall provide the respondent with updates every 30 days advising as to what offers have been made and/or accepted and the terms of such offers until the Elgin condo is sold.

b. The applicant shall immediately return the funds in the sum of $34,127.50 to the real estate lawyer holding the Donway property sale proceeds, Mr. Vakili to be held in trust. This is without prejudice to the respondent arguing that the $1,700 plus HST relating to the cost of extending the interim closing date by the applicant is not his responsibility.

c. The applicant shall direct Mr. Vakili to hold $25,000 as security for costs for her claims against the added respondent immediately.

d. [Justice Kraft's] judgment dated November 1, 2023, is without prejudice to either party's right to bring a motion seeking the release of funds being held in trust from the sale of the Donway property.

e. Until the $25,000 is posted as security for the applicant's claims against the added respondent, the applicant shall not be permitted to take any further steps in this proceeding, pursuant to r. 24(15) of the Family Law Rules.

[26] At a long motion argued in December 2024, Payam sought summary judgment against Shabnam. Payam argued that there was no genuine issue for trial on either the fraudulent conveyance, or Shabnam's trust claim against him on Amir's behalf. In the alternative, Payam asked to be removed as a party. On March 13, 2025, I granted Payam's motion in part. I dismissed Shabnam's trust claim against him for lack of standing. However, I did not grant summary judgment against Shabnam's fraudulent conveyance claim or remove Payam as a party.

[27] Elgin was sold July 8, 2024, on assignment, for $705,000. For that sale, Shabnam used a lawyer named Gary Shapiro.

Analysis

[28] My findings on a balance of probabilities are contained in the following analysis.

One: Is Shabnam in breach of prior court orders and, thus, disentitled to relief?

[29] Under Rule 1.8(b) of the Family Law Rules, the court can dismiss a claim "if a person fails to obey an order in a case or a related case": O.Reg. 114/99.

[30] The parties' written and oral submissions reveal stark differences in how to interpret Justice Pinto's order of October 2022, and Justice Kraft's orders of November 2023 and March 2024. Shabnam argues that Justice Kraft ordered that a total of $150,000 be held in trust. Amir and Payam argue that the amount ordered to be held is far greater.

[31] Having considered the evidence and the arguments, I cannot accept Shabnam's position. Shabnam's argument does not account for the prior Pinto order and does not respect the context and wording of the two Kraft orders.

[32] For convenience, I will repeat some of the facts recounted earlier:

a. Justice Kraft's November 2023 endorsement considered Shabnam's request to release all of the funds owing to her from the sale of the Donway property. Applying the figures supplied to her at that time, Justice Kraft assumed that the amount owing to Shabnam from the remaining Donway proceeds was $109,500.

b. Justice Kraft did not grant Shabnam's request in full. Instead, Justice Kraft ordered as much money be released as required to close on the Elgin condo. Thus, paragraph 85(a) of the November 2023 endorsement directs that "the total sum of the adjustments and transaction fees plus $67,840, from Shabnam's share of the Donway Property net sale proceeds shall be released to Shabnam to enable her to close the Elgin Condo purchase. The balance of the Donway Property net sale proceeds shall remain held in trust pending further court order or agreement of the parties." [emphasis added]

c. Justice Kraft further ordered that "upon the closing of the Elgin Condo purchase", Shabnam would pay the following amounts into trust: $125,000 as security for Amir's property claims under Part I of the Family Law Act, and $25,000 as security for costs against Payam's claim. In her analysis of the "balance of convenience" for releasing any funds from the Donway proceeds, Justice Kraft considered the risk that Shabnam would default on the Elgin Condo purchase. Justice Kraft assumed that the Elgin Condo would close on December 19, 2023.

d. The next stage in the proceedings was the March 2024 case conference. After Justice Kraft learned that the Elgin closing was interim, not final, she ordered Shabnam to immediately repay $34,127.50 "to the real estate lawyer [Vakili Law] holding the Donway property sale proceeds". Justice Kraft further ordered Shabnam to immediately direct Vakili Law to hold $25,000 as security for costs against Payam.

e. I accept on a balance of probabilities that Shabnam did return $33,127.50 to Vakili Law.

f. There is no dispute that the total proceeds currently held by Vakili Law are $268,478.79. There is no evidence of funds being held in trust at any other law firm or by any other lawyer.

[33] Amir says that, because Justice Kraft never released all of Shabnam's share of the Donway proceeds, there should be more money being held in trust. Relying on slightly different figures than Justice Kraft, Amir calculates that Shabnam's remaining proceeds from Donway should have been $83,488.29. Added to the $117,483.29 that Amir says is his share of Donway, and the $150,000 required to be held in trust for Amir and Payam, the total amount held in trust should be $351,971.54.

[34] Shabnam's position is:

a. Justice Kraft ordered that "a total of $150,000 be held in trust from the net proceeds of sale of both properties." [emphasis in original]

b. Prior to Payam retaining new counsel in April 2025, "none of the Parties in this litigation, or their counsel, interpreted Justice Kraft's order as requiring anything other than a total of $150,000 of Shabnam's money be held in trust."

c. The respondents' position that Justice Kraft ordered that $150,000 be held in trust from the sale of Elgin alone is "nonsensical" because the net proceeds of sale of Elgin Shabnam were only $69,249.95.

[35] Although she does not expressly say so, Shabnam thinks that the proceeds of the Donway and Elgin transactions can be treated as one. That is consistent with the actions of Vakili Law, which did not maintain separate trust ledgers for each property. Vakili Law says that is because it did not act for Shabnam on the Elgin sale – as noted above, Gary Shapiro did.

[36] Payam's position is, inter alia:

a. Vakili Law is not holding the correct amount of money in their trust fund pursuant to the prior court orders.

b. Vakili Law has comingled the proceeds of sale of Donway and Elgin, making it difficult to determine how the ledgers have been created.

c. Justice Kraft ordered that Shabnam would not be entitled to take further steps until Shabnam ensured that $25,000 was held in trust for Payam. The comingling of funds makes it difficult to determine whether that happened.

d. Shabnam's argument makes it clear that she is in breach of either the Kraft order or the Pinto order. Given the amount of funds being held in trust, Shabnam cannot be in compliance with both.

[37] For the following reasons, I find on a balance of probabilities that Shabnam has not fully complied with prior court orders about Donway and Elgin.

[38] First, Justice Pinto's order from October 2022 remains in effect. Under that order, the remaining Donway proceeds of sale must be held in trust. It is a consent order, and Amir has not agreed to change it.

[39] According to Justice Kraft, in the fall of 2023 Shabnam had $109,500 owing to her from Donway. Justice Kraft declined Shabnam's request to receive all of that money, releasing only $68,122.50 for Elgin. That should have left $41,377.50 in trust. Four months later, Justice Kraft ordered Shabnam to return $33,127.50. That means that, separate from Amir's share, there should be at least $74,505 remaining in trust from Donway. (Amir and Payam say that there should be a higher amount - $83,488.29. For the purpose of this motion, I will rely on Justice Kraft's calculations.)

[40] Shabnam insists that she needs to hold only $150,000 in trust. She does not address what, if anything, she is still required to hold in trust under the Pinto Order. None of Shabnam's submissions specify what should be left of the original proceeds from Donway, separate and apart from the disbursements Justice Kraft permitted to enable Shabnam to close on Elgin.

[41] Second, Shabnam does not adequately address how much money she was required to pay into trust following the Elgin sale:

a. Justice Kraft's November 2023 order states that "upon the closing" of Elgin, Shabnam would pay a total of $150,000 into trust: $125,000 for Amir and $25,000 for Payam.

b. Although no party appears to have addressed this, Justice Kraft's March 2024 supersedes her prior order about Payam, since his $25,000 security was to be held in trust immediately rather than after the Elgin sale.

c. Justice Kraft's March 2024 order does not negate her November 2023 order that Shabnam pay $125,000 into security against Amir's property claims from the Elgin closing. Indeed, the March order states that the November order "is without prejudice to either party's right to seek the release of funds being held in trust from the sale of the Donway property." Justice Kraft must have assumed that some amount owing to Shabnam – unrelated to the security order for $125,000 to Amir – remained in trust. Justice Kraft also must have assumed that Shabnam would be contributing $125,000 from the sale of Elgin. Otherwise, the March 2024 order would have undone Justice Kraft's original order that security for Amir be paid "upon the closing of the Elgin purchase". Given that the March 2024 order was made on consent, it is implausible that Amir would have agreed to such a result.

d. Therefore, a fair reading of the March 2024 Kraft order is that Shabnam was still obliged to pay $125,000 into trust for Amir from the Elgin proceeds of sale.

[42] Shabnam does not view the Kraft orders as requiring her to deposit a specific amount into trust from the sale of Elgin. In particular, Shabnam argues that it is "nonsensical" to think that she was required to contribute anything even approaching $150,000, because the net proceeds of sale from Elgin turned out to be only $69,295.95.

[43] The problem with Shabnam's argument is that, at paragraph 24 of the November 2023 endorsement Justice Kraft says that, at the motion, Shabnam represented having equity in Elgin of at least $200,000 and as much as $330,000.

[44] It appears that, on this motion, Shabnam is citing a decrease in the value of Elgin (if that is in fact what occurred) to justify her depositing into trust almost half of what Justice Kraft ordered her to. If that is indeed Shabnam's position, then once Shabnam knew that the actual proceeds of Elgin would be lower than what she initially told Justice Kraft, Shabnam should have realized that she would not be able to comply with the prior orders and sought directions. I do not accept Shabnam's argument that Amir and Payam have always known exactly what was happening with the funds and cannot complain now. I am satisfied that Amir and Payam have had trouble obtaining a clear account of the Elgin sale, or other timely information, such as trust ledgers, which would have alerted them to potential issues like the fact that the Donway and Elgin proceeds had been comingled.

[45] Therefore, I find that, subtracting Amir's own share of Donway, there should be more than $150,000 remaining in trust with Vakili Law. The combination of the Pinto and Kraft orders means that (a) at least $74,505 originally owing to Shabnam from the Donway proceeds should have been held in trust and (b) Shabnam should have paid at least $125,000 into trust from the sale of Elgin. In any event, Shabnam's position that exactly $150,000 is being held in trust for her now means that there is a deficit which she has not adequately explained.

[46] Furthermore, I agree with Payam that it is difficult to ascertain how his $25,000 security is being held.

[47] Accordingly, relying on the authority of Rule 1.8(b), I find that Shabnam's request to receive $150,000 must be dismissed.

[48] Amir has requested an order that, within ten days, Shabnam must comply with the Orders of Justice Kraft dated November 1, 2023, and March 15, 2024, including the repayment and trust requirements set out therein. I will grant an order that within twenty-one days Shabnam must show, in a manner consistent with these reasons, how she has complied with the Orders of Justice Pinto dated October 20, 2022; and Justice Kraft dated November 1, 2023, and March 15, 2024. If Shabnam does not do that, either respondent has leave to bring a short motion for further appropriate relief under Rule 1(8).

Issue Two: If Shabnam is not in breach, is she entitled to the release of funds?

[49] Given my finding on the first issue, it is not necessary to answer this second question. For completeness I will address it.

[50] The first step is to decide what standard ought to be applied to release the funds, and in particular whether Shabnam must establish a material change in circumstances. In paragraph 7(d) of Justice Kraft's March 2024 order, Justice Kraft states that her November 2023 order is without prejudice to either party's right to seek a release of the Donway funds. Relying on that paragraph, Shabnam argues that she is not required to show a material change to release the funds held in trust. That is incorrect, because it relies on Shabnam's mistaken position that the Donway and Elgin proceeds can be treated as one. I have already explained why they cannot. The Pinto and Kraft orders are separate. It is inappropriate to treat an order relating to Donway, necessarily, as an order relating to Elgin.

[51] Therefore, the second step is whether Shabnam has established on a balance of probabilities the necessary grounds to vary an interim order pre-trial.

[52] I rely on D.N. v. A.N., 2024 ONSC 3330, which sets forth the following framework:

a. A strong prima facie case that there has been a material change in circumstances since the time of the order in question;

b. A clear case of hardship;

c. A situation of urgency; and

d. The moving party comes to court with "clean hands".

[53] Shabnam is not required to prove all of the above elements. However, I find that she is required to show, at least, that one of the first three elements applies. In addition, if she has not come to court with clean hands, I am entitled to exercise my discretion to refuse to change the order.

[54] As I will explain, Shabnam has not shown that any of the first three elements exist in this case.

Material Change in Circumstances

[55] Determining whether there has been a material change rests, in part, on why Justice Kraft made the two orders for security in November 2023.

[56] First, Justice Kraft ordered that $125,000 be held in trust for Amir pursuant to section 12 of the Family Law Act because she found it more likely that Shabnam would owe Amir an equalization payment than he would owe her.

[57] Second, with respect to Payam, Justice Kraft stated:

While I do not find, on the record before me, that I can reasonably say the claims against Payam are a nuisance and waste, I do believe naming Payam as a party without setting out the elements of the trust claim being made is not in line with r. 2(3) because it does not ensure that the procedure is fair to all parties, it does not save expense and time, and it simply does not promote the primary objective of the FLRs, namely, to deal with cases justly. Accordingly, in my judicial gatekeeping role, and my mandate to enable the court to deal with cases justly, I find that Shabnam ought to preserve the sum of $25,000 from the Elgin Condo proceeds of sale as security for Payam's claims, pursuant to s.12 of the Family Law Act.

Kraft J. November 2023 order para. 82

[58] At that time, Justice Kraft noted, Payam had not yet provided full disclosure to Shabnam. Shabnam says subsequent disclosure she received makes it clear that she will be owed a large equalization payment once Appliedtech is considered. Had that disclosure been known in November 2023, she says, it would have changed Justice Kraft's conclusion about whether the orders for security were required.

[59] It is true that Shabnam received additional disclosure after November 2023. The question is what effect that disclosure would have had on Justice Kraft's order.

[60] At paragraph 30 of her July 2025 affidavit, Shabnam offers a bulleted list of 16 facts she says would have persuaded Justice Kraft to rule differently.

[61] I am not persuaded that Shabnam's list establishes on a balance of probabilities a material change that would have produced a different order. I find that a number of points on Shabnam's list factors are misleading, inaccurate or unclear. For example:

a. Shabnam argues at paragraph 30(g) that there is no proof that Payam ever paid Amir $35,000 for Appliedtech; and at paragraph 30(l) that Appliedtech was worth much more than $35,000. Justice Kraft was aware of the disputes over the amount for which Appliedtech sold and its actual value (see paragraphs 48-49 of the November 2023 endorsement). In addition, both Amir and Payam have since provided sworn affidavits replying to these allegations. Therefore, the claims remain disputed, and I am not persuaded on a balance of probabilities that this information is a material change.

b. At paragraph 30(c), Shabnam says that, during questioning in 2024, Payam deposed that he has never received any money or any benefit from Appliedtech. Shabnam does not explain how this sworn statement would have changed Justice Kraft's analysis in November 2023. Even if Justice Kraft had found such a statement to denote a lack of credibility or reliability on Payam's part, it is not clear how that would have led her to make a different order.

c. Shabnam says that Payam has a "history of dishonesty". At paragraph 30(j) she refers to a lawsuit against Payam by a former U.S. employer for fraud, and that it "appears" that Payam had to pay a settlement of $30,000. In the summary judgment motion argued before me in December 2024, Shabnam also referred to this incident. On that motion, Payam responded with clarifying information including the fact that a U.S. District Court dismissed the claim against him, with prejudice. I find that Shabnam's continued and incomplete reference to this past, unrelated event misleading.

d. With respect to the security for Amir's property claim, I do not find any of Shabnam's alleged new facts sufficiently dispositive to establish a material change of circumstances. Justice Kraft found that Shabnam liked owed Amir an equalization payment. All of the so-called new facts suggest that Amir was benefitting in some way from Appliedtech. However, it remains unclear what impact this would have on equalization. This is, in part, because Shabnam has not produced a valuation of Appliedtech on the date of separation. So far only Payam has produced a valuation, and it shows that the company's en bloc fair market valuation in January 2020 was $40,000.

[62] In addition to the fact that Shabnam's 16-point list does not establish a material change, there remain questions about Shabnam's claim against Payam. In November 2023, Justice Kraft exercised what she called a "gatekeeping function" to require security for costs because she found that, when Shabnam added Payam as a party, Shabnam did not set out the elements of the trust claim.

[63] During the within motion, Payam's counsel said that he remains uncertain about the claim being advanced. On June 6, 2025, he wrote the following to Shabnam's counsel after receiving Shabnam's amended statement of claim:

Finally with regard to the substantive amendment at paragraph 37, I need further clarity on the exact relief sought so that I may respond. To the extent that you are seeking that the corporate entity be the property of Amir Bozorgi, that would imply that Amir Bozorgi owns the company both at the date of separation, March 2022, and currently. Alternatively and as alluded to in that section, it appears that you are seeking that the value of the company as at the date of separation be included in Amir's calculation of NFP. Those are two different outcomes – one that crystalizes value on a certain date and attributes it back to Amir, and the other that effectively changes ownership of the asset. The difference materially changes how my client has to plead his case. I do not think you can merge the two remedies into a single claim. Because this is not a claim by one of the brothers, I have to think that the actual relief sought by your client is simply relating to value, and not ownership per se?

[64] On June 12, 2025, Shabnam's counsel advised that they did not intend to make any changes to her pleadings and offered no additional response to Payam's counsel's request for clarity. During the hearing of this motion, Shabnam appeared to clarify that she was seeking relief related to value. Given all the circumstances, including Justice Kraft's expressed concerns about Shabnam's claim against Payam, I find that Shabnam should have been more responsive.

[65] For clarity, I do not find that my decision on the summary judgment motion is a material change. Justice Kraft had already determined that she could not say that Shabnam's claim was a nuisance. Therefore, the fact that Payam did not entirely succeed in his motion does not imply that Justice Kraft would have ordered anything different.

[66] In summary, I am not persuaded that there has been a material change in circumstances such that Justice Kraft would have made a different order in November 2023.

Hardship

[67] Shabnam did not produce an updated Financial Statement. I am not prepared to make any findings about potential hardship she might face.

Urgency

[68] Shabnam says she urgently needs funds to pay her legal fees and obtain a business valuation for Appliedtech. Justice Kraft considered and declined Shabnam's request for funds for legal fees. I do not have sufficient information about current legal fees to make a finding of urgency on that ground. Nor has Shabnam explained why she needs to perform a second valuation of Appliedtech. Nothing in the record indicates specific concerns with the valuation that Payam obtained. I am therefore not persuaded that there is urgency on that ground either.

[69] I add that the parties have not yet had a Trial Management Conference, and no trial date has been set. While there have been discussions about bifurcating the trial, there is no order or agreement as such.

[70] Therefore, I do not find that there is an urgent need to release the funds.

Clean Hands

[71] Under the clean hands doctrine, a court may refuse to grant equitable relief to a person "who has engaged in some form of discreditable conduct, thereby rendering it unjust that the order sought be made": McNutt v. McNutt, 2020 ONSC 6800 at para. 35.

[72] Given that I have not found any of the previous three factors to be established, I find it unnecessary to decide whether Shabnam has come to court with clean hands.

Conclusion

[73] In summary, even if I was persuaded that Shabnam was entitled to argue for a variation to the Kraft order that she hold $150,000 in security, I am not persuaded that Shabnam has satisfied the test for varying an interim order pre-trial.

[74] Therefore, Shabnam's claim is dismissed. Since the money will continue to be held in trust, the funds will be moved out of Vakili Law to the law office of Payam's counsel, Mr. Fogelman. Shabnam and Amir shall ensure that reasonable legal fees are paid to Vakili Law, without prejudice to the right of each party to seek a future credit for that amount from each other.

Issue Three: Is Amir entitled to the disclosure that he seeks?

[75] I have already found a lack of clarity around the funds currently being held in trust. Therefore, I find that Amir is entitled to the following order:

That Shabnam be ordered to provide, within ten (10) days, full financial disclosure and an accounting of the proceeds of sale of the Elgin Condo, including but not limited to:

i. all trust ledgers relating to the sale;

ii. all reporting letters from counsel and/or the brokerage;

iii. all records confirming the receipt and disbursement of funds; and

iv. any other documents necessary to establish the disposition of the proceeds.

Costs

[76] Amir and Payam prevailed on this motion and are entitled to costs. Amir's total costs are $15,683.27. Payam's total costs are $20,224.17. Shabnam's total costs are $29,170.95.

[77] Shabnam's materials were filed late. She served a Form 14A Affidavit and a factum the day before the motion. Shabnam said she was waiting for a response from Vakili Law which did not arrive until the week of the motion. It is not clear why delays from Vakili Law affected Shabnam's ability to file a factum. The factum should have been filed first and not formed part of her reply.

[78] At the motion, Amir said he would not seek an adjournment but asked the court to consider the late materials in any costs award.

[79] In reviewing the bills, I find that both Payam's and Shabnam's respective costs are high. The motion lasted for a half-day, and the matters were not novel or complex. Many of the materials had already been prepared, and a number of arguments on all sides were made in prior proceedings.

[80] However, I must also note that Shabnam framed numerous facts in this case in a misleading manner. For example:

a. Shabnam mischaracterizes Payam's summary judgment motion. She says that "Justice Mathen denied Payam's summary judgment motion (July 11 affidavit, paragraph 4); "Justice Mathen dismissed Payam's summary judgment motion (July 11 affidavit, paragraph 29); and "Payam was unsuccessful in his summary judgment motion to have all claims dismissed" (Factum, paragraph 4). These statements are not accurate. Summary judgment was granted in part – Shabnam's trust claim against Payam on Amir's behalf was dismissed.

b. Shabnam did not mention Justice Kraft's March 2024 order until her materials filed on the eve of this motion. The March order contains the important information about the actual closing of Elgin. Shabnam says she did not mention it in her July affidavit because she faced a 12-page limit. That excuse is not convincing. Justice Kraft's November 2023 motion cannot be analyzed separate from the March 2024 motion and the intervening events.

c. Shabnam misstates part of the March 2024 order. Shabnam says that the order allowed either party to seek a release of the funds currently held in trust without having to establish a material change of circumstances. But Justice Kraft only made that order with respect to the Donway proceeds of sale. When pressed on this, Shabnam's counsel simply stated that he did not read the provision that way.

d. As explained earlier in these reasons, Shabnam continues to mischaracterize the prior claim against Payam in the United States.

[81] Viewed in isolation, these could be simple errors. Taken together, they point to a pattern that posed a risk of misleading the court. It so happened that I have some familiarity with the file. A judge encountering the case for the first time should not be expected to comb through materials to discern what is and what is not accurate in a party's pleadings. Additionally, litigating in this manner increases overall costs, since opposing counsel must spend time explaining to the court why statements cannot be taken at face value.

[82] In the circumstances, I order Shabnam to pay all of Amir's costs, and to pay Payam's costs fixed at Amir's total costs.

Order

[83] In conclusion, I make the following order:

a. Shabnam's motion is dismissed.

b. Amir's motion is granted in part:

i. Within ten days, Shabnam shall provide full financial disclosure and an accounting of the proceeds of sale of the Elgin Condo, including but not limited to:

1. all trust ledgers relating to the sale;

2. all reporting letters from counsel and/or the brokerage;

3. all records confirming the receipt and disbursement of funds; and

4. any other documents necessary to establish the disposition of the proceeds.

ii. Within twenty-one days, Shabnam shall show, in a manner consistent with these reasons, how she has complied with the Orders of Justice Pinto dated October 20, 2022; and Justice Kraft dated November 1, 2023, and March 15, 2024. If Shabnam fails to do that, either respondent has leave to bring a short motion for appropriate relief under Rule 1(8).

c. As soon as practicable, the funds currently held in trust for the parties by Vakili Law shall be transferred to Fogelman Law Professional Corporation to be held in trust. Shabnam and Amir shall cooperate to ensure that Vakili Law's reasonable legal fees are paid, without prejudice to either of them seeking a credit for those fees from each other.

d. Once the funds have been transferred from Vakili Law to Fogelman Law Professional Corporation, the sum of $25,000 shall be held in a clearly demarked trust account representing the Applicant's security for costs against the added respondent Payam Bozorgi for so long as the added respondent remains a party to the proceedings.

e. Within 60 days, the Applicant Shabnam Shokoufimoghiman shall pay costs of this motion as follows:

i. To Amir Bozorgi, $15,683.27 inclusive of disbursements and HST; and

ii. To Payam Bozorgi, $15,683.27 inclusive of disbursements and HST.

Mathen J.

Date: September 29, 2025

[1] At the time of her November 2023 endorsement, Justice Kraft calculated that Shabnam's remaining share was $109,500 and Amir's was $115,500.