Court File and Parties

Court File No.: CV-22-00003417-0000 Date: 2025-11-03 Superior Court of Justice - Ontario

Re: Elham Mafi, Plaintiff And: Seyedmohsen Sadati, Defendant

And Re: Seyedmohsen Sadati, Plaintiff by Counterclaim And: Elham Mafi and Afshin Mafi, Defendants by Counterclaim

Before: The Hon. Mr. Justice R.E. Charney

Counsel: Jordan D. Sobel, Counsel for the Plaintiff/Defendant by Counterclaim, Elham Mafi Jesse Watts, Counsel for the Defendant/Plaintiff by Counterclaim, Seyedmohsen Sadati

Heard: October 15, 2025 - Virtually

Endorsement

Motion for Certificate of Pending Litigation

[1] The Plaintiff, Elham Mafi, brings this motion for leave to file a Certificate of Pending Litigation (CPL) against the Defendant's property.

Pleadings

[2] The Plaintiff issued a statement of claim on October 25, 2022. The relief sought includes leave to issue a certificate of pending litigation in respect of a property in Richmond Hill, Ontario (the "Property").

[3] The claim alleges that the Plaintiff executed a partnership agreement with the Defendant, Seyedmohsen Sadati ("Sadati"), on July 12, 2017, and that the agreement created a general partnership in relation to the Property.

[4] The Plaintiff claims that the partnership agreement gave the Plaintiff an undivided 50% ownership interest in the Property and that she was entitled to the benefit of rental income generated from the Property. The partnership agreement could only be dissolved with the unanimous consent of the partners.

[5] It is not contested that the parties signed the partnership agreement or that the Plaintiff paid Sadati a total of $128,873. What is in dispute, however, is whether those funds represented half of the costs necessary to purchase the Property, close on the Property and renovate the Property.

[6] The Plaintiff alleges that Sadati cancelled the tenancies and moved into the Property and, as a result, she received no rental income. Sadati still resides at the Property without paying rent. The Plaintiff claims that these acts are breaches of their partnership agreement.

[7] Sadati filed a Statement of Defence and Counterclaim against the Plaintiff and her husband, Afshin Mafi ("Afshin").

[8] Sadati alleges that Afshin was the listing agent for the Property and suggested that the Mafis and Sadati purchase the Property together. Under this agreement, the Mafis and Sadati would each hold a 50 percent ownership interest in the Property and contribute 50 percent of the funds necessary to close, maintain, repair and renovate the Property. Sadati also alleges that Afshin agreed to share the commission from the sale of the Property with him but breached that agreement. Sadati further alleges that Afshin suggested that the Property be registered in Sadati's name alone to avoid any appearance of a conflict of interest.

[9] Sadati maintains that he alone funded the purchase of the Property for $1,010,000 with a mortgage from ICIC bank for a total of $808,000 and that the closing costs came out of the proceeds of a second mortgage he obtained against his family home. Sadati claims that he used the second mortgage on his family home to fund numerous renovations to the Property and that the Mafis did not contribute any monies to the renovations.

[10] Sadati acknowledges executing a partnership agreement proposed by Afshin after the Mafis made their first financial contribution towards the Property. Sadati alleges that this contribution from the Mafis was not enough to cover the Mafis' share of the costs associated with the purchase, closing, repair and renovation of the Property. Sadati alleges that the Mafis were aware that the Property was going to be sold after the renovations and that Afshin was the listing agent when numerous attempts were made to sell the Property in 2020 and 2021.

[11] The Property did not sell and Sadati alleges that he was required to sell his family home on November 18, 2020. Sadati claims that he moved into the Property in August 2021, because he was no longer able to afford to pay rent and the full carrying costs of the Property. He funded additional renovations to the Property to make it more marketable.

[12] In her Reply to the Defence and Defence to the Counterclaim, the Plaintiff denies that Sadati completed renovations on the Property and alleges that the monies paid by the Mafis actually represented more than half of the closing costs for the purchase of the Property.

[13] The Plaintiff registered a Notice of unregistered interest or estate in the Property under s. 71 of the Land Titles Act, R.S.O. 1990, c. L.5 on July 7, 2021. The Defendant's lawyer wrote to the Director of Land Titles on June 19, 2025 to request that the Notice be removed. On June 27, 2025, the Director of Land Titles advised the Plaintiff's lawyer that the Notice was not authorized by the Act and was to be removed from title effective July 3, 2025, thus precipitating this motion for a CPL.

[14] This motion was to be heard on August 6, 2025, but could not be reached. The parties agreed to a temporary without prejudice order prohibiting Sadati from entering into any agreement to sell or transfer the Property pending the determination of this motion, but permitting the Defendant to refinance the Property with certain limitations.

Test for Granting CPL

[15] A certificate of pending litigation may be issued where a proceeding is commenced in which an interest in the land is in question; s. 103 of Courts of Justice Act, R.S.O. 1990, c. C. 43 ("CJA"); Rule 42 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[16] The applicable principles were summarized by Schabas J. in Marmak Holdings Inc. v. Miletta Maplecrete Holdings Ltd. et al., 2019 ONSC 4630, at para. 14 (citations omitted):

The moving party must demonstrate that there is a triable issue with respect to the moving party's claim to an interest in the Property... The Court must consider all relevant factors between the parties, including whether damages would be a satisfactory remedy, and balance the interests of the parties in exercising its discretion equitably.

[17] See also: 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003, at paras. 20–21; Perruzza v. Spatone, 2010 ONSC 841, at para. 20.

[18] The threshold is whether the Plaintiff has demonstrated a triable issue, not whether the Plaintiff is likely to succeed: Perruzza, at para. 20 (ii). In determining if there is a triable issue, the evidentiary bar is low. The court is not to assess credibility or decide disputed issues of fact and credibility: Karkoulis v. Karkoulis, 2023 ONSC 499, at para. 19.

[19] The triable issue must, however, relate to the Plaintiff's interest in land, not simply a right that would lead to an award of damages: Bobbie Mann v. Marcus Chac-Wai, 2017 ONSC 3416, at para. 5. In other words, an interest in land must be a possible remedy at trial based on the evidentiary record on the motion.

[20] An alternative claim for damages is a relevant factor but is not an absolute bar to the issuance of a CPL: Karkoulis v. Karkoulis, 2023 ONSC 499, at para. 46; Gentles v. Lynch, 2024 ONSC 2656, at para. 47.

[21] A CPL is more likely to be granted in circumstances in which an order for specific performance is a potential remedy: Caroti v. Kegalj, 2019 ONSC 5772, at para. 62; Global West Development Ltd. v. 16380 Jane Street Inc. et al., 2021 ONSC 4284, at paras. 38–39. That said, I do not agree with the Defendant's position that the test for granting a CPL is the same as the test for granting specific performance, and that a CPL is only available if the test for specific performance has been met.

[22] In addition, the Courts have considered principles relating to the timing of a CPL. Where a party has delayed in seeking a CPL, this is a factor that the Court will consider in denying the request for a CPL. See Nanton v. Julien, 2019 ONSC 68, at para. 30 and Wilanmar Holdings Ltd. v. Meredith.

[23] The cases confirm that granting a CPL is an equitable remedy: "[T[he governing test is that the Judge must exercise his discretion in equity and look at all of the relative matters between the parties…": Clock Investments Ltd. v. Hardwood Estates Ltd. et al., 16 O.R. (2d) 671 (Div.Ct.), at para. 10; Perruzza, at para. 20 (v) and cases cited therein; 2235209 Ontario Inc. v. Sedona Lifestyles (Rometown) Inc., 2020 ONSC 4008, at para. 70. See also: Bobbie Mann, at para. 5:

Even if the plaintiff has a potential case for a remedy related to an interest in land the court may still refuse the CPL if it would be unjust to order it. The court must consider the equities of granting this form of interim relief. This is not a mechanical application of a test but an exercise of discretion to achieve a just result.

Analysis

[24] I am satisfied that the Plaintiff has met the threshold requirements of s. 103 and Rule 42.01. The Plaintiff's Statement of Claim seeks a certificate of pending litigation and claims a 50% undivided ownership interest in the land in question.

[25] The Plaintiff has also demonstrated that there is a triable issue with respect to her claim to an interest in the Property. Paragraph 1 of the Partnership Agreement provides: "Both parties hold an undivided 50% interest in the subject property." The subject property is identified as "30 Nottingham Drive, Richmond Hill, Ontario". The existence of the Partnership Agreement easily meets this test. The Defendant did not contest that this test was met.

[26] The Defendant argues that there is an alternate claim for damages in the Statement of Claim. The Plaintiff pleads that the Property was purchased as an investment property to be rented out. There is no suggestion that the Plaintiff ever intended to live at the Property. If the Property is sold, and the Plaintiff is entitled to a share in the net profits of sale, the damages would be easily calculated.

[27] The Plaintiff issued the Statement of Claim in October 2022, and has waited almost 3 years to bring this motion for a CPL. The Plaintiff explains that she did not move sooner because she registered a Notice of unregistered interest in July of 2021, and brought this motion immediately after that instrument was removed from the registry by the Director of Land Titles in July 2025. That is a satisfactory explanation.

[28] In this case, I am satisfied that the partnership agreement and pleadings of both parties clearly evidence that the Plaintiff has a claim to an interest in the Property in dispute. Ownership of the Property is the very subject matter of the claim. The question for the court that hears this action will be whether the Plaintiff's contribution to the purchase price was a violation of the partnership agreement, thus depriving the Plaintiff of any interest in the Property, or whether the Plaintiff is entitled to her 50% undivided interest or some percentage less than that.

[29] The Defendant indicates that he intends to reside in the Property for the foreseeable future. He would be prejudiced if he was unable to refinance the Property and obtain a mortgage at a lower interest rate, but that prejudice appears to have been resolved by the interim order signed by Mathai J. on August 6, 2025, permitting the Defendant to refinance the Property with certain protections for the Plaintiff.

[30] The prejudice to the Plaintiff is the possibility that the Defendant could further encumber or sell the Property and dissipate the equity before the claim to the Property is resolved by the Court.

[31] This action was commenced over 3 years ago. There does not appear to be any factual dispute with respect to the partnership agreement signed by the parties, the price of the Property, or the Plaintiff's financial contribution to the Property. I assume that the Defendant's financial contribution can be readily calculated. The legal issue appears to be the interpretation of the written partnership agreement given the parties' respective financial contributions. This might well be an appropriate case for summary judgment, and I encourage the parties to consider proceeding on that basis to resolve this dispute as quickly and as cost effectively as possible.

[32] Given all of these factors, I find that the equities support granting leave to issue a CPL on title.

Costs

[33] On the issue of costs, I am of the view that costs should be in the cause, as is often the case where a plaintiff is successful on a motion for an interlocutory injunction since there has been no final determination of the rights of the parties, but rather an order to protect the plaintiff's position pending trial: Hao Chen et al. v. Masih Moazen-Safaei, 2025 ONSC 4576, at paras. 6–7; Mondee, Inc. et al. v. Voyzant Inc et al., 2025 ONSC 3133, at paras. 9–11.

[34] In Quizno's Canada Restaurant Corp. v. 1450987 Ontario Corp., at para. 10, Perell J. observed that an order of costs in the cause in interlocutory injunctions "allows the court to have the benefit of hindsight and to avoid the possible injustice of awarding costs to a plaintiff for having succeeded in obtaining an order to protect his or her position pending trial when the outcome of the trial reveals that the plaintiff's position was not worthy of having been protected."

Justice R.E. Charney

Date: November 3, 2025