Citation and Court Information
Motion Heard: 20260603
Superior Court of Justice - Ontario
Re: Fogler Rubinoff LLP, Applicant And: Shohreh Eslami-Manouchehri also known as Shohreh Manoushehri, Alireza Pardazi Moghaddam, Leila Sarie, Zahra Salimi Marand, Mohammad Shams Astaneh Ravazi, Sub-Prime Mortgage Corporation, Amex Bank of Canada, Bank of Montreal and The Toronto Dominion Bank, Respondents
Heard: 3 June 2026
Before: Associate Justice Jolley
Counsel: Giancarlo Mignardi, counsel for the moving party respondent Shohreh Eslami-Manouhehri Courtney Hughes and Pulkit Sachdeva, counsel for the responding party Zahra Salimi Marand Allyson Fox, counsel for the responding party Bank of Montreal Thom Harley, counsel for the responding party Toronto Dominion Bank Miranda Bohns, counsel for the responding party Amex Bank of Canada Subramanyam Narasimhan, in attendance for the responding Mohammad Shams Astaneh Razavi, but not making submissions
Reasons for Decision
A. Background
1Firm Capital Mortgage Fund Inc. held a mortgage over property owned by the respondent Alireza Pardazi Moghaddam (“Alireza”). Alireza defaulted on the mortgage and Firm Capital sold the property on 16 October 2019. Following distribution to the mortgagee and various other creditors, the sum of $215,563.58 remained in trust with its counsel, the applicant Fogler Rubinoff.
2Due to competing claims on the funds, Fogler Rubinoff sought an interpleader order which was granted on 7 January 2021.
3The respondents Toronto Dominion Bank, Bank of Montreal, Amex Bank of Canada and Shohreh Eslami-Manouchehri (“Shohreh”) are execution creditors of Alireza. They seek a division of the interpleaded funds.
4The Accountant of the Superior Court was unable to provide a current statement and was unsure when one could be provided. The best information available is as of 31 March 2026, when the account balance was $236,405.45. If the funds were divided by execution creditor, the percentage entitlements would be as follows:
Shohreh 45.9967% Bank of Montreal 32.0491% The Toronto-Dominion Bank 15.5741%; and Amex Bank of Canada 6.3801% Total 100.0000%
5The respondent Zahra Salimi Marand (“Zahra”) was married to Alireza. She commenced family law proceedings in April 2017. On 17 September 2025, she obtained a family court order granting her judgment against Alireza for spousal and child support in the amount of $387,919. She obtained a writ on 20 April 2026.
6Zahra seeks payment of the interpleaded funds and an order invalidating the writs of the other secured creditor claimants. She also seeks to set aside the default judgment of Shohreh against Alireza. Lastly, she objects to the motion by the judgment creditor Toronto Dominion Bank for an order for leave to issue writs of seizure and sale nunc pro tunc as of 9 April 2025.
B. Zahra motion to set aside Shohreh default judgment against Alireza
7This motion cannot succeed for three reasons.
8First, Zahra does not have standing to bring the motion. If the judgment were to be set aside, it would need to be on motion by the party against whom it was made, Alireza.
9Second, that motion would need to be made in the action in which judgment was granted (Eslami-Manouchehri v Moghaddam, CV-19-00138937), not by way of collateral attack in this proceeding.
10Third, the evidence tendered does not meet the test to set aside a default judgment in any event. The motion was not made promptly. Shohreh deposed that Zahra knew of the claim, and perhaps the judgment, by October 2019. Zahra knew of the affidavit upon which Shohreh relied for judgment and which Zahra now claims is defective by 30 September 2024, but did not bring her motion to set aside the default judgment until January 2026.
11There is no evidence that Alireza did not know about the claim. In July 2019 his lawyer wrote to counsel for Shohreh requesting a copy of the pleading.
12Lastly, there is no draft statement of defence tendered that would indicate that Alireza has a valid defence to Shohreh’s claim. Zahra suggested that I should review the 2019 motion for default judgment tendered by Shohreh to determine if it supported the judgment granted. I have no jurisdiction to conduct such a review. If Alireza wanted to challenge the judgment, he had to either move to set it aside or appeal it. The motion must fail.
C. Zahra motion for payment of the interpleaded funds
13Zahra argues that her September 2025 judgment should outrank all other secured creditors, either because the other creditors’ writs have expired or because the equities favour treating her family law order as retroactive and therefore in priority to the execution creditors.
14The law is clear that the operative date for fixing priorities is the date that the funds were created. Here, that date is 16 January 2020, when the sale of the property closed. At that time, Shohreh, TD, BMO and Amex had execution judgments against Alireza. Zahra did not obtain her order for five more years, on 17 September 2025.
15While this may seem to work some unfairness to Zahra, absent some legislative change to the ordering of priorities set out in the Creditors’ Relief Act, 2010, S.O. 2010, c.16, Sched. 4, that is the law in Ontario.
16Unlike the situation in Rathbone Herman v Rathbone 2000 22321 (ON SC), here it is not contested that Zahra’s support order did not exist at the time of sale. She may have had a claim for an interest in the home or its proceeds, but she had no recognized entitlement until the September 2025 order was made. As the court in M.J.C. Investment Corp. v. Cole 2013 ONSC 6293 (“MJC”) noted at paragraph 17:
[17] The cases of Central Guaranty Trust Co. v. Sudbury (1992), 8 O.R. 3d 561 (Gen. Div.) and National Bank of Canada v. Young, 2002 14518 (ONSC) stand for the proposition that an execution creditor can only participate in a distribution of surplus proceeds if the execution exists by the date of sale. A subsequent execution cannot attach to land no longer owned by the debtor.
17MJC was argued on very similar facts to the case at bar and is, in my view, dispositive of Zahra’s motion. MJC involved an interpleader of surplus sale proceeds. The sale closed on 30 May 2013. Mr. Martin obtained a child support order against his spouse, the respondent Ms. Cole, five days after closing, on 5 June 2013. He argued that his order had priority over the judgment creditors. The court held that only creditors whose executions existed by the date of the sale could participate in the distribution of the interpleaded funds. The support order could not receive priority under the Creditors’ Relief Act, 2010 because it did not exist when the sale occurred. As the MJC court concluded at paragraph 39: “I determine that a support order made after the closing date of the sale can never be given priority afforded by the Creditors’ Relief Act, regardless of its provisions.”
18Zahra could not direct me to any case where the court authorized family law orders obtained after the creation of the fund to displace civil judgment creditors, such as these that existed for many years before she obtained her family order and, importantly, existed as of the date of the sale. Her support order did not take effect until it was made and could not operate retroactively.
19The court in MJC also addressed the equities argument raised by Zahra before me. The court held:
[38] … Regrettably, I am led to the conclusion that the law requires that I rule that Mr. Martin's support order cannot have priority, as it did not exist when the sale occurred. Although the vesting order itself was characterized in Lynch as "essentially an equitable remedy designed to work as an enforcement mechanism", the application before me involves an interpretation of statute and case law that cannot involve weighing the equities involved, which surely favour Mr. Martin and his son.
20If there were concerns about dissipation of assets, it may have been open to one of the family law judges to make an order securing the sale proceeds of the home for future child support when Zahra commenced her family law proceedings in April 2017. That cannot now be done retroactively through a re-ordering of the rights of execution creditors under the Creditors’ Relief Act, 2010.
21With respect to Zahra’s request to invalidate the writs of the judgment creditors, there was no reason advanced to do so and I decline to make such an order.
22Zahra’s cross motion is dismissed.
D. TD motion to renew its writ of execution nunc pro tunc
23All other judgment creditors do not oppose the renewal of TD’s writ. It obtained judgment in October 2018 and had issued writs in Toronto and Newmarket that same month. Through inadvertence, its writs expired in October 2024, extended to 9 April 2025 with the COVID-related court extensions.
24TD had never abandoned its enforcement rights as a creditor and has participated throughout these interpleader proceedings since 2021 with the intention of pursuing its judgment.
25Zahra objects on the basis of equity. She argues, as she does on the main motion, that she has been left in dire circumstances by her ex husband Alireza, and has a support order from 2025 which Alireza has thwarted at every turn. She proposes that fairness dictate that she and her son be given a priority as they have been pursuing Alireza now for almost ten years.
26While Zahra’s circumstances are tragic, they do not support any legal argument for refusing the renewal of TD’s writ.
27TD’s motion is granted.
E. Conclusion
28The court and all the secured creditors recognize how difficult Zahra’s situation is. But this cannot be used to upset a priorities system set out in the Creditors’ Relief Act, 2010. Creditors and the lending system are also entitled to the certainty that a known and orderly system of judgment recognition and payment provides. She is not without her rights to otherwise enforce the family law order.
29Zahra’s cross motion is dismissed. TD’s motion is granted. Shohreh’s motion is granted. The proceeds held by the Accountant shall be divided as set out below, as consented to by the execution creditors.
F. Costs
30Shohreh seeks her costs on a substantial indemnity basis in the amount of $25,000. She argues that the law in this area is settled and Zahra’s argument only served to delay a straightforward distribution. I do not accept the delay argument. The interpleader order was made in January 2021 and no creditor took any steps to seek a distribution of the interpleaded funds until January 2026, when Zahra raised her issues.
31Considering the fairness to all parties and looking to craft a fair and just resolution for all, I decline to award costs against Zahra.
32However, it is fair that Shohreh be reimbursed for those costs, as she carried the work to respond to Zahra’s allegation on behalf of all the execution creditors.
33I propose that Shohreh receive $25,000 from the proceeds held by the Accountant. This will share those costs among all the parties that benefited.
34After payment out of those costs, the proceeds held by the Accountant shall be divided as follows, as consented to by the execution creditors:
(a) Shohreh 45.9967% (b) Bank of Montreal 32.0491% (c) The Toronto-Dominion Bank 15.5741%; and (d) Amex Bank of Canada 6.3801% Total 100.0000%
35I recognize that the parties did not have the opportunity to address this proposal on costs. If there is an objection, they may email my assistant trial coordinator, Ms. Meditskos at Christine.Meditskos@ontario.ca within 30 days of receipt of this decision to request a case conference on this issue.
Associate Justice Jolley
Date: 5 June 2026