Executive Summary: Key Legal and Evidentiary Issues

• Dispute centres on an alleged misappropriation of about $700,000 from the plaintiffs’ reserve funds by Mr. El-Riffaey to prop up his foreign exchange business.
• The court manages and varies an existing Mareva injunction and related asset-freezing regime to balance preservation of funds with the defendant’s need for living expenses and legal representation.
• Evidence about the defendant’s and his wife’s financial position (life insurance values, home equity, RRSP, CPP/OAS, and credit facilities) drives whether and how frozen assets can be accessed.
• The Credit Valley / Waxman test governs access to Mareva-frozen funds, requiring exhaustion of non-proprietary assets and proof that claimed expenses and debts are reasonable and substantiated.
• Several categories of expenses are trimmed or denied, especially spousal car and debt costs, excessive telecom charges and unproven liabilities, while core household, tax and legal expenses are approved.
• On this variation motion, the defendant largely succeeds in gaining structured access to life insurance and mortgage proceeds, but there is no final finding of liability and no determinable monetary award yet in favour of either side.

Background and nature of the dispute
The case arises from a commercial dispute between Kiosk Design Inc., Squadrapiu Inc. o/a Poliform Toronto, and Robert Sidi as plaintiffs, and Ahmed Yasser El-Riffaey and Trustex Currency Trading Corporation as defendants. The plaintiffs allege that approximately $700,000 was misappropriated from their reserve funds by Mr. El-Riffaey to cover the operating losses of Trustex, his foreign exchange company. In an earlier 2024 decision, Justice Charney granted a Mareva injunction and a Norwich order, finding a strong prima facie case that funds from the plaintiffs had been diverted in this way and freezing the defendants’ assets pending resolution of the claim. Since then, the parties have repeatedly returned to court on consent to vary the Mareva so that the defendant could access limited sums for basic living costs and to pay legal fees as the litigation progressed.

The new motion: loan and access to funds
In the 2025 decision, the court addresses a further variation motion brought by the defendant. He seeks permission, with his wife Ursula (a non-party), to obtain a loan of $427,890 from Home Equity Bank secured as a first charge on the matrimonial home at 50 West Borough Street in Thornhill, and to access additional funds for ongoing living expenses, debt payments and legal representation. Because the Mareva currently sits on title, a mechanism is needed to temporarily lift and then re-register the injunction so that the bank may safely register its charge while still protecting the plaintiffs’ position. At the same time, there is an acknowledgment that earlier orders already contemplated a mortgage-backed loan and payments out of those proceeds, including fees to prior counsel and $60,000 in previously ordered costs payable to the plaintiffs. The plaintiffs accept that a new mortgage loan and further distributions may be necessary but stress that the pot of available assets is finite. Even if the full cash surrender value of two life insurance policies (about $216,540) and the new mortgage proceeds are realized, the combined amount of roughly $643,000 will still be less than the alleged $700,000 misappropriation once expenses, debts and fees are deducted. They therefore push for strict conditions and lower figures for discretionary items to preserve as much as possible for eventual judgment enforcement.

Legal test for varying a Mareva injunction
Justice Charney applies the test from Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, as endorsed by the Court of Appeal in Waxman v. Waxman, which governs when and how a defendant may access funds frozen by a Mareva injunction to cover living costs and legal fees. The defendant must show that he has no significant assets outside those frozen, that there are assets caught by the Mareva that are not subject to a proprietary claim by the plaintiffs, and that he will exhaust non-proprietary assets before touching assets that might be impressed with such a claim. If those criteria are met and more funds are still needed, the court weighs the plaintiffs’ right to protection of their money against the defendant’s right to fund a proper defence, having regard to the apparent strength of the competing cases. The court accepts that Mr. El-Riffaey personally has no non-frozen assets, but it notes that his wife has an RRSP of about $104,000 and receives her own CPP/OAS benefits. When the defendant asks to use Mareva-affected funds for her personal car, debts and other expenses, her independent assets become part of the analysis. The judge also reiterates that, generally, a defendant should be able to maintain the pre-injunction standard of living, but a proposed monthly budget will still be tested for reasonableness and evidentiary support.

Structured access to life insurance and mortgage proceeds
On the asset-access side, the defendant is authorized to cash out two life insurance policies with surrender values of $98,082 and $118,458, totaling $216,540. Those proceeds may be used to pay his expenses, debts and legal fees. The plaintiffs insist, and the defendant agrees, that these insurance funds must be exhausted before the proposed Home Equity Bank mortgage is drawn upon. The court grants this structure, thereby sequencing the use of non-real-estate funds first and preserving mortgage proceeds for later needs. Justice Charney also permits the defendant and his wife to enter into the $427,890 loan with HEB, subject to strict conditions. Advances from the mortgage principal can only be made after the life insurance is fully depleted. HEB and/or the defendant must pay all costs tied to temporarily removing and then re-registering the Mareva around the bank’s charge, though the defendant is not ordered at this stage to pay the plaintiffs’ own legal costs of that process. The parties’ solicitors, including the lender’s lawyers, must enter a document registration agreement ensuring that the removal of the Mareva, registration of the HEB charge and re-registration of the Mareva occur simultaneously. Finally, all documents and correspondence relating to the loan must be produced to the plaintiffs. These terms are designed to allow the defendant to unlock home equity for necessary expenses while keeping the plaintiffs’ security on the property largely intact.

Legal fees, professional services and annual obligations
The decision then deals with specific categories of payments. On past and present legal fees, the plaintiffs accept distributions of $76,000 to Blaney McMurtry LLP, $65,000 to Ross Nasseri LLP, $37,677.60 to Spetter Zeitz Klaiman PC, and $30,654.39 to the Canada Revenue Agency for tax arrears. They challenge, however, a proposed $100,000 plus HST for current civil counsel, Trung Nguyen, now at Simpson Wigle Law LLP. They argue that when added to about $170,000 already paid to earlier counsel and nearly $38,000 to SZK, a further six-figure retainer is disproportionate to the size of the claim and drains too much of the finite pool. The court accepts the principle that Mareva-funded fees must be reasonable but also cites authority warning against micro-managing the solicitor-client relationship or forcing defence counsel to litigate every step of their billing. With the parties only $25,000 apart, Justice Charney approves the full $100,000 plus HST but imposes an important condition: there will be no further request for civil legal fees from these funds before examinations for discovery are completed. The court also permits payment of $15,000 plus HST to retain criminal defence counsel, Mark Kamel, for pre-trial criminal proceedings involving Mr. El-Riffaey, and authorizes $12,204 (inclusive of HST) to Canham Rogers for accounting fees that, while high for personal tax work, are uncontested as actually incurred. With respect to annual obligations, the court allows $3,770 for car insurance premiums and $4,564.79 for property tax, recognizing them as necessary recurring expenses tied to core household assets.

Monthly living expenses and credit facilities
The most contested area is the defendant’s requested monthly living allowance of $6,487. The plaintiffs point out that he did not credit his and his wife’s combined CPP and OAS payments, estimated at $2,887 per month, and urge that these benefits should reduce the draw from Mareva-controlled assets. They also challenge the maintenance of two leased vehicles—a BMW for the defendant and a Mini Cooper for his wife—two internet providers, and an extensive telecom package including a fax line, as well as an assortment of household, grocery, restaurant and miscellaneous expenses they say are inflated or improperly include the wife’s discretionary spending. Justice Charney accepts that CPP/OAS income must be taken into account. Lacking an exact breakdown between spouses, he conservatively treats half of the total, $1,443 per month, as attributable to the defendant and deducts that amount from the requested allowance. He also rules that Mrs. El-Riffaey’s car lease and operating costs, totaling about $1,077 per month, must be paid from her own RRSP and income rather than the Mareva-frozen pool, while allowing the defendant to continue leasing his BMW in line with the family’s pre-injunction standard of living. The judge further finds that $600 per month for overlapping Bell and Rogers services is excessive and reduces that line to $400. He declines to dissect other items—household utilities, groceries, some restaurant spending and modest medical costs—on the basis that they are not obviously extravagant and largely represent ordinary family expenses that cannot sensibly be split. After these adjustments, the monthly Mareva-funded allowance for living expenses is cut from $6,487 to $3,767. On debt servicing, the defendant originally seeks $3,700 per month for various credit facilities. The plaintiffs identify about $700 of this as either unsupported by documentation or tied to Mrs. El-Riffaey’s accounts. The court agrees and excludes those portions, but accepts $3,000 per month as a substantiated amount for minimum payments on the defendant’s own credit cards and lines of credit. That figure is authorized as a continuing monthly allocation.

Overall result and identification of the successful party
In the final summary order, the court confirms that the defendant may access the cash surrender value of his two life insurance policies and, subject to detailed conditions, he and his wife may enter into the $427,890 Home Equity Bank loan secured by a first charge on the matrimonial home. The mortgage proceeds are to be distributed consistent with an earlier May 30, 2024 order, with the payment to former counsel Blaney McMurtry reduced from $90,000 to $76,000. The court approves a continuing allowance of $3,767 per month for living expenses, $3,000 per month for interest on the defendant’s own credit facilities, lump-sum payments for CRA tax arrears, accounting fees, annual car insurance and property tax, and specific legal-fee payments to the defendant’s former and current counsel, including $100,000 plus HST to Simpson Wigle Law LLP on the condition that no further civil legal-fee requests be made before discoveries are completed. On costs of this motion, Justice Charney notes that each side has enjoyed partial success and indicates a provisional inclination toward no order as to costs, subject to any offers to settle and further brief written submissions if the parties cannot agree. There is no final liability finding and no damages judgment in this decision; the underlying misappropriation claim remains to be tried. On this particular interlocutory variation motion, the defendant is the more successful party because he secures structured access to both life insurance and mortgage-backed funds and obtains most of the specific distributions he sought, albeit in reduced and conditioned form. However, the decision does not fix any final costs or damages in favour of the plaintiffs or the defence, and the total monetary award in favour of the ultimately successful party in the overall action cannot yet be determined.