Executive Summary: Key Legal and Evidentiary Issues

• Interpretation of whether the court order required the Mayfield Defendants to pay $200,000 into their lawyers’ trust account or only to preserve funds already held in trust.

• Determination of whether the preservation order should apply to all defendants or be limited to the Mayfield Defendants.

• Dispute regarding the sufficiency and timing of the defendants’ documentary productions, with procedural directions issued for addressing deficiencies.

• Centrality of the term “maintain” in the court order, specifically its meaning in the context of trust funds.

• Consideration of the risk of asset dissipation and the appropriateness of interim relief prior to judgment.

• Scheduling of further steps, including motions and costs submissions, with clear deadlines for parties.

Background facts

2246733 (2010) Ontario Ltd. is the plaintiff, a company that made a $200,000 capital contribution to a real estate development known as the Mayfield Partnership. The investment was for the purchase of property, and a schedule of potential payouts was provided at the time of investment. The investments were not successful, and no payouts were made to investors. There are two groups of defendants: the “Mayfield Defendants” (Surinder Ahuja, Ahuja Holdings Inc., Arcadeium Development Corp., and Mayfield Arcadeium Holdings Ltd.), with Mayfield as the general partner, and the “Gandhi Defendants” (Harsimrat Gandhi and Aarav Holdings Ltd.), who were involved in previous litigation with the Mayfield Defendants and were sued by the plaintiff due to their involvement in the Mayfield development and related litigation. The plaintiff alleges that Mayfield promised to return its capital contribution once monies paid into court were released. The claim was issued on February 28, 2025, and each group of defendants delivered a separate Statement of Defence in April 2025. In August 2025, the plaintiff became concerned that monies might have been paid out by Mayfield to the Gandhi Defendants, raising concerns about dissipation of funds originally held in court. The plaintiff sought leave to bring an ex parte motion for monies to be paid into court by the Mayfield Defendants and for a further and better Affidavit of Documents from the Gandhi Defendants. Leave was granted, and the motion was heard on September 9, 2025. The court denied the request for monies to be paid into court but granted a temporary order requiring monies in the trust accounts of the law firms for both the Mayfield and Gandhi Defendants to be maintained. The defendants were given an opportunity to move to set aside the order, with a hearing set for October 2, 2025.

Procedural history and the disputed order

Before the October 2 hearing, counsel for the Mayfield Defendants raised an issue regarding the interpretation of the order. The plaintiff argued that the order required the Mayfield Defendants to collectively maintain $200,000 in their lawyers’ trust accounts, regardless of whether funds were currently held in trust. The Mayfield Defendants contended that the order only required them to maintain money in trust if it was already in the trust account. The Gandhi Defendants argued that the order should not apply to them, as they were not the general partner. The court ordered the transcript of the September 9 hearing and scheduled a further hearing on October 24, 2025, to address the scope of the order and provide directions.

Issues before the court

The court identified three issues: (a) directions for moving the matter forward; (b) whether the order should apply to all defendants or be limited to the Mayfield Defendants; and (c) whether the order required monies to be paid into the lawyers’ trust accounts or only to preserve existing funds.

Court’s analysis and interpretation of the order

On the first issue, the court directed the parties to agree on a timetable for the action, with a specific process for addressing any deficiencies in documentary productions before discoveries. An appearance was scheduled for December 3, 2025, to address unresolved issues regarding affidavits of documents. On the second issue, the parties agreed that the order requiring monies to be maintained in trust should not apply to the Gandhi Defendants, and the court accepted this position. On the third issue, the court examined the wording of the order, the context of the relief sought, the meaning of “maintain,” and the transcript of the original hearing. The court concluded that the order did not require the Mayfield Defendants to deposit new monies into their lawyers’ trust account, but only to maintain funds already present, up to $200,000. The court found that the word “maintain” means to continue or keep at the same level, not to add new funds. The court also noted that the original relief sought was for payment into court, which was not granted.

Outcome and further directions

The court held that the Mayfield Defendants are not required to pay additional monies into their lawyers’ trust account, but must maintain any monies already held in trust, up to $200,000. The order does not apply to the Gandhi Defendants. The court set deadlines for any party seeking further relief regarding the monies, with materials to be served by November 5, 2025, and responding materials by November 14, 2025, for a motion scheduled on November 18, 2025. An appearance was also scheduled for December 3, 2025, to address documentary production issues. The court outlined the process for costs submissions, with strict deadlines and no extensions without leave. No specific monetary award was made in this decision, as it concerned the interpretation of an interim order and procedural directions, not the merits of the underlying claim or damages.