Key Facts:

• Claims:

  • Amanat Investment Corp. sued the moving parties for breach of contract regarding an investment property at 4172 Tea Garden Circle.
  • The moving parties counterclaimed, alleging fraud in relation to two other properties (7287 Dellaport Drive and 192-1055 Dundas Street East) and sought a Certificate of Pending Litigation (CPL) to prevent their sale or encumbrance.
  • The moving parties argued that their investments were mismanaged and that the defendants by counterclaim engaged in a fraudulent Ponzi scheme.

Court’s Decision:

• Motion Dismissed: The judge ruled that a CPL was not warranted.
• Key Reasons for Dismissal:
  • Evidentiary Issues: The affidavit supporting the CPL was filed by the moving parties' lawyer, rather than by the parties themselves. The affidavit contained unsourced hearsay, making it inadmissible.
  • Equitable Considerations:
    • The moving parties did not claim ownership of the properties, only a financial interest.
    • The properties were not unique, meaning monetary damages would be a sufficient remedy.
    • The CPL appeared to be a means of securing a claim for damages, which is not its intended purpose.
  • Lack of Support from Other Investors: No other investors involved in these properties supported the CPL request.

Outcome:

• The interim order preventing the sale or encumbrance of the Dellaport and Dundas properties was set aside.
• The issue of costs was left for the parties to resolve, with deadlines set for cost submissions if necessary.
• No damages or monetary awards were granted.