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.
