Executive Summary: Key Legal and Evidentiary Issues

• Transfer of a $1.95 million property for $2.00 from Jazzar Holdings to the principal’s parents raised a serious triable issue of fraudulent conveyance aimed at defeating potential judgment creditors.
• Evidence of “badges of fraud” – including a close family relationship, nominal consideration, haste in documenting a trust, and the immediate listing of the property for sale – supported maintaining the Certificate of Pending Litigation (CPL).
• The court found a high probability that the plaintiffs would recover judgment in the underlying construction dispute, notwithstanding a release and the defendants’ failure to complete undertakings.
• Arguments that Jazzar Holdings held the property in trust for the parents were undermined by the late-created trust document and prior dealings treating Jazzar Holdings as beneficial owner.
• The balance of convenience favoured preserving the CPL because sale of the property would likely move sale proceeds to Jordan, making any judgment difficult to enforce, while concrete prejudice to the defendants was not shown.
• Allegations of material non-disclosure on the ex parte CPL motion failed, as the release and discovery evidence were either already before the court or not material enough to affect the outcome.

Facts and background

The dispute arises out of a residential construction project for which Shu Wang and Peng Lu (the plaintiffs) sued Jazzar Holdings Inc., Elevate, and Samer Al-Jazzar in 2023. In that main action, they allege breach of contract, breach of the duty of honest contractual performance, and misrepresentation, and seek rescission of a Cost Plus Agreement, an accounting of all monies paid, and damages of $550,000 plus interest and costs. The property now subject to a Certificate of Pending Litigation (CPL) is different from the property involved in the construction project.

Jazzar Holdings purchased the property at 105 Halliday Creek Road, Burnstown, Ontario in 2022 for $1,950,000. On January 29, 2025, Jazzar Holdings transferred this property to Samer Al-Jazzar’s parents, Omar Jazzar and Sana Al Hussaini, for nominal consideration of $2.00. Omar and Sana reside in Amman, Jordan. Within about three weeks, the property was listed for sale on the Multiple Listing Service for $2,400,000.

The plaintiffs learned of the transfer in early March 2025. They were already concerned that Samer and Jazzar Holdings appeared to have ceased their Ontario construction operations, were not paying certain debts (including an amount owing to Tarion), had allowed the Home Construction Regulatory Authority licence to lapse, were selling Ontario assets, and that Samer had apparently relocated to Jordan and could not leave the country. Against that backdrop, the plaintiffs commenced a new proceeding alleging that the January 2025 transfer was a fraudulent conveyance made to defeat, hinder, delay, or defraud their recovery on the main action, and brought a motion to register a CPL against the Burnstown property.

In March 2025, on an ex parte motion, Associate Justice Kamal granted the plaintiffs leave to register a CPL over the property. The 2026 decision deals with the defendants’ subsequent attempt to discharge that CPL, not with liability or damages in the underlying construction claim.

The defendants’ explanation for the transfer

The defendants denied that the transfer was fraudulent. They argued that Jazzar Holdings was merely holding title as bare trustee for Omar and Sana, who were allegedly the beneficial owners. On this account, Omar had lent money to Jazzar Holdings and Elevate, and the parents decided as early as September 2024 that they no longer wished to develop the Burnstown property and wanted to sell it to recover their money. They contended that the January 2025 transfer for nominal consideration was simply a formal step to put legal title in the hands of the true beneficial owners so they could sell.

The court examined this explanation closely. There was evidence that Jazzar Holdings had, at various times, held other properties in trust for Omar and Sana under written trust agreements executed in 2018, 2021, and 2022. However, none of those earlier trust agreements covered the Burnstown property. A trust document for the Burnstown property was not created until January 29, 2025 – the very date of the transfer. On the transfer deed itself, Omar and Sana were simply named as transferees; the available notation to indicate that they were taking as trustees was not used.

Throughout the period leading up to the transfer, the parties had acted as though Jazzar Holdings was the beneficial owner of the property. That consistent conduct was fundamentally inconsistent with the claim that Jazzar Holdings had always been merely a bare trustee. The late creation of a specific trust agreement on the same day as the transfer, in circumstances where prior trust arrangements on other lands had been properly documented much earlier, was treated as evidence of haste rather than corroboration of a long-standing beneficial ownership in the parents.

Legal framework for discharging a Certificate of Pending Litigation

The Ontario Courts of Justice Act gives the court discretion to discharge a CPL in several circumstances, including where the party who obtained it lacks a reasonable claim to an interest in land, where another form of security would adequately protect that interest, or “on any other ground that is considered just.” The court must consider whether there is a triable issue supporting the asserted interest in land and then weigh the equities and balance of convenience in deciding whether to let a CPL stand or be discharged.

In cases like this, where the underlying main action does not directly concern the specific parcel of land but the plaintiff alleges a fraudulent conveyance designed to thwart recovery, a specialized test from Grefford v. Fielding applies. Before judgment in the main action, and where that main action does not itself concern an interest in the land transferred, a plaintiff seeking a CPL based on fraudulent conveyance must show three things: a high probability of success in the main action; some evidence (lightened if there is under-value consideration) that the transfer was made with the intent to defeat or delay creditors; and that the balance of convenience favours issuing or maintaining a CPL.

A fraudulent conveyance action itself is recognized as a proceeding in which an interest in land is brought into question for CPL purposes, even though it does not create a proprietary interest in that land for the plaintiff. The CPL is therefore a procedural and protective tool, not a declaration of ownership.

High probability of success in the main action

The defendants attacked the first branch of the Grefford test, contending there was no “high probability” that the plaintiffs would succeed in their 2023 construction lawsuit or in the fraudulent conveyance action. They relied on discovery admissions by the plaintiffs, including acknowledgments that they had understood and signed various agreements (agreements of purchase and sale, a cost-plus contract, a termination agreement, and a mutual release), and that they had been represented by counsel when signing.

However, the court looked beyond those admissions to the procedural record and conduct of the defence in the main action. The defendants had not produced the documents that would support or justify the invoices rendered during construction. Plaintiffs had obtained about 80 undertakings on discovery, particularly targeting the documentation behind the amounts billed by Jazzar Holdings and others. Many undertakings remained unanswered; a judge had ordered production of answers to undertakings and refused or taken-under-advisement questions, but even after partial compliance in May 2025, many remained outstanding.

On the earlier CPL motion, the court had already concluded there was a high probability the plaintiffs would recover some judgment in the main action, even if the precise amount and certain defences were in dispute. On the fuller record presented in 2026, Associate Justice Kamal held that assessment still stood. The court also rejected the argument that a high probability must be shown only against the specific party with title to the property. Evidence suggesting that Elevate and Jazzar Holdings’ affairs were intertwined supported a live issue about piercing the corporate veil, and the court found a reasonable prospect of success against the corporate defendants involved.

Evidence of intent to defeat or delay creditors

The second part of the Grefford test requires only that there be evidence of a triable issue that the transfer was carried out with intent to defeat or delay creditors. The threshold is lower than the “high probability” standard.

Several classic “badges of fraud” were present. The transfer was between closely related parties – a corporation controlled by the son and his parents. It was made for grossly inadequate consideration: $2.00 for property purchased for $1.95 million approximately three years earlier and then listed for $2.4 million. The timing was suspicious: the trust agreement specific to this property was executed on the very day of the transfer, contrary to earlier practice of recording trust arrangements well in advance. The transfer had the effect of moving the valuable Ontario asset out of Jazzar Holdings’ name at a time when the company had unpaid creditors and was facing a significant lawsuit.

These factors, particularly when combined with concerns about the defendants’ other conduct (ceasing construction operations, unpaid debts, ignoring litigation obligations, and the principal’s relocation to Jordan), were enough to establish at least a triable issue that the transfer was made with the intent to defeat or delay creditors, including the plaintiffs. The court therefore held that the second branch of the test was clearly satisfied.

Balance of convenience and equitable factors

The final branch of the Grefford test, and the statutory discretion under section 103(6) of the Courts of Justice Act, turns on the balance of convenience and the overall equities. Courts often refer to so-called “Dhunna factors” and variations of them, which include whether there is an alternative damages remedy, whether damages are adequate and readily calculable, whether the CPL is sought for an improper purpose, whether there is a pending sale, and what harm each side would suffer if the CPL is maintained or removed.

Here, the underlying 2023 action is primarily a claim for monetary damages concerning the construction project, not a claim to the Burnstown property itself. Ordinarily, a CPL would be inappropriate if the plaintiff’s interest could be fully captured in a money judgment. But in the fraudulent conveyance context, the analysis shifts: where a creditor alleges a scheme to put assets beyond reach, the court must realistically assess whether damages would in fact be an adequate remedy.

The judge concluded that if the CPL were discharged and the property sold, it was likely that sale proceeds would be moved to Jordan, beyond the easy reach of Ontario judgment enforcement tools. That would severely prejudice the plaintiffs’ ability to enforce any judgment they obtained in the main action. By contrast, the defendants did not provide evidence of concrete prejudice from maintaining the CPL. Although a CPL may impede a sale, there was no evidence of an impending transaction or of hardship or necessity requiring an immediate sale, beyond Omar and Sana’s desire to recover their investment. On this record, that desire did not amount to compelling harm.

There was also no indication the plaintiffs were using the CPL for an improper collateral purpose, such as to pressure settlement. Taken together, the equitable factors and the Dhunna-style considerations weighed in favour of leaving the CPL in place.

Allegations of material non-disclosure on the ex parte motion

Because the original CPL was granted on an ex parte basis, the defendants argued the order should be set aside for material non-disclosure by the plaintiffs, pointing to Rule 39.01(6) of the Rules of Civil Procedure. That rule requires a party seeking relief without notice to make full and fair disclosure of all material facts and warns that failure to do so may be sufficient ground to set aside the resulting order.

The defendants highlighted two alleged omissions. First, they said the plaintiffs had failed to put before the court an August 2021 release executed in favour of Jazzar Holdings, and that this release, coupled with later agreements, undermined the plaintiffs’ case. Second, they complained that the plaintiffs had selectively presented discovery evidence, “cherry-picking” parts of the examinations of Samer and a manager of Elevate.

The court rejected these objections. The release was already referenced in the defendants’ pleading (the statement of defence and counterclaim), which was filed with the court and referred to in the original decision. The judge found the release was not a material fact in the context of the CPL motion, because many of the plaintiffs’ allegations against Jazzar Holdings concerned conduct that occurred after the release and involved alleged misrepresentations and statutory breaches that could not simply be contracted away. The release was also limited to claims arising from an earlier agreement and could not act as a complete bar to the broader claims, including any sham-corporation allegations or statutory warranty issues.

As for the discovery record, the court concluded that even if further excerpts had been presented, they would not have changed the outcome on the CPL test. Other defence concerns about undertakings, timing of service, and representation issues were also found not to be material. The key question is whether the undisclosed information might reasonably have affected the result on the ex parte motion; here, it would not have.

Moreover, even if there had been some imperfection in disclosure, the rule does not compel automatic discharge of the order. The court still retains discretion, and in this case, taking into account the urgency created by a recent transfer and immediate listing of the property, and the minimal importance of any arguably omitted facts, the judge held that the CPL should not be discharged.

Outcome and significance

In the 2025 ex parte decision, the court had granted a Certificate of Pending Litigation over the Burnstown property to protect the plaintiffs’ ability to pursue their fraudulent conveyance claim and, ultimately, to enforce any judgment in their underlying construction lawsuit. In the 2026 decision, Associate Justice Kamal revisited that relief on the defendants’ contested motion, applying the Grefford test and the statutory discretion to discharge under the Courts of Justice Act.

The court held that the plaintiffs continued to meet the necessary legal thresholds: there was a high probability of success in the main construction action, a clear triable issue that the transfer for $2.00 from Jazzar Holdings to the principal’s parents was effected with intent to defeat or delay creditors, and a balance of convenience that strongly favoured maintaining the CPL in light of the risk that sale proceeds would leave the jurisdiction. Allegations of material non-disclosure on the ex parte motion were rejected; any omissions were either not material or did not justify setting aside the order.

Accordingly, the defendants’ motion to discharge the CPL was dismissed, and the CPL remains in force over 105 Halliday Creek Road. The successful party in the 2026 motion decision is therefore the plaintiffs, Wang and Lu. No damages, judgment amount, or quantified costs are fixed or ordered in this ruling; the main action for $550,000 in damages is still pending, and costs of the motion are left to agreement or later written submissions, so the total monetary award in favour of the successful party cannot be determined from this decision.