“Essentially, in asking for the net proceeds of sale, less $200,000, to be held in trust, Mr. Zadeh seeks a preservation order. Section 12 of the Family Law Act provides that if the court considers it necessary for the protection of the other’s spouse’s interest under this Part, the court may make an interim or final order a) restraining the depletion of a spouse’s property; and b) for the possession, delivering up, safekeeping and preservation of the property.
If a spouse resists the release of funds under s. 12 of the Family Law Act, where title to a property is held in the name of both spouses, that spouse has the onus to show why a preservation order should be made: Godfrey v. Godfrey, 2019 ONSC 3093, at para. 15. Again, in this case, Ms. Zadeh is the sole legal owner of the matrimonial home and is presumptively entitled to 100% of the proceeds, but agrees to hold 50% of the net proceeds in trust until Mr. Zamani’s claims can be heard at trial.
The test the Court applies in determining whether to grant a preservation order was set out in Price v. Price, 2016 ONSC 728, as follows:
a. The onus lies on the party asserting that a preservation order is necessary to protect his or her interests under Part I of the FLA, or that his or her claim for support under Part III of the Act would be impaired or defeated unless a preservation order was made, to demonstrate that on the balance of probabilities.
b. The standard that the court should apply is not the high threshold required for the granting of a Mareva injunction.
c. Different decisions apply different standards. Some consider whether there is “a real risk that assets could be dissipated before the equalization claim is determined”: Davis v. Tangredi, 2006 CanLII 44269 (ONSC), at para. 23; others suggest that an order should be made “out of an abundance of caution”: Barbini v. Edwards, 2014 ONSC 6762, at para. 91. The correct standard is the same one to be applied when determining whether to grant an interim injunction:
i. Is there a serious issue to be tried?
ii. Will the moving party suffer irreparable harm if relief is not granted? And
iii. Which party will suffer the greater harm from granting or refusing the remedy pending a decision of the merits?”