In a decision released regarding a collapsed multi-million dollar modular construction venture, the Ontario Superior Court of Justice has ordered a plaintiff corporation to post security for costs after finding insufficient evidence of its assets in the province1. Associate Justice Eckler ruled on December 22, 2025, that Citiland Express Inc. must pay $45,000 into court as security and an additional $15,000 in legal costs to the defendants, Ahmad Mackieh and DoBuild General Contracting Inc. The ruling comes after a motion where the court scrutinized the plaintiff’s financial records, finding them heavily redacted and lacking the robust particularity required to prove financial stability during litigation.
The underlying dispute traces back to a business relationship formed between February 2022 and April 2023. Badreddine Ahmadoun, the principal of Citiland Express Inc., engaged Ahmad Mackieh to provide project management services for his corporations. During this engagement, Mackieh introduced Ahmadoun to Salvatore Saker and his business, GPS 3D Modular Solutions LP. The goal of this introduction was to establish a partnership that would bring Saker’s three-dimensional seamless concrete modular system to the Canadian market. This introduction eventually led to a formal joint venture partnership formalized on July 18, 2022.
Under the terms of the partnership agreement, Citiland agreed to provide substantial funding to launch the venture. This included an initial capital injection of $1.5 million for a pilot project in the Toronto area and approximately $18.68 million to cover the first year of working capital, equipment costs, and factory setup. However, the ambitious project failed to materialize as planned. While Citiland made some payments toward its funding obligations, the relationship between the parties deteriorated, the funding was never fully satisfied, and the project ultimately failed to launch.
Following the collapse of the venture, Citiland launched two separate legal actions. The first lawsuit, commencing in August 2023, was directed against GPS, Saker, and his wife, seeking $1.6 million in damages for breach of contract, fraud, and misappropriation of funds. Subsequently, in May 2024, Citiland commenced a second action against Mackieh and DoBuild General Contracting Inc. This second lawsuit sought $5 million in damages for misrepresentation, unjust enrichment, and loss of economic opportunity. Citiland alleged that Mackieh had misrepresented GPS as an industry leader and had provided false assurances regarding the wealth of Saker and his wife, which induced Citiland to enter the failed agreement.
In response to the 2024 lawsuit, the defendants brought a motion under Rule 56.01(1) of the Rules of Civil Procedure requesting that Citiland post security for costs. This legal mechanism is designed to protect defendants from incurring unrecoverable legal expenses if they successfully defend a lawsuit against a plaintiff who may not have the assets to pay a costs award. The defendants argued that Citiland had another proceeding pending for the same relief and that there was good reason to believe the corporation had insufficient assets in Ontario to satisfy a potential costs order.
A key issue in the motion was whether the two lawsuits filed by Citiland constituted multiple proceedings for the same relief, which is one of the grounds for ordering security for costs. The defendants argued that both actions were rooted in the same July 2022 partnership agreement and sought damages arising from the same factual matrix. Citiland opposed this characterization, arguing that the first action was a breach of contract case against GPS, while the second action focused on misrepresentations made specifically by Mackieh.
Associate Justice Eckler analyzed the pleadings in both actions and found that while the specific causes of action differed slightly, there was a sufficient overlap to meet the threshold of the rule. The court noted that in both proceedings, Citiland sought damages resulting from its decision to enter the partnership with GPS. Both claims relied on allegations that the defendants misrepresented the status of GPS in the modular construction industry and the wealth of its principals. The court concluded that the defendants had met their onus of showing that the plaintiff had brought multiple claims with a sufficient appearance of similar relief.
The court then turned to the critical issue of Citiland’s financial status. Under the rules, if a defendant can show good reason to believe a corporate plaintiff has insufficient assets in Ontario, the onus shifts to the plaintiff to demonstrate possession of sufficient assets. The defendants pointed to Citiland’s financial disclosures, arguing they were inadequate. Citiland maintained it was a fully operational construction company with millions of dollars flowing through its accounts, listing various assets such as construction equipment, vehicles, and a roster of employees.
To support its claim of solvency, Citiland produced various documents, including payroll summaries, bank statements from TD Bank and BMO, and a list of fixed assets. However, upon review, the court found these documents to be deficient. The bank statements provided by Citiland for 2023 and 2024 were heavily redacted. The court noted that the redactions obscured critical information, including account balances, account numbers, and the identity of entities making deposits. Consequently, there was no evidence before the court to confirm the actual balances in the accounts during the relevant years.
Further scrutiny of the bank statements revealed patterns that concerned the court. The statements showed frequent occurrences of exact or near-exact amounts being deposited and then withdrawn, which the plaintiff’s principal, Mr. Ahmadoun, could not adequately explain during cross-examination. Additionally, the unredacted portions of the statements suggested that the company was barely breaking even, with withdrawals often outweighing deposits, and frequent overdraft charges appearing in the BMO records.
The court also identified significant issues with the list of fixed assets Citiland claimed to own. Citiland produced a “Fixed Assets Register” but failed to provide adequate proof of ownership or supporting documentation for the valuations. During cross-examination, it was revealed that several vehicles listed as company assets were not actually owned by Citiland. Two of the vehicles were leased to a different company, Neptune Security Services, which had gone bankrupt in April 2023. Two other vehicles on the list were owned by individuals rather than the corporation. When pressed on why certain asset purchases did not appear in the bank statements, Mr. Ahmadoun suggested the company paid cash, an explanation the court found unverified.
The payroll information submitted by Citiland was also deemed unhelpful. The summary did not reference specific dates or the number of employees paid, and when the defendants requested T4 slips to verify the data, the plaintiff produced limited and redacted documents with no visible dates. The court highlighted that a plaintiff seeking to prove sufficient assets must provide financial disclosure with “robust particularity,” including the amount and source of income, a full description of assets and liabilities, and details on the ability to borrow. The court found that Citiland’s disclosure fell far short of this standard.
Citiland attempted to rely on two recent cheques from customers totaling approximately $200,000 as proof of active operations. Associate Justice Eckler ruled that evidence of income is not the same as evidence of assets. Without knowing the account balances or the company’s liabilities, isolated revenue payments did not prove that the corporation had sufficient net assets to pay a future legal bill. The court also noted the existence of significant loans funneled into Citiland’s accounts from family members of the principal, the status of which remained unclear as no complete financial statements or corporate tax returns were provided.
After determining that the defendants had met the requirements for security for costs, the court considered whether ordering such security would be unjust. This analysis requires a holistic look at the circumstances, including whether the plaintiff has a meritorious claim and whether the order would prevent them from pursuing the lawsuit. The court acknowledged Citiland’s position that it had a meritorious case based on the alleged misrepresentations but observed that the outcome would likely turn on credibility findings at trial. As the action was still in its infancy with no examinations for discovery conducted, the court could not determine a clear probability of success for either side.
Ultimately, Associate Justice Eckler concluded that an order for security for costs was just in the circumstances. The order balances the defendants’ need for protection against the plaintiff’s right to access the court. The court determined that the amount of $45,000 was appropriate for the stages of litigation up to summary judgment. To manage the financial burden on the plaintiff, the court allowed the security to be posted in stages: $15,000 must be posted within 60 days, and the remaining $30,000 is due only after a summary judgment motion is scheduled.
In addition to the security order, the court addressed the costs of the motion itself. The defendants, having been successful, sought costs on a substantial indemnity scale, arguing that the plaintiff’s refusal to provide unredacted documents warranted a higher penalty. The court disagreed that the conduct rose to the level of reprehensible behavior required for such an award. Instead, the court awarded costs on a partial indemnity basis. Citiland was ordered to pay the defendants $15,000 within 30 days to cover the legal fees associated with the motion.
The litigation will now pause until Citiland posts the first installment of the security. If the payment is made, the case regarding the alleged misrepresentations and the $5 million claim will proceed in the Ontario Superior Court of Justice.
Read more business cases here.
