CITATION: Deol v. Ontario Khalsa Darbar, 2015 ONSC 6256

DIVISIONAL COURT FILE NO.: 494/15

DATE: 20151009

SUPERIOR COURT OF JUSTICE – ONTARIO – DIVISIONAL COURT

RE: GURVINDER SINGH DEOL, BURJIT SINGH DHONITA and KULVINDER SINGH KANG (Appellants/Applicants)

and

ONTARIO KHALSA DARBAR (Respondent)

and

RANJODH SINGH PANDHER, NARINDER SINGH DHILLON, MANOHAR SINGH KHAIRA, and SWARAN SINGH KAIRON (Respondents/Proposed Intervenors)

COUNSEL: Jasdeep Singh Bal, for the Moving Parties

Bhupinder Nagra, for the Responding Parties/ Intervenors

HEARD: October 2, 2015 in Toronto

E N D O R S E M E N T

MOLLOY J:

Introduction

[1] The appellants seek a stay of the Order of Edwards J. dated September 4, 2015 pending their appeal of that Order to the Divisional Court. The Order relates to the conduct of an election for a Board of Directors of the Ontario Khalsa Darbar (“OKD”), a not-for-profit corporation that operates a large Sikh place of worship and cultural centre in Brampton. Pursuant to the Order of Edwards J. (and a prior Order also made by him), the election was scheduled to be held in Brampton on Sunday, October 4, 2015.

[2] The Notice of Appeal was originally filed in the Court of Appeal and a motion for a stay was scheduled for and heard in the Court of Appeal on October 1, 2015. The motion proceeded before Sharpe J.A. who ruled that the appeal properly lies to the Divisional Court pursuant to s. 329 of the Corporations Act. He directed that the appeal and notice of motion be transferred to the Divisional Court and awarded costs against the appellants fixed at $2,500.00 all inclusive.

[3] The motion for a stay was heard by me the next day, Friday, October 2, 2015 on an emergency basis, given that the election was scheduled to proceed on the Sunday. Nobody appeared for the OKD. After hearing submissions from the other parties, I dismissed the stay motion and awarded costs of $7,500.00 payable by the moving parties to those parties who responded to the motion. I advised the parties at that time that I would provide brief written reasons for this decision within a few days. Those reasons follow.

Background Facts

[4] There is a long and convoluted history to this proceeding, which I will not attempt to set out in any detail in these reasons. I will summarize only those facts necessary to give context to my decision.

[5] The current OKD Board of Directors was elected in 2003. The existing 11 Board members are deeply divided on many issues. Although the term of office for Board members is three years, disputes between the parties have resulted in no elections being held since 2003. In 2006, the minority Board members commenced litigation in the Superior Court in Brampton under the Corporations Act seeking, among other things, a determination of the eligibility to vote of certain challenged members (Court file no. CV-06-1579-00). In light of an election scheduled for May 2006, an interlocutory injunction was issued restraining any elections until the disputed issues were resolved by the court. In 2007, an Order was made by Dunn J. (in the 06/1579 proceeding) setting out a process for determining the validity of membership. Six years later, that process still had not been completed. In October 2013, MacKenzie J. made a further Order implementing an agreement between the parties for a streamlined process that would have seen the membership issues resolved within 90 days. The process was to start with the OKD notifying the challenged members by registered mail within 15 days of the Order. Members wishing to be validated were required to respond by registered mail.

[6] The minority Board members again brought the matter before the courts with a motion on July 2015 within the 06/1579 proceeding. At the same time, the majority Board members caused a counter-motion to be brought by OKD. Both motions were heard before Edwards J. on July 29, 2015 and he issued a written endorsement setting out the terms of his Order, stating that his reasons for the Order had been given orally. Among other things, the July 29, 2015 Order stipulated that the election would proceed on Sunday, October 4, 2015 and listed certain individuals eligible to vote.

[7] One of the issues raised in the OKD cross-motion was a group of 89 responses received by means other than registered mail (e.g. by regular mail or courier) and which had not been opened, but rather placed in a sealed box. OKD sought an Order from Edwards J. that those responses be opened and considered.

[8] The moving parties, Deol, Dhonita and Kang are individuals whose memberships have been challenged. They allege that they did not receive notice of the validation process by registered mail as was required. Further, they allege that they heard about the process and sent in their responses, but not by registered mail as they were unaware of that requirement. They seek the right to vote in the upcoming election, but their names are not on the list of validated voters.

[9] Deol, Dhonita and Kang commenced a new proceeding in the Superior Court by Notice of Application issued on August 18, 2015, returnable in Brampton on September 4, 2015 (Court file no. CV-15-3830-00—“the 15/3830 Application”). They sought an Order requiring the OKD to open the locked box containing the member responses sent by means other than registered mail. The only named respondent is OKD. On the face of it, the relief claimed in the 15/3830 Application is the same as that sought by OKD in its cross-motion in 06/1579 before Edwards J. in July 2015. According to the affidavit of Narinder Singh Dhillon, filed on the motion before me and unchallenged in any other material, this issue was fully argued before Edwards J. on July 29, 2015 and rejected by him in his oral reasons. Further, Mr. Dhillon states in his affidavit that none of the responses in the box were received prior to the December 9th deadline. I also note that in July 2015, OKD filed a number of affidavits in support of its cross-motion before Edwards J., one of which was sworn by Gurvinder Singh Deol (who is now an applicant in the 15/3830 Application) and another of which was sworn by an individual with the surname Kang and who lives at the same address as Kulvinder Singh Kang (who is also an applicant in the 15/3830 Application).

[10] The parties in the 15/3830 Application were well aware of the earlier proceeding and of the Order made by Edwards J. on July 29, 2015 in that proceeding. The lawyer for the applicant in the 15/3830 Application was in touch with counsel for the minority Board members in the earlier proceeding and was advised by her that this issue had already been determined by Edwards J. in that proceeding. Notwithstanding this, a new proceeding was brought, rather than a motion within the existing application. Further, the application was not made returnable before Edwards J., although it did wind up before him.

[11] At the return of the motion on September 4, the minority Board members (Pandher, Dhillon, Khaira and Kairon) filed material and sought to be added as intervenors. They opposed the relief sought by Deol, Dhonita and Kang and argued that the issue had already been decided.

[12] Edwards J. granted intervenor status to the minority Board members (all of whom had been applicants in the earlier 06/1579 proceeding and parties on the motion that resulted in the July 29, 2015 Order.

[13] Edwards J. held that his recollection of the matter before him on July 29, 2015 was the letters at issue (which had not been opened) had all been received after the December 9, 2013 deadline. He also believed that he stated in his oral reasons on July 29 that if the letters had been received prior to December 9, 2013, it would be improper to prevent those individuals from validating their membership. He could not be certain of this in the absence of a transcript, which was not ordered. Based on the evidence before him, Edwards J. held that the new application was a collateral attack on his July 29, 2015 Order. He dismissed it on that basis, as well as on the basis of issue estoppel.

[14] Deol, Dhonita and Kang now appeal the Order of Edwards J. dated September 4, 2015, both with respect to his granting intervenor status to the proposed intervenors (the minority Board members) and with respect to his dismissal of the application. The Notice of Appeal (originally erroneously in the Court of Appeal) was filed on September 22, 2015.

The Applicable Test

[15] The moving parties seek a stay of the election of the Board of Directors scheduled to proceed on October 4, 2015. Although cast as a stay pending appeal, it is to be noted that staying the Order of Edwards J. dated September 4, 2015 would have no effect on the election proceeding. It is the Order of July 29, 2015 in the other proceeding which set the date for the election. What the moving parties are actually seeking is an interlocutory injunction restraining the election from proceeding until the disposition of their appeal.

[16] The parties agree that the test for granting an injunction (or stay) is as established in RJR-MacDonald[^1] as follows:

1. Is there a serious issue to be tried?

2. Will there be irreparable harm if a stay is not granted?

3. Does the balance of convenience justify granting a stay?

Serious Issue

[17] This issue relates to the merits of the underlying appeal. The threshold at this stage has been described as a low one. Essentially, if the appeal cannot be said to be frivolous or vexatious, the standard is met.

[18] I see no merit in the moving parties’ argument that Edwards J. erred in adding the minority Board members as intervenors. The OKD sent a letter to counsel for Deol, Dhonita and Kang indicating it would take no position on the 2015 Application they had commenced. That would mean that the 2015 Application would be essentially unopposed were it not for the parties added by the application judge. Further, these intervenors have a very clear interest in the subject matter, having been the applicants on the previous application dealing with these very issues. In my view, this issue does not even cross the low threshold level and does not raise a serious issue to be tried.

[19] I also see little merit in the other arguments raised in the appeal. It appears to me that this Application was an attempt to thwart the previous ruling by Edwards J. by starting a new proceeding, as was noted by Edwards J. on September 4. It also appears from the material before me that this issue was squarely before Edwards J. in the cross-motion on July 29, 2015 and was ruled on by him at that time. Issue estoppel would therefore arise, even though the current moving parties were not parties to that proceeding. Unfortunately, without a transcript, it is difficult to be certain of the fact. Also, the full reasons of Edwards J. from September 4, 2015 were not before me on the motion because the transcript of that date was not filed. When I asked counsel about the availability of the transcript for September 4, he advised me that it had been ordered and had not yet been received. I asked if an expedited transcript had been requested and counsel undertook to make the inquiry at a break. Upon returning, counsel for the moving parties admitted that no request had been made at all for the transcript of the hearing and/or rulings for either July 29 or September 4. It is therefore difficult to be sure on this issue, but by the same token, much of the blame for the absence of the transcripts lies at the feet of the moving parties.

[20] That said, I would not dismiss this motion based solely on the merits of their appeal. I am not prepared to conclude that the appeal is completely without merit, or that it is frivolous and vexations. For purposes of this motion, I will accept that the moving parties have successfully passed the initial hurdle under the three-part RJR-MacDonald test.

Irreparable Harm

[21] In determining if there has been irreparable harm, the focus should not be on the magnitude of the harm, but rather on whether it is compensable in damages. The loss of a right to vote in an election is not quantifiable in dollar amounts.[^2] I therefore conclude that the second aspect of the RJR-MacDonald test is met.

[22] Counsel for the intervenors relies upon the 2013 decision of the Divisional Court in Singh v. Sandhu[^3] in support of her argument that the harm alleged in this case does not meet the test for irreparable harm. The facts in that case are strikingly similar to the case before me. It involved the right of members of a Sikh Spiritual Centre to vote for a Board of Directors. The membership of the Centre amounted to 64 members. Based on the ruling that was under appeal, 23 of those members would lose the right to vote at imminent elections, but only five of those had participated in the appeal. Pardhu J. (as she then was), in a brief endorsement, found (at para. 11) that she was “not persuaded that loss of the right to vote at the next meeting by five defendants who have appealed will result in irreparable harm.” While I accept that this statement was made, I also note that in the immediately preceding paragraph, the Court found that the balance of convenience test was not met, which would have been sufficient to dispose of the motion. Accordingly, I consider the observation with respect to irreparable harm to be obiter dicta. Further, the decision contains no analysis of the nature of the harm, and with the greatest of respect, I believe it to be in conflict with the Supreme Court of Canada decision in RJR-MacDonald. Accordingly, I do not find that I am bound to apply Singh v. Sandhu on this point.

[23] In my view, the second test is met. The moving parties’ entitlement to the injunction they seek therefore depends on the third aspect of the test – the balance of convenience (or balance of inconvenience, as it is sometimes called).

Balance of Convenience

[24] The current Board has remained in place long past its three-year term, having been elected in 2003. There would normally have been an election in 2006, but the parties have been mired in litigation ever since that date. That is not an acceptable state of affairs for an organization such as this.

[25] There are only three moving parties attempting to prevent the Court-ordered election from proceeding. Even if I were to accept that those three individuals also represent the interests of 89 individuals whose responses are in the locked box, and even if I were to accept that there could be multiple responses in some of those 89 envelopes, I must bear in mind that the total number of members entitled to vote is 2,728. The question is whether this small group of potentially eligible voters should be entitled to hold up the entire process so that their votes can be registered, given the fact that as a practical matter they are highly unlikely to have a significant impact on the result of the election.

[26] Were it not for the history of this matter, and everything that has been done to get to this point, I might place greater weight on the entitlement of every member to cast his or her vote. However, the recognized individual rights must be balanced against the importance of moving forward with the process to elect a Board. It has taken nine years to get to this point. If I stay the election now, it may easily be several more years before the issue can be resolved, even if the appeal is expedited.

[27] Given the passage of time since the last election of a Board of Directors, this is not a situation where maintaining the status quo can be the determining factor. But for the ongoing litigation, the term of office for the existing Board of Directors would have expired in 2006.

[28] If in fact the election to take place on October 4, 2015 is tainted because of the inability of these individuals to vote, there is a process whereby disenfranchised voters might seek to set aside the election. If that process is undertaken, at least a new Board will be in place with the ability to carry on the business of the OKD. That is preferable to continuing with a split and dysfunctional Board that is nine years past its proper expiry date.

[29] As was stated by Pardu J. in Singh v. Sandhu (at para. 10):

The balance of convenience favours election of directors sooner rather than later so that the normal business of the Temple can resume based on a vote by the majority of members.

[30] In the case before me, given the large number of eligible voters, and the protracted delay already interfering with the normal operation of the Temple as a result of nine years of litigation, the balance of convenience is even more strongly in favour of the election proceeding than was the case in Singh v. Sandhu.

[31] In my view, the harm that would ensue if I were to prevent the election from proceeding would far outweigh any harm to those limited number of individuals whose right to vote may not have been recognized.

Conclusion and Order

[32] Accordingly, the motion is dismissed.

[33] The intervenors have been successful and seek their costs of the motion. Ms. Nagra provided a Costs Outline totaling $11,474.47 on a substantial indemnity basis and submitted that an award of $7,500.00 would be appropriate on a partial indemnity basis. I am not satisfied that substantial indemnity costs are warranted. However, I do find that as the successful party, the intervenors should get their costs on a partial indemnity basis.

[34] Mr. Bal, on behalf of the moving parties, argued that $7,500.00 was an excessive cost award. However, when asked, he provided the Costs Outline indicating what his clients would have sought if successful. That claim would have been for $13,061.16 on a partial indemnity basis. Although $1,800.00 of that amount is disbursements (as compared to $280.00 for the intervenors’ disbursements), it is clear that the amount of costs sought by the intervenors would have been within the reasonable expectation of the moving parties. I find the costs claimed to be reasonable and appropriate.

[35] In the result, the motion is dismissed with costs to the responding parties/intervenors fixed at $7,500.00, for which each of the individual moving parties shall be jointly and severally liable.

MOLLOY J.

Date: October 9, 2015

[^1]: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311 [^2]: Ibid, para. 64 [^3]: Singh v. Sandhu, 2013 ONSC 6479