Court File and Parties
CITATION: Centre for Immigrant and Community Services v. B.S.A. Diagnostics Limited, 2017 ONSC 3051
DIVISIONAL COURT FILE NO.: 449/16 DATE: 20170517
ONTARIO SUPERIOR COURT JUSTICE DIVISIONAL COURT
MARROCCO A.C.J.S.C.
BETWEEN:
CENTRE FOR IMMIGRANT AND COMMUNITY SERVICES
Respondent/Plaintiff
B.S.A. DIAGNOSTICS LIMITED and BIRINDER AHLUWALIA, aka BIRINDER SINGH AHLUWALIA
Appellants/ Defendants
Chia Hsuan Allisa Wu, for the Plaintiff/Respondent
Amrita Mann, for the Defendants/Appellants
HEARD at Toronto: March 22, 2017
Reasons for Judgment
MARROCCO A.C.J.S.C.
[1] The respondent successfully sued the appellant in Small Claims Court for breach of an agreement to purchase a Sapphire sponsorship at its 45th Anniversary Gala/fundraising event. Specifically, the appellant B.S.A. Diagnostics Limited was recognized as a sponsor at the Gala but never paid for the sponsorship.
[2] At the Small Claims Court trial the appellant Birinder Singh Ahluwalia testified and denied agreeing to purchase a sponsorship.
[3] Specifically, Dr. Ahluwalia testified that he had never heard of the respondent until he discussed the Gala with Dr. Leung – who was a long-term good friend of his and who sent referrals to his laboratories. Dr. Ahluwalia testified that while Dr. Leung asked him to be a sponsor, there was no discussion of a Sapphire sponsorship and that he didn't recall the word "sapphire" at the gala. He agreed that he was sent an email chain referring to "sapphire" before the lawsuit but he denied reading the email.
[4] At the Gala/fundraising event, B.S.A. Diagnostics Limited’s Logo was displayed on two large screens. In addition, a plaque was presented to Dr. Ahluwalia and B.S.A. Diagnostics Limited. The plaque was engraved as follows: “CICS, Centre for Immigrant & Community Services. The board of directors and staff extend their appreciation to BSA Diagnostics, Sapphire Sponsor for CICS’s 45th Anniversary Gala. November 8, 2013.”
[5] Dr. Ahluwalia testified that didn't notice any special recognition at the Gala until he was asked to pose for a picture with the plaque. Dr. Ahluwalia stated that he did not recall looking at the plaque or reading it. Dr. Ahluwalia also testified that he did not recall the display of his Logo at the Gala.
[6] Dr. Ahluwalia stated that while he and Dr. Leung sat at different tables, he and his guests attended the gala as Dr. Leung's guests.
[7] Dr. Ahluwalia stated that after he received the respondent’s invoice, he spoke to Dr. Leung who told him that there was no agreement and that he should forget about the invoice.
[8] Dr. Leung was not called as a witness at the trial.
[9] The Small Claims Court judge did not accept Dr. Ahluwalia’s evidence and found for the respondent.
[10] The appellants’ first objection is that the trial judge wrongly discounted Dr. Ahluwalia’s evidence that Dr. Leung told him to disregard the sponsorship invoice because there was no agreement to sponsor. The appellants also complain that the trial judge’s finding that Dr. Leung was not on the board of the respondent at the time of the conversation was factually incorrect.
[11] A review of the trial judge’s reasons indicate that the trial judge attached no significance to the statement attributed to Dr. Leung because he was not satisfied that Dr. Leung was purporting to bind the corporation. Specifically, the trial judge states at paragraph 48: “it was not clear whether Dr. Leung was just expressing his thoughts or purporting to speak on behalf of CICS. Dr. Leung was not called to testify. I therefore do not accept that evidence.” Further, the reason why the trial judge did not accept Dr. Ahluwalia’s evidence is set out in paragraph 43 of the Reasons where the trial judge states that Dr. Ahluwalia’s evidence was “somewhat vague and mostly he could not remember or did not notice. I therefore prefer the evidence of the plaintiff.” The trial judge’s observation that Dr. Leung had resigned from the board at the time of the conversation with Dr. Ahluwalia and therefore could not bind CICS was offered as a supplementary reason for discounting Dr. Ahluwalia’s evidence concerning the conversation.
[12] The appellants’ second objection is that the trial judge made an error by failing to decide whether an adverse inference ought to be drawn as a result of the respondent’s failure to call Dr. Leung as a witness at trial.
[13] The Supreme Court of Canada dealt with this question in the case of Levesque v. Comeau, [1970] S.C.R. 1010. In that case, the appellant claimed damages as a result of a motor vehicle accident, which occurred while she was a passenger in her husband’s car. The only question was whether the appellant lost her hearing as a result of the collision. There was evidence that the appellant had seen various doctors about her condition but no evidence was called from those doctors. This medical evidence was within the control of the appellant. In those circumstances the court made the following observation at page 1011: “she [the appellant] alone could bring before the court the evidence of those facts and as she had failed to do so, it must be presumed that such evidence would adversely affect her case” (emphasis added).
[14] It cannot be said that the evidence of Dr. Leung was within the sole control of the respondent. Dr. Leung was a long-term good friend of Dr. Ahluwalia and it was open to the trial judge to conclude that either party could have called Dr. Leung. Accordingly, it was entirely within the discretion of the trial judge to attach weight to the respondent’s failure to call Dr. Leung as a witness. The failure of trial judge to draw an adverse inference against the respondents cannot be properly characterized as an error.
[15] The appellant also complains that the trial judge pierced the corporate veil and found Dr. Ahluwalia personally liable for breach of the sponsorship contract.
[16] The Court of Appeal commented on piercing the corporate veil in the case of 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 at paragraph 68:
Typically, the corporate veil is pierced when the company is incorporated for an illegal, fraudulent or improper purpose. But it can also be pierced if when incorporated “those in control expressly direct a wrongful thing to be done": Clarkson Co. v. Zhelka at p. 578. Sharpe J. set out a useful statement of the guiding principle in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 at pp. 433-34 (Gen. Div.), aff’d [1997] O.J. No. 3754 (C.A.): "the courts will disregard the separate legal personality of a corporate entity where it is completely dominated and controlled and being used as a shield for fraudulent or improper conduct.”
[17] There was no evidence suggesting that B.S.A. Diagnostics Limited was incorporated for an improper purpose. There was no evidence suggesting that Dr. Ahluwalia agreed that he personally would sponsor the Gala; the invoices were made out to the BSA Group of Companies and the plaque presented at the Gala recognized B.S.A. Diagnostics Limited as the sponsor and not Dr. Ahluwalia.
[18] Accordingly, there was no basis for the finding that Dr. Ahluwalia was personally liable for breach of the sponsorship contract.
[19] The trial judge considered the question of costs and found that the respondent was largely successful at trial. This conclusion was open to the trial judge and as a result, there is no principled basis for disturbing the trial judge’s finding concerning the costs of the trial.
[20] The appeal by B.S.A. Diagnostics Limited is therefore dismissed. The appeal by Dr. Ahluwalia from the finding that he was personally liable for the breach of contract is allowed.
[21] The parties agreed that $6000 was a reasonable assessment of costs to be paid to the successful party. However, both parties had success on this appeal. As a result, there will be no order concerning costs.
___________________________ MARROCCO A.C.J.S.C.
Released: 20170517
CITATION: Centre for Immigrant and Community Services v. B.S.A. Diagnostics Limited, 2017 ONSC 3051
DIVISIONAL COURT FILE NO.: 449/16 DATE: 20170517
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MARROCCO A.C.J.S.C.
BETWEEN:
CENTRE FOR IMMIGRANT AND COMMUNITY SERVICES
Respondent/Plaintiff
– and –
B.S.A. DIAGNOSTICS LIMITED and BIRINDER AHLUWALIA, aka BIRINDER SINGH AHLUWALIA
Appellants/ Defendants
REASONS FOR JUDGMENT
MARROCCO A.C.J.S.C.
Released: 20170517