COURT FILE NO.: FS-18-00000324-0000 DATE: 2023 05 01 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Nagaveni, MANJUNATH D.K. Sherr and K. Montagnese, for the Applicant Applicant

• and -

Manjunath KUPPA G.S. Joseph and A. MacEachern, for the Respondent, Manjunath Kuppa Respondent

Danashankara MALLAPPA & Satish Kuamr SUBRAMANI A. Bakaity, for the Respondents, Danashankara Mallappa & Satish Kuamr Subramani Added Respondents

HEARD: April 05, 2023

REASONS FOR JUDGMENT RSJ RICCHETTI

MOTION

[1] This is a motion by the Applicant, Nagaveni Manjunath (the “Applicant”), to strike the pleadings of the Respondent, Manjunath Kuppa (“the Respondent”) and the added Respondents, Danashankara Mallappa, (“Mallappa”) and Satish Kuamr Subramani, (“Subramani”) for failing to comply with various court orders.

[2] The Applicant also seeks an order that:

a) The Respondent is not entitled to seek any further court Order(s);

b) The Respondent is not entitled to any further notice of any step in this proceeding;

c) The Respondent is not entitled to participate further in this proceeding; and

d) Monies frozen by the Mareva Order (described below) be paid into court until further order of this court.

THE POSITION OF THE PARTIES

i) The Applicant

[3] The Applicant submits that:

a) The Respondent secretively, deceptively and deliberately sheltered and disposed of his assets despite court preservation orders.

b) The Respondent refused to completely and accurately disclose his financial affairs, despite numerous court orders.

c) The Respondent failed to pay monies into court, being the proceeds of sale of the Matrimonial Home (described below).

d) The Respondent failed to pay spousal support ordered, despite having the financial ability to do so.

e) The Respondent failed to pay cost awards in favour of the Applicant, despite having the financial ability to do so.

f) Mallappa and Subramani knowingly and deliberately assisted the Respondent to breach this court’s Preservation Order regarding the Matrimonial Home.

g) Mallappa and Subramani knowingly and deliberately ignored court orders to provide detailed, complete and accurate information about their financial dealings with the Respondent or properties in which the Respondent had an interest, including encumbrance on and the proceeds of sale of the Matrimonial Home.

h) Mallappa and Subramani knowingly and deliberately disregarded the court order to pay the proceeds of sale of the Matrimonial Home into court, despite having the financial ability to do so.

[4] The Applicant submits that the only possible remedy for the above breaches is to strike the pleadings of the Respondent, Mallappa and Subramani and have the “frozen” monies paid into court.

ii) The Respondent

[5] The Respondent submits that the 2011 separation agreement, executed by the Applicant, waives her rights to equalization and support. Accordingly, striking the Respondent’s pleading would essentially eliminate this triable issue and deprive him of the ability to defend this Application.

[6] The Respondent submits that, if the 2011 separation agreement is found valid, then the Respondent’s conduct would not have prejudiced the Applicant or affected her claim.

[7] The Respondent submits there are other remedies which are less severe than striking pleadings that would be more appropriate in these circumstances.

[8] The Respondent submits that, given that he has “no income and cannot work”, he could not and cannot comply with the financial court orders of support, costs and payment into court.

iii) Mallappa and Subramani

[9] Mallappa and Subramani submit they were unaware of the Preservation Order and/or the outstanding motion to pay the proceeds of sale of the Matrimonial Home into court when they received and disbursed the proceeds of sale of the Matrimonial Home.

[10] Mallappa and Subramani submit that, when ordered by the court to deposit the proceeds of sale into court, the proceeds of sale had already been re-invested with the Respondent and were not “readily available or accessible” from the Respondent. Accordingly, Mallappa and Subramani submit, they could not comply with the court order to pay the proceeds into court.

[11] Mallappa and Subramani submit they still do not know specific and exact details of their re-investment of the proceeds of sale with the Respondent because the Respondent is “exercising his rights to silence in what had been a fairly lengthy contempt proceeding, which is no longer moving forward”.

[12] Mallappa and Subramani submit their conduct does not rise to the level to strike their pleading and disentitle them from participating in the proceedings.

INTRODUCTION

[13] The relief sought, striking a party’s pleading, is granted only in exceptional cases, reserved for only the most egregious conduct by a party where no other lesser remedy will redress the party’s failure to comply with court order(s). In circumstances such as:

a) Where a party, despite attempts by the court to obtain compliance by issuing court orders, fails to comply with the court orders and there is no prospect that a further court order(s) would be complied with by the party.

b) The party’s misconduct in the proceeding, including ignoring court orders and/or continuous bad faith conduct and/or obstruction of the litigation process that has, likely or will seriously prejudice the opposing party; or

c) Where the party is aware that continued misconduct or disregard of court order(s) could or would likely result in a striking of their pleading. In other words, the party has been given a last chance to comply with the court order(s).

[14] The grounds for granting an order striking a party’s pleadings for failure to comply with court orders, requires a clear evidentiary record for making such an order because it deprives the party, whose pleading is struck, from participating in an adversarial process where the presumption is that the court hears from all parties with an interest in the dispute so to permit the court to fairly hear and adjudicate their respective claims, rights and obligations on the merits. However, in some circumstances, a party may choose not to participate in the proceeding, resulting in in default or uncontested proceedings. In other proceedings, the party’s actions deprive them of their right to participate in the process.

[15] Hence, a lengthy procedural background is necessary in these motions.

[16] To suggest this is a typical family dispute, or even a high conflict dispute, is a serious understatement. The Applicant diligently sought to prosecute her financial claims but has been met with a serious, persistent, deliberate and flagrant response from the Respondent in this proceeding. The Respondent ignored his obligation to make full and accurate financial disclosure and disregarded numerous court orders. The Respondent’s conduct amounts to bad faith rising to the level of fraudulent misconduct. The Respondent engaged the assistance of Mallappa and Subramani, who then also engaged in misconduct and ignoring court orders. All of this was done by the Respondent, with the assistance of Mallappa and Subramani, for the sole purpose to avoid and defeat the Applicant’s financial claims to equalization and spousal support of family assets. By all accounts, the Respondent is a wealthy person who chose to engage in misconduct and ignored court orders, risking that his pleadings would be struck, rather than defending the Applicant’s financial claims on the merits. All to protect his financial wealth and not risk losing any of it to the Applicant in this proceeding.

FAMILY BACKGROUND

[17] The parties were married on March 13, 1992. In 1999, they emigrated to Canada. The Applicant is 53 years old. The Respondent is 58 years old. They have two children of the marriage. Both children are adults living independently.

[18] On August 9, 2011, the Applicant signed a document which purports to be a separation agreement. She says she was misled and coerced to sign the document. Yet, despite execution of the agreement, apparently, the parties continued to live together as a married couple. The Applicant denies the validity of the alleged separation agreement as it purports to waive all equalization and support claims. The Respondent submits the separation agreement is a complete bar to the Applicant’s claims. That issue is not before this court, and I make no comment or determination of that issue.

[19] In October 2014, the Respondent sought a divorce. The Applicant didn’t respond because, she alleges, at the Respondent’s insistence. The divorce was granted, by default, on December 18, 2014.

[20] In 2015, the Respondent asked the Applicant to leave the jointly owned home, 1525 Glenburnie Road, Mississauga (“Matrimonial Home”), but the Respondent allegedly promised to resume living together if, the Applicant left the matrimonial temporarily. The Applicant complied.

[21] Sometime later in 2018, because of alleged threats by the Respondent, the Applicant transferred her joint interest in the Matrimonial Home to the Respondent for $1. However, the Applicant remained liable on the joint debts registered against the Matrimonial Home for approximately $1,600,000.

[22] The parties went about with their lives representing themselves as a married couple.

[23] In addition to the Matrimonial Home, the Respondent also owned at least two rental homes valued over $1,000,000 each. Potentially more given subsequent evidence by Mallappa. However, the Respondent has numerous other corporate interests which are not valued and not fully disclosed – to date.

[24] In 2018, The Respondent, now the sole owner of the Matrimonial Home valued at over $3,000,000, the Respondent sought to sell the Matrimonial Home. The Applicant objected. As a result, the Applicant commenced this proceeding claiming equalization and spousal support.

[25] At the time of this Application, the Applicant claimed she has no assets and a limited income of approximately $20,000 per year. On the other hand, the Applicant claimed the Respondent owned at least 3 valuable properties (the two rental properties and the Matrimonial Home) valued in excess of $4,000,000, other corporate interests (details of which were not known to the Applicant), accounts/investments and valuable vehicles.

[26] The Applicant submits they separated in 2018 and seeks to set aside the 2011 separation agreement. The Respondent submits they separated in 2011 and relies on the 2011 separation agreement.

[27] As set out below, despite 4 ½ years of litigation, the complete and accurate disclosure of the assets and financial affairs of the Respondent has not been provided to the Applicant. The Respondent’s two rental properties have been sold and the monies “gone”. The Matrimonial Home has been sold and the monies “gone”. The Respondent’s accounts, as of October 2022, virtually empty. And the location of the Respondent’s monies (proceeds and previously in his account) and other undisclosed assets, such as his corporate holdings – unknown.

[28] The Respondent’s position in this litigation is that there is no net family property to equalize and that he has no financial ability to pay any spousal support or cost awards.

THE LAW

[29] Rule 1(8) of the Family Law Rules, O. Reg. 114/99 provides the court with broad authority to make any order necessary for a just determination of the matter, including striking pleadings:

(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,

(a) an order for costs.

(b) an order dismissing a claim.

(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party.

(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case.

(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise.

(f) an order postponing the trial or any other step in the case; and

(g) on motion, a contempt order.

[30] The power to strike pleadings is to be used sparingly and only in exceptional cases. However, where necessary and appropriate, where a litigant chooses to ignore court orders and fails to follow the basic principles of family law litigation, a fundamental tenant of which is the complete and accurate financial disclosure and no other lesser remedy is available to redress the party’s failure, the court has the discretion to strike a party’s claim.

Roberts v. Roberts, 2015 ONCA 450, at para. 15.

Purcaru v. Purcaru, 2010 ONCA 92, at para. 47.

[31] In Norris v. Norris, 2019 ONSC 2795 the court summarized a three-step test regarding the exercise of judicial discretion to strike a party’s pleadings:

a) Is there a triggering event justifying the striking of pleadings?

b) Is it appropriate to strike the pleadings in the circumstances of the case?

c) Are there other remedies in lieu of striking pleadings that might suffice?

Norris v. Norris, 2019 ONSC 2795, at para. 20

[32] I am not persuaded that a “triggering event” is necessary. A motion seeking to strike a party’s pleadings because of the continuous, deliberate and flagrant disregard for compliance with court orders or continuous disregard for compliance with the procedural process of the litigation process will suffice for the court’s exercise of its discretion under FLR 1(8).

THE FACTS AND DISCUSSION

December 31, 2018 Hearing and Ex Parte Preservation Order

[33] In 2018, the Respondent listed the Matrimonial Home for $3.2 million dollars. The Applicant objected. The Applicant sought a Preservation Order. On December 31, 2018, Doi J. granted the Preservation Order expressly prohibiting the Respondent from selling the Matrimonial Home (“Preservation Order”).

February 11, 2019 Hearing

[34] The Respondent brought a motion to set aside the Preservation Order. After several adjournments at the request of the Respondent, on February 11, 2019, the matter came back before the court.

[35] The Respondent, by this time, had stopped paying the Matrimonial Home expenses and had stopped paying insurance on the vehicle he owned, but the Applicant drove.

[36] The Applicant sought interim spousal support.

[37] In response, the Respondent claimed limited financial ability to pay neither the Matrimonial Home expenses nor any spousal support despite the Respondent not made provided financial disclosure and appearing to be enjoying an affluent lifestyle.

[38] On February 11, 2019, the court ordered the Respondent to:

a) Pay interim monthly spousal support of $5,000.

b) Make specified financial disclosure within 14 days: and

c) Pay $3,500 costs to the Applicant.

April 12, 2019 Hearing

[39] The Respondent failed to provide the financial disclosure as ordered. As a result, the Applicant brought a motion to compel the Respondent’s financial disclosure. At the time the motion was brought, the Respondent had not filed a Financial Statement. He had not filed an Answer. He had not paid the costs ordered.

[40] After the Applicant’s motion was brought, the Respondent prepared a Financial Statement and Answer. The Respondent was granted leave to late file his Answer and Financial Statement.

December 17, 2019 Hearing

[41] The Respondent brought a motion to vary the interim spousal support order made on February 11, 2019. The Respondent also sought to strike the Applicant’s claims because of the 2011 separation agreement.

[42] The Respondent also brought a motion to vacate the December 31, 2018 Preservation Order. However, the Respondent, at this hearing, subsequently advised the court that he was no longer contesting the 2018 Preservation Order.

[43] At the time of this motion, the spousal support arrears were $34,698.68. The Respondent had paid only one court ordered support payment and a few partial payments until June 2019, when he stopped making spousal support payments entirely. The Respondent’s December 10, 2019 Financial Statement, set out that the Respondent had NO INCOME. Yet, the Respondent had very substantial monthly expenses.

[44] The motion was adjourned to January 31, 2020.

January 31, 2020 Hearing

[45] The Respondent made some financial disclosure shortly before the hearing date. The Applicant sought an adjournment to review the Respondent’s late disclosure, questioning the sufficiency and accuracy of the Respondent’s financial disclosure. The court granted the adjournment.

March 10, 2020 Hearing (Reasons Released July 17, 2020)

[46] The Respondent’s motions were subsequently heard on March 10, 2020.

[47] Upon review of the Respondent’s late disclosure, the court concluded that the Respondent had still not disclosed “crucial financial information. In particular, the court identified the failure of the Respondent to disclose his interest in three (3) companies” involved in loans of hundreds of thousands of dollars.

[48] The court found:

a) Despite the Respondent’s alleged limited financial resources:

• The Respondent’s annual expenditures were over $235,000 including a $2,525 monthly payment for a luxury BMW i8 Sports car.

• The Respondent’s bank statements suggested he made around $300,000 per year.

• The Respondent lived in a $3.2 million dollar home with monthly expenses of $9,000.

• The Respondent’s credit card expenses were consistent with the much higher income; and

• The Respondent claimed to have millions of dollars of mortgages on his properties but did not disclose how he could have secured nor how he was servicing this financing on his alleged limited income.

b) The Respondent claimed he was unable to work and couldn’t stand or walk. Yet, at paragraphs 15 through 21 of the court’s endorsement, the Respondent’s own social media was compelling evidence of the Respondent’s physical abilities and lifestyle. For example (one of many):

[16] Although the Respondent claimed to be unable to stand or walk after the home invasion on March 17, 2019, he posted a public video to his Instagram profile that showed him dancing at a nightclub on April 22, 2019. The video also showed him performing a headstand on the dancefloor, which he described as “My signature move #headstand #dance #club #sugardaddy” on his Instagram profile.

[21] On or about December 27, 2019, the Respondent posted a photo to his Instagram profile that showed him downhill skiing at Snow Valley Ski Resort in Barrie, Ontario.

c) The Respondent disclosed in his May 22, 2020 Affidavit that he had sold one of his rental properties. The parcel registry showed the sale closed on April 21, 2020 under a power of sale by RBK Financing Inc. for $1.3 million dollars. The Respondent had not previously disclosed this indebtedness to RBK Financing Inc., nor the alleged renovations which allegedly led to a construction lien by Facility Maintenance Solutions Corp. (“Facility Maintenance). Both RBK and Facility Maintenance have the same registered offices, AND there was no evidence before the court that Facility Maintenance was in the construction or renovation business.

d) The Respondent paid $100,000 on an HSBC Line of Credit.

e) Mallappa (one of the subsequently added Respondents) told the Applicant that the Respondent had paid him $300,000, allegedly because Mr. Mallappa was a 50% holder of a $600,000 charge on the Matrimonial Home. However, Mallappa had previously told the Applicant that he was owed $150,000 by the Respondent. Subsequently, Mallappa admitted (in his April 22, 2022 Affidavit) that he told the Applicant he was owed $150,000 but says it was “to avoid further confrontation” with the Applicant. The Respondent had yet a different version of events. He denied paying Mallappa any money, but instead says that Mr. Mallappa transferred the charge to Mr. Subramani (the other added Respondent) and 2084596 Ontario Inc. The description of the transactions between the Respondent and Mallappa are and remain inconsistent and impossible to reconcile.

[49] The court was critical of the Respondent’s incomplete financial disclosure and the Respondent’s claims of limited or no financial means. The Court ordered the Respondent to make further specified financial disclosure within 60 days.

[50] The Court dismissed the Respondent’s motions. The Respondent was ordered to pay $17,900 costs to the Applicant.

July 12, 2020 Hearing

[51] The Respondent’s financial disclosure was not forthcoming.

[52] Again, and to address the alleged encumbrances on the Respondent’s properties, the court ordered the Respondent to produce without 60 days, “all records for all alleged loans from private lenders, including but not limited to proof of initial transfers of funds, any loan agreement and charge terms, any amortization schedule, proof of all payments towards the alleged loans, and any discharge statements.”

October 22, 2020 Hearing

[53] The Respondent’s financial disclosure was not forthcoming.

[54] The Respondent was not making the court ordered support payments. The Respondent had not paid the cost awards to the Applicant.

[55] On October 22, 2020, there was a Case Conference in this matter. Again, the court ordered the Respondent to make the outstanding financial disclosure by November 6, 2020. The Respondent was ordered to pay $1,500 in costs to the Applicant.

Sale of the Respondent’s Two Rental Properties

[56] According to the Respondent, there was no equity in the first rental property sold because of the alleged encumbrances – those same encumbrances that the Court ordered the Respondent to provide financial information, but which was not forthcoming.

[57] The second rental property was sold by the mortgagee – Mallappa. On the Mineola Property, there were serious questions about the validity and quantum of the outstanding indebtedness. According to Mallappa, there was no equity payable or paid to the Respondent from this sale, just like there was no equity on the sale of the first rental property. Mallappa says there was nothing payable or paid to the Respondent from this sale. Mallappa did provide a limited description of this sale in his February 17, 2023 Affidavit, two years after the sale, which description remained incomprehensible and not fully documented.

[58] The Respondent has never provided complete and accurate financial disclosure regarding the acquisition, financing and sale of these two rental properties.

May 18, 2021 Hearing and Adjournments

[59] The Applicant brought a motion to strike the Respondent’s pleadings because of his failure to comply with the support and cost orders and the various orders requiring the Respondent to make complete and accurate financial disclosure. This motion came before the court on May 18, 2021.

[60] The Respondent brought a cross motion seeking disclosure from the Applicant. The Respondent’s motion for disclosure from the Applicant was scheduled for July 22, 2021. On July 22, 2021, the Respondent sought and obtained an adjournment to August 12, 2021. The court ordered costs against the Respondent of $1,000. After numerous adjournments, at the request of the Respondent, nothing ever came of the Respondent’s cross motion.

[61] At the request of the Respondent, the Applicant’s motion was adjourned to July 8, 2021.

July 8, 2021 Hearing

[62] The Applicant’s motion was adjourned to August 5, 2021.

August 12, 2021 Hearing (Reasons Released October 01, 2021)

[63] The Applicant’s motion to strike was heard on August 12, 2021 by J. Dennison. Reasons were released on October 1, 2021.

[64] The Respondent continued to allege an inability to comply with court orders because of impecuniosity. The Respondent had only made nominal payments for both ordered spousal support and the costs awards. The spousal support arrears, at the time, were $84,377.05.

[65] The Respondent acknowledged that he had not made complete financial disclosure in accordance with his FLA obligations and the three prior financial disclosure orders. The Respondent proffered explanation why he was not able to provide the remaining items.

[66] The court was satisfied that the outstanding disclosure was crucial, including documents relating to the power of sale of the two rental properties and details of the encumbrances which the Respondent alleged eliminated any equity in those two rental properties.

[67] The Respondent claimed that he did not receive any funds from the sale of his two rental properties. However, the Applicant subsequently discovered that Mallappa received $428,152.94 from the sale of one of the rental properties. Complete details and circumstances of this payment (along with other financial disclosure for these two rental properties) has never been provided nor fully documented and disclosed by neither Mallappa nor the Respondent.

[68] In addition to the rental properties, the Respondent claimed that the Matrimonial Home had little to no equity, alleging there were:

a) Two liens on the property.

b) $1,850,000 registered mortgage; and

c) An alleged $600,000 mortgage (a claim that the court referred to as having “serious reservations about the legitimacy” of this debt).

[69] The court rejected the Respondent’s claim that he was unable to comply with the court orders.

[60] In considering the proper remedy with respect to the outstanding cost orders and outstanding spousal support owing, I have considered the impact of the Respondent’s failure to pay the outstanding court orders and spousal support has had on the Applicant. The Applicant earns approximately $44,000. The Respondent claims the Applicant earns cash that she does not declare. He has not provided any evidence to support such a finding.

[62] The Respondent’s failure to comply with the spousal support order and costs orders is wilful. There is enough equity in the former Matrimonial Home for the Respondent to pay the money that is outstanding. The Respondent has shown repeated disregard for paying the Applicant pursuant to the court orders. He sold his car and did not use those proceeds to pay the outstanding cost orders or spousal support arrears. The Respondent has chosen to live in a very expensive home that costs him approximately $9,000 per month to maintain. The Applicant has demonstrated that the Respondent has led a lavish lifestyle up until at least July 2020, when he brought the motion to vary the interim spousal order.

[63] Recognizing that striking of pleadings is a remedy of last resort, I am giving the Respondent one last chance to comply with the court orders. The Respondent is to pay the Applicant the amount owing for the outstanding cost orders and spousal support owing within 150 days.

[64] The Respondent may choose to remortgage or sell the house to satisfy the court orders. If the Respondent has not paid the Applicant the outstanding monies owed for costs and spousal support, the Applicant is granted has leave to have the motion to strike the pleadings be heard without further leave of the court. If the Respondent fails to repay the Applicant the outstanding amounts owed for costs and the amount of arrears owing for spousal support, the Respondent is likely to have his pleadings struck and the court order that the Applicant may proceed to trial on an uncontested basis.

(Emphasis added.)

[70] The Respondent was ordered to pay costs to the Applicant of $17,000 within 60 days, on the basis “the Respondent had acted dishonestly and wilfully to deprive the Applicant of interim spousal support knowing that his physical disability claim was untrue”.

The Discussions – the Sale of the Matrimonial Home

[71] After the release of the court’s reasons on October 1, 2021, there were no payments by the Respondent for either outstanding support or costs.

[72] The Respondent did not make the ordered financial disclosure.

[73] The parties disagreed over the way the Matrimonial Home was to be sold. In the fall of 2021, the Respondent unilaterally listed the Matrimonial Home for sale – with himself as the listing agent. The Applicant objected. The Respondent insisted he had the right to sell the Matrimonial Home and neither the 2018 Preservation Order nor the October 1, 2021 Reasons prohibited it.

[74] The Respondent advised the court he would comply with October 1, 2021 Reasons and provide “full visibility” that, if the Matrimonial Home did not sell for a reasonable price, he would refinance it to satisfy the outstanding orders for support and costs within the timeframe allotted to him.

[75] What is noteworthy, is the Respondent stated there was sufficient equity in the Matrimonial Home that, a refinancing by him, would permit him to satisfy all outstanding court orders for the Applicant’s support and costs. This was inconsistent with the Respondent’s early statement that there was little to no equity in the Matrimonial Home. This is also inconsistent with the subsequent sale of the Matrimonial Home where the Respondent, Mallappa and Subramani all said there was no equity in the Matrimonial Home nor any proceeds were available or paid to the Respondent.

[76] The Mallappa and Subramani indebtedness secured against the Matrimonial Home is fraught with inconsistencies and questions. For example, Mallappa, in his April 22, 2022 Affidavit, describes the discharge of the mortgage on the Matrimonial Home (consistent with the early evidence that the Respondent had paid him $300,000 being ½ of the $600,000 mortgage). But then, after discharging that mortgage, there was a new mortgage placed shortly after the October 1, 2021 Reasons were released ordering that the Matrimonial Home be sold or refinanced to satisfy the outstanding orders. Mallappa described the discharge and subsequent charge he “reacquired” in November 2021 (the month following the release of the court reasons) as follows:

[24] As the Applicant's psychological pressure was enormous, I decided to transfer the 1525 Glenburnie charge with an intent to regain the charge at a later date. On 11th May 2020, the charge was transferred to get relief from the Applicant’s vexatious emotions towards myself. Later, the charge was reacquired in November 2021.

(April 22, 2022 Affidavit of Mallappa)

[77] And why did Mallappa and Subramani proceed with their power of sale of the Matrimonial Home of the “reacquired” mortgage:

49. Because of the ongoing court battle, the respondent informed me that he is out of funds and stopped paying his mortgage. He also mentioned that he could not afford the house or his lifestyle anymore and that the house may be lost in the battle with the court proceedings, as the applicant was moving for an uncontested trial. Due to these concerns, I decided to recover my loaned funds was via the power of sale. If I had not commenced the proceedings, HSBC would have done so, and I would have incurred substantial losses. Thus, Karanpaul was contacted to initiate the power of sale as he had previously done for 1299 Mineola gardens.

(April 22, 2022 Affidavit of Mallappa)

(Emphasis added.)

[78] This was later described as the Respondent “encouraging” the power of sale that eventually resulted in the sale by Mallappa and Subramani of the Matrimonial Home, despite the 2018 Preservation Order.

[79] Also undisclosed is that shortly after the October 1, 2021 J. Dennison Order and while the discussions between the Respondent and the Applicant were ongoing regarding the sale of the Matrimonial Home, Mallappa and Subramani commenced their Power of Sale on November 4, 2021. The Respondent was aware of this, not only having encouraged this, but as a recipient of the Notice of Sale that would have been served on him. This was not disclosed by the Respondent. This information only came to light after the Matrimonial Home had been sold in the spring of 2022 – many months later.

March 23, 2022 Hearing

[80] The Applicant, not knowing of the power of sale, in financial need of the outstanding spousal support and payment of the cost order and unable to come to terms with the Respondent, brought a motion to sell the Matrimonial Home.

[81] The court determined that the Applicant’s motion to immediately sell the Matrimonial Home was urgent. Before the Applicant’s motion could be heard, the Applicant learned that one of the registered financial institution mortgages, securing a Line of Credit, had been paid off in its entirety. Eventually, after making inquiries, the Applicant learned that the Matrimonial Home had been sold.

[82] The Applicant brought a motion to strike the Respondent’s pleadings and to preserve (or freeze) the proceeds of sale. The motion to strike was scheduled for March 31, 2022.

[83] It is important to note that, on March 23, 2022, when this motion was brought,

a) Mr. Mallappa had $827,817 in his RBC account; and

b) Mr. Subramani had $828,883.90 in his TD account.

[84] Also unbeknownst to the Applicant and not disclosed to the court, all the proceeds of sale (after the third-party registered encumbrances were paid) had allegedly been disbursed to Mallappa and Subramani by March 28, 2022. Mallappa and Subramani claim they had no knowledge of the Preservation Order nor outstanding motion. Yet even Mallappa admitted in his affidavit that the Respondent had told him about the court proceeding and that the Matrimonial Home might be “lost”.

March 24, 2022 Hearing

[85] As of March 21, 2022, the Respondent was in arrears of $152,991.77 in spousal support and $31,375 in costs - plus interest.

[86] Once again, it was confirmed to the court that the Matrimonial Home had been sold by Mallappa and Subramani, purportedly, under a power of sale for $3.35 million dollars. Even more surprising, the court was advised by the real estate lawyer for Mallappa and Subramani, Mr. Randhawa, that he had already disbursed all the proceeds of sale to Mallappa and Subramani save for $15,537.

[87] There are several problems with Mallappa’s and Subramani’s assertion they didn’t know about the outstanding Applicant’s motion to preserve the proceeds of sale:

a) Mr. Randhawa, their real estate lawyer on the sale of the Matrimonial Home, was before the court on March 24, 2022 (before all the proceeds were “reinvested” by Mallappa and Subramani), was fully aware of the 2018 Preservation Order and the outstanding motion to freeze the proceeds of sale.

b) Mr. Randhawa undertook to the court on March 24, 2022 to forward the Applicant’s motion materials to “freeze” the proceeds of sale to Mallappa and Subramani.

[88] To whom were the monies disbursed? No information was disclosed by either Mallappa or Subramani.

[89] Eventually, it was disclosed to the court that Mallappa and Subramani received $1,646,569.24. PLUS they received the sum of $86,435, which amount was identified as real estate commission for the listing agent. Neither identified who was the listing agent nor entitled to the commission. Later, when the Agreement of Purchase and Sale was disclosed, the listing agent was the Respondent’s son.

[90] The Applicant sought an order that Mr. Randhawa hold the few proceeds, still in his trust account, until further order of the court. The Applicant sought an order adding Mallappa and Mr. Subramani as parties to this proceeding.

[91] Considering these developments, the Applicant asked for an adjournment to file additional evidence. The hearing was adjourned to March 30, 2022.

March 30, 2022 Hearing

[92] On March 30, 2022, an adjournment was sought by the Respondent (an alleged health issue) and by Mallappa and Subramani (seeking to retain Counsel and an opportunity to respond).

[93] The hearing was adjourned to April 1, 2022.

April 1, 2022 Hearing

[94] On April 1, 2022, the Respondent, Mallappa and Subramani again sought an adjournment. Mallappa and Subramani both advised the court that, not only had they received the proceeds of sale of the Matrimonial Home, they had re-invested the monies. Where and with whom was not disclosed at that time – and would not be disclosed to the Applicant or the court for 5 months.

[95] The court granted a further adjournment to April 28, 2022 but ordered the following:

b. Mr. Mallappa shall preserve and not disburse or deplete any of the funds currently held in any accounts to which he invested or otherwise placed any of the net proceeds that he or any entity under his control received from the sale of the property at 1525 Glenburnie Road in Mississauga; and

c. Mr. Subramani shall preserve and not disburse or deplete any of the funds currently held in any accounts to which he invested or otherwise placed any of the net proceeds that he or any entity under his control received from the sale of the property at 1525 Glenburnie Road in Mississauga.

[8] By April 22, 2022, the Respondent and Mr. Randhawa shall provide the Applicant with financial disclosure to show where the listing commissions for the sale of the former Matrimonial Home at 1525 Glenburnie Road in Mississauga were paid. Further, both Mr. Mallappa and Mr. Subramani shall forthwith give the Applicant financial disclosure to confirm where the amounts received from the sale of the property at 1525 Glenburnie Road in Mississauga referred to in paras 7(b) and (c) are being held.

(Emphasis added.)

[96] This order clearly required Mallappa and Subramani, by April 22, 2022, to disclose where the proceeds from the sale of the Matrimonial Home were being held and where the listing commission was paid.

April 22, 2022 Evidence

[97] Mallappa and Subramani did not provide the ordered financial disclosure.

[98] The evidence of Mallappa and Subramani, at that time, is important as it conflicts with their subsequent evidence and that of the Respondent.

I) The Respondent’s Evidence

[99] The Respondent stated in his April 22, 2022 Affidavit that:

27. The distribution of funds [from the power of sale] has happened for the account of the Solicitor and I have not received even a single penny from the transaction.

(Emphasis added.)

[100] The Respondent went on to state that he was dependent upon his son for day-to-day expenses, he had insufficient income to rent a premises, and he was residing at the home of a friend.

[101] The Respondent did NOT disclose that, on April 22, 2022, he had more than $1,000,000 in his bank accounts:

a) $7,393.84 in TD account 69*****

b) $232,504.52 in TD account 52*****

c) $270,201.11 in TD account 52*****

d) $248.79 in RBC account 50*****

e) $80,808.30 in RBC account 101-*****; and

f) $410,775.72 in RBC account 107-*****

[102] These balances do not reflect substantial prior withdrawals from the accounts by the Respondent. This disclosure was obtained through the subsequently obtained Norwich Orders (a Norwich order, usually obtained on an ex parte basis and directs third parties to make documentary disclosure to the party obtaining the order).

[103] The April 22, 2022 statement by the Respondent that he didn’t receive a “single penny” was later, in August 2022 (4 months later) shown to be clearly false. The Respondent did not disclose that Mallappa and Subramani, after receiving more than $1.6 million dollars from the sale of the Matrimonial Home, returned all the proceeds to the Respondent or entities controlled by him.

II) Mallappa’s Evidence

[104] Mallappa in his April 22, 2022 Affidavit stated that he “reinvested” most of the proceeds the day after the Applicant’s motion was first in court on March 24, 2022:

51. The proceedings from the sale of 1525 Glenburnie road were re-invested within a day or two of the receipt of the funds. The transactions can be seen in Exhibit “J”. Of the $780,000 received, the $750,000 was reinvested on 24th March 2022 and the remaining was invested on 28th March 2022.

52. Based on the April 1st, 2022 endorsement, the remaining funds were to be preserved until further notice. However, all the funds except $405 were reinvested before 28th March 2022. The account balance by 1st April was around $2,700.

[105] Mallappa does NOT disclose nor provide an explanation for not complying with the court order as to where the proceeds of sale from the Matrimonial Home were.

III) Subramani’s Evidence

[106] Like Mallappa, Subramani also deposed in his April 22, 2022 Affidavit, that he too had disposed of the proceeds he received by showing a copy of a screenshot showing no activity in his TD bank account post April 1, 2022. The exact dates of his “reinvestment”, to whom the proceeds were sent were redacted.

[107] As for his failure to provide detailed disclosure of the whereabouts of the proceeds he received, Mr. Subramani stated, in his April 22, 2022 Affidavit, that:

39. I am not comfortable with providing financial disclosure to Applicant relating to the investments I have made with respect to my portion of the proceeds from the power of sale of 1525 Glenburnie. I have serious concerns that providing said disclosure will risk involving legitimate business partners, family and friends in this family proceeding, which should remain strictly between the Applicant and the Respondent only.

40. The Applicant makes allegations of a fraudulent conspiracy without merit, likely having regrets in agreeing to register the disputed mortgage in favour of Mr. Mallappa and myself against 1525 Glenburnie Road on account of funds borrowed by the Respondent.

[108] The court said:

Both Mr. Mallappa and Mr. Subramani expressed their reluctance to share information about the current location or whereabouts of these funds apart from advising that they had reinvested the funds in accounts under their control. Apart from their bald assertions of unspecified risks to their alleged business partners, family or friends, neither Mr. Mallappa nor Mr. Subramani identified any actual or particular prejudice from the disclosure of this information.

April 28, 2022 Hearing

[109] Despite the court order, Mallappa and Subramani continued to refuse to provide details and the whereabout of their alleged re-investment of the proceeds. On April 28, 2022, an adjournment was requested by Mallappa and Subramani’s Counsel. The adjournment was granted to May 2, 2022.

May 2, 2022 Hearing (Reasons released on May 13, 2022)

[110] On May 22, 2022, the Applicant’s motion was heard. The court ordered that:

a) Mallappa and Subramani were added as parties.

b) With respect to the sale of the Matrimonial Home and the sale proceeds, the court said:

[8] …Two of the Respondent’s friends, Danashankara Mallappa and Satish Kumar Subramani, had sold the Property under an alleged power of sale to enforce a $600,000.00 jointly-held charge that had been receipted against the home in April 2013.

[9] Although the December 31, 2018 preservation order had restrained the Respondent from transferring the former Matrimonial Home, he nevertheless listed the home for sale on November 4, 2021 as the listing agent. The next day, Karanpaul Singh Randhawa, the real estate solicitor for Messrs. Mallappa and Subramani, purportedly served the Notice of Sale dated November 4, 2021 on the Respondent while he also served as the listing agent….

[13] According to Mr. Randhawa’s first or “draft” trust ledger statement dated March 24, 2022 for the power of sale, Mr. Mallappa and Mr. Subramani each took $780,067.12 to retire their alleged $1.503 million second mortgage, an alleged $80,230.00 invoice from Facility Maintenance dated March 2, 2022 was paid with $74,781.75 of the sale proceeds while Mr. Mallappa and Mr. Subramani got to split the $5,448.25 balance for reasons that are unclear, $16,417.36 was paid to Mr. Randhawa for legal fees, and $27,130.00 went to an alleged commission for the listing agent. Later on, however, for reasons that remain unexplained, Mr. Randhawa prepared a second or “final” trust ledger statement dated March 31, 2022 in which the $80,230.00 that was paid to Facility Maintenance and Messrs. Mallappa and Subramani from the proceeds of sale was deleted. Mr. Randhawa’s second trust ledger statement also shows that Mr. Mallappa and Mr. Subramani each got a further $43,217.50 (i.e., being an apparent half-share of $86,435.00) on some unknown date from the cooperating realtor (i.e., acting for the buyer on the power of sale) for unexplained reasons which the Applicant surmises is likely the listing realtor’s commission on the sale of the home.

[19]…. By Endorsement dated July 17, 2020 at para 73(d)(iv), the Respondent was ordered to produce without 60 days, “all records for all alleged loans from private lenders, including but not limited to proof of initial transfers of funds, any loan agreement and charge terms, any amortization schedule, proof of all payments towards the alleged loans, and any discharge statements.” However, he provided no records or evidence of any sort until January 12 and 18, 2021 when he produced two tranches of records that included email exchanges with “Dana Shankar” (i.e., who is said to be Mr. Mallappa) and “Satish Kumar” (i.e., who is said to be Mr. Subramani).

[20] When taken at face value, the Respondent’s brief emails with Mr. Mallappa in the January 12, 2021 disclosure brief imply that he owed Mr. Mallappa $200,000.00 as of January 6, 2021 after offsets to reconcile a series of loan and repayment transactions. Similarly, the Respondent’s email communications with Mr. Subramani seemingly show at face value that he owed Mr. Subramani a $210,000.00 principal debt with outstanding interest of $2,875.00 as of July 3, 2014.

[21] The January 18, 2021 brief includes a draft dated January 7, 2019 for $124,000.00 payable to the Respondent, and a bank slip showing a third party deposit of $26,000.00 and withdrawal of $26,000.00 that purportedly evidence an alleged $150,000.00 payment from Mr. Mallappa to the Respondent. The brief also contains redacted bank statements from Mr. Subramani showing transfers to “Manju” (i.e., who seems to be the Respondent) of $50,000.00 in November 2016 and $99,350.00 in February 2017.

[22] The above-mentioned material comprises the totality of the Respondent’s evidence for the alleged loans which triggered the power of sale, which he apparently compiled with assistance from Mr. Mallappa and Mr. Subramani after seeking their help and cooperation to establish what monies were owed and paid. Minimal or no evidence was tendered to show that Mr. Mallappa or Mr. Subramani actually transferred or advanced any funds to the Respondent, as stated in the above-mentioned emails, and the evidence on the motion lacks the sort of records normally associated with private loans of this nature such as receipts, amortization schedules or discharge statements. Moreover, at no point prior to this motion did the Respondent represent that he owed anything other than $600,000.00 on the private second mortgage for the former Matrimonial Home, as stated in his financial statement and affidavit sworn August 6, 2021. However, the record includes a private mortgage commitment letter dated April 1, 2013 for a $600,000.00 loan at 10% interest for an open term with a renewal fee of 8% per annum (i.e., which translates to $48,000.00 per year) which was signed by both the Applicant and the Respondent, respectively.

[24] ….As the Respondent conceded on the motion, he approached Mr. Mallappa and Mr. Subramani and encouraged them to bring a power of sale to redeem the mortgage before the family proceeding could progress to a potential uncontested trial due to his non-payment of spousal support and costs arrears. The Respondent then listed the property for sale on the same day as the Notice of Sale was prepared, which was several days before it allegedly was served on him. According to the Notice of Sale, the $600,000.00 principal balance is due along with $513,849.31 in accrued interest on the automatic annual renewal fee over the 8 ½ year period when the Respondent apparently made nearly no payments on this debt.

(Emphasis added.)

[111] Justice Doi’s detailed reasons set out additional highly questionable financial dealings by the Respondent, the involvement of Mallappa and Subramani in the Respondent’s disposition of his property, including the numerous questionable financial dealings between them as it relates to the Matrimonial Home. The Respondent, Mallappa and Subramani’s disregard of the court order to make complete and accurate financial disclosure, the disregard as to the whereabouts of the proceeds, and the timing of the listing, sale, distribution and reinvestment, raised a prima facie case of fraud.

[112] As a result, Justice Doi ordered that Mallappa and Subramani pay the amount of the proceeds into court.

[113] It is important to remember, there remained outstanding, substantial, serious financial questions about the sale of the two rental properties and the alleged lack of any proceeds paid or payable to the Respondent.

[114] Justice Doi once again ordered Mallappa and Subramani to make complete financial disclosure of the indebtedness of the various Respondent’s homes (the rentals and Matrimonial Home) and the proceeds:

b. Danashankara Mallappa, Satish Kumar Subramani, and Karanpaul Singh Randhawa are added as parties to this proceeding;

c. Upon the Applicant filing an undertaking as to damages with the court, Danashankara Mallappa, Satish Kumar Subramani, and Karanpaul Singh Randhawa shall forthwith pay into court any and all funds which they either have received or are holding on account from the sale of 1525 Glenburnie Road in Mississauga, subject to Mr. Randhawa being able to pay any outstanding property tax or utility charges on the subject property from the funds being held in trust which must be set out in a valid written invoice that he must first produce to the other parties before making any such payments;

d. Danashankara Mallappa and Satish Kumar Subramani shall forthwith produce proof of the advance or receipt of funds, and account for any and all amounts which they claim were due and payable by the Respondent to them, including but without limiting the generality of the foregoing, in respect of the property at 1525 Glenburnie Road, proof of the advance of funds relating to any charge and all documents relating to any such charge including all charge terms, any demands for payments against the alleged unpaid balance, any payments or amount received in relation to this alleged debt whether personally or through another person or corporation to which they have an interest, full particulars of the calculation as to monies owed under the charge pursuant to the Notice of Sale dated November 4, 2021, all documentary evidence relating to any sale of any secured interest including proof of payment, and all documentary evidence relating to any re-acquisition of any secured interest, including proof of any payment to acquire it.

e. Danashankara Mallappa shall further produce in respect of the property at 1299 Mineola Gardens, full details and supporting documentation regarding the transfer of his ownership of 1299 Mineola Gardens to the Respondent and a detailed and sworn explanation as to the transfer of real property to an individual who allegedly owes him $300,000.00 on another property, and full particulars and supporting documentation regarding the acquisition of the $50,000.00 charge and its subsequent change to become a $400,000.00 charge, including all transfers of funds relating to same;

f. Karanpaul Singh Randhawa shall forthwith produce:

i. A full accounting of the whereabouts of the sale proceeds of 1525 Glenburnie Road including proof of all financial transactions and the location and timing thereof;

ii. Produce the content of his file that is not subject to solicitor client privilege for all matters involving the Respondent, Danashankara Mallappa and/or Satish Subramani, including but not limited to the power of sale of 1299 Mineola Gardens, the transfer of Danashankara Mallappa’s secured interest in 1525 Glenburnie, and the power of sale of 1525 Glenburnie Road;

iii. Full particulars of his statement of account dated March 24, 2022 including production of the statement of claim, the requisition for default judgment, and the writ as set out in his statement of account;

iv. Full particulars of the whereabouts of the $200,000.00 deposit and full particulars of the listing agent for the power of sale in respect of 1525 Glenburnie Road;

[115] Justice Doi proceeded to grant a Norwich Order.

Refusal to Pay the Proceeds into Court

[116] Neither the Respondent, nor Mallappa nor Subramani paid any monies into court. Not as ordered. Not to date. But there were funds available to the three respondents to fully comply or, at a minimum, partially comply with the order to pay the proceeds into court.

[117] On May 13, 2022, the Respondent had more than $1,646,000 in his accounts (again subsequently obtained documentation pursuant to the Norwich order):

a) a. $4,893.84 in TD account 69****

b) b. $232,499.52 in TD account 52****

c) c. $270,196.11 in TD account 52*****

d) d. $203.79 in RBC account 50*****

e) e. $80,803.30 in RBC account 101-******

f) f. $410,775.72 in RBC account 107-****

[118] The week following the May 13, 2022 Order, the Respondent transferred out of his accounts, approximately $800,000. None was paid into court.

[119] On May 13, 2022, Mallappa had approximately $200,000 in known accounts. On May 25, 2022, Mallappa received $995,139 from an undisclosed source, and paid $955,000 to the Respondent on May 31, 2022. Mallappa also proceeded to encumber his properties with a $2,500,000 blanket mortgage in favour of a numbered company, incorporated by the Respondent’s son.

[120] On May 13, 2022, Subramani had approximately $250,000 in his known accounts.

June 10, 2022 Hearing

[121] On June 7, 2022, the Applicant brought a motion to settle the May 13, 2022 Order and to enforce compliance with that Order.

[122] By the hearing date, there was still no payment into court, no financial disclosure, no disclosure as to the whereabout of the proceeds of sale of the Matrimonial Home.

[123] The court said:

By Endorsement dated May 13, 2022, I ordered the Respondents to forthwith pay funds into court and provide disclosure. But despite multiple efforts by the Applicant to secure compliance, the Respondents paid no funds into court, made no disclosure, and gave no response to the draft order which the Applicant circulated on May 25, 2022 for approval as to form and content. As a result, the Applicant brought this urgent 14B motion dated June 7, 2022 to enforce my orders.

(Emphasis added.)

[124] The motion was adjourned to June 13, 2022.

June 13, 2022 Hearing

[125] Neither Mallappa nor Subramani disclosed the whereabouts of the proceeds of sale of the Matrimonial Home nor did either make any payment into court.

[126] Mallappa and Subramani were not present at this hearing. Mallappa and Subramani’s Counsel requested a 30-day adjournment allegedly to produce the ordered disclosure, submitting that materials had to be reviewed to deal with issues of privilege. What possible privilege issue might exist as to the whereabout of the proceeds of sale was not described.

[127] The court adjourned the matter to June 23, 2022.

[128] On June 15, 2022, Mallappa and Subramani, wrote to the court stating they were not aware of the May 13, 2022 hearing. Despite the fact, their counsel had been present.

June 23, 2022 Hearing

[129] The Respondent sought to be removed as one of the persons ordered to pay the proceeds of sale into court. The Respondent’s position was that there was no evidence he had received any proceeds and, hence the order to pay the monies into court should not include him. Given the Respondent’s lack of financial disclosure and failure to pay the monies into court, the court rejected the Respondent’s submission.

[130] Mallappa and Subramani also sought to vary the Order made in Doi J.’s Reasons on May 13, 2022. Justice Doi rejected Mallappa and Subramani’s submission:

In emails filed with the court on June 15 and 16, 2002, respectively, Mr. Mallappa and Mr. Subramani claimed that they had been unaware of the June 13, 2022 hearing and, therefore, did not appear and were unable to make submissions to settle the Order that day. Their new counsel, Mr. Bakaity, restated this on behalf of his clients at today’s appearance. However, from the Applicant’s unchallenged affidavit sworn June 21, 2022, I find that Mr. Mallappa and Mr. Subramani had advance notice of the June 13, 2022 return date and received the zoom link for the hearing prior to its return. In the circumstances, I find that the requests by Mr. Mallappa and Mr. Subramani to revisit the terms of the Order were made without merit on false information that warrants a sanction of costs to express the court’s disapproval of their conduct. Mr. Mallappa and Mr. Subramani shall forthwith pay the Applicant costs fixed at $800.00, inclusive of taxes and disbursements, for requiring her to prepare for and attend on that matter.

(Emphasis added.)

[131] The court reaffirmed the amounts to be paid into court by Mallappa ($780,067.12) and Subramani ($780,067.12).

[132] The court granted Mallappa and Subramani a further 30 days to provide the disclosure but no additional time to pay the proceeds into court.

The Contempt / Strike Pleadings Motions

[133] None of the three respondents complied with the court orders for full disclosure nor payment into court of the proceeds of sale.

[134] On June 29, 2022, the Applicant brought a contempt/strike motion against the Mallappa and Subramani. Subsequently, the Applicant brought a contempt/strike motion against the Respondent. These motions were to be heard together.

[135] On June 30, 2022, Mallappa and Subramani would again represent, through their Counsel, that they had re-invested the proceeds from the sale of the Matrimonial Home and could not access their investments without a “substantial loss”. The letter from Mr. Bakaity reads:

Unfortunately, prior to your Notice of Motion being served, the funds were received by my clients and then were invested. These investments unfortunately cannot be liquidated at this particular time. If they were, any liquidation would result in a substantial loss.

(Emphasis added.)

[136] Again, no disclosure of to whom the proceeds were paid or where the proceeds were. AND no payment into court. Incurring a “substantial loss” was not an exception to compliance with the court order. Also, on numerous later occasions including in the affidavit for these motions, Mallappa and Subramani stated the Respondent told them the reinvested monies were simply not available – at a loss or otherwise.

[137] The hearing for both contempt motions was scheduled for August 15, 2022.

August 15, 2022 Hearing

[138] The Respondent’s Counsel motion to be removed as solicitor of record was granted. Neither Mallappa nor Subramani appeared but were represented by Counsel.

[139] No responding materials had been filed by any of the three respondents.

[140] No further disclosure was made by any of the three respondents.

[141] No payment into court by any of the three respondents.

[142] The Respondent called later the day to say he was ill – high blood pressure. He produced a medical letter dated August 11, 2022 which states: “He finds that stress especially that of going to court markedly elevates his blood pressure, which it likely does and makes him feel very unwell”.

[143] The Respondent’s failure to attend prompted Mallappa and Subramani’s Counsel to seek an adjournment because, according to them, the Respondent was going to take the “lead” in the contempt/strike motions. Mallappa and Subramani’s Counsel produced some banking records of Mallappa and Subramani that he “intended to rely on”. To be clear, this was not the complete financial disclosure ordered to be provided by Mallappa and Subramani. Nor did either of them pay any of the proceeds into court.

[144] However, now faced with a contempt motion, Mallappa and Subramani, for the first time, acknowledged that they had transferred ALL the proceeds from the sale of the Matrimonial Home to the Respondent or entities within his control. As confirmation, they produced their bank records showing the proceeds going into their accounts and back out staring on March 24, 2022 (the very next day after the Applicant’s motion to preserve the proceeds of sale was served). The exact destination of the proceeds of sale were NOT disclosed – only that the proceeds had been transferred to the Respondent.

[145] The court adjourned the contempt/strike motions to September 2, 2022.

August 29, 2022 Evidence

I) Mallappa’s Evidence

[146] Mallappa stated in his Affidavit of August 29, 2022 that, after he received the proceeds from the sale of the Matrimonial Home, he reinvested the money by March 28, 2020. With whom?

“I decided to reinvest these monies with Mr. Kuppa [the Respondent]”

[147] Why didn’t he pay the monies into court?

“I inquired with Mr. Kuppa about the status of my investment. He indicated that the funds were invested, but were not in liquid form. He failed to provide me with any further concrete information in that regard, other than to state that monies are not available.”

II) Subramani’s Evidence

[148] Subramani also delivered an Affidavit of August 29, 2022.

[149] The language was identical to that in Mallappa’s Affidavit.

Unfortunately, these monies were advanced to Mr. Kuppa, as previously stated.

6. Of course, I am aware of the Order of Justice Doi dated May 13, 2022 and the subsequent Order dated June 23, 2022 requiring me to return the funds or pay them into Court. Unfortunately, those monies were advanced to Mr. Kuppa, as previously stated. Attached to this my Affidavit and marked as Exhibit “A” is a copy of my back records setting out the transfers to entities and companies owned by Mr. Kuppa. When it was ordered that the monies were to be paid into Court, I inquired with Mr. Kuppa about the status of my investments. He indicated that the funds were invested, but were not in liquid form. He has failed to provide me with any further concrete information in that regard, other than to state that monies are not available. I have asked if they were invested in stocks, bonds, etc. that could be pledged as security, and he indicated that the monies are currently invested but he could not provide me with any details of same, other than to state that the investments could not be liquidated.

7. Manjunath Kuppa has also been ordered to return these monies. The funds are in his control, and I am obviously concerned about the status of my own investments at this time. I have had numerous dealings with Mr. Kuppa over the years with respect to various investments, and I have never experienced any issues previously which is why I had continued to trust him.

8. However, any questions with respect to where that money went must be directed to Mr. Kuppa, since he advised me that he has simply invested the funds and he is not in a position to return the funds to the Court or to me directly at this particular time.

9. I undertake to the Court to pay the funds in to Court should they be returned to me or will advise the Court and the Applicant if I receive any further information with respect to the nature of the investments made on my behalf. I wish to co-operate in this regard and am prepared to enter into any questioning that the Applicant may feel is necessary. I will provide any information that I have to assist.

(Emphasis added.)

[150] As a result, in their August 29, 2022 affidavits, Mallappa and Subramani confirmed that they had transferred the entirety of the proceeds they received from the sale of the former Matrimonial Home to the Respondent. Both attested that the funds were fully within the Respondent’s power and control. Mallappa and Subramani said that the funds transferred to the Respondent were a “re-investment”.

[151] Mallappa and Subramani didn’t explain why they previously had “concerns” about disclosing to whom the proceeds were transferred. Clearly, the evidence of the Respondent, Mallappa and Subramani was deliberate to avoid advising the court for many months that the proceeds of sale had been returned to the Respondent.

[152] Of note, other than saying Mallappa and Subramani had asked the Respondent about the proceeds, there was no other evidence of any written demand nor other attempt(s) by Mallappa nor Subramani to obtain the return of the proceeds they sent to the Respondent so that they could comply with the outstanding court order.

September 2, 2022 Hearing

[153] Again, the Respondent failed to appear. He emailed the Registrar seeking an adjournment of 1-2 months to retain new Counsel. The motion was adjourned to October 14, 2023. The court again ordered financial disclosure that remained outstanding:

By September 19, 2022, the Respondents, Mr. Subramani and Mr. Mallappa, shall deliver sworn financial statements and any outstanding disclosure previously ordered, and shall pay their outstanding costs orders. The Applicant may bring a 14B motion for interim preservation relief.

(Emphasis added.)

October 14, 2022 Hearing

[154] Neither Mallappa, nor Subramani nor the Respondent complied with the prior financial disclosure order nor the prior order to pay the proceeds into court. Nor did they pay the outstanding cost orders.

[155] Mallappa and Subramani sought yet another adjournment.

[156] By this date, months after the Applicant’s motion for contempt and to strike his pleadings, there were no filed any responding materials, nor disclosure nor payment into court.

[157] The Respondent again did not appear at this hearing but filed an Affidavit that he was too ill to attend relying on a letter from his doctor, asking for an additional 2 months to allow his blood pressure to “settle”.

[158] As set out in Doi J.’s endorsement, there was considerable evidence of the Respondent’s social activities to clearly show the Respondent was well enough and able to attend court:

[9] In her affidavit sworn October 13, 2022, the Applicant has adduced considerable evidence from social media to show that Mr. Kuppa is actually fit and well.

[10] On August 24, 2022, September 21, 2022 and October 5, 2022, Mr. Kuppa posted videos and pictures to Instagram of him golfing at Glen Abbey Golf Course.

[11] On September 23, 2022, Mr. Kuppa uploaded photos and videos to Instagram of his attendance at a weekend concert at the Rogers Centre.

[12] On September 25, 2022, Mr. Kuppa posted an Instagram story with a video of him smoking shisha and watching a sports game at a bar.

[13] On October 1, 2022, Mr. Kuppa uploaded a video to social media of his attendance at a party with loud music and dancing.

[14] On October 2, 2022, Mr. Kuppa posted a video to Instagram of himself on a patio enjoying a night out in the Ossington Area, and another video that same evening of his attendance at a house party with beer pong, music and dancing.

[15] On October 8, 2022, the Applicant saw Mr. Kuppa with their son at the Albion Cinema Theatre for the screening of a movie from the Kannada community. Mr. Kuppa reportedly was in good spirits and in good health.

[16] On October 12, 2022, Mr. Kuppa posted pictures to Instagram of his attendance at a concert at Roy Thomson Hall.

[17] Based on the Applicant’s evidence from the above-mentioned social media content that Mr. Kuppa himself uploaded, I am satisfied that Mr. Kuppa is able to attend court.

[159] The Respondent’s adjournment request was denied.

[160] The court adjourned the contempt/strike motions to October 18, 2022.

October 17, 2022 Evidence of the Respondent

[161] The Respondent, having earlier said in his April 22, 2022 Affidavit that he hadn’t received a “penny” of the proceeds, in his Affidavit of October 17, 2022, finally acknowledged that Mallappa and Subramani had “reinvested” in his “lending business” which he acknowledged he had been operating for more than 12 years:

“As usual, Mr. Mallappa and Mr. Subramani reinvested in my lending business. We have been doing this lending business for a long time (more than 12 years) and I never defaulted on their investments. I always returned their investments with good returns…”

October 18, 2022 Contempt Motion

[162] The Respondent again failed to attend. The Respondent sent an email from Counsel, who was not on the record, who had not filed materials, but wanted to produce materials for the court to rely on, as the basis for an adjournment or the dismissal of the contempt/strike motions.

[163] The contempt/strike motions were adjourned to November 28, 2022.

October 19, 2022 Applicant’s Contempt, Mareva and Norwich Order Motion

[164] The Applicant sought and obtained a Mareva (a broad preservation order freezing various assets of the three respondents) and a Norwich Order in respect of certain accounts held by the Respondent with third party financial institutions.

[165] J. Doi stated in his endorsement:

[9] Since then, the Applicant’s claim has become even more compelling after Mr. Mallappa and Mr. Subramani disclosed (i.e., with supporting bank statements) that they transferred the subject funds back to Mr. Kuppa or entities under his control ostensibly for him to reinvest on their behalf. Their shared narrative requires the court to accept that they initially felt compelled to affect a power of sale on the former Matrimonial Home (i.e., to realize an earlier secured investment with Mr. Kuppa) before immediately giving all of the sale proceeds back to Mr. Kuppa on an unsecured basis. This narrative is difficult to accept. This disclosure by Mr. Mallappa and Mr. Subramani was only offered in response to the Applicant’s contempt motion against all of the Respondents after they appear to have tried to hide or conceal the subject proceeds of sale.

[12] Ultimately, Mr. Mallappa and Mr. Subramani claim to have given Mr. Kuppa an unsecured debt in excess of their deposed net worth in a collective amount that is nearly triple their alleged secured charge before the power of sale which they affected due to their apparent concern that Mr. Kuppa was no longer a reliable borrower.

(Emphasis added.)

[166] A further Preservation Order and an order to payment into court the proceeds of sale were made:

[24] In the circumstances, and to prevent the applicant’s claims from being frustrated if not defeated, I am satisfied that it is fair and just to grant the preservation order as signed to preserve the funds in certain accounts held by the Respondents pending the return of this matter on October 28, 2022 to be spoken to, or further order of the court.

[27] In light of the evidence from Mr. Mallappa and Mr. Subramani that they transferred the subject proceeds of sale to Mr. Kuppa, paragraph 4 of my Order dated May 13, 2022 as amended on June 23, 2022 shall be further amended to again include and require Mr. Kuppa, along with Mr. Mallappa and Mr. Subramani, to forthwith pay into court the subject proceeds of sale.

(Emphasis added.)

[167] The contempt/strike motions were adjourned.

October 28, 2022 Hearing

[168] This was the return date for the ex parte Preservation Orders (the Mareva Order) for the assets of the Respondent, Mallappa and Subramani. Again, the Respondent did not to attend for this hearing. The hearing was adjourned to November 7, 2022.

End of October 2022

[169] By the end of October 2022, the Respondent had all but completely depleted his known account holdings.

[170] The Respondent has not provided an explanation, nor an accounting, nor set out what happened to the funds in his accounts.

[171] The Respondent did not pay the proceeds into court.

November 7, 2022 Hearing (Reasons released November 15, 2022)

[172] Mallappa and Subramani brought a motion seeking financial relief from the Mareva Order.

[173] Neither Mallappa nor Subramani had made complete financial disclosure. One glaring example will suffice: In his November 2, 2022 Affidavit, Mallappa sought release of funds to pay mortgages on 4 properties (which he alleged were jointly owned with the Respondent) and to cover his living expenses. Yet, Mallappa had only disclosed 2 properties in his Financial Statement of September 19, 2022. These two additional properties were not disclosed by the Respondent. And Mallappa had placed the $2.5 million blank mortgage on his properties shortly after the court made various orders against him.

[174] Subramani’s deficiencies are also set out in the court’s endorsement.

[175] As a result, Mallappa and Subramani were ordered to forthwith “swear fresh financial statements to make complete financial disclosure of all their financial holdings and affairs.”

[176] Again, Mallappa and Subramani were also ordered to forthwith make complete financial disclosure of all their financial holdings and affairs including the proceeds of sale of the Matrimonial Home:

[8] To provide transparency, Mr. Mallappa and Mr. Subramani shall deliver a written accounting of where and how these funds were drawn within 10 days of drawing the funds. Apart from the foregoing, I accept that the Applicant has shown that the Mareva injunction should otherwise continue given her strong prima facie claim in this proceeding, her strong evidence that the net proceeds of sale for the former Matrimonial Home were converted for the use of the Respondents, and the serious risk of the funds being removed, dissipated, or hidden if the injunction is not continued. I am satisfied that she would suffer irreparable harm if the subject funds were dissipated before the matter returns on a fulsome and complete evidentiary record. I add that Mr. Mallappa led no evidence to suggest that his spouse, with whom he apparently hold joint accounts, has an immediate need for any funds in those accounts which are preserved by the Mareva injunction.

[177] The motions were adjourned to November 25, 2022.

The Applicant obtains Financial Disclosure from Third Parties

[178] In the meantime, the Applicant obtained from third parties, substantial financial documentation of the respondent’s financial affairs. This documentation was put before the court in an Affidavit dated November 23, 2022.

[179] This substantial third party produced financial disclosure was provided to the Respondent and Mallappa/Subramani on November 24, 2022, the day before the hearing.

November 25, 2022

[180] Despite the fact the financial documentation was that of the respondent (which had not been disclosed despite the court orders), the Respondent sought and obtained another adjournment to review the financial documentation now in the Applicant’s possession. The Applicant’s motion was adjourned to December 19, 2022.

December 19, 2022 Hearing

[181] On the return of the contempt/strike motions, the Respondent, for the first time since the motions had been brought with numerous court appearances before J. Doi, now sought the recusal of Doi J.

[182] After considering the motion, Justice Doi recused himself from hearing the Applicant’s contempt/strike motions.

February 23, 2023 Hearing

[183] The Applicant’s contempt/strike pleadings motion came before this court on February 23, 2023.

[184] The three respondents sought to exercise their Charter rights to:

a) A viva voce contempt hearing; and

b) Their right to silence on the contempt motion.

[185] The Respondent’s submitted that they wanted to file materials on the motion to strike but did not want to waive their right to silence on the contempt motion.

[186] The Applicant wished to proceed with both the contempt motions and strike motions under the FLR. The Applicant claimed limited financial ability to fund Counsel for two hearings and pointed to the continually growing arrears for spousal support, cost awards, and the non-recovery of the proceeds of sale of the Matrimonial Home.

[187] Unfortunately for the Applicant and while understandable in these circumstances, the Applicant’s financial limitation is not a basis to disregard the three respondents’ Charter rights. To avoid this conflict, only the contempt motion was scheduled to proceed. The court provided directions for the Phase 1 (liability) contempt hearing.

[188] Subsequently, the Applicant decided to abandon the contempt motions and proceed with non-compliance with court order/strike motions.

[189] The Applicant’s strike motions for non-compliance with court orders was heard on April 5, 2023.

The Situation as of April 5, 2023

[190] There were spousal arrears of approximately $213,391 and cost arrears of approximately $31,375 (with outstanding cost decisions to still be decided).

THE BREACHES OF COURT ORDERS

[191] There are numerous breaches of court orders by the three respondents which continue to date:

I) The Respondent’s Failure to comply with Dennison J.s’ Order of October 1, 2021

[192] Dennison J. gave the Respondent 150 days to pay the outstanding orders (support and costs) and to make complete financial disclosure which had previously been ordered, warning that if the Respondent did not do so, he would likely see his pleadings struck.

[193] The Respondent has not paid spousal support, has not paid the costs orders, and has not made complete financial disclosure.

[194] After advising the court on August 12, 2021, the Respondent was going to pay the outstanding support arrears and costs by selling or financing the Matrimonial Home, the Respondent unilaterally listed the Matrimonial Home; the Respondent clandestinely encouraged Mallappa and Subramani to sell the Matrimonial Home as a power of sale and told no one of the power of sale by Mallappa and Subramani. As Mallappa said:

…He [the Respondent] also mentioned that he could not afford the house or his lifestyle anymore and that the house may be lost in the battle with the court proceedings, as the applicant was moving for an uncontested trial.

(para. 49 Mallappa Affidavit of April 22, 2022)

[195] The Applicant received NO information whatsoever until after the Matrimonial Home had been sold. The Applicant was not even told about the sale of the Matrimonial Home.

[196] I am satisfied that the Respondent is in breach of J. Dennison’s October 1, 2021 Order.

II) The Respondent’s continued failure to make complete and accurate Financial Disclosure (various orders to do so)

[197] It is evident from the above that, despite his obligations to make complete disclosure under the FLA and the repeated orders (many with specific financial disclosure ordered) as far back as December 2018, the Respondent has failed to make complete and financial disclosure. But not limited to, the Respondent has not disclosed the whereabouts of the proceeds of sale of the Matrimonial Home nor financial information regarding the encumbrances on the two rental properties nor details of his other assets such as his corporate assets.

[198] According to Mallappa and Subramani, the Respondent won’t even tell them where the proceeds of sale of the Matrimonial Home have been invested. The Respondent won’t comply with the court order to disclose where the proceeds are. And, even when faced with this motion and the admonition of Dennison J. on October 1, 2021, the Respondent continues to disregard the various court orders requiring him to make complete and accurate financial disclosure. And the Respondent provides no explanation nor an excuse for not doing so.

[199] The response by the Respondent to the Applicant’s motions and court orders, is to transfer, shelter and divest himself of his assets to others without any explanation or accountability. For example, in October 2022, the Respondent, after being denied yet another adjournment, virtually depleted all his accounts. To where? That information is not disclosed. Not even when faced with this motion to strike his pleadings.

[200] The Respondent explanations regarding his financing are inconsistent and not believable. For example, after Mallappa and Subramani’s sworn evidence that the proceeds were returned to the Respondent, who refuses to return the proceeds or tell them where the proceeds are, the Respondent, in his March 28, 2023 Affidavit, the Respondent states that he didn’t get the proceeds from Mallappa and Subramani. Instead, he alleges that the “funds were invested through a Private American Company”. Another example, the Respondent states he sold his BMW i8 for $25,000. When the Applicant produced photos that the vehicle continued to be parked outside his house, the Respondent say it was “because the purchaser [of the car] would check on me to make sure the payments were made to BMW on time”.

[201] And the Respondent’s undisclosed financial information is critical and not related solely to the proceeds of sale of the Matrimonial Home:

a) The financial affairs of the two rental properties (or perhaps 4 properties jointly owned with Mallappa) continue to remain undisclosed.

b) The other corporate entities owned or controlled by the Respondent remain undisclosed.

c) The source and disposition of the vast amounts of money through his accounts remain undisclosed.

[202] The evidence goes beyond non-disclosure in this case. The evidence is that the Respondent deliberately intended to frustrate, deceive and deprive the Applicant of the disclosure to defeat and avoid the Applicant’s claims.

[203] The result is that the Applicant is left without complete and accurate financial information and documentation with respect to the sale of the two rental properties, the proceeds of the Matrimonial Home, the Respondent’s “lending business”, his corporations, the Respondent’s banking transactions and other assets.

[204] I find that the Respondent has breached and continues to breach the various court orders requiring him to make complete and accurate financial disclosure and specifically identified financial disclosure in the court orders.

III) The Respondent’s failure to comply with the 2018 Preservation Order

[205] In 2018, the court granted an Order that the Respondent preserve the Matrimonial Home.

[206] On October 1, 2021, Dennison J. dismissed the motion to strike the Respondent’s pleadings, and while it was an option that the Matrimonial Home might be sold including by the Respondent, it was to be with “full visibility” to the Applicant, something the Respondent agreed to do. Yet, the Respondent failed to disclose the Respondent’s dealings with Mallappa and Subramani, the power of sale proceedings and the eventual sale until it was too late. And by then, the proceeds had been disbursed and are “gone”.

[207] The Respondent knowingly breached the 2018 Preservation Order.

IV) The Respondent’s failure to pay support and cost Orders

[208] The Respondent was ordered to pay support to the Applicant in 2019. The Respondent failed to do so.

[209] The Respondent was again ordered to pay the arrears of support on October 1, 2021 within 150 days. The Respondent failed to do so.

[210] Throughout the proceeding, the Respondent has been ordered to pay various costs to the Applicant.

[211] The Respondent has simply ignored all these financial orders.

[212] The support of arrears continues to increase each month. The cost orders continue to be outstanding. And, the financial records, now available, show the Respondent had the financial ability to pay the support and pay the cost awards but did not do so.

[213] The Respondent is in breach of the support orders and the cost orders.

V) The Respondent, Mallappa and Subramani’s failure to make full financial disclosure of their financial dealings and the three respondents’ failure to comply with the May 13, 2022 Order to pay the proceeds of sale of the Matrimonial Home

[214] The Respondent has not paid the proceeds of sale into court. The evidence establishes that vast amounts of monies have gone through the Respondent’s “hands” right up until the end of October 2022. Yet, the Respondent has made no payment into court. And the Respondent is deliberately not returning the proceeds of sale to Mallappa or Subramani or paying the proceeds into court.

[215] Neither Mallappa nor Subramani have paid the proceeds of sale into court. As for Mallappa and Subramani, despite being faced with a clear court order to pay the proceeds into court, all they produced was an Affidavit that they asked the Respondent and he said “no”. This coupled with their lack of disclosure and lengthy delay in disclosing that the proceeds were sent to the Respondent, makes their current explanation simply not believable.

[216] The Respondent, Mallappa’s and Subramani’s failure to comply with the Order was deliberate as the evidence establishes, they had sufficient monies to pay the amounts ordered into court.

[217] To be clear, the outstanding financial disclosure from Mallappa and Subramani does NOT relate solely to the Matrimonial Home. For example, Mr. Mallappa was ordered to produce the financial records, including his alleged loan, relating to the rental properties. On April 5, 2022, Mallappa received $442,277.94 from the sale proceeds from the Mineola Property (one of the Respondent’s rental properties), but on April 12, 2022, Mr. Mallappa transferred $442,278 to the Respondent.

[218] I am satisfied that all three respondents breached the order to pay the approximately $1.6 million dollars into court.

[219] Further, Mallappa and Subramani have breached the order to make complete and accurate disclosure of the financial dealings with the Respondent and their financial dealings with the three properties.

CONCLUSION

[220] The above breaches of court orders continue to date.

[221] The Respondent’s participation in this proceeding has demonstrated a deliberate disregard of the court orders and the litigation process. Simply, he has acted in bad faith throughout. For example,

a) The Respondent throughout took calculated and deliberate actions to avoid this matter being dealt with on the merits such as the many adjournments he sought or caused by his non-attendances at scheduled court hearings which caused substantial delays in this proceeding to the very serious prejudice of the Applicant.

b) The Respondent’s actions were to delay, deny and when forced to, move his assets to another location or someone else like Mallappa and Subramani where they would not and could not be found or disclosed to the Applicant. For example, when his adjournment in was denied in the October 2022, the Respondent essentially emptied his bank accounts. Similarly, when J. Dennison issued her October 1, 2021 reasons, the Respondent clandestinely set into motion the power of sale proceedings through Mallappa and Subramani.

[222] Delay and obfuscation of his financial affairs was the Respondent’s “game plan” throughout. It remains his game plan.

[223] The circumstances in this case are exceptional. They are one of the worst, if not the worst circumstances, in any of the authorities referred to by Counsel. Comparisons with other circumstances in the authorities is futile.

[224] The Respondent’s Counsel submits that there are lesser remedies available to this court than striking the pleadings. However, Counsel does not suggest what such a remedy might be and why such a remedy, even if court ordered, would be complied with by the Respondent or could effectively undo the prejudice to the Applicant.

[225] Another court order against any of the three respondents would futile. There is a clear pattern that orders directing the three respondents to do something have and will continue to be ignored or circumvented if possible, and where not possible, the three respondents will profess explanations that make no sense and full documentation of the financial dealings, even if ordered, will not be made available to the Applicant. The Respondent, Mallappa and Subramani have continued to ignore the court orders for many months and have brazenly done so to date, even when faced with a motion to strike their pleadings.

[226] In these circumstances, the only reasonable and available remedy is to strike the pleadings of the Respondent, Mallappa and Subramani and permit the Applicant to proceed with an uncontested trial.

[227] This court orders that:

a) The pleadings of the Respondent, Mallappa and Subramani are herby struck, without leave to re-file their pleadings.

b) The Applicant can proceed to an uncontested trial, without further notice, to the Respondent, Mallappa and Subramani.

c) The Applicant shall have costs of these motions.

d) The monies that have been frozen by the court’s Mareva order are to be immediately paid into court. The Applicant is to provide a draft order to this effect. Approval of this order directed to the third parties to pay monies subjected to the Mareva order into court, does not require the approval as to form and content by the Respondent, Mallappa and/or Subramani.

COSTS

[228] The Applicant shall provide written submissions within two weeks, limited to 10 pages of submissions, plus any Offers, Bill of Costs, and authorities.

[229] The Respondent, Mallappa and Subramani shall provide written submissions within 2 weeks thereafter, limited to 10 pages of submissions, plus any Offers, Cost Outlines and authorities.

[230] There will be no reply submissions.

RSJ Ricchetti Released: May 01, 2023