COURT FILE NO: CV-11-437946
DATE: 20120214
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Welcome Taxi & Limousine Ltd. and Ghazanfar Ali Choudhary
Plaintiffs
- and -
Fadl Kanaan also known as Fazel Kanaan
Defendant
BEFORE: The Honourable Mr. Justice Brian P. O’Marra
COUNSEL: Norman Epstein,
for the Plaintiffs
Arnold H. Zweig,
for the Defendant
HEARD: January 25, 2012
ENDORSEMENT
Nature of Proceedings
[1] The plaintiffs brought a motion returnable November 10, 2011 seeking injunctive relief and costs. They seek an interim interlocutory injunction for the following:
A) Delivery of telephone number 905-471-0101 (the “Telephone Number”).
B) Restraining the defendants from disposing of the shares and/or assets of Welcome Taxi & Limousine Ltd. (“Welcome Taxi”) other than in the ordinary course of business.
C) Waiver of the required undertaking pursuant to Rule 40.03.
The Facts
[2] Welcome Taxi is an Ontario business corporation started in 2007 running a taxi and limousine dispatch business in Markham. The plaintiff, Choudhary, owns 1/3 of the shares, Sabri Saker (“Saker”) owns 1/3, and by Power of Attorney dated August 1, 2011, those shares are controlled by Choudhary. The defendant, Kanaan, owns the remaining 1/3 shares.
[3] Welcome Taxi owns no real estate and no vehicles. It does own the advertised telephone number and obtained municipal and livery plates from the Town of Markham.
[4] Prior to August 1, 2011, Kanaan was not involved in the business, did not answer the phones, did not dispatch calls and was not involved with any property in the taxi business.
[5] In 2010, Choudhary replaced Saker completely in answering the corporation’s phone, driving the municipally licensed cab in response to calls and dispatching taxis as required. Choudhary arranged for the telephone number to be transferred from Bell Canada (which hosted it at the home of Saker) to Rogers Communications Inc. to host out of the corporation’s head office in Markham which is Choudhary’s residence, commencing August 4, 2011.
[6] As of October 28, 2011, Kanaan stopped call-forwarding the telephone number to Choudhary, cutting off all income for Choudhary. Instead, Kanaan would call forward the telephone number at night to a competitor, Markham Taxi. This adversely affects Welcome Taxi’s competitive opportunities and gives confidential information to a municipal taxi competitor.
[7] The plaintiffs allege that Kanaan surreptitiously obtained a replacement municipal livery plate based on a false application dated September 12, 2011, claiming that the plate had been lost. In fact, the plate has remained at the corporate head office in the custody of Choudhary.
[8] Choudhary contacted Rogers Communications to have them return the telephone number to his control. He claims Rogers said they would return the telephone number by October 19, 2011. However, on October 24, 2011, Rogers refused to return the telephone number to Choudhary.
[9] Kanaan recently delivered an “Agreement” dated November 10, 2005 between Kanaan and Welcome Taxi. This Agreement purports to confirm that Kanaan “owns” the telephone number until December 31, 2011. The only signatory to this Agreement is Kanaan.
[10] Choudhary has called the telephone numbers which are answered by Markham Taxi, a competitor of Welcome Taxi.
[11] Choudhary fears that the Town of Markham may revoke both the original and replacement plates if it is determined that the application to replace the original was false.
[12] Kanaan has been involved in the taxi business for 21 years. He claims to have purchased Welcome Taxi (unincorporated at that time), in November of 2005. Further, he claims he paid $50,000 cash for the phone number. Kanaan has filed an unsigned agreement dated 2005 with no day or month that provides for Kanaan to have the use of the telephone number for $1 per year.
[13] In 2007, Kanaan incorporated Welcome Taxi along with his cousin, Saker, who agreed to pay $12,000 to Kanaan for a ½ share of ownership of the company.
[14] On August 30, 2006, Kanaan applied to the Town of Markham for a livery plate in the name of Welcome Taxi. The renewal from the Town of Markham dated October 17, 2007 refers to Kanaan as the owner. After 2007, Saker operated Welcome Taxi with the consent of Kanaan.
[15] In June of 2011, Saker was issued a temporary deportation Order and knew he would be unable to continue in Welcome Taxi. Saker had already hired Choudhary as a driver. Kanaan denies Choudhary was an officer or director of the company, but that he merely drove his own taxi under the name of Welcome Taxi.
[16] Saker advised Kanaan that Choudhary was interested in becoming a 1/3 owner of the business. Kanaan agreed to this and shares were issued to Choudhary in 2011 upon payment of $12,000. Kanaan denies he received any money from Choudhary.
[17] Kanaan did not sign Saker’s Power of Attorney and claims he did not consent to the transfer of Saker’s shares to Choudhary.
[18] Kanaan claims he had an arrangement with Choudhary whereby Choudhary would be entitled to deal with customers and answer the phone during certain times of the day and Kanaan would have the other times of the day.
[19] Saker was deported August 23, 2011.
[20] Kanaan claims the dispute between he and Choudhary arose in October of 2011 when Choudhary called to advise that he controlled 2/3 of the shares of Welcome Taxi. Kanaan denied that and claims he knew nothing of the alleged Power of Attorney from Saker to Choudhary. Kanaan then arranged to have the phone number transferred from Rogers to Bell.
[21] In late October 2011, Kanaan stopped the forwarding service to Choudhary. He claimed he did so because Choudhary breached their arrangement regarding customers during certain times of the day. Kanaan claims Choudhary was using his own phone number and diverting customers to himself away from Welcome Taxi.
[22] Kanaan intends to wind up Welcome Taxi based on the breakdown of the Agreement between the parties.
[23] Welcome Taxi does not have a bank account and has never filed financial returns. For all intents and purposes, it is the name and phone number. Choudhary continues to drive a taxi and is earning money from that work.
[24] The plaintiffs claim there is a serious issue to be tried and that Welcome Taxi will suffer irreparable harm if the interim interlocutory injunction is not granted.
Analysis
[25] The burden on an application for injunctive relief involves the following test:
A) Is there a serious question to be tried?
B) Will the applicant suffer irreparable harm if the relief is not granted?
C) Does the balance of convenience favour the granting of the injunction pending trial of the issues?
RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311
[26] There are clearly serious questions to be tried in this matter including the following:
a. Authenticity of various documents
b. Nature of the arrangements between Kanaan and Saker, and then between those two and Choudhary
c. Unavailability of Saker
d. Credibility
The claim is not frivolous and there are substantial issues to be tried.
[27] “Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is a harm which either cannot be quantified in monetary terms or which cannot be cured. RJR-MacDonald, supra, para. 59
[28] On this issue, the application fails. I am not satisfied that if the plaintiff were to succeed on their claims a court would be unable to quantify damages, including loss of earnings by the plaintiff. If it is found at trial that Kanaan falsely obtained a replacement livery plate from the Town of Markham, the plaintiff’s case will be formidable. The absence of Saker from Canada may present significant challenges for the plaintiff’s claim. However, the strength of the claim does not address the issue of irreparable harm.
[29] On such an application for interim relief, the onus is on the applicant to show that in all the circumstances the balance of convenience favours the granting of the injunction pending trial. I am not satisfied that precondition has been met. In RJR-MacDonald, supra, the Supreme Court indicated this issue involves a determination of which of the two parties will suffer the greater harm from the granting or refusing of an interlocutory injunction pending a decision on the merits. A related question which may affect the determination of the balance of convenience or inconvenience relates to the giving of an undertaking with respect to damages. Airport Limousine Drivers v. Greater Toronto Airports Authority, 2005 CanLII 29654 (O.S.C.).
[30] The applicants on this application initially sought to have the undertaking waived if the court was otherwise satisfied that the relief should issue. The applicants now claim they are prepared to offer such an undertaking.
[31] I conclude that the balance of convenience favours a refusal to grant the interim relief. The ambivalent position of the applicants on the issue of the undertaking can be viewed as tilting the balance of convenience against the moving party who seeks injunctive relief. See Airport Limousine Drivers, supra, at para. 156.
Disposition
[32] Application dismissed.
Costs
[33] I have reviewed written submissions provided by both counsel. On a partial indemnity basis, I award costs of $7,000 to the defendant.
B. P. O’MARRA, J.
DATE: