COURT FILE NO.: CV-11-2126-00
DATE: 20120618
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MINING TECHNOLOGIES INTERNATIONAL INC.
Norman Groot, for the Plaintiff
Plaintiff
- and -
SHLAIMOUN ET AL
David E. Wires, for the Defendants
Defendants
HEARD: May 25, 2012
ENDORSEMENT
Thomas A. Bielby
[1] The defendants Zia Shalaimoun, Oussha Shalimoun, Infina Fund Limited, and Infina Fund Ltd. (the defendants) seek leave to appeal to the Divisional Court the interlocutory decision of Lemon J., dated April 12, 2012. Therein he dismissed the defendants’ motion to stay this action.
[2] Motions for leave to appeal are governed by Rule 62.02 of the Rules of Practice. The defendants rely on subsection (4)(b) and submit that there is good reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that, leave to appeal should be granted.
[3] The defendants brought a motion, originally returnable February 22, 2012, requesting a stay of this action pursuant to Rule 21.01(3)(c) on the grounds that another proceeding is pending in California between the same parties in respect of the same subject matter. The request for a stay, together with other requests for relief, were included in previous motions before the Court. On February 22, those motions were withdrawn and only the most recent motion for stay proceeded before Justice Lemon.
[4] The defendants acknowledge at paragraph 23 of their factum that the power to order a stay must be exercised sparingly and will only be ordered in the clearest of cases.
[5] The facts that give rise to this lawsuit are complex and deal with allegations of fraud and the misappropriation of money. The plaintiffs allege they loaned to the defendants $2,000,000.00 for investment purposes and that the defendants used these funds for unauthorized purposes.
[6] The complexities are international in scope and litigation has been commenced not only in Ontario but in California and the United Kingdom.
[7] In this action, the plaintiffs obtained an ex parte Mareva Injunction. They also obtained, from the Court of Queen’s Bench in England, an order requiring two English banks to release certain bank records relating to the defendants. The order was made and I am advised, therefore, that the English action is complete.
[8] The plaintiff submits that the action in California was commenced for the purpose of obtaining a lis pendens against a residential property in Malibu owned and/or controlled by the defendants. It is alleged this property was purchased in part by the monies paid to the defendants for investment purposes.
[9] It is the position of the plaintiff that the substantive issues are to be tried in Ontario.
[10] The only named defendant in the California action is Versailles Investments, LLC which is a company owned by Shlaimoun.
[11] Having heard the motion on February 22, 2012, Justice Lemon released his endorsement on April 12, 2012. At the outset, he states that the defendants moved for an order to stay these proceedings on the basis that Ontario is not a convenient forum for the hearing of the proceeding. Further, he noted the defendants sought an order staying the action because of the proceedings in California.
[12] The learned judge made a number of findings. He determined that the Ontario Court had jurisdiction to hear the proceedings. He found that claim as pleaded is for a tort committed in Ontario and that the onus then lies on the defendants to show that the real and substantial connection test to Ontario has not been met.
[13] Justice Lemon noted that the plaintiff is an Ontario corporation and the loss was suffered in Ontario. Mr. Korakianitis, one of the primary defendants, resides in and carries on business in Ontario and is allegedly in partnership with the defendants. On those facts, Justice Lemon states, “There is clearly a connection between Ontario and the plaintiff’s claim.”
[14] The learned judge, however, at paragraph 28, finds that Mr. Shlaimoun has been actively involved in this jurisdiction through his activities and those of his alleged partner Korakianitis. He finds there is a connection between the defendants and this jurisdiction.
[15] The learned judge then discusses the other international proceedings. He acknowledges the proceedings in the United Kingdom have been completed and sets out that the plaintiff had made it clear it wishes to pursue its remedies in Ontario and that the California action was started only to protect the Malibu property asset.
[16] Justice Lemon reviewed other principles and considerations and concludes there is a real and substantial connection for this Court to take jurisdiction.
[17] The learned judge then turns his attention to the issue of which forum is more convenient. He finds at paragraph 45 that the defendants have failed to demonstrate that there is another jurisdiction clearly more appropriate than Ontario.
[18] Justice Lemon concludes at paragraph 48 that Ontario is the most appropriate and convenient forum.
[19] The only argument put to me on this issue by counsel for the defendants is that, since Mr. Shiaimoun resides in California, the action ought to proceed there and there is at least one asset in California. There was no other evidence placed before the Court as to why California was the more convenient jurisdiction.
[20] While I recognize the learned judge may not have specifically referenced the criteria in Rule 21.01(3)(c) his findings clearly dictate a stay is not appropriate.
[21] Further, it cannot be said that the two actions involve the same parties. There are numerous defendants in the Ontario action, many of whom have filed statements of defence.
[22] I have had regard to the decision in Eurofase Inc. V. FDV-Firme Di Vetro S.P.A., 2010 ONSC 5277, a case, involving a motion for a stay of proceedings. I do not believe, base on the findings of Justice Lemon, that it is an abuse of the court process or unfair for that matter, to allow the Ontario action to continue and to stay it would cause an injustice to the plaintiff.
[23] It is unlikely that, given the representations of the plaintiff, the two actions would proceed in tandem and conclude with different results.
[24] I find there is no good reason to doubt the correctness of Justice Lemon’s endorsement in dismissing the motion for a stay of proceedings. He made findings that were clearly supportable by the evidence and facts before him. The plaintiffs have clearly indicated that they wish to pursue the matter here and the California action was taken to simply preserve an asset.
[25] Further I do not believe the proposed appeal involves matter of such importance that, in my opinion leave should be granted. The issues relating to jurisdiction and forum conveniens are, as in this case, generally fact driven. There is no legal issue before me which would suggest an issue of such importance to require the granting of leave.
[26] The motion for leave to appeal the order of Lemon J., dated April 12, 2012 is dismissed.
[27] Costs are to be awarded to the plaintiff and if the parties cannot agree on the quantum, costs submissions can be made to me in writing of no more than five pages, within 30 days.
Justice Thomas A. Bielby
Released: June 18, 2012
COURT FILE NO.: CV-11-2126-00
DATE: 20120618
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MINING TECHNOLOGIES INTERNATIONAL INC.
- and –
SHLAIMOUN ET AL
ENDORSEMENT
Thomas A. Bielby
Released: June 18, 2012