COURT FILE NO.: 6819/11

DATE: 2012-08-16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: NIRMAL HEERALAL, Plaintiff/Respondent

AND:

SAVITREE HEERALAL-JUDHAN, as Trustee, SAVITREE HEERALAL-JUDHAN, also known as SAVITREE HEERALAL, also known as SAVITREE JUDHAN, also known as SAVITREE HEERALAL JUDHAN, also known as SANDY HEERALAL JUDHAN, also known as SANDY JUDHAN, also known as SAVITREE HEERALAL LAMBERT, in her personal capacity, 2027752 ONTARIO LTD., MARK JUDHAN and BRIAN JUDHAN, Defendants/Applicants

BEFORE: FITZPATRICK J.

COUNSEL: Stephen Durbin, Counsel for the Plaintiff/Respondent

Tanya Walker, Counsel for the Defendants/Applicants

HEARD: July 10, 2012

ENDORSEMENT

[ 1 ] The plaintiff (“Heeralal”) seeks summary judgment ostensibly transferring two adjacent properties located in Lindsay, Ontario (together the “Lindsay Properties”) to him. Heeralal has other claims related to real properties in Brampton, Ontario (the “Brampton Property”), Hamilton, Ontario (the “Hamilton Property”) and Jamaica (the “Jamaica Property”).

[ 2 ] The personal and corporate defendants (together “Judhan”) also seek summary judgment striking Heeralal’s statement of claim, leaving the dispute over the Lindsay Properties to be addressed in a separate Application commenced by Judhan prior to the date of issuance for the Heeralal statement of claim.

[ 3 ] In support of his motion, Heeralal filed four affidavits, a factum and case book containing nine cases, plus rule/statute excerpts. In support of their motion, Judhan filed four affidavits, two factums and case books containing 24 cases. Incomprehensibly, neither counsel provided the Court with Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 , [2011] O.J. No. 5431 (C.A.), (hereinafter “ Combined Air” ), being the leading case on summary judgment motions in Ontario. Obviously, factums on competing summary judgment motions that fail to reference the leading case are of limited assistance to the Court. I do note that counsel for Judhan did manage to provide the Court with a copy of Combined Air at a later point during the argument of the motions.

[ 4 ] In terms of other procedural background, I note that no examinations have taken place in either this action or the Judhan Application. No cross-examinations on the various affidavits filed in these motions has occurred. Again, this lack of process/testing of the competing merits does not assist the Court or advance the positions of either party on these motions.

Noting in Default

[ 5 ] The first issue that can be addressed is the Judhan request to set aside the noting in default for failure to file a statement of defence in this action. A brief history is needed to place this request in the proper context.

[ 6 ] On October 18, 2011, Heeralal registered cautions on title to the Lindsay Properties. In response, Judhan issued a Notice of Application on October 21, 2011 (the “Judhan Application”) to address the competing claims in the Lindsay Properties. As such, Judhan had counsel of record since October 21, 2011.

[ 7 ] By letter dated October 26, 2011, Heeralal’s counsel wrote to Judhan’s counsel stating his client would be moving to dismiss the Judhan Application and commence “an action far broader in scope”. The Heeralal statement of claim was issued December 5, 2011 (the “Milton Action”) and served December 27, 2011.

[ 8 ] Judhan’s counsel wrote to Heeralal’s counsel by letter dated January 19, 2012, noting issues to be addressed with the Milton Action and specifically directing counsel to refrain from any noting in default until the specified issues were addressed. Judhan’s counsel wrote again on January 20, 2012, directing counsel for Heeralal to not note the defendants in default before the February 29, 2012 date scheduled for the Judhan Application. Heeralal’s counsel did not respond to either letter. Instead, and without any notice, Heeralal’s counsel requested the defendants to be noted in default on or about February 9, 2012.

[ 9 ] Heeralal’s counsel waited until a telephone conversation with Judhan’s counsel on February 21, 2012 to advise he had noted the defendants in default. Judhan’s counsel, by letter dated February 28, 2012, requested the noting in default be set aside. Heeralal’s counsel refused to do so except on the term that the Lindsay Properties, forming the subject of this current litigation, be transferred to Heeralal thereby necessitating a motion to set aside the default noting.

[ 10 ] Heeralal’s, counsel at the start of the motions hearing, advised that the noting in default would now be set aside on consent. Simply stated, the conduct of Heeralal’s counsel in noting the defendants in default, in the circumstances of this case, is nothing short of a shocking lack of professional courtesy and practice that cannot be condoned by the Court. The noting of default is hereby set aside now on consent. It is obvious that the consent of Heeralal is very last minute, resulting in unnecessary expense and wasted resources which will form part of the costs consideration in the overall context of these competing motions.

The Lindsay Properties

[ 11 ] As stated above, Heeralal takes the position that summary judgment can be granted in his favour based on the evidentiary record before the Court on these motions such that an order should be made transferring the Lindsay Properties absolutely to him. Judhan’s position is that the Milton Action should be struck in its entirety. Judhan says the Lindsay Properties can be addressed in their application proceeding.

[ 12 ] The parties agree that the competing claims respecting the Lindsay Properties need to be addressed. Each side has initiated proceedings in that respect, namely, Heeralal initiated the Milton Action and Judhan Application. Not surprisingly, each side states his/their proceeding is the appropriate forum to address this dispute.

[ 13 ] Regarding the merits of the competing claims, the parties do not agree on two fundamental issues: whether Heeralal breached the terms of the two trust agreements dated May, 2005 (i.e. the identical trust agreements for each of the two Lindsay Properties) and what the consequences of any such breach are. The seminal term of the trust states that the trust is revoked and the trustee (i.e. Savitree Heeralal-Judhan or 2027752 Ontario Ltd. respectively) can “mortgage, transfer or otherwise deal with the subject property without the written consent of Nirmal Heeralal”, if Heeralal defaults on payments for the property of two months or more.

[ 14 ] Heeralal states he has made all payments as required so there is no breach. In support of this contention, Heeralal’s counsel filed an affidavit from his law clerk attaching various cheques, bank drafts and ledger sheets toward confirming payments for the Lindsay Properties from May, 2005 forward. Heeralal is in breach of the trust agreements on the face of these documents. For example, there is no proof of any payment for March, April and May, 2012. Heeralal’s documents on their face also evidence late mortgage payments for June, July, November and December, 2007; February, March, April, May, June, July, August, September, October, and November, 2008; June, July, September, October and November, 2009; and August, September and October, 2010.

[ 15 ] Heeralal’s documents evidence a payment made at March, 2011 to Sandy Heeralal-Judhan to “reimburse” her for two mortgage payments. Heeralal, in reply submissions on these motions, through his counsel, suggests that the trustee made these two mortgage payments prior to their due date. Again through counsel, Heeralal states he repaid the trustee for the two payments prior to the due date for these two mortgage payments.

[ 16 ] Heeralal’s counsel sought to have Heeralal’s spouse provide viva voce evidence counsel suggested would confirm these two reimbursed mortgage payments were provided prior to the mortgage payments being due. When pressed on the issue and support for this contention in the documentation already before the Court, Heeralal’s counsel was unable to direct the Court to any specific reference in the materials but simply submitted that a “close review of the documentation” would demonstrate this point. The Court rejected the request of Heeralal to have his spouse provide viva voce evidence. Heeralal’s spouse did not provide any affidavit material in support of her spouse’s motion and would only be able to address the discrete issue of the reimbursement of these two mortgage payments to the trustee at March, 2011, which counsel advised could be confirmed by the Court undertaking a “close review” of the documentation already before it. As such, the suggested viva voce evidence of Heeralal’s spouse would add nothing additional to the evidentiary record. The Court was also disinclined to allow Heeralal’s spouse to provide viva voce evidence as this was done without notice to opposing counsel or the Court and requested in reply submissions as opposed to Heeralal’s case in-chief. In any event, and as indicated above, the Court accepts that Heeralal’s position is that he made all payments as required under the terms of the trust.

[ 17 ] Judhan’s affidavit evidence is that Heeralal has regularly defaulted on the trust payment terms such that the defendants’ paid $20,862.86 in cumulative missed mortgage payments, plus a further $6,267.58 in missed property taxes and penalties.

[ 18 ] As the above amply demonstrates, the parties and the evidence before the Court on these motions, are in direct conflict as to whether Heeralal breached the trust agreements resulting in revocation of these trusts. In addition to this basic conflict, the trust agreements themselves lack terms addressing the consequences of any such breach and revocation. The trust terms state that the trustee on revocation may deal with the Lindsay Properties without Heeralal’s consent, but does not address what ultimately happens with the properties and/or proceeds from their disposition or other dealings. Specifically, would Heeralal be entitled to some share in the properties/proceeds even if he breached based on the monies he can demonstrate he contributed to the properties? The parties did not provide any affidavit or other evidence to address this issue. As such, the Court on these motions has absolutely no evidentiary basis to even attempt to interpret and/or read in terms to the trust to address this void.

[ 19 ] This is a case where there are extreme conflicts in the evidence and positions of the parties with respect to the issue of whether Heeralal breached the trust payment terms. As stated, there have been no cross-examinations on the competing affidavits filed. There is no evidence before the Court respecting how the trust agreement should be interpreted/enforced if there is a breach and the trusts are revoked. The record before the Court cannot be satisfactorily supplemented by the limited oral evidence suggested by Heeralal’s counsel.

[ 20 ] Combined Air directs a judge to ask himself “can the full appreciation of the evidence and the issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?” Based on the evidentiary record before me, a full appreciation cannot be made as directed by Combined Air . The issue of the competing claims to the Lindsay Properties must proceed to trial where the various witnesses from both sides can be heard with related credibility determinations that are fundamental to the resolution of these disputes, along with the findings of fact and interpretation of the trust agreements that will necessarily flow from a review of all of the evidence at trial, including these witnesses. As such, summary judgment is denied respecting the Lindsay Properties. I will detail how this issue is to proceed below.

The Brampton and Hamilton Properties

[ 21 ] Judhan states the Milton Action respecting the Brampton and Hamilton Properties should also be struck as either barred by limitations statute or the principle of res judicata .

[ 22 ] Heeralal claims compensation for monies he allegedly contributed to the property taxes, improvements and related expenses for the Brampton and Hamilton Properties. Heeralal also claims compensation on the basis of unjust enrichment with respect to these two properties.

[ 23 ] Heeralal was never on title to the Hamilton Property. Natasha Judhan transferred the title to her brother, Brian Judhan, at November, 2001. Heeralal registered a caution on title to the Hamilton Property in April, 2005 and then withdrew that caution at May, 2005. Brian Judhan sold the property to a third party at May, 2005, on the same date that the caution was withdrawn.

[ 24 ] Heeralal purchased the Brampton Property in December, 2001 for $234,398.93. He transferred to the property to Brian Judhan at November, 2002 for $196,790. Brian Judhan transferred the Brampton property to third parties for $328,000 in December, 2004.

[ 25 ] As stated above, Heeralal registered a caution against the Hamilton Property at April, 2005, which he withdrew at May, 2005. Heeralal retained counsel to address his alleged claims respecting the Brampton and Hamilton Properties. His counsel wrote to Brian Judhan, by letter dated June 21, 2006, to receive payment of $52,804.62 for “expenses” incurred by Heeralal respecting the Brampton and Hamilton Properties. The Brampton Property was sold at December, 2004 and the Hamilton Property at May, 2005. Based on the evidence before me, the latest date Heeralal could be said to have known of any/all claims respecting the Brampton and Hamilton Properties, was June 21, 2006, being the date of his counsel’s letter. Any limitation period would run from that date.

[ 26 ] Heeralal issued a statement of claim on November 17, 2006 (Toronto Court File No. 06-CV—322498 PD3; the “Toronto Action”). In the Toronto Action, Heeralal sought payment for $52,804.62 in expenses he states he incurred respecting the Brampton and Hamilton Properties. The items and amounts claimed are the identical items/amounts detailed in the letter of Heeralal’s counsel, dated June 21, 2006. In addition, the Toronto Action sought aggravated damages or in the alternative, damages for unjust enrichment on a quantum meriut basis.

[ 27 ] The Toronto Action was dismissed by the Registrar based on Heeralal’s delay in moving the action forward, by order dated October 27, 2009.

[ 28 ] Heeralal issued the Milton Action on December 5, 2011. Again, in the Milton Action, Heeralal sought payment for the $52,804.62 in expenses he states he incurred respecting the Brampton and Hamilton Properties. Again, the items and amounts claimed are the identical items/amounts detailed in the letter of Heeralal’s counsel, dated June 21, 2006. Heeralal also again claimed aggravated damages and, alternatively, damages for unjust enrichment on a quantum meriut basis.

[ 29 ] Heeralal’s claims respecting the Brampton and Hamilton Properties were subject to the two-year limitation period set forth in the Limitations Act , 2002 S.O. 2002, c24 running from June 21, 2006. The Toronto Action was commenced within the applicable limitation period but that action was dismissed. The limitation period for the commencement of any claim respecting the Brampton and/or the Hamilton Properties was June 21, 2008. The Milton Action was commenced more than three years later. Accordingly, I find all such claims at now statute barred. This applies not only to the identical relief claimed in the Toronto Action and the Milton Action, but also to any claim that Heeralal “had the opportunity of putting before the Court in the earlier proceedings but failed to do so.” (reference McQuillan v. Native Inter-Tribal Housing Operative Inc. (1998), 1998 6408 (ON CA) , 42 O.R. (3d) 46) on the basis of the doctrine of res judicata. Heeralal’s claims respecting the Brampton and Hamilton Properties are hereby dismissed.

The Jamaica Property

[ 30 ] In the Milton Action, Heeralal seeks an order requiring Savitree Heeralal-Judhan to transfer the Jamaica Property to him.

[ 31 ] Judhan states the Milton Action respecting the Jamaica Property should also be struck, basically arguing that the Ontario court lacks jurisdiction to deal with a foreign property.

[ 32 ] Savitree Heeralal-Judhan, Heeralal, Mark Judhan, Brian Judhan and Natasha Judhan entered into an Agreement for Sale to purchase the Jamaica Property from Winston Ashley, administrator for the estate of Cecil Ashley. The Agreement for Sale was executed in Jamaica where the property, then vendor and counsel for the intended vendor and purchasers are all located.

[ 33 ] The Agreement for Sale stipulates a closing date of December 10, 1995.

[ 34 ] The evidence before the Court on these motions is absolutely clear that the Jamaica Property has never been transferred from Winston Ashley despite $375,000 (Jamaican currency) of the $500,000 ( Jamaican currency) purchase price having been paid. Heeralal alleges he made certain payments towards the Jamaica Property purchase price, although he provided no corroboration of these alleges payments.

[ 35 ] Given the purchase transaction did not happen, the five intended purchasers of the Jamaica Property had a claim to force the sale pursuant to the terms of the Agreement of Sale or to sue for damages arising from the failure to complete the sale, including for the return of all monies paid towards the purchase price. Any claim would by necessity be brought by the five intended purchasers against Winston Ashley, the vendor. Mr. Ashley is not a party to the Milton Action. Neither is Natasha Judhan a party to this action.

[ 36 ] I agree with Judhan counsel that the relief sought by Heeralal herein, namely, transfer to him of the Jamaica Property from Savitree Heeralal-Judhan cannot proceed for the simple reason that the property was never transferred to any of the defendants.

[ 37 ] In addition, and as stated above, any claim respecting the Jamaica Property would need to include persons who are not parties to the Milton Action. In particular, the only possible defendant to any claim brought by the intended purchasers would be the vendor, Winston Ashley.

[ 38 ] Finally, I agree with Judhan that any proceeding respecting the Jamaica Property should be brought in Jamaica where the land is located, where the Agreement for Sale was signed, where the vendor is located and where counsel for both the intended vendor and purchasers are located. The facts of this case fall within the general rule that Canadian courts have no jurisdiction to determine claims in foreign land (reference Katania v. Giannattasio , 1999 1930 (ON CA) , [1999] O.J. No. 1197).

[ 39 ] Given all of the above, I hereby dismiss that part of Heeralal’s Milton Action respecting the Jamaica Property without prejudice to Heeralal or any of the intended purchasers pursuing a claim respecting the Agreement for Sale in the proper forum and naming all necessary parties.

Certificate of Pending Litigation

[ 40 ] I am satisfied that the minimal threshold required to obtain a Certificate of Pending Litigation against the Lindsay Properties has been met by Heeralal. Heeralal has provided some evidence, albeit less than comprehensive, about planned development for these properties. Given Judhan states there is no intention to sell or deal with the Lindsay Properties, there is no prejudice whatsoever to the defendants in making the order for a Certificate of Pending Litigation to be registered against the Lindsay Properties pending the competing claims of the parties being addressed.

Without Prejudice Pleadings

[ 41 ] Based on the copies of various correspondence filed as exhibits to the affidavits filed by the parties, I agree with Judhan counsel that paragraphs 23 and 24 of Heeralal’s statement of claim in the Milton Action should be struck as they refer to without prejudice/settlement communications. Similarly, paragraphs 27, 29(a) and that part of paragraph 30 referencing and in furtherance to the without prejudice communications set forth in paras. 23 and 24 should also be struck.

Summary and Next Steps

[ 42 ] Given all of the above, the only issues that remain to be dealt with between the parties in the Ontario court is the competing claims respecting the Lindsay Properties. Judhan acknowledges in their factum dated July 4, 2012, responding to Heeralal’s motion for summary judgment, that “there are a number of facts in dispute that raise a genuine issue requiring a trial” (reference Judhan factum paras. 23-26). I have previously stated my agreement with this proposition in my reasons for dismissing Heeralal’s summary judgment motion respecting the Lindsay Properties. An application is not the appropriate proceeding where the fundamental facts are in dispute. Such cases require a trial with witnesses providing in person testimony. As such, the Judhan Application is hereby ordered dismissed. The competing claims respecting the Lindsay Properties shall be addressed in the Milton Action.

[ 43 ] Heeralal shall serve and file an amended claim within 15 days of this order. The amended claim shall simply contain those paragraphs that remain from the pleading in the Milton Action once the matters that I have dismissed or struck have been removed. There will not otherwise be any new/added/amended paragraphs in the amended claim.

[ 44 ] Judhan shall serve and file a statement of defence to the amended claim within 30 days of this order.

[ 45 ] Within 30 days of this order, counsel shall agree to a written schedule for the exchange of affidavits of documents, including all productions, examinations and answering of relating undertakings, filing of a trial record and a pre-trial, along with any other procedural matter both counsel agree must occur to have this case ready for trial. Should there arise any issue with scheduling, then either party may bring a motion before the Court on at least seven days notice to address scheduling. The pre-trial judge shall set the trial date for this matter, unless counsel can agree to a trial date prior to attending for the pre-trial, in which case counsel can simply advise the pre-trial judge of the trial date agreed to.

[ 46 ] If counsel are unable to come to an agreement with respect to the costs for these motions, then I will entertain written submission of not greater than three pages, exclusive of a bill of costs and any offers. Heeralal’s counsel shall provide his cost submissions within 15 days of this order. Judhan’s counsel shall provide her cost submissions within 30 days of this order. Heeralal’s counsel shall provide any reply to the cost submissions of Judhan’s counsel within 40 days of the date of this order.

FITZPATRICK J.

Date: August 16, 2012