SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-11-436144
DATE: 20120910

RE: Tahir Ahmad, Toronto Condominium Corporation No. 1908, Sanjay Saran Mathur, Syed Z. Qadri, Marceellus Wiradharma, 1752166 Ontario Inc., Anjaniay Holdings Inc., Rexdale Jame Masjid and 1770420 Ontario Inc.

and

1288124 Ontario Inc.

BEFORE: Justice E.M. Morgan

COUNSEL:
Yadvinder Singh Toor, for the Applicants
Michael Miller and Sam DeCaprio, for Harpeet Singh Sethi
No one appearing for the Respondent

DATE HEARD: October 9, 2012

E N D O R S E M E N T

[ 1 ] Counsel for the Respondent has advised that he is unable to attend today, but he indicated at the last appearance that he is content that we proceed today in his absence. Harpeet Singh Sethi is here as director and officer of the Respondent, and is personally represented by separate counsel. Messrs. Miller and DiCaprio are content to proceed and have indicated that they will keep Respondent’s counsel apprised of today’s proceedings. They should forward him a copy of this endorsement.

[ 2 ] Mr. Sethi has today brought to court, and handed over to counsel for the Applicants, a package of banking and other financial documents. This package includes bank statements that were just provided to Mr. Sethi this past Friday, October 5, 2012. Mr. Miller has advised the court on Mr. Sethi’s behalf that these are the only outstanding documents included in the court order of Lederer J. dated Janurary 9, 2012 that Mr. Sethi has in his possession. He has now disgorged everything he has.

[ 3 ] Mr. Sethi has also advised the court, through counsel, that an audited statement of the condominium corporation is under preparation by auditors Krigstin & Krigstin LLP. It is estimated that the audited statements will be available at the end of this month or shortly thereafter.

[ 4 ] Mr. Toor submits that the documents tendered by Mr. Sethi today are not helpful to the Applicants, and that they do not include all of the ledgers, journals, and other management and financial materials that the Condominium Act requires.

[ 5 ] In particular, Mr. Toor is concerned that the bank statements show the deposits and withdrawals on a monthly basis but, without proper bookkeeping records and in the absence of cancelled cheques and deposit and withdrawal receipts, they do allow the current management of the condominium corporation to know who has paid condominium fees, what expenses have or have not been incurred, etc.

[ 6 ] Mr. Miller responds that some of the backup documentation that the Applicants seek is in the hands of the auditors, and that once the audit is complete it will all be available to the Applicants. In any case, he submits, the issue for today is not the extent to which the Respondent has complied with its statutory obligations; there are separate remedies for any such defaults which can be addressed in the within Application on the merits. Rather, the issue for the moment is whether the Respondent’s director, Mr. Sethi, is still subject to the contempt order.

[ 7 ] I am not convinced that the Respondent has fully purged the contempt order issued August 14, 2012. In particular, I note that the materials delivered to the Applicants do not encompass “all financial records of the corporation and of the declarant relating to the operation of the corporation from the date of registration of the declaration and the description”, as required in para. 7(i) of the Order of Lederer J.

[ 8 ] That said, the blatant disregard of the Order of Lederer J. that prevailed on August 14, 2012 has dissipated. It was that blatant contempt that prompted me to exercise my discretion under Rule 60.11(5) and (6) to order that Mr. Sethi, as director of the Respondent, personally attend at court and be subject to punishment. I am satisfied that the Respondent is now on the road to fully complying with the Order of Lederer J., and that Mr. Sethi has now started using his best efforts to move the compliance process forward. Mr. Sethi therefore does not need to attend the hearing personally any longer.

[ 9 ] I am adjourning the motion against the Respondent sine die to give the auditors time to complete their work and for the Respondent to hand over to the Applicants the audited statements and the backup documentation provided to the auditors for this task. I advised Mr. Toor at the hearing that he should make the next return date after the beginning of November in order to allow the auditors the time they need.

[ 10 ] Mr. Toor submits that Mr. Sethi has required the pressure of the ongoing contempt proceedings in order to prompt him to pay any attention at all to the disclosure obligations contained in the Order of Lederer J. In particular, he had to continue to press ahead today in order to get the final package of materials that Mr. Sethi delivered this morning.

[ 11 ] In view of Mr. Toor’s demonstrated need to appear today, the Applicants deserve their costs of the appearance. Mr. Miller submits that much of the material presented by Mr. Toor this morning was not relevant to the contempt issue. It seems evident, however, that Mr. Toor was justified in spending a couple of hours in preparation for today’s appearance, and that he was a half day in court.

[ 12 ] Costs of today are to be paid by Mr. Sethi to the Applicants in the amount of $1,000, inclusive of disbursements and tax.

Morgan J.

DATE: October 9, 2012