SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: IN THE MATTER OF THE BANKRUPTCY OF 2046272 Ontario Inc. c.o.b. Global Group

BEFORE: D. M. Brown J.

COUNSEL: J. Clark, for the Trustee, BDO Canada Limited

HEARD: April 11, 2013

REASONS FOR DECISION

I. Motion for records under BIA s. 164

[1] BDO Canada Limited, the trustee in bankruptcy of 2046272 Ontario Inc. c.o.b. Global Group, moves under section 164 of the Bankruptcy and Insolvency Act for an order requiring Rogers Communications Inc. to deliver up cell phone records and emails from accounts in the name of one Kumar Thevendra. Mr. Thevendra was not an officer, director, shareholder or employee of the Bankrupt.

[2] Although properly served, Rogers did not attend on the return of the motion. Previous correspondence with the Trustee disclosed that Rogers would not release the requested information without a court order because the accounts were not in the name of the Bankrupt.

[3] Mr. Thevendra was served with the motion. On April 10, 2013, a lawyer, Jane Martin, emailed the Trustee to advise that although she had not yet been retained by Mr. Thevendra, he would not consent to the order sought “since it would compromise the right to privacy of the individuals with whom he has communicated in the course of his business, using the email addresses or cell phone for which you seek to obtain records. He cannot waive the third parties’ right to privacy.”

II. The demand

[4] On February 15, 2013, the Trustee wrote to Rogers making a demand under section 164(1) of the BIA for the production of “all emails and any attachments for kumarthevendra@rogers.com, sent or received, between May 1, 2012 until December 31, 2012 that contain” certain email addresses or names of individuals or companies. On February 20 the Trustee sent a further demand requiring production of “all records, including subscriber information, from June 2, 2012 and August 28, 2012, inclusive, for” two stipulated phone numbers.

[5] Rogers responded on February 27, 2013 stating that “as the email account and account owner(s) of the cellular telephone numbers are not owned by the numbered company, Rogers will not release this information without a court order”.

[6] The Trustee moved for an order that Rogers produce the records requested.

III. Analysis

A. BIA s. 164

[7] Section 164 of the BIA authorizes the trustee to require third parties to produce documents:

164. (1) Where a person has, or is believed or suspected to have, in his possession or power any of the property of the bankrupt, or any book, document or paper of any kind relating in whole or in part to the bankrupt, his dealings or property, or showing that he is indebted to the bankrupt, he may be required by the trustee to produce the book, document or paper for the information of the trustee, or to deliver to him any property of the bankrupt in his possession.

(2) Where a person fails to produce a book, document or paper or to deliver property as required by this section within five days after being required to do so, the trustee may, without an order, examine the person before the registrar of the court or other authorized person concerning the property, book, document or paper that the person is supposed to possess.

(3) Any person referred to in subsection (1) may be compelled to attend and testify, and to produce on his examination any book, document or paper that under this section he is liable to produce, in the same manner and subject to the same rules of examination, and the same consequences of neglecting to attend or refusing to disclose the matters in respect of which he may be examined, as would apply to a bankrupt.

[8] To succeed on this motion, the Trustee must establish that Rogers has, is believed to have or is suspected of having “any book, document or paper of any kind relating in whole or in part to the bankrupt, his dealings or property”. Stored emails can constitute “any book, document or paper of any kind”, as can records of cell phone communications. The issue on this motion is whether the Trustee has demonstrated that the emails and cell phone records it seeks relate in whole or in part to the Bankrupt, its dealings or property.

B. The events

[9] There is no evidence to suggest that Kumar Thevendra was an officer, director, shareholder, employee or agent of the Bankrupt. The Trustee based its request on a rather unusual sequence of events.

[10] The Bankrupt imported textiles from China for distribution in the North American market. The Bankrupt sought to borrow from HSBC Bank of Canada. HSBC was approached by Mr. George Barake and Mr. Yves Lebel, through their businesses, Barake Business Consulting Group : (“BBCG”) and CFO Conseil to lend money to Global. Barake and Lebel were business consultants retained by the Bankrupt. According to the Trustee’s information, Barake and Lebel were HSBC’s main point of contact with the Bankrupt and supplied all of the information requested by HSBC in support of the loan facility.

[11] In April, 2012, the Bankrupt secured a $400,000 demand revolving loan from HSBC.

[12] The Bankrupt then sought to increase the loan to $2 million. At that point HSBC required Global to provide a Review Engagement Report. Financial statements dated July 18, 2012 purporting to be from KPMG and signed by Mr. Pradeep S. Gill, C.A., were presented to HSBC. HSBC authorized an increase in the loan to the Bankrupt based on those financial statements.

[13] Certain transactions in the Bankrupt’s account caused HSBC concern. On August 10, 2012, Mr. Christian Hamel, the HSBC employee responsible for the Bankrupt’s account, contacted Mr. Pradeep Gill at KPMG. Gill left Hamel a message advising that he was not the person Hamel was looking for because he had never worked on a Global Group account. As a result of further contact, on August 17 HSBC (Hamel) sent Gill the Review Engagement Report. Gill ascertained that he had had no involvement in preparing the Review Engagement Report and that someone had fabricated the document.

[14] Late on the afternoon of August 10 Kumar Thevendra surfaced. Gill had met Thevendra, a Rogers employee, as part of the KPMG team auditing the Rogers account. Gill prepared a detailed memorandum dated August 22, 2012, concerning his dealings with Thevendra on August 10. In his memo Gill wrote that Thevendra insisted that Gill meet with him immediately on August 10. A meeting was held at KPMG late that afternoon. According to Gill, Thevendra stated that Gill had received a call from HSBC that day and went on to say: “I think you know that my friend Georges Barake made a boo-boo and he wants to know how to fix it”. Thevendra stated that he had provided Barake with Gill’s contact information because Barake was looking for an auditor. Thevendra asked Gill: “What is your price to fix this?” In response to Gill’s expression of surprise, Thevendra advised that Barake had prepared fraudulent documents on KPMG letterhead, with Gill as the author, and he now needed help to fix the situation. Thevendra stated that Gill could help Barake, Hamel and GTA Woodworking Inc. by phoning Hamel and explaining that Gill had worked on the account. Gill refused.

[15] According to Gill’s memo, he then asked Thevendra for more information. In response Thevendra alleged that Barake and Hamel had worked together to create a fraudulent scheme under which GTA Woodwork Inc. would receive a $700,000 loan from HSBC. During the meeting Thevendra had two telephone calls with Barake, as well as a text message from Barake which Gill read. The meeting ended with Gill refusing to help Thevendra. Shortly after Thevendra left, Gill received an email from Thevendra (kthevendra@gmail.com) asking him to call 416.618.7294. Gill’s memo of that meeting with Thevendra made no mention of Thevendra referring to the Bankrupt.

[16] Gill also prepared an August 23, 2012 memo describing all the events concerning his discovery of the false Review Engagement Report. In that memo he recorded that on Monday, August 20, KPMG received from HSBC an email of that date purportedly authored and sent by Gill to jktextiles@yahoo.ca confirming that (i) he had in fact done the Review Engagement Reports for Global Group and GTA Custom Woodwork Inc., (ii) Lam was his primary contact and (iii) HSBC should call him directly on his private cell number: 416.270.7485. The email chain disclosed that Lam used the email address, jktextiles@yahoo.ca, and had forwarded to the email to one Rabih at bbcgglobal@yahoo.com. Gill stated that the email attributed to him was fraudulent.

[17] KPMG has provided the Trustee with an August 21, 2012 email from Barake in which he denied that BBCG had provided HSBC with anything and asserted that a person named Pradeep Gill had delivered the Review Engagement Report to him. Barake complained about the allegations being made against him.

[18] The Trustee has not been able to locate any assets of the Bankrupt other than four old desk top computers. A review of cheques issued by the Bankrupt disclosed some issued to BBCG and GTA Custom Woodwork, a kitchen installation company. Raymond Lam was the president and director of both the Bankrupt and GTA Custom Woodwork

C. Email account: kumarthevendra@rogers.com

[19] No email from Thevendra using a rogers.com email address was placed into evidence. The only email filed from Thevendra was one of August 17, 2012 to Gill using a gmail account. The Trustee conducted an internet search of “Kumar Thevendra”. It found a listing for a person of that name at TL Debt Management in Scarborough. A web site for the Canadian Tamil Chamber of Commerce provided contact information for TL Debt Management, with a contact name of Gnanakumaran Thevendra and an email address of kumarthevendra@rogers.com. Apart from the internet search results, no other evidence linked the Rogers-employee Thevendra who met Gill with that Rogers email address.

[20] The Trustee has scheduled a BIA s. 163(2) examination of Thevendra for May 9, 2013. Given that scheduled examination, I am not prepared to grant the production order sought by the Trustee for the Rogers account. The evidence filed before me does not establish a sufficient link between the Rogers email account, associated with TL Debt Management, and the Kumar Thevendra who met Gill last August. Questions asked on the BIA s. 163(2) examination may establish such a link and the Trustee can renew this motion following that examination.

[21] In anticipation of that examination, I am of the view that it is most proper for the Trustee to ask Thevendra whether the Rogers account is his. The Trustee has established that Thevendra had some link with Barake and some knowledge of the fraudulent Review Engagement Report. Based on the evidence filed by the Trustee, Thevendra is a person who appears to possess information about the affairs of the Bankrupt, or at least of the entity who assisted the Bankrupt in securing the loans from HSBC.

D. Telephone number: 416.618.7294

[22] Although the evidence satisfies me that this telephone number was used by Thevendra, the request of the Trustee is far too broad. Thevendra may have made calls to hundreds of people from that number. In whom is the Trustee interested? Calls to the Bankrupt? Calls to Lam, the Bankrupt’s principal? Calls to Barake? The Trustee does not say. In the absence of such particularity, I am not prepared to grant the order requested at this time. Following the BIA 163(2) the Trustee may renew the motion provided a more targeted request is made.

E. Telephone number: 416.270.7485

[23] This telephone number appeared in the August 20, 2012 email attributed to Gill which Gill contended was fraudulent. It purported to be a phone number for Gill. In the absence of knowing the name of the customer subscriber for the telephone number, I am not prepared to order disclosure of the call records for that account. I am prepared to order that Rogers disclose to the Trustee the name, address and any other contact information for the customer subscriber for 416.270.7485, assuming it is a Roger’s customer. The inclusion of that number in an email directly related to the issue of the authenticity of the Engagement Review Report for the Bankrupt makes it producible under BIA s. 164. I order Rogers to disclose that information to the Trustee no later than Tuesday, April 23, 2013.

[24] To ensure the Rogers preserves the email and cell phone records in its possession, I order Rogers to preserve all information and data concerning the Rogers email account and the two cell phone numbers until further order of this Court.

IV. Relief against Google and Thevendra

[25] The Trustee did not pursue this part of its motion on April 11, 2013. The Trustee may schedule the motion through a 9:30 appointment before me. I will remain seized of this matter.

V. Costs

[26] The Trustee sought costs of $7,094.14 against Rogers. I will not make any award of costs against Rogers for two reasons. First, Rogers properly required the Trustee to obtain a court order given that the accounts were not in the name of the Bankrupt. Second, the organization of the materials filed by the Trustee was poor. When the police file affidavits in support of search warrants before this Court, they are required to explain, with descriptive precision, the link between the evidence sought and the offence alleged. So, too, when trustees file motions seeking production orders against third parties, they must organize their supporting materials so that the Court can quickly and clearly understand the link between the third party information sought and the affairs or property of the Bankrupt. The Trustee in this case did not meet that level of organizational clarity.

D. M. Brown J.

Date: April 15, 2013