Court File and Parties

COURT FILE NO.: ES-756-11

DATE: 2013-08-08

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Roslynn Valera Eve - Plaintiff

AND:

Lillian Wilhelm as Estate Trustee et al - Defendants

BEFORE: The Honourable Mr. Justice J. W. Sloan

COUNSEL:
Jarvis K Postnikoff - Counsel for the Plaintiff

Randell K. Thomson - Counsel for 345023 Ontario Inc. et al

HEARD: August 7, 2013

Corrected decision: The correction was made on January 9, 2017.

The Plaintiff was identified as “Rosalyn” Valera Eve and this

was changed to “Roslynn” Valera Eve.

ENDORSEMENT

PLAINTIFF’S MOTION

[1] The plaintiff brings this motion in an attempt to obtain two orders from the court.

[2] She first asks the court for an order that 345023 Ontario Inc. (345) and people associated with that company, all represented by Mr. Thomson, must inform her of what they intend to do with the proceeds of the sale of properties owned by 345.

[3] Secondly she asks for an interlocutory order and injunction prohibiting the same people and entities from dispersing, distributing or paying out the proceeds from the sale of the properties other than taxes, if any, due as a result of the sale of the property without the consent of the parties or further court order.

[4] The plaintiffs fear is that if she obtains a judgment, she may be unable to enforce it since 345 owns no other assets.

[5] One of the plaintiff’s main points is that 345 and/or the people associated with it may have committed fraud or something akin to fraud when dealing with the assets of 345.

[6] The plaintiff's material states that when the Philips Bros. Radiator Service operating company was purchased by one of the defendants in 2005, a promissory note was given by it to 345 for $560,000.

[7] The plaintiff has produced material showing that on the books of 345 it is recorded in 2007 that the promissory note has been paid down to approximately $160,000. Since there are no corresponding deposits in the bank records of 345, she argues that something is very wrong with the accounting.

[8] Nowhere in the material filed by the defendants taking part in this motion do they address or try to address this issue of the allegedly missing $400,000.

[9] Prior to the death of the deceased, the shares of 345 were owned equally by the deceased and his brother, who now unfortunately has dementia.

[10] I am informed that the gross selling price of all three properties is approximately $455,000.

[11] Both parties rely in part on the Ontario Court of Appeal case of Chitel et al. v. Rothbart et al (1983), 1982 1956 (ON CA), 39 O.R. (2nd) 513.

[12] In that case the court confirms at page 13 that: (i) the plaintiff should make full and frank disclosure of all matters. This guideline seems more appropriate to an ex-parte application. (ii) the plaintiff should give particulars of his claim against the defendant. In this case both parties have filed pleadings so the claims are well set out. (iii) the plaintiff should give grounds for believing that the defendants have assets here. This is conceded. (iv) the plaintiff should give the court some grounds for believing that there is a risk of the assets being removed/dissipated before any judgment or award is satisfied. (v) the plaintiff must give an undertaking in damages. This has been done.

[13] At page 17 of Chitel, the court states that under (ii) above the facts should persuade the court that the plaintiff has a strong prima facie case on the merits and at page 18 the court states that under (iv) above the plaintiff must persuade the court that there is a real risk of the defendant dissipating or disposing of its assets in a manner clearly distinct from its usual or ordinary course of business so as to render the possibility of future tracing of the assets if not impossible in fact or in law.

Defendants

[14] With respect to the plaintiff's first request, the defendants state that the plaintiff has no right to know what 345 intends to do with the money. I agree.

[15] With respect to the plaintiff's request for an interlocutory injunction, the plaintiff submits because a similar motion was dismissed on consent, without a hearing, in July 2012, that the matter is res judicata and the plaintiff cannot proceed with this motion. Neither party filed any law with respect to the issue of res judicata and I do not see how a matter can be res judicata if it has not been determined on its merits.

[16] The defendants also submit that the plaintiff did not move promptly and therefore cannot bring the motion at this date. As long as the properties remained as real estate the plaintiff would not have the same concerns over its value being dissipated as she would once the land is turned into money. I therefore dismiss this argument.

[17] The defendants rely on the reasoning of RJR-MacDonald v. Canada 1 S.C.R. 311, a 1994 case from the Supreme Court of Canada.

[18] At paragraph 48 the court adopted a three stage inquiry to be applied when considering an application for an interrogatory injunction.

[19] First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused and finally an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.

[20] In my opinion, there is a serious question to be tried and 345 is right in the middle of it.

[21] If at the end of a trial, only 345 was found liable and all of its assets had been dissipated, the harm to the plaintiff would indeed be irreparable. I draw a negative inference against 345 for not explaining where the $400,000 allegedly paid on the promissory went to.

[22] I do not see that any harm would come to 345 if the injunction were granted since it could always apply to the court for funds for a specific purpose, if it could not obtain the funds with the consent of the plaintiff.

[23] I therefore grant an order in accordance with paragraph 2 of the plaintiff's motion record dated July 19, 2013 subject to the following conditions.

[24] 345 may pay from the gross proceeds of the sale of the three properties its legal fees and real estate commission incurred with respect to the sale of the property, the usual disbursements associated with the sale of real estate, expenses required for it to comply with the agreements of purchase and sale, and any taxes that may be immediately owing as a result of the sale of the properties.

[25] Since it is anticipated that there may be monies in the range of $400,000 available, it would seem to me to be preferable to have it invested, if possible, at a rate that would be higher than what would be obtained if the monies were paid into court. In addition, an amount of money that hopefully can be estimated by the parties should be left in a relatively liquid state in the event that it is needed to pay expenses of 345.

[26] If the parties are unable to agree on how the money should be invested I may be spoken to.

[27] If the parties are unable to agree on costs, Mr. Postnikoff shall forward his brief submissions on costs to me by August 16, 2013. Mr. Thomson shall forward his brief response to me by August 23, 2013. Mr. Postnikoff shall then forward his reply, if any, to me by August 30, 2013. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca

J.W. Sloan J.

Date: August 8, 2013