Court File and Parties

COURT FILE NO.: CV-12-1883-00

DATE: 2013 09 10

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MUHAMMAD ARIF CHOKSI, Plaintiff

AND:

MUHAMMAD IQBAL PEERANI, NEELOFAR PEERANI, ZAIN PEERANI and SUMAIR PEERANI, Defendants

BEFORE: Justice André

COUNSEL:
Ralph Swaine, for the Plaintiff

Ray Thapar, for the Defendants

HEARD: August 19, 2013

ENDORSEMENT

[1] The defendant moving parties seek to have a Certificate of Pending Litigation (CPL) obtained by the plaintiff on an ex parte basis vacated on the following grounds:

(1) The plaintiff did not provide full and frank disclosure to the judge who heard the ex parte motion.

(2) The plaintiff has no reasonable interest in the property in question.

(3) The court has an overarching discretion under s. 103(b) of the Courts of Justice Act to discharge the CPL.

[2] For the reasons provided below, I agree that the plaintiff did not provide full and frank disclosure to the ex parte judge. However, I find that the plaintiff does have an interest in the subject property which warrants protection.

OVERVIEW

[3] The plaintiff arranged with the defendants to purchase three acres of property, called the Port Qasim Authority, in Pakistan. The plaintiff sent $602,332.33 to the defendant, Muhammad Iqbal Peerani, in 2006 for the purchase of this property.

[4] The plaintiff maintained that since he sent the money to the defendant he tried in vain to obtain an accounting from the defendant regarding the purchase of the property.

[5] In 2010, he discovered for the first time that the defendant had only used $125,000.00 towards the purchase of the property. The plaintiff deposed, in his affidavit supporting his ex parte motion for a CPL, that he then discovered that following his transfer of money to the defendant, the latter purchased a house located at 17 - 3510 South Millway Avenue in Mississauga.

[6] The plaintiff also claimed that after news leaked to the defendant that the plaintiff intended to sue him for the $487,332.33 difference between the money he gave to the defendant and the purchase price for the Port Qasim property, the defendant transferred his Mississauga house to his sons, defendants Zain and Neelofar Peerani, for $2.00.

[7] The defendants maintain that the full amount of money received from the plaintiff was used to pay for the property by way of “official and unofficial payments” in accordance with the prevailing system in Pakistan. The defendants also rely on a number of letters obtained from the vendor of the property, indicating that the plaintiff knew that the selling price of the property was $125,000.00 and that as early as 2006, he knew that he was merely purchasing a leasehold interest in the property. The defendants submit that the omission of this information in the affidavit material in support of the ex parte motion, warrants the discharge of the CPL.

LEGAL PRINCIPLES

[8] Where a motion is made without notice, the moving party shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application. R.R.O. 1990, Reg. 194, r. 39.01(6).

[9] A party moving for an order without notice is justifiably held to an exceedingly high standard. Maesbury Homes v. Hutchens, 2011 ONSC 6198 (S.C.J.) para. 15. The justification for this is that the ex parte judge is literally at the mercy of the party seeking injunctive relief in that the ordinary checks and balances are not operative. United States of America v. Freidland [1996] O.J. No. 4399 (S.C.J.) para. 26.

[10] The evidence adduced by the moving party on an ex parte application must provide the judge with a complete picture of the relationship between the parties and the nature of their business dealings. Anything less will result in the discharge of a CPL obtained on an ex parte basis. JDM Developments Inc. v. J. Stollar Construction Ltd. 2004 35004, S.C.J.

[11] Material facts are those which the ex parte judge needs to be aware of in deciding whether or not to grant the ex parte motion. All material facts must be disclosed whether or not the moving party believes that these facts are material. Pazner v. Ontario Reflex (1990) 74 O.R. (2d).

ANALYSIS

Issue One

[12] Did the plaintiff fail to make full and frank disclosure to the ex parte judge?

[13] The moving party has presented, as part of its motion record (Tab H) a number of letters from the Port Qasim Authority to the applicant which indicates that:

(1) In 2006 the applicant knew he was acquiring a leasehold interest in the subject property.

(2) That $104,000.00 represented 75% of the selling price and that accordingly, the plaintiff knew that the full purchase price of the property was $125,000.00.

[14] The moving party also relies on an email purporting to be one from the applicant to the Port Qasim Authority in which he mentioned that the latter was seeking payment of $104,101.00 for the subject property. He also relies on a letter purporting to be from the applicant to the Port Qasim Authority, dated December 23, 2006, in which he referred to the Authority’s request for $104,101.00 as payment for the subject property.

[15] The applicant relies on the report of a handwriting expert for the proposition that much, if not all the documentary evidence, relied upon by the defendants, or which purports to have been signed by the plaintiff, are bogus.

[16] On the other hand, the applicant admitted, under cross-examination on August 12, 2013, that he received the letter from the Port Qasim Authority which indicated that he was merely acquiring a leasehold interest in the subject property and that $104,101.00 represented 75% of the “Peripheral Development Charges”. This suggests that the applicant knew, well before 2010 that the price of the land was nowhere close to the money he gave to Muhammad Peerani and that he was not buying, but leasing the land.

[17] In my view, this constitutes non-disclosure of material information to the ex parte judge.

[18] The defendant also suggests that the plaintiff knew, as early as 2005, that he owned property in Mississauga given that he had visited Muhammad Peerani at the home on many occasions. The plaintiff’s omission to advise the ex parte judge of this fact, the defendants submit, constitutes a material non-disclosure that, on its own, warrants a discharge of the CPL.

[19] I disagree. The defendant sold his home in 2009 and in 2011, purchased a new home the location of which was unknown to the plaintiff when he brought his ex parte motion. Even if this home was purchased for $280,000.00 as the moving party suggests, the fact that it was transferred to Muhammad Peerani’s son for $2.00 less than two weeks before the plaintiff commenced legal action against the defendant provided the plaintiff with a reasonable basis for bringing his ex parte application.

[20] The defendant Sumair Peerani has indicated that the transfer of the Mississauga property to his brother and himself was to enable them to avail themselves of provincial insurance coverage in Ontario. Specifically, he claims that a Ministry of Health official advised him in September 2011 that one way to be eligible for provincial health insurance coverage was to show evidence that he owned property in Ontario.

[21] I am not convinced by this explanation for the transfer of the subject property. One would think that eligibility for health insurance in Ontario is based on permanent residency status or length of residency in the province rather than ownership of property. Even if Sumair Peerani was in Pakistan for much of 2011, I fail to see how ownership of property in Mississauga would make him eligible to receive an Ontario health insurance card.

Issue Two

[22] Does the plaintiff have a reasonable interest in the subject property?

[23] In my view he has. There is a question about the authenticity of many of the documents relied upon by the defendants. Secondly, there is no documentation confirming the defendant’s assertion that there was an “unofficial price” of over $487,000.00 paid by the defendant to the Port Qasim Authority. Thirdly, I am concerned about the timing of the transfer of the defendant’s Mississauga property to his son, Sumair Peerani and the consideration paid for this property.

[24] The constellation of these factors suggest that part of the funds provided by the plaintiff to the defendant Muhammad Iqbal Peerani may well have been diverted by the latter and used to acquire other property for himself.

CONCLUSION

[25] Based on the above I conclude that the plaintiff did not make full and frank disclosure in its ex parte motion for the registration of a CPL against the subject property.

[26] Accordingly the CPL registered against the property known as 17 – 3510 South Millway Avenue, Mississauga, is vacated. However, pursuant to s. 103(6)(b) and (c) of the Courts of Justice Act, I have the discretion to discharge the CPL where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or on any other ground that is considered just.

[27] In my view, the plaintiff has an interest in any property owned by the defendants on account of the money paid to Muhammad Iqbal Peerani to acquire land at the Port Qasim Authority in Pakistan.

[28] To that extent the defendants Sumair Peerani and Zain Peerani shall pay into court security amounting to the greater of $250,000.00 or 75% of the proceeds of sale of the property known municipally as 17 – 3510 South Millway Avenue, Mississauga, less any real estate or legal fees incurred as a result of the sale of the subject property.

[29] The defendants must also pay $250,000.00 into court as security if the subject property is transferred to any other individual.

[30] If the parties are unable to agree as to the costs of this motion, they may submit written submissions within fifteen days of this judgment.

André J.

Date: September 10, 2013