Pabla v. Lalri et al., 2014 ONSC 2088

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-13-7807-00
DATE: 2014 04 02

RE: Rajvinder Pabla v. Charanjit Singh Lalri, Nirmal Singh Lalri, Kuldip Kaur Lalri & Ranvir Singh Vaid

BEFORE: EMERY, J.

COUNSEL:
Harminder S. Dhillon, for the Applicant

Jeff Rechtshaffen, for the Respondents

HEARD: March 4, 2014

ENDORSEMENT

1There are two motions before the court. The applicant wife, Rajvinder Pabla requests an order that the respondents Nirmal Lalri and Kuldip Lalri produce certain documentary disclosure, including an updated financial information form 13.1. Those respondents are the father and mother of the respondent husband. The applicant also requests a production order for the respondent husband to disclose various records and documents pertaining to his financial arrangements with the respondent Ranvir Vaid. Ranvir Vaid is the respondent husband’s brother-in-law. The applicant also seeks an order for the respondent Ranvir Vaid to produce certain disclosure including certain records and documents relating to funds transferred, borrowed or advanced between the respondent husband and the other respondents.

2The respondent husband, Charanjit Lalri, brings the second motion in which he seeks an order for regularly scheduled, unsupervised access to the only child of the marriage, Simrit Lalri. He also seeks an order for the applicant to produce all items described in a request for information served, and an order removing the additional respondents Nirmal Singh Lalri, Kuldip Kaur Lalri and Ranvir Singh Vaid as parties to this proceeding.

3It was agreed between counsel for the parties at the outset of the hearing that the applicant’s motion and the motion of the respondent husband with respect to access to the child and for disclosure be adjourned to a later date. It is common ground that the remaining issue on the motion of the respondent husband for an order to remove Nirmal Singh Lalri, Kuldip Kaur Lalri and Ranvir Singh Vaid as the additional respondents should first be determined, as the result will inform the scope of the disclosure orders to be heard later. The respondent husband’s motion for access to the child Simrit Lalri and the two motions as they relate to disclosure were therefore adjourned to April 8, 2014 for hearing on a normal motions day. Counsel assured me they would not take longer than one hour in total to argue those motions.

4The motion for an order to remove the additional respondents therefore proceeded as the sole issue to decide at this time.

Background

5Counsel for the respondents made emphatic submissions that there is no basis for the additional respondents to remain as parties to this application. He directed the court to the application commenced against all four respondents, and outlined how the relief requested by the applicant relate only to the respondent husband, with two exceptions. The first exception is found in paragraph 5 where the applicant seeks full financial disclosure from all respondents for all bank accounts, held individually or jointly, in Canada, India, U.A.E., and other countries since 2003. The second exception is contained in paragraph 7, where the applicant seeks an order that the respondents provide a complete accounting for all money transfers between Canada, India, U.A.E., and other countries since 2004.

6The respondent husband states that the applicant seeks only disclosure related relief from the additional respondents. He makes the argument that there are other procedural devices available to obtain relevant information from other persons relating to the family law issues between the applicant and himself without naming them as parties. He argues forcefully that the applicant has asserted no cause of action against the additional respondents in the application. According to him, they are therefore not necessary parties to decide the family issues between himself and the applicant.

7The respondent husband grounds the motion under Rule 7 of the Family Law Rules. Rule 7(3) that requires that a person starting a case shall name as respondent (1) every person against whom a claim is made, and (2) every other person who should be a party to enable the court to decide all the issues in the case. The respondent husband takes the position that Rule 7 does not apply to the non-spousal respondent. Therefore, says the respondent husband, they should never have been made parties to the case to begin with.

8Not surprisingly, counsel for the applicant paints a larger picture. The applicant relies upon Rule 7(3) and (5) as well. The applicant also points to the order made by the Honourable Justice Snowie on August 6, 2013 at a case conference, at which the additional respondents had separate counsel. This order was made on consent, and provided that the parties be at liberty to serve a request for information on any other party in the case. This order included the right for the applicant to request information from the additional respondents. Those respondents have never complained that they were improperly joined as parties until now.

9Counsel for the applicant served her request for information on August 30, 2013. Having received no answer to that request for information within the 45 days required by Justice Snowie’s order, Mr. Dhillon wrote a letter dated October 23, 2013 on behalf of the applicant to counsel for the respondents asking for the requested disclosure by October 31, 2013. He advised counsel for the respondents that if he did not receive the required information by that date, he would bring a motion for disclosure and would seek costs.

10The applicant brought her motion four months after Mr. Dhillon’s deadline had passed without a satisfactory response to his letter. The motion to remove Nirmal Lalri, Kuldip Lalri and Ranvir Vaid as respondents was never brought until the applicant had launched her motion to enforce Justice Snowie’s order against all of the respondents.

11Counsel for the applicant has informed the court that the additional respondents have not produced any documents or made any of the required disclosure under Justice Snowie’s order, or the request for information to date.

12The applicant has filed affidavit evidence relating to the relevance of the additional respondents to her issues with the respondent husband. The applicant has made a claim in the application for an equalization payment between net family properties. It is clear that she takes the position in this proceeding that the respondent husband is using his father, mother and brother-in-law as filters, if not shields for income purposes and the accumulation of assets.

13The applicant describes how the respondent husband has been a self-employed businessman since 2004. For the majority of their married life, she and the respondent husband have lived with his family including the respondent Nirmal Lalri, the respondent Kuldip Lalri and the respondent Ranvir Vaid. The applicant describes how her father-in-law has a grade 10 or 12 education from India, but has not worked since the mid-1980s. She describes her mother-in-law as having a very basic education. To the best of the applicant’s knowledge, neither of them have been gainfully employed since coming to Canada in the year 2000.

14The applicant deposes that the respondent Ranvir Vaid has been in Canada on a temporary Visa since 2006. At first, he was sponsored on a work Visa by the respondent husband and has stayed on temporary Visas since then. According to the applicant’s affidavit, Ranvir Vaid works fulltime with the respondent husband at his kitchen cabinet making business. The applicant states that he is paid in cash by the respondent husband, most of which is recycled back to the respondent husband.

15According to the applicant, the respondent husband has only disclosed an annual income of between $9,000 and $16,000 for the years 2009 to 2012 in his financial statement. The applicant considers the respondent Ranvir Vaid to be a necessary party to the case as he receives funds for the respondent husband that should be considered income, and because he is instrumental in handling the cash flow of the business.

16The applicant further deposes that the respondent husband has told her that the respondent Ranvir Vaid loaned him $39,000 to purchase various properties. Further, the applicant has adduced evidence from the bank account history showing that the respondent Ranvir Vaid would make large cash deposits before arranging bank drafts payable to the respondent husband.

17The applicant’s evidence on the motion states that the parents of the respondent husband have no known source of income, yet have large cash flows into their accounts. The respondent Nirmal Lalri was in a position in September of 2010 to loan $51,000 from cash deposits of unknown origin to the respondent husband for the purchase of properties in Guelph. In September 2012, the respondent Kuldip Lalri was somehow in a position to purchase a property in Milton for $227,000. This property was purchased by cash of unknown origin. That same property was later sold in March 2013 for 299,000. In April 2013, the respondent Nirmal Lalri purchased another property in Brampton for $506,000. It would appear this property was as paid for in cash, as there was no mortgage registered to secure financing on closing.

18The applicant requires financial disclosure from the respondents Nirmal Lalri and Kuldip Lalri in order to trace the cash income from the respondent husband’s business as well as the proceeds of sale from these properties. She states that it is beyond belief that either Nirmal Lalri or Kuldip Lalri is able to buy and sell properties worth more than half a million dollars in cash. She states that she firmly believes that all the properties held in the names of these additional respondents are in fact owned by the respondent husband.

19The applicant deposes that it is typical for the respondent husband to make large cash transfers to India or to the Middle East through this network of bank accounts. She states in her affidavit that these transfers are typically returned to Canada in the name of one or more of the additional respondents.

20The applicant takes the position that the flow of funds through bank accounts in India and the Middle East which are returned to Canada under the guise of one or more of the additional respondents are actually to him. The true ownership between those funds and funds of the additional respondents are within the ambit by the applicant’s equalization claim, and entitle the applicant to full disclosure.

21The applicant also deposes that the disclosure she seeks from all of the respondents are necessary to enable the court to decide all the issues in the case. She alleges that the business income and the properties purchased by one or more of the additional respondents should be included as part of her equalization claim. There is evidence in the applicant’s affidavit material that non-spousal respondent have participated in receiving or holding income or assets in trust for the respondent husband, thus putting the nature their relationship and the beneficial ownership of the income and properties in issue.

22It is of note that the allegations relating to the acquisition of properties, and the funnelling of funds from abroad and back again is described in the applicant’s affidavits sworn on January 28, 2014 and February 12, 2014 were not refuted by the respondent husband in his affidavit sworn on January 29, 2013. He did not file any subsequent affidavit, and the additional respondents have not filed any affidavit material on the motion at all.

Analysis

23I am dismissing the motion to remove the additional respondents as parties to this application for three reasons.

24First, the motion seeking this order is made only by the respondent husband, Charanjit Singh Lalri. The additional respondents have no motion before this court. In my view, a motion to dispose of a claim against respondents to an application is something for those respondents to seek as a final order.

25The additional respondents who seek an order removing them as parties to the application should have been the moving parties for this relief. This should not have been difficult given that the respondent husband and the additional respondents are represented by the same law firm. The timing of the motion to remove the additional respondents after the applicant had brought her motion for disclosure from all respondents is suspicious, but I digress.

26Second, I asked counsel for the authority his clients rely upon for the order they seek. Counsel directed me to Rule 7(3) and (5) as the basis for naming every person who should be named as a party, but could not give me any specific authority for the power to remove a person who is currently named as a party in a family law case. I was referred to the decision of Justice Nelson in Noik v. Noik 2001 27970 (ON SC), 2001 CarswellOnt. 324, 14 R.F.L. (5th) 370 as authority for the principle that if the applicant has no claim to make against a party, a motion to add as that party as a respondent should be denied. The respondents argue that if they should not be added as respondents after the fact, they should not have been added in the first place.

27In Noik, the applicant was seeking an order to add four persons and a group of family companies as parties to the family law action between herself and her husband. After a comprehensive review of the case law, Justice Nelson found that an individual or corporation should not be added as a party only for the purpose of examining that individual or corporation for discovery. This presumably extends to naming an individual or corporation for the sole purpose of obtaining documentary. The court in Noik discussed how it is unlikely that a potential defendant will be necessary for the proper adjudication of the issues between the parties if the plaintiff has no cause of action against that potential defendant.

28In response, counsel for the applicant referred me to the case of Coulstring v. Lacroix, [2001] O.J. No. 1826. In Coulstring. The motion of the respondent husband Lacroix and the respondent Mandel asked for an order removing Mandel as a respondent. Mr. Lacroix had been cohabiting with Ms. Mandel since his marriage with the applicant Coulstring had ended. Mandel argued that Rule 20(5) of the Family Law Rules was sufficient to allow the applicant to obtain an order for the questioning of her. It was Mandel’s position that questioning would adequately address the allegations the applicant was making that she and Lacroix had arranged his financial affairs in such a manner as to render him judgment-proof and to depress is actual income level for child support purposes. On the evidence before him, the motions judge found ample evidence to raise more than a mere suspicion as to the alleged arrangement and prima facie sufficient evidence to support the allegation of a co-mingling of funds and assets. The motions of the respondents Lacroix and Mandel to remove Mandel as a respondent in that family law case was dismissed accordingly.

29On the motion materials before me, I find there is evidence that the respondent Charanjit Lalri is likely the principle mind behind various financial arrangements he has made with family members to filter or shield his business income and his accumulated assets from the applicant. I find on the evidence that the applicant has established the foundation for a claim that the additional respondents have co-mingled funds and assets with the respondent husband. There is evidence before me to suggest that the additional respondents have actively participated in one or more arrangements to hide the true income or assets of the respondent husband from the applicant. This evidence is more similar to the fact pattern found in the Coulstring case than the facts argued in Noik. Therefore, the claim of the applicant that those additional respondents are working in concert with the respondent husband to receive or hold assets in trust for him make them each persons who should remain a party to enable the court to decide all issues in the case.

30The question therefore becomes whether the additional respondents should be parties to enable the court to decide all the issues in the case.

31Even if the connecting issue is the equalization of net family properties between the applicant and the respondent husband, can it be said that the implied claims against the additional respondents as trustees or agents are enough to make them more than witnesses? In my view, if those respondents have something more at stake amounting to an interest to protect or an allegation to defend on the claims framed on the application, they are properly named as parties.

32I find that the additional respondents are necessary parties to be bound by any order the court makes with respect to the issues that pertain to them and the property they allegedly hold in trust. It may be important for the applicant to bind the additional respondents in the event further orders are needed under the Family Law Act or other legislation to enforce any judgment the court may grant.

33Third, I can find no authority or power given to the court in the Family Law Rules to remove a respondent before trial short of a motion for summary judgment. Counsel for the respondent husband referred me in argument to Rule 16(6) of the Family Law Rules that allows a party to make a motion for summary judgment on all or part of any claim made or any defence presented if there is no genuine issue requiring a trial. He also referred me to Rule 16(12) that gives the court the power, on motion, to decide a question of law before trial, if the decision would dispose of all or part of the case, substantially shorten the trial or saves substantial costs.

34The respondents did not bring this motion under Rule 16 to enable the applicant to meet that case, or to empower the court to make that kind of order.

35Furthermore, under Rule 16(13), evidence is admissible on a motion under Rule 16(12) only if the parties consent or the court gives permission to serve affidavit evidence. Not only was Rule 16(12) not relied upon in the motion materials, no consent was requested for and no leave was given to adduce evidence on the motion before me. Therefore I do not base any part of this decision on Rule 16(12).

36The motion to remove the additional respondents as parties is therefore dismissed.

37If counsel cannot agree on costs, the applicant may serve written submissions on the respondent Charanjit Lalri within seven days of this endorsement. The respondent Charanjit Lalri shall have seven days thereafter to serve written submissions to respond. Each of those submissions shall consist of no more than three double-spaced, typewritten pages, not including a Costs Outline. After receiving the submissions of the respondent Lalri, the applicant shall have a further three days to serve reply submissions, if any, consisting of no more than three double-spaced typewritten pages. Counsel for the applicant shall then file all such written submissions as a package by faxing them to (905)456-4834 to my attention. If no submissions are received within this timeframe, the parties shall be deemed to have settled the issue of costs as between themselves.

Emery J.