ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-14-2724-00
DATE: 2014-12-22

B E T W E E N:

GURMUK SINGH HUNJAN, AJAIB SINGH SIDHU, GURMEET SINGH, LAKHVIR SINGH DHALIWAL, ANMOL SINGH LOTA, BALBIR SINGH DHALIWAL, GURSHARAN SINGH SIDHU, SATPAL SINGH DHALIWAL, GURCHARN SINGH RAHEL, SATWANT KAILA, SUKHDEV SINGH, GURJEET SINGH DHALIWAL, SADHU SINGH HUNJAN, TAJINDER SINGH BHOGAL, SUKHWINDER SINGH, GURCHARN SINGH SOHAL, DARSHAN SINGH, JASWINDER FLORA, SANTOKH SINGH BHAMBER AND TEJINDER SINGH KALRA

Robert Filkin and Pavel Malysheuski, for the Applicants

Applicants

• and -

RAGHBIR SINGH, SUNIL AHUJA, NANAKSAR SATSANG SABHA OF ONTARIO, AND TEJPAL SAHNI ALSO KNOWN AS TEJPAL SAINI

Ray Thapar and Amrita Mann, for the individual Respondents

Respondents

• and -

HIS HOLINESS BABA GURDEV SINGH JI

Ron Segal and Maria Constantine, for the Proposed Intervener

Proposed Intervener

• and -

DIDAR SINGH

Jasmeet Dara, for the Proposed Added

Party

Proposed Added Party

HEARD: December 19, 2014

REASONS FOR DECISION

Sproat, J.

Introduction

1Before coming to my decision it may be helpful to all concerned to review some of the history.

2In 1994, five members of your religious community, all residents of the Greater Toronto Area, incorporated Nanaksar Satsang Sabha of Ontario, (“the Corporation”) under the Corporations Act. This means they chose to have the governance structure that is required by the Corporations Act.

3It is extremely unfortunate that disputes amongst members of any religious community end up in court. When, however, matters are brought to court the obligation of the judge is to deal with them in accordance with law.

4All of the parties were represented by lawyers from the beginning to the end of this process. Specifically:

(a) the Applicants were represented by Robert Filken;

(b) the individual Respondents were represented by Ray Thapar; and

(c) the Corporation was represented by Jonathan Kulathungam.

5This case was brought to court on October 17, 2014, before Justice O’Connor. With the consent of all parties, rather than conduct a formal, adversarial hearing, he conducted a mediation to attempt to resolve all issues. Justice O’Connor has been a judge for 21 years and is extremely knowledgeable and highly respected. Justice O’Connor met with the lawyers, as well as many of the parties, on October 17, 30, November 12, 19, 25 and 28, 2014.

6As I will describe in greater detail all parties agreed on a process to select the directors of the Corporation. Justice O’Connor was respectful of the wishes and desires of His Holiness Baba Gurdev Singh Ji (“His Holiness”) who I understand is the spiritual leader of the Nanaksar Satsang Sabha religious community. Justice O’Connor spoke directly to His Holiness on two occasions.

7Justice O’Connor followed the agreed process. On November 25, 2014, he read the names of the directors to His Holiness who approved them. Justice O’Connor then made a court order on consent.

The Issues

8The issues are as follows:

(a) should counsel represent His Holiness as a “friend of the court” intervener and should other interveners be added;

(b) should the November 25, 2014, consent order of Justice O’Connor be varied, amended or set aside;

(c) are the individual Respondents in contempt or breach of the consent order and, if so, what orders are appropriate to remedy the breach; and

(d) should the individual Respondents be granted leave to appeal what they characterize as a “finding” by Justice Edwards on September 10, 2014, that they breached court orders by providing to hold an Annual General Meeting (“AGM”) of the Corporation on August 30, 2014.

Motions for Leave to Intervene

9The law firm of Blumberg Segal LLP applied, on behalf of His Holiness, to intervene in this case “as a friend of the Court”. The Court rules allow for such an application, however, it is extremely rare.

10In support of this request affidavits were filed, sworn by Swaran Singh who describes himself as Personal Secretary to His Holiness and Didar Singh one of the newly appointed Directors of the Corporation. I ruled that they could be filed as evidence on all of the matters before me.

11I do note that there was conflicting evidence as to whether Swaran Singh had the authority he claimed to retain counsel. There was affidavit evidence, and Mr. Filkin offered to call oral evidence, of individuals who had spoken recently to His Holiness and who quote him as stating he was unaware of counsel being retained.

12Mr. Segal submitted that with the benefit of His Holiness’ perspective on the issues before the court, given that His wishes are to be followed in all respects, the parties will be assisted in an amicable resolution. The difficulty is that this dispute has been in court for approximately one year. It was open to His Holiness at any time over the past year to provide clear guidance. If all of the members followed that guidance the legal dispute would have been settled long ago.

13In seeking to be added as a friend of the court, His Holiness made it a condition that he “shall not be directed to appear before any court of law”. I respect that request. The reality is, however, that if his views are not presented in person there will continue to be doubt and uncertainty about whether individuals claiming to speak for His Holiness are authorized to do so. That will be counter-productive.

14When a party is appointed as “friend of the court” it is most commonly because they are able to provide a perspective, or present an argument, that the court would otherwise be unaware of. In this case all of the arguments in favour of the Respondent’s position were capable of being (and were in fact) advanced by Mr. Thapar. As such I concluded that it was not necessary or appropriate to appoint a “friend of the court” to present additional argument. I did advise Mr. Segal that he was welcome to remain at the counsel table and provide any input he wished to Mr. Thapar and he did so.

15Didar Singh, one of the directors named in the consent order applied to intervene as a party. His stated interest was that he did not want to serve if that was contrary to the views of His Holiness. All agreed that if Mr. Singh wishes to resign as a director he can. As such he has no special interest justifying his addition as a party.

16Counsel Michael Dibua also appeared on behalf of another proposed intervener. As no materials had been filed I declined to consider this further.

Whether the Consent Order is Valid

17After meetings with Justice O’Connor over several days the parties agreed upon a process to select three directors of the Corporation. It was agreed that the Applicants would select one director and the Respondents would select one director. The Applicants and the Respondents would then each put forward two additional names as the potential third director. The name of each potential director was put on a card and the cards were put in a box. It was agreed that Justice O’Connor would then draw one card and the person named on the card would serve as the third director.

18On November 19, 2014, Justice O’Connor spoke by telephone to His Holiness, from the courtroom, and His Holiness confirmed he was prepared to participate in a video conference to be arranged. On November 25, 2014, in accordance with the agreed process the Applicants selected Lakhvir Dhaliwal. The Respondents selected Didar Singh. Justice O’Connor drew the card of Rajinder Singh Sahota to become the third director. Mr. Sahota was obviously put forward by the Applicants and not the Respondents.

19Justice O’Connor then called His Holiness. (Justice O’Connor had proposed a video conference, however, His Holiness was only prepared to speak by telephone.) An independent court interpreter provided the interpretation. As agreed Justice O’Connor advised His Holiness the parties had agreed on three directors and that he wished to seek his approval. The names were read to His Holiness and he approved. After His Holiness got off the telephone, Mr. Thapar expressed that he would be eternally grateful for Justice O’Connor’s efforts. Justice O’Connor then said, “I have made an order on consent” and read it out in the form that was eventually issued and entered. No one suggested that the order was not appropriate and could only be made as part of an overall settlement. No one suggested that making the order was illegal or contrary to public policy.

20Let me be very clear on one point. Mr. Filken on behalf of the Applicants knew that once Justice O’Connor selected the third director there would be a final order on consent. Mr. Thapar on behalf of the individual Respondents understood that. Mr. Kulathungam on behalf of the Corporation understood that. The lawyers well understood that the law does not permit any judge to make a “final” decision one day and to change it the next day. Once an order is consented to then it is final and the parties have to live with it. It is virtually impossible to appeal a consent order.

21It is also crystal clear that if Justice O’Connor had drawn one of the two names submitted by the Respondents as the third director, the position of the Respondents today would be that the consent order was valid and enforceable. What has obviously happened is that the Respondents, or individuals sharing their view, prevailed upon His Holiness to change his mind. Justice O’Connor’s conclusion, with which I am in complete agreement, was that the law did not permit Justice O’Connor to change his mind about a final decision.

22The Respondents argue that the consent order should be set aside because:

(a) the condition precedent of the approval of His Holiness was not satisfied;

(b) the consent order could only be made as part of an overall settlement; and

(c) the consent order is contrary to law and public policy.

23In my view there is simply no merit to these arguments.

24Justice O’Connor obtained the agreement of His Holiness and the parties to the procedure followed. A decision was made and, as a matter of law, it is not the perogative of a judge to change a final decision.

25It is always open to parties to settle some, but not all of the issues. Settling the issue of the directors made sense regardless of whether all issues could be settled. Justice O’Connor was aware of all the outstanding issues and obviously did not see any impediment to making a consent order on one issue. Neither did any of the parties at the time.

26The further argument of the Respondents is that the consent order is illegal and contrary to public policy. First, I note Mr. Thapar was obviously of the view on November 25, 2014, that the order was perfectly legal or he would have been obliged as an officer of the court to bring that to the attention of Justice O’Connor.

27In any event, this argument directly contradicts the earlier argument of the Respondents that the consent of His Holiness was a condition precedent to a valid order. At paragraphs 69-73 of their factum the Respondents submit that the Corporations Act governs and that new directors can only be determined on a vote of members.

28I note that the Corporation was formed in 1994 and, apart from the contested AGM of August 30, 2014, has never had an AGM. It has, however, obviously had individuals who served as, or performed the function of, directors over the past 20 years. The parties consented to a February 4, 2014, court order which similarly appointed directors pending an AGM in six months’ time.

29The Respondents approve of and rely upon the February 4, 2014, consent order declaring who the directors are but challenge the November 25, 2014, order declaring who the directors are. This is illogical.

30Certainly there are arguments on appeal that the Corporations Act requires the election of directors. I am not, however, the Court of Appeal. Further, the parties have ignored the Corporations Act for 20 years.

31I would hope that all the parties to this litigation would recognize and respect the fairness of the procedure followed by Justice O’Connor with the approval of His Holiness. I would also hope they would recognize the unfairness of agreeing to an impartial process and then complaining about the process when it does not go in your favour.

32I can do no better than quote what Justice O’Connor said on November 28, 2014:

My request to all of you is that there has to be – as Baba Ji must have said five times during our telephone conversation, there must be peace in the Gurdwara. That’s all he wants. That’s all he wants. And that means it’s up to you, it’s up to the leaders of the two sides of this dispute to get together, put their heads together, and put behind them the conflict and the disagreement that you’ve had in the past and say, “We have a responsibility to our congregation, to run this place, effectively, and to obey the wishes of Baba Ji, that there be peace in our Gurdwara.”

All I know is that there is an order, it’s in effect, it must be obeyed. If it’s not obeyed, the persons that don’t obey it are in contempt of court. There are consequences with respect to disobedience of a court order, and you can hear from your counsel as to what those consequences might be. In any event, we’ve done all we can. I thank you for your attention throughout. I wish the result might have been more peacefully accepted by everyone. However, that’s the nature of some court proceedings.

What Orders are Appropriate to Remedy the Breaches

33The consent order must be obeyed. As such I make the following orders requested by the Applicants:

(a) enjoining the Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni from proceeding with any action, application or motion in the name of the Corporation;

(b) enjoining the Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni from removing any funds from the Corporation;

(c) restraining the Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni from interfering in the corporate affairs and governance of the Corporation including but not limited to, the banking affairs of the Corporation;

(d) compelling the Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni to provide the Applicant, Lakhvir Dhaliwal, with all keys relating to the Corporation or its temple, and all corporate and financial documents in their possession or control relating to the Corporation; and

(e) an Order directing the Peel Regional Police, if required, to assist the Applicants in retrieving the keys and corporate and financial documents from the Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni if those Respondents fail to comply with this Order by December 29, 2014.

34This leaves the motion by the Applicants to have Respondents, Raghbir Singh, Sunil Ahuja, and Tejpal Sahni found in contempt of court. This is a serious matter as a person found in contempt of court may be fined or imprisoned.

35I trust that there will be compliance with the orders I make today. If so it will probably not be necessary to proceed to a hearing on the contempt of court issue. If a hearing is required the Respondents will have the opportunity to testify and present evidence and argument.

36This litigation, in both Toronto and Brampton, has no doubt been stressful and costly to all concerned. Now is the time to stop the litigation and rebuild the relationship of friendship and trust among the members of your community.

37For the guidance of the parties I will make any further orders required to undo any actions taken by the Respondents from and after November 25, 2014, that were inconsistent with the consent order. As such the Respondents would be well advised to co-operate in that regard without the necessity of further court orders. Failure to do so will put them at an increased risk of being found in contempt of court.

38A first step in rebuilding friendship and trust is complying with the court orders. A second step would then be to agree on a costs order or simply that each side bear its own costs. If costs are requested I will be obliged to deal with that in accordance with the court rules.

Should Leave to Appeal the September 10, 2014, Order of Justice Edwards be Granted

39This issue was not argued but I raised a question for Mr. Thapar to consider.

40While no formal order was issued and entered, I have reviewed a transcript of the September 10, 2014, hearing and the handwritten endorsement of Justice Edwards. It is correct that in providing his decision Justice Edwards stated:

For reasons that I will later provide, I am satisfied the respondents breached the orders of Justices Tzimas and Van Melle by causing the AGM to be held.

41From his endorsement, however, it appears that the only actual order Justice Edwards made was to add the corporate defendant as a party and establish a schedule to move the litigation forward. An appeal lies from the order itself, not from the reasons and not from a “finding” that may or may not prove to be significant to the final decision. I asked Mr. Thapar to consider whether an application for leave to appeal was premature.

The Path Forward

42I am not allowed to dictate how the parties proceed but I do make a recommendation.

43If the parties continue to litigate about the validity of the August 30, 2014, AGM there are two possible results:

(a) the AGM will be held valid. Given the fact that Justice Edwards already found the AGM should not have been held, and given the concerns raised by a significant number that the AGM did not provide for a free and fair vote, on this scenario there will be continuing distrust, conflict and probably litigation;

(b) the AGM will be found to be invalid. Huge legal costs will be incurred and huge additional costs will be incurred in holding a new AGM. There will be delay which will increase the stress for all concerned.

44There are obviously grounds on which to doubt the validity of the AGM. On June 13, 2014, the Applicants filed a court application. They sought an order that only full or life members of the Corporation could vote and determining how the AGM should be held and conducted.

45According to the February 4, 2014, consent order the AGM was to be held by July 21, 2014. When the application came before Justice Tzimas on July 15, 2014, it was obvious an AGM would not be held by July 21, 2014, and that issues raised by the Applicants would have to be determined. Justice Tzimas ordered that the status quo be maintained. Regional Senior Justice Van Melle repeated this on August 5, 2014. No one advised her of any intention to hold an AGM. The Respondent Tejpal Saini swore an affidavit making the point that prior to any AGM the court would have to determine who could vote. The Applicants allege that notwithstanding the ongoing litigation their counsel was only advised on August 28, that an AGM had been scheduled for August 30, 2014. It is further alleged the Respondents solicited new memberships leading up to the AGM.

46The AGM also purported to approve a new by-law which provided that the only members of the corporation shall be the directors. In other words instead of several hundred members of the corporation being entitled to vote only three members, being the three directors, would have a vote. This would convert the Corporation to what is referred to as a “self-perpetuating governance” structure.

47Justice Edwards has already found the holding of the August 30, 2014, AGM court breached two court orders.

48The Respondents’ explanation that the AGM was held to avoid being in contempt of the February 4, 2014, consent order does not make much sense to me. Justice Tzimas adjourned the application in July so that matters relating to the AGM could be addressed. The Applicants were clearly not raising contempt as an issue since they were applying to get court guidance prior to any AGM.

49The Applicants have made serious allegations that may well lead to the August 30, 2014, AGM being set aside. Focusing on the past, and litigation to uphold the validity of the AGM, may prove to be a waste of time and money.

50My recommendation is that the parties instead co-operate on agreeing on procedures for the holding of a new AGM. It was suggested that late March might be appropriate and that His Holiness might be able to visit Brampton prior to that time. Proceeding in this way will probably be less expensive and a fair process, that both sides provide input to, offers the best hope of lasting peace.

51Didar Singh, one of the directors named in the consent order, indicated his intention to resign as a director. That is up to him. I simply observe that given he was effectively selected by the individual Respondents there may be some benefit to him remaining to the next AGM to provide the Respondents with a voice.

52While I make no order, given the levels of discontent and distrust, the directors would be well advised to proceed cautiously and prudently and avoid long-term changes or commitments that could not be altered or undone by the directors elected at the next AGM.

Conclusion

53Approximately 50 people attended the hearing. I offered to and will email a copy of this decision to all who requested it. I think it is very important that as many as possible have direct access to my written decision and my reasoning.

54This order shall be issued and entered forthwith. Mr. Filkin should send a draft order to Mr. Thapar. Counsel should be able to agree as to form and content and in that event I direct that the order be issued and entered immediately. Failing agreement each shall email a draft order to my assistant, together with any comments, by December 23, 2014, at 4:00 p.m. and I will settle and sign the order on December 24, 2014.

Sproat, J.