COURT FILE NO.: CV-08-00357350-0000
DATE: 20150717
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
REXDALE SINGH SABHA RELIGIOUS CENTRE
Plaintiff
– and –
NARINDER SINGH, AMARJIT SINGH DEOL, SIKH SPIRITUAL CENTRE
and AKAL FUNERAL HOME
Defendants
Bernie Romano, for the Plaintiff
Mark Wiffen and J. O’Connor, for the Defendants
HEARD: March 9, 10, 11, 12, 13, 16, 17, 18, 19, 20, 2015
DOW, j
reasons FOR JUDGMENT
[1] The plaintiff, Rexdale Singh Sabha, seeks repayment from the defendants of monies raised which permitted the defendant Sikh Spiritual Centre, actually Sikh Spiritual Centre Toronto (in which the defendants Narinder Singh (“Narinder”) and Amarjit Singh Deol (“Deol”) are original directors) to commence operation of the Sikh temple, known as a Gurdwara, at 9 Carrier Drive, Etobicoke (“Carrier”). The plaintiff also seeks repayment of or damages for a mortgage placed on the plaintiff’s property, at 47 Baywood Road, Etobicoke (“Baywood”). The amount being sought is $406,530.99. There is also a claim and counterclaim for expenses incurred at Baywood after August, 2001 up until the end of 2006 when it was being renovated to become (the defendant) Akal Funeral Home.
Facts
[2] The original five directors who incorporated Rexdale Singh Sabha in December 1993 included Ranjit “Hans”, Surgit Singh “Gill” and Harlikjinder “Chattha”. These three are to be known as the “Hans/Gill/Chattha faction”. The other two directors are Amarjit Singh “Deol” and “Narinder” Singh, whom I will together refer to as the “Deol/Narinder faction”. The property at Baywood is an industrial building, about 20,000 square feet, backing onto a Hydro corridor with 62 parking spots on the premises (See Exhibit 1, Tab 1 at page 2). Baywood was purchased for $500,000. Rexdale Singh Sabha was incorporated by letters patent a non-share, not for profit, charitable organization with the power to admit members who can vote for directors as determined by the directors.
[3] In order to raise the money necessary to purchase the property, the original five directors sought contributors. Both Chattha and Gill gave evidence about their placing mortgages of $185,000 and $100,000 respectively on their homes to assist in fundraising. The property is registered at closing as being owned by “Chattha, in trust”.
[4] A Sikh Gurdwara is a place where food is prepared and served for free, passages from the Holy Book are read and life events such as marriage and the birth of children are celebrated. The purpose of a Gurdwara is to teach people about the good deeds mentioned in the Holy Book, to encourage adherence and for members to work together, pray and share their food, particularly with the poor. The congregation is also known as a Sangkat. The premises of a Gurdwara consists of a main hall for service or prayers. There must also be a kitchen to serve the “langar” or food as part of the ceremony. The Gurdwara also houses Holy Books which require a separate room for safe keeping in an appropriate fashion at night.
[5] The plaintiff sought Committee of Adjustment and Ontario Municipal Board (“OMB”) approval for alterations of Baywood requiring minor variances, a series of which were granted in a decision filed June 16, 1994 (Exhibit 1, Tab 1). It does not appear these requirements were completed with any diligence. In fact, the plaintiff also became the owner of a property, 22 Helmsdale, which backs onto the other side of the Hydro corridor opposite Baywood and becomes a source of additional parking. The indirect evidence was that congregants would park at Helmsdale and walk across the Hydro corridor.
[6] The Rexdale Singh Sabha venture was successful. Funds were raised through the congregation (members of which place funds in a container known as a “Golak”, which is placed in front of the Holy Book and for which no receipts are provided. Receipts are issued for funds donated upon request.) The funds raised were sufficient to enable Chattha and Hans to be repaid their loans to the plaintiff. Accordingly, the property was transferred into the name of the plaintiff in April 1995.
[7] The volunteerism exhibited by the five original directors took its toll on their relationship as a result of the success of the Gurdwara and the increased demands on their time. On May 19, 1996, the five directors passed a resolution proposing to expand the number of directors to seven for a two-year term but to restrict new directors such that they “cannot sell, lease, rent, donate, alter any existing or future property at Rexdale Singh Sabha” without the written majority consent of the original five (Exhibit 1, Tab 3). That alteration was later found not to be proper corporate governance.
[8] By July 1998, Gill had become either disinterested or unwilling to further serve and tendered his resignation in writing (Exhibit 2, Tab 68) although the resignation is from the “New Committee of our Gurdwara”. By his own evidence, he admitted to disagreeing with others and being a “tough guy”. He continued to attend to worship once or twice per week. He also had a falling out with Deol, details of which are not clear but may have to do with not being reimbursed for the cost of repairs to the doors in the main hall.
[9] The congregation continued to flourish. Gill, in cross-examination, noted that Golak deposits increased from an initial $35 per week to over $4,000 per week, likely as of his withdrawal in 1998. The congregation was, however constrained by the size of the facility, particularly the parking lot. The directors therefore began to search for a new premises.
[10] On January 14, 2001, the active directors, which at that point included Sukhdev Singh “Randhawa” as president, Major Singh and others, purported to pass a resolution increasing the number of directors to 15 (Exhibit 1, Tab 4). Eventually, a former Canadian Tire store location, at 9 Carrier Drive, was located and a deal negotiated for its purchase as of February 27, 2001, in the amount of $2,850,000. Gill gave evidence about his opposition to the location given its proximity to a strip club nearby, which closed in or about 2010-2011.
[11] The Agreement of Purchase and Sale provided for a closing date of August 31, 2001. Thus, the directors had six months to raise the necessary funds. The bank advised it would mortgage only 50 percent and thus the directors were faced with raising $1,425,000 from the local Sikh community. Logically, and, in my view, without any ulterior motive or hidden agenda by those directing the plaintiff corporation, the good name and credibility of Rexdale Singh Sabha Religious Centre was used to raise the money. I find this was made known to any and all attending services at Baywood, including the members of the Hans/Gill/Chattha faction. Gill specifically admitted his awareness of this use of the name in 2001 (but not the creation of separate corporate entities).
[12] The need to raise the money and the reason for raising the money was made clear. Local radio and television programs for the Sikh community in the Toronto area were utilized to appeal for funds. There was also a proposal to convert the Baywood property into a funeral home that could specialize in conducting Sikh funerals.
[13] The process of a Sikh funeral was the subject of evidence and some dispute. Traditionally, it appears to have involved washing and preparing the body at a location other than a Gurdwara, conducting prayers before the body at that location and then proceeding to have the body transported to a crematorium. There was evidence arrangements were made at a nearby crematorium for this to be done at a flat fee. Following cremation, the ashes are distributed. There is a further service, which could be at the home of loved ones or at the Gurdwara (as noted in the evidence of both Gill and Major Singh). There was disputed evidence about the propriety of a dead body being inside a Gurdwara.
[14] The creation of a funeral home catering to the Sikh faith appears to have been the subject of considerable positive reaction as there was no such facility in the area at the time.
[15] On May 9, 2001, the Sikh Spiritual Centre Toronto was incorporated, with the name apparently having been chosen to optimize the ability of interested adherents of the Sikh faith to find it on the internet. The new corporate entity was not specifically made known to the congregation. There were 17 initial directors, of which Deol and Narinder were two. Narinder testified that a bank account for Sikh Spiritual Centre was not opened until around the closing of the real estate deal in August 2011. I find there was no deliberate intent by the incorporators and initial directors to convert the assets of Rexdale Singh Sabha.
[16] The congregation, evidently enthusiastic about the new Centre, was able to raise $1,475,000 in the six months before the closing on August 31, 2001. The money was raised through gifts and loans. After the transaction closed, modest renovations were conducted at the Carrier location before it opened on April 13, 2002. The grand opening involved a large celebration and parade from Baywood to Carrier transporting, symbolically, one of the Holy Books. It was reported by the press to have attracted between 7,000 and 10,000 followers. There is evidence a sign was erected on the Carrier property identifying it as the Sikh Spiritual Centre Toronto. Importantly, the opening of the Carrier resulted in the closing of Baywood as a Gurdwara so as to begin renovations to make it into a funeral home.
[17] Unfortunately, the funeral home idea was put forward before any of the necessary licensing, zoning or construction costs were ascertained. It appears this project fell largely on the shoulders of a congregant and architect, Major Singh. He had begun to get involved sometime between 1998 and 2000 when he was approached by Pritnam Singh Dhillon to assist in regularizing structural changes that had been made to Baywood without a permit and was preventing the Gurdwara from getting a mortgage. This was completed in or about 2000 and he was honoured for his volunteer efforts.
[18] Major Singh’s evidence was that this was his first time designing a funeral home and, in hindsight, may not have been the wisest decision. However, as demonstrated in his evidence, he was clearly passionate about his efforts to assist the community and, in particular, his congregation. He learned that certain zoning adjustments would be required and assisted in preparing the Committee of Adjustment application. The application used the unfortunate phrasing of the funeral home being “an undertaking establishment to operate as an accessory use to the existing place of worship” (Exhibit 2, Tab 56, at the second page). This is unfortunate because what was actually being proposed was conversion from a place of worship to a funeral home and the phrasing appears to have raised concern about the facility being both at the same time. This is contentious given the concern over the presence of a dead body in a Sikh place of worship. The decision set out five adjustments which included prohibiting operation of a kitchen (and the removal of the existing kitchen in the building which is clear to the court prevented use of any portion of the building as a Gurdwara), obtaining all necessary permits, approvals and/or licenses, revising the parking layout, providing wheelchair access/disabled parking, removing the gravel pathway and restoring the Hydro corridor, and maintaining the property in accord with the prior OMB decision.
[19] This decision was appealed by an individual (neighbour) opposed to it and is the subject of an OMB decision dated December 18, 2002. That decision notes that 30 of the 103 parking spaces are on Hydro land. The appeal was largely unsuccessful, and the property was permitted to be converted into a funeral home. (Exhibit 1, Tab 12).
[20] Meanwhile, the community continued to raise funds. Some of the money loaned by various community members began to repaid. There were a total of 23 receipts indicating repayment under Rexdale Singh Sabha religious letterhead, in an amount totalling $193,000, tendered at the trial (Exhibit 4, Tab 115).
[21] The funds raised included those from the sale of the 22 Helmsdale property in June 2002 for $237,600 (Exhibit 4, Tab 114 at pages 1049-1050) of which Rexdale Sikh Sabha received $189,279.25.
[22] The renovation to Baywood commenced and appeared to be extensive. The expert evidence tendered by the defendants through Mr. R. W. Cumming, P. Eng., assesses same in excess of $1,300,000. However, it is also clear the bookkeeping records detailing the work are both inadequate and incomplete with regard to invoices retained and cheques written.
[23] The work involved interior alterations, and an inspection report was issued on June 3, 2003 (Exhibit 1 at Tab 14). As part of the fundraising scheme, individuals were offered free funerals by the Akal Funeral Home, which was incorporated February 13, 2002, to run the funeral home, and which became the third non-share, not for profit corporation of this community. The evidence at trial was that a free funeral certificate could be obtained in return for a donation of $2,000. The free funeral certificates were issued from about August 2003 through March 2005. Twenty-one such certificates were filed at trial (Exhibit 2, Tab 72).
[24] The renovation at Baywood required additional funds and the directors sought to obtain same through a mortgage from CIBC. A letter from CIBC dated January 13, 2004, approved a loan of $500,000 for the construction of a funeral home at Baywood. The funds were not advanced until April 24, 2004. Monthly “Income and Expenses” statements prepared by Narinder Singh for January, 2004 – August 2004 show “repair and new construction” expenses totalling $605,343.65, of which $448,094 is after the $500,000 advance identified in the May 2004 statement.
[25] As indicated, the corporate governance was inadequate. There was evidence at trial from both sides that the work of the Gurdwara was being done in an informal and open fashion, with meetings involving not only directors but other interested individuals, and that the plans and aspirations of the community by 2005 were expanding beyond a larger Gurdwara and the establishment of a funeral home. For example, on April 29, 2005 (Exhibit 1, Tab 19) a group of about 40 individuals signed what purports to be a resolution that “until we establish another Gurdwara Sahaib with school, we run Baywood building as a Gurdwara Sahaib and school then convert Baywood building to funeral home”. This document is signed by Hans, Gill and Chattha and indicates not only their awareness of but also their agreement to the plan to have the Baywood property become a funeral home. The ongoing acquiescence and, in fact, support by Chattha in 2005 is noted in his signature to a plan to increase the number of committee members as of May 25, 2005 (Exhibit 1, Tab 20). This appears to be the beginning of the mistrust between the two factions with Hans/Gill/Chattha being concerned Deol/Narinder were attempting to exert control over the operation.
[26] However, there were also efforts made to reopen a portion of the Baywood property prior to completion of the renovation. Gill signed a letter to the City of Toronto authorizing Major Singh to obtain City records. That letter resulted in the City of Toronto issuing an occupancy permit dated June 16, 2005 for the Baywood property, “Except embalming area” (Exhibit 1, Tab 25). Why and for what purpose the permit was requested (given the existence and operation of the Gurdwara at Carrier, less than 1.5 kilometers away) is unclear. The occupancy permit appears to have been the source of what later became a dispute between the two factions over the Baywood property being zoned only 19 percent for a funeral home, with the remaining 81 percent remaining as a place of worship. For some, the problem of having dead bodies inside a Gurdwara crystalized at this point.
[27] At this juncture, it appears the first of what becomes eight separate pieces of litigation commences, the first being appealed to the Court of Appeal and can be summarized as follows:
the “Van Melle decision” (CV-05-006018-00) which was commenced in 2005 and heard by Justice Van Melle, with reasons released January 24, 2006. It involved an application by Rexdale Singh Sabha and Akal Funeral Home against three of the original directors plus Major Singh and Sukdev Singh Randhawa to regularize the expansion of the number of directors from the original five to fifteen, which had been done in 2001, but not in accordance with the Corporations Act. Justice Van Melle fixed membership based on a list of 935 persons submitted by the respondents, and ordered that meetings of the membership be called within 30 days to determine the number of directors;
the November 2006 “Court of Appeal decision” (C44998) overturning in part the Van Melle decision and holding that the members and directors of the corporations remained those listed as the applicants for the letters patent of each corporation. The Court ordered a meeting to be held within 30 days to move forward;
the “kitchen injunction” application (07-CV-328779 PD 3) commenced March 2, 2007, by Akal Funeral Home and Sikh Spiritual Centre against Rexdale Singh Sabha, to enjoin them from removing the embalming facility. That application was dismissed by Justice Forestell with reasons dated April 17, 2007;
the “Major Singh action” (CV-07-3794-00) against Rexdale Singh Sabha commenced in November 2007 for payment of outstanding construction management fees, which action was dismissed, apparently on technical reasons rather than on the merits;
the “Randhawa claim” (CV-08-0206-SR) against Rexdale Singh Sabha likely commenced in late 2007 for repayment of a $20,000 loan Randhawa made to supply caskets as part of obtaining the funeral home licence, which claim was settled;
the “Deol/Narinder Singh action” against other Sikh Spiritual Centre members/directors (07-CL-7302) decided by Justice Pattillo on September 2, 2008, with detailed reasons 119 paragraphs in length (plus an additional 52 paragraphs to determine costs) correcting individual director failure to follow basic corporate governance requirements;
the “class action proceeding” (CV-09-2216-CP) commenced May 15, 2009, by representative purchasers of certificates from Akal Funeral Home (backed by Rexdale Singh Sabha) for “free” funerals. Akal Funeral Home had never commenced business operations. This matter settled;
the “Sri Guru Nanak Sikh Centre Brampton action” against Rexdale Singh Sabha and Sikh Spiritual Centre (CV-12-5425-00) commenced December 31, 2012, for repayment of $360,000 loaned and not repaid, which action was apparently settled;
the “Justice Brown decision” (CV-12-9860-00CL) dated June 3, 2013, involving those at Sikh Spiritual Centre Toronto and two factions of the Sikh community in northwestern Toronto and the GTA. Justice Brown through his order attempted to correct the directors’ ongoing failure to fairly advance the interest of their community over personal agendas and their continual seeking of control over a place of worship. Justice Brown found the “directors have demonstrated that they have no practical understanding of their over-riding fiduciary duty to act in the best interests of the corporation; their loyalties appear to lie with their faction” (at paragraph 119). His order, contained in 130 paragraphs of reasons, not only had to unravel inappropriate corporate decisions and set rules for membership but required that all current members of the Board attend at the same time and in the same room for a one-day training session on basic corporate governance conducted by a recognized corporate governance expert. Further, his decision was ordered posted on the Sikh Spiritual Centre website so that “all members and congregants become aware of what the Centre must do to right its corporate governance keel” (at paragraph 130) and to bring pressure on the directors to discharge their duties in a proper manner.
[28] Following the Van Melle decision and before the Court of Appeal decision, Chattha’s support for completing the funeral home continued. He signed a document dated April 8, 2006, in support of obtaining the necessary licensing application and completing the outstanding work (Exhibit 1, Tab 30).
[29] On November 20, just three days before the Court of Appeal decision, Chattha also executes a consent to disclosure of his criminal record, if any, required as part of the funeral home licensing process. In Chattha’s evidence-in-chief, he acknowledged awareness of the purpose of the consent and in cross-examination suggested he was “forced to sign” or pressured, without giving a more detailed or sound explanation. In fact, within the Court of Appeal file (marked as Exhibit 24) is an affidavit of Mr. Chattha sworn March 16, 2006, in which he deposes his support for the opening of the funeral home at the earliest opportunity.
[30] Following the Court of Appeal decision November 23, 2006, the majority three directors, being Hans, Gill and Chattha, passed a bylaw appointing the original directors as an Executive Council that “shall be the ultimate controller of the affairs of RSSRC” (Exhibit 1, Tab 34A). While this may be interpreted as a paternal decision to ensure the needs and goals of the Sikh community are met, it can also be interpreted as maintaining a very restrictive control over the operation of what both Gill and Chattha testified was a place of worship open to all, where the poor could obtain food for free. The evidence also suggests that, presently, the number of directors at Rexdale Singh Sabha is five and the number of members is only 10.
[31] In contrast, following the Court of Appeal decision, 21 directors of the Sikh Spiritual Centre were elected, on staggered two-year terms. The replacement of two sets of retiring directors was the subject of Justice Brown’s order. The evidence from Major Singh was there are currently 74 members which, while also restrictive, is significantly better than what has occurred at Rexdale Singh Sabha.
[32] The Court of Appeal decision recognized the corporate governance shortcomings by the directors and restricted the directors in each corporation to the original five. At the next directors meeting of Rexdale Singh Sabha held on January 2, 2007, Chattha, Gill and Hans voted to return Baywood to a Gurdwara, contrary to the wishes of Deol and Narinder, thus thwarting the efforts by the Deol/Narinder faction which appears to have had widespread support in the community and amongst the congregants.
[33] In 2007, the mistrust between the two organizations worsened and any type of cooperation ceased. Sikh Spiritual Centre stopped making the monthly payment on the $500,000 mortgage on the Baywood property, resulting in the CIBC commencing Power of Sale proceedings. Rexdale Singh Sabha raised the necessary $406,532.99, again with personal loans from the assets of Gill and Chattha. Rexdale Singh Sabha also began incurring expenses with regard to removing the embalming room and equipment contained therein. With respect to the ongoing renovation at Baywood, in February 2009 the lawyer for Polkry Mechanical Plumbing and Heaitng Inc. advised it had yet to be paid $23,749.87 for labour and material as of February 9, 2007. It registered a Construction Lien on the Baywood property (Exhibit 1, Tab 38) which Rexdale Singh Sabha negotiated and paid. However, the financial situation appears to have stabilized and by October 2011 Rexdale Singh Sabha was in a position to refinance its debt through a loan with the Royal Bank of Canada, secured by a $300,000 charge on the property (Exhibit 4, Tab 99).
Issue – Breach of Trust
[34] Rexdale Singh seeks repayment of the $1,475,000 raised to proceed with the purchase of the Carrier Drive property, arguing breach of basic or resulting trust law principles.
[35] The Court was referred to the decision in Nortel Networks Corp. (Re), 2010 ONSC 5584. A valid trust only arises if the three certainties are present. The first, certainty of objects requires that the beneficiaries be clear and ascertainable. The second, certainty of subject, matter requires a clarity as to which property forms part of the trust fund. Finally, certainty of intention requires a clear intention on the part of the settlor to establish a trust.
[36] In this regard, it is the Court’s view, the beneficiaries would be the congregants as opposed to the very restrictive membership given it is clear the donations and loans made which created the sum of money came from many more than just the membership.
[37] There is also clarity of the property. However, it seems clear the donations and loans were made to permit the purchase of a larger location with ample parking to have an improved Gurdwara.
[38] In giving consideration to the intention of the settlor, in my view, the settlors would have been the active “directors” which would have included Mr. Randawa and Narinder Singh. Even with the Court of Appeal decision to revert back to the original five directors, it is clear during the fundraising phase of 2001 until at least November, 2006 such fundraising had the support of a majority of the original directors, that being Narinder Singh, Mr. Deol and Mr. Chattha. As a result, the claim fails on this argument.
[39] Further, there is a precedent for the Court to consider the interest of the public generally and “the interest of those who provide financial support” to charitable organizations in the exercise of the Court’s discretion (Asian Outreach Canada v. Hutchinson, [1999] O.J. No. 2060 at paragraph 28).
[40] An alternative argument presented was that of a constructive trust as created by the Supreme Court of Canada in the 1980 decision of Pettkus v. Becker. As described at page 11 of the decision, the constructive trust is based on the principle of unjust enrichment. Specifically “the judiciary is thus able to shape these malleable principles so as to accommodate the changing needs and morals of society, in order to achieve justice. The constructive trust has proven to be a useful tool in the judicial armory.” More recently, to quote Regional Senior Justice Morawetz from the Nortel Networks Corp. decision, “A constructive trust is a remedy that the Court may impose where necessary to prevent the unjust enrichment at the expense of the plaintiff.” However, on the facts at hand, this does not appear to have occurred. Those who donated and loaned their money for a larger Gurdwara with ample parking have received what they were promised except for the funeral home. As a result, the plaintiffs’ claim also fails on this ground. Similarly, the claim of resulting trust, which was not specifically argued by the plaintiff, fails on the same basis.
Issue – Breach of Fiduciary Duty or Conversion
[41] The plaintiff alleges that the individual defendants, Narinder and Deol, as directors of Rexdale and Sikh Spiritual Centre breached their fiduciary duty to Rexdale by preferring the interests of the Sikh Spiritual Centre over those of Rexdale. It alleges these defendants surreptitiously incorporated Sikh Spiritual Centre and transferred money from Rexdale Singh Sabha to Sikh Spiritual Centre for the purchase and improvement of the Carrier property without the knowledge or consent of the other three directors. It alleges the money was raised in the name of Rexdale Singh Sabha and belongs to Rexdale Singh Sabha. The Court rejects this argument given the finding all five original directors were aware that the name and credibility of Rexdale Singh Sabha was being used to raise the money for a new, larger facility. Further, the congregants supported (by their fundraising efforts) the move to the Carrier location. The creation of a second, not for profit corporation was merely part of the transition process and supported by the action of all three Rexdale Singh Sabha directors in signing the resolution of April 25, 2005. There is also Chattha’s support to increase the number of committee members as of May 25, 2005. Finally, Gill’s signing a letter to the City of Toronto authorizing Major Singh to obtain city records in pursuit of an occupancy permit June 16, 2005 suggests his awareness and support of what was going on at that time.
[42] With regard to the plaintiff’s reference and reliance on the decisions of D’Amore v. McDonald et al. [1973] O.R. 845 (HCJ) and Dominion Trusts Co. (Re), [1916] B.C.J. No. 178 (B.C.C.A.), both relate to a secret profit and directors negligence and can be distinguished from the facts in this matter.
[43] The plaintiff also argued there is personal liability on Deol and Narinder Singh relying on the tort of conversion (Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, 1996 CanLII 149 (SCC), [1996] 3 S.C.R. 727. At paragraph 31 the Court describes this tort as a “wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner’s right of possession. The tort is one of strict liability…” In the facts at hand, the Court rejects this argument by considering the alternative. That is, had those running Rexdale Singh Sabha, particularly Narinder and Deol done what Rexdale Singh Sabha is seeking and kept the funds raised or purchased the Carrier Drive property under the Rexdale Singh Sabha corporate entity, the split over whether Baywood could or should be converted to a funeral home remains. The corporate fallout of the disagreement which arises when Chattha reverses his position when given the opportunity to do so after the Court of Appeal decision would have resulted in the congregation not having a funeral home or, the same situation as they now face. As a result, the Court concludes there has been no tort committed and the claim as against the Defendants, Narinder Singh and Amarjit Singh Deol, is dismissed.
Issue – Value/Obligation to Repay $406,532.99
[44] The plaintiff claims entitlement to repayment of the $406,532.99 it paid to discharge the $500,000 mortgage placed on the Baywood property in 2004 to fund renovations which it acknowledges were proceeding, principally at the Baywood property. This is not to ignore work is continually being done to improve the Carrier Gurdwara. Rexdale Singh Sabha was required to raise and pay $406,532.99 after power of sale proceedings were commenced by the CIBC in the fall of 2007.
[45] The Court is not able to determine the actual cost of renovating the Baywood property with any precision given the absence of proper or detailed accounting records. However, counsel for the plaintiff did admit that its own expert report from Mr. Brown and his evidence indicates a minimum of $348,972 plus GST was expended. It also admittedly did not include items such as legal and design fees, asphalt paving, railings, signage, ceiling grills, removing kitchen equipment and final cleanup which was acknowledged would increase the minimum amount to in excess of the $406,532.99 Rexdale Singh Sabha was required to raise and pay (and continues to pay).
[46] The key would appear to be Rexdale Singh Sabha has an improved facility at a cost that meets or exceeds the debt it has been required to take on. This will assist it in achieving the goal of a Gurdwara and providing service to the Sikh community. Further, while Mr. Chattha was permitted the opportunity to reconsider his position following the Court of Appeal decision in November 2006, it should not follow he (or his faction) also gets to undo the commitment made and actions taken to renovate the Baywood property, particularly in light of his prior acquiescence if not support for the improvements (which had to be funded in the only manner possible for a not for profit non-share corporation, that is, by donations or loans).
Issue - Counterclaim
[47] The defendants’ counterclaim was advanced in the alternative. Sikh Spiritual Centre sought either to have returned to it the value of improvements it made to the Baywood property which benefited Rexdale Singh Sabha while it was attempting to convert the property to Akal Funeral Home or a declaration that Rexdale Singh Sabha is holding the Baywood property in a constructive trust for Sikh Spiritual Centre and further that it now be permitted to proceed to complete the conversion and have Akal Funeral Home commence operations. As indicated, the Court is not able to determine the actual cost of renovating the Baywood property with any precision given the absence of proper or detailed accounting records. The expert evidence of Mr. R. W. Cumming, P. Eng. attempts to documents expenses in excess of $1,117,875 but lacks sufficient detail and attempted to put value on what was clearly significant volunteer efforts made by members of the congregation.
[48] Utilizing the constructive trust as a basis to prevent unjust enrichment, the conclusion is Sikh Spiritual Centre has benefited from the funds raised by its purchase and development of the Carrier property and left Rexdale Singh Sabha with a mortgage debt of $406,532.99 which Rexdale Singh Sabha has been dealing with since 2007. Rexdale Singh Sabha has the benefit of the Court of Appeal decision which entitles it to remain on the Baywood property and determine how and for what purpose that property is to be used. (It is the fervent hope of the Court that those involved in both factions can soon reach an agreement that would benefit all of the Sikh community).
[49] As a result, the counterclaim is also dismissed.
Costs
[50] Given neither party was successful in their respective claims or both parties were successful in defending the claims against them, there does not appear to be any value or merit in having one side pay or receive costs from the other. The Court is also mindful that any amount awarded for costs would need to be raised by the community and would take away from the overriding greater purpose of serving the Sikh community and providing a place of worship, teaching people about the good deeds mentioned in the Holy Book, working together and sharing food, particularly with the poor. As a result, the Court orders no costs are payable by or to either party. This decision on costs is made following receipt and review of the letter dated July 6, 2015 from counsel for the defendants (which was copied to counsel for the plaintiff).
Mr. Justice G. Dow
Released: July 17, 2015
COURT FILE NO.: CV-08-00357350-0000
DATE: 20150717
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
REXDALE SINGH SABHA RELIGIOUS CENTRE
Plaintiff
– and –
NARINDER SINGH, AMARJIT SINGH DEOL, SIKH SPIRITUAL CENTRE
and AKAL FUNERAL HOME
Defendants
REASONS FOR JUDGMENT
Mr. Justice G. Dow
Released: July 17, 2015