Court File and Parties

COURT FILE NO.: CV-13-2888-00 DATE: 2016 04 19 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: JAIB HOLDINGS INC. o/a MECEL SECURITY SYSTEMS, Plaintiff AND: PRAKASH KUMAR ET AL., Defendants

BEFORE: J. TRIMBLE J.

COUNSEL: J. R. Smith, for the Plaintiff V. Luchko, for the Defendants

HEARD at Brampton: In writing

Endorsement

Introduction

[1] The Plaintiff, Jaib Holdings seeks leave to appeal from the January 15, 2016 order of Edwards, J., who set aside a Mareva Injunction Skarica, J. put in place on July 19, 2015, as Edwards, J. amended on August 16, 2015.

Facts

[2] The Defendant provided personal services to the Plaintiff through his corporation, PK Atkins Inc. On April 26, 2013, the Plaintiff terminated the relationship alleging fraud.

[3] The Plaintiffs did not take the usual procedural route to obtain a Mareva Injunction of bringing an Application ex parte, with an undertaking to commence an action. Rather, in this case, the Plaintiff issued a Statement of Claim. The Plaintiff did not serve the Statement of Claim. Rather, it brought a Motion for a Mareva Injunction within the Action, returnable on July 19, 2013. The Plaintiff served the Notice of Motion by leaving a copy of it in a sealed envelope at the Defendant’s residence. There was no personal service of the Motion on the Defendants.

[4] No one appeared for the Defendants on July 19, 2013, so Skarica, J. issued the Mareva.

[5] The Defendants sought to set aside the injection, saying that a) service of the Notice of Motion was improper, b) the Plaintiffs did not make full and fair disclosure on an ex parte hearing of the Defendants’ position, and c) the injunction was improperly issued.

[6] Edwards, J. heard the Defendants’ motion.

Test for Leave to Appeal

[7] The test for granting leave to appeal under Rule 62.02(4) of the Rules of Civil Procedure is well-settled. It is recognized that leave should not be easily granted and the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.

[8] Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere (but not a lower level court) and that it is, in the opinion of the judge hearing the motion, “desirable that leave to appeal be granted.” A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542 (Div. Ct.).

[9] Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to “very serious debate”: Nazari v. OTIP/RAEO Insurance Co., [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 282 (Gen. Div.). In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice: Rankin v. McLeod, Young, Weir Ltd. (1986), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 110 (Div. Ct.).

Decision to be Appealed From

[10] Edwards, J. decided as follows:

a. SERVICE: The motion for the Mareva was a motion within an action. Although the Notice of Motion was not an originating process, the Statement of Claim is but was never served. Therefore, the Notice of Motion had to be served, personally. It was not. Further, the Defendant was out of the country at the time of service and did not have notice of the Motion. b. DISCLOSURE: Since the Motion for the Mareva was not served, Edwards, J. considered it to be ex parte, engaging Rule 39.01(6), which required the Plaintiffs to make full and fair disclosure to Skarica, J. of all material facts. Edwards, J. held that under Hunter Square Dev. Inc. v. 351 Ontario Ltd. and 1245 Ontario Ltd. v. Vince Rosie et al. a material fact is one which the judge hearing the matter would need to be aware of in coming to the decision and which might affect the outcome. Material facts include facts relevant to the opposing party’s position (L’Unita Dev. Corp. v. 505 Ontario Ltd., 2001 CarswellOnt 3217). The Plaintiff never fully and fairly disclosed the Defendants’ position. c. IMPROPER MAREVA: Had the Mareva been served and there were no disclosure problems, Edwards, J. would not have dissolved it as being improper.

[11] In other words, Edwards, J.’s decisions a) and b) above are alternate reasons for dissolving the Mareva.

[12] ON February 18, 2016, Edwards, J. issued his reasons on costs, awarded costs to the Defendants of $45,000 inclusive of HST.

Analysis

[13] Since Edwards, J. gave two reasons for dissolving the Mareva Injunction (improper service and failure to make full disclosure), in order to succeed in this Leave Application the Plaintiff must obtain leave to appeal on both issues under 62.02(4)(a) and (b).

[14] The Plaintiff’s Motion for Leave to Appeal is dismissed.

[15] SERVICE: The Plaintiff says that service was proper. The Rules do not require personal service of other than an originating process. In any event, the decisions of Skarica and Edwards, JJ. conflict.

[16] I give no effect to this ground of appeal under R. 62.02(4)(a). There is no decision that conflicts with Edwards, J.’s decision. Skarica, J. was not directed to the propriety of service. His comments on service of the motion in his reasons do not constitute a finding or a conflicting decision. In any event, there is no reason to suggest that it is desirable that leave to appeal should be granted.

[17] I would not grant leave to appeal under R. 62.02(4)(b). There is no reason to believe that Edwards, J.’s decision was open to serious debate. Edwards, J.’s decision is a straight-forward application of the Rules as they concern service of a Motion seeking an injunction in an action where the Statement of Claim was never served. Further, the issues in this ground of appeal are not of such importance that they transcend the interests of the parties.

[18] DISCLOSURE: The Plaintiff says that other decisions conflict with Edwards, J.’s decision. Edwards, J. said that the Plaintiff had an obligation to disclose to Skarica, J. the position or anticipated position of the Defendants, and having failed to do so, Skarica, J.’s Mareva Injunction should be dissolved. The Plaintiff says that the case law says that the Plaintiff must disclose only material facts, within its knowledge at the time, and that there is no obligation to disclose the Defendant’s position or anticipated position.

[19] I give no effect to this ground of appeal under R. 62.02(4)(a). There is no conflict in the law. L’Unita Dev. Corp. v. 505 Ont. Ltd., [2001] O.J. No. 3581 (SCJ), at paras. 20 to 21, citing Passarelli v. DiCienzo (1989), 67 O.R. (2d) 603 (Ont. H.C.) says that the moving party must disclose “a reasonable statement of the positions known or likely to be taken by the party or parties opposite”. In addition, L’Unita says that the moving party must highlight in an Affidavit the facts in relation to those positions or anticipated positions. These cases further develop the principles stated in, and are not in conflict with the principles stated in Chitel v. Rothbart, [1982] O.J. No. 3540 (C.A.).

[20] The Plaintiffs, according to Edwards, J. did not state the position, or anticipated position of the Defendants, at all. The Plaintiff did not say in the Affidavit material before Skarica, J. that it did not know the position or anticipated positions of the Defendant.

[21] I give no effect to this ground of appeal under R. 62.02(4)(b). Based on the preceding paragraph, it cannot be said that Edwards, J.’s decision is open to serious debate. Further, on this issue, the proposed appeal does not involve any issue that transcends the interests of the parties.

[22] EDWARDS, J.’S DECISION ON COSTS: The Plaintiff argues that Edwards, J. failed to consider many of its arguments as to why costs as claimed by the Defendants were exorbitant. These arguments were all part of the costs submissions the learned motions judge had before him. That he did not mention each of them does not mean that he did not consider them. It appears that the Plaintiff is not happy with the costs award, and wishes to re-argue its position. No error is indicated. Edwards, J. applied the criteria of R. 57. All parties agreed to those criteria. The learned motions judge is entitled to deference as costs are a discretionary matter. This ground for leave is dismissed.

Costs of the Leave Application:

[23] The parties may address the issue of who should pay costs and in what amount, in submissions of not more than three pages, excluding bills of costs. The Defendant’s submissions are due by May 3, 2016 and the Plaintiffs’ by May 17, 2016. I note and shall consider with respect to claims for costs that both parties failed to observe the 20 page limit for facta as set out in paragraph 64 of the Central West Consolidated Practice Direction. The Plaintiff’s was 34 pages and the Defendants’ was 33, with a 6 page reply factum. The facta filed by both parties are hardly “concise” as required by Rule 61.03(2)(b).

J. Trimble, J. Date: April 19, 2016