Court File and Parties

Court File No.: CV-14-508596 Date: June 15, 2016 Superior Court of Justice - Ontario

Re: TRUE NORTH VANTAGE INC., Plaintiff And: PANG et al., Defendants

Before: MASTER RONNA M. BROTT

Counsel: M. Cooper, for the Plaintiff B. Yellin, for the Defendant Pang C. Sainsbury, for the affected party Jitneytrade Inc. M. Stanton, for the affected parties Ribeiro and Mansouri

Heard: April 29, 2016

Endorsement

[1] The plaintiff, True North Vantage Inc. (“True North”) brings this motion seeking relief from the deemed undertaking rule. True North seeks the court’s permission to disclose to the Hamilton Police Service evidence gathered during the discoveries in this action and two related action that True North believes proves that the defendant Steven Zhen Pang (“Pang”) committed perjury under oath in a cross-examination on an Affidavit proffered in these proceedings.

[2] The within action was commenced on the Commercial List and was transferred to the Civil List in Toronto. In this action, True North sought, inter alia, an interim injunction enjoining Pang from competing with True North’s business. This action was subsequently ordered by Justice Wilton-Siegel, on consent of all parties in all actions, to be tried together with two other actions commenced by Orbixa Technologies Inc. (“Orbixa”) and True North respectively against its former broker, Jityneytrade Inc. (“Jitneytrade”) and its former traders and employees Oscar Ribeiro (“Ribeiro”) and Kamal Mansouri (“Mansouri”). Further, it was ordered that Affidavits of Documents and productions be exchanged amongst the parties in all three actions. The actions concern allegations of breach of confidentiality, breach of fiduciary duty and conspiracy to damage Orbixa and True North’s economic and contractual interests. Examinations for discoveries of all parties have been concluded.

[3] In January 2014 Orbixa served a motion in its action seeking relief from the deemed undertaking rule in order to disclose evidence against Jitneytrade, gathered during discoveries, to Jitneytrade’s governing regulatory authorities. Orbixa subsequently amended its Notice of Motion to include relief from the deemed undertaking rule in this action concerning Pang, seeking to have certain documents produced to police services so that an investigation could be launched to determine if Pang had perjured himself in his cross-examination for the injunction motion. The motion for relief from the deemed undertaking rule was argued before Master Graham on May 1, 2015. On May 20, 2015 the Master dismissed the motion in its entirety on the basis that the moving party failed to adduce admissible evidence and that the transcripts are the root of any contention that Pang perjured himself. Court File numbers noted in Master Graham’s Reasons are the Orbixa action and the within action.

[4] Justice Faeita dismissed Orbixa’s appeal of the Master’s decision. Orbixa then sought leave to appeal to the Divisional Court arguing that the motion should have been dismissed on a without prejudice basis to allow it to adduce admissible evidence supporting the allegation of perjury. Leave was denied. Justice Wilton-Siegel noted that there was “no obvious explanation for the plaintiff’s interest in causing an investigation of its allegations of perjury at the present time apart from a naked attempt to gain leverage over the defendant Pang in this litigation.”

Position of the Parties on this Motion

[5] True North submits that, having regard to the decisions of the court in the Orbixa litigation concerning the proper interpretation of the requisite evidentiary elements required by a court in order to make a determination under the deemed undertaking rule, it has provided all of the evidentiary record which establishes Pang’s perjury. Specifically, True North submits that the oral evidence on discovery and the documentary evidence produced by the other defendants in the other actions commenced by Orbixa and True North against Jitneytrade and Ribeiro, establish that Pang’s testimony under oath on material issues relating to his involvement with the other defendants was untruthful and constitutes perjury.

[6] The defendants resist this motion on the basis that the plaintiff’s privy, Orbixa, has already unsuccessfully sought the same relief from the deemed undertaking rule for the same purpose in a related action and in this action. Pang submits that the relief sought should be denied on the basis of issue estoppel or abuse of process or on its merits.

Issue Estoppel

[7] Issue estoppel, a form of res judicata, “precludes a litigant from asserting a position that is inconsistent or contrary to a fundamental point decided in a past proceeding”. (Civil Litigation by Walker and Sossin). The key principles governing the doctrine of issue estoppel as outlined in Toronto (City) v C.U.P.E. Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 and Penny v Royal & Sun Alliance Co. of Canada, [2006] O.J. No. 2858 can be summarized as follows:

1. The issue must be the same as the one described in the prior decision;
2. The prior decision must have been final; and
3. The parties to both proceedings must be the same, or their privies.

[8] In this action;

1. The question of relief from the deemed undertaking rule has been considered and denied not only in the Orbixa action but in this action as well;
2. The question has been considered and denied by this court, on appeal to one Judge and leave to Divisional Court was denied. Therefore the most recent decision was final; and
3. Orbixa is True North’s privy or affiliate.

[9] Jurisprudence has held that so long as there is a sufficient degree of connection or identification between the two parties, there is privity of interest. As stated by Rosenberg J.A. for the Ontario Court of Appeal in Banque Nationale de Paris (Canada) v Canadian Imperial Bank of Commerce, [2001] O.J. 53 (C.A.), for parties to have privity of interest, “justice and common sense compel the conclusion that they abide by the previous decision”.

[10] Here, Orbixa and True North are intrinsically connected in that they share counsel, they have had some directors/officers and employees in common, they collaborated in their business dealings, they both consented to trial together of their actions, they share the same outside counsel and they both sought identical relief. Mr. Schlaepfer, upon whose affidavit the plaintiff relied on the injunction motion, and who was cross-examined on that Affidavit, stated under oath that the two companies are affiliates.

[11] True North submits that the decisions of Master Graham and Justice Faieta and Wilton-Siegel were decided on the basis that Orbixa had failed to provide an evidentiary record of Pang’s alleged perjury whereas on this motion, he has done so. After Master Graham’s decision was released, Orbixa never requested an opportunity to tender further evidence – even when the motion was initially adjourned. Nor did True North bring this motion at the same time as the Orbixa motion and the record here is silent as to why.

[12] A litigant is only entitled to one opportunity to put its best foot forward. Here, Orbixa appealed twice, without success. The decision is final. This is an excellent example of why we have the principle of issue estoppel – to avoid duplicative litigation and potentially inconsistent results, and to give credence to finality. The plaintiff may not re-litigate this issue.

[13] On the basis of issue estoppel alone, this motion shall be dismissed.

Abuse of Process

[14] If the third requirement for issue estoppel is weak, and the strength of the privity of the two companies is lacking (which I find that it is not), this motion is to be dismissed on the basis of the doctrine of abuse of process. In Foy v Foy (No. 2), [1979] O.J. 4386:

The concept of abuse of process protects the public interest in the integrity and fairness of the judicial system. It does so by preventing the employment of judicial proceedings for purposes which the law regards as improper. These improper purposes include harassment and oppression of other parties by multifarious proceedings which are brought for purposes other than the assertion or defence of a litigant’s legitimate rights. Such abuse of process interferes with the business of the Courts and tarnishes their image in the administration of justice.

[15] Justice Wilton-Siegel held that “the record suggests that the plaintiff seeks relief from the deemed undertaking rule for the sole purpose of gaining leverage over the defendant in this litigation.” I agree. Further, in my view, this motion is simply a collateral attack on the Orbixa decision and constitutes an abuse of process.

[16] In light of the dismissal of the motion on the grounds of issue estoppel and abuse of process, it is unnecessary to discuss the merits of the request for the relief from the deemed undertaking rule.

Costs

[17] At the conclusion of argument, counsel for True North and Pang delivered costs outlines. They are the only parties who participated in this motion who are seeking costs. In the event that they are unable to agree on the issue of costs within 30 days, the defendant Pang shall within 20 days, serve and file brief (two-page maximum) written submissions and the plaintiff shall deliver its responding submissions within 20 days after receipt of Pang’s submissions.

__ (original signed) ____ MASTER RONNA M. BROTT Released: June 15, 2016.