Court File and Parties

CITATION: SE Canada Inc. v. Falcon Group Inc., 2016 ONSC 6442

COURT FILE NO.: CV-16-557724

DATE: 2016-10-14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SE Canada Inc. o/a Service Experts Heating & Air Conditioning Inc., Plaintiff

-and-

Falcon Group Inc., Falcon Group International Inc. and Emmanuel De Guzman, Defendants

BEFORE: Justice K. Corrick

COUNSEL: Karen Phung, for the Plaintiff

No one appearing for the Defendant

HEARD: October 12, 2016

ENDORSEMENT

[1] I am satisfied on the basis of the evidentiary record before me that the plaintiff is entitled to judgment in the amount of $419,525.35 against all defendants. I am also satisfied that the plaintiff is entitled to a declaration that the sum of $419,525.35 in the defendants’ hands constitutes a trust fund for the use and benefit of the plaintiff.

[2] The plaintiff also seeks a declaration that the judgment shall survive any event of bankruptcy undertaken by Mr. De Guzman in accordance with s. 178(1)(d) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c B-3.

[3] I provided Ms. Phung with two decisions of this court, which hold that judicial declarations should not be made in relation to hypothetical future events, such as Mr. De Guzman's bankruptcy: Royal Bank of Canada v. Elsioufi, 2016 ONSC 5257; B2B Bank v. Batson, 2014 ONSC 6015.

[4] Ms. Phung submitted that these cases are distinguishable from the case at bar because neither of them deal with a breach of a statutory trust. She also submitted that there is authority from both the Ontario Court of Appeal and this court for making such a declaration. She relied on the decisions of the Ontario Court of Appeal in Commdoor Aluminum v. Solar Sunrooms Inc., 2004 CanLII 465 (ON CA), 2004 CarswellOnt 2387 and Bibico Electric Inc. v. Battlefield Electrical Services Inc., 2012 ONCA 676 and on the decision of this court in Toro Aluminum v. Sampogna, 2013 ONSC 5345. However, in all of these cases, the defendant had made an assignment in bankruptcy. The court did not grant a declaration in advance of an event occurring. There is no evidence before me that Mr. De Guzman has undertaken any event of bankruptcy, and I am thus being asked to make a declaration before the issue has arisen.

[5] I am persuaded by the reasoning of Stinson J. and Dunphy J. in the Elsioufi and the B2B Bank cases that courts ought not to make declarations based on events that have not occurred. To grant the declaration sought would require the court to make a ruling in advance of the occurrence of an event and to assume that the legal regime governing the situation today will be the same at some unknown future date, if and when the event occurs.

[6] For these reasons, I decline to make the declaration sought with respect to Mr. De Guzman's possible future bankruptcy.

[7] The plaintiff is entitled to costs, fixed at $5,000, all-inclusive, payable by the defendants.

[8] Judgment is granted on the terms of the attached draft, which bears my signature.

Corrick J.

Date: October 14, 2016