CITATION: Tax Recovery Group v. Raj Ghangas, 2016 ONSC 6902
COURT FILE NO.: C-1051-15
DATE: 2016/11/10
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Tax Recovery Group (First Nationals) Inc.
Plaintiff
Raj Ghangas
Defendant
Robert W. Scriven, for the Plaintiff
Piet de Jong, for the Defendant
HEARD: October 13, 2016
The Honourable Mr. Justice P.B. Hambly
JUDGMENT
[1] This is a motion for an order that the defendant be found in contempt of an interlocutory injunction and for related relief.
Background
[2] Members of First Nations bands are entitled to receive refunds of HST and provincial sales tax that they have paid. Tax Recovery Group (First Nations) Inc., also known as Refund Associates (“Refund”), provides accounting services to the bands for this purpose throughout Canada. The other organization which performs this service is William Squid and Associates (“Squid”).
[3] Raj Ghangas (“Ghangas”) was a bookkeeper who had worked for Refund from May, 2009 until early 2016 when Refund terminated his employment. Ghangas’s contract contained non-disclosure and non-competition clauses. Refund commenced an action against Ghangas in which it claimed damages for alleged breaches of these clauses. On July 13, 2016, Justice Reilly granted Refund an interim injunction against Ghangas which stated the following:
- This court orders that on an interim and without prejudice basis, the defendant shall refrain from:
i) Disclosing any confidential information to his new employer and/or coworkers, including, but not limited to, existing clients of the Plaintiff, pricing information, contact information, tax history, tax position, profitability, and similar information, and
ii) Either soliciting any clients of the Plaintiff personally, or having any coworkers under the direction of the Defendant solicit any client of the Plaintiff.
[4] Refund alleges that Ghangas has breached this order. It brings a motion for an order finding Ghangas in contempt and imposing a fine of $2,500.
[5] Mark Parnell (“Parnell”) is a sales representative of Refund. Beaver Lake Cree Nation (“BLCN”) is a client of Refund. The financial officer of BLCN is Tito Cayabyab (“Cayabyab”). Parnell deposes in an affidavit sworn August 26, 2016 that he spoke by telephone with Cayabyab on August 16, 2016. In this telephone conversation, Cayabyab told him that Ghangas had phoned him and sought to solicit the business of BLCN by providing auditing services to the band for the years 2015-16 and 2016-17. Refund employs Chris Belyea (“Belyea”) as a tax recovery auditor. In an affidavit sworn August 26 Belyea deposes that in a telephone conversation on the same day Cayabyab told him that Ghangas asked Cayabyab to take the business of the band to Ghangas.
[6] In an affidavit sworn September 14, 2016, Ghangas deposes that he has been a contractor for Squibb since June, 2015 to remit tax refunds for native groups of HST. He deposes that he has not been involved in soliciting new clients. He denies soliciting the work of BLCN. Ron Wynn is the account manager of BLCN. He deposed in an affidavit sworn September 15, 2016 that he phoned the BLCN on August 16, 2016. Their office told him that Cayabyab was on an extended vacation.
[7] Parnell provided an affidavit sworn September 26, 2016 in response to the affidavit of Ghanagas sworn September 14, 2016. He deposes that he spoke by telephone with Cayabyab after receiving the affidavit of Ghanagas. Cayabyab confirmed that Ghanagas phoned him on August 16, 2016 and tried to solicit his business. He states that he did not attempt to obtain an affidavit or a confirming E mail from Cayabyab because he believes that this could damage Refund’s business relationship with BLCN. Sharron Young and Susan McKamey work in the office of the Sq’ewa:lxw First Nation (“SFN”). Parnell attaches E mails to his affidavit between them and with him on September 21 and 22 to confirm an attempt by Ghangas to arrange a meeting with a representative of the SFN on October 3 and October 4, 2016 to solicit the business of SFN. Sharon in an E mail to Parnell confirmed that Ghangas held himself out as being a representative of Refund.
Analysis
[8] The affidavits provided by Refund are those of Parnell and Belyea. There is no affidavit from anyone who can testify from the deponent’s own knowledge that Ghangas attempted to solicit any business of a client of Refund or disclosed confidential information of Refund to Squibb.
[9] The Ontario Rules of Civil Procedure state the following:
60.11(3) An affidavit in support of a motion for a contempt order may contain statements of the deponent's information and belief only with respect to facts that are not contentious, and the source of the information and the fact of the belief shall be specified in the affidavit.
[10] The affidavits of Parnell and Belyea on the contentious point of whether Ghangas attempted to solicit the business of First Naions bands is hearsay and on information and belief. This evidence is inadmissible on a motion for contempt.
[11] In Prescott-Russell Services for Children and Adults v. G. (N.)] 2006 CanLII 81792 (ON CA), [2006] 82 O.R. (3d) 686 the Court of Appeal in the judgment of Justice Blair noted the following:
[26] However, notwithstanding its civil nature, contempt of court is quasi-criminal. The burden of proof is therefore the same as in criminal matters, that is, beyond a reasonable doubt. Furthermore, the party alleging contempt has the burden of proof. (authorities omitted)
Justice Blair confirmed the criteria for a finding of contempt to be the following:
[27] The criteria applicable to a contempt of court conclusion are settled law. A three-pronged test is required. First, the order that was breached must state clearly and unequivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and wilfully. Thirdly, the evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the person or entity alleged to have breached the order. (authorities omitted)
Result
[12] This motion is without merit. The evidence filed in support of it is inadmissible. Even assuming its admissibility the affidavits are conflicting. It does not come close to satisfying the criteria for a finding of civil contempt in Prescott.
[13] The motion is dismissed. Ghangas shall have 10 days from his receipt of these reasons to make submissions in writing on costs. Refund shall have 10 days to respond.
P.B. Hambly J.
Released: November 10, 2016
CITATION: Tax Recovery Group v. Raj Ghangas, 2016 ONSC 6902
COURT FILE NO.: C-1051-15
DATE: 2016/11/10
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Tax Recovery Group
Plaintiff
– and –
Raj Ghangas
Defendant
REASONS FOR JUDGMENT
Justice P.B. Hambly
Released: November 10, 2016