McFlow Capital Corp. v. James, 2017 ONSC 1049

Court File No.: CV-15-528478 Date: 2017-02-13 Ontario Superior Court of Justice

Between: McFlow Capital Corporation, Plaintiff

• and - Kenneth James, personally and in his capacity as trustee for Laura McClenaghan, Rosemary Cremer and the Estate of Kenneth McClenaghan, Laura McClenaghan, personally and in her capacity as trustee for the Estate of Kenneth McClenaghan, Dorothy Short in her capacity as trustee for the Estate of Kenneth McClenaghan, Rosemary Cremer, Susan James, 1303678 Ontario Inc., Sterling Capital Corporation, Eveline Holdings Ltd. and G.A.C. Investments Ltd., Defendants

And Between: Kenneth James, personally and in his capacity as trustee for Laura McClenaghan, Rosemary Cremer and the Estate of Kenneth McClenaghan, Laura McClenaghan, personally and in her capacity as trustee for the Estate of Kenneth McClenaghan, Dorothy Short in her capacity as trustee for the Estate of Kenneth McClenaghan, Rosemary Cremer, Susan James, 1303678 Ontario Inc., Sterling Capital Corporation, Eveline Holdings Ltd. and G.A.C. Investments Ltd., Plaintiffs by Counterclaim

• and - McFlow Capital Corporation, Premium Properties Limited and Milton Winberg, Defendants by Counterclaim

Counsel: Hilary Book and Nadia Chiesa, for McFlow Capital Corporation Theodore B. Rotenberg, Ranjan Das, for Kenneth James Melanie Toolsie for the non-party Royal Canadian Mounted Police Larry Reimer for First Canadian Title[^1] S. Bergman for Mr James[^2] James Lockyer for the non-party Fairibourz Mirian

Decision

D.L. Corbett J.:

[1] In this endorsement I deliver three decisions:

a. granting an interlocutory order preserving funds ordered paid into court by Wilton-Siegel J. in 2009;

b. dismissing a Rule 21 motion by the defendants by counterclaim to strike out the counterclaim; and

c. giving directions respecting efforts by the plaintiff to obtain documents uncovered in an investigation by the Royal Canadian Mounted Police (“RCMP”) relevant the pending contempt motion in this proceeding and otherwise dismissing the RCMP’s motion to quash a summons directed at RCMP Sgt Gordon Aristotle.

Litigation History

(a) Civil Proceedings Concerning the Condominium

[2] These proceedings concern a 44-unit residential condominium at 12 Lankin Boulevard in Orillia, Ontario. The condominium corporation was Simcoe Condominium Corporation No. 27 (“SCC No. 27” or the “Condo Corp”).

[3] From 1995 to January 2001, all 44 units were owned and controlled by Lucy Cianciulli, either directly or through corporations.

[4] Kenneth James is a lawyer. He represented the Condo Corp from 1995 until the various legal proceedings in issue in these matters. Sterling Capital Corporation (“Sterling Capital”) and Eveline Holdings Ltd. (“Eveline Holdings”) are corporations incorporated in the Turks and Caicos Islands. The legal and beneficial ownership of Sterling Capital and Eveline Holdings, and their role in respect to events at issue in this proceeding, are not clear on the record before the court on these motions. One court has found that Eveline and Sterling are not distinguishable from James. However, in their statement of defence in this proceeding, these corporations plead that they are trustees, originally for Kenneth McClenaghan and subsequently for the Estate of Kenneth McClenaghan, “meaning that they exercised no independent judgment or discretion but acted in accordance with instructions given to them from McClenaghan while he was alive and from the Estate after his death.”[^3] Mr McClenaghan was apparently a real estate agent or broker who loaned or arranged loans for mortgages for many units in the condominium.

[5] In 2001, because of mortgage default (not to Mr McClenaghan, but to a commercial lender, Citifinancial), Ms Cianciulli lost possession of 14 of the 44 units. In 2003, these 14 units were sold by power of sale. As of 2009, these 14 units were owned by 1652030 Ontario Ltd. (“165”). 165 mortgaged its units to the plaintiff, McFlow.

[6] James appears to have represented Ms Mianciulli, the Condo Corp, Mr McClenaghan and his Estate, and also to have been the property manager for the Condo Corp, although these points are not clear on the records before the court on these motions.

[7] From 2001 (when Ms Cianciulli lost possession of 14 units) to 2009 (when the case came before Forestell J., as described below), there was conflict between the persons controlling the 14 units and Ms Cianciulli , who apparently controlled the other 30 units.[^4] These conflicts concerned management and maintenance of the condominium, Condo Corp finances (including accounting for assessments, special assessments, and expenditures on behalf of the Condo Corp) and a growing state of disrepair of the condominium. This history is set out in detail in motion materials before Forestell J. in 2009.[^5]

[8] On April 16, 2009, McFlow commenced an oppression application against James and the Condo Corp. This action was subsequently consolidated into the proceedings at bar and is ongoing. In its application, back in 2009, McFlow sought, among other things, appointment of an Adminstrator for the Condo Corp, and damages for losses associated in respect to loans it made to owners of units in the Condo Corp.

[9] On May 27, 2009, on motion by McFlow, Forestell J. appointed an Administrator for the condominium.[^6] Forestell J. found:

I conclude from the two affidavits of Mr. James filed in this proceeding, that the property is in a state of disrepair requiring immediate attention; that the value of the property has declined to the point that the mortgage indebtedness exceeds the value of the units and that the ownership of the units has not been properly recorded since 2000. Mr. James states that the records of the Corporation have not been made to comply with the ‘new’ 1998 legislation. This evidence establishes that there has been a substantial inability to manage the Corporation over the past ten years.[^7]

In light of the serious deficiencies in the records of the Corporation in addition to the other aspects of mismanagement noted in paragraphs 24 and 25, I am satisfied that substantial misconduct or mismanagement or both in relation to the affairs of the Corporation has been demonstrated.[^8]

It is clear that there has been an ongoing and bitter battle between the owners/mortgagees of the 30 units for whom Mr. James speaks and the 14 units for which McFlow is the mortgagee.[^9]

Mr. James speaks for the [Condo Corp] in these proceedings. He has been representing the [Condo Corp] for the past fifteen years and appears to have had the responsibility of managing the condominium’s affairs. Mr. James has not been able to manage the affairs of the [Condo Corp]. He has expressed the opinion that the affairs cannot be regularized unless the owners of the 14 units are “eliminated”. He has, in the past, represented unit owners and mortgagees of the remaining units. Mr. James is not able to manage the affairs of the [Condo Corp] and there is no other identifiable person or body capable of governing the Corporation. There is no doubt that the affairs of the [Condo Corp] must be put in order and that this must occur as soon as possible. There is no alternative to the appointment of an administrator to accomplish that task. I am conscious of the admonition that the democratic government of the community should not be overridden unless absolutely necessary. In this case, there is no evidence of any democratic process. Even had there been some sign of democracy, the state of mismanagement and dysfunction is such that I would nevertheless have concluded that the immediate appointment of an administrator was necessary.[^10]

[10] McFlow also sought an order from Forestell J. for payment into court of $2 million (said by James to have been paid to the Condo Corp on account of assessments and special assessments). Forestell J. found:

In light of the order that I am making appointing an administrator, I am not satisfied that an order freezing the funds is necessary or appropriate. If the money belongs to the [Condo Corp] it should be available to the administrator.[^11]

[11] Once the Administrator was appointed, he was unable to obtain the $2 million. The Administrator took the position that this money “should be available” to him for management of the condominium. On June 3, 2009, the Administrator served a motion for an order pursuant to R.45.02 that James and Eveline Holdings pay the $2 million into court.

[12] On June 4, 2009, James swore an affidavit in which he said that the $2 million (which he had previously deposed had been paid to the Condo Corp) belonged to Eveline Holdings, and had been sent to Eveline Holding’s solicitors in TCI on Eveline Holdings’ instructions.

[13] Wilton-Siegel J. granted this order on June 30, 2009.[^12]

[14] On the record before me, it appears that James directed return of the $2 million from TCI on June 12, 2009. The return transfer of funds was not disclosed by James in the motion before Wilton-Siegel J. Thus, it appears that in his evidence before the court on the motion before Wilton-Siegel J., James advised the court, under oath, that he had sent the money to TCI on his client’s instructions, and failed to disclose that the funds had been returned to his control, in Ontario (ie that the money that was the subject-matter of the motion had been returned to Ontario and was in James’ control). And thus it appears that James misled the court on the return of the motion before Wilton-Siegel J. by failing to update the information in James’ affidavit of June 3, 2009. These findings are only made for the purposes of the motions currently before the court.

[15] McFlow moved to remove and replace the Administrator of the condominium, and for related relief, before Himel J. on November 16, 2010. Himel J. dismissed the motion.[^13] Herman J. denied leave to appeal the decision of Himel J.[^14]

[16] The Administrator moved for approval of his accounts and for directions respecting the management of the condominium. On November 14, 2011, K.L. Campbell J. concluded that he did not have adequate materials before him in respect to the relief sought. He set out applicable legal principles and a list of necessary materials to provide guidance to the parties in completing adequate materials to be considered afresh in future.[^15]

[17] In about February 2012, the Administrator listed all units in the condominium for sale.

[18] On April 5, 2013, on motion by the Administrator, I approved sale of all of the condominium units and ordered that net proceeds of sale (including funds held in trust by the Adfministrator), be paid into court to the credit of these proceedings.[^16]

[19] In about August 2013, all of the condominium units were sold. The “Net Sale Proceeds” of about $700,000 were paid into court to the credit of this proceeding, after which the Administrator was discharged.

[20] On December 17, 2013, James commenced oppression proceedings against the defendants to counterclaim.

[21] On September 30, 2015, I gave directions respecting McFlow’s intended contempt motion. That motion was served by McFlow on October 13, 2015 for, among other things, a declaration that James is in contempt of the order of Wilton-Siegel J.

[22] On February 19, 2016, I ordered that the McFlow oppression action and the James oppression action be consolidated and gave directions to regularize and complete the pleadings in the consolidated action.

[23] On September 27, 2016, in a teleconference with counsel, I established a schedule for exchange of materials on the RCMP’s motion to quash the summons directed at Sgt Aristotle, with a return date before me of November 24, 2016.

(b) Criminal Proceedings

[24] In June 2012, James, Eveline Holdings, Sterling Capital and others were charged with laundering proceeds of crime and fraud over $5,000 under the Criminal Code[^17] and the Controlled Drugs and Substances Act.[^18]

[25] In its investigation into these charges, the RCMP sought documents from the Turks & Caicos Islands (“TCI”) for various TCI companies (including Eveline Holdings and Sterling Capital). Requested documents were received by the RCMP in July 2013 and January 2014, to be used “on an intelligence basis only”.

[26] The prosecution then applied to and obtained from the Ontario Superior Court of Justice a Letter of Request for Judicial Assistance in a Criminal Matter from TCI for the “production” of the requested documents so that they could be used in the criminal proceedings.

[27] James claimed privilege over some of the requested documents. The RCMP provided an affidavit from Sergeant Aristotle in respect to these privilege claims. This affidavit included 70 exhibits. Counsel for James asserted that some of the documents were protected by solicitor-client privilege between James and Eveline Holdings and between James and Sterling Capital. The court concluded that any privilege belonged to Eveline Holdings and Sterling Capital and not to James, and that the alleged privilege-holders (the companies) should be given notice of the issue. Notice was given but those companies did not appear to assert privilege. James was denied standing on the privilege issue (since he claimed the privilege belonged to his clients, the companies, and not to himself).[^19]

[28] In handwritten endorsements dated July 24 and September 18, 2014, J.R. McCarthy J. concluded that “it is abundantly clear on the evidentiary record before me [which included “documents and emails found on James’ computer”] that… James was the principal and controlling mind of Sterling Capital and Eveline Holdings. There is not a shred of evidence to the contrary.” As a result, J.R. McCarthy J. found that “[t]here was no client here and accordingly no solicitor & client relationship.” Rather, “documents and emails found on James’ computer clearly tie him as controlling and directing mind” of the companies. In performing legal services for Eveline Holdings, James was performing work for himself.[^20]

The Interlocutory Injunction

[29] In connection with the criminal proceedings, the RCMP seized or obtained restraining orders in respect to bank accounts in the names of James personally, James in trust for Eveline Holdings, and James in trust for Sterling Capital, containing millions of dollars in the aggregate. The RCMP also seized about $72,991 in cash from a lunch bag in James’ office and $665,261 in cash in duffle bags and other containers at James’ temporary residence.

[30] James was acquitted of the criminal charges in January 2016, following which he applied to the criminal trial court for return to him of the funds seized by the RCMP. McFlow sought standing in those proceedings to oppose release of the funds to James. Both James and the Crown opposed McFlow’s request to participate in the criminal proceedings and took the position that McFlow should seek assistance from this court in this proceedings.

[31] McFlow now seeks an interlocutory injunction restraining release of the property seized in the criminal proceedings pending the outcome of the contempt proceedings and final determination of these civil proceedings.

[32] There were early skirmishes in the injunction proceedings which have all been resolved: McFlow was concerned that the criminal court would decide to release funds to James before this court had the opportunity to hear the injunction motion. That concern was resolved, and funds continue to be held in the criminal proceedings pending release of this decision.

[33] A second preliminary concern related to the quantum of funds sought to be held in court by McFlow. Considerably more than $2 million was seized in connection with the criminal proceedings. However, McFlow sought an order that all funds be held pending determination of these civil proceedings. McFlow explained that its position was based on a concern about tracing the funds: there is no admission from James that a certain fund is comprised of the funds that had been wired to TCI and thus are the subject matter of the order of Wilton-Siegel J. McFlow was concerned that if the quantum held to the credit of these proceedings was limited to $2 million, it might subsequently be unable to establish that the precise funds held as security could be traced back to TCI.

[34] This tracing issue has been resolved on the basis that, to the extent that McFlow needs to trace funds that were the subject matter of the order of Wilton-Siegel J., it will only be necessary for McFlow to show that those funds were part of the funds seized in connection with the criminal proceedings: it will not be necessary to trace the funds beyond the seizures to a specific portion of the funds seized in connection with the criminal proceedings.

[35] On this basis, McFlow agreed to limit its request to $2 million of the funds held in connection with the criminal proceedings.

(a) Analysis

[36] The general test for an interlocutory injunction is set out in RJR MacDonald v. Canada:

(i) is there a serious issue to be tried;

(ii) will McFlow suffer irreparable harm if the injunction is not granted?

(iii) does the balance of convenience favour granting the injunction?[^21]

(I) Serious Issue to be Tried

[37] The threshold to establish a “serious issue to be tried” is low. It is not usually necessary to engage in an extensive review of the merits of the case.[^22] I am satisfied that the plaintiff has shown a serious issue to be tried in two respects:

(a) the funds are already subject to an order for payment into court, which should be enforced now by way of an injunction, since voluntary compliance by James and/or Eveline Holdings has not been sufficient to secure performance of the court’s earlier order; and

(b) there is evidence that the $2 million was property of the Condo Corp. If it was, then there is a serious issue whether McFlow, as a lender with mortgage security over units in the Condo Corp, will be entitled to realize on its security against some portion of the $2 million.

[38] There are arguments on the other side. The condominium has been sold and the Administrator has completed its work. However, it could be argued that any claim to the $2 million is a claim by the Condo Corp, not its owners or beneficial owners, nor lenders to the beneficial owners. Second, the evidence before me suggests that the $2 million was made up of contributions made by only some of the unitholders to the Condo Corp, and specifically not by the unitholders of the units over which McFlow holds security: the evidence suggests that the $2 million was paid to the Condo Corp as the share of the unitholders represented by James for work that needed to be done on the condominium, but that the units subject to McFlow’s security did not pay their share of these assessments. Thus, the argument goes, although the money might belong to the Condo Corp, its distribution to unitholders now would be subject to the claim by the Condo Corp for proportionate payments for the units subject to the McFlow security, with the net result that the $2 million would flow back to the persons who advanced it and not to McFlow.

[39] I am satisfied that there are serious issues to be tried and that those issues could entitle McFlow to payment from the funds ordered paid into court by Wilton-Siegel J. I am also satisfied that there is a serious issue to be tried that the funds ordered paid into court by Wilton-Siegel J. can be traced to the funds seized by the RCMP. McFlow has satisfied the first branch of the test for an injunction.

[40] James spends considerable time in his factum on the form of McFlow’s evidence on this motion. A number of my colleagues have been at pains to point out in other cases that second-hand evidence through the affidavits of subordinate legal professionals may carry little or no weight on an important motion such as an injunction. I agree with the principles stated in those cases.[^23] However, the central facts relevant to the injunction motion are not greatly in dispute, at least for the purposes of this motion. James’ evidence before Forestell J. provides a basis for concluding that there was a fund of money held for the Condo Corp that was the subject-matter of the order of Wilton-Siegel J. Evidence apparently uncovered by the RCMP seems to be a basis to conclude that the $2 million was sent by James to TCI and then was returned to his trust account from TCI. It is not disputed that this money was not paid into court as ordered by Wilton-Siegel J. I do not believe the weight of the evidence supporting these facts is diminished by the use of paralegal affidavits, or that it would be enhanced by an affidavit from principals of the plaintiff, who, themselves, have no personal knowledge of the disposition of these funds. I would not give effect to James’ argument about the form of the plaintiff’s evidence on the injunction motion.

[41] James argued that this motion is, in effect, a motion for a Mareva injunction, and thus the test on the merits ought to be the higher standard that applies to such a motion: a “strong prima facie case” rather than a “serious issue to be tried”.[^24] I do not agree with this characterization. The order made by Wilton-Siegel J. was made under Rule 45.03 of the Rules of Civil Procedure. The injunction sought on this motion is to secure performance of the order of Wilton-Siegel J., and is not for a broad-based Mareva injunction. I do not consider it a “drastic and extraordinary” order[^25] for the court to secure compliance with a court order that has already been made.[^26]

(II) Irreparable Harm

[42] “Irreparable” harm is harm that cannot be compensated adequately by payment of money or which cannot be cured, usually because the plaintiff cannot collect damages from the other side.[^27]

[43] On the record before me, it appears that James wired the funds to TCI on the eve of the motion before Wilton-Siegel J., to put the funds beyond the reach of Canadian justice. James refused to answer questions that could have assisted the Administrator in tracing the funds, claimed solicitor-client privilege in respect to a corporation that may be his own alter-ego, failed to disclose to the court that he had control of the funds and had caused them to be returned to his trust account, and failed to comply with the order to pay the funds into court. There is good reason to believe that the funds will disappear if they are released to James. On the record before me, I am satisfied on a balance of probabilities that McFlow will not be able to collect against James, Eveline Holdings or Sterling Capital if the injunction is not granted.

[44] I also conclude that there is an argument that the $2 million belongs to the Condo Corp and should form part of the Net Sale Proceeds (that is, that it should be considered part of the net realization of Condo Corp assets available for distribution to those beneficially entitled to distributions to unitholders). I am satisfied that if the funds are released and not held in court that it is likely that the funds will no longer be available for distribution.

[45] James argues in his factum that the alleged irreparable harm is merely speculative, an argument he rests primarily on the source of evidence used by McFlow on this motion: a law clerk’s affidavit.[^28] With respect, assessments of irreparable harm involve assessing probabilities of future events. Guessing about past events is “speculation”. Assessing future probabilities is “assessing risk”. I do not accept this argument.

(III) Balance of Convenience

[46] The balance of convenience strongly favours granting the requested order. It is “convenient” that James and Eveline Holdings comply with the order of Wilton-Siegel J. The injunction order will secure that compliance. McFlow has given an undertaking as to damages which should be adequate to secure any award that may be made to the defendants if it turns out that the injunction ought not to have been granted, though there is no reason to believe that the defendants will suffer any prejudice from the injunction other than the loss of use of the money, and that damage may be compensated by the interest that may be earned on the funds while they are held in court.

[47] James argues that McFlow’s undertaking as to damages is “hollow” and notes the failure to produce financial information by McFlow that would enable James to test the strength of the undertaking. As is clear from the jurisprudence, an undertaking as to damages is an undertaking to the court, and carries with it an implicit assurance that the party giving the undertaking will be able to discharge the undertaking. It is sometimes called the “price” of an injunction, and although it can be dispensed with, it is normally required.[^29]

[48] The potential exposure on the undertaking as to damages in the instant case does not seem substantial and it is likely that McFlow has some interest in the Net Proceeds of Sale which can serve as security for its undertaking. Further, the undertaking is called upon only if it appears that the injunction order ought not to have been made. In this case, one factor that would weigh in the balance in assessing that question is the order of Wilton-Siegel J. and the non-compliance with that order by at least some of the defendants. As a matter of practical security, I am satisfied that little damage will be caused to anyone by the injunction sought by McFlow, it does not seem probable that McFlow will be called upon to honour its undertaking, and that the undertaking is likely to be performed if McFlow is called upon to pay money as a result of it.

[49] Finally, on the issue of the undertaking as to damages, by letter dated March 2, 2016, Ms Book advised that McFlow would post a letter of credit in support of its undertaking as to damages if the court concluded that this was appropriate.[^30] For the reasons given above I do not consider it necessary for McFlow to post security in support of its undertaking beyond whatever interest it may be found to have in the Net Proceeds of Sale that were paid into court by the Administrator.

[50] James also argued that the issue on this motion has been litigated several times and decided repeatedly against McFlow. On principles of issue estoppel or abuse of process, he argues that McFlow should not be permitted to relitigate this issue again. I give this argument short shrift. This issue has not been litigated before: there is an order from Wilton-Siegel J. that a particular fund of money be paid into court. Is has not been. There is a serious issue to be tried that the very fund that was the subject-matter of the order of Wilton-Siegel is being held in connection with the criminal proceedings. Now that those proceedings have been concluded, James seeks return of those funds to him and McFlow seeks to have those funds preserved. These facts have not presented themselves on previous motions before the court, and they are a compelling basis on which to grant the requested relief.

(III) Terms of the Injunction Order

[51] I would have considered ordering something more than $2 million to address the loss of interest on the funds since the date of the order of Wilton-Siegel J. However, McFlow has limited its request to $2 million (once the tracing issue was resolved), and I agree that $2 million is sufficient to cover any likely claims that McFlow has against the defendants. The order will go, as sought, for $2 million of the funds held in connection with the criminal proceedings, that those funds be paid into court to the credit of this proceeding, to be held pending further order of the Ontario Superior Court of Justice.

[52] In his factum, James argues that McFlow seeks to have the $2 million treated as “Net Sale Proceeds” arising from the sale of the condominium by the Administrator in 2013. McFlow does seek this result in the underlying litigation. However, to be clear, in granting the injunction this court does not impose any particular characterization on the $2 million: that is a matter to be decided by the court addressing the merits of the underlying claims on a final basis.

[53] I understand that this order will not conflict with any order that has been made by the Ontario Court of Justice, and that counsel expect to be able to make the necessary arrangements to have the $2 million transferred to the Accountant of the Ontario Superior Court of Justice. If there are any issues in bringing this about, counsel may arrange a 9 am appointment to speak with me any morning I am sitting.

The Request to Strike the Counterclaim

[54] The defendants counterclaimed against McFlow and two others: Premium Properties Limited (“Premium Properties”) and Milton Winberg. McFlow, Premium Properties and Winberg move to dismiss the counterclaim on the basis that:

(a) all of the claims in the counterclaim are statute-barred by the Limitations Act[^31]; and

(b) the counterclaim discloses no reasonable cause of action against either Premium Properties or Winberg.

[55] On the first return date before this court on the Rule 21 motion, I ordered on consent that the claims by 1303678 Ontario Inc. against Premium Properties and Winberg be struck out without leave to amend. These reasons why I dismiss the balance of McFlow’s motion to strike the counterclaim.

Overview

[56] I am case managing these proceedings.

[57] At this point the condominium units have been sold and the Administrator has been discharged from his responsibilities. Net Sale Proceeds have been paid into court and by virtue of this decision a further $2 million will be paid into court. This latter amount stands as the $2 million ordered paid into court by Wilton-Siegel J. What remains to be decided (in general terms) is the proper order for payment out of the Net Proceeds of Sale, and a determination of entitlement to the $2 million. As part of this process, the parties assert claims against each other arising from the financial collapse of the Condo Corp.

[58] The position of McFlow is that James and other defendants are responsible for the collapse of the Condo Corp and are liable to unitholders for their actions. McFlow’s claims are based on its position as holder of security against 14 of the units. The position of James and other defendants is that a reason for the collapse of the Condo Corp was the failure of unitholders to fund the Condo Corp. This failure, in turn, is blamed on McFlow for failing to fund (or causing its borrowers to fund) the proportion of these expenses attributable to the 14 units over which McFlow holds security.

[59] There are rights and obligations that arise under the constating documents of the Condo Corp, under the Condominium Act, and in respect to the general law that governs corporations. It would be fair to say that the claims, on both sides of this proceeding, are framed in legally novel ways: it is not clear to me that either side has a convincing legal theory for liability, given the options that are available to condominium corporations and to condominium unitholders when the governance of a condominium encounters difficulties.

[60] Until the sale of the condominium units by the Administrator, the litigation focus was on preserving and realizing upon what assets remained. Now the task is to divide what has been realized and otherwise determine who owes what to whom as a result of all that has passed. And so this litigation is only at the pleadings stage in respect to the final adjustment of accounts to take account of liability claims among the parties.

[61] Rule 21 is one approach under the Rules of Civil Procedure to facilitate the underlying goal of the Rules: to come to a just final decision on claims, on the merits of those claims, in the “most expeditious and least expensive” way.[^32] Procedures used should be proportional to the matters in issue in the proceeding.[^33]

[62] For the reasons that follow I am not prepared to dismiss any of the counterclaim on the basis of limitations defences, and I leave limitations issues for a motion for summary judgment or trial. I am not prepared to strike other portions of the defence and counterclaim because it is not “plain and obvious” that the impugned claims, though frail, will fail. I come to this conclusion on the presumption that there is a tenable cause of action by McFlow for damages arising from mismanagement of the Condo Corp, a claim that itself seems frail to me. While “relative frailty” is not a test under Rule 21, this motion arises in a particular context: I am persuaded that the allegations of each side against the other should be before the court deciding all issues concerning liability for losses suffered in connection with the condominium project.

(a) Rule 21 Motions Generally

[63] On a Rule 21 motion, the facts in the claim (in this case, the counterclaim) are deemed to be true for the purposes of the motion. A claim will not be struck on a Rule 21 motion unless it is “plain and obvious” that it will fail.[^34]

(b) R.21 Motions Involving Discoverability and Limitations Periods

[64] Where a limitations defence will turn on an issue of discoverability, Rule 21 can only be used to dismiss the claim where the claim discloses sufficient facts in order to decide the discoverability issue as a question of law. If the issue will require determination of contested issues of fact, then it is a triable issue to be addressed on a motion for summary judgment under Rule 20 or at trial.[^35]

(c) Application of the Limitations Act to Oppression Claims

[65] Counsel made spirited submissions on the question of whether the Limitations Act[^36] applies to an oppression claim brought under the Condominium Act[^37] and/or the Ontario Business Corporations Act.[^38] Mr Rotenberg argued that this is an open question in view of authority from the Court of Appeal. Ms Book argues that there is a clear jurisprudential consensus that the two year limitation period applies.[^39] I decline to decide this issue on this motion, and leave it to the trial judge or summary judgment motions judge to decide. In my view the limitations defence fails on this Rule 21 motion because the date of discoverability is a triable issue. For that reason it is not necessary for me to express a view on the legal issue, and it is preferable that I not do so as part of this interlocutory decision.[^40]

(d) Date of Discoverability

[66] The essence of McFlow’s civil claims is that James (and others) as the persons controlling 30 of the 44 units in the Condo Corp, mismanaged the Condo Corp and thereby oppressed and caused loss to McFlow. The essence of the counterclaim is that McFlow failed in its obligations as mortgagee, and later, mortgagee-in-possession of 14 units to pay assessments associated with the 14 units in which it holds security, thereby making the Condo Corp financially incapable of meeting its obligations. In simple terms, one group (controlling the Condo Corp with about 2/3 of the units) argues with a second group (holding the balance of about 1/3 of the units) over who is responsible for the continuing deterioration in the condominium and the eventual losses that all are alleged to have suffered as a result.

[67] A cause of action accrues when all the facts that give it rise exist and are known to the plaintiff (or would have been known to the plaintiff through the exercise of reasonable diligence).[^41] The application of this principle can be complex in a situation such as this, where a delict may be known (such as the failure to pay a condominium assessment), but the delict may not have given rise immediately to the claim now asserted (for example, a failure to pay a condominium assessment would not ordinarily give rise to a claim that the value of other units in the condominium are thereby damaged: the usual remedy would be a collection action for the unpaid assessment, not an allegation that the project has been brought to ruin). Here, I think it arguable that the claim did not crystallize until the condominium was sold by the Administrator and the losses that are the subject matter of the counterclaim were crystallized.

[68] I appreciate that there are other theories as to when the claims were discoverable. It may be that one of those other theories prevails at trial. I want to be clear that I am not deciding that the limitations defence fails on a final basis: it is a triable issue to be decided at trial or on a motion for summary judgment.

(e) Claims Against Premium Properties and Winberg

[69] The claim against Premium Properties is that it failed to require its borrowers to pay common expenses, participated in sale of the 14 units by lending to the succeeding purchaser without requiring that common expense arrears be paid, extended further credit on the security of its mortgages, and then failed itself to pay common expenses when it allegedly became mortgagee-in-possession of the 14 units. The claim against Winberg is that he was the directing mind of McFlow and Premium Properties and acted oppressively towards James and the other defendants by causing McFlow and Premium Properties to fail to require their debtors to pay common expenses, and then failing to themselves pay common expenses when they were allegedly mortgagees-in-possession.

[70] I assess the claims against Winburg and Premium Properties on the presumption that there may be a valid claim against McFlow. On that presumption, it is not plain and obvious that the claims against Winburg and Premium Properties will fail. Piercing the corporate veil seldom succeeds[^42] and it may be that these claims cannot survive a motion for summary judgment, but I am not persuaded that they should be dismissed summarily solely on the basis of the pleadings.

[71] The plaintiffs by counterclaim sought leave to amend their pleadings if I concluded that the counterclaim was technically deficient as against Winberg and/or Premium Properties. The defendants to the counterclaim did not argue the motion on the basis of technical defects in the pleadings, and I am satisfied that the current pleadings, if not a model of particularity, are sufficient to enable the defendants to the counterclaim to plead in response and for the case to proceed through disclosure.

The RCMP Motion to Quash the Summons Served on Sgt Aristotle

[72] McFlow served a summons directed to Sgt Gordon Aristotle of the RCMP on July 11, 2016. The purpose of the summons is to obtain evidence of a non-party under Rule 39.03 for use on McFlow’s contempt motion against James. The RCMP moves to quash or set aside this summons on several bases:

(a) the summons directs Sgt Aristotle to bring with him, among other things, “any documents in your custody, possession or power in any way relevant to the matters that are within the scope of this proceeding or have any reference thereto”.[^43] The RCMP is not a party to the civil proceedings and argues that it cannot determine what is relevant to these proceedings.

(b) McFlow has not brought a motion under Rule 30.10 to compel production from a non-party and thus has not satisfied the burden on a moving party under that Rule, nor has it established that the requested documents are relevant to the litigation. The RCMP argues that McFlow cannot circumvent the effect of R.30.10 by issuing a summons;

(c) The RCMP argues that the court cannot assume that the requested documents are relevant to the civil proceedings;

(d) Documentary discovery has not yet occurred in the action. The RCMP argues that McFlow should exhaust its discovery rights against the defendants before bringing the RCMP into the proceedings;

(e) The summons has the effect of requiring the RCMP to produce documents which the RCMP obtained from third parties, including documents obtained from parties in TCI (the “TCI Documents”). The TCI Documents were obtained on the basis of an undertaking that the documents would only be used for the criminal proceedings. The RCMP argues that production of the TCI Documents would place it and the court in breach of the undertaking.

Context: The Alleged Contempt

[73] As stated above, shortly after his appointment, the Administrator moved for a preservation order in respect to the $2 million deposited with TD Canada Trust. On June 30, 2009, Wilton-Siegel J. found that after the Administrator was appointed on May 27, 2009, James had moved the $2 million by wire transfer to Eveline Holdings in TCI. Wilton-Siegel J. found:

[The Administrator] is entitled to an order under Rule 45.02… requiring Eveline to pay into Court all monies currently in its possession that it has received from James that are derived from the proceeds of the GIC of TD Canada Trust previously held by him… including… the proceeds of wire transfers from James in the amount of $1.2 million and $0.8 million…. [The Administrator] is also entitled to an order requiring James to pay into court all monies that he has received personally, and to use his best efforts to pay into Court any funds over which he has control, including any funds in any account of which he is a trustee for Eveline, that are derived from such GIC.

[74] James took the position before Wilton-Siegel J. that Forestell J. had refused to grant an order restraining transfer of the $2 million, and that Eveline Holdings, his client, had directed him to transfer the money to TCI in the absence of any order restraining such conduct. Wilton-Siegel J. did not decide the issue of whether James and Eveline Holdings were independent. Rather, Wilton-Siegel J. ordered that James use his best efforts to pay the $2 million into court.

[75] The $2 million was not paid into court.

[76] McFlow alleges that James is in contempt of court for failing to use his best efforts to pay the $2 million into court. McFlow bears the burden of proof, beyond a reasonable doubt, to establish this allegation. As argued by McFlow on this motion, the contempt allegation is quasi-criminal, and James is entitled to the usual protections afforded a criminal defendant, including the right to remain silent and the right to be presumed innocent until proven guilty.

Analysis

[77] There are three general issues that arise on this motion:

(i) the proper procedure for obtaining evidence from a non-party for use on a contempt motion;

(ii) the proper procedure for protecting collateral interests (such as respect for the undertaking given to TCI);

(iii) the proper scope of production in a summons directed to a non-party.

[78] It is clear that some records in the RCMP’s possession are relevant to the contempt motion. J.R. McCarthy J. made findings, on the basis of some of these documents that James is the controlling mind of Eveline Holdings. If this finding was true as of the time that the $2 million was transferred out of Canada by James, on behalf of Eveline Holdings, then at least some aspects of James’ explanation of events to Wilton-Siegel J. may have been false or misleading. An inference may be available on the basis of this evidence, in the absence of any other evidence, that James could have paid the funds into court in accordance with the order of Wilton-Siegel J., and thus failed to use his best efforts to comply with the order.[^44]

(i) The Proper Procedure

[79] The RCMP argues that the parties should exhaust the mutual discovery process available in civil litigation before having recourse to a non-party for production. This argument is reinforced by the scope of the summons which seeks all documents “within the scope of the civil proceedings” rather than being restricted to matters in issue on the contempt motion.

[80] I do not agree with the RCMP on this point. The contempt motion is a distinct process. McFlow is required to prove its allegations beyond a reasonable doubt, and having commenced the contempt motion, it may not compel evidence from James for use in the contempt motion.[^45]

[81] Further and in any event, McFlow’s summons is for the purpose of obtaining evidence to put before the court on the contempt motion and not for purposes of discovery. McFlow could, instead, have taken the position that the RCMP should provide its evidence by way of oral testimony and served a summons for Sgt Aristotle to appear in court to testify, with his documents. Conducting the examination out of court is an alternate method of gathering the evidence for use on the motion. If the examination proceeds, the transcript will be available for use, in its entirety, on the motion.

[82] These principles are reflected in the Rules. The summons is brought under R.39.03 as a summons to a witness to obtain his evidence for use on a pending motion. Such a summons cannot be used to conduct a “fishing expedition” or to obtain discovery.[^46] Instead, discovery of a non-party is governed by R.30.10. The process under R.30.10 for obtaining a Crown brief is governed by D.P. v. Wagg.[^47] However, Wagg does not cover the process for the giving of evidence, whether at a trial or on a motion. The police force, in this case the RCMP, is able to raise and defend any third party interests at stake in providing the requested evidence, as has been done in this case.[^48] Where there are issues involved in police testifying in a civil case, it is appropriate for police to raise those issues with the court – before the trial judge if the evidence is sought at trial, before the motions court if the evidence is sought for a motion. There is no need for a party to bring a motion before issuing a summons: the interests at stake may be protected adequately in the manner I have described already without adding a further procedural layer to the process.

[83] The RCMP argues that the summons has been served to circumvent the process under R.30.10 and thus is an abuse of process. It notes that R.39.03 does not exist to supplant the protections respecting production under R.30.10. I see little merit in this argument. Pre-trial production and discovery are different issues than evidence at trial or on a motion. Ordinarily the parties are limited to discovery from opposing parties. No such limitation exists on the presentation of evidence, whether at trial or on a motion. I agree that if the summons had been served not in good faith, to obtain discovery rather than evidence for use on a motion, that would be a basis to set it aside. But there is no evidence to support this argument. The underlying motion is serious: for contempt of court. The motion is brought seriously: there is an obvious foundation for it in the record. The evidence sought from the RCMP is directly relevant to the issue of contempt: findings have been made in other proceedings on the basis of some of the requested evidence that appear to bear directly on the question of contempt. There is simply no basis to say that McFlow has misused the summons power to circumvent R.30.10 and Wagg.

[84] As the RCMP acknowledges, setting aside a summons is “drastic relief”. So long as the summons is not an abuse of process, there is a prima facie right to obtain evidence from a witness that is relevant.[^49] The summons in this case is not a “fishing expedition”.[^50] Overbreadth in the summons can be remedied with suitable directions from this court and usual professional cooperation among counsel.

[85] The RCMP acknowledges that it bears the onus to show that the summons is an “abuse”.[^51] It argues that it is an abuse because the information may be obtained from James during the discovery process, may involve consideration of undertakings such as those given to TCI authorities, and will involve inconvenience and expense for Sergeant Aristotle and the RCMP. For reasons given above, I do not accept that McFlow may compel the evidence from James in the context of the contempt proceedings. Second and in any event, seeking the documents from James would not obviate issues concerning undertakings given to TCI. The RCMP and/or the Crown would then have to be involved in any process to address the effect of the undertaking. And third, inconvenience and expense has to be raised as more than a general concept. Here, efforts must be made to focus the request, and if there are truly material problems meeting the request then those problems need to be placed before the court in concrete terms. If the request is overly broad and thus will be unduly onerous for the RCMP to answer, the court may give directions to bring the request within reasonable and practical bounds. On the record before me the steps have not been taken to determine whether the request will be truly too onerous to be reasonable.

[86] Civil courts have been making this comment since the Supreme Court of Canada’s decision in Hryniak, but it bears repeating again in this context: the court is concerned that these matters be addressed in a proportional way. It is clear from the record that the RCMP has relevant, perhaps critical evidence, which bears on the contempt motion. McFlow wants that evidence before the court, from the RCMP. McFlow has a prima facie right to have that evidence presented to the court. It should be possible to work out a practical and proportional way for that evidence to be made available. Certainly the request is not an “abuse of process”. Finally, I note that the motion is quasi-criminal in nature. It concerns alleged non-compliance with a court order. Although the RCMP and the Crown are not parties to the contempt motion, they have an interest in relevant evidence being made available to the court in order to adjudicate this issue: any claim that the request is unduly onerous should bear in mind the nature of the proceeding, and the RCMP’s position as a police force.

(ii) Protecting Collateral Interests

a. Documents Already in the Public Domain

[87] I agree with the RCMP that it is important that the court protect collateral interests, such as an obligation to respect the terms on which TCI documents were provided to Canadian authorities. Fortunately, this does not present as a practical concern in this case.

[88] First, it appears that a great many of the documents that McFlow seeks have been filed with a Canadian court in the criminal proceedings and are part of the public record of those proceedings. McFlow advised that it had sought copies of those documents from the court in Newmarket, but that staff had refused to provide them for some reason. There is no evidence that an order has been made by a judge restricting public access to these documents. On the usual “open court” principle, evidence filed in a court proceeding is available to members of the public, both for review at the court office and for duplication.

[89] The RCMP did not argue before me that the undertaking given to TCI authorities has the effect of preventing further use of documents once they become part of the public record in proceedings in a Canadian court.

[90] In order to simplify the process for obtaining the evidence sought by McFlow, in my view McFlow should take further steps to obtain the documents filed in the criminal proceedings. If court officials in Newmarket continue to refuse to provide the documents, presumably they will provide some reason for doing so. If necessary, that reason may be placed before this court, and this court will consider making an order for production of public court records to McFlow for use on the contempt motion (on notice to any affected party). If McFlow learns, through the process of making a further request for these documents, that there is an impediment to obtaining them (such as a court order precluding production of the documents), then McFlow may return to this court for further directions on the issue, and/or may seek assistance from the court that made the order.

b. Other Documents from TCI

[91] It is not clear to me whether the RCMP has any other non-privileged documents received from TCI that are relevant to the contempt proceedings. If not then there is no need, at this stage, to make any further order respecting this issue. If the RCMP does have other relevant non-privileged relevant documents obtained from TCI, then there is a procedure that may be followed to request authority from TCI to use the documents previously produced for the purposes of the contempt proceedings.

[92] As I read a letter[^52] from Principal Crown Counsel of the Attorney General’s Chambers in TCI dated October 17, 2016, a request to use these documents in the civil proceedings should be made by this court. I expect that the parties can cooperate to determine the form of such a request. If not, McFlow shall arrange an appointment for further directions respecting such a request.

c. Other Documents in the RCMP’s Possession

[93] On the basis of the endorsements of J.R. McCarthy J., some relevant evidence was obtained by the RCMP on computers belonging to Mr James. I do not see how these documents would be protected by any undertaking given to TCI. Thus there appear to be at least some documents caught by the summons which would not be covered by the directions I have given respecting the TCI Documents.

[94] I see no reason why these documents should not be available for quasi-criminal proceedings against Mr James. Any issue about the admissibility of these documents may be raised by Mr James in the context of the contempt proceedings.

(iii) Scope of the Summons

[95] I agree with the RCMP that the scope of the summons, read by itself, is overbroad. The summons should be limited to matters relevant to the contempt motion.[^53] However, in an email dated October 26, 2016, Ms Book clarified that the phrase “this proceeding” in the summons should be read to mean “relevant to the contempt proceeding”. This correspondence from counsel is sufficient to address the overbreadth argument.

[96] I appreciate that the RCMP is not a party to the civil proceedings, or the contempt proceedings. However, in civil proceedings, including civil contempt proceedings, the court expects counsel and the parties to work together to resolve practical issues such as what is sought under a summons. On this motion, McFlow is clear about what it seeks; any evidence of the relationship between James and Sterling Capital and Eveline Holdings, any evidence relating to the transfer of the $2 million to TCI and any subsequent transfer of those funds (including any information about James’ relationship to any entities to which the funds were transferred after the funds reached TCI). This court is not aware of the scope of the criminal prosecution of Mr James, and so has no way to determine whether the documents relevant to the civil contempt proceedings are a small or large sub-set of all of the documents in the case. Counsel for the RCMP described a very large number of documents in the RCMP’s possession as a result of the criminal investigation, but that general description did not much assist me in understanding how difficult or onerous it would be for the RCMP to locate documents in their investigation materials that are relevant to the issues on the contempt motion.

[97] I would hope that this would be an issue that can be worked out between counsel. If not, it may be necessary to conduct the examination of the RCMP witness in court, before the judge hearing the contempt motion.

Summary: Order Respecting RCMP Summons

[98] Taking all of these points into account, order to go as follows:

(a) McFlow shall seek copies of exhibits filed in the criminal proceedings, including the exhibits to the Aristotle Affidavit, from the court file in Newmarket. If production of these documents to McFlow is refused by staff in Newmarket, McFlow will seek a reason, in writing, for this refusal, including a copy of any court order(s) restricting production of these documents, and McFlow shall then return before this court for further directions.

(b) RCMP shall use its reasonable best efforts to determine if there are other non-privileged documents in its possession received pursuant to the request made of officials in TCI, and if there are,

a. whether those documents are relevant to the civil contempt proceedings;

b. the quantity and nature of those documents, and to the extent that it would not be inconsistent with the undertaking given to the TCI, a description of those documents;

and shall advise McFlow of its determinations of these matters.

(c) If, based on the information provided pursuant to (b), McFlow determines that it wishes to obtain any of the documents described in (b), McFlow shall confer with counsel for the RCMP and TCI authorities, as may be necessary, in order to frame a request from this court to TCI, as described in the letter from the TCI Attorney General’s Principal Crown Counsel dated October 16, 2016. McFlow shall then arrange an appointment with this court to obtain this court’s request.

Other Matters

[99] On my reading of the materials filed on these motions, the following matters remain outstanding:

(a) McFlow filed a copy of the affidavit of Sgt Aristotle on the contempt motion. James objected to this affidavit on the basis that it is hearsay. McFlow responded that it would examine Sgt Aristotle as a witness on a pending motion (all steps that were preliminary to McFlow serving the summons that is challenged by the RCMP on this motion). I direct that the Aristotle affidavit (including any exhibits to it obtained by McFlow) may be filed on the motion, and that the transcript of the examination of Sgt Aristotle be likewise filed on the contempt motion, and that any issue respecting the admissibility of that evidence or any claims of privilege in respect to this evidence to be subsequently determined, either (i) by me on a motion brought after all evidence has been filed on the contempt motion other than that to be elicited orally before the contempt motion judge, or (ii) by the contempt motion judge;

(b) McFlow has sought an order that none of the exhibits to the Aristotle affidavit are privileged. This issue has not yet been argued before me and I understand that the defendants are not asserting privilege over any of these documents.[^54] However, if there are any issues respecting privilege, to the extent that the parties are not able to agree upon a process for bringing those privilege issues before the court, counsel may seek directions from me at a case management conference;

(c) Future steps and a return date for the contempt motion need to be scheduled (including the examination of Sgt Aristotle). Counsel shall arrange an in-person case management conference with me on these issues no later than March 31, 2017.

(d) A schedule is required for exchange of documents and examinations for discovery in the underlying proceedings. Counsel shall arrange a case management conference with me in respect to this schedule no later than May 31, 2017. This conference may be by teleconference if all counsel agree. This conference may, but need not be, conducted at the same time as the case conference respecting scheduling of the contempt motion.

Summary and Costs

[100] The interlocutory injunction is granted on the terms set out in this decision. The motion to strike the counterclaim pursuant to Rule 21 is dismissed. The motion to quash the summons directed to Sergeant Aristotle is dismissed with directions set out in this decision.

[101] In respect to costs, subject to any relevant offers to settle:

(a) This court will fix costs on both a partial and substantial indemnity basis for the interlocutory injunction. Liability to pay these costs shall be left in the discretion of the motions judge hearing the contempt motion or, at the direction of that motions judge, in the discretion of the judge finally deciding the claim.

(b) James has succeeded on the motion to strike. He shall have his costs of that motion on a partial indemnity basis, in an amount to be fixed by this court, payable at the conclusion of these proceedings, payable in the discretion of the motions judge hearing the contempt motion or, at the direction of that motions judge, in the discretion of the judge finally deciding the counterclaim.

(c) There shall be no costs payable to or by the RCMP in respect to the motion to strike the summons. The costs of all other persons respecting the motion to strike the summons shall be in the cause of the contempt motion, in the discretion of the court deciding that motion.

(d) If the parties cannot agree on the quantum of costs ordered in respect to (a) and/or (b) then the parties shall make their written submissions as to quantum of these costs by March 14, 2017.

(e) If the parties take the position that liability for costs in respect to (b) should be affected by an offers to settle, they shall make their submissions in this regard by March 14, 2017, with responding submissions on this issue only to be made by March 28, 2017.

[102] My reasons for these costs directions are as follows:

(a) When an interlocutory injunction is granted, the costs of the injunction are ordinarily left to the court deciding the underlying issues on the merits. I see no reason to depart from this practice here. However, if the judge deciding the contempt motion concludes that James has committed a contempt of court, that judge could conclude that the need for the interlocutory injunction arose because of the failure to pay the $2 million into court, and that costs for the interlocutory injunction ought to be paid by James as a consequence.

(b) It is not clear to me that there is merit to James’ counterclaim against McFlow. That counterclaim has survived a motion to strike on the basis of a limitations defence, and on ordinary costs principles James is entitled to costs for defending that motion successfully. However, if James is found in contempt of court, it will be in the discretion of the motions judge deciding the contempt motion to deprive James of those costs as part of the court’s response to the finding of contempt.

(c) I order no costs to or from the RCMP because the RCMP acted reasonably in seeking directions from this court. I consider that the motion was primarily a matter of necessary case management for the parties, and thus that their costs ought to be considered as part of the costs of the overall proceeding, to be in the discretion of the trial judge.

[103] If the parties and/or the RCMP have any difficulties agreeing on the form of the order to be issued as a result of this decision, or if any of them require further directions in respect to these matters, they should arrange an appointment to see me by the end of March 2017.

D.L. Corbett J.

Released: February 13, 2017

[^1]: Mr Reimer appeared but took no part in these motions [^2]: Mr Bergman and Mr Lockyer appeared in their role as counsel in proceedings in the Ontario Court of Justice respecting funds that were the subject of forfeiture proceedings. A portion of those funds are sought to be paid into court to the credit of these proceedings, as described below in these reasons. [^3]: Statement of Defence of Sterling Capital and Eveline Holdings, para. 7, Responding Record of the Plaintiffs by Counterclaim to the Motion to Strike the Counterclaim, tab 10. [^4]: Ms Cianciulli died in about 2009, and it is not clear on the record before me who has owned the 30 Cianciulli units since that time. [^5]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28400 (Ont. SCJ). [^6]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28400 (Ont. SCJ), amended in part in McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649 (Ont. SCJ). [^7]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649, para. 25 (Ont. SCJ). [^8]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649, para. 38 (Ont. SCJ). [^9]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649, para. 39 (Ont. SCJ). [^10]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649, para. 40 (Ont. SCJ). [^11]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 28649, para. 41 (Ont. SCJ). [^12]: McFlow v. Simcoe Condominium Corporation No. 27, 2009 33531 (Ont. SCJ). [^13]: McFlow v. Simcoe Condominium Corporation No. 27, 2010 ONSC 6260 (SCJ). [^14]: McFlow v. Simcoe Condominium Corporation No. 27 (2011), 277 OAC 395, 2011 ONSC 475 (Div. Ct.). [^15]: McFlow v. Simcoe Condominium Corporation No. 27, 2011 ONSC 7389 (SCJ). [^16]: McFlow argues that if the defendants had complied with the order of Wilton-Siegel J. and paid the $2 million into court, then those funds would also have been the subject-matter of my order of April 5, 2013. I consider this speculation: a guess as to what the court might have directed, or the Administrator might have done, with the $2 million, if it had been paid into court back in 2009. [^17]: Criminal Code of Canada, RSC 1985, c. C-46. [^18]: Controlled Drugs and Substances Act, SC 1996, c.19. [^19]: Handwritten endorsements #1 and #2 of J.R. McCarthy J., July 24, 2014. [^20]: Handwritten endorsements of J.R. McCarthy J. #2 and #3 dated July 24, 2014. [^21]: RJR MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 SCR 311. [^22]: Bell ExpressVu Limited Partnership v. Torroni (2009), 2009 ONCA 85, 94 OR (3d) 614 (ONCA), para. 21. [^23]: Ferreira v. Cardenas, 2014 ONSC 7119 at paras. 13-19, per F.L. Myers J.; Danos v. BMW Group Financial Services Canada et al., 2014 ONSC 2060 per R.F. Goldstein J., at paras. 26, 29, 31. [^24]: See for example Sibley & Associates LP v. Ross, 2011 ONSC 2951, para. 12, per Strathy J. (as he then was); RBC Dexia Investor Services Trust v. Goran Capital Inc., 2016 1138, para. 11, per Hainey J. [^25]: Kanda Tsuchin Kogyo Co. v. Coveley (1997), 96 OAC 324, paras. 3-4 (Div. Ct.). [^26]: See Gold Star Renovations Inc. v. Alla Vinnik, 2012 ONSC 6575, per Lauwers J. (as he then was). [^27]: RJR MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 SCR 311, para. 64. [^28]: See the reasoning of A.J. Goodman J. in Thompson v. BFI Canada Inc., 2014 ONSC 3726. [^29]: See, for example, 642947 Ontario Ltd. v. Fleischer, 2001 8623 (ON CA), [2001] O.J. No. 4771, paras. 62-63, 70 (C.A.), per Laskin J.A.; The Catalyst Group Inc. v. Moyse, 2015 ONSC 4388, para. 26, per Glustein J.; Levy v. Fitzgerald, 2012 ONSC 2105, para. 59, per D.M. Brown J. (as he then was); Equitas Investment Corp. v. Goodman, 1987 4057 (ON SC), [1987] O.J. No. 9 (H.C.J.); Shear v. Coffee Time Donutes Inc., [1994] O.J. No. 273, para. 11 (Gen. Div.), per Farley J.; 967305 Ontario Ltd. v. North American Trust Co., 1996 11102 (ON SC), [1996] O.J. No. 517, paras. 23-24 (Gen. Div.), per Sharpe J. (as he then was). [^30]: Letter from Ms Book to Mr Das dated March 2, 2016, James’ Responding Record on the Injunction Motion, tab 1A, p.13. [^31]: Limitations Act, 2002, SO 2002, c.24, Sched. B. [^32]: Rule 1.04(1). [^33]: Rule 1.04(1.1). [^34]: Knight v. Imperial Tobacco Canada Ltd., 2011 ONSC 42. See also Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 SCR 959. [^35]: See Charlton v. Beamish (2004), 2004 35934 (ON SC), 73 OR (3d) 119, paras. 15-30. [^36]: Limitations Act, SO 2002, c.24, Sch. B. [^37]: Condominium Act, SO 1998, c.19. [^38]: Ontario Business Corporations Act, RSO 1990, c. B.16. [^39]: See Morritt et al., The Oppression Remedy (Toronto, Canada Law Book, Looseleaf), pp 8.23 – 8.30; Sutherland v. Birks (2003), 2003 39961 (ON CA), 65 OR (3d) 812 (CA), Waxman v. Waxman, 2004 39040 (ON CA), [2004] OJ No. 1765, paras. 534-536 (CA), Ford Motor Co. of Canada v. OMERS Board, [2004] OJ No. 191 (SCJ), [2006] OJ No. 27 (CA), Fracassi v. Cascioli, 2011 ONSC 7002, paras. 265-274 (SCJ), Joseph v. Paramount Canada’s Wonderland (2008), 2008 ONCA 469, 90 OR (3d) 401 (CA), Reinhart v. VIXS Systems Inc., 2011 ONSC 5349, paras. 5-8; Paul v. 1433295 Ontario Ltd., 2013 ONSC 7002, paras. 37-40, Maurice v. Alles, 2015 ONSC 1671, paras. 52-57 (SCJ), Sterling Warehouse Inc. v. LMC Endocrinology Centres (Toronto) Ltd., 2015 ONSC 3987 (SCJ). [^40]: If this court decides this legal question, an issue can arise as to whether that decision has final effect, thus prompting what may be an unnecessary appeal: in an interlocutory decision it is best to say only what is necessary to dispose of the motion. [^41]: Limitations Act, SO 2002, c.24, Sch.B., s.5. [^42]: Shoppers Drug Mart Inc. v. 6470360 Canada Inc., 2014 ONCA 85; 642947 Ontario Ltd. v. Fleisher (2001), 2001 8623 (ON CA), 56 OR (3d) 417 (C.A.), per Laskin JA. [^43]: Summons to Sgt Aristotle dated July 11, 2016, p.2 (2nd para.). [^44]: In this decision I say nothing about the effect in these civil proceedings of the findings of J.R. McCarthy J. in the criminal proceedings. James argued that he was denied standing on the privilege issues before J.R. McCarthy J., and thus the findings on the privilege issue do not create an issue estoppel as against him. To my mind this issue is a good deal more subtle, and it will be for the court deciding the contempt issue to decide what use that may be made of the proceedings before J.R. McCarthy J. At this juncture I go no further than to conclude that the evidence that was before J.R. McCarthy J., on which His Honour found a basis for the findings he made about James’ relationship with Eveline Holdings and Sterling Capital, ought to be available to McFlow for use in the contempt proceedings. [^45]: Korea Data Systems Co. v. Chiang (2007), 2007 12203 (ON SC), 31 CBR (5th) 19, para. 25 (Ont. SCJ). I say nothing here about the availability for use on a contempt motion of evidence compelled from an alleged contemnor in civil proceedings prior to the contempt proceedings. [^46]: D’Addario v. Environmental Management Solutions Inc., 2007 54666 (Ont. Div. Ct.). [^47]: P.(D.) v. Wagg, 2004 39048 (Ont. CA). [^48]: This includes concerns raised by the RCMP in respect to the provisions of the Privacy Act, RSC 1985, c.P-21, Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c.17, and Mutual Legal Assistance in Criminal Matters Act, RSC 1985, c.30. [^49]: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 7258 (ON SC), 27 OR (3d) 291 (SCJ); Canada Metal Co. v. Heap (1975), 1975 675 (ON CA), 7 OR (2d) 185 (CA). [^50]: Bearden v. Lee, 2005 CarswellOnt 1538 (SCJ). [^51]: Hong Kong (Official Receiver) v. Wing, 1986 CarswellOnt 452 (SCJ). [^52]: Affidavit of Sadian Campbell sworn October 20, 2016, RCMP’s Motion Record, p.67. [^53]: See Maesbury Homes Inc. v. 1539006 Ontario Inc., 2011 ONSC 2829, per Grace J. [^54]: See letter from Mr Rotenberg to Ms Book dated January 22, 2016, Exhibit “C” to the affidavit of Michelle Reichenbach sworn November 3, 2016, McFlow Responding Record to RCMP Motion to Quash Summons, tab 1C.