CITATION: Johnson v. Singh, 2017 ONSC 3312
COURT FILE NO.: CV-14-510228
DATE: 20170529
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Errol Johnson, EagleDove Financial Inc.
Plaintiffs
– and –
David Singh, Erogo Mortgage Corporation, Infinity Real Capital Inc., Money Plus Group Inc.
Defendants
Errol Johnson, in person
HEARD: May 29, 2017
EM Morgan J:
[1] This is an undefended trial in respect of a claim for payment due under a contract of employment.
[2] The Plaintiff, Errol Johnson (“Johnson”) is a licensed mortgage broker who conducts mortgage brokerage services through his company, the co-Plaintiff “EagleDove Financial Inc. (“EagleDove”).
[3] The Defendant, David Singh (“Singh”) is a businessman who conducts his financial affairs under a number of different corporate entities controlled by him and registered either by him or his spouse, Loriana Valenté (“Valenté”).
[4] The evidence presented by Johnson establishes to my satisfaction that the Defendant companies, Erogo Mortgage Corporation (“Erogo”), Infinity Real Capital Inc. (“Infinity”), and Money Plus Group Inc. (“Money Plus”), are used virtually interchangeably by Singh, and are effectively his alter egos. Johnson describes this as a “shell game” in which Singh uses his corporate vehicles interchangeably, often denying liability for one by pointing to another. All of the Defendant corporations, in addition to Singh himself, were ultimately responsible for paying Johnson and EagleDove what they deserved to be paid under the contract.
[5] On February 1, 2014, Singh and Erogo, in their own capacities and on behalf of Infinity and Money Plus, appointed Johnson as Vice President Operations and Compliance of Erogo. Further, it was Johnson’s responsibility to act as the chief compliance officer of Erogo and the other companies in order to ensure compliance with all regulatory requirements. This agreement was supplemented by a letter agreement dated March 5, 2014 between Singh and Johnson in which Singh outlined the payment terms. The February 1, 2014 agreement and the March 5, 2014 letter together form the basis of the contractual relationship between Johnson and Eagle Dove, on one hand, and Singh, Erogo, Infinity, and Money Plus, on the other hand (the “Contract”).
[6] The March 5, 2014 letter from Singh to Johnson specified the terms of employment as follows:
(a) Position: Vice President, Operations & Comp.
(b) Remuneration: $10,000 per month
(c) Start Date: February 1, 2014
(d) Commission on mortgages: (a) Base Commission: 100%
(b) Volume Bonus: 100%
(e) Commission on mortgage syndications: 10%
(f) Profit from Erogo: 5% (paid annually)
(g) Commission from sale of Money Plus
franchises: $8,000
(h) Equity in Erogo To be determined in 3 months’ time
(i) Office in Mississauga (until end of
May 2014): $682.50/month until lease expires
(j) Additional income from Infinity: ½ of 1% of funds raised by Infinity
[7] Johnson commenced working for Singh and his various companies on February 1, 2014. He submitted a number of his invoices for the work he performed, but was paid only $3,000 on account of those invoices. On May 9, 2014, Johnson and Singh agreed in writing that Johnson would be paid his outstanding compensation by means of a series of post-dated cheques commencing on May 16, 2014 and going until July 11, 2014. In return, Johnson continued to do work for Singh and his companies. This agreement was documented by letter issued by Singh on the letterhead of Infinity.
[8] The promised post-dated cheques were never provided to Johnson and/or EagleDove.
[9] Singh, Erogo, Infinity, and Money Plus have breached the Contract and owe Johnson and EagleDove payment under the invoices submitted by Johnson to Singh, as follows:
Invoice EJ14-05 dated May 8, 2014…………………………………$27,000.00
Salary and office expenses (May-Sept 2014, $10,000 + $682.50)…..$53,412.50
Total………………………………………………………………….$80,412.50
[10] It is Johnson’s view that this type of breach forms a pattern of conduct by Singh and Valenté. He has introduced evidence that they are operating under a number of other new corporate entities, all located at their office address, that may have taken the place of the Defendant corporations as the latest participants in Singh’s “shell game”. The IT and web designer for Singh and his companies, Abu Mamun, testified at this trial and corroborated that his experience as a Singh company employee was similar in that Singh consistently hid behind his varous corporate entitles.
[11] The new companies referenced by Johnson here – The Wealth Management Institute, mortgage Investment Corporation, and Greenview Capital – have not been named as Defendants in the Amended Statement of Claim, and so there is no formal claim against them. If it turns out that they have received assets from the Defendants during the pendency of the present claim, Johnson may be in a position to bring a further action against them at a future time.
[12] Johnson has indicated that he has been unable to find comparable employment since the time of the Defendants’ breach of contract. He has not, however, pleaded any specific amount of compensation in this regard. As a short-lived arrangement that barely lasted 3 months, I do not think that the termination of the Contract leads to damages beyond those in the invoices and specifically payable amounts submitted by Johnson and detailed above.
[13] Likewise, Johnson has requested punitive damages given Singh’s repetitive pattern of wrongful behaviour toward employees. However, he did not specifically plead punitive damages, and although his prayer for relief in the Amended Statement of Claim contains the standard request for “any other relief this Honourable court deems just”, I am reluctant to award punitive damages on that basis. The Defendants have a right to more precise notice that they are facing an additional monetary claim before that kind of relief can be awarded.
[14] Johnson has advised me that although he represented himself at trial, he incurred legal fees along the way in the amount of roughly $10,000. He has asked for costs on a substantial indemnity basis in his Amended Statement of Claim, and has outlined for me a history of delay and deflection practiced by Singh since the beginning of this litigation. Johnson understandably feels aggrieved by the Defendants’ tactic of putting up procedural obstacles in a case where they raised no substantive defense.
[15] Under Rule 57.01(1)(e) of the Rules of Civil Procedure, I am directed to take into account “the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding”. In my view, substantial indemnity costs are in order here.
[16] The Defendants shall pay the Plaintiffs damages in the amount of $80,412.50. These damages shall accrue pre-judgment interest at the Courts of Justice Act rate from the date at which the liability commenced under the Contract.
[17] In addition, the Defendants shall pay the Plaintiffs costs in the amount of $10,000, inclusive of disbursements and HST.
[18] For greater certainty, the Defendants’ liability for damages and costs is on a joint and several basis. All of them, or any one or any combination of them, are liable for the entire $90,412.50. This amount shall accrue post-judgment interest from today at the Courts of Justice Act rate.
[19] The Plaintiffs may serve the Defendants with this judgment and with any other material that needs to be served in respect of this action or this judgment by email to Singh or by regular mail to Singh at his last known home or business address. Service by email or regular mail on Singh is deemed to be service to all of the Defendants.
Morgan J.
Released: May 29, 2017
CITATION: Johnson v. Singh, 2017 ONSC 3312
COURT FILE NO.: CV-14-510228
DATE: 20170529
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Errol Johnson, EagleDove Financial Inc.
Plaintiffs
– and –
David Singh, Erogo Mortgage Corporation, Infinity Real Capital Inc., Money Plus Group Inc.
Defendants
REASONS FOR JUDGMENT
EM Morgan J.
Released: May 29, 2017