Court File and Parties

COURT FILE NO.: 01-1123/07 DATE: 20170622 SUPERIOR COURT OF JUSTICE - ONTARIO

B E T W E E N:

DIANE BOODHOO and DIANE BOODHOO as estate trustee of the ESTATE OF ALICIA BOODHOO Plaintiffs

– and –

THAKUR (JOHN) PERSUAD and SURUJDAI (SHANTI) PERSAUD, Defendants

BEFORE: F.L. Myers, J.

COUNSEL: Robert P. Sullivan and Wade Morris, counsel for the Plaintiff Mark M. Persaud, counsel for the Defendants and S. Saeed, student-at-law

HEARD: June 21, 2017

Endorsement

[1] The plaintiff moves for:

(a) an order excluding all of the parties from each other’s examinations for discovery; (b) an order requiring the defendant to turn over to the plaintiff, on behalf of the estate of Alicia Boodhoo, an insurance policy that the defendants wrongly removed from the estate; (c) an order excluding the defendants’ daughter from the examinations for discovery; (d) an order striking certain allegations from the defendants’ affidavit material and factum; and (e) costs (including the possibility of seeking costs against counsel personally under Rule 57.07).

[2] Subject to costs being resolved at a later date, the plaintiff is entitled to all of the relief that she seeks on the terms set out below.

Facts

[3] Alicia Boodhoo passed away on December 25, 2006. She left two surviving daughters being the plaintiff, Diane Boodhoo, and her sister Jaiwaitte Boodhoo. The plaintiff’s sister is not a party to this proceeding.

[4] The defendant Thakur Persaud is the brother of the deceased and the uncle of the plaintiff.

[5] On May 14, 2007, Thakur Persaud went to court and had himself recognized as the Estate Trustee in accordance with the deceased’s will.

[6] Neither of the defendants is a beneficiary under the will. They have no right to any of the property of the deceased’s estate except, possibly, as creditors in respect of a small, pre-existing debt or, in Thakur Persaud’s case, for Estate Trustee’s fees, if any.

[7] In 2012, Diane Boodhoo had reason to be concerned that one or both of the defendants had improperly used estate funds for themselves. She moved to replace her uncle as Estate Trustee. Thakur Persaud consented to the order sought. Stinson J. made the consent order sought. He also ordered, on consent, that Thakur Persaud account for his administration of the estate by September 7, 2012.

[8] Thakur Persaud did not provide the required accounting.

[9] By order dated October 5, 2012, Stevenson J. again required Thakur Persaud to account. She required him to deliver all documents and records pertaining to the estate within 30 days. Thakur Persaud failed to do so once again.

[10] The defendants have not provided a formal accounting in the ensuing three-plus years. During that time however, they have run through a number of lawyers. Until the recent retainer of Mr. Mark Persaud as their new lawyer last month, the defendants had generally failed to fulfill the outstanding court orders and the documentary and oral discovery provisions of the Rules of Civil Procedure.

[11] With the assistance of their new counsel, the defendants have made much more disclosure recently. They continue to promise to deliver a report from a forensic accountant concerning the status of the estate’s assets under Thakur Persaud’s stewardship. For now, they advise only that their bookkeeper has reported to their forensic accountant that approximately $70,000 remains unaccounted for in their calculations. That is a very damning admission.

[12] In 2015, proceedings were held outside Toronto concerning the proposed sale of a property by the defendants’ daughter Tisha Persaud. She is a paralegal who is employed by the defendants’ counsel Mr. Mark Persaud. Diane Boodhoo claimed that estate funds were improperly invested in the property by the defendants. The defendants moved title to the property to their daughter. The evidence conflicts among the three of them as to who holds legal and equitable title for whom. Thakur Persaud allegedly transferred his interest in the property to his daughter several days after he filed a proposal in bankruptcy. The transfer was said to be from trustee to beneficiary. As a trustee, Thakur Persaud did not disclose that he held any interest in the property in his bankruptcy proceeding. Yet Tisha Persaud swore in the proceeding that she holds title to the property in trust for both of her parents. That would mean that Thakur Persaud’s transfer documents were not correct and that he had a beneficial interest in the property that he did not disclose in his bankruptcy proceeding.

[13] The defendant Shanti Persaud is the spouse of Thakur Persaud. She is an insurance broker. Although she was not an estate trustee of the estate of Alicia Boodhoo, she seems to have been quite involved in some of the estate’s activities. She was involved in the sale of an estate property with the plaintiff. She used her insurance agency to help Thakur Persaud move an insurance policy owned by the estate into his name. In the fifteen or so court appearances between the parties over the past few years, it has been Shanti Persaud who generally attends with her daughter rather than her spouse.

Striking Evidence concerning the Defendants’ Challenge to the Plaintiff’s Character

[14] While the defendants’ counsel concedes that his clients’ conduct raises concerns in this action, the defendants also allege that the plaintiff has committed serious wrongdoing. The defendants allege that the plaintiff forged her mother’s will. They have an expert’s report to that end. Yet it was Thakur Persaud who propounded the validity of the will in court and acted as Estate Trustee under the will for a decade. If the will turns out to be invalid, the plaintiff’s share of her mother’s estate will decrease from 70% under the will to 50% on an intestacy. This issue raises serious questions for trial concerning the plaintiff’s conduct.

[15] The defendants say that one way or the other Thakur Persaud will always have to account fully for his acts and he will be held fully accountable for any misconduct. They say that they have more reasons to be concerned about dealing with the plaintiff’s fraudulent conduct than she has reason to be concerned about them.

[16] In paras. 10 and 11 and Exhibit “E” to Thakur Persaud’s affidavit sworn June 19, 2017, he makes reference to two events that occurred when the plaintiff was a child. The defendants’ counsel argues that the evidence is probative of the plaintiff’s propensity to commit fraud now. Even if such propensity evidence was admissible, which it is not, I would not find either event to be the least bit probative of a claim that Ms. Boodhoo forged her mother’s will as an adult. The prejudice of the evidence far outweighs any possible probative value that it may have. The evidence is scandalous. The fact that it was delivered at all in light of its content is very troubling. Paragraphs 10 and 11 and Exhibit “E” of the affidavit of Thakur Persaud sworn June 19, 2017 are therefore struck out. So too is every reference to that evidence in the defendants’ factum.

[17] The defendants sent their material to my office directly in light of the timing of the motion. I have removed the objectionable references from the drafts that I have. The defendants will file with the registrar new materials that omit completely the struck material. The offending portions are not just to be crossed out in the filed versions. There must be no reference at all to facts and issues in the text and body of paras. 10, 11, and Exhibit “E.”

Excluding the Parties from Oral Discovery

[18] I am readily satisfied that there is compelling evidence that the factors adopted by the Divisional Court Lazar v. TD General Insurance Company, 2017 ONSC 1242 are made out in this very unusual case. All of the parties have cause to be worried that the others will tailor their evidence based upon what they hear at examinations for discovery.

[19] The defendants have common interests. They have the same lawyer. Their daughter, who is implicated in the wrongdoing, is involved in managing the litigation. The examinations of all of the parties will cover the same grounds. The defendants’ counsel argues that the examination of Thakur Persaud will relate to his entire stewardship of the estate while the examination of Shanti Persaud will relate only to bits and pieces that she can fill-in. I do not agree. She is alleged to have been involved, if not the leader, in several key areas where funds and assets are alleged to have moved such as those listed in para. 22 (iii) of the plaintiff’s factum. There will likely be a full exploration of all relevant events in all of the examinations for discovery.

[20] Credibility both as between the defendants and as among the plaintiff and the defendants looms especially large in this case. Absent detailed records, much of the case against the defendants will turn on oral versions of events. While the defendants’ counsel puts great faith in the obligation of Thakur Persaud to account, he glosses over the incentives on the defendants to try to avoid doing so as they have done for the past several years. They appear to be willing to move title to assets, mislead creditors, ignore court ordered production obligations and schedules, change lawyers repeatedly, and drag their daughter into their affairs where it is in their interests to do so. I make no final findings of course. Neither do I make any finding on the allegation that the plaintiff forged her mother’s will. That allegation, supported by an expert, also has the potential to have significant impact on the assessment of the plaintiff’s credibility. All of that will be determined at trial. In the interim, there is good reason to exclude all of the parties from each other’s examinations.

[21] Counsel for the parties and anyone who attends discoveries with them shall not disclose any evidence given by a party on examination for discovery to any other party in advance of the completion of all of their respective examinations by answering all undertakings and refusals (if any). Nor shall any counsel or their staff provide any transcripts or summaries of transcripts of any of the examinations for discovery to any of the parties prior to the completion of all of their respective examinations by answering all undertakings and refusals (if any).

Excluding Tisha Persaud from her Parents’ Discovery

[22] Mr. Mark Persaud takes umbrage at the suggestion that he might bring his paralegal, the defendants’ daughter Tisha Persaud, to the examinations for discovery. I am unclear on why this is so given that she works as staff in his office and he has sent her to court in his stead in this case previously. In any event, Mr. Mark Persaud volunteers that he will not bring Tisha Persaud to her parents’ examinations for discovery. This is ordered on consent therefore. In addition, Mr. Mark Persaud shall not tell Tisha Persaud any evidence given on any of the examinations for discovery in this action nor allow her to have any access to any transcripts of any of the examinations for discovery in this action until the completion of all of the respective examinations by answering all undertakings and refusals (if any).

Return of the Insurance Policy

[23] The parties dispute the facts as to what happened. Both sides acknowledge that prior to her death, Alicia Boodhoo held an insurance policy on her father’s life. The beneficiary under the policy was Diane Boodhoo. The plaintiff says that Thakur Persaud illegally took the deceased’s insurance policy and changed the ownership from the estate to himself and changed the beneficiary from Diane Boodhoo to himself. Thakur Persaud says that Diane Boohoo told him that she could not afford the policy and that he should take it. He says that there was no money in the estate and he had to pay personally the $414.18 monthly premium to keep the policy on foot. He says that he has paid approximately $50,000 for premiums. But a need for cash does not explain why there was a need to change either the ownership or the designated beneficiary under the policy. There are currently ample funds being held in court as a result of the impugned sale of the property by Tisha Persaud. Moreover, the defendants have yet to account for the further $70,000. The parties should be able to agree upon a mechanism to access any funding for premiums as required.

[24] In the end, Thakur Persaud is willing to put the policy back as before but he asks for repayment of the premiums that he has funded of approximately $50,000. Had the estate kept the policy throughout, it would have had to make the premium payments that Thakur Persaud made. It appears therefore that he may well have a valid claim for reimbursement of any premiums that he actually paid. However, the record of who paid what is not fully known as Thakur Persaud has not delivered the accounting as required. Moreover, even if it is later determined that the estate owes Thakur Persaud a refund of premiums paid, it appears likely that the estate will have offsetting claims for funds improperly taken or used by or for one or both of the defendants.

[25] In trying to assess whether a payment or security should be provided in return for the insurance policy, I do not ascribe any value to Thakur Persaud’s claim for trustee’s fees at this time. Whether he will be entitled to fees in light of the acknowledged concerns regarding his conduct remains to be seen.

[26] I am satisfied that the estate is properly the owner of the policy. Thakur Persaud will therefore deliver up the policy and all documents in his possession, power, and control concerning the policy to counsel for the plaintiff forthwith. Thakur Persaud shall also execute such documents as are reasonably required by counsel for the plaintiff in order to transfer ownership of the policy back to the estate. Diane Boodhoo agrees to designate the estate as the beneficiary under the policy. By doing so, she ensures that the proceeds of the policy can be reached by the court and therefore by Thakur Persaud should he be entitled to any net payment from the estate at the end of the day. Diane Boodhoo, as estate trustee, shall pay all premiums as they come due. Diane Boodhoo shall also provide a copy to the defendants, through their counsel, of proof of payment each month and copies of any and all communications that she receives from the insurance company concerning the policy up to trial. If the defendants become concerned with the absence of communication or with anything contained in the communication, they may bring an appropriate motion.

Costs

[27] The plaintiff may submit a costs outline and up to five pages of submissions on costs by June 30, 2017. If the plaintiff seeks costs against the defendants’ counsel personally, then she shall deliver a particularized notice of motion as well by that time. In the event that the plaintiff seeks costs against the defendants only, then the defendants shall respond with both a costs outline and up to five pages of submissions by July 7, 2017. All documents shall be submitted as searchable PDF attachments to an email to my Assistant.

[28] If the plaintiff brings a motion under Rule 57.07 of the Rules of Civil Procedure, then the defendants’ counsel will need time to engage LawPro and counsel for the parties and for counsel will need to agree upon a schedule. Therefore, the July 7, 2017 deadline will not apply in that case. Instead, if relief is sought under Rule 57.07, counsel are to arrange a case conference by telephone with me during the week of July 17, 2017 to set a schedule if one has not been already agreed upon by then. The hearing under Rule 57.07 is to be booked by the parties for a date between August 21 and September 1, 2017 when I am sitting.

F.L. Myers, J. Date: June 22, 2017