CITATION: Sanaee v. Grad, 2017 ONSC 5991
NEWMARKET COURT FILE NO.: CV-16-125199-00
DATE: 20171006
CORRECTED DATE: 20171026
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Baha-Al Deen Sanaee, also known as Dean Sanaee, Plaintiff
AND:
Herman Grad, Jeff Handelsman, Patrick Regina, Markham Suites Hotel Limited, Mark Charlebois, Matthew Robinson-Vincent, York Regional Police Services Board and Eric Jolliffe in his capacity as Chief of Police for the York Regional Police Services, Defendants
BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN
COUNSEL: H.S. Dorsey, Counsel for the Plaintiff
R. Macklin and M.F. Cooper, Counsel for the Defendants
HEARD: August 11, 2017
Corrected Endorsement: The text of the original Endorsement was
corrected on October 26, 2017 and the description of the correction is appended.
ENDORSEMENT
[1] This is a summary judgment motion brought by some of the defendants in this action seeking that this claim be dismissed against them. Those defendants are Herman Grad, Jeff Handelsman, Patrick Regina and Markham Suites Hotel Limited, (the Grad defendants).
The Grad Defendants
[2] The remaining defendants, who took no position with respect to this motion, are Mark Charlebois, Matthew Robinson-Vincent, York Regional Police Services Board and Eric Jolliffe in his capacity as Chief of Police for the York Regional Police Services (the Police defendants).
[3] Both parties filed affidavits in support. The Grad defendants filed affidavits from Herman Grad, principal of the defendant Markham Suites Hotel Limited (Markham Suites), Jeff Handelsman, Chief Financial Officer of Markham Suites, and Patrick Regina, General Manager of Markham Suites. The responding party filed an affidavit by the plaintiff, Dean Sanaee.
Background Facts
[4] Before considering in detail the requested relief sought by the Grad defendants in this summary judgment motion, a review of the background facts will provide context for the discussion that follows. In this action, Dean Sanaee claims damages against the Grad defendants for malicious prosecution, abuse of process, false imprisonment, and related relief. Although not an issue for decision with respect to this summary judgment motion brought by the Grad defendants, the plaintiff also make various claims against the Police defendants for a negligent investigation, false arrest and imprisonment, and related relief.
[5] The plaintiff’s claims against the various defendants stem from certain information provided to York Regional Police Services by the Grad defendants, leading to charges filed against the plaintiff, Deen Sanaee and his subsequent arrest. In due course, those charges were withdrawn in court by the Crown Attorney. This litigation followed.
[6] The following background facts, not in dispute, will assist with the discussion that follows.
[7] In 2012, Markham Suites Hotel Limited entered into a contract with Deen Sanaee, or his company, to conduct substantial renovations at its 400-room hotel in Markham, Ontario. There is a serious dispute about the work done and amounts owing as a result of that contract. The Grad defendants’ complaint to the police centres around whether or not drapes were ordered by Mr. Sanaee for which he received certain deposits. The Grad defendants’ concern about that aspect of the order led them to report the matter to the police who subsequently laid criminal charges. But before that complaint was laid, Markham Suites Hotel Limited, Mr. Grad’s company, had already commenced an action against Deen Sanaee for breach of contract, seeking damages of $700,000 and other relief. Deen Sanaee filed a defence to that claim and brought a counterclaim against Markham Suites for breach of contract for funds owing pursuant to the contract, loss of profit and other heads of damage. That litigation is a separate claim which has not been joined with this action.
[8] The following timelines will assist.
2012
Contract entered into between Deen Sanaee and Markham Suites Hotel Limited.
January 15, 2014
E-mail from Jeff Handelsman, CEO of Markham Suites about the drapery order stating “…If you do not respond to me with respect to the status of drapes, we will initiate both civil and criminal actions (i.e. fraud and theft) against Deen’s standards and yourself. …Failure to respond by the end of the day will initiate legal proceedings first thing tomorrow morning.”
February 13, 2014
Markham Suites commences its action against Deen Sanaee for breach of contract.
March 26, 2014
Deen Sanaee files a Statement of Defence and Counterclaim against Markham Suites.
April 15, 2014
Herman Grad contacts York Regional Police and reports a complaint against Deen Sanaee.
May 5, 2014
York Regional Police Det. Charlebois interviews Markham Suites’ CEO, Jeff Handelsman.
May 6, 2014
York Regional Police Det. Charlebois interviews Patrick Regina, General Manager of Markham Suites.
May 14, 2014
Herman Grad is interviewed by York Regional Police Det. Charlebois.
May 17, 2014
York Regional Police Services arrested Deen Sanaee, charging him with three counts under the Criminal Code:
Count 1 – Theft over $5,000;
Count 2 – Possession over $5,000; and
Count 3 – Fraud over $5,000.
September 2, 2014
The three charges were withdrawn in court at the request of the Crown, who stated that there was no reasonable prospect of conviction. The Crown also noted, “The fact there is an ongoing civil proceeding which really mirrors the allegations before the court, and at least one troubling e-mail in the file which threatened a criminal action for non-payment.”
August 24, 2016
Deen Sanaee filed an Amended Statement of Claim in this action further to his original Statement of Claim against the Grad defendants and the Police defendants.
The Drapery Order
[9] The basis of the Grad defendants’ report to the police was the drapery order dispute, one aspect of the overall contract between the parties. There is a great deal of affidavit evidence filed by all of the deponents about this. As Mr. Grad summarizes in his affidavit at para. 15:
Given all of the above cited information [about the drapery order and progress] and Mr. Sanaee’s continued failure to provide a refund, I genuinely believe that Mr. Sanaee had taken money for the drapes, not ordered them, used the money for something else and tried to deceive me regarding these steps. I thus believe Mr. Sanaee had defrauded me and I contacted York Regional Police on or about April 15, 2014 to file a complaint about the actions of Mr. Sanaee.
[10] In his responding affidavit, Deen Sanaee deposes at para. 15-16:
For reasons set out infra, I verily believe that the timing of Grad’s complaint to the [police] was malicious and made for the purpose of trying to intimidate me to enter into a favourable settlement on behalf of DSI and personally, to the detriment of DSI and myself, and for the benefit of the Markham Suites Hotel, in the Markham Suites action. For reasons set out infra, I verily believe that Grad, on behalf of the Markham Suites Hotel in laying the complaint, was utilizing the criminal justice system, as a type of civil collection agency for the benefit of the Markham Suites Hotel.
[11] Both parties hired experts to provide reports with respect to certain aspects of this dispute. Those reports were filed as exhibits.
Police Investigation Report
[12] The plaintiff, Deen Sanaee, retained Gary Keys, a senior investigator and former police officer to review the investigation conducted by York Regional Police Services. His investigation concludes:
The investigator believes that although the investigation was not thorough and complete, this was due in part by the failure of Herman Grad, Jeff Handelsman, and Patrick Regina to be forthcoming with all pertinent information. The statements provided by Grad, Handelsman and Regina failed to disclose pertinent information that they were aware of. In particular, not mentioning the ongoing civil action and Handelsman failing to advise Charlebois that Sanaee had provided what Handelsman had asked for as verification of the purchase, that being wire transfers. Handelsman failed to advise the detective that he did not ask Sanaee for any further documentation to corroborate the wire transfers.
The Wire Transfers
[13] In support of his position, the plaintiff retained Zysman Forensic Accounting Inc. to provide a report about the overall contract between the parties. That Report, dated February 6, 2017, was an exhibit attached to the affidavit of Jeff Handelsman, CEO. The primary purpose of the Report appears to be to assist Markham Suites in the separate action brought by them against Deen Sanaee to assist a court in determining what, if anything, is owing between the parties with respect to the overall contract. However, with respect to the drapery aspect of the order, the Report states at para. 11:
There is a wire transfer dated October 10, 2013, to Cyber International in the amount of $42,213.32. The report also notes that “Handelsman, on behalf of Markham Suites, requested copies of the wire transfers regarding drapery to verify that the payments had been made.
[14] By way of a Supplementary Report dated May 16, 2017, attached as a further exhibit to the Updated Affidavit of Jeff Handelsman, the Report provides at p.3:
Included as Exhibit “C” of the Sanaee Affidavit is a Wire Transfer Authorization dated October 2, 2013, in the amount of $14,768.24 USD… In addition, this Wire Transfer Authorization was not issued and it was replaced by one issued November 8, 2013, in the amount of $9,343.45 USD. Included as Exhibit “D” of the Sanaee Affidavit is a Wire Transfer Authorization dated October 10, 2013, in the amount of $42,213.32 USD. This Wire Transfer Authorization was also included in Appendix 9 of our Report at p.41. Based upon our review of the US Dollar Deposit Account History Reports for the period detailed above, it appears that this wire transfer authorization was not completed and never issued.
[15] With respect to the wire transfers, the Grad defendants succinctly set out their position in the moving parties’ factum, para. 23, p.14 as follows:
(6) As confirmed in answers to undertakings following the cross-examination of Sanaee on this motion, the wire transfer confirmations provided as Exhibit C and D to the Sanaee affidavit are fake. The wire transfer confirmation form was generated and sent to Markham Suites in October 2013, but the underlying funds were not transferred by wire or otherwise. In other words, Markham Suites worse suspicions have now been confirmed.
[16] It appears that the flaws with respect to the wire transfers only became evidence after-the-fact as a result of undertakings provided and further examination by the forensic accountants. These facts do not appear to be incorporated in the report of Gary Keys, who conducted an independent investigation of the police activity. His report notes at p.54:
Sanaee provided Jeff Handelsman with copies of wire transfers payable to Cyber for the purchase of the drapes. Sanaee states that Markham Suites defendants knew for five months prior to the complaint by Grad that Dong was not the purchasing agent and that a wire transfer to Cyber was evidence of payment.
At the time of his report, he was not aware of the misleading wire transfers.
[17] It is also clear that the investigating officer, Det. Charlebois, was not aware of the fact that the wire transfer documents as produced were not acted upon. Money was not sent. Clearly, the Crown Attorney did not have this information either, when the charges were withdrawn.
Analysis
Summary Judgment Motion
[18] There is no doubt that the court now enjoys expanded powers to deal with matters by way of summary judgment motion. Rule 20.04(2) provides:
The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
(2.2) A judge may, for the purpose of exercising any of the powers set out in sub-rule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
[19] The Supreme Court of Canada had an opportunity to provide guidance with respect to the summary judgment rules in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, 2014 SCC7, as Karakatsanis J. stated at para. 68:
While summary judgment must be granted if there is no genuine issue requiring a trial, the decision to use either the expanded fact-finding powers or to call oral evidence is discretionary. The discretionary nature of this power gives the judge some flexibility in deciding the appropriate course of action. This discretion can act as a safety valve in cases where the use of such powers would clearly be inappropriate. There is always the risk that clearly unmeritorious motions for summary judgment could be abused and used tactically to add time and expense. In such cases, the motion judge may choose to decline to exercise her discretion to use those powers and dismiss the motion for summary judgment, without engaging in the full inquiry delineated above.
[20] In Hawkshaw v. Bachly Investments Inc., 2017 ONSC 1364, [2017] O.J. No. 1158, Glustein J. provided a helpful summary of the governing principles in Hyrniak at para. 49:
[49] In Mayers v. Khan, 2017 ONSC 200 (“Mayers”), I summarized the applicable principles governing summary judgment arising out of Hryniak v. Mauldin, 2014 SCC 7 (“Hryniak”) and the applicable case law. I held Mayers, at paras. 18-21:
Both parties rely on Hryniak, I summarize the Hryniak principles below:
i) Summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. It is no longer merely a means to weed out unmeritorious claims but rather a “legitimate alternative means for adjudicating and resolving legal disputes” (Hryniak, at paras. 5 and 36);
ii) An issue should be resolved on a motion for summary judgment if the motion affords a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial (Hryniak, at paras. 4 and 49);
iii) On a motion for summary judgment, the judge must first determine if there is a genuine issue requiring a trial based only on the evidence before the judge and without using the judge’s fact-finding powers. If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the powers under Rule 20.04(2.1) and (2.2) (Hryniak, at para. 66) and
iv) The standard for determining whether summary judgment will provide a fair and just adjudication is not whether the procedure is as exhaustive as a trial, but rather “whether it gives the judge confidence that [the judge] can find the necessary facts and apply the relevant legal principles so as to resolve the dispute” (Hryniak, at para. 50). A judge must be confident that he or she can fairly resolve the dispute (Hryniak, at para. 57).
[21] In Baywood Homes Partnership v. Haditaghi, (2014) 2014 ONCA 450, 120 O.R. (3d) 438, Lauwers J.A. speaking for the court, cautioned as to the use of affidavit evidence on a summary judgment motion where credibility is an issue. As he stated in paragraph 44,
What happened here illustrates one of the problems that can arise with a staged summary judgment process in an action where credibility is important. Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all.
[22] On this summary judgment motion, the Grad defendants seek to have the claims against them dismissed. If successful, the result would be that the claims against the Police defendants would continue based on the originating complainant of Mr. Grad. As Hryniak cautioned at paragraph 60:
The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance [page 110] access to justice, and be the most proportionate, timely and cost effective approach.
Position of the Moving Parties
[23] The moving parties submit that this is an appropriate case for a summary judgment motion dismissing the claims against them relying on Hryniak for the proposition that there are no genuine issues requiring a trial.
[24] With respect to the claim of malicious prosecution, the Supreme Court of Canada has stated in Nelles v. Ontario, 1989 77 (SCC), 1989 2 S.C.R. 170 at para. 42:
A plaintiff bringing a claim for a malicious prosecution has no easy task. Not only does the plaintiff have the notoriously difficult task of establishing a negative, that is, the absence of reasonable and probable cause, but he is held to a very high standard of proof to avoid a non-suit or a directed verdict.
[25] In Ebagua v. National Rent A Car, 2015 ONSC 979, 2015 O.N.S.C. 979, Justice Myers provided this guidance at paragraph 35:
The plaintiff cannot surmount the first element [element of malicious prosecution]. The prosecution was initiated by the police. The Crown carries the case. Simply providing information to the police for them to investigate is not an act that exposes people to liability where the police lay a charge that does not result in a conviction. Exposing people to liability for making reports to the police would be contrary to the important public policy encouraging reporting of criminality as recognized by the Court of Appeal.
[26] In Mirra v. Toronto Dominion Bank, 2004 CarswellOnt 1716, Justice Wilton-Siegel stated at paragraph 39-40:
The Police were in a position to request whatever computer-based information they required from the T-D Bank… The fact that the Police may have chosen to rely heavily on the results of Sheluk’s investigation, because they believed he had conducted a credible investigation, does not affect the legal result. This was a decision over which the T-D Defendants had no control. If the Police investigation is demonstrated to have been negligent, it may well result in liability of the Police for the plaintiffs’ damages. It should not, however, affect the potential liability of the T-D Defendants.
Conclusion
[27] In my view this is not a case where the Grad defendants ought to be granted summary judgment on the record before me. The following facts inform my decision.
(a) The motion, if successful, would leave the claims against some of the parties, the Police defendants, to proceed to trial. As Hryniak notes at para. 60, this could run the risk of duplicate proceedings or inconsistent findings of fact. The evidence of the Grad defendants, so far only set out in affidavit form, were the basis for the police actions in charging Mr. Sanaee.
(b) Although there is a high standard which ordinarily protects citizens who report matters to the police, there are significant factors at play here. Mr. Grad did not inform the investigating officer about the civil action he commenced on behalf of his company Markham Suites. Nor did he advise the officer that Mr. Sanaee filed a statement of defence and a counterclaim against Markham Suites. These events occurred just weeks before Mr. Grad contacted the police. He did provide the police with a copy of an email which had been sent to Mr. Sanaee earlier, threatening civil proceedings, but by the time he reported the matter to the police his threat of a civil action had crystalized into a claim. That claim was responded to by a statement of defence and a counterclaim by Mr. Sanaee.
(c) Mr. Grad’s motives must be examined on a full evidentiary record. The full machinery of a trial will enable the evidence of the parties to be tested by cross-examination.
(d) In the context of a full trial involving all parties, the Police defendants will also have a chance to cross-examine the Grad defendants concerning the claim against them. Therefore there is no benefit in having a mini-trial involving part of this action separate from the claims against the Police defendants.
(e) There is a pre-existing claim brought by Markham Suites against Sanaee, the plaintiff in this action. Although I do not need to make that determination in this action, it is logical to assume that these actions ought to be tried together.
(f) I do not want to lose sight of the wire transfers which were tendered to the Grad defendants during their prior negotiations as proof of some payments towards the draperies. As events unfolded during the course of this litigation, it became plain and obvious that those wire transfers were never acted upon. Simply put, the funds shown on the wire transfer were never sent to the recipients.
(g) This misleading information was unknown to Det. Charlebois at the time he received the complaint and was unknown at the time the Crown Attorney withdrew the criminal charges. It would be speculation to determine what, if any, effect that would have had on the police investigation or withdrawal of the charges by the Crown Attorney. It was after the fact information. However, it is information now known by all parties. The parties including the Police defendants are encouraged to have a mediation or settlement conference to canvass this issue and the effect it may have on the damages claim by Mr. Sanaee if he is successful on the liability issue in this action.
Costs
[28] The parties are encouraged to settle the issue of costs. If no settlement is arrived at, I will receive written submissions not exceeding five pages from the successful party Sanaee, together with a Bill of Costs within 20 days of the release of this endorsement. The moving parties, the Grad defendants, will then have 10 days to respond with submissions not exceeding five pages. Submissions to be sent in care of my Judicial Assistant in Barrie.
MULLIGAN J.
Date: October 26, 2017
October 26, 2017 – Corrections:
The first sentence in para. 13 now reads: In support of his position, the plaintiff retained Zysman Forensic Accounting Inc. to provide a report about the overall contract between the parties.
The second sentence in para. 27(a) now reads: As Hryniak notes at para. 60, this could run the risk of duplicate proceedings or inconsistent findings of fact.