COURT FILE NO.: CV-15-4731-00 DATE: 2017 11 27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SUKHUNDER SANDHU and 2207190 ONTARIO INC. – and – SIKH LEHAR INTERNATIONAL ORGANIZATION and MANJIT MANGAT and HARKHANWAL SINGH
BEFORE: LEMAY J
COUNSEL: Paul Pape, Shantona Chaudhury and Justin Nasseri, for the Plaintiffs Simon Schneiderman, for the Defendant Sikh Lehar International M. Goyal, for the Defendants Manjit Mangat and Harkhanwal Singh
ENDORSEMENT
[1] I released my reasons for judgment in this case on September 25th, 2017 (see 2017 ONSC 5680). The parties attempted to settle the terms of the judgment flowing from those reasons, but have been unsuccessful in doing so.
[2] The issues that the parties have not been able to resolve are as follows:
a) Whether determining the quantum of the judgment is premature, given that there are other proceedings ongoing before Ricchetti J. b) How should interest be calculated on the loan amounts? c) When should pre-judgment interest start to accrue on the amounts that were a deposit? d) Should the Order reflect that Tzimas J. remains the case management judge? e) Should the draft judgment reflect that the CPL be removed at the Plaintiffs’ expense?
[3] I will deal with each issue in turn.
[4] I should note, at the outset, that the individual Defendants, Mr. Manjit Mangat and Mr. Harkhanwal Singh, served a notice to act in person during the time period when these submissions were due. Neither of them sought any extension to the deadlines that I had ordered in our teleconference on October 18, 2017. Neither of them provided any submissions on these issues.
[5] In order to ensure that I had not missed any submissions, I had my judicial assistant write to the parties on Friday November 17th, 2017, outlining what submissions had been received from the parties, and indicating that no submissions had been received from either Mr. Mangat or Mr. Singh. A further deadline of Monday, November 20th, 2017 to provide any missing submissions was provided. Nothing further, other than a copy of Sikh Lehar’s responding submissions, was received.
Determining the Quantum of the Judgment
[6] In my reasons, I found that the $1,735,000.00 loan was made to the Defendants Manjit Mangat and Harkhanwal Singh for the benefit of Sikh Lehar. I further found that all the defendants were jointly and severally liable for the repayment of these monies.
[7] This loan was ultimately paid into the trust account of Mr. Laframboise. While Mr. Laframboise was, for a time, counsel for the Plaintiffs in this case, he was also counsel for three of Sikh Lehar’s departing trustees, Messrs. Saini, Atwal and Matthu.
[8] The monies that were paid into Mr. Laframboise’s trust account were to be used to cover all claims that the three departing trustees may have against Sikh Lehar. Those claims are to be resolved by Ricchetti J. in a proceeding that commences on December 4th, 2017.
[9] I understand that Mr. Singh and Mr. Mangat, the personal defendants, are not parties to the proceeding before Ricchetti J. Similarly, the Plaintiffs in this case are also not parties in the proceeding before Ricchetti J.
[10] However, I also understand that it is possible that, as a result of the proceeding before Ricchetti J., Sikh Lehar (or some other person or group) may be entitled to a refund of a portion of the monies in Mr. Laframboise’s trust account.
[11] As a result, Sikh Lehar argues that a determination of the amounts it owes to the Plaintiffs should be deferred until the proceeding before Ricchetti J. is completed. The Plaintiffs oppose this position on the basis that it would result in delaying the judgment indefinitely, and that the issues before Ricchetti J. are not related to the issues that I was required to determine.
[12] I accept the Plaintiffs arguments on both points. First, we do not know when Ricchetti J. will be able to make a decision in the matter before him. It is clear that the hearing before Ricchetti J. has become more complicated than originally anticipated, both because of my judgment and because of the fact that Sikh Lehar is in receivership. It is not reasonable to require the Plaintiffs to wait indefinitely to satisfy their judgment.
[13] Further, the issues before Ricchetti J. are not the same as the ones I had to determine. I was required to make findings of fact about the transaction between the Plaintiffs and the Defendants, and I have done that. The transaction before Ricchetti J. relates to issues between the Defendants and third parties, and does not have any bearing on my judgment.
[14] However, I am also alive to the concerns implicit in Sikh Lehar’s submissions that, if monies are released back to Sikh Lehar (or other parties) from Mr. Laframboise’s trust account, those monies should be used to satisfy a portion of the judgment in this case. That is not, however, a decision for me to make. It is a decision for Ricchetti J. to make and, if enforcement proceedings are taken in the interim, it would appear to me that those proceedings would be managed by Tzimas J. as the case management judge.
[15] As a result, the judgment is to issue. I leave the form of it to the parties.
Interest on the Loan
[16] The Defendants argue that only simple interest should be paid on the loan monies. The Plaintiffs seek to have compound interest paid on these amounts. Both parties have directed my attention to the Supreme Court’s decision in Bank of America Canada v. Mutual Trust Company (2002 SCC 43, [2002] 2 S.C.R. 601).
[17] That decision explains the circumstances in which compound interest will be ordered. In particular, Major J. observes (at paragraph 55):
An award of compound pre- and post-judgment interest will generally be limited to breach of contract cases where there is evidence that the parties agreed, knew, or should have known, that the money which is the subject of the dispute would bear compound interest as damages. It may be awarded as consequential damages in other cases but there would be the usual requirement of proving that damage component.
[18] In the case before me, there was no evidence that the parties had discussed compound interest or, indeed, had discussed the agreement lasting more than a year at all. This is not surprising as I am of the view that, when the money was originally provided to the personal Defendants, the expectation was that the sale of the property would close shortly thereafter.
[19] However, there is no evidence before me of any intent to have compound interest, and there is no evidence of any proof that the Plaintiff suffered losses that would justify an award of compound interest.
[20] Ultimately, the parties had in part, a loan agreement. It would have been a simple matter to specify that the interest on the loan would have been compound interest. They did not do so, and there is no contractual basis for awarding compound interest.
[21] Further, I am not persuaded to exercise my discretion under section 130 of the Courts of Justice Act to order compound interest, as there are no independent bases for awarding compound interest. In particular, I reject the Plaintiffs’ assertion that paragraphs 143 and 144 of my original decision somehow decided that compound interest was appropriate. I simply said that the interest ran from when the loan was made, and that I would retain jurisdiction to address any calculation issues that might arise between the parties. I did not address the issue of what type of interest was owing.
Pre-Judgment Interest on the Deposit
[22] In submissions, it has become clear that the parties all accept the positon set out by Sikh Lehar in its submissions, and the final judgment will reflect that. I leave this issue to the parties.
Tzimas J. as Case Management Judge
[23] Sikh Lehar takes the position that it is not necessary to reference that Tzimas J. continues to be the case management judge because the issues in this case are mostly complete. I disagree with this submission for two reasons. First, there are issues relating to the cross-claim between the Defendants that remain outstanding. Second, there are issues relating to the lease between the Convention Centre and Sikh Lehar that remain to be litigated. Both of these issues may necessitate the involvement of a case management judge.
[24] In any event, the appointment of a case management judge is within the discretion of the R.S.J for the Region. I have no authority to terminate Tzimas J.’s appointment as case management judge. The paragraph sought by the Plaintiffs to note that her role as case management judge will continue. However, I note it is included in the Order for clarity only, as Tzimas J.’s authority as case management judge flows from the orders of Daley R.S.J.
The Removal of the CPL
[25] In my decision, I found that the CPL should be removed from the property. Sikh Lehar, which is now in receivership, argues that the judgment should reflect that the removal of the CPL is to take place, and that it is to be at the Plaintiffs’ expense.
[26] The Plaintiffs argue that Sikh Lehar’s receiver will be free to deal with the lands free of the CPL, and that Sikh Lehar has no ability to remove the CPL. The Plaintiffs also argue that the judgment should be sufficient to remove the CPL.
[27] On this issue, I agree with Sikh Lehar. This has already been a complex transaction, and it has undoubtedly been made more complex by the fact that Sikh Lehar is in receivership. In addition, the formal document that encapsulates my decision is the judgment, and it should address the CPL. As a result, in order to ensure that there is no confusion, a paragraph is to be included in the judgment requiring the CPL to be lifted at the Plaintiff’s expense.
Disposition
[28] My reasons as set out above should be sufficient for the parties to be able to agree on the form of the judgment. If there are any issues that remain outstanding, the parties are free to contact my judicial assistant.
LEMAY J
Released: November 27, 2017