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# Sikh Lehar International Organization v. Saini, 2017 ONSC 7317
**CITATION:** Sikh Lehar International Organization v. Saini, 2017 ONSC 7317
**COURT FILE NO.:** CV-15-1855-00
**DATE:** 2017-12-08
**ONTARIO SUPERIOR COURT OF JUSTICE**
**BETWEEN:**
SIKH LEHAR INTERNATIONAL ORGANIZATION
Plaintiff/Respondent
-and-
SUCHET SAINI, NARINDERJIT SINGH MATTU, SULAKHAN SINGH ATWAL, PARAMJIT SINGH SIDHU, ACRES REAL ESTATE INC.
Defendants/Applicants
**BEFORE:** Ricchetti, J.
**COUNSEL:**
S. Schneiderman for Sikh Lehar International Organization and the Receiver, J.P. Graci & Associates Ltd.
D. LaFramboise for Suchet Saini, Narinderjit Singh Mattu, Sulakhan Singh Atwal
Manjit Mangat, personally
Harkanwal Singh, personally
P. Pape for Sukhinder Sandhu and 2207190 Ontario Inc.,
**HEARD:** December 4, 2017
---
## ENDORSEMENT
### The Motion for Directions
[1] This matter has been ongoing for a number of years. There are legal proceedings involving similar parties. At stake are monies held in trust in this proceeding. Various claims have been made by third parties to these monies.
[2] A number of months ago, this court was advised that Sikh Lehar International Organization (“Sikh Lehar”) had been put into receivership pursuant to the order of Justice Harper dated September 1, 2017. J.P. Graci & Associates Ltd, was appointed over “all of the assets, undertakings and properties of the Debtor [Sikh Lehar], including all proceeds thereof”.
[3] As a result, this court ordered that a motion for directions be brought on notice to all persons who have an interest or potential interest in the trust monies.
[4] The motion for directions was heard on December 4, 2017.
### Background
[5] Nine persons decided to establish a Gurdwara at 79 Bramsteeles Road in the City of Brampton (the “Property”). Sikh Lehar was established as a religious, private charitable organization with the nine persons, as Trustees, to buy the Property, manage and operate the Gurdwara.
[6] At the commencement of this proceeding, there were five remaining Trustees of Sikh Lehar. The five Trustees were: Suchet Singh Saini (Saini); Narinderjit Singh Mattu (Mattu); Sulakhan Singh Atwal (Atwal); Manjit Singh Mangat (Mangat); and Harkanwal Singh (Singh).
[7] Saini, Mattu and Atwal are hereafter referred to as the Three Trustees.
[8] Mangat and Singh are hereafter referred to as the Two Trustees.
[9] By 2014, Sikh Lehar was not doing well financially. The Three Trustees claimed they had loaned substantial monies to Sikh Lehar.
[10] Disputes arose between the Trustees in late 2014 on how to deal with Sikh Lehar’s financial issues. The Three Trustees wanted to sell the Property to recover their indebtedness. The Two Trustees did not agree to the sale of the Property by the Three Trustees.
[11] The Three Trustees passed a resolution, using their majority, to sell the Property. In March 2015, an offer for the Property was received by the Three Trustee. On March 27, 2015, Saini, Mattu and Atwal, the Three Trustees, accepted the offer to sell the Property.
[12] Mangat and Singh, sought to prevent the sale of Property. To do so, Mangat brought this Application, in the name of Sikh Lehar, to prevent the sale of the Property.
[13] Ms. Goyal purported to act on behalf of Sikh Lehar. Clearly, there was a serious issue regarding the authority of Sikh Lehar to commence this proceeding (and instruct counsel) on the authority of only the Two Trustees. On any reading of the constating documents of Sikh Lehar, at least three of the five Trustees were required to “authorize” Sikh Lehar’s actions. This issue was raised by this court.
[14] On April 30, 2015, given the issues and importance to the parties and the congregation of Sikh Lehar, the court encouraged the parties, namely the Trustees, all of whom were present in court, to attempt to settle this matter.
[15] Counsel and the parties agreed to embark upon settlement discussions.
[16] Eventually, on May 5, 2015, the parties entered into Minutes of Settlement (the “Minutes of Settlement”). The Minutes of Settlement were executed by the lawyer for the Defendants (in essence the Three Trustees) and “Monica Goyal, Counsel for Manjit Singh Mangat, Harkanwal Singh”. Sikh Lehar was not a party to the Minutes of Settlement.
[17] Essentially, Mangat and Singh were to pay $1,734,584 into the trust account of the Three Trustees’ lawyer, Mr. LaFramboise. The Minutes of Settlement expressly contemplated that the Settlement Trust Monies would come from the Two Trustees. The settlement amount included $25,000 for the legal fees of the Three Trustees and the full amount claimed as owing from Sikh Lehar (“Settlement Trust Monies”). An audit was to be conducted to determine the “amount allegedly advanced” by the Three Trustees to Sikh Lehar. The amount determined by the audit would be paid to the Three Trustees from the Settlement Trust Monies. Once the settlement monies were deposited into the trust account, the Three Trustees would immediately resign as Trustees of Sikh Lehar and have no further involvement in Sikh Lehar’s business and management. The Minutes of Settlement provided that Mangat and Singh were to pay the monies into the lawyer’s trust account by May 29, 2015, failing which, the sale of the Property would continue. The Minutes of Settlement also provided that if the settlement was not concluded by May 29, 2015, the Settlement Trust Monies would be returned to Mangat.
[18] The Settlement Trust Monies were paid into the Three Trustees’ lawyer’s trust account pursuant to the Minutes of Settlement. Upon being advised of this in court, on or about June 1, 2015, the court made an order in accordance with the Minutes of Settlement.
[19] As a result of compliance with the Minutes of Settlement, the Three Trustees resigned as Trustees and from the affairs of Sikh Lehar. The Two Trustees took over Sikh Lehar. An accountant was chosen and the audit commenced. Sikh Lehar continued to carry on its affairs.
[20] The claims against the real estate agent and broker regarding the sale was no longer necessary.
[21] On July 29, 2015, after written submissions, the court determined that the $25,000 costs included in the Settlement Trust Monies be paid to Mr. LaFramboise.
[22] That should have ended the court’s involvement in the matter. It did not.
[23] The audit took more time than expected as production and disclosure of financial documentation became a huge task and an impediment to the timely completion of the audit.
[24] On October 6, 2015, the Three Trustees brought a motion seeking to revisit the issue of costs, for the appointment of 3 other persons as Trustees of Sikh Lehar, and for a Certificate of Pending Litigation against the Property. There was no motion by the Three Trustees to set aside the Minutes of Settlement. The basis for this motion was Mangat’s non-disclosure of highly relevant materials in the April motion, namely that the Two Trustees had entered into their own arrangements to sell the Property to Sandhu.
[25] While the source of the Settlement Trust Monies had come from Mangat and Singh, it would appear that those monies were borrowed by Mangat and Singh from Sandhu. This fact was not known to this court at the time it approved the Minutes of Settlement and not until the October motion was brought.
[26] The Three Trustees were not aware of the source of the Settlement Trust Monies other than they were provided by the Two Trustees.
[27] At the first appearance of the October motion, the court advised the relief sought contemplated setting aside the Minutes of Settlement but no motion to set aside the Minutes of Settlement had been brought. Counsel were advised that any motion seeking to set aside the Minutes of Settlement should be heard first. If no such motion was brought or the motion was unsuccessful, then issues regarding the accounting of the Three Trustees’ claims to the Settlement Trust Monies could then be dealt with. If the motion was brought and successful, the accounting issue(s) would be moot.
[28] The court issued an order that an accountant complete the audit subject to the Three Trustees bringing a motion to set aside the Minutes of Settlement within 2 weeks.
[29] On October 30, 2015, the Three Trustees brought a motion to set aside the Minutes of Settlement “due to fraud and non-disclosure by Manjit Mangat”.
[30] The court found that the terms of the Minutes of Settlement were, but for the audit, carried out and completed. The steps that had been taken in furtherance of the Minutes of Settlement included: a withdrawal of a RECO complaint; the resignation of Saini, Mattu and Atwal; the new appointment of three replacement Trustees; and the continued operations of Sikh Lehar.
[31] On January 28, 2016, the motion to set aside the Minutes of Settlement was dismissed. The audit was to continue.
[32] A “report” was produced for the audit but it was objected to by the Three Trustees for a number of reasons. In summary, a new audit was necessary with additional directions from this court. A number of issues have delayed the completion of this audit. The parties have been before this court on a number of occasions for further directions for the audit.
[33] There continued to be objections by the Three Trustees and the Two Trustees to the “report”.
[34] On agreement with counsel, this court scheduled the week of December 4, 2017 for a trial to determine the amount payable, if any, to the Three Trustees from the Settlement Trust Monies (the “Accounting Hearing”).
[35] And then Sikh Lehar went into receivership.
### The Issues to be Decided
[36] There are a number of issues to be decided today:
a) Sikh Lehar seeks party standing at the Accounting Hearing; and
b) Sandhu seeks an order:
i. Adding Sandhu to this proceeding;
ii. Adding Mangat and Singh to this proceeding; and
iii. A summary order that the Settlement Trust Monies be paid to Sandhu;
### THE ANALYSIS
#### Sandhu’s Relief Sought
[37] The entitlement to the Settlement Trust Monies is an issue between the Two Trustees (who paid the monies) and the Three Trustees (who claim they are owed monies from Sikh Lehar). The Minutes of Settlement were executed. The Settlement Trust Monies were paid by the Two Trustees (regardless of where they may have obtained those monies). The Settlement Trust Monies are in trust with the Three Trustees’ lawyer.
[38] The parties chose to structure their affairs in this manner.
[39] Sikh Lehar did not provide the Settlement Trust Monies nor was it entitled to the monies in the event the settlement was not completed. The Settlement Trust Monies would have been returned to Mangat pursuant to the express term of the Minutes of Settlement.
[40] Sandhu chose to structure his arrangements with Mangat and Singh in the manner that advanced monies to Mangat and Singh and, thereafter, Mangat and Singh could use those monies as the Settlement Trust Monies. Sandhu’s agreement(s) regarding the purchase of the Property with Mangat and Singh, not with the Three Trustees. Sandhu could have provided that his deposit monies under the purchase agreement(s) would remain in trust or that the deposit monies not be used for any other purpose except closing the purchase agreement. Sandhu did neither. In fact, Justice LeMay’s decision of September 25, 2017 found that Sandhu was aware his deposit monies advanced to Mangat and Singh would be used to pay the Three Trustees (see paragraph 31).
[41] Sandhu’s suggestion that “The effects of the Minutes of Settlement was to convert the security for the claims of the Three Trustees from the assets of Sikh Lehar (namely, the real Property) to the purchase price that the Applicants [Sandhu] was paying to acquire the very property.” is to re-write the terms of the Minutes of Settlement and the purchase agreement(s) between Sandhu and the Two Trustees. The Three Trustees entered into a settlement in a bona fide manner and without knowledge of the involvement of Sandhu and they completed their obligations under the settlement.
[42] The suggestion that the Three Trustees are in the same position they would have been had the settlement had not materialized on May 29, 2015 disregards the fact that the settlement did materialize and was carried out. The Three Trustees did resign from Sikh Lehar and the Two Trustees took over Sikh Lehar. To give Sandhu priority to the Settlement Trust Monies would prejudice the Three Trustees. It is not what they bargained for and what this court approved.
[43] The decision of Justice LeMay dated September 25, 2017 did not change the entitlement or the nature of the Settlement Trust Monies (see paragraph 24). It makes no sense to now give Sandhu priority over the claim of the Three Trustees to the Settlement Trust Monies. The fact this decision is under appeal does not change this finding.
[44] Sandhu has no direct interest in the outcome of the Accounting Hearing which is to determine how much of the Settlement Trust Monies be paid to the Three Trustees. Sandhu has a contingent creditor claim to monies which may be returned to Mangat and Singh, the same as any other creditor of the Two Trustees. Creditors, even execution creditors, by virtue of their status as creditors of a party to a legal proceeding, do not have standing in legal proceedings.
[45] There is no issue that Sandhu may have a right to seek relief as to what happens to the balance of any Settlement Trust Monies returnable to the Two Trustees (i.e. Sandhu may wish to enjoin any payment out to Mangat and Singh). Other creditors of Mangat and Singh may also seek relief regarding the remaining Settlement Trust Monies to be returned to Mangat and Singh.
[46] There is no reason to grant Sandhu standing in this proceeding or at the Accounting Hearing.
[47] It necessarily follows that there is no basis to order that Sandhu be paid the Settlement Trust Monies at this time.
#### Should Sikh Lehar be a party to the hearing to determine the quantum payable to the Three Trustees?
[48] Sikh Lehar submits that it may have potential exposure from the “accounting”. I disagree. Paragraph 6 of the Minutes of Settlement make it clear that all claims of the Three Trustees are subsumed in the results of the accounting and payment from the Settlement Trust Monies. A brief release is included to that effect in that paragraph. Further, and more importantly, Mr. LaFramboise, counsel for the Three Trustees, confirmed to this court that the claims of the Three Trustees are limited to and satisfied by the amounts found owing to them in the Accounting Hearing and paid from the Settlement Trust Monies.
[49] This, however, does not dispose of Sikh Lehar’s claim for standing.
[50] Sikh Lehar is a party to this proceeding. I see no basis to deny them the right to attend the Accounting Hearing despite the fact they have to direct claim to the Settlement Trust Monies.
[51] Sikh Lehar has standing at the Accounting Hearing.
#### Mangat and Singh
[52] Clearly, Mangat and Singh have an interest in the settlement trust monies and the Accounting Hearing.
[53] They are granted and have standing to participate in the Accounting Hearing and are added as parties to this proceeding for this purpose only.
#### Does the Receivership Order impede proceeding with the accounting?
[54] It does not.
[55] The claimants to the Settlement Trust Monies are the Three Trustees and the Two Trustees. Sikh Lehar has no “assets, undertaking or property” at stake in the Accounting Hearing.
[56] In any event, even if there was an impediment, I see no reason why leave would and should not be granted to allow the Accounting Hearing to proceed despite the Receivership Order.
### CONCLUSION
[57] The balance of this proceeding shall be conducted as follows:
a) There shall be a hearing to determine the amount of the Settlement Trust Monies payable to the Three Trustees (referred to above as the Accounting Hearing). The parties to this hearing shall be the Three Trustees, the Two Trustees and Sikh Lehar. A date for this hearing shall be scheduled by counsel with the Trial Coordinators Office in Brampton; and
b) Once the Accounting Hearing is completed, the balance of the Settlement Trust Monies shall be paid into court. There shall be a further court attendance to determine what claims or further steps shall be taken to deal with the balance of the Settlement Trust Monies. The parties to this attendance shall include all parties who have or may have a claim to those monies, including the Receiver.
### COSTS
[58] Any party seeking costs shall serve and file written submission on entitlement and quantum within two weeks of the release of these reasons. Written submissions shall be limited to 3 pages, with attached Costs Outline and any authorities.
[59] Any responding party shall have one week thereafter to serve and file responding submissions. Written submissions shall be limited to 3 pages with any authorities relied on attached.
[60] There shall be no reply submissions without leave.
Ricchetti, J.
Date: December 8, 2017
---
**CITATION:** Sikh Lehar International Organization v. Saini, 2017 ONSC 7317
**COURT FILE NO.:** CV-15-1855-00
**DATE:** 2017-12-08
**ONTARIO SUPERIOR COURT OF JUSTICE**
**RE:** SIKH LEHAR INTERNATIONAL ORGANIZATION, Plaintiff/Respondent
**AND**
SUCHET SAINI, NARINDERJIT SINGH MATTU, SULAKHAN SINGH ATWAL, PARAMJIT SINGH SIDHU, ACRES REAL ESTATE INC., Defendants/Applicants
**COUNSEL:**
S. Schneiderman for Sikh Lehar International Organization and the Receiver, J.P. Graci & Associates Ltd.
D. LaFramboise for Suchet Saini, Narinderjit Singh Mattu, Sulakhan Singh Atwal
Manjit Mangat, personally
Harkanwal Singh, personally
P. Pape for Sukhinder Sandhu and 2207190 Ontario Inc.,
**BEFORE:** Ricchetti, J.
**ENDORSEMENT**
Ricchetti, J.
Date of Release: December 8, 2017
minicounsel