IN THE MATTER OF THE BANKRUPTCY OF RAJINDER SINGH BRAR (AKA RAAJ BRAR) OF THE CITY OF VAUGHAN, IN THE PROVINCE OF ONTARIO

COURT FILE NO.: 32-2120334

DATE: 20180524

SUPERIOR COURT OF JUSTICE – ONTARIO

IN BANKRUPTCY AND INSOLVENCY

RE: IN THE MATTER OF THE BANKRUPTCY OF RAJINDER SINGH BRAR (AKA RAAJ BRAR) OF THE CITY OF VAUGHAN, IN THE PROVINCE OF ONTARIO

BEFORE: L. A. Pattillo J.

COUNSEL: Neil Abbott, for the Creditor, Taboola Inc. Rajinder Singh Brar – In Person Frank Kisluk – the Trustee

HEARD: May 17, 2018

ENDORSEMENT

[1] This is an appeal by the bankrupt, Rajinder Singh Brar, from the Order of Master Mills dated February 12, 2018, which dismissed Mr. Brar’s application for a discharge from bankruptcy with leave to re-apply after 12 months provided that he has made full and complete financial disclosure to his Trustee respecting his business and personal affairs.

Background

[2] The only testimony at the discharge hearing was from Mr. Brar who was questioned, both in chief by his own counsel and in cross-examination by counsel for his largest unsecured creditor, Taboola Inc., concerning his personal and business affairs. The Trustee was present but did not participate.

[3] In a brief written endorsement dismissing Mr. Brar’s application, the Master concluded, based on his evidence, that Mr. Brar had not been forthcoming with his Trustee, his creditors or the court as to his current financial situation and that there may well be surplus income owing to the estate. The Master further concluded that the income and expense statements provided by Mr. Brar did not truly reflect his income or his expenses. She stated that she was satisfied that the facts as set out in s. 173 (1)(a), (b), (c), (d), (e) and (o) of the Bankruptcy and Insolvency Act, 1992, c. 27, s.2 (the “BIA”) had been established and that to grant a discharge to Mr. Brar at that time would undermine the integrity of the insolvency system.

[4] In reaching those conclusions, the Master referred to various aspects of Mr. Brar’s testimony and stated that she did not believe his evidence respecting his business affairs and where his evidence conflicted with a document; she accepted the document as reflecting the true state of affairs.

The Issues

[5] Mr. Brar raises the following three issues on appeal:

1. He seeks to introduce new evidence concerning his involvement with various companies;

2. He submits that his cross-examination by Mr. Fred Tayer, co-counsel for Taboola, was an abuse of process; and

3. He submits the Master made a factual error in respect of what occurred in the New York proceeding brought against Mr. Brar by Taboola.

Standard of Review

[6] The standard of review on an appeal from the Master’s decision on a question of law is correctness; on findings of fact it is palpable and overriding error and on a question of mixed fact and law, it is palpable and overriding error unless there is an extricable legal principal, in which case it is correctness: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R 235 (S.C.C.).

[7] In respect of an issue of procedural fairness, the standard of review analysis is not engaged. Rather, it is for the Court to determine whether the requisite level of procedural fairness has been accorded, taking into account the factors in Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817, which include the nature of the decision and the process followed in making it; the nature of the statutory scheme and the terms of the statute to which the decision maker operates; the importance of the decision to the individual affected; and the legitimate expectations of the person challenging the decision.

Fresh Evidence

[8] During his cross-examination, Mr. Brar denied that he ever incorporated or had any involvement with various companies despite his name being shown on government records for the companies. As the Master stated: “Where corporate documents reflect a direct involvement, the bankrupt testified the government registry is wrong or was filed with erroneous information, going so far as to suggest one was a forgery.” Mr. Brar also refused to provide any information concerning his remuneration from EngageGen, a company with which he was involved both before and during his bankruptcy and which pays the rent for his pent house apartment.

[9] On the appeal, Mr. Brar seeks to introduce by way of an affidavit and various emails, evidence to show that he had no involvement in the incorporation of a couple of the companies as he denied during his cross-examination. He also seeks to provide information about EngageGen, and the rent on his pent house apartment.

[10] The test for fresh evidence was set out by the Supreme Court of Canada in R. v. Palmer, 1979 CanLII 8 (SCC), [1979] SCJ No. 126. In order for the evidence to be admitted, the proponent must establish:

a) The evidence could not through due diligence have been adduced at the hearing;

b) The evidence is relevant in that it bears on a decisive or potentially decisive issue;

c) The evidence is credible in the sense that it is reasonably capable of belief; and

d) The evidence, if believed and taken with the other evidence, could be expected to affect the result.

[11] In my view, the evidence Mr. Brar seeks to introduce fails to meet the Palmer test and accordingly is not admissible. Mr. Brar was aware before the hearing that his involvement in various corporations, both before and during his bankruptcy, was an issue. Further, his involvement with EngageGen and the remuneration he received from it, directly or indirectly, was also an important issue. The evidence he seeks to introduce which purportedly deals with those issues was clearly available before the hearing. More importantly, while it seeks to rehabilitate Mr. Brar’s credibility, there remain many other areas of the cross-examination that the Master relied on in reaching her conclusion with respect to Mr. Brar’s credibility. Finally, given Mr. Brar’s evidence at the hearing, I have a concern regarding the credibility of the evidence he now seeks to introduce.

Mr. Tayar’s Involvement

[12] The issue regarding Mr. Tayar’s presence at the hearing and his cross-examination raises an issue of procedural fairness. Mr. Brar submits that his participation was an abuse of process, conflict of interest and questions the integrity of the legal system.

[13] Mr. Tayar acted for a client who was a potential creditor of Mr. Brar. On the eve of the discharge hearing, the Trustee denied Mr. Tayar’s client standing to cross-examine Mr. Brar at the hearing. Mr. Tayar was subsequently retained by Taboola and appeared at the hearing as co-counsel for Taboola along with Taboola’s counsel and conducted the cross-examination of Mr. Brar. He submits that Mr. Tayar’s cross-examination constitutes an abuse of process.

[14] I have reviewed the transcript of Mr. Brar’s evidence. In my view, there was nothing improper or abusive concerning the questions asked by Mr. Tayar during the cross-examination. They focused on the issues before the court, specifically Mr. Brar’s financial affairs both before and during his bankruptcy and his lack of disclosure concerning them.

[15] Further, Mr. Brar had counsel at the hearing who was aware of Mr. Tayar’s prior attempt to obtain standing and did not object either to his presence at the outset or to any of the questions asked on the grounds that they were unfair or improper. He did object, however, to the admission of certain documents on the grounds that they had not been produced in advance or were not sent or received by Mr. Brar.

[16] Mr. Brar submits that in failing to object to Mr. Tayar’s presence or questions, his counsel was not acting in his best interests. The failure to object does not establish that his counsel was not acting in his best interest, particularly when the questions asked were proper given the issues before the court.

[17] Accordingly, I am satisfied that Mr. Tayar’s presence as co-counsel and his cross-examination did not amount to an abuse of process or any unfairness. Further, there is no evidence of any conflict of interest on Mr. Tayar’s part.

Factual Error

[18] Mr. Brar submits that the Master made a factual error by finding that he had counsel for the New York proceedings by Taboola and that he disengaged and allowed a default judgment to be issued.

[19] At the outset of her reasons, the Master noted that the discharge was opposed by Mr. Brar’s largest unsecured creditor (Taboola) who holds a default judgment from the Supreme Court of the United States. She stated: “The bankrupt was represented by counsel on a motion before the New York court to challenge the jurisdiction of the court. Having been largely unsuccessful on that motion, the bankrupt disengaged and allowed a default judgment to be issued.”

[20] There was evidence before the Master that supported her findings. Specifically, the evidence established that Mr. Brar had counsel in the New York proceedings; that his counsel brought a motion to dismiss on the basis of, among other things, lack of personal jurisdiction; that the jurisdiction motion was dismissed and Mr. Brar was ordered to file a defence and appear at a status hearing and that a default judgment was subsequently entered against him.

[21] Mr. Brar submits that after his motion was dismissed, he continued to respond to the action. While that may be, at some point he did “disengage” and allowed default judgment to be issued. Based on the evidence before her, the Master made no error in her factual findings, let alone a palpable and overriding error.

[22] Section 173 (1) of the BIA sets out facts for which a discharge may be refused, suspended or granted conditionally. Subsection (a) deals with the value of the bankrupt’s assets; (b) concerns the failure of the bankrupt to keep business books and records; (c) involves the bankrupt continuing to trade after becoming aware of being insolvent; (d) deals with the bankrupt’s failure to account satisfactorily for any loss or deficiency in assets; (e) concerns the bankrupt’s inappropriate conduct resulting in his or her bankruptcy; and (o) involves the bankrupt failing to perform the duties imposed on him or her by the BIA.

[23] In refusing to grant Mr. Brar his discharge, the Master relied on each of the above subsections of section 173. In my view, having reviewed the transcript of the evidence before her, there was more than enough evidence to enable her to come to those conclusions.

Conclusion

[24] For the above reasons, therefore, Mr. Brar’s appeal from the Order of February 12, 2018 is dismissed.

[25] The Trustee was present for the appeal but made no submissions and does not seek costs.

[26] Taboola requests its costs of the appeal which it submits, based on its cost outline, amount to $3,483 on a partial indemnity basis. Mr. Brar submits there should be no costs.

[27] In my view, costs are appropriate. Taboola has incurred costs in responding to Mr. Brar’s appeal and it was successful. Costs of the appeal to Taboola fixed at $2,500 which is fair and reasonable in the circumstances.

L. A. Pattillo J.

Released: May 24, 2018