Court File and Parties

COURT FILE NO.: CV-08-00361674 COURT FILE NO.: CV-10-00404713 DATE: 20180726 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Midwest Amusement Park, LLC Plaintiff – and – Cameron Motorsports Inc., Robert Cameron, MMG Financial Corp. Malcolm McMaster and Team Hurricane Inc. Defendants

AND BETWEEN:

Dr. R.C. Samanta Roy Institute of Science & Technology, Inc. and Midwest Amusement Park, LLC Plaintiffs

• and – Robert Cameron Defendant

COUNSEL: Ryan MacIsaac, and James Holtom for the Plaintiff

HEARD: July 19, 2018

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] In 2008, Midwest Amusement Park, LLC sued Robert Cameron, Cameron Motorsports Inc., Malcolm McMaster, MMG Financial Corp., and Team Hurricane Inc. for fraud (the 2008-action).

[2] In 2010, Midwest Amusement and Dr. Samanta Roy Institute of Science and Technology (the “Institute”) sued Mr. Cameron for another fraud (the 2010-action).

[3] In the 2008-action, Midwest Amusement now moves for summary judgment against Mr. Cameron and Cameron Motorsports for the equivalent in Canadian dollars of $386,281.93 (USD). Midwest Amusement also requests a lift of the stay of proceedings against Cameron Motorsports, which a few days ago made an assignment into bankruptcy under the Bankruptcy and Insolvency Act.

[4] In the 2010-action, Midwest Amusement and the Institute now move for summary judgment against Mr. Cameron for $5 million plus the equivalent in Canadian dollars of $175,000 (USD), plus punitive damages of $500,000.

[5] For the reasons that follow:

• I lift the stay of proceedings in the 2008-action brought about by the assignment into bankruptcy of Cameron Motorsports.
• In the 2008-action, I grant Midwest Amusement a judgment against Mr. Cameron and Cameron Motorsports for: (a) the equivalent in Canadian dollars of $386,281.93 (USD), plus post-judgment interest at 2%; and (b) costs of $40,000 on a substantial indemnity basis.
• In the 2010-action, I grant Midwest Amusement and the Institute a judgment against Mr. Cameron for: (a) the equivalent in Canadian dollars of $175,000 (USD) plus pre-judgment and post-judgment interest at 2% per annum from November 1, 2008; (b) damages at large of $500,000 with post-judgment interest at 2% per annum; (c) punitive damages of $500,000 plus post-judgment interest at 2% per annum; and (d) costs of $40,000 on a substantial indemnity basis.

B. Evidentiary Background

[6] In support of the two summary judgment motions, Midwest Amusement and the Institute relied on the affidavit of Naomi Isaacson dated April 3 2018 and on the affidavit of Kathy Stubits dated April 3, 2018. The Plaintiffs also relied on the transcripts from the examinations for discovery and form the cross-examinations on summary judgment motions in the 2008-action and in the 2010-action.

[7] Ms. Isaacson, who is the manager of Midwest Amusement and the Chief Executive Officer of the Institute, was not cross-examined. Ms. Stubits, who is a law clerk at McCarthy Tétrault LLP, lawyers for Midwest Amusement and for the Institute, was not cross-examined.

[8] Mr. Cameron and Cameron Motorsports did not file any evidence on the summary judgment motions and neither defendant appeared at the hearing of the summary judgment motions.

[9] Late during the course of the argument of the motion, I was advised that Mr. Cameron was in transit from Hamilton to the courthouse in Toronto. He did not arrive before the argument was completed, and I reserved judgment.

[10] Cameron Motorsports’ trustee-in-bankruptcy was aware of the summary judgment motion but did not appear, although duly served.

C. Facts

[11] Midwest Amusement is a limited liability corporation incorporated pursuant to the laws of Wisconsin, U.S.A. It operated USA International Raceway, a go-kart race track located in Shawano, Wisconsin on lands owned by a subsidiary of the Institute.

[12] Midwest Amusement is owned by the Institute, which is a not-for-profit corporation pursuant to the laws of Delaware, U.S.A. The Institute owns a group of corporations that operate a variety of business including amusement parks, hotels, land development, and resource development.

[13] Mr. Cameron is an Ontario resident and is the principal of Cameron Motorsports, an Ontario corporation that carried on the business of distributing go-karts and go-kart accessories. Mr. Cameron and, or his wife are the owners of Cameron Motorsports.

[14] Malcolm McMaster is or was an Ontario resident and is the principal of MMG Financial, an Ontario corporation that carried on the business of a financing purchase transactions. It was alleged that MMG Financial was the financial arm of Cameron Motorsports. Mr. Cameron and Mr. McMaster were business associates or partners until there was a falling out between them.

[15] Team Hurricane is an Ontario corporation. Team Hurricane was owned and controlled by some combination of Messrs. Cameron and McMaster, Cameron Motorsports, and MMG Financial. Team Hurricane was a shell company.

[16] In the winter of 2005, Kal Gronval, a representative of Midwest Amusement, met with representatives of Cameron Motorsports at a trade show. Subsequently, representatives of Midwest Amusement met in Wisconsin with Mr. Cameron and Mr. McMaster and with representatives of Cameron Motorsports and Team Hurricane.

[17] As a result of these meetings, Midwest Amusement was induced to enter into an oral agreement pursuant to which it agreed to purchase 24 go-karts, a service and maintenance service, and also rights to the “Arrive and Drive Program,” an apparently very successful turnkey racing program to operate go-cart race tracks for amateur competitors. Midwest Amusement was to receive the rights to use the program and a distributorship to licence the program to other race tracks across the U.S.

[18] To induce Midwest Amusement to purchase the go-karts and the Arrive and Drive Program, Messrs. Cameron and McMaster, Cameron Motorsports, MMG Financial, and Team Hurricane misrepresented the quality of the go-karts, the services that would be provided, the distributorship program, the forecasts of profits, and their own intention to perform their promises.

[19] Midwest Amusement was also induced to enter into an oral loan agreement with MMG Financial. Under this arrangement, MMG Financial agreed to finance Midwest Amusement’s purchase of goods and services from Cameron Motorsports and Team Hurricane. MMG Financial agreed to pay on Midwest Amusement’s behalf the cost of the goods and services. The payment was to be a $190,000 (USD) loan to be repaid by Midwest Amusement with interest at 2% per month.

[20] It is unknown whether MMG Financial actually advanced the $190,000 (USD). Mr. McMaster said that it did. However, Cameron Motorsports denies every being paid for the go-karts and the associated goods and services. The breakup of the business relationship between Mr. Cameron and Mr. McMaster may have had something to do with this dispute about what happened to the $190,000 (USD).

[21] In any event, in the late summer of 2005, Team Hurricane, which was a shell company, delivered the go-karts to Midwest Amusement. The delivery was late, and the go-carts were unassembled, defective, and dangerous and inoperable when assembled. The engines of twelve go-carts exploded during a test run, and the remaining twelve go-karts were inoperable. The material for the Arrive and Drive Program was never delivered.

[22] Mr. Cameron and Cameron Motorsports later admitted that they never intended to provide the goods and services that they had represented and promised to Midwest Amusement.

[23] As a result of not receiving the goods and services from Mr. Cameron and Cameron Motorsports, Midwest Amusement reneged on making any payments to MMG Financial.

[24] In August 2006, MMG Financial responded by bringing an action against Midwest Amusement in the District Court for the Eastern District of Wisconsin for repayment of its $190,000 (USD) loan.

[25] In September 2008, MMG Financial’s action was successful. A jury of the U.S. District Court granted MMG Financial a judgment for $386,281.93 (USD) for breach of contract.

[26] On August 29, 2008, by notice of action (the 2008-action), Midwest Amusement sued Cameron Motorsports, Mr. Campbell, MMG Financial, Mr. McMaster and Team Hurricane for fraud.

[27] On September 26, 2008, Midwest Amusement delivered its Statement of Claim.

[28] Following the commencement of the 2008-action, Mr. Cameron persuaded Midwest Amusement and the Institute that Mr. McMaster was to blame for all the problems. Mr. Cameron said that he would help Midwest Amusement and the Institute if they discontinued the 2008-action against him and his company. Thus, in October 2008, notwithstanding the delivery of its Statement of Claim, in the 2008-action, Midwest Amusement entered into a Loan Agreement and a Business Agreement with Mr. Cameron. Under these agreements, Mr. Cameron agreed to provide consulting services to ensure that Midwest Amusement would realize weekly revenues of $50-70,000 (USD) during the 2009 racing season, and he agreed to lend or to arrange a loan to Midwest Amusement and the Institute of $10 million (USD) for their ongoing operations.

[29] In order to induce Midwest Amusement and the Institute to enter into the Business Agreement and the Loan Agreement, Mr. Cameron fabricated documents indicating that international wire transfers of funds had been arranged. On his examination for discovery, Mr. Cameron admitted that he fabricated all of the banking and financial information that he provided to Midwest Amusement and the Institute.

[30] Midwest Amusement and the Institute were fooled. Around November 1, 2008, in performance of the Business Agreement, Midwest Amusement and the Institute agreed to pay Mr. Cameron a consulting fee of $250,000 (USD), and they paid $175,000 (USD) as an advance payment to Mr. Cameron.

[31] After receiving the $175,000 (USD), Mr. Cameron stated that he had never intended to honour the Loan and Business Agreement and that he had tricked Midwest Amusement in order to receive the monies that he alleged were never paid for the go-karts pursuant to the 2005 agreement.

[32] On his examinations in these proceedings, Mr. Cameron admitted that he never intended to fulfill his obligations under the Business and Loan Agreements and that he had fraudulently induced Midwest Amusement and the Institute to transfer $175,000 (USD) as the first instalment of the consulting fee. He confessed that he faked the Swiss bank and the financial records that he sent to Midwest Amusement and the Institute as assurance that $10 million was available for a loan. On his examination for discovery, Mr. Cameron testified as follows:

Q. 769 Generally one of the things that you were in discussion with my client about doing during this September/October time frame of 2008 was being a consultant for them whereby you would set up an arrive and drive program, lend them go-karts, promote certain events and get their racetrack in the black, if you will, in terms of turning a profit, right? A. Correct. Q. 770 And there's a contract that was signed in that regard, wasn't there? A. Uh-huh. Q. 771 We'll come to it. MR. HENDERSON: Is that the business agreement that you're referring to?

BY MR. TAIT: Q. 772 Yes, and we'll come to it, but I'm right, and I know we've talked about this before, you never had any intention of living up to that? A. No. I never had intentions living up to any of the things that I agreed to do for them. Q.773. You just wanted them to pay you some money because you felt they owed you money for the go-karts? A. Yes, they owed me money for the go-karts. Q.774 How much did they owe you for the go-karts? A. I don't know offhand, but when they went to court, I think they lost 190,000, so if I would have asked for 190, I would look too suspicious, so I asked for 350. I think it was or something like that and 175,000 up front, and then the last whatever 100 and something thousand once I got all the stuff done. Q. 775 Expecting only to ever get the 175? A. That's correct. Q. 796 And is it your evidence that this contract entitled Loan and Business Agreement Between USA International Raceway Inc. and Robert Cameron of October 23rd, 2008 reflects the terms of the consultancy agreement that was being negotiated and entered into at the time? A. To be honest with you, I never read this agreement. It didn't matter what it said. I sent them a different agreement, and this is what they sent back. Q.797 And you were fine with it? A. Like I said, it didn't matter what it said. It could have said anything. I was signing it. It didn't matter. Q.798 One of the aspects, the idea, the concept, was that you were going to be a consultant. They were going to pay you I think you said 300 and some odd thousand dollars with 175,000 up front, right? A. Uh-huh. Q.799 Then, as part and parcel of that, you were going to lend my clients ten million as a mortgage on the racetrack. Is that correct? A. It had nothing to do with -- I guess it was ten million, and in return I guess whatever collateral they could put up for that kind of money. Like I said, it's -- Q. 800 What was the ten million for clause No. 3? A. They needed money. Ten million was to -- Q. 801 You were supposed to wire ten million? A. Yes. Q. 802 And of course you never did? A. I never did. Where would I get ten million? Where would I get half a million dollars? Q. 803 You don't have ten million? A. No, I don't have ten million. If -- no. Q. 804 But you told my clients that you did? A. Your clients told me a lot of things too. Q. 805 That's not the question, sir. A. So, I lied just like they lied, and I did whatever I could do in accordance even to the police when they found out the money that I got and they saw the wire transfers. They lied to me right from day one, and I just did whatever I said to get my money back. Q.806 Is it fair to call it a setup? A. I'm sorry? Q. 807 Can we call it a setup? A. Yes, I think they set me up. Q. 808 No, no, what you did to them. A. No. What I did to them was in retaliation, sir, to their setup.

[33] Retaliation was not enough for Mr. Cameron. He felt horribly wronged by Midwest Amusement and the Institute. He wanted revenge. In his lust for blood, he concocted and published to the media a story that the Institute had paid him $175,0000 (USD) to arrange a contract killing of 60 residents of Shawano, Wisconsin including its mayor and virtually every other town official. For example, on December 23, 2008, Mr. Cameron was interviewed on a CBS Evening News. During the broadcast, a video of which I viewed, he said that he had received $175,000 (USD) in wire transfers from the Institute along with a list of 60 names of persons marked for assignation. Mr. Cameron said that he had only approached the Institute to recover the money owed him for go-karts, but they hired him to arrange murders.

[34] In November 2008, Mr. Cameron set numerous threatening, racist, sexist, and repulsive text and phone messages to Ms. Isaacson, members of her family, and to others associated with Midwest Amusement and the Institute. Examples are set out below:

Text: 11/23/2008 - I hope your sister enjoyed the pork she ate while in jail. Does she look or sound like the dirty pig she is? Text: 11/23/2008 - Tomorrow I will be releasing all our taped conversations to all media and the people you guys have been emailing shit about me. Text 11/23/2008 - u just signed the end to [the Institute] I will not stop until everyone of you are dead and behind bars and I have more supporters than u have cult members. Text: 11/23/2008 - Your son Gad is going hunting - I hope he is safe in N orth Dakota Text: 11/23/2008 - u r about 2 go to jail 4 along time, bitch Text: 11/23/2008- U have to be the ugliest bitch I ever seen. Phone Message: Hey Darlene, I hope all you guys are fucking tape-recording all these messages. Especially you. I am gonna fuck with you and yours. You don't understand you got a big fucking mouth. And you're gonna keep talking about my family, me, my business and your emailing everybody. You know what? Now its time to talk about you, you little bitch. I heard you're an old bitch, but you're an old bitch that wants everybody. You know, what the fuck, I'm talking about you know who the fuck I am. I'm coming after you two fucking pieces of shit. Phone Message: Hey bitch, website, email and everything else. Shut your fucking hole. I hear everything about you fucking people. Gonna be all over the fucking Internet. I'm gonna email everybody in fucking Wisconsin. You are fucked, bitch. You, and your fucking sister and all your fucking religion. You fucking cock sucking people are all gonna be paying for what you did to me. You cunt. You slimy bitch. Phone Message: Did the Doc tell you about your sister Naomi? I'll get her number tomorrow from the telephone company. I know where you guys live. I know whom the companies you guys are associated with. I know everything now. I am gonna find a little bit more out each fucking day. You guys are in a lot of fucking trouble. I'm fucking coming. I'm telling you, you think your sister got it bad, you're gonna get it good. You fucking bitch.

[35] Meanwhile, on November 24, 2008, Mr. McMaster and MMG Financial delivered its Statement of Defence in the 2008-action. They also delivered a Crossclaim against Mr. Cameron and Cameron Motorsports.

[36] On February 19, 2009, Mr. Cameron and Cameron Motorsports delivered its Statement of Defence in the 2008-action. They also delivered a Crossclaim against Mr. McMaster and MMG Financial.

[37] On February 27, 2009, Team Hurricane was noted in default for failure to deliver a Statement of Defence in the 2008-action.

[38] On July 7, 2009, Mr. Cameron and Cameron Motorsports withdrew a motion for security for costs at the hearing of the motion.

[39] In August, 2009, Mr. McMaster and MMG Financial moved for a summary judgment in the 2008-action on the basis that the claim against it was barred by res judicata because of the U.S. District Court decision.

[40] On July 29, 2010, Mr. Cameron was cross-examined in respect of Mr. McMaster’s and MMG Financial’s motion for a summary judgment against Midwest Amusement in the 2008-action.

[41] On January 5, 2010, the United States Court of Appeals for the Seventh Circuit dismissed Midwest Amusement’s appeal of the jury verdict.

[42] On June 20, 2010, Midwest Amusement and the Institute sued Mr. Cameron for breach of contract, deceit, injurious falsehood, intentional interference with economic interests, libel and slander and unjust enrichment (the 2010-action). By this time several of the Institute’s subsidiaries had gone bankrupt, allegedly as a result of the damage to their reputation caused by Mr. Cameron’s retaliatory actions.

[43] On August 3, 2010, Mr. Cameron delivered his Statement of Defence to the 2010-action against him.

[44] On April 1, 2011, Master Hawkins dismissed Mr. McMaster’s and MMG Financial’s motion for a summary judgment in the 2008-action.

[45] On April 28, 2011, Mr. Cameron was examined for discovery in the 2008-action and in the 2010-action in his own behalf and as the representative of Cameron Motorsports.

[46] In December 2011, Midwest Amusement set the 2008-action down for trial. It is not clear to me precisely when, but the 2010-action was also set down for trial.

[47] Between August 2012 and February 2014, Mr. Cameron and Cameron Motorsports changed counsel several times and the parties were unable to agree about scheduling the trial or trials. Eventually, the trial in the 2010-action was scheduled for March 10, 2014 and the trial in the 2008-action was scheduled for June 23, 2014.

[48] On March 7, 2014, days before the commencement of the trial in the 2010-action, Mr. Cameron advised counsel for the Plaintiffs that he had declared bankruptcy on September 4, 2013. As a result, the actions against him were automatically stayed pursuant to the Bankruptcy and Insolvency Act.

[49] On March 10, 2014, Justice Stinson ordered that the automatic stay against Mr. Cameron be lifted for the sole purpose of making an order as to costs against Mr. Cameron for the wasted preparation for the trial in the 2010-action. The stay was then reinstated, including enforcement of the costs award just made, pending further order of the court. The costs award of $8,000 was never paid.

[50] On April 25, 2014, there was a pre-trial conference in the 2008-action. Justice Chiapetta ordered that the scheduled trial not proceed as Mr. McMaster and MMG Financial could not be located. The 2008-action was struck off the list, and a pre-trial conference was scheduled for October 29, 2014.

[51] The October 29, 2014 pre-trial was abortive as Mr. Cameron and Cameron Motorsports failed to attend.

[52] On November 13, 2014, Mr. McMaster and MMG Financial were noted in default.

[53] On October 8, 2015, Mr. Cameron was discharged from bankruptcy. Pursuant to s.168.1(1) of the Bankruptcy and Insolvency Act, Mr. Cameron was discharged and released from all debts, except those matters referred to in s.178(1) of the Act. Section 178 (1) of the Act states:

Debts not released by order of discharge

178 (1) An order of discharge does not release the bankrupt from

(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;

(e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;

(h) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g.1).

[54] The result of Mr. Cameron’s discharge from bankruptcy was that the stay of the action was terminated and Midwest Amusement and the Institute were at liberty to sue him for fraud, which was a debt not discharged by his discharge from bankruptcy.

[55] Meanwhile, on November 27, 2015, Justice Diamond awarded Midwest Amusement a default judgment against Mr. McMaster and MMG Financial for the equivalent in Canadian dollars of $386,281.93 (USD) plus pre and post-judgment interest at 2% per annum.

[56] Mr. McMaster and MMG Financial have not paid the judgment, and the U.S. courts have declined to recognize the Ontario court’s default judgment to offset the U.S. judgment.

[57] On September 7, 2016, as a result of correspondence with the trustee-in-bankruptcy, Midwest Amusement and the Institute learned for the first time that Mr. Cameron had been discharged from bankruptcy.

[58] On April 26, 2017, Master Abrams made a procedural order and ordered, among other things, that summary judgments or trials in the 2008-action and the 2010-action be heard together.

[59] In early 2018, Midwest Amusement in the 2008-action and Midwest Amusement and the Institute in the 2010-action brought motions for summary judgment.

[60] On February 27, 2018, Justice Firestone issued a scheduling order requiring Mr. Cameron and Cameron Motorsports to deliver its responding material by April 27, 2018. No material was delivered.

[61] On April 26, 2018, Cameron Motorsports filed an assignment in Bankruptcy and it delivered a notice of stay of proceedings pursuant to the Bankruptcy and Insolvency Act.

[62] Notwithstanding the notice, Midwest Amusement and the Institute continued with their motions for summary judgment and on this motion, they ask for the additional relief of an order lifting the stay against Cameron Motorsports in the 2008-action.

[63] On its motion for summary judgment in the 2008-action, Midwest Amusement seeks the equivalent in Canadian dollars of $386,281.93 (USD) to offset the judgment of the Wisconsin District Court.

[64] On its motion for a summary judgment in the 2010-action, Midwest Amusement and the Institute submit that as a result of the frauds perpetrated by Mr. Cameron: (a) they lost the expected profits of approximately $33 million (USD) between 2009 and 2013 from the Business and Loan Agreement; (b) in the alternative, they lost the expected profits of approximately $7 million (USD) from the loan portion of the agreement; (c) they lost the $175,000 (USD), which was taken by false pretences; (d) they lost approximately $21.5 million in investments in seven properties that were lost through foreclosures; and (e) in the alternative, they lost approximately $2.3 million in equity on the properties lost due to the foreclosures. In consequence of the various losses, they claim $5 million, which they submit very conservatively approximates the position they would have been in had the fraudulent agreements been performed.

[65] On its motion for a summary judgment in the 2010-action, Midwest Amusement and the Institute claim punitive damages of $500,000.

D. Discussion

1. Introduction

[66] There are five issues to determine on these two summary judgment motions; namely: (1) Should the stay of proceedings against Cameron Motorsports be lifted? (2) Are the cases appropriate for a summary judgment? (3) Should Mr. Cameron and Cameron Motorsports be found liable for deceit, fraudulent misrepresentation, and for obtaining property by false pretences? (4) What is the quantum of damages? and (5) Are Mr. Cameron and Cameron Motorsports liable for punitive damages?

2. Lifting the Stay of Proceedings

[67] Section 69 (1) of the Bankruptcy and Insolvency Act provides for a stay of proceedings against a person, which includes a corporation, that makes an assignment into bankruptcy. Section 69 (1) states:

Stay of proceedings — notice of intention

69 (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person,

(a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy,

[68] Section 69.4 of the Bankruptcy and Insolvency Act empowers the court to lift the stay in certain circumstances.

Court may declare that stays, etc., cease

69.4 A creditor who is affected by the operation of sections 69 to 69.31 or any other person affected by the operation of section 69.31 may apply to the court for a declaration that those sections no longer operate in respect of that creditor or person, and the court may make such a declaration, subject to any qualifications that the court considers proper, if it is satisfied

(a) that the creditor or person is likely to be materially prejudiced by the continued operation of those sections; or

(b) that it is equitable on other grounds to make such a declaration.

[69] Courts have a wide discretion based on the particular facts of the particular case to lift a stay of proceedings brought about by a bankruptcy. In Fiorito v. Wiggins, 2017 ONCA 765 at para. 35. In Advocate Mines Ltd. (Re), (1984), 52 C.B.R. (N.S.) 277 (Registrar), Registrar Ferron held that the court may remove the stay of proceedings in a variety of circumstances including: (1) where the action is against a bankrupt for a debt to which a discharge would not be a defence; (2) where the action is in respect of a contingent or unliquidated debt, the proof of which and the valuation of which has a degree of complexity that makes the summary procedure prescribed under the Bankruptcy and Insolvency Act inappropriate; (3) where there are other parties and the action is one in which the bankrupt is a necessary party for the complete adjudication of the matters at issue; (4) where the action is brought to establish judgment against the bankrupt to enable the plaintiff to recover under a contract of insurance or indemnity or under compensatory legislation; and (5) where the action at the date of bankruptcy has progressed to a point where logic dictates that the action be permitted to continue to judgment.

[70] Registrar Ferron’s decision has been used and approved of in a variety of cases. Fiorito v. Wiggins, 2017 ONCA 765 at para. 38; Global Royalties Ltd. v. Brook, 2016 ONCA 50 (in chambers); Toronto-Dominion Bank v. Mawji, 2011 ONSC 4259. Applying it to the circumstances of the immediate case, the stay should be lifted because the case against Cameron Motorsports falls within criteria (1), (2), (3), and (5). In the immediate case, it may also be noted that the trustee-in-bankruptcy did not appear to oppose the lifting of the stay.

[71] In Lincoln Trust and Savings Co. v. Wagman, (1977), 23 C.B.R. (N.S.) 240 (Ont. H.C.J.), aff’d (1978), 28 C.B.R. (N.S.) 179 (Ont. C.A.), the court lifted the stay in action in which the plaintiff sued the bankrupt for fraud.

[72] In Royal Bank of Canada v. Société Générale (Canada), 2003 ONSC 20584, 48 C.B.R. (4th) 103 (Ont. S.C.J.), Justice Ground held that that the stay will be lifted in circumstances where the claims against the Bankrupt are for debts which would not be released by an order of discharge; for example, where the claim is about a fraudulent scheme, or where the Bankrupt is a necessary party for the completed adjudication of the matters in an action involving the other parties.

[73] I conclude that the stay of proceedings against Cameron Motorsports should be lifted.

3. Are the Cases Appropriate for a Summary Judgment?

[74] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (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:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[75] In Hryniak v. Mauldin, 2014 SCC 7 and Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[76] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case. Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001.

[77] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial. Dawson v. Rexcraft Storage & Warehouse Inc., 1998 ONCA 4831, [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 ONCA 814, 18 O.R. (3d) 481 (C.A.); Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11. Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment. Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798.

[78] In my opinion, the cases at bar are appropriate for summary judgments.

[79] With Mr. Cameron and Cameron Motorsports delivering no responding material and not appearing to resist the summary judgment motions, the motions were more like a default judgment motion than a summary judgment motion, but in any event, the court was in a position to decide the matter summarily and there would be little to nothing to be achieved by prolonging this thirteen-year saga that began in the winter of 2005 by deferring the matter to a trial.

[80] Mr. Cameron and Cameron Motorsports are the only remaining defendants, and having regard to Mr. Cameron’s admissions - more like spiteful confessions - there are no genuine issues requiring a trial.

[81] If there were genuine issues requiring a trial (and there are none), there is a large and ample evidentiary record of documents and transcripts of examinations from which the court can decide the issues and there is no need for a trial.

[82] In the 2008-action and the 2010-action, the court has all it needs to fairly and justly decide the 2008-action and the 2010-action, and it is in the interests of justice that it do so.

4. Liability for Deceit, Fraudulent Misrepresentation, Obtaining Property by False Pretences

[83] Should Mr. Cameron and Cameron Motorsports be found liable for deceit, fraudulent misrepresentation, and for obtaining property by false pretences?

[84] To defraud a person is to deprive a person dishonestly of something which is his or of something to which he is or would or might but for the perpetration of the fraud, be entitled. Scott v. Commissioner of Police for the Metropolis, [1974] 3 All E.R. 1032 at p. 1038 (H.L.). The elements of a claim of fraudulent misrepresentation are: (1) a false statement by the defendant; (2) the defendant knowing that the statement is false or being indifferent to its truth or falsity; (3) the defendant having an intent to deceive the plaintiff; (4) the false statement being material and the plaintiff having been induced to act; and, (5) the plaintiff suffering damages. Bruno Appliance and Furniture Inc. v. Hryniak, 2014 SCC 8; Parna v. G. & S. Properties Ltd. (1970), 1970 SCC 25, 15 D.L.R. (3d) 336 at p. 344 (S.C.C.); Fiorillo v. Krispy Kreme Doughnuts, Inc. (2010), 2009 ONSC 29902, 98 O.R. (3d) 103 at paras. 66-67 (S.C.J.); Derry v. Peek (1889), 14 App. Cas. 925 (H.L.).

[85] All of the elements of a claim for deceit, fraudulent misrepresentation, and for obtaining property by false pretences are factually present in the 2008-action and in the 2010-action.

[86] Mr. Cameron and Cameron Motorsports mounted no defence because they have none.

[87] Mr. Cameron and Cameron Motorsports should be and are liable for deceit, fraudulent misrepresentation, and for obtaining property by false pretences.

5. Quantum of Damages

[88] Turning to the matter of the quantification of damages, in the 2008-action, Midwest Amusement seeks to be placed in the same position it would have been in had the Defendants’ fraud not induced it to enter into the contract to purchase go-karts.

[89] Midwest Amusement seeks the equivalent in Canadian dollars of $386,281.93 (USD), which is the amount that Justice Diamond ordered payable by the McMaster Defendants to offset the debt owed on account of the Wisconsin judgment debt incurred but for Mr. Cameron’s and Cameron Motorsport’s fraudulent misrepresentations.

[90] In the 2010-action, Midwest Amusement and the Institute Midwest seek damages of $5 million, which they submit very conservatively approximates the position they would have been in had the fraudulent agreements been performed. They also seek the equivalent in Canadian dollars an additional $175,000 (USD) on account of the consulting fees obtained by Mr. Cameron deceitfully and by false pretences in the fall of 2008.

[91] In an action in deceit or fraudulent misrepresentation, plaintiffs are entitled to be put in the same position they would have been in if the representations had not been made, but not to be put in the position they would have been if the representations had been true. Fiorillo v. Krispy Kreme Doughnuts, Inc., 2009 ONSC 29902, [2009] O.J. No. 2430 at para. 101 (S.C.J.); C.R.F. Holdings Ltd v. Fundy Chemical International Ltd., 1981 BCCA 488, [1982] 2 W.W.R. 385; leave to appeal to SCC refused (1982), 42 N.R. 358; Parna v. G. & S. Properties Ltd., 1969 ONCA 28, [1969] 2 O.R. 346 (C.A.); rev’d on other grounds, 1970 SCC 25, [1971] S.C.R. 306.

[92] The measure of damages for fraudulent misrepresentation or deceit is the tort measure, not the measure used for breach of contract. In Todd Family Holdings Inc. v. Gardiner, the Court of Appeal stated:

25. We agree with counsel for the appellants' submission that the measure of damages for deceit requires that the injured party be placed in the position it would have been in had the misrepresentation not been made. Damages for deceit are not calculated on the assumption that the injured party is entitled to enforce the agreement entered into as a result of the misrepresentation. […]

[93] Thus, I have no difficulty in the 2008-action in awarding Midwest Amusement the equivalent in Canadian dollars of $386,281.93 (USD).

[94] In the 2010-action, with the exception of the claim seeking the equivalent in Canadian dollars of $175,000 (USD) on account of the consulting fees obtained by Mr. Cameron deceitfully and by false pretences, all of Midwest Amusement’s and the Institute’s claims for damages are essentially based on the notion that they lost profits and investments that would not have been lost had Mr. Cameron performed the Loan and Business Agreement. These alleged pecuniary losses underlie Midwest Amusement’s and the Institute’s claim for $5 million.

[95] I have no difficult in the 2010-action in awarding Midwest Amusement and the Institute the equivalent in Canadian dollars of $175,000 (USD), which is a genuine loss for which compensation is required to place them in the position they would have been had they not been fraudulently deceived. The $5 million claim, however, is not recoverable, because damages for deceit are not calculated on the basis that the injured party is entitled to enforce the agreement entered into as a result of the misrepresentation. That is the contract measure of pecuniary losses not the tort measure for deceit or fraudulent misrepresentation.

[96] That said, Midwest Amusement and the Institute are not limited only to a claim of the equivalent in Canadian dollars of $175,000 (USD).

[97] Damages at large may be awarded in cases of intentional torts in circumstances where there has been injury to the plaintiff’s reputation and associated economic loss. Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175 at paras. 82-89, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 183; Foschia v. Conseil des Écoles Catholique de Langue Française du Centre-Est, 2009 ONCA 499 at para. 37; PSC Industrial Canada Inc. v. Ontario (Ministry of the Environment) (2005), 2004 ONSC 15482, 48 B.L.R. (3d) 58 at paras. 60-62 (Ont. S.C.J.), rev'd in part on other grounds (2005), 2005 ONCA 27657, 258 D.L.R. (4th) 320 (Ont. C.A.); Uni-Jet Industrial Pipe Ltd. v. Canada (A.G.), 2001 MBCA 40, 198 D.L.R. (4th) 577 at paras. 66-72 (Man. C.A.); and Alleslev-Krofchak v. Valcom Ltd., aff'd 2010 ONCA 557. In the immediate case, I award Midwest Amusement and the Institute $500,000 for damages at large.

[98] Damages at large are a matter of impression, and unlike pecuniary damages, damages at large are not capable of precise measurement. Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175 at paras. 82-89, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 183; Howard v. Madill, 2010 BCSC 525, at para. 89; Foschia v. Conseil des Écoles Catholique de Langue Française du Centre-Est, 2009 ONCA 499 at para. 37; Uni-Jet Industrial Pipe Ltd. v. Canada (A.G.), 2001 MBCA 40, 198 D.L.R. (4th) 577 at para. 72 (Man. C.A.). The principles for calculating damages at large are: (1) damages at large include compensation for loss of reputation, injured feelings, or victimization from the defendant’s bad conduct; (2) damages at large compensate for losses that can be foreseen but cannot be readily quantified; (3) damages at large are a matter of discretion and are more a matter of impression, not addition; and (4) damages at large provide an opportunity to condemn flagrant abuse of the legal process.

[99] In the immediate case, Midwest Amusement and the Institute suffered an outrageous and egregious attack on their reputation, and I am satisfied that their business suffered financially and that their principals and representatives suffered from the abuse, threats, and slanders and hate mongering of Mr. Cameron.

[100] Not surprisingly, there is no comparable cases where a defendant combined the harm caused by his frauds with the bad conduct boastfully and unabashedly undertaken by Mr. Cameron. As a matter of impression, in my opinion, the appropriate award of damages at large is $500,000.

6. Punitive Damages

[101] Punitive damages are only awarded in extraordinary situations. In general, punitive damages are considered in situations where the defendant's misconduct is so malicious, oppressive, and high-handed that it would offend the court's sense of decency. Punitive damages do not bear any relation to what the plaintiff should receive by way of compensation. Their aim is not to compensate a party, but rather to punish someone. It is the means by which a court expresses its outrage at what it considers egregious conduct of a party. Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595; Vorvis v. Insurance Corp. of British Columbia, 1989 SCC 93, [1989] 1 S.C.R. 1085.

[102] In the leading case of Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, the Supreme Court of Canada restored a punitive damages award of $1 million made by a jury in an action against an insurer who had breached its duty of good faith and fair dealing to its insured. At para. 94 of his judgment, Justice Binnie described how to instruct a jury about punitive damages; he stated:

94. [I]t would be helpful if the trial judge's charge to the jury included words to convey an understanding of the following points, even at the risk of some repetition for emphasis. (1) Punitive damages are very much the exception rather than the rule, (2) imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. (3) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, (4) having regard to any other fines or penalties suffered by the defendant for the misconduct in question. (5) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation. (6) Their purpose is not to compensate the plaintiff, but (7) to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community's collective condemnation (denunciation) of what has happened. (8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and (9) they are given in an amount that is no greater than necessary to rationally accomplish their purpose. (10) While normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a "windfall" in addition to compensatory damages. (11) Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.

[103] It follows from Justice Binnie’s remarks that an assessment of punitive damages requires an appreciation of: (a) the degree of misconduct; (b) the amount of harm caused; (c) the availability of other remedies; (d) the quantification of compensatory damages; and (e) the adequacy of compensatory damages to achieve the objectives or retribution, deterrence, and denunciation. These factors must be known to ensure that punitive damages are rational and to ensure that the amount of punitive damages is not greater than necessary to accomplish their purposes.

[104] Earlier in his judgment, at para. 74, Justice Binnie stated:

[T]he governing rule for quantum is proportionality. The overall award, that is to say compensatory damages plus punitive damages plus any other punishment related to the same misconduct, should be rationally related to the objectives for which the punitive damages are awarded (retribution, deterrence and denunciation).

[105] Later in his judgment, at para. 100, he stated: “The rationality test applies both to the question of whether an award of punitive damages should be made at all, as well as to the question of quantum.”

[106] The cases at bar is certainly an extraordinary case. For many of the same reasons and because of the factual circumstances that justified the above compensatory award of damages at large of $500,000, the case at bar is an appropriate case to award punitive damages.

[107] I assess the punitive damages at $500,000, the amount requested by Midwest Amusement and the Institute. If the far less egregious circumstances in Whiten v. Pilot Insurance Co., justified a $1 million punitive damages award, the circumstances of the 2010-action justify a punitive damages award of $500,000.

E. Conclusion

[108] For the above reasons, I lift the stay of proceedings in the 2008-action brought about by the assignment into bankruptcy of Cameron Motorsports. In the 2008-action, I grant Midwest Amusement a judgment against Mr. Cameron and Cameron Motorsports for: (a) the equivalent in Canadian dollars of $386,281.93 (USD), plus post-judgment interest at 2%; and (b) costs of $40,000 on a substantial indemnity basis. In the 2010-action, I grant Midwest Amusement and the Institute a judgment against Mr. Cameron for: (a) the equivalent in Canadian dollars of $175,000 (USD) plus pre-judgment and post-judgment interest at 2% per annum from November 1, 2008; (b) damages at large of $500,000 with post-judgment interest at 2% per annum; (c) punitive damages of $500,000 plus post-judgment interest at 2% per annum; and (d) costs of $40,000 on a substantial indemnity basis.

Perell, J.

Released: July 26, 2018

Footnotes

[1] Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3.

[2] Fiorito v. Wiggins, 2017 ONCA 765 at para. 35.

[3] Advocate Mines Ltd. (Re) (1984), 52 C.B.R. (N.S.) 277 (Registrar).

[4] Fiorito v. Wiggins, 2017 ONCA 765 at para. 38; Global Royalties Ltd. v. Brook, 2016 ONCA 50 (in chambers); Toronto-Dominion Bank v. Mawji, 2011 ONSC 4259.

[5] Lincoln Trust and Savings Co. v. Wagman (1977), 23 C.B.R. (N.S.) 240 (Ont. H.C.J.), aff’d (1978), 28 C.B.R. (N.S.) 179 (Ont. C.A.).

[6] Royal Bank of Canada v. Société Générale (Canada), 2003 ONSC 20584, 48 C.B.R. (4th) 103 (Ont. S.C.J.).

[7] Hryniak v. Mauldin, 2014 SCC 7.

[8] Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8.

[9] Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001.

[10] Dawson v. Rexcraft Storage & Warehouse Inc., 1998 ONCA 4831, [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 ONCA 814, 18 O.R. (3d) 481 (C.A.); Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11.

[11] Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798.

[12] Scott v. Commissioner of Police for the Metropolis, [1974] 3 All E.R. 1032 at p. 1038 (H.L.).

[13] Bruno Appliance and Furniture Inc. v. Hryniak, 2014 SCC 8; Parna v. G. & S. Properties Ltd. (1970), 1970 SCC 25, 15 D.L.R. (3d) 336 at p. 344 (S.C.C.); Fiorillo v. Krispy Kreme Doughnuts, Inc. (2010), 2009 ONSC 29902, 98 O.R. (3d) 103 at paras. 66-67 (S.C.J.); Derry v. Peek (1889), 14 App. Cas. 925 (H.L.).

[14] Fiorillo v. Krispy Kreme Doughnuts, Inc., 2009 ONSC 29902, [2009] O.J. No. 2430 at para. 101 (S.C.J.); C.R.F. Holdings Ltd v. Fundy Chemical International Ltd., 1981 BCCA 488, [1982] 2 W.W.R. 385; leave to appeal to SCC refused (1982), 42 N.R. 358; Parna v. G. & S. Properties Ltd., 1969 ONCA 28, [1969] 2 O.R. 346 (C.A.); rev’d on other grounds, 1970 SCC 25, [1971] S.C.R. 306.

[15] Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175 at paras. 82-89, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 183; Foschia v. Conseil des Écoles Catholique de Langue Française du Centre-Est, 2009 ONCA 499 at para. 37; PSC Industrial Canada Inc. v. Ontario (Ministry of the Environment) (2005), 2004 ONSC 15482, 48 B.L.R. (3d) 58 at paras. 60-62 (Ont. S.C.J.), rev'd in part on other grounds (2005), 2005 ONCA 27657, 258 D.L.R. (4th) 320 (Ont. C.A.); Uni-Jet Industrial Pipe Ltd. v. Canada (A.G.), 2001 MBCA 40, 198 D.L.R. (4th) 577 at paras. 66-72 (Man. C.A.); and Alleslev-Krofchak v. Valcom Ltd., aff'd 2010 ONCA 557.

[16] Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175 at paras. 82-89, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 183; Howard v. Madill, 2010 BCSC 525, at para. 89; Foschia v. Conseil des Écoles Catholique de Langue Française du Centre-Est, 2009 ONCA 499 at para. 37; Uni-Jet Industrial Pipe Ltd. v. Canada (A.G.), 2001 MBCA 40, 198 D.L.R. (4th) 577 at para. 72 (Man. C.A.).

[17] Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175 at paras. 84-85, leave to appeal to the S.C.C. ref’d [2016] S.C.C.A. No. 183; Howard v. Madill, 2010 BCSC 525, at para. 89.

[18] Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595; Vorvis v. Insurance Corp. of British Columbia, 1989 SCC 93, [1989] 1 S.C.R. 1085.

[19] Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595.