Court File and Parties

COURT FILE NO.: 2511-17

DATE: 2018/01/31

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DAN ANDERSSON and LEO CANADA INC. Plaintiffs

AND:

GERALDINE AQUINO (aka GERALDINE BORROMEO) and ATIF KAMRAN Defendants

BEFORE: Justice I.F. Leach

COUNSEL: Michael Polvere, for the plaintiffs Edward L. Marrocco, for the defendant Geraldine Aquino (aka Geraldine Borromeo) John Downing and Keegan Boyd, for the defendant Atif Kamran

HEARD: December 22, 2017

ENDORSEMENT

Introduction

[1] When this matter came before me for a full day special appointment hearing on December 22, 2017, (the last regular sitting date of the year), there were no less than six motions scheduled to be heard in this complex commercial litigation.

[2] In circumstances outlined in greater detail below, the time available that day nevertheless was completely consumed by:

• the formal hearing of only one of the six motions, (i.e., a motion by the defendant Mr Kamran to have the plaintiff Mr Andersson found in contempt of court and consequential relief); and
• additional submissions from all parties concerning requested refinements to an earlier interim interim without prejudice order made by Justice Templeton in relation to this matter, pending the court’s ability to address remaining motions.

[3] My substantive decision relating to the contempt motion, and refinements to Justice Templeton’s interim interim without prejudice order, is set out below.

[4] To provide context for that decision, and in an effort to assist other judges who may be dealing with this litigation in the future, (as I am not seized of this matter), I nevertheless will begin with an extended overview providing general background to the current dispute, including a summary of the relatively short but pithy litigation to date, an outline of the various motions now before the court, and an overview of respective party positions as I understand them.

[5] At the outset, it needs to be emphasized that much of the factual background underlying this litigation remains very much in dispute, and has not yet been addressed or decided one way or the other by the court. In the course of providing the overview that follows, it is not my intention to expressly or implicitly make any contested factual findings in that regard, and my decision should not be read that way.

[6] While I necessarily will make certain limited findings regarding contested facts in the course of addressing the contempt motion and party requests for modification of the order made by Justice Templeton, I generally intend to make express indications of when I have done so.

Background

[7] In her earlier endorsement, (released on November 10, 2017, and amended on November 15, 2017), Justice Templeton provided a detailed outline of the factual background presented to her, up until that time, by the evidentiary material filed solely by the plaintiff, and the oral submissions of counsel for the defendants.

[8] I do not think it necessary to reiterate all of that information here.

[9] However, basic contextual matters and assertions, both then and during my dealings with the litigation, include the following:

• This litigation centres on ownership and control of the corporate plaintiff, LEO Canada Inc., (hereafter described as “LEO Canada”). It is one of a number of “LEO” companies, existing in various countries around the world.
• The acronym “LEO” stands for “Learning Enterprises Organization”, and reflects the nature of the principal business commonly carried on by the various LEO companies; i.e., direct sales of entrepreneurial training through the provision of seminars and conferences, (marketed through its network “members” or distributors), and participation in various business opportunities.
• The first such LEO company, (still in existence and apparently prominent within the global business operations of the LEO companies), was created in the United Kingdom by the plaintiff Dan Andersson and the defendant Atif Kamran in or about 2012.[^1] The business was very successful, and expanded somewhat rapidly into other markets; e.g., through approximately 30 or more further LEO corporations being created in approximately 8-10 other countries or territories, including the creation of the plaintiff LEO Canada in 2014.
• Creation of the various entities in the LEO Group apparently has not involved consistency in shareholding arrangements. In particular, while the original United Kingdom company at times may have held most or all of the shares in certain LEO entities created in other jurisdictions, (resulting in something resembling a traditional “parent and subsidiary” corporate relationship), it seems others were created using a variety of different shareholding arrangements. In particular, many if not most of the LEO corporations were created with all shares being held exclusively by one or more named individuals, making them “stand alone” corporations in that sense.
• For the most part, it seems that the various LEO companies nevertheless also have been operated, at least until recently, in a generally coordinated manner. To varying degrees, that coordination arguably is reflected in certain commonalities of creation, ownership and operation of the various LEO corporations; e.g., with Mr Andersson and/or Mr Kamran frequently owning shares in the various corporations, (in addition to more limited shareholding by other individuals for purposes that sometimes have included satisfaction of shareholder residency requirements, imposed by the corporate law of the jurisdictions in which LEO companies were created), and with Mr Andersson and/or Mr Kamran holding various director and/or officer positions in relation to the companies. However, as noted below, the extent or absence of such commonalities and variations, the proper inferences to be drawn in that regard, and the relevance of such matters to the outcome of the current litigation, are also in dispute.
• As noted above, LEO Canada was created in 2014. In that regard:
  • At the time of incorporation, there formally were only two shareholders: Mr Andersson and the defendant Geraldine Aquino, (sometimes known as Geraldine Borromeo), a resident of Canada. In particular, Mr Andersson was named as the registered holder of 95 common shares of LEO Canada, and Ms Aquino was named as the registered holder of one common share of LEO Canada.
  • Apart from an original nominal director used to incorporate the company, (who resigned her position immediately after appointing her initial successors), there also formally were only two directors of LEO Canada shortly after its incorporation. In particular, Mr Andersson was appointed as its President and Chief Executive Officer (CEO), and Ms Aquino was appointed as its Chief Operating Officer (COO).
  • Pursuant to various corporate resolutions signed in June of 2014, the registered office of LEO Canada was to be located in Markham, Ontario, its financial accounts were to be held at the Royal Bank of Canada, and its corporate solicitors would be Siskinds LLP, (a law firm based here in London, Ontario).
• Although the proper scope and timing of its use form important issues in the litigation, it seems undisputed that a “short form continuing power of attorney for property” was executed by Mr Andersson in favour of Ms Aquino on or about September 30, 2014, and formally remained in effect until March 15, 2017.
• There does not seem to be any dispute that, prior to 2016, no changes were made in relation to the formal shareholding or director arrangements for LEO Canada described above. In particular, prior to 2016, Mr Andersson continued to be the registered holder of 95 common shares while Ms Aquino continued to be the registered holder of one share, and there were only two corporate officers: the President and CEO Mr Andersson, and the COO Ms Aquino.
• For reasons and in circumstances that are very much in dispute, steps nevertheless then were taken to either alter or attempt alteration of those shareholding and director arrangements in relation to LEO Canada. Responsibility for initiating those steps, their precise nature and timing, and whether and when they were authorized, completed and effective, are also matters very much in dispute. The respective positions of the parties in that regard, (as I understand them), are summarized in more detail below. Generally, however:
  • Ms Aquino and Mr Kamran contend that, by the end of 2016, (and certainly prior to termination of the aforesaid power of attorney for property on March 15, 2017), proper and sufficient steps had been taken, with the knowledge, approval and authorization of Mr Andersson, to transfer half of Mr Andersson’s 95 shares in LEO Canada to Mr Kamran, and to issue a further 4 shares in LEO Canada to Ms Aquino.
  • Mr Andersson contends that attempts to implement such a share transfer and further share issue not only were taken without his knowledge or authorization, but were also unlawful, incomplete and ineffective.
• For reasons that are disputed, (and addressed in my outline of the parties’ respective positions), there unquestionably was a falling out between Mr Andersson and Mr Kamran that came to a head in or about January of 2017. The rift had implications within the LEO group of companies, including steps taken by Mr Andersson to terminate Mr Kamran’s position as Chief Marketing Officer (CMO) of the original LEO corporation in the United Kingdom, and steps taken by Mr Andersson to prohibit directors of the LEO companies, (including Ms Aquino as a director of LEO Canada), from having further contact with Mr Kamran. Mr Kamran nevertheless apparently remains involved in the LEO group of companies and their operation; e.g., as a shareholder, and as an officer of other corporate entities in the LEO group.
• For reasons that are disputed, (and addressed in my outline of the parties’ respective positions), there also unquestionably was a falling out between Mr Andersson and Ms Aquino that came to a head in or about March of 2017. That too had ramifications, including: steps taken by Mr Andersson purporting to terminate Ms Aquino’s status as a director and officer of LEO Canada; Ms Aquino’s resignation as COO of LEO Canada; and measures taken by Mr Andersson and Siskinds LLP purporting to appoint Peter Dillon of Siskinds LLP as a replacement director of LEO Canada, in order to satisfy the residency requirements of Ontario’s corporate law.
• In the wake of the aforesaid falling outs, the period between January and October of 2017 involved related litigation, threats of litigation, and/or contemplation of litigation, in Canada and other jurisdictions.
• The disputes and disagreements between the parties then carried over into an overt struggle for control of LEO Canada. In particular:
  • On October 20, 2017, Mr Kamran sent notice through counsel of a “Special Meeting of Shareholders” of LEO Canada scheduled for October 31, 2017. The same notice indicated an intention to pass a special shareholder resolution removing Mr Andersson from office, and appointing Mr Kamran as a new director, President and Secretary of LEO Canada. At the same time, relying on his asserted shareholding in the company, Mr Kamran asked Siskinds LLP to grant him access to the books and records of LEO Canada.
  • Between October 20 and 31, 2017, correspondence was exchanged between Siskinds LLP and counsel for Mr Kamran. In its correspondence, Siskinds LLP, (apparently taking the position that it was communicating on behalf of Mr Andersson and LEO Canada), disputed Mr Kamran’s alleged status as a shareholder. In that regard, Siskinds LLP sought production of documentation relied upon by Mr Kamran in that regard, asserted that the contemplated “Special Meeting of Shareholders” was not duly authorized such it would have no force or effect, and served a formal Notice of Trespass prohibiting Mr Kamran and Ms Aquino from attending at the company’s office; a notice accompanied by an indication that the police would be called to address any such attendance.
  • On October 31, 2017, relying on their asserted majority shareholding in LEO Canada, Mr Kamran and Ms Aquino attended the contemplated “Special Meeting of Shareholders”, (not attended by Mr Andersson), and passed numerous motions, the validity of which is disputed. They included motions whereby:
    • Mr Kamran, Ms Aquino and Mr Andersson were appointed as directors of the corporation;
    • Mr Andersson was removed from his position as CEO;
    • Mr Kamran was appointed President and Secretary of the company; and
    • BDO Canada LLP was appointed as auditor of LEO Canada pending the company’s next annual general meeting.
  • Following that meeting, both “sides” then continued or proceeded, (depending on each side’s perspective), to assert control over LEO Canada; e.g., through contentious communications sent to employees of the company, presenting those employees with entirely conflicting (and therefore no doubt confusing) assertions as to who properly had control over the company, and whose instructions should be followed.
• In the meantime, Mr Kamran and Ms Aquino also had started another business; i.e., “MyTravelBiz”, hereinafter referred to as “MTB”. In that regard:
  • MTB admittedly relies on direct selling, and networks of direct sellers or “members”, similar to the business model employed by LEO Canada and other companies in the LEO group.
  • For now at least, as suggested by its name, MTB appears to be focused specifically on the sale of travel products and packages, rather than the sale of general entrepreneurial training.

Competing theories - Overview of party positions

[10] In addition to that general outline of events, and overview of why and how the parties have divergent views as to the significance of MTB and its operations, I think it helpful to now provide, (particularly for the benefit of judges who may be dealing with this matter after me), a more focused description of what I understand to be the particular suggested developments and competing theories, relied upon by the parties, in support of their respective assertions as to whether the steps taken or attempted to alter share ownership in LEO Canada in 2016 were proper and effective, and why the operations and activities of MTB may or may not be significant.

[11] In that regard, although I will refer to the position formally advanced by the “plaintiffs”, (i.e., both Mr Andersson and LEO Canada), I think it advisable to note and recognize that issues identified at the outset of this litigation, (and underscored by one of the cross-motions brought by Mr Kamran), involve fundamental questions as to:

• whether LEO Canada properly should have been named as a party to this proceeding;
• whether Mr Andersson and LEO Canada should have common representation; and
• whether Siskinds LLP should be representing any party herein as litigation counsel, given the prior and ongoing status of Siskinds LLP as corporate solicitors for LEO Canada, which in turn may give rise to possible “lawyer as witness” concerns.

[12] Nothing said in this endorsement, including my reference to positions formally advanced by “the plaintiffs”, is meant to predetermine those issues in any way. In particular, I am alive to those issues and, in particular, the defendants’ position that the views formally put forward as being those of Mr Andersson and LEO Canada may really just be the views of Mr Andersson.

[13] With that important caveat in mind, I understand the general theory of the case advanced by the plaintiffs to be as follows:

• At all material times, it was agreed between Mr Andersson and Mr Kamran that the former would retain majority control of the various entities in the LEO Group, including LEO Canada. While changes to shareholdings and profit sharing may have been discussed and/or agreed, (e.g., in relation to the UK corporation), the fundamental principle of majority control and ultimate decision making by Mr Andersson was not to be altered. Allegations that Mr Andersson and Mr Kamran were intended to be “equal” partners or shareholders in all of the various LEO group entities, including LEO Canada, is simply untrue. Entities within the LEO Group always have functioned as an integrated whole, under Mr Andersson’s direction and management. Nominal shareholdings in various LEO entities, ostensibly suggesting otherwise, do not reflect the manner in which the shares are beneficially held, so as to preserve Mr Andersson’s ultimate authority and control – always recognized in practice.
• Mr Andersson is not guilty of any wrongdoing, despite false assertions to the contrary now being made by the defendants, in an effort at misdirection and justification of their own misconduct. In particular:
  • A director’s loan admittedly made to Mr Andersson, now being questioned by the defendants, was not only a matter of public record and fully transparent, but a standard and proper business transaction mirrored in a similar but larger director’s loan made to Mr Kamran.
  • A land development deal in Portugal now being impugned by the defendants was the subject of full financial review and approval by the original LEO corporation in the United Kingdom and its directors, and a recent valuation of the relevant land confirms that its value is now considerably higher than its purchase price.
• Over time, Mr Andersson and/or the LEO Group nevertheless discovered significant wrongdoing on the part of Mr Kamran and Ms Aquino. That prompted justified efforts by Mr Andersson and the LEO Group to restrict or terminate the participation of both individuals in activities of the LEO Group, including LEO Canada. That in turn has been followed by improper, vengeful and malicious efforts on the part of Mr Kamran and Ms Aquino to seize control of LEO Canada; e.g., in order to undermine the operations and reputation of the LEO Group while diverting assets and business opportunities to themselves.
• In particular, in late 2016 and early 2017, abnormalities were discovered in certain markets related to the compensation plan and commission payments of the LEO Group; abnormalities which prompted an investigation and forensic audit of Mr Kamran’s activities as the CMO of the original LEO company in the United Kingdom (“LEO UK”); a corporation Mr Andersson described, in cross-examinations, as “the mothership”. Such inquiries confirmed that Mr Kamran’s actions effectively diverted millions, (in pound sterling), to various members of Mr Kamran’s family; e.g., through improperly received commissions, bonuses and awards. In the wake of such discoveries, actions quite properly were taken to terminate Mr Kamran from his position as CMO of LEO UK, and prohibit further contact between Mr Kamran and directors of LEO group companies, including Ms Aquino.
• At the time of those developments, and for months thereafter, Mr Andersson and the LEO Group did not know that Mr Kamran and Ms Aquino were engaged in an undisclosed personal relationship, or that Ms Aquino accordingly continued to communicate and work with Mr Kamran despite the aforesaid termination of Mr Kamran and non-communication directives. Such interaction included a photographed meeting between Ms Aquino and Mr Kamran at a resort in the Bahamas, instead of her expected attendance at a previously scheduled and important LEO Group meeting in Dubai. It also included the initiation of efforts by Ms Aquino, through abuse of the power of attorney for property given to her by Mr Andersson, to facilitate an effective takeover of LEO Canada by Mr Kamran and Ms Aquino. In particular:
  • On or about September 20, 2016, without Mr Andersson’s knowledge or instructions, Ms Aquino asked Siskinds LLP to prepare documents sufficient to transfer half of Mr Andersson’s shares in LEO Canada to Mr Kamran, and issue four more shares in LEO Canada to Ms Aquino.
  • Not suspecting any abuse of Mr Andersson’s power of attorney for property, Siskinds prepared the necessary share transfer and issue documents, and provided them to Ms Aquino on or about September 23, 2016.
  • However, Ms Aquino then failed to execute or return the documents to Siskinds LLP prior to March 15, 2017, when the power of attorney was terminated. The transfer of shares to Mr Kamran and issue of further shares to Ms Aquino, contemplated by her directions to Siskinds LLP, accordingly never took place. In the circumstances, no such transactions were recorded in the corporate books and records maintained by Siskinds LLP.
  • Even if the documents had been executed while the relevant power of attorney for property was still in effect, it would have represented an unauthorized, excessive and improper abuse of that delegated authority.
• By March of 2017, Mr Andersson still had no knowledge or awareness of the abortive efforts by Ms Aquino to alter the share arrangements in relation to LEO Canada. He nevertheless had noticed a pattern of troubling behaviour by Ms Aquino, including neglect of her duties as COO of LEO Canada, abuse of her authority within the LEO Group of companies, and her suspected misappropriation of funds from various LEO Group bank accounts.
• On March 3, 2017, Ms Aquino, (perhaps sensing Mr Andersson’s growing concerns about her continued involvement in the LEO Group), contacted Siskinds LLP again to request finalization of the earlier steps taken, (without Mr Andersson’s knowledge or proper authorization), to transfer half of Mr Andersson’s shares in LEO Canada to Mr Kamran and issue four more shares in that company to Ms Aquino. However, between March 3 and March 15, 2017, Siskinds LLP did not respond to the request, and Ms Aquino made no follow up inquiries in that regard.
• On March 15, 2017, Mr Andersson took steps to end Ms Aquino’s further involvement in the LEO group. Those steps included:
  • formal termination of Ms Aquino’s employment with LEO Canada, (which was followed by Ms Aquino tendering a formal letter of “resignation” from her position as a director of LEO Canada);
  • formal termination of the power of attorney for property given to Ms Aquino;
  • removal of Ms Aquino as a director of LEO Canada; and
  • appointment of Mr Dillon of Siskinds LLP as a new additional director of LEO Canada, effectively replacing Ms Aquino while ensuring satisfaction of the director residency requirements imposed by Ontario corporate law.
• Although Ms Aquino threatened a wrongful dismissal claim against LEO Canada, (in May of 2017), no such claim was initiated. However, in June of 2017, LEO Canada commenced an Ontario legal proceeding against Ms Aquino, seeking damages for breach of contract, tortious conversion, misappropriation of funds, breach of fiduciary duty and fraud.
• Acting through malice, a desire for revenge, contemplated use of control of LEO Canada to terminate its litigation against Ms Aquino and another MTB employee, (i.e., Michelle Smith), and/or in furtherance of a general goal to enrich themselves at the expense of Mr Andersson and the LEO Group, Mr Kamran and Ms Aquino formulated and pursued a plan to take control of LEO Canada, undermine the operations of the LEO Group, and divert business opportunities to themselves through MTB. In particular:
  • sometime between March 15 and October 20, 2017, Ms Aquino located the share transfer and issue documentation prepared and forwarded by Siskinds LLP in September of 2016, which had not yet been executed;
  • working in concert with Mr Kamran, (in furtherance of their fraudulent scheme), Ms Aquino then belatedly executed the documentation, fraudulently backdating her signature to a time before termination of Mr Andersson’s power of attorney; and
  • using their purported majority shareholding in LEO Canada, Mr Kamran and Ms Aquino then embarked on further improper efforts to take control of LEO Canada through the “Special Meeting of Shareholders” described above.
• Siskinds LLP has indicated to Mr Andersson that it has no record of ever having received the executed share transfer and issuance documentation now being relied upon by the defendants, and the purported share transfer and issuance therefore was never recorded in the corporate documents maintained for LEO Canada by Siskinds LLP. The first indication received by the plaintiffs, of any such purported execution of the draft share transfer and issue documentation, came with or after the notice of Special Meeting of Shareholders orchestrated by the defendants.
• From the plaintiffs’ perspective, continued involvement of the defendants in the operations of LEO Canada is toxic, and undermines the viability of that corporation and the LEO Group more generally. For example, the plaintiffs point to departures, from the LEO Group and LEO Canada, of personnel who apparently no longer wished to work with Mr Kamran. They also contend that Mr Kamran has engaged in unilateral and undisclosed communications with LEO Canada personnel and others, contrary to the letter or spirit of Justice Templeton’s interim interim without prejudice order.
• The defendants’ creation and promotion of MTB is seen as a particular existential threat to LEO Canada and the LEO Group generally. In that regard:
  • The plaintiffs assert that the MTB business concept, (i.e., to market travel packages by direct selling), originated within the LEO Group and effectively has been misappropriated by the defendants. In particular, the plaintiffs contend that:
    • the LEO Group retained a consultant, (Jason Sosnowski), to develop that concept for the LEO Group;
    • the resulting concept developed by Mr Sosnowski for the LEO Group was put into effect by the LEO Group’s creation and active promotion of a business known as “MyLEOTravel” (or “MLT”), involving MLT promotional material and purchase of a domain name for MLT; and
    • further efforts to promote MLT nevertheless were frustrated by the effective desertion of Mr Sosnowski, who stopped responding to communications from the LEO Group, and now works for MTB.
  • The plaintiffs apparently do not dispute that MTB seems to be focused specifically on the sale of travel products and packages, rather than the sale of general entrepreneurial training. Indeed, in the course of submissions before me, counsel for Mr Andersson and LEO Canada expressly acknowledged that MTB currently appears to be focused on selling a product different from that currently sold by LEO Canada or other members of the LEO group of companies.
  • However, notwithstanding that current product differentiation, counsel for Mr Andersson and LEO Canada says there is a very real concern, on the part of his clients, that the profitable direct selling network of LEO Canada, (and that of the LEO Group more generally), improperly will be diluted and diverted to the benefit of MTB and the defendants. In particular:
    • Reliance is placed on an alleged agreement or understanding, set forth in “membership policies” of the LEO Group and LEO Canada, (described in the affidavit evidence of Mr Andersson), that precludes members” of the LEO group, (i.e., its direct sellers and distributors), from advertising or participating in more than one direct selling operation at a time, especially at the leadership level.
    • Such membership policies are said to be similar to those of other direct selling businesses, and reflect the fundamental reality that direct selling businesses depend on the vitality and strength of their field sales force. When a member of a direct selling network fails to devote all of his or her energies to marketing that network’s product, by devoting some or even all of his or her time to the marking of another network’s product, the strength of the original direct selling network inherently is diluted and undermined.
    • If Mr Kamran and Ms Aquino are permitted to “poach” known members of the LEO Group’s direct selling network, (e.g., by persuading them to market MTB products as well, or to leave the LEO Group altogether to henceforth devote their energies to marketing MTB products on a full time basis), the LEO Group and LEO Canada inevitably will suffer.
    • Given such realities, the LEO Group and LEO Canada inherently are in competition with MTB, and the defendants accordingly have an irreconcilable conflict of interest in purporting to control and promote LEO Canada and MTB at the same time.
  • The plaintiffs have information indicating that MTB, (through the efforts and activities of Mr Kamran and Ms Aquino), nevertheless has engaged in such “poaching” efforts; e.g., through promotional communication, contact and meetings with prominent members of the direct selling network relied upon by the LEO Group and LEO Canada, aimed at persuading such members to engage in direct selling of MTB products.
  • A number of individuals formerly employed by the LEO Group also now have been persuaded to work for MTB.

[14] In their motion material, the defendants present a very different scenario and characterization of events. In that regard, I understand the general theory of the case advanced by the defendants to be as follows:

• At all material times, and consistent with their cofounding of the original LEO enterprise with equal investment contributions, it was agreed between Mr Andersson and Mr Kamran they would be equal “50/50 partners” in relation to all entities and aspects of the LEO Group, including profit distribution, capital value and decision-making. That overall arrangement was expected to apply notwithstanding an intention that the two men would focus on different aspects of the business; e.g., with Mr Andersson looking after legal and accounting matters, (including the formal creation of new LEO companies in various jurisdictions), while Mr Kamran assumed primary responsibility for generating sales along with marketing and growth of the business. While additional individual shareholders would be brought into LEO companies, (e.g., to recognize and/or reward the contributions of others), all aspects of ownership and control always would be subject to the aforesaid “50/50” agreement as between Mr Andersson and Mr Kamran.
• The reality of that pervasive 50/50 equal partnership agreement admittedly was not reflected in ostensible shareholding arrangements initially put in place, (and in many cases still in place), for many of the various entities of the LEO Group. However, such initial shareholding arrangements frequently were adopted for the sake of expediency, and were not intended to reflect the true beneficial ownership of shares.
• In relation to LEO Canada, for example, it was never intended that Mr Andersson would beneficially own 95 shares in the company while Ms Aquino beneficially owned 1 share in the company, with Mr Kamran having no beneficial interest whatsoever in the company. It was instead intended that the shares ostensibly held by Mr Andersson alone would be owned equally by Mr Andersson and Mr Kamran, and that Ms Aquino initially would be the beneficial owner of 1 share, to be increased after one year, (subject to her satisfactory performance of job duties), to beneficial ownership of 5 shares - - thereby bringing the total number of shares in the company to 100. (The intentions and agreement regarding beneficial share ownership by Ms Aquino were settled at the time of Ms Aquino’s hiring in 2014.)
• Conversations between Mr Andersson and Ms Aquino in 2015 and 2016 led her to understand that Mr Andersson intended to alter existing shareholder arrangements, such that he and Mr Kamran would have equal shares in all LEO entities, including LEO UK.
• Initially, at least, Mr Kamran himself was not troubled by the fact that ostensible share arrangements did not reflect true beneficial ownership of the various entities of the LEO Group. He was content to trust and rely upon the verbal agreement he has with his good friend Mr Andersson about the equal “50/50” sharing and partnership agreement. He was content, for example, to have Mr Andersson hold half of his ostensible shares in LEO Canada in trust for Mr Kamran.
• Over time, however, Mr Kamran had growing concerns about his ownership interest in the LEO Group not being properly documented; e.g., concern about what would happen if Mr Andersson died, leaving Mr Kamran with possible challenges associated with enforcing the underlying verbal agreement. In early 2016, Mr Kamran therefore pressed Mr Andersson to participate in updating shareholding arrangements so that they would accurately reflect their true equal partnership agreement. The only issue raised by Mr Andersson in that regard was his expressed desire for “51 percent” control of LEO UK, in order to maintain his self-esteem and professional image.
• Despite that caveat, Mr Andersson initially provided Mr Kamran, on January 10, 2016, with email confirmation that Mr Kamran’s entitlements were based on a “verbal 50/50” and that Mr Kamran “never had to fear for that”. A memorandum of understanding was completed in an effort to confirm the “50/50” arrangement. Steps also were taken, (at a meeting of the United Kingdom board of directors on January 25, 2016), to confirm that directors of LEO UK were aware of the underlying “equal partners” agreement, and Mr Andersson’s intention to complete corresponding formal adjustments to existing shareholding arrangements in various LEO corporations – including LEO Canada.[^2] In that regard, Mr Andersson specifically advised that he would instruct Siskinds LLP to prepare the documentation necessary to formally transfer half of Mr Andersson’s ostensible shareholding in LEO Canada to Mr Kamran, and also follow through on the contemplated issue of four additional shares in LEO Canada to Ms Aquino.
• Acting on the instructions of Mr Andersson, Siskinds LLP subsequently prepared the documentation required to formally transfer half of Mr Andersson’s shares in LEO Canada to Mr Kamran, and to issue four additional shares in the company to Ms Aquino. In that regard:
  • The drafted share transfer and issuance documentation deliberately was backdated by Siskinds LLP to January 25, 2016; i.e., the date of the LEO UK board meeting at which Mr Andersson had confirmed his “50/50” agreement with Mr Kamran, and his intention to make corresponding alterations to existing shareholding arrangements to reflect that agreement.
  • The documentation was drafted in contemplation of its being executed by Ms Aquino on Mr Andersson’s behalf, using the continuing power of attorney for property previously granted by Mr Andersson.
  • As Siskinds LLP explained to Ms Aquino when she initially received that delegated authority, the relevant unrestricted power of attorney and a simultaneous “unanimous shareholders agreement” for LEO Canada, (both executed in 2014), were put in place by Mr Andersson to streamline the operations of LEO Canada; e.g., by enabling Ms Aquino to execute documents on behalf of Mr Andersson, thereby facilitating her ability to carry out the affairs of LEO Canada.
  • The relevant share transfer and issuance documentation was provided to Aquino by Siskinds LLP for execution in September of 2016, after Siskinds LLP brought the need to complete the shareholding reallocation to Ms Aquino’s attention.
• Upon receiving the draft share transfer and issuance documentation from Siskinds LLP in September of 2016, Ms Aquino sought directions from Mr Andersson and Mr Kamran. She did so because there had been ongoing discussion of possible alternative arrangements; i.e., whereby all shares in LEO Canada might be acquired by LEO UK, in which the shareholdings already mirrored the contemplated shareholding arrangement for LEO Canada. However, both Mr Andersson and Mr Kamran instructed Ms Aquino to proceed with execution of the share transfer and issuance documents for LEO Canada that had been prepared by Siskinds LLP, and Ms Aquino did so.
• Ms Aquino then took steps to return the executed share transfer and issue documentation for LEO Canada to Siskinds LLP. In particular, after making copies of the executed documents for retention, Ms Aquino placed what she believed to the original documents in an envelope marked “confidential” and gave the envelope to Mr Borromeo, (her brother, and Business Development and Project Manager for LEO Canada at the time), with instructions to send the package to Siskinds LLP.
• Siskinds LLP received and then relied upon the executed share transfer and issuance documentation; e.g., by updating LEO Canada’s corporate filings with government agencies in Alberta, indicating that shareholdings in LEO Canada had been formally altered such that Mr Andersson and Mr Kamran now each held 47.5 shares in the corporation, while Ms Aquino held 5 shares. Through Ms Aquino, Mr Kamran also was provided with a share certificate, prepared by Siskinds LLP, confirming his ownership interest in LEO Canada.
• Neither Mr Kamran nor Ms Aquino is guilty of any wrongdoing. In late 2016 and early 2017, however, they each learned of financial irregularities suggesting possible wrongdoing on the part of Mr Andersson. For example:
  • Mr Kamran learned of substantial director loans to Mr Andersson that were said to be “unauthorized”, and a suspicious land investment transaction in respect of which Mr Andersson had the LEO Group pay an English company 1.87 million pounds to acquire a property in Portugal for 1.125 million pounds.
  • Ms Aquino, (who came to be associated with the LEO Group after working with Mr Andersson at another company, and held director and officer positions in LEO UK concurrent with her involvement in LEO Canada), similarly became concerned about apparent financial irregularities relating to Mr Andersson and LEO UK.
• Mr Kamran and Ms Aquino each took steps to identify and express concerns about such irregularities; e.g., through communications with Mr Andersson and Siskinds LLP, and/or calls for an independent audit. However, such “whistle blowing” efforts were met with swift and fierce resistance by Mr Andersson, who embarked on drastic steps to divert further focus on his misconduct while silencing and discrediting Mr Kamran and Ms Aquino. In particular, he made baseless accusations of misconduct on their part, and did what he could to terminate their further involvement in the LEO Group; e.g., by purportedly terminating Mr Kamran from his position as CMO of LEO UK, and purportedly terminating Ms Aquino from her position as COO of LEO Canada. However:
  • Mr Andersson currently is the party consequently involved in numerous legal proceedings “around the globe”. He is, for example, the subject of an active injunction in Germany prohibiting his use of certain intellectual property of an entity known as “LEO Tower”, (a German corporation), and injunction proceedings in the United Kingdom relating to a disputed extra class of shares in LEO UK.
  • In contrast, the only formal litigation in which Mr Kamran is involved, apart from this matter, concerns a disputed settlement agreement in Germany. (Mr Kamran is disputing his dismissal as CMO of LEO UK through an active employment tribunal case in the United Kingdom.) Kamran remains deeply involved in the business operations of the LEO Group. For example, Mr Kamran remains a director of LEO UK, (in which he has a significant shareholding equal to that of Mr Andersson), continues to hold executive positions and shares in a numerous other LEO entities, and continues to investigate and call attention to apparent financial irregularities in operations of the LEO Group, including “unauthorized money transfers” by Mr Andersson.
  • Apart from this litigation, Ms Aquino is actively defending the claim brought against her by the plaintiffs, and has retained separate counsel to advance claims relating to the termination of her employment by LEO Canada. She has not attended the offices of LEO Canada since her termination.
• Despite the current denials of Mr Andersson and Siskinds LLP, the contemplated share transfers and share issue arrangements upon which Mr Kamran and Ms Aquino rely were properly completed and finalized in or about September of 2016, well before the falling out between the parties, well before formal termination of the power of attorney granted by Mr Andersson to Ms Aquino, and well before the entirely proper Special Meeting of Shareholders, at which steps were taken to safeguard the interests of LEO Canada; e.g., through the appointment of an auditor for the corporation. Moreover, Siskinds LLP, (with whom Mr Andersson remained in frequent contact), clearly was aware of the completed arrangements to restructure the shareholdings of LEO Canada.
• In any event, Mr Kamran always has been the true beneficial owner of half the shares in LEO Canada originally granted to Mr Andersson. Moreover, although not a formal officer or director of LEO Canada prior to the Special Meeting of Shareholders, Mr Kamran actually has been fully and actively involved in the corporation since its creation; e.g., working closely with its staff, and attending numerous LEO events in Canada.
• As far as MTB is concerned:
  • While MTB admittedly relies on direct selling and networks of direct sellers or “members”, similar to the business model employed by LEO Canada and other companies in the LEO group, there is nothing inherently unique about such arrangements.
  • The MLT business platform attempted by the LEO Group was fleeting, (being “on-line” only temporarily in 2016), unsuccessful, (generating only a single booking and $6.00 in revenue), and inactive from 2016 onwards; i.e., well before the onset of the current dispute.
  • Nor was there anything unique or proprietary about the LEO Group’s failed MLT effort. The relevant travel software underlying the MLT effort was not specifically developed for the LEO Group by Jason Sosnowski, as alleged by the plaintiffs. It was instead a non-exclusive “off the shelf” travel software package, developed entirely by Mr Sosnowski in 2005 or 2006; i.e., well before the creation of any LEO entity. Ownership of the relevant software or “platform”, (concurrently deployed by many other businesses across a variety of industry sectors), always has remained vested in “Travelopolis”; an entity owned by Mr Sosnowski. Mr Sosnowski interacted with LEO Canada only as a consultant or independent, and never licensed or sold his platform to MLT.
  • MTB is focused specifically on the sale of travel products and packages, rather than the sale of general entrepreneurial training. It also offers an array of products, packages and solutions that MLT neither offered nor could have offered. As acknowledged by counsel for the plaintiffs, in the course of submissions before me, MTB accordingly is selling products different from that currently sold by LEO Canada or other members of the LEO group of companies. There accordingly is no inherent conflict between the business activities of the LEO Group and the business activities of MTB, and MTB is neither a direct nor indirect competitor of LEO Canada.
  • The defendants also deny the existence of any agreement or understanding whereby “members” of the LEO Group, (i.e., its direct sellers and distributors), are required to commit all their energies to marketing of LEO Group products, and/or are prohibited from becoming members of other direct selling networks, including that now being promoted by MTB.
  • Although a number of individuals formerly employed by the LEO Group now work for MTB, their employment contracts did not restrain or prohibit future employment that might compete with LEO Canada, in relation to direct selling of entrepreneurial skills or otherwise.
  • The plaintiffs’ request for injunctive relief restraining or severely restricting the operations of MTB represents a severe threat to its success and continued existence; e.g., as the granting of such relief would frustrate the momentum of MTB and its “first to market” advantage, (as it currently is the first and only online travel business with a marketing plan using “blockchain” technology), and force MTB to breach existing contracts and commitments that inevitably will destroy consumer confidence in its operations.

[15] Having regard to significant and obvious conflicts in the evidence filed, it seems reasonably clear that there has been a failure to date, on the part of one or more of the parties, to provide the court with an accurate account of events and concerns leading to the present dispute.

Litigation history

[16] As far as this particular litigation is concerned, the plaintiffs Mr Andersson and LEO Canada formally were “first off the mark” with their notice of action issued here in London on November 7, 2017, and their urgent motion for interim and interlocutory injunctive relief served and made returnable the following day; i.e., November 8, 2017.

[17] Having said that, I note indications by Mr Kamran in his affidavit material, and by defence counsel during the course of submissions before me, that when they were served with the plaintiffs’ initial material, the defendants simultaneously had been finalizing arrangements to commence similar litigation; i.e., to address and resolve the parties’ dispute, and seek various forms of relief, including injunctions and damages, vis-à-vis Mr Andersson. In particular, in the proceedings before me, it was emphasized:

• that the defendants intended to commence such litigation in Newmarket, closer to the location of LEO Canada’s head office in Markham;
• that the defendants refrained from doing so, after service of the plaintiffs’ material, only because they thought it appropriate to avoid the inevitable confusion, delays and added expense that would have been caused to all concerned by the existence of competing and duplicative proceedings in more than one region;
• that the defendants still are quite intent on advancing their own formal claims for injunctions, damages and further relief by way of counterclaim, but have been waiting on anticipated service of the plaintiffs’ statement of claim, which appeared to be overdue at the time of the hearing before me; and
• that the defendants were surprised to learn, during the course of the hearing before me, that the plaintiffs had filed but not yet delivered a formal statement of claim, dated December 7, 2017, following up on their notice of action.

[18] In my view, given the number of responding motions already advanced by the defendants, there is no reason to doubt such assertions that the defendants were and are equally intent on aggressively advancing allegations and claims of their own.

[19] When the matter initially came before Justice Templeton on November 8, 2017:

• The plaintiffs sought urgent interim injunctive relief that effectively would exclude the defendants from any contact or involvement with LEO Canada or its business contacts; e.g., by preventing them from acting as directors, officers or shareholders of the company, and declaring that the purported transfer of shares to Mr Kamran and issue of further shares to Ms Aquino were “invalid and of no force and effect”.
• In seeking that urgent interim injunctive relief, the plaintiffs relied on substantial prepared motion material, presenting a detailed account of events from their perspective.
• Although represented by counsel, the defendants had not yet had any meaningful opportunity to deliver responding material, and were obliged to rely on unsupported oral submissions. Those submissions emphasized that the allegations of wrongdoing on their part were denied, that there was another side to the story, and that the defendants intended not only a response but motions of their own; e.g., challenging the propriety of Siskinds LLP representing the plaintiffs in the litigation.

[20] Precise dates and details of how Justice Templeton dealt with the matter procedurally, (e.g., in terms of court attendance, endorsements, orders and directions), are noted below.

[21] However, by way of substantive outcome:

• Justice Templeton recognized that the defendants required an opportunity to participate fully in the litigation, the outcome of which seemed likely to turn on significant issues of credibility and reliability, particularly in relation to Mr Andersson, Mr Kamran and Ms Aquino.
• Justice Templeton nevertheless also emphasized that interim arrangements were necessary to protect the livelihood and viability of LEO Canada and its interests, pending further order of the court.
• Through an initial and amended endorsement, a further hearing, and a formal interim interim without prejudice order issued and entered on November 17, 2017, Justice Templeton sought to strike a temporary balance. In particular, she mandated interim joint operation of LEO Canada by Mr Andersson and Mr Kamran, (or their respective designates), and gave numerous specific directions in that regard. Those directions obviously were designed, amongst other objectives, to ensure consultation and transparency; to restrict disruptive or confusing unilateral decisions and communications; to prevent any disclosure of sensitive information that might harm LEO Canada; and to restrain temporarily any further attempts to alter the corporation’s structure, shareholdings or management.

[22] Apparently contemplating that all interlocutory issues would be addressed on their merits during a full day special appointment hearing scheduled for December 22, 2017, Justice Templeton also set a timetable to ready the plaintiffs’ original motion, and all unspecified further motions, for argument that day.

[23] However, by December 21, 2017, (and despite some further intervening court attendances noted below), there were no less than six motions before the court in relation to this matter, all returnable on December 22, 2017:

i. the plaintiffs’ original motion, (served on or about November 7, 2017), seeking extensive interim and interlocutory injunctive relief, described above, vis-à-vis both defendants; ii. the defendant Mr Kamran’s motion, (served on or about November 13, 2017), seeking an order requiring the plaintiff Mr Andersson to fortify, (e.g., by posting security into court), his undertaking given in support of the plaintiffs’ aforesaid motion requesting interim and injunctive relief; iii. the defendant Mr Kamran’s motion, (served on or about November 13, 2017), seeking an order requiring the plaintiff Mr Andersson to post $150,000 as security for costs; iv. the defendant Mr Kamran’s motion, (served on or about November 13, 2017), for an order removing Siskinds LLP as counsel of record for the plaintiffs, and compelling Siskinds LLP to search for and produce specified non-privileged documents from its paper and electronic files relating to the corporate plaintiff; v. the plaintiffs’ supplementary motion, (served on or about December 7, 2017), seeking court appointment of an independent forensic document examiner or examiners specializing in ink-dating and/or handwriting analysis, as well as production of specified original documents for examination by such court appointed experts, and adjournment of all other motions pending the delivery of reports by such court appointed experts; and vi. the defendant Mr Kamran’s motion, (served on or about December 11, 2017), for an order requiring the plaintiff Mr Andersson to comply with Justice Templeton’s order of November 17, 2017, and a contempt order pursuant to Rule 60.11 of the Rules of Civil Procedure.

[24] Each of those six motions realistically would require advance judicial review of the voluminous material filed by the parties, and extended argument and consideration. In short, each motion, on its own, would have warranted a special appointment hearing.

[25] Precisely how all six motions came to be returnable on December 22, 2017, is not entirely clear, owing in part to an absence, in some instances, of endorsements on the relevant motion records. However, by way of summary, based on the information available:

i. The plaintiffs’ motion for interim and injunctive relief originally was returnable on November 8, 2017. On that date, Justice Templeton apparently heard the motion and reserved her decision. On November 9, 2017, Justice Templeton made an endorsement on the relevant motion record noting that an interim interim order had been released that day, although the file contains an apparently corresponding typed “Ruling” by Justice Templeton dated November 10, 2017, and a typed “Amended Ruling” dated November 15, 2017. Justice Templeton’s handwritten endorsement on the plaintiffs’ motion record adjourned the plaintiffs’ motion to November 17, 2017, “for hearing”, or to a “date thereafter as Ct can accommodate”. Both the “Ruling” and “Amended Ruling” adjourned the motion to November 17, 2017, “and thereafter as required”. On November 17, 2017, counsel for all parties appeared again before Justice Templeton, at which time Justice Templeton made a further endorsement adjourning the plaintiffs’ “injunction” motion “and all motions” to December 22, 2017, and setting a timetable for the delivery of motion material, the carrying out of any desired cross-examinations, and the delivery of facta. On the same date, Justice Templeton then made a further endorsement, indicating that her previous interim interim order was being “amended as noted”, (apparently referencing handwritten notations Justice Templeton made to the court copy of her endorsement dated November 10, 2017), and indicating that a new formal order “incorporating the amendments shall be issued and entered by the court”. A formal order was indeed then issued and entered on November 17, 2017, effectively revising Justice Templeton’s earlier interim interim without prejudice order, and incorporating the aforesaid timetable Justice Templeton had established for “the return of the Plaintiffs’ motion and the Defendants’ motions on December 22, 2017”. The order also specified that, “pending a final decision of the court”, the costs of any named individual party to the litigation were not to be taken from the corporate plaintiff, and that all costs were being “reserved until the conclusion of the interlocutory motion herein and the motions to be brought by the defendants as referred to” therein. ii. When the motions came before me for hearing on December 22, 2017, no endorsements whatsoever had been made on the records relating to the defendant Mr Kamran’s motions relating to fortification of the plaintiff Mr Andersson’s undertaking, the posting of security of costs by the plaintiff Mr Andersson, and the removal of Siskinds LLP as the plaintiffs’ counsel of record, (before producing non-privileged documents relating to the corporate plaintiff). However, all three of those motions initially had been made returnable on November 17, 2017. It seems clear that they accordingly were before Justice Templeton that day, and they almost certainly therefore formed part of the unspecified additional “motions” or “Defendants’ motions” referred to in Justice Templeton’s handwritten endorsement of November 17, 2017, and the order issued and entered that same day. (Although the order refers to such motions as the “Defendants’ motions”, I note that they nominally were brought only by the defendant Mr Kamran, although the defendant Ms Aquino effectively may support, or at least not oppose, some or all of them.) In effect, those particular three motions brought by Mr Kamran therefore effectively were adjourned to December 22, 2017, by the November 17th handwritten endorsement Justice Templeton made on the motion record relating to the plaintiffs’ request for interim and interlocutory relief, and the order issued and entered that same day. iii. The plaintiffs’ supplementary motion seeking court appointment of an independent forensic document examiner or examiners specializing in ink-dating and/or handwriting analysis, as well as production of specified original documents for examination by such court appointed experts, and adjournment of remaining motions pending the delivery of reports by such court appointed experts, initially was returnable in regular motions court on December 12, 2017. The only endorsement on the record is an undated one, apparently made by Justice Desotti, saying “Matter is adj. to Dec.22/2017 at 10am”. I was advised by counsel that the matter initially came before Justice Desotti in regular motions court on December 12, 2017, at which time it was adjourned to an available full day special appointment hearing date on December 18, 2017, as part of the ancillary relief requested was an adjournment of all other motions scheduled for hearing on December 22, 2017. However, counsel further advised that, that when the matter happened to come back before Justice Desotti for hearing on December 18, 2017, counsel were informed at the outset that they were not to open their books, as Justice Desotti had decided it would not be advisable to risk “stepping on the toes” of the judge scheduled to hear other motions on December 22, 2017, and that the plaintiffs’ supplementary motion therefore would be adjourned to that date as well. Counsel further advised that Justice Desotti nevertheless also scheduled a “trial management conference” before me on the morning of December 21, 2017, so that all of the motions could be organized for contemplated hearing the following day. Without the benefit of a dated and more extensive endorsement on the record relating to the plaintiffs’ supplementary motion, I am unable to confirm the accuracy of what was related to me by counsel in that regard. However, the limited endorsement made on that record at least confirmed that the plaintiffs’ supplementary motion also was adjourned, in the result, to December 22, 2017. iv. The contempt motion brought by Mr Kamran initially was returnable in regular motions court on December 19, 2017. When the matter came before me, there were no endorsements whatsoever on that motion record, to indicate how the motion was dealt with on December 19, 2017. For example, there was no indication that the motion was being adjourned to December 22, 2017, or to any other particular special appointment hearing date. However, it seemed to be the understanding of the parties that the contempt motion also would be heard on December 22, 2017.

[26] When the file material was delivered to my London chambers on or about the later afternoon of December 19, 2017, it frankly was in an appalling state of disorganization. In particular:

• The material physically arrived in a significantly over-flowing banker’s box that was torn and broken.
• No apparent effort had been made to segregate the particular material relating to each of the numerous motions. To the contrary, all of the various motion records, facta and books of authorities effectively had been shuffled together like over-sized playing cards.
• There also apparently had been little or no effort made to separate the substantial motion material from a substantial quantity of other completely disorganized “loose” material in the court file, including pleadings, court administrative documents, Justice Templeton’s rulings, Justice Templeton’s orders, and myriad affidavits of service.
• Some of the material and filings one might have expected to find in the file, having regard to the timetable established by Justice Templeton, (e.g., transcripts of the intended cross-examinations and supplementary facta), were simply not there.

[27] In the result, I spent considerable time on the evenings of December 19 and 20, 2017, after my other court hearings on those dates, attempting to impose order on the file and review material in preparation for the full day substantive hearing scheduled for December 22, 2017.

[28] However, my task in that regard was complicated by a number of additional factors, including:

• failure by the plaintiffs to clearly identify, on the front page of material, the particular motion or motions in respect of which their many records, facta and books of authorities had been filed;
• failure by the plaintiffs to highlight or sidebar the particular passages relied upon in the numerous authorities provided to the court for review;
• the above-noted absence of endorsements on the various motion records, readily indicating the court’s previous treatment of each motion and confirming what motions had thereby been scheduled for hearing on December 22, 2017; and
• failure of the parties to file confirmation forms, in relation to the hearing scheduled for December 22, 2017, by the deadlines set by Rule 37.10.1 of the Rules of Civil Procedure and confirmed by paragraph 7 of the Consolidated Practice Direction for the Southwest Region; i.e., deadlines which should have required such confirmations to be filed no later than 2pm on December 18, 2017, three full days before the scheduled hearing date.

[29] In fairness to counsel, I gather that last failing may have resulted from an understanding, based on the brief appearance before Justice Desotti on December 18, 2017, that the “trial management conference” directed by Justice Desotti for December 21, 2017, was intended to supplant the need for normally required confirmations. As a practical matter, however, the absence of such confirmations severely compromised my ability to know with any certainty, during the course of my organization efforts and preparations, what motions were scheduled for hearing on December 22, 2017, what motions the parties realistically expected to have heard that day, and the corresponding material I was expected to review for that hearing.

[30] Through the trial co-ordinator, I therefore asked counsel, on December 20, 2017, to provide me with appropriate confirmation forms by the end of the day. However, the confirmations then received were less than helpful, in that they simply indicated that the parties contemplated a hearing of “all issues” on December 22, 2017, and listed their respective filings without any effort being made to organize and segregate the listed material by reference to particular motions.

[31] On the morning of Thursday, December 21, 2017, I then met with counsel for the “trial management conference”, scheduled by Justice Desotti, for the purpose of ensuring that matters were in order for the full day special appointment hearing scheduled for the next day. In particular:

• I met that morning, for approximately three uninterrupted hours, with counsel for the plaintiffs and counsel for the defendant Mr Kamran, with the latter also appearing as agent for counsel representing the defendant Ms Aquino.
• I noted, (for the benefit of counsel and to underscore why I was looking to them for further assistance with file organization and my preparation for the scheduled hearing), the lamentable state of the court file as it was provided to me.
• To assist with future efforts to maintain the growing court file in an ordered manner, and help with court preparation for hearings, I asked counsel to ensure, on a “go forward” basis:
  • that all future filings contain readily discernible labels or descriptions specifying the particular motion in respect of which they were being filed;
  • that all books of authorities be adequately highlighted or side-barred to identify the particular passages relied upon by the parties;
  • that separate facta and books of authorities be filed in relation to each motion, (as it was likely that motions would be argued on different dates, and not necessarily by the same judge, such that the use of “rolled up” facta and books of authorities addressing more than one motion substantially increased the difficulty of maintaining order over the file, (e.g., as court staff searched through the file to identify and pull only the material needed for specific court hearings); and
  • that future confirmation forms would not only always be filed in accordance with the rules and the consolidated regional practice direction, but also have the focused input of counsel to ensure that material listed for requested advance review by the court would be organized in a more coherent and structured fashion.
• With the assistance of attending counsel, I conducted a thorough inventory of the material that had been provided to me, and which I had attempted to organize. Unfortunately, that process, (assisted by the belated confirmation forms), made it clear that significant and substantial material filed by the parties, (including transcripts of extended cross-examinations on affidavit material conducted by the parties, and fresh as amended facta, all prepared and served by both sides), was indeed inexplicably missing from the court file. Arrangements were made for counsel to supply me with duplicate copies of some of the missing material as soon as possible, although it was unlikely that I would receive all of that material in time for a thorough review in advance of the hearing scheduled for the following day.
• Counsel confirmed that, in addition to the six motions formally scheduled for hearing on December 22, 2017, all parties had submissions to make concerning further requested modifications to Justice Templeton’s interim interim without prejudice order of November 17, 2017, if that order generally was to remain in place for a further period of time as the matter worked its way towards a substantive hearing of the plaintiffs’ motion for interlocutory relief.
• All concerned agreed that even the full day special appointment hearing scheduled for December 22, 2017, realistically would not come close to being sufficient to address all six of the motions before the court. That reality, coupled with the identified court file deficiencies, made it necessary to perform a “triage” assessment, and determine how the time available on December 22, 2017, could be used most efficiently and effectively.
• After receiving input from counsel, I made the following interim determinations regarding hearing and scheduling priorities, without prejudice to my ability, or the ability of any other judge subsequently dealing with the file, to alter those priorities in light of changed circumstances or perceptions:
  • In my view, the plaintiffs’ motion for interlocutory relief realistically was not ready for hearing the next day, for numerous reasons. In particular:
    • The absence of existing material, which inexplicably had gone missing from the court file, prevented my advance review of that material, and appropriate preparation for the special appointment hearing of that motion.
    • Proceeding with hearing and disposition of the plaintiffs’ motion for interlocutory injunctive relief, without prior hearing and determination of the plaintiffs’ other motion, (i.e., the motion requesting appointment of ink-dating and/or handwriting experts, their inspection of certain documents, and adjournment of other motions until reports from those experts could form part of the material for consideration in relation to the plaintiffs’ motion for interlocutory relief), effectively would presuppose the outcome of that other motion, and deny the plaintiffs the relief requested therein without a hearing.
    • Hearing and disposition of the plaintiffs’ motion for interlocutory relief, without prior hearing and disposition of the defendant Mr Kamran’s motion raising questions about the propriety of the plaintiffs’ representation by Siskinds LLP, (including “counsel as witness” concerns), also might presuppose the outcome of that motion to some extent, or oblige the court to otherwise address the issues raised by that motion.
    • It seemed appropriate to address and resolve, before hearing and disposition of the plaintiffs’ motion for interlocutory relief, the issues raised by the defendant Mr Kamran’s motions to compel fortification of Mr Andersson’s undertaking, (i.e., to provide reimbursement for any damages sustained by the defendants if it later transpired that an interlocutory injunction should not have been granted), as the viability and strength of the undertaking axiomatically seemed a relevant consideration to whether an interlocutory injunction should be granted.
    • Before putting the defendants to the expense of further hearings, it also seemed appropriate to address and resolve, as soon as practically possible, the question of whether Mr Andersson should be posting security for costs in relation to that expense.
  • If the plaintiffs’ motion for interlocutory injunctive relief would not be proceeding the next day, (and perhaps not for several more weeks or months), in my view that made resolution of issues surrounding the contempt motion and addressing suggested problems with the existing interim interim without prejudice order immediate priorities. In that regard, the welfare of the corporate plaintiff was not only the professed goal of all parties to the litigation, but something of vital interest to the many employees of the corporate plaintiff. The court therefore needed to ensure that the interim interim without prejudice arrangements put in place for the corporation’s ongoing management and operations were being respected, and that such arrangements also were viable. I accordingly indicated that, on December 17, 2017, initial priority would be given to hearing of:
    • the motion brought by the defendant Mr Kamran for a finding of civil contempt, addressing alleged non-compliance with Justice Templeton’s interim interim without prejudice order; and
    • the requests, contemplated by each party, for modification of that interim interim order to address perceived inadequacies and/or problems said to have materialized since Justice Templeton dealt with the matter.
  • As counsel thought hearing of those two matters could be completed in half a day, that left open the possibility of trying to address at least one of the other remaining motions during the afternoon of December 22, 2017. In that regard, I indicated my view that the next priority should be hearing and resolution of the issues raised by the motion questioning whether Siskinds LLP should continue to represent the plaintiffs in this litigation. In particular, it seemed to me that all concerned had an interest in knowing, as soon as possible, whether Siskinds LLP properly should be advising and representing either or both plaintiffs in relation to the issues already placed before the court for determination, let alone additional issues that are likely to arise. (I recognize that the same could be said of the issues raised by the contempt motion, and the issues raised about suggested deficiencies in the existing interim interim without prejudice order. However, I thought the pressing need to address those issues, for the reasons outlined above, outweighed any immediate concerns about the plaintiffs’ representation by Siskinds LLP. Nor did such issues inherently raise, to the same extent, “counsel as witness” issues directly or indirectly underlying some of the remaining motions.) I therefore directed that, on December 22, 2017, argument of the contempt motion and requests for modification of the existing interim interim without prejudice order would be followed by efforts to hear Mr Kamran’s motion to remove Siskinds LLP as counsel of record for the plaintiffs, and related relief. I nevertheless also emphasized to counsel that, because the already established regional schedule might not permit me to hear anything further in this matter for quite some time, we would not embark on the hearing of any motion that could not be completed during the time available on December 22, 2017.
• On the latter point, I had some discussion with counsel about whether or not this matter might be suitable for appointment of a case management judge, pursuant to Rule 37.15, to hear all remaining and further motions in this matter before trial. In that regard, I expressed a preliminary view that, while appointment of a Rule 37.15 judge has a superficial appeal, (in terms of ensuring judicial familiarity with the matter, which might be expected to speed the matter along), the benefits of such an appointment were likely to be illusory, and the appointment actually counter-productive, if the competing demands of the existing regional schedule and most judges already being seized of existing matters would make the appointed Rule 37.15 judge effectively unavailable to hear successive extended special appointment hearings without very significant delays. Without intending to predetermine the possible Rule 37.15 issue in any way, in my view it also really would and will not be that difficult for one or more successive judges to address the remaining and/or further motions before trial. In particular, with concerted effort, I was able to review all the extant material over the course of a few evenings, and later judges hopefully will have a much easier task in that regard given the extensive background information provided in this endorsement, the fact that the file now has been organized, and the reality that many of the remaining motions raise issues that can be addressed and resolved discretely without any need to review all of the motion material. There frankly was and is no need for all the extant motions to be scheduled for one hearing – which is what necessitated my review of the entire court file. Having said all that, I indicated to the parties, and indicate again here, that I am happy to assist by hearing further motions in this matter, to the extent the existing regional and London court schedule might permit that to happen. I simply emphasize that I am not seized of this matter, that any judge should be able to hear remaining or further motions in this matter, and that past experience suggests that my being seized of the matter effectively might delay progress of the matter significantly.

[32] When the matter came before me again the following day, every effort was made to complete a hearing of the three prioritized matters noted above; i.e., Mr Kamran’s contempt motion, party requests for modification of Justice Templeton’s interim interim without prejudice order, and Mr Kamran’s motion challenging the ability of Siskinds LLP to represent the plaintiffs in this litigation.

[33] Unfortunately, party submissions in relation to the first two matters completely exhausted the hearing time available on December 22, 2017.

[34] In the result, I reserved my decision in relation to those two matters, and initially adjourned all of the motions to a further “speak to” date on January 9, 2018, to address further scheduling requests. On consent of the parties, that original “speak to” date then was adjourned to January 16, 2018.

[35] On January 16, 2018, the matter came before Justice Grace, as the Local Administrative Justice for London. In a free standing endorsement, effectively applicable to all of the outstanding motions:

• Justice Grace indicated that the next motion to proceed should be Mr Kamran’s motion for an order removing Siskinds LLP as counsel of record for the plaintiffs, and compelling Siskinds LLP to search for and produce specified non-privileged documents from its paper and electronic files relating to the corporate plaintiff. That motion was adjourned to January 31, 2018, for contemplated hearing.
• Justice Grace similarly adjourned, to January 31, 2018, the plaintiffs’ supplementary motion seeking court appointment of an independent forensic document examiner or examiners, and ancillary production and adjournment relief. However, expressing reservations about whether that motion should be allowed to proceed in advance of hearing and determination of the motions concerning the continued involvement of Siskinds LLP, Justice Grace indicated that it would be up to the judge presiding on January 31, 2018, to determine whether that second motion would be heard that day.
• While there was no express mention of the other outstanding motions, it seems clear from the comments of Justice Grace that the other motions effectively were being adjourned sine die, pending determination of the above two motions adjourned to January 31, 2018.
• Costs of the scheduling appearance were reserved as costs of the action, to be addressed upon conclusion of the litigation.

[36] In the meantime, I continued with preparation of this endorsement.

Contempt motion

[37] With that extended background in mind, I turn now to the contempt motion brought by the defendant Mr Kamran.

[38] As noted above, that motion, served on or about December 11, 2017, formally seeks an order requiring the plaintiff Mr Andersson “to comply with Justice Templeton’s order of November 17, 2017”, and a contempt order pursuant to Rule 60.11 of the Rules of Civil Procedure.[^3]

[39] In the course of oral submissions, counsel for Mr Kamran distilled Mr Andersson’s alleged non-compliance with the interim interim without prejudice order into four principal categories:

i. engaging in prohibited communications and disclosure concerning this litigation; ii. denying Mr Kamran ordered access to files, data and records of LEO Canada, to facilitate his joint operation of the corporation with Mr Andersson; iii. failing to provide monthly written reports of LEO Canada’s financial position, in the manner ordered by the court; and iv. failing to operate LEO Canada jointly with Mr Kamran, in the manner ordered by the court.

[40] Before embarking on a more detailed consideration of those complaints, I pause to outline general principles and legislation relating to the law of civil contempt, which include the following:

• Contempt of court rests on the power of the court to uphold its dignity and process. The rule of law depends directly on the ability of courts to enforce their process, and maintain their dignity and respect. The purpose of a contempt order therefore is first and foremost a declaration that a party has acted in defiance of a court order.[^4]
• In relation to civil contempt, (which lacks the element of public defiance essential to criminal contempt), exercise of the court’s contempt jurisdiction is primarily intended to be coercive rather than punitive; i.e., to encourage or ensure compliance with court orders.[^5]
• A finding of civil contempt requires proof, beyond a reasonable doubt, of three essential elements:
  • First, to ensure that a party will not be found in contempt where an order is unclear, the court order alleged to have been breached must state clearly and unequivocally what should and should not be done. For example, an order may not be sufficiently clear if it is missing an essential detail about where, when or to whom it applies; if it incorporates overly broad language; or if external circumstances have obscured its meaning.[^6] On the other hand, a party must comply with both the letter and spirit of a court order, and will not be permitted to hide behind formalistic, restrictive and literal interpretation to circumvent an order, thereby making a mockery of the order and the administration of justice. The days are long past when someone subject to a court order can get away with circumventing it by relying on a benign technicality.[^7]
  • Second, the party alleged to have breached a court order, (the alleged “contemnor”), must have had actual knowledge of the order. In appropriate circumstances, it nevertheless may be possible to infer such knowledge, or find the knowledge requirement satisfied on the basis of the “wilful blindness” doctrine.[^8]
  • Third, the alleged contemnor must have intentionally done the act that the order prohibits, or intentionally failed to do the act that the order compels. An intention to disobey the court order, in the sense of desiring or knowingly choosing to disobey the order, is not required for a finding of contempt, (although the existence or non-existence of such a “contumacious intent” may be relevant in determining the penalty to be imposed following a finding of contempt). All that is required, in relation to this third essential element of civil contempt, is proof beyond a reasonable doubt of an intentional act or omission that is in fact a breach of the relevant court order.[^9] Reliance on legal advice does not shield a party from a finding of contempt.[^10] Nor does a belief on the part of the alleged contemnor that there is a conflict between the demands of a court order and other perceived legal obligations. A party in such a position has appropriate avenues open to him or her other than a unilateral decision to breach the order, (e.g., seeking a court determination in relation to the perceived conflict, and/or other efforts to appeal, quash, vary or otherwise have the order set aside), and cannot ignore the important and elementary principle that, so long as an order of the court remains in force, it is binding and conclusive, and must be obeyed.[^11]
• It nevertheless must be remembered that the court’s contempt power is discretionary, and the full scope of that discretion purposely has not been delineated. A judge entertaining a contempt motion therefore generally retains some discretion to decline making a finding of contempt even where the three essential elements of civil contempt otherwise have been established; e.g., in circumstances where a contempt finding would work an injustice, as in cases where an alleged contemnor acted in good faith in taking reasonable steps to comply with an order. In that regard, it should be remembered that courts consistently have discouraged routine use of the contempt power to obtain compliance with court orders, as resorting to the power too easily might ultimately “cheapen” the role and authority of the very judicial power a finding of civil contempt seeks to protect. The contempt power therefore should be used “cautiously and with great restraint”, as an enforcement power “of last rather than first resort”.[^12]
• In Ontario, civil contempt proceedings are governed by Rule 60.11 of the Rules of Civil Procedure. In that regard:
  • Pursuant to Rule 60.11(1), a party to a proceeding may make a motion to a judge, in that proceeding, seeking a contempt order to enforce an order requiring a person to an act, (other than the payment of money), or to abstain from doing an act.
  • Pursuant to Rule 60.11(5), a judge disposing of such a motion may “make such order as is just”. Without limiting the generality of that jurisdiction, where a finding of contempt is made, the judge may order the person in contempt to be imprisoned, pay a fine, do or refrain from doing an act, pay just costs, and comply with any other order the judge considers necessary.
  • Pursuant to Rule 60.11(6), where a corporation is found in contempt, the judge also may make an order against any officer or director of the corporation, and grant leave to issue a writ of sequestration against his or her property.
  • Pursuant to Rule 60.11(8), a judge also has authority to discharge, set aside, vary or give directions in respect of any order made under subrules 60.11(5) and 60.11(6), and grant such other relief and make such other order as is just.
• Rule 60.11 does not prescribe the form of contempt proceedings. However, in contempt proceedings, liability for contempt and imposition of an appropriate penalty for any established contempt are discrete issues. As a general rule, contempt proceedings therefore are bifurcated into a two phases. In particular, the first is a “liability phase”, wherein liability for an alleged contempt, (including any defence offered by the alleged contemnor), is considered. If liability for contempt is established, the matter then moves on to a second “penalty phase”, during which the court determines a just order to address the relevant contempt.[^13]

[41] With the latter procedural approach in mind, I intend to focus at present, as far as the contempt motion is concerned, on whether Mr Andersson should be found liable for contempt, in relation to any of the complaints advanced by Mr Kamran. Any formally established contempt should then be the subject of a further hearing, to receive further submissions as to how such contempt should be addressed if it has not been purged by the time of that hearing.

ALLEGATIONS OF PROHIBITED DISCLOSURE

[42] As noted above, Mr Kamran’s first contempt-related complaint is that Mr Andersson has engaged in communications and disclosure, concerning this litigation, which were prohibited by the interim interim without prejudice order.

[43] In that regard, specific reliance is placed on paragraph 7 of Justice Templeton’s order of November 17, 2017, which reads as follows:

7. No party to this proceeding shall directly or indirectly disclose or allow to be disclosed to any person, other than their respective counsel, the fact or circumstances of this action or any step within this action, [or] the allegations and evidence contained in this action, except as required by law.[^14]

[44] Those provisions replicated and effectively continued those originally set forth in sub-paragraph 50(g) of the “Ruling” released by Justice Templeton on November 10, 2017, and sub-paragraph 50(g) the “Amended Ruling” released by Justice Templeton on November 15, 2017.

[45] In support of his first contempt-related complaint, regarding prohibited communication and disclosure, Mr Kamran also relies on evidence of the following:

• Athena Avritidis is Mr Andersson’s executive assistant. She works closely with Mr Andersson, and takes direction from him. She does some work for others. However, in Mr Andersson’s words: “broadly speaking, she is mine”.
• On Saturday, November 11, 2017, (the day after Justice Templeton first imposed the aforesaid restrictions on disclosure), Ms Avritidis sent an email with the subject line “Full copy of Canadian Legal Files”. The email, (copied to Mr Andersson), was sent to the following individuals:
  • Paul Southworth – a resident of the United Kingdom, a former Chairman of the United Kingdom Direct Sellers Association, and an “advisor” to the board of LEO UK, but not a director or employee of any LEO entity, including LEO Canada;
  • Robert Ganpatsingh – a British lawyer who provides counsel to Mr Andersson, (not LEO UK or LEO Canada), but is neither an executive nor director of any LEO entity;
  • Mihir Magudia – an “executive team” member of LEO UK, and a member of its board of directors, but not an employee of LEO Canada or a member of its board of directors;
  • Bernard Landi – the Chief Financial Officer (“CFO”) of LEO UK, and a member of its board of directors, but not an employee of LEO Canada or a member of its board of directors; and
  • Sohail Ramzan – then a member of LEO UK’s board of directors, and the Chief Technology Officer (“CTO”) of LEO’s Dubai corporation and LEO Canada.
• The aforesaid email provided the recipients with a link “as mentioned by Dan”, (i.e., Mr Andersson), to a file sharing site maintained by Siskinds LLP, through which the recipients would be able to access the following materials:
  • a scanned copy of the affidavit sworn by Mr Andersson in support of the plaintiffs’ motion for interim and interlocutory injunctive relief in this litigation;
  • the full motion record filed by the plaintiffs in this litigation, in support of their request for interim and injunctive relief, (including not only Mr Andersson’s affidavit, but all exhibits thereto);
  • the plaintiffs’ Notice of Action in this litigation, dated November 7, 2017; and
  • the factum filed by the plaintiffs, in this litigation, in support of their motion for interim and interlocutory injunctive relief.
• Although Mr Andersson had no specific recollection of instructing Ms Avritidis to send the aforesaid email, Mr Andersson acknowledged during cross-examination that Ms Avritidis would have been given instructions to send the mail, (i.e., that she would not have done so independently), and in all likelihood he was the one who provided those instructions.

[46] The evidence set forth in the previous paragraph essentially was not disputed. Indeed, most if not all of it was confirmed and/or provided by Mr Andersson himself during cross-examination on his affidavit evidence. I accordingly find the facts set forth in the previous paragraph to have been established – including the fact of Mr Andersson having instructed Ms Avritidis to send the relevant email. In my view, that is the only sensible conclusion to be drawn from:

• the confirmed business relationship between Mr Andersson and Ms Avritidis;
• Mr Andersson’s cross-examination testimony acknowledging that he likely was the person who instructed Ms Avritidis to send the email, (which she would not have sent without such instructions); and
• the combined assertions and indications, in paragraphs 12-14 of the affidavit filed by Mr Andersson in response to the contempt motion, that he “had a fiduciary duty to inform the LEO UK board of directors about the status of the Canadian litigation”, that his executive assistant “therefore” shared the folder “with several members of the LEO UK board of directors”, and that he “at that time” did not “contemplate or apprehend” that sharing public documents filed in the Canadian litigation would lead to an allegation of contempt for Justice Templeton’s “First Order”; i.e., the initial order effectively made by Justice Templeton through the “Ruling” released on November 10, 2017.

[47] Applying the principles outlined above, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the relevant email, sent at Mr Andersson’s direction, sharing detailed information about this litigation with the recipients of that email.

[48] In relation to the first essential element, in my view the terms of Justice Templeton’s order relating to disclosure, (initially made on November 10, 2017, although expressly continued on November 15 and 17, 2017), stated clearly and unequivocally, for the purposes of grounding Mr Kamran’s first civil contempt complaint, what should and should not be done in that regard. Without limiting the generality of the foregoing:

• The disclosure restrictions imposed by Justice Templeton expressly applied to all parties to this litigation, and therefore obviously to Mr Andersson.
• The disclosure restrictions also expressly applied to direct disclosure, indirect disclosure, and allowed disclosure. In my view the latter two prohibitions clearly cover disclosure technically made by persons other than a party to the litigation, (such as Mr Andersson’s executive assistant), who nevertheless make such disclosure pursuant to the directions of a party to the litigation.
• The scope of information and documentation covered by the disclosure restrictions specifically and expressly included “the fact or circumstances of this action or any step within this action, the allegations and evidence contained in this action”. No exception was made for matters of public record; an exception which effectively would have negated the restrictions completely, since all of the types of information and documentation expressly enumerated by Justice Templeton are found in the court file for this matter, and are therefore matters of public record. The parties, and Mr Andersson in particular, (as reflected in his affidavit evidence), may have felt that an exception should have been made for matters of public record contained within the court file for this litigation. However, at all material times, Justice Templeton’s order contained no such exception.
• No disclosure of the specified information and documentation was to be made “to any person”, subject only to two expressly indicated exceptions: the “respective counsel” of the parties, and those to whom disclosure was “required by law”. While the latter exception inherently has an amorphous quality, in my view it has sufficient clarity, in the sense required for civil contempt, in circumstances where impugned disclosure clearly falls outside the boundaries of any proffered legal justification.

[49] In relation to the second essential element, in my view the evidence, and/or the only sensible inference to be drawn from the evidence, is that Mr Andersson had actual knowledge of the order made by Justice Templeton on November 10, 2017. Without limiting the generality of the foregoing:

• Mr Andersson is not only a party to this litigation, but someone who obviously had direct and immediate involvement in bringing this matter before Justice Templeton on November 8, 2017. He swore the affidavit evidence offered in support of the plaintiffs’ request for urgent interim injunctive relief, emphasizing that dire consequences would ensue, (including appropriation of confidential information, asset stripping, depletion of corporate bank accounts, and irreparable harm to business reputation and goodwill), if the requested injunctive relief was not granted. Mr Andersson also swore an undertaking, on behalf of LEO Canada and personally, to abide by any order concerning damages the court might make; e.g., in the event the court imposed injunctive relief but found later that such relief was inappropriate and should not have been granted, with the defendants suffering harm in the meantime.
• In such circumstances, I think it inconceivable that Mr Andersson would not have been keenly interested in the outcome of the initial hearing before Justice Templeton, or that Mr Andersson’s lawyers would not have advised him immediately of the “Ruling” released by Justice Templeton on November 10, 2017. The only sensible inference is that Mr Andersson was made aware of Justice Templeton’s initial order immediately after it was released to counsel.
• I think that inference is buttressed by the above-noted indications in Mr Andersson’s own affidavit, (filed in response to the contempt motion), that he did not contemplate or apprehend, at the time the email was sent by Ms Avritidis, that its sending would lead to an allegation that he was breaching that first order made by Justice Templeton. In particular, such indications obviously are quite different from a claim that Mr Andersson simply was not aware of Justice Templeton’s first order when the email was sent. To the contrary, in my view, such indications implicitly acknowledge that Mr Andersson was aware of Justice Templeton’s first order when the relevant email was sent.
• Finally, I note that, during cross-examination of Mr Andersson, the plaintiffs specifically refused to provide information as to when Mr Andersson became aware of the “Ruling” released by Justice Templeton on November 10, 2017. In the circumstances, I agree with counsel for Mr Kamran that it was no longer open to Mr Andersson to suggest that he was not aware of Justice Templeton’s “Ruling” at the time the relevant email was sent by his executive assistant.

[50] In relation to the third essential element, I think the same evidence and indications make it clear that Mr Andersson intentionally did an act prohibited by Justice Templeton’s order. Without limiting the generality of the foregoing:

• The relevant email clearly disclosed information concerning:
  • the fact and circumstances of this action, (outlined in considerable detail in Mr Andersson’s affidavit);
  • steps taken in this action, (including the plaintiffs’ issued notice of action and filed motion seeking interim and interlocutory injunctive relief);
  • the allegations being made against the defendants, (broadly described in the notice of action and detailed in Mr Andersson’s affidavit); and
  • evidence filed with the court in this action, (including not only Mr Andersson’s affidavit but all of the many exhibits attached to that affidavit).
• In my view, sending of the email was an act that clearly breached the restrictions imposed by Justice Templeton, in that the information outlined above was disclosed to persons other than the “respective counsel” of the parties, and persons to whom such disclosure was “required by law”. In particular, as far as the latter is concerned:
  • The only legal justification proffered by Mr Andersson, (i.e., in support of an argument that the disclosure he directed somehow was “required by law”), was that he “had a fiduciary duty to inform the LEO UK board of directors about the status of the Canadian litigation, of which they were previously aware”.
  • In my view, a disclosure recipient’s prior awareness of the Canadian litigation was no justification for the email providing further disclosure. Justice Templeton clearly intended to restrict the dissemination of further information and documentation on a “go forward” basis.
  • Beyond that, I find Mr Andersson’s reliance on a supposed fiduciary duty requiring disclosure to the LEO UK board of directors suspect and inadequate for a number of reasons, including the following:
    • If Mr Andersson was intending to comply with such a duty at the time he directed the sending of the relevant email, one would have expected it be sent to all members of the LEO UK board of directors. However, as confirmed by Mr Andersson’s own affidavit evidence, the relevant email was sent only to “several members of the LEO UK board of directors”. It was not sent to all of them – including Mr Kamran, who at all material times has remained a member of the board. At the same time, Mr Andersson’s personal counsel was included in the circulation list. The obvious objective inference is that the email was not any attempt by Mr Andersson to fulfil a fiduciary duty of disclosure to the LEO UK board of directors. It was instead a partisan communication directed to those whose support or reactions Mr Andersson was trying to maintain or influence, and withheld from others. In short, the relevant email has the hallmarks of the sort of partisan communications, potentially damaging to the reputation and stability of LEO Canada, that Justice Templeton was trying to restrain.
    • On his own theory of the case, Mr Andersson was and remains the beneficial owner of his original shareholdings in LEO Canada. On that theory of the case, LEO UK has no shareholding interest in LEO Canada. There is no “parent-subsidiary” relationship. The two entities are “stand alone” corporations in that sense, without LEO UK arguably having any legal right whatsoever to information about the nature of any internal dispute about the operations or management of LEO Canada. In my view, that makes the argument that Mr Andersson had a legal obligation to report such matters to the LEO UK board of directors far more tenuous. At best, Mr Andersson arguably had conflicting duties. In particular, at the material time, Mr Andersson was a party to this litigation bound by Justice Templeton’s order, (which effectively made all information in the public court file confidential to the parties, including LEO Canada), and a putative director of LEO Canada with a fiduciary duty not to disclose confidential information of LEO Canada to third parties. If he also had a conflicting duty not to withhold any acquired information concerning LEO Canada from the LEO UK board of directors, the Canadian law of civil contempt, as noted above, requires a party in such a position to seek further direction before proceeding unilaterally at his or her peril.
    • In my view, the extent of disclosure effected by the relevant email exceeds, in any event, the scope of the only legal justification proffered by Mr Andersson. In particular, even if one views the disclosure to Mr Ganpatsingh as falling with a generous reading of Justice Templeton’s exception permitting disclosure to the “respective counsel” of the parties, (although I am inclined to view that exception as an intended reference to counsel in the Canadian litigation), Mr Southworth, (as confirmed by Mr Andersson’s own testimony under cross-examination), was not a member of the LEO UK board of directors. I do not regard Mr Andersson’s assertion during cross-examination that Mr Southworth was “practically” a non-executive director persuasive or adequate.
• Although Mr Andersson emphasized in no uncertain terms in his affidavit evidence that he had no intention of breaching Justice Templeton’s first order at the time he directed sending of the relevant email, (and counsel for the plaintiffs stressed the same point repeatedly during the course of oral submissions), a finding of civil contempt in Canadian law does not require, (as noted above), an intention to disobey a court order in the sense of desiring or knowingly choosing to disobey a court order. It is sufficient that the alleged contemnor committed an intentional act that was in fact a breach of the relevant court order. In this case, there is no suggestion that Mr Andersson’s instructions to send the relevant email, or the resulting sending of the email by his executive assistant, were any accident. Mr Andersson intended both things to happen. For the reasons noted above, the result was a breach of the disclosure restrictions imposed by Justice Templeton’s order. Mr Andersson accordingly intended the relevant conduct that breached the relevant court order.
• In the responding factum tendered by the plaintiffs, it was suggested that complaints of contempt based on prohibited disclosure were in some way barred by estoppel; e.g., insofar as Mr Andersson and Mr Kamran had agreed on the sending of a joint letter to staff of LEO Canada, instructing them to disregard all prior correspondence sent by either party. The suggestion was not pursued during the course of oral submissions, and in my view had no merit factually or in law, in any event. Factually, any agreement between the parties seems to have concerned prior communications with staff of LEO Canada, whereas the relevant email underlying Mr Kamran’s complaint or prohibited disclosure was sent to others. In law, the provisions restricting disclosure were imposed by Justice Templeton as part of her contemplated interim arrangement to protect the interests of all parties, including LEO Canada; it was not within the power of Mr Andersson and Mr Kamran to agree that Justice Templeton’s order need not be respected.

[51] Again, for the reasons I have outlined, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the relevant email, sent at Mr Andersson’s direction, sharing detailed information about this litigation with the recipients of that email.

[52] That leaves, however, the question of the court’s residual discretion to decline making a formal finding of contempt in the circumstances, as far as this first aspect of Mr Kamran’s civil contempt complaint is concerned.

[53] In that regard, any situation involving proof beyond a reasonable doubt of the three essential elements of civil contempt obviously should be taken seriously.

[54] Moreover, I agree with submissions by Mr Kamran’s counsel that the prohibited disclosure in this case was potentially quite damaging; e.g., insofar as Mr Southworth is a person clearly well connected in the direct sellers community in Britain, where Mr Kamran has spent most if not all of his professional life building a reputation central to his continued livelihood. The potential for unnecessary damage to that reputation – and indirectly to the reputation of LEO Canada insofar as Mr Kamran currently remains actively involved in its joint operation pursuant to Justice Templeton’s orders – was considerable, particularly insofar as Mr Kamran was restrained, by the same provisions of Justice Templeton’s orders, from making further communications to Mr Southworth and others to present his counter-balancing side of the story, thereby “defending himself” and perhaps helping to allay any reader’s concerns about possible negative impacts on LEO Canada that might flow from his joint operation of that company.

[55] All of that underscores the seriousness of what Mr Andersson did by directing sending of the relevant email, and militates in favour of a formal finding of contempt in that regard.

[56] What gives me pause, in making a formal finding of civil contempt against Mr Andersson in relation to the first ground of Mr Kamran’s complaint, are the combined effect of the well-established principles, outlined above, generally emphasizing:

• that the court’s contempt power should be used cautiously and with great restraint; and
• that, in relation to civil contempt, the court’s contempt jurisdiction is primarily intended to be coercive rather than punitive; i.e., to encourage compliance with court orders.

[57] In the particular circumstances of this case, the parties generally agree that the relevant disclosure restrictions in Justice Templeton’s interim interim without prejudice order now should be lifted and removed, and I intend to make that alteration to the provisions of the interim interim without prejudice order, for reasons outlined in further detail below.

[58] In the result, a formal finding of civil contempt against Mr Andersson, in relation to the first ground of Mr Kamran’s complaint, effectively would serve no purpose in terms of laying the foundation for encouraging or ensuring future compliance with the provisions of any relevant court order restraining any such future disclosures. The relevant court ordered restrictions will cease to exist with the release of this endorsement. A finding of contempt in that regard therefore would only be retrospective and punitive – which, again, is not the primary purpose of a civil contempt finding.

[59] Furthermore, in terms of bringing home to Mr Andersson the seriousness of court order compliance, I think that effectively will be accomplished by the contempt findings I do intend to make in relation to other aspects of Mr Kamran’s complaints.

[60] Having regard to all the circumstances, I therefore decline, (albeit not without hesitation), to make a formal finding of contempt in relation to the disclosure Mr Andersson directed in breach of Justice Templeton’s order.

ALLEGATIONS OF DENIED ACCESS TO CORPORATE INFORMATION

[61] Mr Kamran’s second contempt-related complaint is that he has been denied court ordered access to files, data and records of LEO Canada; access he needs in order to jointly operate LEO Canada in the manner contemplated by Justice Templeton.

[62] In that regard, reliance is placed on the first paragraph of Justice Templeton’s order of November 17, 2017. The provisions of that paragraph, and the paragraph which follows immediately thereafter, (which is referenced in the first paragraph and therefore must also be considered to provide context), read as follows:

1. Andersson and Kamran will jointly operate LEO Canada on a day-to-day basis, which includes access by both Andersson and Kamran to all LEO Canada files, data and records, both electronic and otherwise, which access shall be for the sole purpose of making a decision pursuant to the order contained in paragraph 2. Should either of Andersson or Kamran be unable to operate LEO Canada personally, they (sic) may either appoint a mutually agreeable third party to do so or ask the Court for such an appointment. Should they seek the Court’s appointment in this regard, each party will submit two names of, in his view, an appropriate corporate candidate.

2. Neither Andersson nor Kamran will make any decision concerning LEO Canada without written notice to the other of not less than 24 hours, and the written consent of the other, which shall not be unreasonably withheld. Failing an agreement, should the matter be of financial significance to the well-being of LEO Canada, the parties may seek the intervention of the Court.

[Emphasis added.]

[63] I note that the wording I have emphasized, in the above provisions, was added, in and by Justice Templeton’s order of November 2017, to the remaining text of those two paragraphs as originally set forth in sub-paragraphs 50(a) and (b) of:

• the “Ruling” released by Justice Templeton on November 10, 2017; and
• sub-paragraphs 50(a) and (b) of the “Amended Ruling” released by Justice Templeton on November 15, 2017.

[64] The natural inference is that Justice Templeton thought the further specific directions in the additional wording were important, and necessary to ensuring that the “joint operation” of LEO Canada by Mr Andersson and Mr Kamran, mandated by the order, would be effective.

[65] In support of his second contempt-related complaint, regarding denial of access to the specified corporate information and documentation, Mr Kamran also relies on evidence of the following:

• Correspondence confirming that Mr Kamran, through the parties’ lawyers, has been asking since November 21, 2017, not only that the plaintiffs generally “take the necessary steps to ensure that [Mr Kamran] has access to all LEO Canada files, data and records, both electronic and otherwise”, but that the plaintiffs also take certain specific steps including:
  • reactivation of Mr Kamran’s corporate email address, to facilitate Mr Kamran’s communications with employees and contractors of LEO Canada;
  • restoration of Mr Kamran’s access to the “MIS” system, so that he can review corporate back office sales and related records;
  • giving Mr Kamran access to the “SQL Server Management Studio”, so that he can access LEO Canada’s database records;
  • giving Mr Kamran access to LEO’s Amazon Web Services account, so that he can access relevant software and cloud computing services;
  • providing Mr Kamran with the private keys for the operational “hot”, “cold” and/or any other “wallet” or “wallets” used to receive and/or store bitcoins on behalf of LEO Canada;
  • giving Mr Kamran access to “Moneris” and “PaySafe” accounts used to receive payments on behalf of LEO Canada; and
  • addition of Mr Kamran as a signatory to LEO Canada’s bank accounts, so that he can ensure LEO Canada is meeting its various obligations in a timely manner.
• Correspondence confirming that Mr Kamran, through lawyer correspondence, has continued to follow up on such requests, press for the granting of the access to information ordered by Justice Templeton, and express concern about the apparent delays and/or refusals in that regard.
• Correspondence from counsel for the plaintiffs, setting forth reasons why the plaintiffs felt they were unable or unwilling to grant the specific forms of access requested by Mr Kamran, including indications:
  • that control of the relevant email domain used by LEO Canada was controlled by the LEO Group generally rather than LEO Canada, and Mr Kamran has demonstrated that access to that particular email domain is not necessary since he has demonstrated an ability to communicate with employees and agents of LEO Canada in other ways;
  • that the MIS system similarly is part of the holdings of the LEO Group generally rather than LEO Canada, and Mr Andersson does not have passwords to access the MIS system;
  • that Mr Andersson does not have access to the SQL Server Management Studio system, or any SQL database;
  • that LEO Canada does not have an Amazon Web Services account, and such an account is not used by employees of LEO Canada or Mr Andersson;
  • that the “private keys” and various “wallets” used to access electronic currency accounts are used and controlled by the LEO Group generally, rather than LEO Canada;
  • that the “Moneris/PaySafe” accounts do not involve a Canadian payment solution, or something used by LEO Canada; and
  • that, while there is a recognized need for signing authority over LEO Canada accounts to be expanded and altered, (in the wake of resignations by Mr Ramzan from the LEO Group and LEO Canada), the plaintiffs feel it would be inappropriate for the new signatory to be either Mr Andersson or Mr Kamran in light of the parties’ current dispute, and that such a request is “overreaching”, “unnecessary”, and not contemplated by Justice Templeton’s orders.
• Additional indications, in correspondence from counsel for the plaintiffs dated November 30, 2017, that “banking statements along with other financial reporting” was being compiled for provision to Mr Kamran.
• Statements made under oath by Mr Andersson, during the course of his cross-examination on December 4, 2017, indicating that the plaintiffs had not yet “given in” to providing Mr Kamran with any passwords or electronic access to any information, and that Mr Kamran had been given “zero access to electronic files”.

[66] In the affidavit filed by Mr Andersson in response to the contempt motion, he reiterates and expands upon certain points made in the aforesaid correspondence, with indications that include the following:

• that the email domain used by LEO Canada is “reserved” by the LEO Group, such that neither LEO Canada nor Mr Andersson, in his “capacity with LEO Canada”, has the authority to grant Mr Kamran a LEO Group email account;
• that Mr Andersson himself does not have access to the MIS system or the SQL Server Management Studio;
• that LEO Canada does not have an Amazon Web Services Account;
• that LEO Canada “does not control” any electronic currency wallets, which are instead controlled by the LEO Group;
• that payment solutions such as Moneris and PaySafe similarly are managed by the LEO Group’s finance function, but include a local finance resource in LEO Canada (Kevin Rao), to whom Mr Kamran “had full access and multiple meetings with” (sic);
• that Mr Andersson does not and has not used the foregoing systems during his involvement in LEO Canada;
• that Mr Andersson, (citing the wording of paragraph 1 of Justice Templeton’s order of November 17, 2017), does not feel access to such systems is necessary “for the sole purpose of making a decision” pursuant to paragraph 2 of Justice Templeton’s order of November 17, 2017; and
• that Mr Andersson believes Mr Kamran, in a manner fuelling Mr Andersson’s “deep rooted concern”, is “knowingly overreaching and requesting access beyond LEO Canada”, and access he knows Mr Andersson personally cannot provide, in order to engage in the sort of misconduct highlighted in the plaintiffs’ motion for injunctive relief; e.g., Mr Kamran’s possible misuse of information gained from the LEO Group and/or LEO Canada “to bolster his competing business, MTB”.

[67] Applying the principles outlined above to the above evidence, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the plaintiffs’ failure to provide Mr Kamran with access to LEO Canada’s corporate information and documentation.

[68] In relation to the first essential element, I think the terms of Justice Templeton’s order of November 17, 2017, relating to Mr Kamran being granted access to the corporate information of LEO Canada, stated clearly and unequivocally, for the purposes of grounding Mr Kamran’s second civil contempt complaint, what should be done in that regard. Without limiting the generality of the foregoing:

• In my view, Justice Templeton employed deliberately broad and unrestricted wording to make it clear that, to facilitate their ordered joint operation of LEO Canada, both Mr Andersson and Mr Kamran were to have access “to all LEO Canada files, data and records, both electronic and otherwise”. The plaintiffs obviously were to do everything in their power to ensure such access.
• In his responding affidavit, Mr Andersson suggests that broad and unrestricted entitlement to the corporate information of LEO Canada is somehow qualified by consideration as to whether such access is needed “for the sole purpose of making a decision” pursuant to paragraph 2 of Justice Templeton’s order. He also seems to suggest that access to such information therefore can be denied if there is a dispute as to whether such access is needed for that purpose. I disagree with both suggestions. In my view, both the letter and intent of Justice Templeton’s provisions make it clear that the corporate information of LEO Canada must be provided, without restriction, before going on to make it clear that the information thus provided must then be used solely for the purpose of making decisions in relation to LEO Canada as per the other provisions of the order. Mr Andersson’s suggested reading of the relevant provisions not only runs counter to the plain wording of the provisions, but leads to outcomes which are not sensible. In particular:
  • Such an interpretation would put a party from whom corporate information is being withheld in the unfair and untenable position of having to argue that he needs undisclosed information to make a decision for LEO Canada, but without knowing what the withheld information is, and perhaps without knowing that certain withheld information even exists.
  • Justice Templeton would not have intended to grant each of Mr Andersson and Mr Kamran full joint authority over the operations of LEO Canada while simultaneously depriving either of the means to make fully informed decisions in that regard. Operational decisions made from a position of ignorance hardly seem conducive to Justice Templeton’s stated “sole concern” of protecting the livelihood and viability of LEO Canada and its interests pending further court order. The corporate information employed to make such operational decisions certainly was not to be misused, (e.g., for purposes unrelated to LEO Canada), but the operational decisions quite sensibly were to be fully informed.

[69] In relation to the second essential element, there was no dispute that both plaintiffs clearly have had actual knowledge of the order made by Justice Templeton on November 17, 2017, without Mr Kamran receiving the access to corporate information directed by the order.

[70] In relation to the third essential element, in my view the evidence before me makes it quite clear that the plaintiffs intentionally have failed to do the act that the relevant order compels, in terms of providing Mr Kamran with access to the corporate information of LEO Canada. Without limiting the generality of the foregoing:

• It needs to be remembered and emphasized that the access ordered in that regard by Justice Templeton was neither contingent upon nor limited to any specific request for access made by Mr Kamran. Mr Kamran was to be granted immediate and unrestricted access to the corporate information of LEO Canada.
• In the circumstances, I find it striking that the plaintiffs have addressed such access to corporate information issues only reactively, (in response to Mr Kamran’s requests), rather than proactively, (without the need for such requests).
• I also find it striking and telling, (when considered against a backdrop of Mr Andersson’s emphatic repetition of concerns that access sought by Mr Kamran will be abused), that the plaintiffs effectively have responded to Mr Kamran’s specific requests for access with little more than excuses, denials and certain proposals (in relation to bank account signing authority) that access be given to someone other than Mr Kamran. Apart from a general indication that banking statements and other unspecified financial reporting was being compiled, coupled with an apparently unfulfilled promise that such information would be delivered, the plaintiffs really have given no indication whatsoever of measures taken or planned to grant Mr Kamran access to LEO Canada’s corporate information, or what further measures might be possible in that regard.
• In circumstances where the plaintiffs have not just failed to provide specific requested forms of access to Mr Kamran, (for reasons which may or may not have merit), but have failed entirely to provide or offer any access whatsoever, the inevitable inference and conclusion is that the complete failure, (as opposed to any failure to provide a specific form of access that may have been beyond the plaintiffs’ ability or control), was intentional. The plaintiffs, (effectively speaking through the voice of Mr Andersson), simply do not want to provide any such access – even though it has been ordered by the court.

[71] Again, for the reasons I have outlined, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the failure of the plaintiffs to provide Mr Kamran with access to LEO Canada’s corporate information.

[72] While I have a residual discretion to decline making a formal finding of contempt in that regard, I think that would be inappropriate in the circumstances. In particular:

• this is not a situation where I was presented with evidence of any good faith actions on the part of the plaintiffs to comply, (albeit unsuccessfully or only in part), with the provisions of Justice Templeton’s order concerning Mr Kamran’s access to LEO Canada’s corporate information; and
• I regard the failure to provide Mr Kamran with any access to LEO Canada’s corporate information as a serious threat to the integrity of the interim arrangement mandated by Justice Templeton’s interim interim without prejudice order.

[73] An order therefore will go, making a formal finding that the plaintiffs are in contempt of court, in relation to their failure to provide Mr Kamran with access to all LEO Canada files, data and records, both electronic and otherwise, as required by paragraph of Justice Templeton’s order of November 17, 2017.

[74] That established contempt should be the subject of further hearing, (if necessary), to receive further submissions as to how such contempt should be addressed specifically, if it has not been purged by the time of that hearing. That decision will take into account steps taken by the plaintiffs, (if any), to provide Mr Kamran with the access mandated by Justice Templeton’s order.

[75] In the meantime, however, I offer the following preliminary observations, in addition to those set forth above:

• The touchstone for provision of such access is not whether either Mr Andersson or Mr Kamran personally may have exercised such access in the past.
• Provision of such access also is not dependent on the ability of the parties to provide Mr Andersson or Mr Kamran with access to certain information directly. In particular, if LEO Canada in its entirety currently has access in some manner or via some system to files, data and records relating to LEO Canada, (including access to such information through any of its putative directors or employees in their capacity as directors or employees of LEO Canada), arrangements should be made to extend or rely such access directly or indirectly to Mr Andersson or Kamran, as the case may be.
• As reflected in those preceding comments, it should be remembered and emphasized at all times that the provisions in Justice Templeton’s order concerning unrestricted access to LEO Canada’s corporate information apply equally to both Mr Andersson and Mr Kamran. Neither should be entitled to more access than the other, and any system put in place to enable access by one should be made readily available to the other as well.
• More generally, it should be remembered that Justice Templeton’s order obviously was intended to strike an interim balance of interests. Complete sharing of LEO Canada’s corporate information in accordance with Justice Templeton’s interim interim without prejudice order inherently ensures a measure of ongoing mutual observation and monitoring, and promotes corresponding détente in the interim joint operation of LEO Canada. Unjustified failures to abide by such orders may give rise to avoidable inferences that a party has something to hide, or cannot be trusted with further involvement in the interim operation of LEO Canada.

ALLEGATIONS OF FAILURE TO PROVIDE MONTHLY WRITTEN REPORTS

[76] Mr Kamran’s third contempt-related complaint is that the plaintiffs have failed to provide monthly written reports of LEO Canada’s financial position, in the manner ordered by the court.

[77] In that regard, specific reliance is placed on paragraph 9 of Justice Templeton’s order of November 17, 2017, which reads as follows:

9. A written report of LEO Canada’s financial position as of the date of inception and at the end of each month thereafter, which report shall include (a) a summary of any and all transactions entered into with a supplier, bank or entity; and (b) a summary of any changes in the employees of LEO Canada shall be generated. The report shall be delivered to counsel for each of Andersson, Aquino and Kamran, to each of the said parties and to an independent corporate overseer on a monthly basis for the sole purpose of financial reconciliation. Should the parties be unable to agree to the identity of the independent corporate overseer, each party may submit the names of two accounting firms within the next fourteen (14) days and the court will choose one.

[78] That paragraph of the order made by Justice Templeton on November 17, 2017, expands substantially on the more limited wording of sub-paragraph 50(i) of her “Ruling” released on November 10, 2017, and sub-paragraph 50(i) of her “Amended Ruling” released on November 14, 2017, both of which simply read as follows:

A written report of the (sic) LEO Canada’s financial position, a summary of any transaction entered into with a supplier, bank or entity and a summary of any changes in the employees of LEO Canada shall be generated at the end of each month and shall be delivered to counsel for each of Andersson, Aquino and Kamran.

[79] Once again, the natural inference is that Justice Templeton thought the further specific directions in the additional wording were important, and necessary to ensuring that the interim “joint operation” of LEO Canada, mandated by the order, would be effective.

[80] Matters underlying this aspect of Mr Kamran’s contempt complaint were the subject of acknowledged facts and realities.

[81] Applying the principles outlined above, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the plaintiff corporation’s failure to provide Mr Kamran, (or Mr Andersson and Ms Aquino for that matter), with the monthly written report mandated by Justice Templeton.

[82] In relation to the first essential element, I think the terms of Justice Templeton’s order of November 17, 2017, relating to provision of a monthly report outlining LEO Canada’s financial position, stated clearly and unequivocally, for the purposes of grounding Mr Kamran’s third contempt complaint, what needed to be done in that regard. Without limiting the generality of the foregoing:

• During the course of oral submissions, it was suggested by counsel for the plaintiffs that paragraph 9 of Justice Templeton’s November 17th order required the monthly reports in question to be prepared by the “independent corporate overseer” mentioned later in that paragraph, and that no reports have been delivered to date because such an overseer has yet to be appointed.
• In my view, however, the plaintiffs simply are not reading the relevant provisions correctly. In particular, the provisions of paragraph 9 require the relevant monthly reports be delivered to Mr Andersson, Ms Aquino, Mr Kamran “and to an independent corporate overseer”. It makes no sense to think that Justice Templeton was directing the corporate overseer to deliver a copy of monthly reports to itself – especially when one considers that the obligation to generate and deliver such a report to Mr Andersson, Ms Aquino and Mr Kamran existed in Justice Templeton’s “Ruling” of November 10, 2017, and “Amended Ruling” of November 15, 2017, before the adding of any reference to a “corporate overseer” and the manner of that overseer’s identification/selection.
• The monthly reports concerning LEO Canada’s financial position therefore obviously were to be prepared by someone other than Mr Andersson, Ms Aquino, Mr Kamran and the contemplated corporate overseer”, and in my view that “someone” clearly was to be LEO Canada; i.e., the party that obviously would have immediate access to all information required to generate such reports.
• In my view, inability to deliver such a report to the fourth of four specified parties in no way undermines or creates uncertainty about the need, pursuant to the terms of Justice Templeton’s order, to prepare and deliver such a report to the other three specified parties.

[83] In relation to the second essential element, there was no dispute that both plaintiffs, including LEO Canada, clearly have had actual knowledge of the order made by Justice Templeton on November 17, 2017, without LEO Canada generating any monthly reports as required by that order.

[84] In relation to the third essential element, there was no dispute that LEO Canada has failed to generate and deliver the monthly reports required by Justice Templeton’s order; i.e., that the plaintiff corporation has failed to do the act that the order compels. In that regard:

• Accepting that the plaintiffs were genuinely mistaken in their reading of paragraph 9 of Justice Templeton’s order, in the manner outlined above, it seems there was no intention on the part of the plaintiff corporation to disobey the order, as far as preparation and delivery of the required monthly reports was concerned.
• As noted above, however, an intention to disobey a court order, in the sense of desire or knowingly choosing to disobey the order, is not required for a finding of civil contempt. All that is required is proof beyond a reasonable doubt of an intentional omission that is in fact a breach of the relevant court order.
• In this case, LEO Canada intentionally failed to prepare and deliver the monthly reports as required because it mistakenly thought it had no obligation to do so, and that the obligation lay elsewhere.

[85] Again, for the reasons I have outlined, I am satisfied beyond a reasonable doubt that all three essential elements of civil contempt have been established in relation to the failure of LEO Canada to prepare and deliver the required monthly reports.

[86] I see no reason to exercise my residual discretion so as to decline making a formal finding of contempt in that regard, I think doing so would be inappropriate in the circumstances. In particular:

• once again, this is not a situation involving any good faith actions on the part of LEO Canada to comply with its obligation to prepare and deliver the required monthly reports; and
• LEO Canada should have every incentive to embark on preparation and delivery of such reports as soon as possible, to ensure the integrity of the interim arrangement contemplated by Justice Templeton.

[87] An order therefore also will go making a formal finding that the plaintiff LEO Canada is in contempt of court, in relation to its failure to prepare and deliver the monthly reports required by paragraph 9 of Justice Templeton’s order of November 17, 2017.

[88] That established contempt also should be the subject of further hearing, (if necessary), to receive further submissions as to how such contempt should be addressed specifically, if it has not been purged by the time of that hearing. That decision obviously will take into account steps taken by the plaintiff corporation, (if any), to retroactively and prospectively generate and deliver the reports mandated by Justice Templeton’s order.

ALLEGATIONS OF FAILURE TO JOINTLY OPERATE LEO CANADA

[89] Mr Kamran’s fourth and final contempt-related complaint is that Mr Andersson has failed to operate LEO Canada jointly with Mr Kamran, in the manner ordered by Justice Templeton; i.e., that Mr Andersson effectively has denied Mr Kamran that opportunity, while operating LEO Canada himself to the exclusion of Mr Kamran.

[90] In that regard, reliance is placed on the first two paragraphs of Justice Templeton’s order of November 17, 2017, set out above but replicated here for ease of reference:

1. Andersson and Kamran will jointly operate LEO Canada on a day-to-day basis, which includes access by both Andersson and Kamran to all LEO Canada files, data and records, both electronic and otherwise, which access shall be for the sole purpose of making a decision pursuant to the order contained in paragraph 2. Should either of Andersson or Kamran be unable to operate LEO Canada personally, they (sic) may either appoint a mutually agreeable third party to do so or ask the court for such an appointment. Should they seek the court’s appointment in this regard, each party will submit two names of, in his view, an appropriate corporate candidate.

2. Neither Andersson nor Kamran will make any decision concerning LEO Canada without written notice to the other of not less than 24 hours, and the written consent of the other, which shall not be unreasonably withheld. Failing an agreement, should the matter be of financial significance to the well-being of LEO Canada, the parties may seek the intervention of the court.

[91] In relation to this fourth and final contempt-related complaint, regarding denial of access to the specified corporate information and documentation, Mr Kamran generally contends that, although Justice Templeton clearly intended Mr Andersson and Mr Kamran to be jointly operated by the two men, Mr Andersson in fact has continued to take actions and make decisions in relation to LEO Canada without consulting or advising Mr Kamran, as if Mr Andersson has primary control over the corporation’s affairs.

[92] In that regard, Mr Kamran relies on evidence, (primarily found in email correspondence introduced by the affidavit sworn by an associate lawyer in the law firm representing Mr Kamran), to support allegations of matters such as the following:

• Mr Andersson has engaged in unilateral communications with LEO Canada staff, while actively discouraging Mr Kamran from doing so. Mr Andersson also has been reluctant to cooperate with efforts at joint communication.
• Mr Andersson did not notify Mr Kamran immediately about the resignation of Mr Ramzan from his position as CTO of LEO Canada, or about the resignation of two further LEO Canada employees; i.e., Richard Qu and Iris Lun. Moreover, Mr Andersson effectively made decisions in that regard without consulting or involving Mr Kamran; e.g., by permitting Mr Ramzan to resign effective immediately without any notice, and by permitting Mr Ramzan and the other two employees to depart without making any provision or extending any opportunity for exit interviews involving Mr Kamran;
• Mr Andersson did not consult Mr Kamran, or seek Mr Kamran’s approval, in relation to LEO Canada staff, (and its customer support team in particular), receiving certain training from the company’s Human Resources department;
• Mr Andersson made decisions about LEO Canada staff bonuses without Mr Kamran’s involvement or consent; and
• Mr Andersson frustrated Mr Kamran’s attempts “to plan a holiday party for LEO Canada staff in an effort to improve employee morale”.

[93] In his response, Mr Andersson makes clear his position that such allegations of contempt are baseless, petty and/or offensive from his perspective. He also provides and emphasizes various examples of co-operative conduct; i.e., to demonstrate how he actually is working to comply with Justice Templeton’s interim interim without prejudice order or orders requiring Mr Andersson and Mr Kamran to jointly operate LEO Canada.

[94] For the reasons that follow, I am not satisfied, at least for the time being, that a finding of civil contempt should be made in relation to allegations that Mr Andersson generally is failing to jointly operate LEO Canada with Mr Kamran.

[95] Having regard to the first essential element of civil contempt:

• I think it fair to say that the terms of Justice Templeton’s orders do not state “clearly and unequivocally”, for all purposes, what should and should not be done by Mr Andersson and Mr Kamran to ensure that they “jointly operate LEO Canada on a day-to-day basis”. That reality does not stem from any failing on the part of Justice Templeton, but from the necessarily amorphous concept of “joint operation” in relation to a large and dynamic business; something which may very well give rise to legitimate differences of opinion, preventing joint agreement on how best to approach a particular aspect of business operations.
• Justice Templeton herself recognized the potential for such legitimate disagreements, (and corresponding incidental failures on the part of Mr Andersson and Mr Kamran to “jointly operate” LEO Canada), when providing, in sub-paragraph 50(g) of her “Ruling” and “Amended Ruling” and paragraph 2 of her order dated November 17, 2017:
  • that written consent by either gentleman to a decision proposed by the other was not to be “unreasonably withheld”, (thereby implicitly acknowledging the possibility of such consent being reasonably withheld); and
  • that, failing an agreement to proceed in a joint fashion in relation to a particular operational decision, the parties were permitted to seek intervention of the court “should the matter be of financial significance to the well-being of LEO Canada”, (thereby implicitly acknowledging that there might very well be situations involving a failure by Mr Andersson and Mr Kamran to jointly agree on a particular operational decision, which nevertheless still might not warrant court intervention if the matter was not of “financial significance to the well-being of LEO Canada”).
• The above observations are not meant to suggest that the provisions of Justice Templeton’s order are incapable of grounding a complaint for civil contempt when conduct clearly and unequivocally falls outside any reasonable interpretation of what should or should not be done, by either Mr Andersson or Mr Kamran, to respect the provisions of Justice Templeton’s order that the two men were to “jointly operate” LEO Canada on a day to day basis. For example, the wording of Justice Templeton’s order clearly prohibits the making of “any decision concerning LEO Canada” by either gentleman absent compliance with the notice, consent and possible court intervention process mandated by Justice Templeton in sub-paragraph 50(b) of her “Ruling” and “Amended Ruling”, and paragraph 2 of her order of November 17, 2017. However, there also will be situations, (e.g., involving disputes as to whether consent to any particular proposed operational decision was “unreasonably withheld”), where the relevant court order would not “clearly and unequivocally” state what should and should not be done. Whether the court order satisfies the first essential element of civil contempt accordingly will depend on the precise nature of the contempt complaint.

[96] In relation to the second essential element of civil contempt, it is not disputed that Mr Andersson had actual knowledge of Justice Templeton’s orders at the time of the disputed “joint operation” issues identified in Mr Kamran’s contempt motion. Indeed, Justice Templeton’s orders are explicitly referenced in a number of the contemporaneous emails, sent to and from Mr Andersson, that were filed in evidence. The second essential element of civil contempt accordingly has been demonstrated.

[97] As for the third essential element, the proffered examples of suggested intentional conduct by Mr Andersson, said to have breached Justice Templeton’s order mandating “joint operation” of LEO Canada, will be considered separately for the reasons outlined above in relation to the first essential element. In that regard:

• As for the allegations relating to communication with LEO Canada employees, the evidence suggests that Mr Andersson and Mr Kamran both engaged in the sending of unilateral and conflicting letters to LEO Canada staff in the immediate wake of Justice Templeton’s order. Thereafter, however, it seems the two men have exchanged emails containing discussion and further debate in that regard. In some cases, such exchanges commendably have resulted in a measure of agreement; e.g., the sending of an agreed joint letter to LEO Canada staff, instructing them to disregard earlier communications sent by either gentleman in relation to the parties’ dispute.[^15] In other instances, there clearly has been further disagreement; e.g., with Mr Andersson proposing that he alone engage in certain communications with the departing Mr Ramzan while asking Mr Kamran to refrain from doing so, with Mr Kamran then disagreeing and both men apparently reaching out to Mr Ramzan in the result. Either gentleman’s decision to intentionally engage in unilateral communications concerning LEO Canada without notifying the other, (so as to provide an opportunity for consent or disagreement), likely would be a breach of Justice Templeton’s order. However, the evidence before me does not make it entirely clear that was or has been the case, outside of an initial adjustment period shortly after the making of Justice Templeton’s initial order. Nor is it clear to me, for the reasons outlined above, that disagreement about appropriate communications, following email notice of intentions and discussion ending without the giving of consent, necessarily should be characterized as a breach of Justice Templeton’s order.
• As for the allegations of misconduct by Mr Andersson in relation to the resignations and departures of Mr Ramzan, Mr Qu and Ms Lun, the evidence does not make it clear to me beyond a reasonable doubt that Mr Andersson acted in the manner suggested by Mr Kamran. In that regard:
  • It is alleged that Mr Andersson decided not to notify Mr Kamran about Mr Ramzan’s resignation. However, the evidence before me contains an email from Mr Andersson to Mr Kamran providing such notice, less than 48 hours after Mr Ramzan delivered his resignation on a Sunday evening.
  • It is alleged that Mr Andersson decided to permit Mr Ramzan’s immediate resignation without Mr Ramzan providing notice. However, a contemporaneous email sent by Mr Andersson indicates that he tried to persuade Mr Ramzan to reconsider his departure for a time, and Mr Ramzan simply refused.
  • It is alleged that Mr Andersson decided to deny Mr Kamran the opportunity to conduct an exit interview in relation to Mr Ramzan. However, if Mr Ramzan insisted in terminating his involvement with LEO Canada immediately, arrangements for an exit interview by anyone simply may have been beyond the ability of Mr Andersson or anyone other than Mr Ramzan to control. In any event, however, (and as noted above), the contemporaneous emails indicate that, as contemplated by the provisions of Justice Templeton’s order, Mr Andersson merely gave Mr Kamran notice of Mr Andersson’s proposal concerning further post-resignation communication with Mr Ramzan; a proposal in respect of which Mr Kamran was not obliged to give consent.
  • In relation to the two other departing LEO Canada employees, the evidence provided to me is largely confined to emails sent by Karen Brown (director of Human Resources) to Mr Kamran notifying him of the resignations, and Mr Kamran’s responses to Ms Brown requesting further information. There seems to be no evidence indicating or confirming that Mr Andersson had any contemporaneous notice or awareness of the resignations, made any decisions or had any involvement in relation to those resignations, or made any kind of decision that Mr Kamran would be denied an opportunity to interview the two departing employees.
• As for the allegations of misconduct relating to training of LEO Canada staff, there similarly is a dearth of evidence to confirm or even indicate that Mr Andersson was responsible for any unilateral decisions made in that regard, without having complied with the notice and request for consent procedures mandated by Justice Templeton. Based on the evidence before me, it seems Ms Brown simply made a passing reference to such training in her email to Mr Kamran advising him of Mr Qu’s resignation. That in turn prompted Mr Kamran to request further information from Ms Brown, and then from Mr Andersson, in relation to matters such as who initiated the training. However, there is nothing to indicate a response from either, let alone any response confirming that the training in question resulted from a decision unilaterally made for LEO Canada by Mr Andersson.
• As for the allegation that Mr Andersson unilaterally made decisions about LEO Canada staff bonuses without Mr Kamran’s involvement or consent, Mr Andersson has responded with sworn testimony emphatically indicating that, as Mr Kamran allegedly knows, bonuses “across the LEO Group are decided by LEO UK rather than LEO Canada”. In the circumstances, I am left with what I consider to be reasonable doubt as to whether Mr Andersson made the relevant bonus decision, and whether the relevant bonus decision was even one falling within the ambit of the operations of LEO Canada which Mr Andersson and Mr Kamran are to manage jointly.
• In relation to the allegation that Mr Andersson frustrated Mr Kamran’s attempts “to plan a holiday party for LEO Canada staff in an effort to improve employee morale”, I frankly am inclined to agree with Mr Andersson’s characterization of this as a relatively minor or petty complaint in the overall context of this dispute. Beyond that general observation, however, it seems to me that the evidence does not really support Mr Kamran’s particular allegation in that regard, nor any suggestion that Mr Andersson failed in any related way to comply with the provisions of Justice Templeton’s order. In particular:
  • The relevant email exchange provided in the evidence indicates that Mr Andersson actually agreed to the proposed Christmas party for the LEO Canada staff and proposed a specific date, (December 22, 2017), albeit coupled with indications that he had no desire to attend any event with Mr Kamran, and his hope that, by the proposed date, Mr Kamran would have no reason to attend the event. However, rather than agreeing with the December 22nd date and proceeding with planning arrangements, Mr Kamran responded by indicating a desire for the gathering to be held on a different date, and asking Mr Andersson for further proposals. The two men may never have come to an agreement in that regard, but I think it unfair to say, (at least on the evidence before me), that Mr Andersson frustrated plans to hold the contemplated party.
  • In my view, the emails exchanged between the two gentlemen, in relation to the Christmas party, actually provide an example of compliance with the provisions of Justice Templeton’s order relating to “joint operation” of LEO Canada, even if the exchange resulted in no agreement. In particular, Mr Kamran gave more than 24 hours of a proposed decision concerning LEO Canada. Mr Andersson responded by indicating his consent, subject to the gathering being held on Friday, December 22, 2017. Mr Kamran disagreed – and the result was a failure by the two men to agree on the contemplated decision. It nevertheless arguably was not a decision “of financial significance to the well-being of LEO Canada”, warranting court intervention.

[98] Having regard to all the circumstances, I accordingly am not satisfied beyond a reasonable doubt that there has been demonstrated satisfaction of all three essential elements of civil contempt in relation to most if not all of Mr Kamran’s specific complaints that Mr Andersson has failed to comply with the provisions of Justice Templeton’s orders requiring joint operation of LEO Canada.

[99] In any event, I am not inclined, on balance, in the exercise of my residual discretion, to make a finding of contempt in that regard at this stage of the proceedings. In that regard:

• I am mindful of the evidence before me of demonstrated efforts by Mr Andersson engaging in email dialogue with Mr Kamran about operation of LEO Canada, even if that dialogue has not always resulted in agreement.
• The two men apparently have managed to reach agreement on certain matters; e.g., the joint communication to staff mentioned above, and a mutually acceptable professional, (Jake Wiebe of Grant Thornton LLP), to assume the contemplated role of independent “corporate overseer”, (although that term needs to be addressed in requested modifications to Justice Templeton’s last order, for reasons noted below).
• To the extent disagreements and suspicions have been fostered to date by Mr Kamran’s lack of access to LEO Canada’s corporate information, that situation hopefully will improve considerably in the wake of my other rulings outlined above.
• I am mindful that the time period addressed by the parties in their respective evidence, concerning this aspect of the contempt motion relating to joint operation of LEO Canada, inherently focused on what is likely to be the most difficult period of adjustment for Mr Andersson and Mr Kamran; i.e., the immediate wake of this dispute erupting into formal litigation. While it obviously may be unrealistic to expect that the parties to this hard fought litigation will warm to each other again, the situation hopefully will stabilize to some extent, especially after the contemplated appointment of Mr Wiebe promotes regular objective financial reconciliation, and corresponding assurance to all concerned that there are unlikely to be any undetected financial irregularities in the operation of the company.

[100] Having said all of that, Mr Andersson and Mr Kamran also should realize that the court no doubt will have careful regard to how matters progress, in terms of compliance with the “joint operation” provisions of the court’s order.

[101] If there is persuasive evidence of either gentleman making unilateral decisions concerning LEO Canada, without corresponding evidence of that party’s prior compliance with the notice and “request for consent” provisions of Justice Templeton’s order, one manner of addressing such concerns might very well be removal of that gentleman from further participation in the interim operations of LEO Canada.

[102] For now, at least, there will no further finding of contempt, beyond those outlined above.

[103] “Liability” for those indicated instances of contempt having been established, Mr Kamran’s contempt motion must now move on, as noted above, to a second “penalty phase”, during which the court will determine a just order to address the relevant contempt.

[104] In my view, that particular hearing properly should be before me, (although I am not otherwise seized of the matter), and counsel accordingly should make arrangements to schedule an appropriate special appointment through consultation with the London trial co-ordinator. In that regard:

• While I understand that this matter is scheduled to be back before me later today, for argument of one or two more of the outstanding motions in this matter, that hearing time will be devoted to such motion or motions. It is not my intention to use any of that time for further submissions in relation to the contempt motion.
• In my view, it would not be appropriate to embark on the contempt motion’s “penalty phase” hearing for a minimum of several weeks, in order to allow the plaintiffs a meaningful intervening opportunity to purge their identified contempt before the court is asked to make a just order in that regard.
• Counsel are advised in any event that, after this week, I am not scheduled to be sitting in London again until the week of March 19, 2018. My availability that week, and in the weeks that follow, will be decided by the trial co-ordinator having regard to matters already scheduled for hearing.

Modifications to interim order

[105] As I noted at the outset, all parties had submissions to make, during the hearing before me, concerning requested modifications to Justice Templeton’s interim interim without prejudice order of November 17, 2017, (or “the November 17th order”).

[106] Having heard from counsel in that regard, I think certain modifications to that order are appropriate, especially since the order necessarily will remain in place for a further period of time as the matter works its way towards a substantive hearing of the plaintiffs’ motion for interlocutory relief. In particular:

• The existing provisions dealing with obligations and entitlements in relation to joint operation of LEO Canada, the mandated consultation procedure, and access to its corporate information and documentation need to be clarified and refined in an effort to prevent further misunderstandings.
• I also think there should be at least some modest relaxation to the scope of decisions concerning LEO Canada that should require Mr Andersson and Mr Kamran to employ the notice and consent procedures mandated by the existing order. As currently worded, those mandated consultation procedures are required in relation to every possible decision concerning LEO Canada, including decisions about minor expenditures and/or fleeting arrangements unlikely to have any significant long term impact on the corporation. Such an obligation seems likely to promote unnecessary frustration and conflict – such as that which materialized in relation to planning of a staff holiday party. At the same time, consultation requirement must be broad enough to assure Mr Andersson, Mr Kamran and the court that neither has the potential to make significant unilateral decisions in relation to LEO Canada until the merits of the significant underlying dispute concerning proper control of the corporation can be decided. Counsel for the plaintiffs suggested the required notice and consent procedure should not apply to decisions not affecting or potentially affecting the “business strategy, finances or operations” of LEO Canada. However, I think there inevitably would be disputes concerning the breadth of such an exception; e.g., since almost any decision concerning LEO Canada might be characterized as something with the potential to affect its finances or operations. Moreover, disputes in that regard might surface only after discovery that one gentleman or the other had relied on the perceived exception to make a unilateral and irrevocable decision the other gentleman or the court view as one of great significance. For the time being, I think it advisable to err on the side of caution and exempt, from the ambit of the mandated notice and consent procedure, only decisions concerning LEO Canada that objectively have modest monetary significance; e.g., decisions concerning expenditures having a dollar value of $2,500 or less. That was a figure agreeable to all concerned during the course of submissions. It is a figure that can be revisited and modified by party agreement or a request to the court over time; e.g., if the parties develop a growing level of trust with each other, or a shared view that certain other decisions relating to LEO Canada are sufficiently trivial that they do not warrant regular advance consultation.
• I agree that a court order prohibiting Ms Aquino’s attendance at the Markham office of LEO Canada inherently carries a pejorative stigma which may or may not be warranted, depending on the final outcome of the plaintiffs’ motion for injunctive relief.[^16] I also agree, as did counsel for the plaintiff, that such a formal prohibition is unnecessary if concerns about the possibility of Ms Aquino attending at the Markham office can be addressed sensibly and effectively in a different fashion. In particular, I am content to withdraw the existing formal prohibition barring Ms Aquino’s attendance at the property, in exchange for her undertaking, (given during the course of the hearing before me and hereby confirmed), that she will not attend the property in question without a further court attendance to seek, on notice to all other parties, directions from the court in that regard. Ms Aquino should understand that any confirmed breach of her undertaking to the court in that regard almost certainly will have a severe negative impact on the court’s perception of her credibility as this litigation, (including the plaintiffs’ claims for very substantial damages), moves forward.
• At the time of the initial hearing before Justice Templeton, there was substantial evidence suggesting misconduct by the defendants, (not yet proven), and a corresponding need for their conduct to be controlled and monitored in order to ensure interim protection of LEO Canada. Since that time, the defendants have filed substantial evidence suggesting misconduct by Mr Andersson, (also not yet proven), and a corresponding need for his conduct to be controlled and monitored to promote the same objective; i.e., interim protection of LEO Canada. It bears repeating that there has yet to be any merits determination, one way or the other, in relation to the parties’ respective allegations of misconduct prior to the litigation. In my view, there accordingly is no reason why imposition of interim controls and monitoring necessarily should be one-sided, in the sense of applying only to the defendants and not to Mr Andersson as well. To proceed otherwise might suggest inaccurately that there has been a formal adjudication in favour of one side or the other. The interim communication restrictions, reporting obligations and undertaking requirements, applicable to those involved in interim joint operation of LEO Canada, accordingly should apply equally to all parties.
• I am persuaded that the provisions currently in place to prohibit, restrict or disclose communication and contact are too narrow in some ways, (e.g., in the sense they do not apply equally to all parties when they should), and too broad in others, (in that they apply to communications and contact in respect of which there currently seems to be no demonstrable need in order to safeguard the interests of LEO Canada on an interim basis.). In that regard:
  • Arrangements to control and monitor communications with current employees of LEO Canada, and limit those communications to ones that promote or at least do not harm LEO Canada, seems entirely understandable. Those on the “inside” of the corporation have considerable ability to cause the greatest harm.
  • However, the need for such restrictions in relation to former employees of LEO Canada seems much more difficult to understand or justify – as demonstrated by the plaintiffs’ concession, during the hearing before me, that there should be no restrictions on the ability of Ms Aquino to freely interact with numerous former employees of LEO Canada who now work with Ms Aquino at MTB.[^17]
  • Application of such restrictions to any past or current contractor, supplier and/or agent of LEO Canada also seems overly broad. For example, such an application would encompass any party’s contact with a utility, telecommunication service, chartered bank or similar purveyor of goods and services on a widespread basis that LEO Canada also happens to use, (or which LEO Canada may have used in the past), even though such contact poses no realistic threat to the welfare of LEO Canada.
  • In my view, the obvious purpose of the relevant restrictions was to prevent any party from engaging in communication or contact with contractors, suppliers and/or agents of LEO Canada in a manner that threatens to undermine, disrupt or terminate LEO Canada’s relationships with such contractors, suppliers or agents. Prohibitions and restrictions on such communications and contacts should be targeted appropriately. Communications and contacts with contractors, agents and suppliers of LEO Canada that do not disrupt or threaten to disrupt such relationships should not be restricted. Coupled with ongoing obligations on the parties to disclose what contacts each has had with LEO Canada’s contractors, suppliers and agents, that will identify the possible need for further court intervention if such relationships are disrupted or undermined following such contact.
• In my view, the existing broad disclosure prohibitions, set forth in paragraph 7 of the November 17th order, should be removed. They no doubt were intended to contain news of the dispute and allegations of serious misconduct; e.g., to minimize confusion and uncertainty amongst employees of LEO Canada, and to prevent damage to the company’s reputation which might flow from disparagement of someone having past involvement in the company’s operations, or continued involvement in those operations via the interim arrangement imposed by the court. However, the evidence before me strongly suggests, and counsel acknowledged, that the proverbial cat is largely “out of the bag” in that regard. As noted above, employees of LEO Canada received conflicting communications and accounts from Mr Andersson and Mr Kamran as to what was happening, before there was agreement on a further joint communication to LEO Canada’s employees. Externally, information and documentation already has been shared with individuals not bound by the court’s earlier orders restricting disclosure, and there is no effective way of knowing or controlling the extent to which such disclosure may have been or will be republished. Moreover, as admirable as the goal of minimizing confusion and potential damage to corporate reputation may be, the earlier court ordered disclosure prohibitions generated a result akin to indirect sealing of the court file, which runs counter to the “open courts” principle reflected in section 135 of the Courts of Justice Act, R.S.O. 1990, c.C.43.
• I agree with the parties that references in the November 17th order to an “independent corporate overseer” need to be altered. In particular, while all parties seem to have a firm understanding of what type of independent professional Justice Templeton had in mind, the term used by Justice Templeton is unfamiliar to professionals who normally provide such services, and who are more used to assuming the well-defined role of “monitor”. That lack of familiarity has in turn led to apprehension about the role such professionals are being asked to assume in this matter, and what the scope of their correlative duties and potential liabilities might be. That apprehension in turn has impeded the parties’ ability to involve such a monitor, on what they anticipate being a mutually agreed rather than contested basis, as the November 17th order contemplated. Further modifications also are appropriate to promote full transparency in relation to communications to and from the proposed or appointed monitor. As noted above, the parties commendably seem to have agreed upon a mutually acceptable monitor; i.e., Jake Wiebe of Grant Thornton LLP. However, his retainer has not yet been confirmed, terms of his appointment have not yet been negotiated, and his appointment accordingly is not yet certain. Provisions of the revised interim interim without prejudice order therefore should cover off all eventualities in that regard.
• The scheduling provisions incorporated into the November 17th order are now spent, and accordingly should be deleted from any further interim interim without prejudice order. I generally think it preferable, on a go forward basis, for transitory scheduling matters to be dealt with by way of endorsements separate from orders of more lasting import.
• In my view, the existing cost provisions of Justice Templeton’s order need to be adjusted, insofar as they apparently were premised on an assumption that all interlocutory motions would be heard simultaneously on December 22, 2017, with one simultaneous decision to follow. For the reasons outlined above, that has not been and will not be the case.

[107] I nevertheless also think that certain of the requested modifications are inappropriate and/or unjustified for the time being. In particular:

• I do not think it appropriate to impose a qualification on access to LEO Canada’s corporate information that makes such access dependent on the party requesting it to demonstrate that such access is required to make a decision for LEO Canada. As noted above, such a qualification or restriction would put a party from whom corporate information is being withheld in the unfair and untenable position of having to argue that he needs undisclosed information to make a decision for LEO Canada without knowing what the withheld information is, and perhaps without knowing that certain withheld information even exists.
• I do not think it appropriate at this stage of the proceedings to prohibit, in the manner requested by the plaintiffs, all forms of communication or contact between the defendants and all members and group leaders in the direct seller network of LEO Canada – or any such prospective members or group leaders. In that regard:
  • It must be remembered and emphasized that, pursuant to the court ordered interim arrangements, Mr Andersson and Mr Kamran both have the right and responsibility to participate in the joint operation of LEO Canada, the business of which clearly is dependent on its direct selling network. Preventing Mr Andersson or Mr Kamran from communicating or contacting any of LEO Canada’s members or network leaders, in that direct selling network, is antithetical to those rights and responsibility of interim joint operation of the company.
  • Whether or not there are any restrictions on members of the LEO Group direct selling network joining other direct selling networks such as that of MTB, whether or not their doing so would have any meaningful impact on the business of LEO Canada, and whether or not the defendants accordingly should be prohibited from having any contact or communication with members of the LEO Groups’ direct selling network for purposes associated with the marketing of products which apparently may not overlap with those marketed by LEO Canada, are all seriously contested issues in this litigation. Again, there has been no determination on the merits, in relation to those issues, and there may not be such a determination for some time to come depending on the progress and outcome of other motions. In my view, to impose such an additional restriction, in the face of further undecided and seriously contested issues as to whether such a restriction would cause irreparable harm to the defendants’ interest in MTB, and whether Mr Andersson’s undertaking regarding damages is sufficient to address any such damages, would be a step too far at this stage of the proceedings. It effectively would grant much of the interlocutory injunctive relief sought by the plaintiffs without a hearing of their motion in that regard, and without the corresponding issues raised by the other outstanding motions being addressed.
  • On any view, the suggested prohibition on communication or contact with any prospective members or group leaders of LEO Canada’s direct selling network is impossibly vague and wide, and arguably would encompass anyone on earth.

[108] Pending further court direction to the contrary, matters therefore will be governed, on a go forward basis, by the following interim interim without prejudice order:

1. Mr Andersson and Mr Kamran will jointly operate LEO Canada on a day-to-day basis. To enable and facilitate that joint operation of the company, both Mr Andersson and Mr Kamran shall be granted access to all LEO Canada files, data and records, both electronic and otherwise. However, such access shall be used for the sole purpose of advancing LEO Canada’s interests.
2. Should either Mr Andersson or Mr Kamran be unable to operate LEO Canada personally, he or his representative may either: a. appoint a third party to do so, if that third party is mutually agreeable to Mr Andersson and Mr Kamran or their respective representatives; or b. ask the court to make such an appointment, in which case Mr Andersson and Mr Kamran or their respective representatives shall each submit the names of two individuals viewed as appropriate candidates to jointly operate LEO Canada.
3. Subject to the provisions of the paragraphs 4 and 5, neither Mr Andersson nor Mr Kamran will make any decision concerning LEO Canada without: i. providing written notice to the other, at least 24 hours in advance; and ii. obtaining the written consent of the other, which shall not be unreasonably withheld.
4. The decision making requirements set forth in paragraph 3 shall not apply to decisions concerning LEO Canada having a financial significance of less than $2,500.00.
5. If either Mr Andersson or Mr Kamran provides written notice of a contemplated decision concerning LEO Canada in accordance with the requirements of paragraph 3, and written consent to the contemplated decision is then withheld by the party receiving notice, such that there is no agreement to proceed with the contemplated decision, either party may seek intervention of the court if the matter is of financial significance to the well-being of LEO Canada.
6. Mr Andersson and Mr Kamran each shall provide, to the other’s counsel of record, a written undertaking that he shall not use, copy or disclose, for any reason other than the advancement of LEO Canada’s interests alone, or the provision of information and documentation to his counsel for the purposes of this litigation, any information, data, source or records in the possession of LEO Canada, under the control of LEO Canada, or pertaining to LEO Canada.
7. Mr Andersson, Mr Kamran and Ms Aquino are each prohibited from communicating with or contacting any current LEO Canada employee, either directly or indirectly, unless: a. the communication or contact is for the sole purpose of advancing the interests of LEO Canada; b. the communication or contact is made by his or her counsel of record for the purposes of this litigation; c. the relevant LEO Canada employee is a family relative and the communication or contact relates to matters other than the operations, strategies, business or finances of LEO Canada.
8. Mr Andersson, Mr Kamran and Ms Aquino shall not engage in communication or contact with contractors, suppliers and/or agents of LEO Canada in a manner that threatens to undermine, disrupt or terminate LEO Canada’s relationships with such contractors, suppliers or agents.
9. At the end of each day, Mr Andersson and Mr Kamran shall each provide a list in writing, to the other, of LEO Canada employees, contractors, suppliers and/or agents with whom he has had communication or contact that day.
10. At the end of each week, Ms Aquino shall provide a list in writing, through her counsel of record, to counsel of record for Mr Andersson and counsel of record for Mr Kamran, of all known LEO Canada employees, contractors, suppliers and/or agents with whom she has had communication or contact that week.
11. A monitor shall be appointed to monitor LEO Canada’s operations pending a final determination of the plaintiffs’ motion for interim and interlocutory injunctive relief. In that regard: a. The parties shall endeavour to select a mutually agreeable monitor, and work with that selected monitor to agree upon terms of a draft court order, acceptable to the parties and the monitor, formally appointing the monitor. Counsel for each party shall be equally involved in that process, and shall be copied on all correspondence sent to and from any proposed or selected monitor. b. If a mutually agreeable monitor is selected by the parties, and the parties and the party-selected monitor agree upon the terms of a draft court order formally appointing the monitor, request for court approval of that draft court order may be made by a “basket motion”, which shall include appropriate written consents of the parties and the monitor to making of the proposed order, as well as a copy of the draft order approved as to form and consent by the parties and the monitor. c. If a mutually agreeable monitor is selected by the parties, but the parties and the selected monitor are unable to agree upon the terms of a draft court order formally appointing the monitor within two weeks of the monitor’s selection, any party may bring a motion on notice requesting court settlement of the terms of an order formally appointing the party-selected monitor. d. If the parties are unable to agree upon a monitor within two weeks of the making of this order, any party may bring a motion requesting court selection of a monitor, in which case each party shall submit the names of two possible monitors acceptable to that party. If a monitor is selected by the court in that manner: i. The parties then shall endeavour to work with that court-selected monitor to agree upon terms of a draft court order, acceptable to the parties and the monitor, formally appointing the monitor. Counsel for each party shall be equally involved in that process, and shall be copied on all correspondence sent to and from any proposed or selected monitor. ii. If the parties and the court-selected monitor then agree upon the terms of a draft court order formally appointing the monitor, request for court approval of that draft court order may be made by a “basket motion”, which shall include appropriate written consents of the parties and the monitor to making of the proposed order, as well as a copy of the draft order approved as to form and consent by the parties and the monitor. iii. If the parties and the court-selected monitor are unable to agree upon the terms of a draft court order formally appointing the monitor within two weeks of the monitor’s selection, any party may bring a motion on notice requesting court settlement of the terms of an order formally appointing the party-selected monitor.
12. LEO Canada shall provide written reports of its financial position as of the date of inception, and at the end of each month thereafter. In that regard: a. Each report shall include a summary of any and all transactions entered into with a supplier, bank or other entity, as well as a summary of any changes in the employees of LEO Canada. b. The reports shall be delivered, on a monthly basis, to each of Mr Andersson, Mr Kamran and Ms Aquino, through their respective counsel. c. Following appointment of the aforesaid monitor, LEO Canada also shall deliver copies of its prior and future monthly reports to the monitor.
13. Pending a final decision of the court, no named individual party’s legal fees shall be taken from or paid by LEO Canada.
14. Costs of the proceedings before Justice Templeton continue to be reserved to the judge making a final determination in relation to the plaintiffs’ motion for injunctive relief.
15. Costs of the proceedings to date before me are reserved, and shall be spoken to at the hearing, to be scheduled before me in the manner outlined above, to address the “penalty phase” of Kamran’s contempt motion.

Costs

[109] In relation to the point addressed by the last paragraph of that revised interim interim without prejudice order, because my decision was reserved, the parties had no opportunity to make any submissions regarding costs of the various steps that have been taken before me, in relation to my period of involvement in this matter.

[110] If the parties are unable to reach an agreement on costs, I intend to hear from counsel in that regard, in due course, at the contemplated “penalty” phase hearing noted above.

[111] In the meantime, I will simply indicate the following preliminary views, subject to hearing from counsel:

• The parties should take considerable care in allocating time between the case management meeting over which I presided, argument of the contempt motion before me, and submissions made before me concerning modifications to the interim order. For example, although the parties spent considerable time before me on submissions outlining the general history and nature of the parties dispute, before proceeding to argue the contempt motion, I would not think it appropriate for any party to seek recovery, in the context of the contempt motion, of all the time spent preparing the evidentiary material formally providing that context to the court. Such costs seem more appropriately recoverable in relation to the motion for injunctive relief, which prompted the bulk of the underlying filings and corresponding cross-examinations.
• Like Justice Templeton, (who effectively expressed such views in the final paragraph of her order dated November 17, 2017), I am inclined to think that time devoted to modification of the interim interim without prejudice order should be reserved until the conclusion of the motion for interlocutory injunctive relief.
• Like Justice Grace, (who effectively expressed such views in his endorsement of January 16, 2018), I am inclined to think that time devoted to broader case management of this litigation, (such as the hours devoted to the case management session over which I presided on December 21, 2017), properly should form part of the costs to be assessed and awarded upon conclusion of the action.

Settlement of order

[112] For greater certainty, my rulings herein should be embodied in a formal order, to be issued and entered.

[113] The parties should prepare and exchange drafts in that regard, and hopefully then forward a mutually approved draft order to me for consideration through the standard London “basket motion” procedure.

[114] If the parties cannot agree on the precise form of the draft order, they should send their competing drafts to me by way of a London “basket motion” to settle the order.

“Justice I. F. Leach”

Justice I.F. Leach

Date: January 31, 2018

[^1]: Mr Andersson is a Swedish national, and it seems that both gentlemen travel a great deal. However, both apparently reside in the United Kingdom. [^2]: To date, (according to the evidence of the defendants), Mr Kamran formally has been made an equal shareholder with Mr Andersson in numerous LEO entities, including those in Germany, Dubai and the United Kingdom. [^3]: In his affidavit material, Mr Andersson suggested that Mr Kamran had filed to comply with the same interim interim without prejudice order, in various ways. However, no motion seeking relief in that regard was brought by Mr Andersson. [^4]: See U.N.A. v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901, at p.931; Pro Swing Inc. v. ELTA Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612, at paragraph 35; and Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paragraph 30. [^5]: See Korea Data Systems Co. v. Chiang, 2009 ONCA 3, [2009] O.J. No. 41 (C.A.), at paragraph 11; and Carey v. Laiken, supra, at paragraph 31. [^6]: See Carey v. Laiken, supra, at paragraph 33. [^7]: See Chirico v. Szalas, [2016] O.J. No. 3907 (C.A.), at paragraphs 54 and 58; and Greenberg v. Nowack (2016), 2016 ONCA 949, 135 O.R. (3d) 525 (C.A.), at paragraph 25. [^8]: See Carey v. Laiken, supra, at paragraph 34, and Greenberg v. Nowack, supra, at paragraph 25. [^9]: See Carey v. Laiken, supra, at paragraphs 35 and 38-39; and Greenberg v. Nowack, supra, at paragraphs 25 and 27. [^10]: See Carey v. Laiken, supra, at paragraph 44. [^11]: See R. v. Wilson, 1983 CanLII 35 (SCC), [1983] 2 S.C.R. 594, at p.599; Paul Magder Furs Ltd. v. Ontario (Attorney General) (1991), 1991 CanLII 7053 (ON CA), 6 O.R. (3d) 188 (C.A.), at p.192; Litterest v. Horrey, 1996 ABCA 13, [1995] A.J. No. 1208 (C.A.), at paragraph 14; and Carey v. Laiken, supra, at paragraphs 58-59. [^12]: See Carey v. Laiken, supra, at paragraphs 36-37; and Greenberg v. Nowack, supra, at paragraph 26. [^13]: See College of Optometrists (Ontario) v. SHS Optical Ltd., at paragraphs 72-75; and Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paragraph 18. [^14]: These provisions replicate those original set forth in sub-paragraph 50(g) of the endorsement released by Justice Templeton on November 10, 2017, and sub-paragraph 50(g) the amended endorsement released by Justice Templeton on November 15, 2017, respectively. [^15]: I note in passing that, for some reason, Mr Andersson repeatedly has failed to provide Mr Kamran or his lawyers with a copy of the relevant letter. I frankly see no defensible reason for that failure. To the contrary, the letter sent to employees of LEO Canada, by one or more of its putative directors acting in that capacity, inherently forms part of LEO Canada’s files, data and records to which Mr Kamran should have been provided immediate access, pursuant to the terms of Justice Templeton’s order of November 17, 2017. It also forms part of the non-privileged documentation, within Mr Andersson’s possession or control, that inevitably would have to be disclosed and produced in this litigation pursuant to Rule 30 of the Rules of Civil Procedure, even in the absence of Justice Templeton’s order. Such a document accordingly should be produced voluntarily, without the need for further court involvement. Failure to do so simply generates more conflict, delay and expense, to the detriment of all concerned. [^16]: In that regard, it should not be forgotten that, on any of the disputed views put before the court, Ms Aquino is a shareholder in LEO Canada, a closely held private company. She holds either one share therein, (according to the plaintiffs), or five shares therein, (according to the defendants). [^17]: The defendants have filed substantial evidence, apparently not disputed or contradicted by the plaintiffs, indicating that the employment contracts of those working for LEO Canada contain no restriction or prohibition on the ability of a former employee of LEO Canada to engage in business that may compete with that of LEO Canada.