Court File and Parties
COURT FILE NO.: CV-18-597253-0000 DATE: 20190417 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kamaljit (aka Tony) Sandhu, 2565212 Ontario Inc., and 2550816 Ontario Inc., Applicants AND: Pannirshelvan Kannuthurai and Metro Zen (Canada) Inc., Respondents
BEFORE: Pollak J.
COUNSEL: Melvyn Solmon, for the Applicants Kristine Holder, for the Respondents
HEARD: March 12, 2019
Endorsement
[1] On January 19, 2019, Justice Chiappetta adjourned this Application to be heard today and made the following endorsement:
“MJ Chiappetta
The Applicants seek a contempt order as against the Respondents. They argue that the Respondents have failed to comply with para 1 of Master Short’s order of Feb. 13, 2018 which reads as follows:
This court orders that by Tuesday Feb. 27, 2018 the plaintiff shall provide Master Short with five copies of a reasonable accounting as to funds received by the plaintiff from the investors and their disposition by the plaintiff.
In my view, there is no ability to make a determination as to whether the respondents complied with the order of Master Short unless it is understood what the Master believed to be “reasonable”. The order is neither clear nor unequivocal. I have advised counsel that in my view, prior to rescheduling the contempt motion, Master Short should be asked to make a declaration on compliance in accordance with 60.12 of the Rules of Civil Procedure. I will leave that with counsel. For today, counsel agree that the contempt motion should be adjourned as Mr. Kannuthurai is not available as he is out of the country, caring for a sick relative. The motion is therefore adjourned peremptory to the Respondents on the following terms:
The Respondents shall provide sworn affidavit evidence attesting to the absence today of Mr. Kannuthurai and
The Respondents shall take no fresh steps in this proceeding (not including responding to this application) prior to the compliance by the Respondents of the costs awarded by Justice Corbett on May 24, 2018.
The contempt motion is therefore adjourned to March 12, 2019 for 90 minutes. Counsel for the Respondents shall confirm the availability for the purposes of the peremptory order within 3 days. If the Respondents are not available March 12, 2019 counsel agree to amend the date of hearing subject to availability.
Costs of today are fixed at $1000 and reserved to the contempt hearing when counsel will have the benefit of the affidavit evidence of the Respondents explaining the absence today. To be clear, my views as expressed on pages 1 and 2 of the endorsement are not binding on the hearing judge.”
[2] On this Application, Kamaljit (aka Tony) Sandhu, 2565212 Ontario Inc., and 2550816 Ontario Inc.) (the “Applicants”) move for the following relief against Pannirshelvan Kannuthurai and Metro Zen (Canada) Inc. (the “Respondents”):
(a) An Order declaring that the Respondents, Pannirshelvan Kannuthruai and Metro Zen (Canada) Inc., are in breach of a court order being paragraph 1 of the order of Master Short dated February 13, 2018;
“THIS COURT ORDERS that by 5:00pm on Tuesday, February 27, 2018, the plaintiff shall provide Master Short with five copies of a reasonable accounting as to all funds received by the plaintiff from the investors and their disposition by the plaintiff.”
(b) An Order declaring that the Respondents, Pannirshelvan Kannuthurai and Metro Zen (Canada) Inc., are in contempt of a court order, being paragraph 1 of the order of Master Short dated February 13, 2018;
(c) An Order granting further relief, as is just, pursuant to Rule 60.11(5) of the Rules of Civil Procedure, including:
(i) That Pannirshelvan Kannuthurai and Metro Zen deliver 5 copies of the accounting as required by the Feb13 Order to the court by May 27, 2018 12 noon and that this application be adjourned to May 28, 2018.
(ii) That if Pannirshelvan Kannuthurai and Metro Zen fail to deliver the said accounting as required by the court, that Pannirshelvan Kannuthurai be imprisoned for such period and on such terms as to the court determines just.
[3] The Applicants submit that the Respondent Metro Zen is in breach of paragraph 1 of the order of Master Short dated February 13, 2018. The February order provides as follows:
THIS COURT ORDERS that by 5:00pm on Tuesday, February 27, 2018, the plaintiff shall provide Master Short with five copies of a reasonable accounting as to all funds received by the plaintiff from the investors and their disposition by the plaintiff.
THIS COURT ORDERS that Master Short will deal with the appropriate distribution of the accounting provided to him in accordance with paragraph 1 of the Order, shortly after receipt.
THIS COURT ORDERS that security for costs in the sum of $35,000.00 in trust, shall be delivered to the office of, and in the name of Solmon Rothbart Goodman LLP; at 375 University Avenue, Suite 701, Toronto, Ontario, M5G2J5 by 5:00pm on Thursday, March I, 2018. These funds are to be delivered by way of Bank Draft or Certified Funds, and will be held in the trust account of Solmon Rothbart Goodman LLP.
[4] The Respondent Metro Zen brought an action against the Applicants for alleged conspiracy and fraud to deprive the Respondent of its property through a series of mortgage dealings. The Order of the Master, which the Applicant now seeks to enforce, was for an accounting to be provided to the Master with respect to the funds that have been received by Metro Zen from investors (who are not parties to the action). The Master did not make any Order that the Applicants were to receive copies of the “reasonable accounting”, or elaborate on any requirements of the “reasonable accounting”.
[5] On September 18 and October 30, 2018 Justice Horkins heard an Appeal brought by the Applicants of the Master’s Order. Justice Horkins held as follows with respect to the Master’s Order:
[71] Paras. 1 and 2 of the February order deal with an accounting that Metro Zen was ordered to provide to the Master. It is not possible to explain these paragraphs in the absence of reasons. However, it is agreed that the orders in paras. 1 and 2 are not affected by the finding of functus officio. These orders stand as against the defendants who remain in the action: John Paul Fletcher, Marpole 88 (Ontario) Holdings Limited, Olympia Trust Company and Western Pacific Trust Company. These defendants did not move to have the action dismissed against them. [emphasis added]
[72] Dealing with paras. 3, 4, 5, and 10, the Master was functus officio and had no jurisdiction to make these orders. The orders in these paragraphs deal with the $35,000 security for costs.
Justice Horkins dismissed the Respondent’s action against the Applicants.
[6] Notwithstanding this dismissal of the action by Justice Horkins, the Applicants move for a declaration that the Respondent Metro Zen Canada Inc. is in contempt of Master Short’s order.
[7] The submission of the Applicants is that notwithstanding Justice Horkins’ finding that “paragraphs 1 and 2 of the February Order “ … stand as against the defendants who remain in the action: John Paul Fletcher, Marpole 88 (Ontario) Holdings Limited, Olympia Trust Company and Western Pacific Trust Company.” These defendants did not move to have the action dismissed against them” and that the Applicants are not the Defendants referred to by Justice Horkins, this Court should still make a finding that Metro Zen is in contempt of Court because it is in the public interest that orders of the court be complied with.
[8] The Applicants could not move for a contempt motion within the action as against the Applicants as it was dismissed. This Application was therefore commenced.
[9] There are several reasons why this Application must be dismissed.
[10] Firstly, as held by Justice Horkins, the “order does not stand as against” the Applicants. The action has been dismissed and the Applicants no longer have any interest or standing in the action.
[11] Further, the Order made by the Master was not made for the benefit of or to provide for any relief or advantage to be given to the Applicants. The Court finds that the Applicants therefore have no standing to bring this Application for a declaration of contempt and for the imprisonment of the principle of the Respondent.
[12] Further, as noted by Justice Chiappetta, although it is acknowledged that her opinion is not binding on this Court, this Court is also of the view that she has correctly summarized the difficulty with satisfying the established criteria set out by our courts for a finding of contempt. I agree that “It would not be reasonable for this court to make a determination as to whether the Respondent complied with the order of Master Short unless it is understood what the Master believed to be “reasonable“. The order is not clear or unequivocal”. Justice Chiappetta at that time suggested to counsel that prior to the rescheduling of this Application, the Master should be asked to make a declaration in compliance and in accordance with rule 60.12 of the Rules of Civil Procedure. At that time, the Applicants were parties to and had standing in the Action. Rather, the Applicants appealed the Master’s order and moved for dismissal of the Action.
[13] For all of these reasons, the Application is dismissed.
Costs
[14] If the parties have reached an agreement on costs at the hearing of this matter, that agreement will apply.
[15] If the successful Respondents wish to make submissions that costs on a higher scale should be awarded and the parties are unable to agree on such costs, they may make brief written submissions to me no longer than three pages in length. The Respondents’ submissions are to be delivered by 12:00 p.m. on April 24, 2019, and the Applicants’ submissions are to be delivered by 12:00 p.m. on April 30, 2019. Any reply submissions are to be delivered by 12:00 p.m. on May 3, 2019.
[16] Submissions are to be delivered to Room 170, 361 University Avenue or via email to my assistant. After May 3, 2019, if no submissions are submitted for costs, the matter will be considered at an end and the file returned to the motions office.