Court File and Parties

COURT FILE NO.: CV-18-1392-00 DATE: 2021 02 23 REVISED: 2021 03 03

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

KULWINDER SINGH, Plaintiff Peter M. Callahan, for the Plaintiff

- and -

RAJAN SHARMA and ESHA SHARMA, Defendants Jordan Goldblatt, for the Defendants

HEARD: September 15, 16, 17, 18, 2020

REVISED REASONS FOR JUDGMENT

Fowler Byrne J.

[1] The Plaintiff Kulwinder Singh (“Singh”) seeks a declaration of interest in two properties of which he is not the registered owner. He also seeks rectification of title with respect to these properties, and an order that these two properties, and two others of which he is a part owner, be sold pursuant to the Partition Act, R.S.O. 1990, c. P.4. From the proceeds of sale, he seeks an order that each party is paid back their investment in the properties and the remainder of the monies divided evenly.

[2] The Defendant Rajan Sharma (“Sharma”) denies that Singh has any interest in the properties other that what is registered on title. He is also claiming the sum of $500,000 in damages from Singh for breach of contract.

[3] Both Singh and Sharma seek interest and costs.

A. Facts

i. Background

[4] Singh and Sharma first met in or around 2009 when Singh hired Sharma to work at his company Ampower Electrical Contractors (“Ampower”). Ampower is a company which provides electrical services for industrial, commercial and residential projects. Sharma was not an electrician when hired, so he assisted the electricians where he could. He remained with Ampower until 2013, during which time Singh helped and supported him to become a licensed electrician and then a master electrician. During this time, they would see each other at work, but the relationship remained one of employer and employee.

[5] In May 2013, Sharma left Ampower and pursed a better opportunity as a project manager at Wyse Meter Solutions Inc. (“Wyse”). Wyse was a new company which provided submetering services for apartment buildings. As a project manager (and later a senior project manager), Sharma was in charge of sourcing and hiring electrical subcontractors to do the actual installation.

[6] Singh had previously worked for Peter Mills, the owner of Wyse, in 2009 or 2010 when Mr. Mills operated another company, Multilogical Lighting. Around the time that Mr. Mills started Wyse, he asked Singh for his rates for submetering work, but nothing came of it at that time. Singh now saw an opportunity to obtain this work when his former employee was put in charge of selecting the electrical company to do the work.

ii. 2013 Meeting

[7] Shortly after Sharma started with Wyse, in June or July 2013, Singh reached out to Sharma and visited him at his house. The Defendant Esha Sharma (“Esha”), Sharma’s wife, was also present, but was only in and out of the room. Her knowledge of the topics discussed at the meeting is only as Sharma relayed to her.

[8] Singh and Sharma disagree about was discussed at this meeting. Singh maintains that he went to visit Sharma to “pitch” his company as a subcontractor for Wyse. He wanted to know from Sharma what Wyse needed from a contractor. He claims nothing was promised in return.

[9] Sharma maintains that Singh proposed a private compensation scheme, wherein they could both benefit financially. Singh promised to compensate Sharma for every Wyse contract that Sharma sent to Ampower. Sharma told Singh that in order for Wyse to award subcontracts to Ampower, Ampower had to offer a lower price. Singh indicated he could do so if Sharma acted as his project manager on site, to supervise the work and train his staff. In this way, we wouldn’t need to provide his own manpower to do so and could make a competitive bid to Wyse. Sharma maintains that they agreed upon the sum of 20% of the gross value of all subcontracts referred to Ampower, GST included (the “Commission Agreement”). No part of the Commission Agreement was reduced to writing.

[10] The evidence is clear that after Sharma started working at Wyse, he started awarding subcontracts to Ampower. The evidence shows that Ampower billed Wyse for subcontract services in the amounts of $677,538.54 in 2014, $743,666.16 in 2015, and $598,250.82 in 2016. In 2017, Ampower billed Wyse $324,259.47 in services for only up to May of that year. The total amount billed during that period was $2,343,714.99. It appears these sums are inclusive of taxes.

[11] It is also clear from the evidence that from at least 2014, Singh started sending Ampower invoices for Wyse work directly to Sharma at his personal email account. This was done in addition to sending Ampower invoices to Wyse as per the normal billing procedure. This continued into 2017. Sharma maintains that this was so they could keep track of the referrals for the purposes of the Commission Agreement. Singh maintains that this was done so that Sharma could check the invoices, as Ampower was prone to making mistakes which was embarrassing. Singh claims that Sharma could then check the invoices and correct any mistakes before they were sent to Wyse to be paid.

[12] It is the evidence of both parties that from the time Sharma started awarding contracts to Ampower until the spring of 2015, no payments were made by Singh to Sharma.

iii. 2015 Meeting

[13] Sharma states that in or around early 2015, he approached Singh about receiving payment. He alleges that Singh couldn’t pay him the sum owed in cash, but instead proposed that they would invest in properties together. The plan was that the two gentlemen would purchase a property jointly. Singh would pay the entire purchase price, but they would own the property jointly, meaning that Sharma’s 50% interest in that property was funded by the monies owned to him pursuant to the Commission Agreement. When the property was sold, they would split the profits equally, irrespective of who contributed what to the property.

[14] Sharma further states that before they actually purchased anything, they met and did some calculations of what was owing. At that time, they had only intended to purchase one property. As will be detailed below, they actually ended up buying two properties right away. So shortly after purchasing the two properties, they met again because they “overspent” and they needed to understand what was still owing.

[15] In support of his position, Sharma pointed to a number of documents that he received from Singh that were prepared by Sulinder Bains, an employee of Ampower. These documents detail the invoices Ampower sent to Wyse for work in 2014. Sharma states that the only reason he had these Ampower documents was because Singh provided them to him to calculate the value of the business referred to Ampower, and to determine what was owed to Sharma. They also used the document to estimate what amount of work could be referred to Ampower in the future. The document that summarized the subcontracts that were awarded to Ampower was dated “04/05/15”. Sharma claims this was April 5, 2015, the same day they purchased their first properties. Singh maintains that it is dated May 4, 2015. Either way, it is clear that this document, generated by Ampower, was given to Sharma on or about one of these two dates. Both gentlemen agree that they met on a number of occasions around this time.

[16] Singh disputes that there was a Commission Agreement. Singh states that he and Sharma started talking about investing in properties in late 2014 or early 2015, which was a venture separate and apart from their relationship through Wyse. Singh maintains that they planned to buy a house, fixing it up, rent it and eventually sell it. Sharma had no experience with this and no available cash, so Singh, as a favour to Sharma, and in return for all the business sent to him, agreed to help him by going into a partnership. Singh stated that they agreed that Singh would put up the money to buy the house, but that he and Sharma would own it equally. When they eventually sold it, Singh would get back his investment and the profits would be divided equally. Prior to the eventual sale of such a property, Sharma would be responsible for finding tenants, collecting rent, and generally managing the properties. If at any time Sharma needed money to maintain the buildings, he would contact Singh to fund it (“Property Venture”).

[17] Singh also gave evidence that he often helped out his favourite employees to purchase their first home in a similar manner. If these valued employees could not afford a down payment for their first home, he would give it to them on the understanding that when the house was eventually sold, he would be repaid his down payment plus 50% of any increase in the equity between the time it was purchased and the time it was sold. When he advanced money in this manner, Singh states he did not register a mortgage or interest on title to protect his investments in these scenarios. He stated that Sharma was aware of this and wanted to benefit from it as well. Singh had purchased approximately 40 properties already over the years.

[18] Singh maintains that he and Sharma first discussed the Property Venture in late 2014. Ms. Pawandeep Dhaliwal, Singh’s long-time real estate agent, gave evidence that in 2014 and early 2015, she started showing properties to Singh and Sharma in the Brampton area.

iv. Property Purchases

[19] Sharma was also looking for properties, and in 2015 he found a property on Kijiji, located at 1904 Olive Road, Windsor, Ontario (the “Olive Property”). It is not disputed that it was Sharma that found this property. He and Singh travelled to Windsor to view the property in early April 2015. It was a six-plex with good rental potential. After viewing the property and seeing the potential, Singh and Sharma jointly entered into an Agreement of Purchase and Sale to purchase this property for $335,000, which was scheduled to close on May 29, 2015. This agreement was signed on April 5, 2015.

[20] It is also agreed that while considering the purchase of the Olive Property, the owner of the Olive Property indicated that he had another property for sale as well. Singh and Sharma decided to look at it. This second property, a residential home, was located at 2824 Jos St. Louis Avenue, Windsor, Ontario (“2824 Property”). After viewing that property, and on the same day, Singh and Sharma jointly entered into another Agreement of Purchase and Sale to purchase the 2824 Property for $150,000, also closing on May 29, 2015.

[21] Both Agreements of Purchase and Sale indicate that a $10,000 deposit was paid upon signing. Sharma maintains that he paid the $10,000 for the Olive Property, and provided a copy of the front of a cheque from his personal account with the notation “Deposit for 1904 Olive Road.” There was no evidence that this was actually negotiated. Singh doesn’t dispute that Sharma paid the $10,000, but claims Sharma was only able to do so because he asked his friend Dinesh Gautam to deliver $10,000 in cash to Sharma, so that he could cover the cheque. Mr. Gautam gave evidence that on at least two occasions during the spring and summer of 2015, Singh called him and asked to borrow $10,000, which was to be delivered in cash to Sharma.

[22] Whoever paid the deposit on either property, it is clear from the evidence that to close the 2824 Property, Singh provided the closing funds in the sum of $139,437.09. After various closing adjustments, this resulted in an overpayment of $7,730.96, which was applied to the Olive Property. Title for the 2824 Property was taken by Sharma and Singh, as tenants in common, each having an ownership interest of 50%. No mortgages were registered on title.

[23] With respect to the Olive Property, after the excess funds of $7,730.96 were credited and various closing day adjustments were made, the remaining amount required to complete the purchase, namely the sum of $318,275.53, was paid by Nampower Inc., a company in which Singh is a partner. The parties decided to take title through a corporation due to the favourable tax treatment. Accordingly, they incorporated 2472593 Ontario Inc. to take title of the Olive Property. Singh and Sharma each owned 50% of the shares of this company. No mortgages or other encumbrances were registered on title.

[24] Both the Olive Property and the 2824 Property closed on schedule on May 29, 2015.

[25] The real estate lawyer which Singh and Sharma used for these two properties was Ms. Suman Umesh Ahuja (“Ahuja”). Ahuja had been Singh’s real estate lawyer for many years and represented him in the purchase and sale of his other properties. Singh stated that he was the individual that gave Ahuja her instructions and directed her how title would be taken. Singh acknowledged that he could have asked Ahuja to register a mortgage on title, but that he chose not to do so. Ahuja was not called as a witness at this trial.

[26] Both parties agree that when they originally went to Windsor on April 5, 2015, it was their intention only to purchase the Olive Property. When they ended up purchasing two properties that day, they met again. Sharma’s evidence is that they viewed the summary of work again, and agreed that although they had “overspent” the amount owed to date under the Commission Agreement, they agreed that Sharma would continue to refer work to Ampower, and thereby make up the difference of any amount advanced on his behalf. Singh states that this meeting occurred on or about May 4, 2015 – as evidenced by the document prepared by Mr. Bains – but only to discuss further plans to purchase properties together as per their Property Venture.

[27] More properties were acquired. Less than two weeks before the 2824 Property and the Olive Property were scheduled to close, Sharma’s neighbour told him about a property that his son was selling at 18 Aloma Crescent, in Brampton, Ontario (“Aloma Property”). Sharma and his wife went to go see it. Sharma sought Singh’s advice due to his experience. On May 19, 2015, Sharma signed a simple one-page agreement wherein he agreed to purchase the Aloma Property for the sum of $367,500, with a $10,000 deposit. Singh witnessed this agreement.

[28] It is Singh’s evidence that he was always meant to have an ownership interest in the Aloma Property, and that he had hoped to obtain a mortgage to help fund the purchase price. Unfortunately, Singh states that he could not qualify for a mortgage as he already had a number of mortgages on other properties for which he was liable. Accordingly, he states that it was agreed that Sharma and his wife would take ownership on title and apply for a conventional mortgage in order to fund the purchase. It is also clear on the evidence that Singh advanced Sharma the sum of $65,000 on June 25, 2015 so that this sum could be in Sharma’s account for a period of time to assist in completing the purchase and to apply for this conventional mortgage. Singh claims it was understood that despite him not being on title, this property would be treated like the other properties in the Property Venture – he would have 50% beneficial ownership, and when it was sold, he would recoup his investment and share in the equity equally with Sharma.

[29] Sharma maintains that the circumstances surrounding the purchase of the Aloma Property were somewhat different. Sharma claims that Singh offered to buy it with Sharma if Singh could qualify for a mortgage. Accordingly, on May 23, 2015, he and Singh entered into a formal Agreement of Purchase and Sale with the vendor of the Aloma Property, wherein they agreed to purchase the property for $367,500, with a closing date of July 31, 2015. Shortly thereafter, Singh learned that he would not qualify for a mortgage, so Sharma and his wife entered into a new formal Agreement of Purchase and Sale with the vendor of Aloma on June 1, 2015, wherein they agreed to purchase the Aloma Property for the same price, with the same closing date. Sharma paid the $10,000 deposit on that day.

[30] Unfortunately, Sharma and his wife had a difficult time obtaining a conventional mortgage for the Aloma Property. The property had a leak in the roof, causing water and mold damage. A bank would not advance mortgage funds until which time the Aloma Property was inhabitable. The vendor allowed them to enter the property to effect the necessary repairs, but as a result, the closing date had to be extended to September 3, 2015.

[31] In order to fund the renovations and repairs, Sharma concedes that he was provided with $10,000 in cash from Singh’s friend Mr. Gautam (and claims this is the only sum advanced by Mr. Gautam). Singh also indicated that he loaned Sharma an additional $3,500 for a new kitchen for the Aloma Property, but provided no evidence of same. Singh claims that Ampower employees did most of the work.

[32] The purchase of the Aloma Property eventually closed on September 3, 2015. Title was taken by Sharma and his wife as joint tenants. The sum of $65,000 previously advanced by Singh to Sharma was used to purchase another property, as detailed below. For the Aloma Property, the $10,000 deposit Sharma paid was used to pay for penalties associated with the extended closing date. As a result of the renovations, Sharma and his wife were able to obtain a mortgage from the Bank of Nova Scotia for $294,000, and after various closing day adjustments, Ampower paid the additional sum of $68,500 to close. There is nothing registered on title that would reflect a debt owed to Singh or Ampower. Sharma states that the Aloma Property is rented, and the rental income covers the cost of maintaining same. Singh agrees that he is not liable under this mortgage from the Bank of Nova Scotia, nor has he had to pay anything towards the upkeep of the Aloma Property following his contributions to the renovations and his payment of $68,500.

[33] Sharma maintains that the Aloma Property belongs to him and his wife only. The contribution by Singh to the renovation costs and the closing funds was in payment of the Commission Agreement. Singh maintains that he would never have invested money in the Aloma Property had he and Sharma not agreed that he would maintain a 50% ownership in same as per the Property Venture. Although Sharma used Ahuja as his real estate lawyer, Singh states that he continued to provide Ahuja with instructions on the purchase of the Aloma Property. He did not instruct her to secure his investment. Ahuja’s reporting letter on the Aloma Property was addressed to Sharma and Esha only.

[34] In the meantime, back in April 2015, right after Singh and Sharma purchased the Olive Property and the 2824 Property, Sharma saw another property for sale, located at 2580 Jos St. Louis Avenue in Windsor, Ontario (“2580 Property”). Sharma states that he wanted to own this property on his own, but would need Singh to provide him the money to do so. Sharma alone entered into the Agreement of Purchase and Sale for the 2580 Property on April 25, 2015. Singh was the witness to the agreement. Sharma agreed to purchase the 2580 Property for $238,000, with a $10,000 deposit paid that day. It was scheduled to close on July 31, 2015.

[35] Sharma agrees he did not pay the deposit for this agreement. Ms. Dhaliwal, Singh’s real estate agent, loaned the money to Singh as a friend. She claims she has been repaid by him indirectly, by providing funds when she needed it. She provided very clear evidence that she transferred the sum of $10,000 from her personal account to the vendor’s lawyer on April 27, 2015.

[36] In the end, the purchase of the 2580 Property closed a few days late on August 6, 2015. Sharma and his wife were unable to qualify for a mortgage, so Sharma asked Singh to advance the funds on his behalf, with the intention of obtaining a mortgage at a later date to replace the funding. He states that any money advanced was a payment to him pursuant to the Commission Agreement.

[37] Singh maintains that he and Sharma were to own the 2580 Property jointly, but he knew he would not qualify for a mortgage, as he was already denied for the Aloma Property. Accordingly, it was agreed that Sharma and his wife would take title, and they would try to obtain a conventional mortgage at a later date. Singh claims he was to keep a half-interest in the 2580 Property as per the Property Venture.

[38] The amount required to close the transaction, being the sum of $234,000, was contributed almost exclusively by Singh, either through his companies or through loans from friends. Sharma did contribute the sum of $67,000, but $65,000 of this were funds that he received earlier from Singh towards the Aloma Property. Since the closing on the Aloma Property was delayed, he used the funds towards the purchase of 2580 Property. Sharma maintains that the additional $2,000 of these funds were his own. Singh is willing to concede that Sharma may have contributed anywhere between $500 and $2,000 towards the purchase price of the 2580 Property. Despite there being no conventional mortgage registered on title, and Singh providing the funds to close, Singh did not insist that he be a 50% owner, as with the 2824 Property, and title was taken by Sharma and Esha as joint tenants. No mortgage was registered on title and no loan documentation was created.

[39] Sharma and Esha did obtain a conventional mortgage loan for the 2580 Property the next year, in May 2016, from the TD Bank for the sum of $200,000, of which only $162,500 was advanced. Sharma advanced to Sharma the sum of $110,000 on June 1, 2016, and then a further $10,000 on July 6, 2016. Singh states that Sharma only got the mortgage because he asked him to, as his company was short of cash. Singh concedes that he has no obligation under the TD mortgage, and that he has not been asked to contribute in any way to the upkeep of 2580 since his initial contribution. Sharma advises that the rental income maintains the 2580 Property.

v. Breakdown of the Relationship

[40] In 2017, the parties had a falling out. In March 2017, Singh and his business associate Mr. Saini went to speak to Sharma’s employer about Sharma’s practice directing the easier subcontracts to Ontario Electric Contractors, with whom Sharma had a family relationship. They alleged that Sharma referred the harder subcontracts to Mr. Saini’s firm, called Build Design, or to Ampower. That month, Sharma was given a warning by his employer that his dealings with Ontario Electric Contractors were to be “severely diminished”. Singh maintains that Sharma was told by his employer to redirect more work to Ampower.

[41] Shortly thereafter, in or around May 1, 2017, it is agreed that Sharma and Singh met to discuss their business relationship. Sharma and Singh have different accounts of what transpired in that meeting, but it is agreed that a handwritten note was the result (“May 2017 Note”). The May 2017 Note, in Singh’s handwriting, states:

May 01 -2017 – Dec 30 2017 - $74,000

IF May 2017 – April 30, 2018 1,000,000 ==> 8% = $80,000 1.2 ==> 8% = 96,000 + 4,000 1.5 ==> 8% = 120000

Monthly ==> $5500/month As of January 2018

Will pay same as Wyse if there is any problem with Wyse Kulwinder Singh

[42] Singh concedes that from this point, he did suggest a commission agreement whereby Sharma would be compensated for the amount of business he sent towards Ampower. At this time, because of the complaint made against Sharma with Wyse, almost all of Wyse’s submetering business was coming to Ampower. Singh needed Sharma to play a bigger role in those subcontracts, so he could concentrate on Ampower’s other contracts. Singh states that he agreed to pay to Sharma 8% of his sales to Wyse, which he predicted would mean a payment of $74,000 from May to December 2017. The court can take note that at 8%, this means the parties expected sales to be between $1 million and $1.1 million for that 8-month period. Singh claims that Sharma wanted 10%, but they agreed upon 8%. Singh agrees he also offered a $4,000 bonus if his business with Wyse exceeded $1.2 million for the year. Singh also offered to pay Sharma $5,500 per month starting in January 2018. Finally, Singh offered to pay Sharma the same amount that he received for working at Wyse in the event that Sharma was let go or laid off as a result of the larger role Ampower was taking, which could eliminate Wyse’s need for Sharma’s project management position.

[43] Sharma has a different account of this meeting. Sharma maintains that at this meeting, they agreed to “settle” any of the advances that Singh had made to him to date, so that nothing was owed by either party and they could start with a clean slate going forward. Given that Wyse would be granting Ampower almost all of its work, which would mean more money for Ampower, they negotiated a new compensation agreement going forward at 8%. Sharma also claims that (i) Singh agreed to a payment of $74,000 for the last part of 2017, in addition to the 8% compensation scheme negotiated, and (ii) Singh agreed to pay him $5,500 per month as of January 1, 2018. Finally, Sharma maintains that Singh would pay him if he was let go for any reason from Wyse.

[44] The parties agree that soon after that meeting, Sharma demanded more money, saying that he was owed more for the work already referred. Although it is not reflected in the May 2017 Note, Sharma did collect an additional $31,357.50 from Singh. He did this by having the wife of his accountant render an invoice from her company, 2577548 Ontario Inc., to Singh at Ampower for $9,250 plus H.S.T. for “consulting and marketing services” on May 1, 2017, June 1, 2017 and July 1, 2017. All three invoices were paid by Ampower on July 7, 2017 by way of a draft to 2577548 Ontario Inc. It appears the funds then made their way to Sharma. There was no explanation for the manner in which this payment was made.

[45] Sharma said that Singh wanted him to sign the May 2017 Note, but he didn’t want to in case it would put his job with Wyse in jeopardy.

[46] Unfortunately, Sharma’s employment came to end with Wyse. Singh states Mr. Saini reported to Wyse that Sharma was pressuring Mr. Saini for compensation for directing work to him and that these demands were increasing since March 2017. According to his termination letter, Sharma was suspended in July 2017 so that the matter could be investigated. Unfortunately the Peel Regional Police called Mr. Mills, the principal of Wyse Meter, and told him that Sharma had threatened Mr. Saini and that Mr. Mills was to protect his employees. Sharma denies that he threatened anyone; he claims he only had an argument. Whatever occurred, Sharma was fired for cause on July 18, 2017. No claim for wrongful dismissal was made.

[47] Needless to say, other than the sum of $31,357.50 paid to Sharma by Singh though 2577548 Ontario Inc., Sharma received no further funds from Singh or any of his companies after this time.

[48] Singh then met with Sharma and told him that he wanted to sell all four properties, so that they could recoup their investments and divide the profits equally, and go their own way. If Sharma didn’t want to do that, Singh offered that he would transfer his interest in the properties to Sharma, but that he wanted his investment monies returned. Sharma refused to agree to either of Singh’s suggestions.

[49] Singh and Sharma have not spoken since and Singh commenced this litigation on April 4, 2018. There is no evidence before the court as to the current value of any of the properties.

B. Factual Findings

[50] Two determinative findings of fact must be made before the law can be applied and a decision reached. These are:

a) What was the agreement between Singh and Sharma in 2015 with respect to their purchase of properties?

b) Was there an agreement in 2013 to compensate Sharma for the work referred to Ampower, and if so, what was the nature of this agreement?

[51] To provide a fuller context, these questions will be determined chronologically.

i. 2013 Agreement

[52] I have considered both parties’ accounts of what transpired when they met in 2013. It is agreed that they met and discussed the referral of work by Wyse to Ampower. It is Singh’s position that no agreement was made at that time to compensate Sharma. It Sharma’s position that he and Singh agreed to the Commission Agreement, and therefore Sharma has the burden of proof to show that this is the case.

[53] After reviewing the evidence, I find that Sharma has met his burden of proof and I find that Singh and Sharma entered into the Commission Agreement in the summer of 2013. I find Sharma’s evidence to be credible for a number of reasons.

[54] First, for almost three years, Singh sent copies of his invoices to Sharma’s personal email. I find it incredulous that Singh would continue to ask Sharma to vet his invoices for such a long period of time, or that they would continue to make such errors in their invoicing that they would require an additional check. Even if Singh lacked confidence in the veracity of his invoices for almost three years, why not send them to Sharma at his work email? Having their billing double-checked is not something that needs to be hidden.

[55] Second, there is no reasonable explanation why Sharma would agree to send more work to Wyse, for no consideration, when he was asked to do more work than what would be asked of him if he awarded the work to another electrician. Sharma agreed to act as a project manager on site, and to supervise and train Ampower’s staff. It is incredulous to believe that Sharma would agree to take on additional work on behalf of Ampower, which would no doubt impact his ability to perform his usual duties as a project manager with Wyse, without additional compensation.

[56] Third, the reports and spreadsheets setting out the amount of business that Ampower billed to Wyse were documents produced by the bookkeeper for Ampower, which were provided to Sharma. There is no reason why Ampower or Singh would provide confidential business records to Sharma other than to account for the amounts contained therein.

[57] Finally, the May 2017 Note shows that Singh was open to a commission agreement that would pay Sharma in return for work referred to him. He admitted to negotiating Sharma down from 10% to 8%. Given the documentary evidence, Singh could not deny this.

[58] With respect to the commission rate of 20%, Sharma claims that, based on his experience at Ampower and as an electrician, and given his knowledge of this type of project, he believes the profit margin for Ampower on this work would be 50-60%, which is why he believes Singh agreed to a 20% Commission scheme. Other than his opinion, which was not qualified as expert opinion evidence, Sharma had no evidence of Ampower’s profit margin on these subcontracts.

[59] Singh was not asked what his profit margin was at trial, but Singh did give evidence that from his gross earnings, he had to pay for his overhead and employees. No financial statements for Ampower were produced and no expert opinion evidence was proffered by either party on profit margins in this industry or for these type of projects.

[60] Despite the lack of evidence as to profit margins though, the few documents produced and the conduct of the parties support a commission of 20%.

[61] Over several months, Singh advanced monies to Sharma to purchase four different properties, only insisting on going on title for two of those four. On those two, he only insisted on being a 50% owner, despite contributing almost the entire purchase price. On the other two, he did not insist on taking title, although he contributed almost the entirety of the funds required to purchase, aside from the amount covered by the conventional mortgage. He did this despite being represented by counsel who advised him to protect his interests.

[62] Also, despite advancing all these funds to Sharma in 2015, Singh paid Sharma approximately an additional $31,000 in July 2017, albeit in an unorthodox manner, on the basis of Sharma’s demands. Neither party had any real explanation for this manner of payment.

[63] The following is a schedule of the monies advanced to Sharma by Singh:

Property:	Purchase Price:	Sharma's ownership	Total value advanced to Sharma:
Olive Property	$335,000	50%	$167,500
2824 Property	$150,000	50%	$75,000
2580 Property	$238,000	100%	$116,000
Aloma Property	$367,500	100%	$78,500
			$437,000

[64] The amounts contributed by Singh for the Olive Property and the 2824 Property are straightforward. Singh essentially contributed most of the purchase price, although there is an allegation that Sharma contributed $10,000, which is not clearly made out. Despite paying for the entire property, Singh gave Sharma 50% ownership, either through title or via ownership in a corporation.

[65] For the 2580 Property, Singh contributed the full purchase price, less the $2,000 that Sharma paid, for a total of $236,000. Singh was repaid $120,000 by Sharma in June 2016, leaving $116,000 remaining.

[66] For the Aloma Property, it is clear that Singh paid $68,500 to close and Sharma concedes he received a further $10,000 cash from Mr. Gautam for renovations.

[67] We also know the value of the Wyse subcontracts referred to Ampower:

Year	Amount
2014	$677,538.54
2015	$743,666.16
2016	$598,250.82
2017	$324,259.47
	$2,343,714.99

[68] In accordance with the Commission Agreement, Sharma should have been entitled to 20% of these sales, or $468,743. Sharma’s evidence was that at the meeting in 2017, they agreed that all commissions were paid in full and that they were going to start fresh. Then, both parties agreed that Sharma then came back after the meeting and maintained that in fact, he was owed another approximate $30,000. Singh paid this sum. Singh provided no other reason for that payment. Given that Sharma was owed $468,743 pursuant to the Commission Agreement, and that he had already received value of $437,000, the additional payment of $31,357.50 left only a few hundred dollars outstanding. On the balance of probabilities, this last payment of $31,357.50 satisfied Singh’s obligations under Commission Agreement.

[69] Also, I find that Singh’s account of their meeting in 2013 lacks credibility. If Singh’s evidence is to be believed, Sharma would send him significant work simply because he was asked. Granted, Sharma used to work for Singh and Singh supported him in becoming a licensed electrician, but neither party suggested that Sharma felt indebted to such an extent that he would be responsible for awarding so much work to Ampower. This is especially the case given that Sharma agreed to take on additional work for Ampower. It does not explain why he sent Sharma his invoices directly as early as 2014 and for the next three years.

[70] Accordingly, I find that Sharma and Singh did enter into the Commission Agreement in 2013, in which it was agreed that Sharma would be privately compensated for the work he referred to Ampower at a commission rate of 20%.

ii. 2015 Agreement

[71] Singh bears the burden of proof to show this court that, on a balance of probabilities, he and Sharma participated in the Property Venture and that his obligation to Sharma is limited to that venture.

[72] Given my findings of what occurred in 2013 between Singh and Sharma, I find that Singh has failed to meet the burden of proof and satisfy the court, on a balance of probabilities, that he and Sharma agreed to the Property Venture as Singh described.

[73] It is the evidence of Singh that he invested in properties with Sharma because Sharma wanted to participate in property ventures similar to those that Singh had previously done with his most valued employees. Singh described a scheme whereby he would help his employees purchase their first home by advancing money interest-free, but requiring one-half of the growth in equity in addition to the return of his initial investment when the property was sold. No evidence was provided by any other third parties regarding these ventures.

[74] Irrespective of whether Singh has done this in the past, I reject Singh’s evidence that this was the arrangement made with Sharma for a number of reasons.

[75] First, Sharma had left Ampower’s employment approximately two years prior. While Sharma was a master electrician while with Ampower, there was no evidence that Sharma was ever presented with such an offer while at Ampower. Also, Sharma could no longer simply be considered a valued employee. Sharma was a major source of business for Singh, who at that time had already referred three-quarter of a million dollars in sales to Ampower to date. This goes beyond being a key employee.

[76] Second, there would be no reason for Singh to provide his business records and accounting of business to date to Sharma if they were participating in a venture of the type that Singh had described. While again, there was no evidence of this, it would be hard to envision that Singh would show his business records to a valued employee before he decided to help them purchase their first home. The facts of the arrangement between Singh and Sharma are entirely different.

[77] Finally, by his own evidence, Singh had complete control over how these properties were registered. He instructed Ahuja to register title of the 2824 Property as tenants in common, each with a 50% interest. He did this although he paid the entirety of the purchase price. There was no conventional first mortgage registered. There was no reason that his investment could not be registered on title, with payment terms and an interest rate. Singh was a self-described sophisticated property investor who has invested in many properties over the years. Something as basic as registering a mortgage, or even signing a loan agreement, are basic steps he could have taken to protect his substantial monetary investment. Instead, he advised his counsel that he chose to not do so.

[78] Likewise, Singh instructed his corporate counsel to incorporate 2472593 Ontario Inc. and to issue an equal number of common shares to both Singh and Sharma. Singh was astute enough to understand the financial benefit of incorporating and for title to be taken in the name of the corporation for the Olive Property, which was a six-unit property. It would not be lost on Singh that he could have instructed counsel to issue the common shares in a way that was more reflective of the substantial contribution he made. In addition, it was within his ability to instruct Ahuja to register a mortgage or somehow properly secure his investment in the Olive Property. Again, there was no conventional mortgage to worry about. He did not do so.

[79] The same comments could be made with respect to the 2580 Property and the Aloma Property. Whether or not he could qualify for a mortgage, Singh’s ability to instruct his counsel to document any potential interest in the property was not impeded, especially considering his substantial investment. He advanced the money which Sharma needed to close. There is no reason why he could not have dictated the terms of their agreement.

[80] It is also difficult for the court to understand why there is no documentation whatsoever to support Singh’s position. I accept that the purported agreement was oral, but the documentation presented all points to a connection between the quantum of work that Sharma sent to Ampower and the purchase of the properties. The Property Venture as described by Singh is completely separate from any business relationship between Ampower and Wyse. The disclosure of business documents from Ampower were not necessary. There is nothing to support Singh’s position, save and except that he initially advanced the monies needed, and when the relationship between the parties broke down, he demanded his money back. As of the trial, Ampower continues to do work for Wyse, although Singh would not disclose how much.

[81] Accordingly, on a balance of probabilities, I do not accept Singh’s position that he advanced the money to Sharma pursuant to the Property Venture, and that he should be reimbursed accordingly. I find that the monies were advanced to Sharma, by Singh, pursuant to the Commission Agreement.

C. Issues

[82] Having made the necessary factual findings, the following issues must be determined:

a) Is Singh entitled to an interest in the Aloma Property and the 2580 Property?

b) Should there be a rectification of title with respect to Aloma Property and the 2580 Property?

c) Should the properties be sold?

d) Is the May 2017 Note a binding contract?

e) If so, was the May 2017 Note breached, and if so, is Sharma entitled to damages?

D. Analysis

i. Does Singh Have an Interest in Aloma and 2580?

[83] In the Statement of Claim, Singh seeks a declaration of ownership interest in all four properties. However, it is agreed that Singh’s 50% interest in the Olive Property and the 2824 Property is already conceded and he seeks no further ownership interest in those properties.

[84] With respect to the Aloma Property and the 2580 Property, Singh claims he has a 50% ownership interest as a result of the Property Venture. Singh also bases his claim on the extensive investments he made to purchase the properties.

[85] In support of his position, Singh relies on basic principles of contract law. The Property Venture was a contract. If I find such a contract existed, then the court should enforce it accordingly. Unfortunately for Singh, I have not found that the Property Venture is an accurate reflection of the agreement reached between the parties. As a result, Singh’s claim in contract will not succeed.

[86] With respect to Singh’s uncontroverted financial investment, no case law was presented in support of Singh’s position that this advancement of funds results in a proprietary interest. Singh argues in his written closing arguments that he is entitled to an interest in the properties pursuant to the principles of a constructive trust, although that is not specifically pled. Sharma objects to Singh relying on the principles of constructive trust, because it was not pled. In fact, Singh sought an amendment to include this prayer for relief in advance of trial, which request was denied.

[87] Nonetheless, even if the principles of constructive trust were pled, they do not assist Singh. A constructive trust is a remedy available in the event that a party can establish an unjust enrichment. To successfully establish an unjust enrichment, Singh would have to show an enrichment to Sharma, a corresponding deprivation by Singh, and an absence of a juristic reason for that enrichment: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 38-40. If such unjust enrichment is found with respect to a property, a constructive trust interest in that property can be made out in certain circumstances. While an enrichment and corresponding deprivation is well established on the facts before me, so is the juristic reason. I have found that an agreement existed whereby Singh would advance these monies to Sharma pursuant to the Commission Agreement. A contract or agreement qualifies as a juristic reason for enrichment: Kerr, at para. 41.

[88] Accordingly, Singh has failed to make out any reason why he should have an interest in any of the properties other that what is set forth on title. He agreed to pay for the referral of work from Wyse. There is no reason why this agreement should not be enforced. Singh did nothing to try to change title, or collect payment (other than in June 2016), until which time Sharma was fired. Then he wanted his money back, then he wanted to deny he ever entered into such an agreement. No doubt, after Sharma’s practice of seeking payment for awarding contracts was revealed to his employer, it would be in Singh’s best interests to deny ever having such an agreement with Sharma. Accordingly, he wanted to sell all the properties and sever all ties with Sharma.

ii. Rectification of Title

[89] Singh seeks rectification of title to reflect his alleged ownership interest. As indicated herein, I have found that Singh has no ownership in the Aloma Property and the 2580 Property. Irrespective of this fact, Singh has not established that he would be entitled to a rectification of title.

[90] Rectification is an equitable remedy whose purpose is to prevent a written document from being used as an instrument of fraud or misconduct “equivalent to fraud”. The traditional rule permitted rectification for a mutual mistake. It is also now available for a unilateral mistake, provided that certain demanding preconditions are met: Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678, at para. 31.

[91] Singh does not allege that a mutual mistake was made when he was not put on title to the Aloma Property and the 2580 Property. Accordingly, Singh must show that this was a unilateral mistake. As set out in Performance, at paras. 37-41, and Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, [2016] 2 S.C.R. 720, at para. 36, in order to show the court that an improper registration of ownership is a unilateral mistake, Singh must prove the following on a balance of probabilities:

a) That there was an inconsistent oral agreement;

b) That Sharma knew or ought to have known there was a mistake in the written document, and allowing Sharma to take advantage of the mistake would amount to fraud or its equivalent;

c) That there is a precise manner in which the correct document should be written to express the prior oral intention; and

[92] Singh has failed to satisfy the first two parts of this test. By Singh’s account, it was his intention to not be registered as an owner of the Aloma Property nor the 2580 Property. He maintains that it was orally agreed that he would not go on title, but would remain a beneficial owner. Clearly there is no prior inconsistent oral agreement. Also, there is no evidence that Singh was not aware of the alleged error, and that Sharma took advantage of it. Singh testified that it was his idea that Sharma and Esha go on title for the Aloma Property and the 2580 Property so as to facilitate obtaining a conventional mortgage.

[93] Accordingly, Singh’s claim for a rectification of title must fail.

iii. Sale of the Properties

[94] Section 2 of the Partition Act, R.S.O. 1990, c. P.4 states:

2 All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only. R.S.O. 1990, c. P.4, s. 2.

[95] As title of the 2824 Property is held by Singh and Sharma as tenants in common, Singh is entitled to an order that this property be sold. The proceeds of sale will be divided equally. Singh is not entitled to any payment for monies allegedly advanced for the purchase of the property.

[96] With respect to the Olive Property, it is owned outright by 2472593 Ontario Inc., which is not a party to these proceedings. As both Sharma and Singh are shareholders, the details of their shareholders’ agreement would usually govern such matters. The court was not made aware of the existence of a shareholders’ agreement and whether one shareholder has the right to force a sale of real property held by the corporation. Another option would be for a shareholder to seek a remedy under the Business Corporations Act, R.S.O. 1990, c. B.16.

[97] None of these avenues were pleaded. The Court is hesitant to make an order that would fly in the face of a shareholder’s agreement or other right of relief which has not be pleaded, or fully explored by discovery.

[98] Accordingly, this Court finds that it is not able to order the sale of the Olive Property, but urges the parties, based on the factual findings herein, to cooperate to list the property so that each party may obtain their equal equity and go their separate ways.

[99] As indicated herein, Singh has no interest in the Aloma Property or the 2580 Property, and accordingly has no standing to request that these properties be sold.

iv. May 2017 Note

[100] Sharma claims that the May 2017 Note is a contract that requires Singh to pay Sharma the following amounts:

a) $74,000 immediately;

b) The sum of 8% on all sales over $1 million from May 2017 to April 2018;

c) $5,500 per month for one year, from January 2018 onwards; and

d) The equivalent of Sharma’s salary with Wyse for one year.

[101] Whether or not the May 2017 Note is a binding contract is determined by considering the basis principles of contract law.

[102] As stated by Rothstein J. in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 53, at para 47:

[T]he interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding”. To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. [Citations omitted.]

[103] I find that the May 2017 Note was a contract, drafted and signed by Singh and accepted by Sharma. Sharma gave evidence that he agreed to its terms, but purposively did not sign it as he didn’t want his employer to see what he was doing.

[104] Using these principles set out in Sattva though, this Court has found that the common-sense interpretation of the May 2017 Note is different than what is advocated on behalf of Sharma. In addition, part of the contract is uncertain.

[105] Based on the prior business dealings of these two gentlemen, I agree that in the 2017 May Note, Singh agreed to pay Sharma 8% on all sales Ampower made to Wyse, going forward as of May 2017. Unfortunately, no evidence was provided showing that Sharma referred any further subcontracts to Ampower after May 2017. All financial documentation from Ampower for 2017 show sales up to the time they made this agreement. There is no evidence of anything further. Accordingly, Sharma has not satisfied this court, on a balance of probabilities, that he referred any work to Ampower after May 2017. Frankly, Sharma was unable to refer work after his termination. Therefore, nothing is owing.

[106] With respect to the payment of $74,000, I do not find that in all the circumstances, this was to be a one-time payment, with no reference to any sales. At no time during the business dealings between these gentlemen were payments made that were not associated with the Commission Agreement. Granted, at times money was advanced prior to the Wyse contracts being awarded, but the advances were made up by the future awards of contracts. As was the practice, I find that this payment was intended to be an advance that was to be “paid back” by future contracts. At this point in time, Ampower was going to get almost all of Wyse’s work, especially since Singh and Mr. Bains complained to Wyse’s principal in March 2017. A payment of $74,000 for May to December 2017, at a rate of 8%, would mean that Sharma intended to send over a million dollars of work to Ampower. There would be no reason for Singh to have to pay this sum, and then pay another 8% for work referred between May 2017 to April 2018. If that quantum was work was referred to Ampower, then Sharma would be paid. Given that there is no evidence that any work was referred to Ampower, this sum is not payable.

[107] I also find, on a balance of probabilities, that the sum of $5,500 per month, to be paid as of January 2018, was Singh’s promise to start more regular payments, rather than to pay Sharma though property investments. Given that the referral of work stopped when Sharma was terminated in July 2017, this sum is not properly payable.

[108] Finally, the last term, “Will pay same as Wyse if there is any problem with Wyse”, is problematic. I find that this term is uncertain. It is not clear that “pay same” refers to Sharma’s salary, the $5,500 per month, or to his commission. It is also not clear for how long that payment would be. Sharma’s submission that the period of one year would be reasonable is not based on any legal concept, except perhaps damages associated with wrongful dismissal. Sharma has no claim for damages for wrongful dismissal as against Singh.

[109] As stated in UBS Securities Canada Inc. v. Sands Brothers Canada Ltd. (2008), 45 B.L.R. (4th) 105, affirmed 2009 ONCA 328, 95 O.R. (3d) 93:

[41] The investigation to determine whether a reasonable observer would think that two parties intended to contract extends to all the circumstances of the agreement. This has been held to include words and conduct, future actions and representations by both parties, and reliance. This determination frequently involves an assessment of the credibility of witnesses.

[42] Intention alone is insufficient to create an enforceable agreement. The essential terms must also be sufficiently clear to suggest that the parties came to an agreement.

“… I am satisfied … that the parties intended to make a contract. However, this does not end the matter. Notwithstanding that the parties may have thought they were bound, if the essential terms of the alleged contract lack certainty, either because they are vague or because they are obviously incomplete, the result will not be a binding contract. [Citations omitted.]

[110] An examination of the surrounding circumstances of the May 2017 Note offers no assistance in clarifying that term. There is no history of either party promising to look after the other in the event that Wyse discovered the Commission Agreement. Clearly both gentlemen were aware of the risk they were taking with the Commission Agreement. They purposively kept this agreement from Wyse. Sharma was always at risk of losing his job. Singh was at risk of losing this lucrative work. Until this time, neither addressed the scenario of what would occur if it all ended.

[111] Therefore, Sharma is not entitled to any damages under his counterclaim, either because the terms, as reasonably understood, do not afford Sharma any damages, or because a term of the contract is uncertain.

E. Conclusion

[112] Accordingly, for the reasons set out herein, I make the following orders:

a) It is hereby declared and adjudged that Sharma and Singh are the owners of the 2824 Property as tenants in common, each having 50% ownership of said property, free of any claim by Singh with respect to monies that Singh or any of his companies, friends or business associates may have advanced to him to purchase same;

b) It is hereby declared and adjudged that 2472593 Ontario Inc. is the owner of the Olive Property, free of any claim by Singh with respect to monies that Singh or any of his companies, friends or business associates may have advanced to him to purchase same;

c) It is hereby declared and adjudged that Sharma and Esha are the owners of the 2580 Property as joint tenants, free of any claim of interest by Singh with respect to monies that Singh or any of his companies, friends or business associates may have advanced to him to purchase same;

d) It is hereby declared and adjudged that Sharma and Esha are the owners of the Aloma Property as joint tenants, free of claim of interest by Singh with respect to monies that Singh or any of his companies, friends or business associates may have advanced to him to purchase same;

e) The 2824 Property shall be listed for sale within 30 days hereof, or as agreed by the parties, and following payment of the usual real estate commission, real estate legal fees, and closing day adjustments, the proceeds shall be paid out in accordance with the declaration herein;

f) Any certificates of pending litigation which may have been registered by either of the parties as against the Olive Property, the 2824 Property, the Aloma Property and the 2580 Property shall be discharged forthwith;

g) The counterclaim of Sharma is dismissed;

h) The parties are encouraged to resolve the issue of costs themselves. If they are unable, both parties shall provide their written costs submissions, limited to 2 pages, double spaced, single sided, exclusive of Costs Outline and case law, to be served and filed no later than 4:30 pm. on March 8, 2021. Any responding written submissions, with the same size limitation, shall be served no later than 4:30 p.m. on March 22, 2021;

i) All other claims in both the main action and the counterclaim are dismissed.

Fowler Byrne J.

Released: February 23, 2021 Revised: March 3, 2021