ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ADASCAN GRAIN CORPORATION
Plaintiff
– and –
SWAD GRAIN EXPORT, INC., ABRISH TANVEER, 9780637 CANADA INC., operating as BRR INTERNATIONAL, IMRAN HIJAZI, ISAIFY INC., ALI IMRAN ZAFFAR, 2534383 ONTARIO INC., operating as A2Z PULSES, MOHAMMED ZIAUDDIN, 1815264 ONTARIO INC., HASHMI TKUVEER and HASHMI TANVEER
Defendants
Counsel:
Jeffrey Radnoff, for the Plaintiff
Surya Sasan, for the Defendants Isaify Inc. and Ali Imran Zaffar
HEARD: December 10, 2020
Reasons for Decision
Dietrich J.
Overview
1The hearing in this action began with a motion by Surya Sasan, of Aastha Lawyers, seeking an order removing Aastha Lawyers as lawyers of record for the defendants Isaify Inc. (“Isaify”) and its principal Ali Imran Zaffar (“Zaffar”). Zaffar was not in attendance. The plaintiff opposed the motion. In oral reasons, I declined to permit Mr. Sasan and Aastha Lawyers to be removed as lawyers of record on the day of the trial. I instead granted a brief adjournment to permit Mr. Sasan to contact the defendants Isaify and Zaffar to let them know that the trial would be proceeding and to encourage them to attend. Owing to the COVID-19 pandemic, the trial was being conducted by videoconference. Mr. Sasan left messages for Zaffar, but he never showed up to the trial. To his credit, Mr. Sasan participated to the best of his ability without the benefit of any viva voce evidence from Zaffar, who was expected to testify.
2The plaintiff, Adascan Grain Corporation, brings this action against Isaify and Zaffar. It seeks an order that these defendants are also liable for damages previously ordered against the defendants Swad Grain Export, Inc. (“Swad”), Abrish Tanveer, 1815264 Ontario Inc., Hashmi Tkuveer and Hashmi Tanveer (“Tanveer”) in the amount of $361,062.10, including prejudgment interest (the “Default Judgment”). The Default Judgment bears interest at the rate of 3 percent per year commencing February 5, 2019.
3I heard the motion in support of the Default Judgment on January 30, 2019. At that time, I did not grant the Default Judgment against the defendant Mohammed Ziauddin, who had filed a statement of defence, or against Isaify and Zaffar, who had filed a notice of intent to defend. On that motion, Isaify and Zaffar sought and were granted leave to file a statement of defence, which they did.
4The plaintiff has settled with the defendants 9780673 Canada Inc., operating as BRR International, Imran Hijazi, 2534383 Ontario Inc., operating as A2Z Pulses, and Mohammed Ziauddin.
5The Default Judgment includes damages for breach of contracts made between the plaintiff and Swad regarding the purchase and sale of lentils. It also includes damages for fraud and oppressive conduct by the defendants who are alleged to have engaged in a scheme to defraud the plaintiff.
6In its statement of claim, the plaintiff alleged that Tanveer devised and carried out a scheme whereby Swad would appear to be in the business of buying and selling lentils. However, other businesses would be incorporated to conduct the same business as Swad, and funds paid to Swad would be diverted from Swad to these other corporations for the purpose of defrauding Swad’s creditors. In the statement of claim, it is also alleged that the defendants engaged in conduct that was oppressive, unfairly prejudicial or that unfairly disregarded the interests of the plaintiff. The defendants against which the Default Judgment was granted were deemed to have admitted the facts alleged in the plaintiff’s statement of claim.
7Isaify and its sole director, officer and shareholder, Zaffar, participated in the business meetings between Tanveer and the plaintiff. Zaffar introduced himself as Tanveer’s business associate and represented to the plaintiff that Swad was a legitimate business with assets and was doing well financially. It was not. The Canada Revenue Agency had frozen Swad’s bank accounts. Swad was also indebted to Zaffar personally for about $240,000.
8For the reasons that follow, I find that Isaify and Zaffar knowingly participated in a scheme that defrauded the plaintiff and that they benefited from this scheme. As such, they are liable to the plaintiff, together with the defendants against whom the Default Judgment was granted, for the Default Judgment.
Issues
9The issues in this trial are: (a) did Isaify and Zaffar make misrepresentations that induced the plaintiff to take actions resulting in a loss, or participate in the alleged oppressive conduct of Swad, or both; and (b) if so, is the Default Judgment binding on them?
Positions of the Parties
10The plaintiff asserts that Zaffar falsely held himself out as a business partner of Tanveer involved in Swad’s business. The plaintiff further asserts that Zaffar was aware of Swad’s serious financial trouble, including the fact that its bank accounts had been frozen by the CRA, and that it was indebted to Zaffar for some $240,000, but that Zaffar knowingly misrepresented to the plaintiff that Swad was doing well financially. Unbeknownst to the plaintiff, Zaffar was permitting Swad to use Isaify’s U.S. dollar CIBC bank account (the “CIBC Bank Account”) for payments made to Swad from the plaintiff, and Tanveer directed Zaffar with respect to these payments deposited into the CIBC Bank Account. The plaintiff also asserts that Zaffar transferred some of those payments from the CIBC Bank Account to himself personally.
11The plaintiff contends that that Isaify and Zaffar are liable to pay the Default Judgment because they were complicit in actions taken to defraud or oppress the plaintiff. It further asserts that the Default Judgment is binding on Isaify and Zaffar insofar as it fixes the quantum of the plaintiff’s damages.
12Isaify and Zaffar submit that Isaify had its own independent business as a general contractor in the renovation of houses and restaurants, and had nothing to do with the sale of lentils. They further submit that they had no involvement, endorsement or partnership with Swad or Tanveer. Zaffar’s company, Isaify, and Tanveer’s company, Swad, merely shared space in the same office. They assert that the contracts for the purchases and sales of the lentils were made between the plaintiff and Swad and that they are not liable for any contractual breach or breach of any duty to the plaintiff as alleged. They further assert that they in no way benefited from the contracts between the plaintiff and Swad and deny any suggestion that Swad had any control over them.
13Isaify and Zaffar also brought a crossclaim for indemnity against Swad and Tanveer, which was not pursued.
Background Facts
The parties
14The plaintiff is in the business of purchasing and selling lentils on the wholesale market and has been in that business since 2013. Amadeus Bachari (“Bachari”) is the sole director and officer of the plaintiff.
15Swad is a company incorporated pursuant to the laws of the Office of the Illinois Secretary of State United States. Swad is not in good standing with the State of Illinois. By the end of 2014, Swad was in financial difficulty.
16Tanveer is the controlling principal of Swad.
17Isaify is a company incorporated pursuant to the laws of the Province of Ontario. It is in the business of renovating homes and restaurants.
18Zaffar is the sole officer, director and shareholder of Isaify.
19Zaffar shared office space with Tanveer from 2015 to 2019. In July of 2018, they were locked out of their commercial premises because Swad had not paid the rent.
The plaintiff enters into business with Swad
20Bachari first contacted Swad in the fall of 2016 looking to purchase 500 to 600 tonnes of lentils for buyers in Iran. He was told that Swad could supply whatever quantity he needed.
21On November 17, 2016, Bachari first met with Tanveer and Zaffar at Swad’s office. The two men were occupying the same commercial premises and Tanveer introduced Zaffar as his “partner” and said that Zaffar provided Tanveer with financing. Bachari was also told that Zaffar was in the renovation business, including restaurant renovation.
22Following that first meeting, Bachari signed a contract to purchase 150 tonnes of lentils from Swad.
23On December 2, 2016, Bachari returned for a second meeting, again with Tanveer and Zaffar, in the same office, to discuss another purchase of lentils. On January 10, 2017, Bachari met with both of them again, together in the same office. Bachari entered into a second contract with Swad to purchase 125 tonnes of lentils.
24On February 1, 2017, Bachari returned to Swad’s office, where he met with Tanveer and Zaffar and entered into a third contract for lentils. At this meeting, Tanveer told Bachari that Zaffar “takes care of my funds.”
25Over the course of these meetings among Bachari, Tanveer and Zaffar in 2016 and 2017, Zaffar told Bachari that Swad was doing well financially, even though Zaffar knew that the CRA had frozen Swad’s bank accounts.
26Because Swad’s bank accounts were frozen by the CRA, the proceeds from Swad’s sales of the lentils were deposited into Isaify’s CIBC Bank Account. In an email from Swad to the plaintiff, Swad instructed the plaintiff to make a payment for the purchase of lentils directly to “Imran company ISAIFY CIBC” and provided the banking details for the CIBC Bank Account.
27The only funds deposited into the CIBC Bank Account from February 2, 2017 to April 7, 2017 came from the plaintiff’s purchases. These funds were used for Swad or its creditors.
Issues with product quality
28In an email dated May 23, 2017, the plaintiff advised Tanveer that nine of the fifteen containers of lentils he purchased from Swad had been rejected by the buyers in Iran because they were of inferior quality. They contained Grade 3 lentils, being two grades below what the buyers had bargained for and what would sell in Iran. The buyers were seeking a refund of the purchase price plus all customs duties paid and other costs. The plaintiff asked Tanveer to come to the plaintiff’s office to discuss the matter. Tanveer declined.
29The plaintiff then went to Swad’s office where he met with Tanveer and Zaffar. At that meeting, Zaffar told Tanveer that Swad would have to compensate the plaintiff for the damages the plaintiff incurred as a result of the lower grade lentils. Zaffar then asked the plaintiff to give them some time to come up with a solution.
30On June 12, 2017, the plaintiff wrote to Tanveer to confirm that, following their meeting, it was agreed that Swad would compensate the plaintiff for six of the containers of lower grade lentils with US$15,000; the plaintiff would resolve the dispute with the buyers in Iran; and Swad would have no further responsibility regarding the nine containers that were rejected by those buyers. It was also agreed that the plaintiff would get a discount of US$50 per tonne on its next purchase of 250 tonnes of lentils from Swad.
31On December 18, 2017, Swad wrote a cheque to the plaintiff for US$15,000. The cheque was not honoured by the bank and returned for insufficient funds on January 16, 2018.
32In addition to selling lentils to the plaintiff, in the fall of 2017, Swad entered into four contracts to purchase lentils from the plaintiff. Swad provided four cheques in respect of these contracts, one of which was dated December 14, 2017, and the other three were dated December 16, 2017. The cheques totaled US$209,265.
33None of these cheques were honoured by the bank and they were all returned for insufficient funds. The plaintiff learned about this in late-December 2017 and he attempted to reach Tanveer, who did not respond. He then contacted Zaffar, who told him “there is no money” and said he would call back but did not.
34On December 29, 2017, the plaintiff insisted on a meeting with Tanveer and Zaffar and insisted that Zaffar be there. At the meeting at Swad’s new corporate premises, the plaintiff asked when he could expect payment on the contracts, but Tanveer responded with anger and asked him to leave the office. Zaffar walked with the plaintiff to his car and said that he would call him to discuss the matter, but never did. The plaintiff did not receive any further payments on the contracts.
35There have been no payments on the Default Judgment.
The Parties’ Evidence
Bachari’s evidence
36Bachari testified that he had done due diligence and ascertained that Swad had been in the lentil business since 2008 or 2009. When he asked for its exportation documents, they were provided. Based on representations made by Tanveer and Zaffar, he thought he was dealing with a financially healthy business.
37He testified that, at the first meeting at Swad’s office, Zaffar was introduced by Tanveer as his “partner”. At subsequent meetings, Tanveer told Bachari that Zaffar provided financing to Swad, that Zaffar “takes care of my money”, and that for financial matters “I have to get his [Zaffar’s] approval.” Bachari testified that he thought he was dealing with “trustful” people and that, had he known that Swad’s bank accounts had been frozen by the CRA, he would “obviously” not have done business with them.
38During his testimony, Bachari identified a number of documents obtained over the course of the purchases he made from Swad that reinforced his belief that Tanveer and Zaffar were business partners. In addition to Tanveer asking the plaintiff to make payment directly into an Isaify bank account and providing the deposit details for that account, Bachari received copies of bills of lading, which describe the supplier of the lentils as “Swad Grain Exports on behalf of Isaify Inc.” The “Health Certificate 1050” form dated February 3, 2017, though unsigned, shows the Exporter as “Swad Grain Exports on behalf of Isaify Inc.” and is printed on “Isaify Inc.” letterhead. Bachari testified that he has the signed copy of this document. The Certificate of Origin, dated January 30, 1997, also shows the Exporter as “Swad Grain Exports on behalf of of [sic] Isaify Inc.”. The same information appears on the Packing List dated January 27, 2017 and on the Phytosanitary Certificate dated January 24, 2017.
39Zaffar also had a “swadgrainsexportsinc.com” email address and Bachari testified that he received emails directly from Zaffar. When there was a default by Swad on the contracts for lentils that it purchased from the plaintiff, the plaintiff reached out to Zaffar directly about payment.
40I found Bachari to be a credible witness. He answered the questions put to him in a forthright manner. He was careful to ensure that his answers were accurate. For example, when asked in cross-examination if Tanveer had told him that Zaffar was his partner “in business”, he admitted that Tanveer never said that Zaffar was a partner “in business” but rather that Zaffar supported Tanveer financially, and that this left him with the impression that they were business partners.
41In cross-examination, Bachari also admitted that Zaffar never said that he was in the lentil business, but went on to say that he believed Zaffar was knowledgeable in the industry because, at one of the contract negotiations, Tanveer was consulting with Zaffar, and it was Zaffar who commented on the price of lentils.
42Based on his meetings with Tanveer and Zaffar and the statements made in those meetings, as well as the shipping documentation, it would be reasonable for Bachari to conclude that Swad and Isaify were intertwined in their dealings.
43The plaintiff also relied on bank statements from the CIBC Bank Account, which were admissible pursuant to s. 35 of the Evidence Act, R.S.O. 1990, c. E.23. The plaintiff had given notice of his intention to use these statements at the trial.
44The bank statements show that deposits from the plaintiff were made on April 7, April 19, April 28, July 10, July 25 and August 15, 2017. On the same day that each deposit was made, or a day or two later, a part or the whole of the deposit was withdrawn. On the same day that a withdrawal was made from Isaify’s CIBC Bank Account, an amount equivalent to the withdrawal was deposited into Zaffar’s personal account. It is reasonable to draw the inference that Zaffar was essentially transferring some of the plaintiff’s money from the CIBC Bank Account to his own personal account. At least $13,500 appears to have been transferred between April 7, 2017 and August 15, 2017.
Zaffar’s evidence
45Although Zaffar was included on the witness list prepared at the pretrial management conference held on November 6, 2020, Zaffar did not show up for the trial.
46Zaffar’s evidence can be found in the agreed statement of facts and in the transcripts from his examination for discovery, parts of which were read into the record. In this evidence, Zaffar admits the following facts:
He was not in the business of selling lentils.
His company, Isaify, was in the business of renovating homes and restaurants.
At the end of 2014, Swad was experiencing financial difficulties.
From 2015 to 2019, he shared commercial premises with Swad and, in July 2018, Swad and Isaify were locked out because Swad had not paid the rent.
Tanveer, Bachari and he had four to five meetings in 2017, and at those meetings he told Bachari that Swad was doing well financially.
In 2017, Zaffar knew that the CRA had frozen Swad’s bank accounts.
From January 24, 2017 to March 2, 2017, Adascan purchased lentils from Swad and the purchase proceeds were deposited into the CIBC Bank Account.
All of the funds deposited into the CIBC Bank Account were funds from the plaintiff’s purchases, and Swad used the CIBC Bank Account because its own bank accounts had been frozen by the CRA. All of the funds deposited into the CIBC Bank Account were used by Swad or its creditors.
In an email message, dated March 4, 2017, from Swad to the plaintiff, with a copy to Zaffar, Tanveer instructed the plaintiff to make payment for one of its purchases directly into the CIBC Bank Account.
As of 2017, Tanveer was indebted to Zaffar for $240,000, $70,000 of which had been owing since 2012. None of the funds that Zaffar lent to Tanveer were used to pay the plaintiff.
47Zaffar’s evidence is borne out as well in the documentary evidence. Many of the shipping documents show that the sales of lentils were made by “Swad on behalf of Isaify.” Zaffar is copied on emails relating to the lentil sales, including a direction by Swad to Adascan to make a payment directly into the CIBC bank account.
Analysis
Fraud
48I first consider whether the conduct of the defendants amounts to fraud. It is difficult, if not impossible, to provide a comprehensive definition of fraud because it is capable of being committed in endless forms and new forms continually arise: Mining Technologies International Inc. v. Krako Inc., 2013 ONSC 7280, O.J. No. 5385 at para. 238. Whether a given course of conduct amounts to fraud is specific to the circumstances at hand in the particular case.
49Despite the difficulties in providing a comprehensive definition of fraud, the caselaw provides ample guidance. In Harland v. Francsali, 1993 CanLII 8457 (ON SC), [1993] O.J. No. 961, (Gen. Div.), (referred to by the Ontario Court of Appeal in 3Com Corp. v. Zorin International Corp. 2006 CanLII 18351 (ON CA), [2006] O.J. No 2184 at para. 7), the court began with the assumption that “if conduct constitutes fraud under the criminal law it certainly constitutes a wrong for which a civil court can grant relief” (at para. 19). The court therefore looked to provisions dealing with fraud in the Criminal Code, R.S.C. 1985 C. c. 46. Specifically, the court cited s. 380(1) of the Code, which provides that:
Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security, ... is guilty of an ... offence ....
50The court proceeded to review the criminal caselaw dealing with fraud, and adopted the following propositions (at para. 21):
a) “other fraudulent means” is a third category of conduct separate from deceit or fraud which includes what reasonable people consider to be dishonest dealing. The non-disclosure of important facts may fall in this category;
b) although other fraudulent means have been broadly defined as means which are “dishonest,” it is not necessary that an accused personally consider these means to be dishonest in order that he or she be convicted of fraud;
c) fraudulent means does not include mere negligent misrepresentation, improvident business conduct or conduct which is sharp in the sense of taking advantage of a business opportunity to the detriment of someone else;
d) the actus reus of the offence will be established by proof of the act of fraudulent means and deprivation caused by that act;
e) the mens rea of the offence will be established by proof of subjective knowledge of the fraudulent means and subjective knowledge that those means could have as a consequence the deprivation of another.
51In Ontex Resources Ltd. v. Metalore Resources Ltd. 1990 CanLII 6952 (ON SC), [1990] O.J. No. 2323 (Ont. Gen. Div.), the court reviewed a number of definitions of fraud contained in the caselaw (at para. 134):
Parna v. G. & S. Properties Limited, 1970 CanLII 25 (SCC), [1971] S.C.R. 306, at p. 316:
Fraud is a false representation of fact, made with a knowledge of its falsehood, or recklessly, without belief in its trust, with the intention that it should be acted upon by the complaining party, and actually inducing him to act upon it.
Re London and Globe Finance Corporation, [1903] 1 Ch. 728, at pp. 732-733:
To defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury. More tersely it may be put, that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action.
Scott v. Commissioner of Police of the Metropolis, [1974] All E.R. 1032 (H.L.), at p. 1038:
The definition of “defraud” in the London and Globe Finance Case is not exhaustive and the word ordinarily means:
… to deprive a person dishonestly of something which is his or of something to which he is or would or might but for the perpetration of the fraud, be entitled.
52Silence and half-truths that mislead can amount to fraud: Ontex at para. 135.
53I find that the conduct of Isaify and Zaffar amounted to fraud. They engaged in a dishonest course of conduct designed to induce the plaintiff into entering transactions which he would not otherwise have entered. This included misrepresenting the relationship between Zaffar and Tanveer, misrepresenting the solvency of Swad and deliberately withholding facts from the plaintiff which would have dissuaded him from entering into business with Swad.
54Based on the evidence, I find that Zaffar held himself out as a business partner of Tanveer. Zaffar admitted that he introduced himself as an “associate” of Tanveer and that he attended four or five meetings with Tanveer and Bachari during which they all discussed purchases and sales of lentils between the plaintiff and Swad.
55It was reasonable for the plaintiff to conclude that Swad and Tanveer and Isaify and Zaffar were business partners. Zaffar was introduced as such by Tanveer. Both appeared to Bachari to be knowledgeable about and active in the lentil business. With the exception of one meeting which Tanveer attended on his own at the plaintiff’s office, all meetings were held at the corporate premises shared by Swad and Isaify and both Tanveer and Zaffar were always present. They both had a “swadgrainsexportsinc.com” email address. Based on the lentil shipping documentation, and the CIBC Bank Account banking arrangements, Bachari reasonably believed that Swad and Isaify’s businesses were intertwined. For all financial matters regarding Swad, Tanveer told the plaintiff that he needed Zaffar’s approval.
56Zaffar also knowingly misled Bachari into believing that Swad was doing well financially at a time when he knew that the CRA had frozen Swad’s bank accounts and that Swad was indebted to him personally for $240,000. Zaffar remained silent about these significant liabilities. In fact, Zaffar told the plaintiff that Swad was doing well financially and neither Tanveer nor Zaffar disabused him of this fact, even though they both knew it to be untrue. Instead, they induced the plaintiff into both purchasing lentils from Swad and selling lentils to Swad. Zaffar furthermore permitted Swad to use Isaify’s CIBC Bank Account as a means of keeping Swad’s finances from the reach of creditors.
57The defendants were dishonest in their dealings with the plaintiff through their silence. They were aware of relevant facts, which they did not disclose, and they misled the plaintiff into dealing with Swad at a time when they knew that Swad was having difficulty paying its suppliers and creditors and the CRA had frozen Swad’s bank account.
58A misrepresentation is fraudulent and not merely negligent when it can be said that its maker has an absence of honest belief in its truth or when its maker has shut his eyes to the facts: Baltimore Aircoil of Canada Inc. v. Process Cooling Systems Inc., 1993 CanLII 5496 (ON SC), [1993] O.J. No. 3059 (Gen. Div.), at para. 50. Zaffar’s misrepresentations were not merely negligent. Because he too was a creditor of Tanveer, I find that he was motivated to encourage the plaintiff to believe that Swad was doing well financially and to induce the plaintiff into doing business with Swad.
59The plaintiff sustained losses as a result of this dishonest conduct. I accept Bachari’s testimony that he would not have done business with Swad and Isaify if he had known about the insolvency of Swad, and that he would have found other, solvent purchasers to buy his lentils and would have purchased lentils from a more reliable source. Swad could not compensate the plaintiff for its damages when Swad supplied lower grade lentils in breach of its contract to sell to the plaintiff Grade 2 lentils, and it could not pay for the lentils that it contracted to buy from the plaintiff. Swad’s bank accounts were frozen by the CRA and Swad was diverting incoming funds from the plaintiff to Isaify, which would, on Tanveer’s instructions, pay those funds to Swad’s creditors and others. The cumulative result was a significant financial detriment to the plaintiff.
60The universal measure for damages from fraud is the value of the property or benefit of which the defendant deprived the plaintiff. The plaintiff is entitled to recover damages sustained as a direct and natural consequence of the fraud, which must be determined in the particular circumstances: Harland at para. 56. Damages in this matter were dealt with in the Default Judgment, as discussed below.
Default Judgment
61A default judgment can raise an estoppel by res judicata in subsequent proceedings: Miel Abitémis Inc. v. Lofthouse, 2011 ONSC 5124 at para. 23. Since the damages in this matter have already been determined, the parties cannot allege something inconsistent with those findings. To do so would violate the principles of cause of action estoppel: final judgments are conclusive to all essential findings necessary to support them: Miel at para. 25, citing Hoque v. Montreal Trust Co. of Canada, [1997] N.S.J. no. 30 (N.S. C.A.).
62The plaintiff sent the motion record to be used in support of its request for the Default Judgment to the defendants on October 11, 2018. The motion was used by the court to assess the damages against Swad, Abrish Tanveer, 1815264 Ontario Inc., Hashmi Tkuveer and Hashmi Tanveer in the amount of $361,062.10 plus post-judgment interest.
63The defendants were present at and made submissions on that motion. They have not taken any steps to set aside the Default Judgment. Accordingly, they are estopped from pleading that the judgment is in any way tainted by facts that would allow a defence to the claim or claims on which the judgment is issued: Miel at para. 27.
Oppression
64The plaintiff asserts that as a creditor of Swad it may seek an oppression remedy against Isaify pursuant to s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16 on the basis that Isaify is in fact an affiliate of Swad. To establish the affiliate relationship, the plaintiff relies on Tanveer’s control of the CIBC Bank Account. While there is evidence of an intertwining of Swad and Isaify for the purposes of defrauding creditors and sheltering income for the benefit of Swad/Tanveer and Zaffar, I am not persuaded that there is sufficient evidence to establish that Swad controlled Isaify in a way that would make Swad and Isaify affiliated corporations. Nor am I persuaded that Isaify’s conduct rises to the level of oppressive or unfairly prejudicial conduct or conduct that unfairly disregards the interest of the plaintiff within the meaning of section 248 of the OBCA.
Disposition
65The defendants Isaify Inc. and Ali Imran Zaffar are liable to the plaintiff, together with the defendants against whom the Default Judgment was granted, for the Default Judgment, on a joint and several basis.
Costs
66The parties are strongly encouraged to agree on the matter of costs. If they cannot, the plaintiff shall provide written submissions on costs not exceeding three pages in length (excluding a costs outline or bill of costs and offers to settle, if any) within 14 days hereof, and the defendants shall provide responding submissions within 14 days of service of the plaintiff’s submissions.
Dietrich J.
Released: January 15, 2021