Court File and Parties
COURT FILE NOS.: CV-11-424029; CV-17-584050 MOTION HEARD: 2021-02-17 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ann Buik, et al., Plaintiffs -AND- Canasia Power Corp., Defendants
AND RE: Ann Buik, et al., Plaintiffs -AND- Canasia Power Corp., et al., Defendants
BEFORE: Master Abrams
COUNSEL: S. Dewart, agent for lawyer for the plaintiffs P. Askew, for the defendants, Canasia Power Corp., Tarun Channa and Ashok Dhillon
Reasons for Decision
The Nature of the Motions
1The motions herein relate to two judgment debtor examinations arising out of a 2011 action, the disposition of which resulted in a judgment directing that more than $2.3 million be paid to the trustees of the Estate of William Buik. The monies ordered paid were determined to have been loaned by William Buik to Canasia Power Corp.; but, they were never repaid. The motions also relate to a 2017 action in which it is alleged that Canasia Power Corp. and its officers and directors, and certain other entities and individuals, received improper payments or transfers intended to thwart and, indeed, defeat the Estate’s collection efforts. The statement of claim in the 2017 action, though issued in a timely fashion, has yet to be served.
2The plaintiffs say that some of the undertakings given by Ms. Channa, a principal of Canasia Power Corp., as recently as 2017 (this in respect of the judgment debtor examinations), remain outstanding and that proper questions were refused that ought not to have been. They say, too, that leave to serve the 2017 statement of claim ought to be given. Ms. Channa and Mr. Dhillon (another principal of Canasia Power Corp.) respond that the plaintiffs’ motions ought to be dismissed and, in any event, that the statement of claim ought to be struck for lack of particularity.
The Context Within Which the Motions Were Brought
3On August 23/17, Ms. Channa was examined in aid of execution in respect of the judgment in the 2011 action (this as a continuation of an earlier examination of Mr. Dhillon). Having regard to the answers given, the plaintiffs came to the view that some transfers by Canasia Power Corp., characterized by Mr. Dhillon and Ms. Channa as ‘short-term loans’, were transactions intended to defeat the plaintiffs’ collection efforts. That being so, the 2017 action was commenced.
4In the course of Ms. Channa’s 2017 examination in aid of execution, 27 undertakings were given and 27 questions were refused. None of these undertakings was fulfilled until after this motion was first brought in September of 2019 and, as at the date the motion was heard by me, a number of the undertakings remained outstanding. The plaintiffs posit, and I agree, that several answers provided by Ms. Channa, ostensibly in fulfillment of undertakings, were and are inadequate or misleading.
5In this latter regard, the plaintiffs point to four specific instances of inadequate/misleading responses. They are as follows:
Ms. Channa undertook to provide banking records—records that are relevant to both the 2011 and 2017 actions. She had deposed that one of two sets of bank statements was not available from the bank but was with Canasia Power Corp.’s former lawyer, Mr. Tayar. She confirmed having requested the Canasia Power Corp. file from Mr. Tayar but said that it was not forthcoming. The evidence before me is that, in October 2020, Mr. Tayar delivered his file to Ms. Channa; but, that notwithstanding, as at the date of the plaintiffs’ motion, the bank records in question had not yet been produced.
And while the bank records have not been produced from Mr. Tayar’s file or otherwise, and while there are other documents that Ms. Channa says she cannot locate, though relevant, Ms. Channa has declined to execute authorizations and directions permitting plaintiffs’ counsel to request the records directly from those who might hold them. Further, Ms. Channa has failed to produce correspondence sent by her (or Mr. Dhillon) to potential record-holders, requesting copies of any relevant documents that may be in their possession.
Then too, Ms. Channa confirmed that Canasia’s former bookkeepers, Omnibus Accounting on Danforth Avenue, would have had detailed records related to the payments on which she was questioned, payments that are at issue in the 2017 action. The principal of Omnibus was said by her to be someone named ‘Ahmed Mustaq’. Ms. Channa undertook to try to locate Omnibus’ work product. In respect of this undertaking, Ms. Channa said that she went to Omnibus’ office but the “business appeared to no longer be in operation” and its telephone number appeared to have been reassigned to someone else. Yet, the plaintiffs have adduced evidence that brings into question the veracity of Ms. Channa’s statements, in this regard. Specifically, they have demonstrated that there is a financial consulting business named Omnibus (Omnibus Tax and Accounting Services Inc.) on Danforth Avenue, with an email address that has, as an addressee, someone with the surname ‘Mustaq’. Even so and even after this information was shared with Ms. Channa, there is no evidence that Ms. Channa pursued getting answers from Omnibus. Further, she declined to permit plaintiffs’ counsel to attempt to obtain Omnibus’ work product directly from it/Mr. Mustaq.
While Ms. Channa made representations about her ability/inability to contact at least two of the defendants named in the 2017 action, the evidence given by her on this issue has been shown to be unreliable. She said that no one by the name of “Brearley” appeared in any online inquiry as at July 2020; but when, in September 2020, Ms. Channa was asked to review a LinkedIn page for Ross Brearley, she said that she had tried to contact him, through that page, in 2017—to no avail. And though she admitted to having seen a LinkedIn page for Joe Verlezza and being ‘certain’ that it belonged to the Joe Verlezza named in the 2017 action, she said that she had “no idea” how to contact Mr. Verlezza so that an undertaking given by her to produce his employment contract might be fulfilled.
6Further and in any event, it was only in September 2020--when cross-examined for this motion--that Ms. Channa provided the names of several persons identified in the 2017 statement of claim by their initials. With only initials and partial names, the plaintiffs submit, they were not in a position to serve their statement of claim on all defendants before at least then.
Disposition of the Motions
7R. 34.15 permits the court to strike out all or part of a person’s evidence or make such other order as is just where a party fails to answer a proper question or produce a document in the course of an examination in aid of execution.
8The plaintiffs say that I should order Ms. Channa to answer all of her outstanding undertakings and refusals1, strike out her evidence on these motions and weigh what, they say, is “her improper conduct” in respect of the plaintiffs’ motion to extend the time for service of the 2017 statement of claim. For their part, the responding defendants posit that I should deny the plaintiffs the relief they are seeking, with Ms. Channa having made efforts to fulfill her undertakings, and that I should strike the plaintiffs’ 2017 statement of claim.
9I do think, having reviewed and considered the evidence adduced and the answers provided and not provided by Ms. Channa (and Mr. Dhillon), that the undertakings and refusals not yet answered need to be answered. The efforts made have not been sufficient; the answers furnished are not satisfactory; and, the evidence given by Ms. Channa on this motion, though not now struck by me, is rife with inconsistencies. Further, while the argument is made that requiring that directions/authorizations be given is here disproportionate and overly intrusive, I cannot say that it is. The bona fides of the efforts made to fulfill undertakings is, in my view, questionable. Further, the contextual framework for my consideration of proportionality is that of an action adjudicated on its merits, for which appeal rights have been exhausted and the judgment not satisfied.
10The question then remains: Do I permit the plaintiffs to serve their 2017 statement of claim at all, or in its present form?
11In a motion to extend the time for service, the court should be concerned mainly with the rights of the litigants, not the conduct of counsel. At the heart of the inquiry is the question of whether the proceeding can be advanced to a just determination on the merits, without prejudice to the defendants.
12In determining whether prejudice exists, the court will consider whether material witnesses have disappeared or died, whether relevant documents have been preserved, whether the delay is such that it can reasonably be assumed that memories have faded, and whether any new facts are being alleged (Rowland v. Wright Medical Technology Canada Ltd., 2015 ONSC 3280).
13I note that the plaintiffs themselves were not negligent and did not do or fail to do anything that led to delay in serving the 2017 statement of claim. Instead, the delay was occasioned by admitted inadvertence on the part of plaintiffs’ counsel (for whom Mr. Dewart acts as agent) owing to an unfortunate confluence of health and practice issues and, as accepted by me, Ms. Channa’s failure to fulfill her undertakings in a timely fashion, or at all. With the limited information that the plaintiffs had as to the identity of those for whom only initials were provided and as to the whereabouts of most who are alleged to have received the transfers at issue in the action, the fulfillment of undertakings was key.
14The “mere passage of time cannot be an insurmountable hurdle in determining prejudice; otherwise timelines would become inflexible and explanations futile” (Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, at para. 49). In evaluating the strength of the presumption of prejudice, owing here to the passage of time, I “must consider all of the circumstances, including the defendant[s’] conduct in the litigation” (HB Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, at paras. 38-39).
15The 2017 statement of claim was filed in early November 2017. Less than two years later, the notice of motion for an extension of time for service was served. As at then, the responding defendants had notice of the plaintiffs’ claims. The plaintiffs say, and I accept, that the failure and/or delay on the part of Ms. Channa in fulfilling her undertakings is “inextricably tied up with the delay in the service of the 2017 action”.
16But even if that were not the case, Ms. Channa’s assertion of prejudice arising from the plaintiffs’ delay in serving the 2017 claim is generalized, weak and speculative.
17In the case at bar, Mr. Dhillon and Ms. Channa don’t allege with any degree of specificity prejudice in their ability to defend the proceeding; though, they do allege “irremediable prejudice”. Ms. Channa vaguely refers to documents and witnesses not being available but has failed to particularize her concerns in a manner that would permit the plaintiffs to test those concerns and for the court to have a good look at the merits of those concerns (1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, at 32). Indeed, her evidence is skeletal and contradictory.
18Why do I say this? Ms. Channa undertook to provide banking records and, though she said that they were with her former counsel, failed to produce them when she received her former counsel’s file. She has failed to make real efforts to secure Omnibus’ documents. She has failed to permit the plaintiffs to seek production of documents directly. And while she says “many financial records of Canasia no longer exist” and its computer system was discarded “years ago”, these are bald contentions. And we do not know when any documents were destroyed or when the computer system was allegedly discarded (save that there is a suggestion that Canasia Power Corp.’s computers became inoperable in 2014). Was evidence lost before or after April 6/18 (the last day on which the statement of claim could have been served in accordance with Rule 14.08)? Or, was evidence lost after September of 2019, when Ms. Channa and Mr. Dhillon had notice of the 2017 claim? These questions have not been adequately addressed.
19Further, in respect of those whom Ms. Channa has identified as ‘key witnesses’, 4 of 5 of those witnesses are said to have passed away before the 2017 action was commenced. It is prejudice that existed “whether or not service [was] delayed” and, as such, “ordinarily is not relevant on a motion to extend the time for service” (Chiarelli v. Wiens, at para. 16). Only one witness, a former politician who allegedly provided “government advice” to Canasia Power Corp. prior to 2000 died after the statement of claim was issued. Of note is the fact that he is not a defendant in the 2017 action and his connection with the claims made in that action is not known and is difficult to surmise, even if baldly stated by Ms. Channa.
20Then too, and as the plaintiffs submit, Ms. Channa’s evidence about her inability to contact a number of named defendants is irreconcilable with the evidence given by her when cross-examined in September 2020. And while she now says that she has “no idea how to contact” the defendant M. Banerjee, she admitted in September 2020 to being Facebook friends with Mr. Banerjee. Further, she gave questionable testimony about Messrs. Brearley and Verlezza, as noted above. And at least one potential witness was someone with whom Ms. Channa has acknowledged having lost contact, long ago (and before the 2017 action was commenced)—i.e. in 2010 (Bikram Lamba).2
21As for the adequacy or inadequacy of the plaintiffs’ pleas, this being an issue raised by Mr. Dhillon and Ms. Channa, I note that they are not so devoid of particularity to merit striking them, without more. The 2017 statement of claim defines the controversy among the parties and gives notice of the case that needs to be met. Some of the lack of particularity is owing to the nature of the claims and the fact that the plaintiffs continue to await answers to undertakings to permit them to expand upon their allegations. Further, and in any event, a demand for particulars can, and should be, delivered (at first instance), if the defendants need greater clarity and precision in the pleas to enable them to plead. And the issue is if they need particulars. There is a lacuna in the evidence, in this regard. At best, the motion to strike the 2017 statement of claim is premature. I am dismissing it, without prejudice to it being renewed anon.
22For all of these reasons and as discussed above, the plaintiffs’ motion is granted. Failing agreement as to the timing of next steps and/or the issue of costs, I may be spoken to.
May 14, 2021 “Original Signed by Master Abrams”
Footnotes
- U/Ts: 1, 4 (all non-privileged documents), #7, #8, #20, #21, #22, #27—by way of unqualified authorization/direction; refusals: #4, #8, #23-#25—also by way of unqualified authorization/direction.
- Parenthetically and on the issue of prejudice, I note that Ms. Channa indicates having a specific and independent memory in respect of the issues here at play (note her response to refusal #11).