COURT FILE NOS.: CV-19-615736, CV-20-647461, CV-21-657951 & CV-21-656901

DATE: 2021 08 12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TERRY ALLEN, IRENE ALLEN, CHRISTOPHER ROBINSON, CRYSTAL ROBINSON, SEAN DELINE, KRISTY ELIK, MAX CAREAU, and ROBIN KUMAR, Plaintiffs

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BRIAN ANISH KUMAR, JOHN DOE, JANE DOE and DOE CORPORATIONS, Defendants

AND RE: USHA KUMAR, Plaintiff

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BRIAN ANISH KUMAR, JOHN DOE, JANE DOE and DOE CORPORATIONS, Defendants

AND RE: SANDRA ARNOTT, Plaintiff

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BRIAN ANISH KUMAR, JOHN DOE, JANE DOE and DOE CORPORATIONS, Defendants

AND RE: SANDRA RUETER, Plaintiff

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BRIAN ANISH KUMAR, CURTIS MACFARLANE, JOHN DOE, JANE DOE and DOE CORPORATIONS, Defendants

BEFORE: Master Todd Robinson

COUNSEL: A. Ferguson, for the plaintiffs (moving parties)

W.A. Kyle, for the defendant, Brian Anish Kumar (responding party)

HEARD: July 27, 2021 (by videoconference)

REASONS FOR DECISION

[1] Brian Kumar has been sued by the plaintiffs in these four fraud actions for his role in their respective loan or investment losses. Although the magnitude and complexity of the claims are varied, the common thread in the motions before me is whether Mr. Kumar’s alleged evasion of service warrants judicial intervention to validate service or authorize substituted service, permit easier future service to avoid further procedural delays, and fix timetables for completion of pleadings, document exchange, and oral discoveries. Ms. Rueter also asks for validation of service of her statement of claim on Chris MacFarlane (a defendant unique to her action).

[2] Agreement on a number of items was reached prior to argument of the motions. Relief sought by the plaintiffs in Court File No. CV-19-615736 to strike Mr. Kumar’s defence and counterclaim has been adjourned to another hearing on an agreed timetable, as ordered below. Requested relief by the plaintiffs in that action to examine non-parties has been withdrawn.

[3] What remains to be determined in these four motions is the following:

(a) if it is appropriate to dispense with the requirement for mandatory mediation in Court File No. CV-19-615736, as requested on consent;

(b) if I should authorize service of all future documents on Mr. Kumar by email, including documents that must otherwise be served by personal or alternative to personal service;

(c) the appropriate date for validation of service of the statements of claim on Mr. Kumar in Court File Nos. CV-20-647461, CV-21-657951, and CV-21-656901;

(d) if service on Curtis MacFarlane in Court File No. CV-21-656901 should be validated or substituted service ordered;

(e) whether Mr. Kumar should be compelled to provide contact information for Mr. MacFarlane; and

(f) if it is premature to fix a timetable for pleadings, exchanging affidavits of documents and productions, and completing oral discoveries in each of Court File Nos. CV-20-647461, CV-21-657951, and CV-21-656901.

[4] I am convinced by the submissions of both counsel that is appropriate to dispense with mandatory mediation in Court File No. CV-19-615736. With respect to the remaining issues, I have determined that a blanket order for service of all future documents on Mr. Kumar by email is not warranted, the date for validation of service on Mr. Kumar is properly the return date of the motion, further attempts to locate and serve Mr. MacFarlane are required before any relief is granted regarding him, and it as premature to fix a timetable in each of Court File Nos. CV-20-647461, CV-21-657951, and CV-21-656901 prior to any party having defaulted in their obligations under the Rules of Civil Procedure, RRO 1990, Reg 194.

Analysis

Preliminary Issue – Bankruptcy Stay

[5] It is undisputed that Brian Kumar is an undischarged bankrupt, although the material filed by the various plaintiffs include very little on the status of his bankruptcy. As a preliminary matter, I invited submissions from both parties on whether these proceedings were stayed, in whole or in part, by operation of the Bankruptcy and Insolvency Act, RSC, 1985, c B-3.

[6] I am satisfied that only the claim of Usha Kumar in Court File No. CV-20-647461 is stayed and requires a lift stay order before it may proceed.

[7] I understand that Brian Kumar’s bankruptcy arose from a consumer proposal made in early 2017. By operation of s. 69.2(1) of the Bankruptcy and Insolvency Act, upon the filing of that proposal, all remedies of Mr. Kumar’s creditors and any action, execution, or other proceedings against him for recovery of property provable in bankruptcy were stayed. Mr. Kumar was deemed bankrupt when his consumer proposal was not accepted, and remains an undischarged bankrupt. The stay of proceedings accordingly remains in place. The scope of the kinds of claims provable in bankruptcy is set out in s. 121(1), which deems those claims provable in Mr. Kumar’s bankruptcy to be all debts and liabilities to which Mr. Kumar was subject on the date of his bankruptcy or those arising from obligations incurred before the date of his bankruptcy.

[8] I accept the submissions made, with reference to the statements of claim in the actions and materials filed, that the claims of all plaintiffs other than Terry and Irene Allen, Robin Kumar, and Usha Kumar deal with debts and liabilities arising after bankruptcy and, accordingly, those claims are not stayed. A lift stay order has already been obtained continuing the claims of Terry and Irene Allen and Robin Kumar in Court File No. CV-19-615736. Usha Kumar’s claim, though, is captured by the stay of proceedings. The underlying debt claimed in that action pre-dates Mr. Kumar’s bankruptcy.

Should mandatory mediation be dispensed with?

[9] Both the plaintiffs in Court File No. CV-19-615736 and Mr. Kumar agree that mandatory mediation in that action should be dispensed with. I am convinced it is appropriate to do.

[10] I have discretion under Rule 24.1.05 of the Rules of Civil Procedure to make an order exempting the action from mandatory mediation. However, it is an order that courts typically granted sparingly. Mediations are not only about settling an action (although that is typically their goal). They also serve the important function of distilling and narrowing issues for determination, and often result in resolution of specific issues, even if the balance of disputed matters proceed through litigation.

[11] The plaintiffs in Court File No. CV-19-615736 and Mr. Kumar have been embroiled in the litigation for nearly 1.5 years. It has been heavily contested. The plaintiffs have obtained a sweeping Mareva injunction and Anton Pillar orders to secure Mr. Kumar’s assets, which have been extended on more than one occasion. There has been court-ordered asset disclosure and examinations. There have been numerous opposed motions. The allegations of fraud against Mr. Kumar are serious and unflinching. Mr. Kumar’s opposition to them is equally steadfast.

[12] I am satisfied that there has been no narrowing of issues to date. I am also convinced that, in the particular circumstances of the relationship between the parties and the issues in dispute between them, there is nothing to be gained from mandatory mediation. The action is unlikely to settle and there is unlikely to be any material narrowing of issues at a mediation.

Should service of all future documents be authorized by email?

[13] The plaintiffs in Court File Nos. CV-19-615736 and CV-21-657951 seek orders authorizing service of all future court documents by email to Mr. Kumar. Although not formally sought in the notices of motion in Court File Nos. CV-20-647461 and CV-21-656901, the relief, as argued, appears to be sought in all four actions. The various plaintiffs rely on the evidence of Mr. Kumar’s evasion of service to argue that Mr. Kumar has demonstrated an intent to evade service wherever needed, such that the plaintiffs should not be forced to incur the time and expense of attempting personal service again.

[14] I do not view a blanket order authorizing service of all future court documents by email as necessary or appropriate. I say this for three reasons.

[15] First, Mr. Kumar’s counsel confirmed at the hearing that his retainer was in the process of being finalized. He anticipated being formally retained by July 30, 2021, at which time he would be serving appropriate notices in each action. Service on a lawyer is straightforward.

[16] Second, to the extent that Mr. Kumar remains or becomes self-represented again, the Rules of Civil Procedure already permit email service on him for any document other than those expressly required to be served personally or by an alternative to personal service. Rule 16.01(4)(b)(iv) was amended specifically to permit email service on parties acting in person and non-parties, provided that service complies with Rule 16.06.1(1), which outlines the information that must be included in the email.

[17] In Court File No. CV-19-615736, Mr. Kumar may already be served by email to the email address listed on his statement of defence (i.e., the last e-mail address he provided for service). In the other actions, which Mr. Kumar has not yet defended, he may be served at either of the email addresses put before me (i.e., his last known e-mail addresses). It is thereby unnecessary to order service by email of documents that do not require personal or alternative to personal service.

[18] Third, I do not agree that Mr. Kumar’s evasion of service of the motion records and statements of claim fairly support dispensing with any future requirement that the plaintiffs comply with rules specifically requiring service by personal or alternative to personal service. Two specific rules come to mind. Rule 60.18(7) expressly requires that a party who is to be examined in aid of execution must be served with a notice of examination personally or by an alternative to personal service, even if they still have a lawyer representing them. Rule 60.11(2) also expressly requires that the notice of motion for a contempt order be served personally, and not by alternative to personal service. This is for good reason: a judge finding contempt is entitled to order serious sanctions, including imprisonment. A person who may be imprisoned or otherwise seriously sanctioned by the court ought to have clear notice of the specific contempt relief sought and the hearing date and location where contempt will be decided.

[19] At the time of the hearing, the plaintiffs in Court File No. CV-19-615736 intended to pursue a contempt motion. If I grant the order sought, and that motion has been or will be brought, Mr. Kumar would no longer have to be personally served. If he failed to check his email or the email was caught as “junk” through automatic spam filters, he may have no actual notice of the contempt hearing, may fail to attend (despite being validly served pursuant to my order), and could be found in contempt and ordered imprisoned.

[20] Judges and masters have discretion to order substituted service or dispense with service under Rule 16.04 where it is impractical for any reason to effect prompt service of a document that must be served personally or by alternative to personal service. Since there are very few documents other than the statement of claim that must be served in that manner, I see no just reason to obviate the plaintiffs’ obligation to make reasonable efforts to effect personal service (or alternative to personal service, where permitted). If Mr. Kumar does evade, the plaintiffs are entitled to put evidence before the court to support deviating from what is otherwise required.

When should validation of service be effective?

[21] Mr. Kumar consents to validation of service of the statement of claim on him in both Court File Nos. CV-21-657951 or CV-21-656901. He also consents to validation of service in CV-20-647461, notwithstanding that the action is formally stayed. However, Mr. Kumar argues that validation should be effective as of the hearing date. The plaintiffs ask that I validate service effective March 23, 2021. That is the date on which a private investigator observed Mr. Kumar at his residence, knocked without answer, left the statements of claim in a folder in the mailbox, and subsequently returned and observed the folder had been removed.

[22] I am satisfied that Mr. Kumar did receive the claims on March 23, 2021. However, if service of the statement of claim is validated as of March 23, 2021, nothing prevents the plaintiffs from immediately having Mr. Kumar noted in default in each of the three actions, and perhaps even requisitioning default judgment. If noted in default, there will be motions to set aside and further procedural delay.

[23] Nothing before me supports any prejudice to the plaintiffs from validating service of their claims as of the hearing date. At the hearing, Mr. Kumar’s counsel committed to serving notices of intent to defend by the end of that week. To avoid unnecessary potential procedural disputes, I am validating service as of the hearing date. Timing of Mr. Kumar’s defences will be governed by the Rules of Civil Procedure and any indulgences agreed between counsel and their clients.

Should service on Curtis MacFarlane be validated or substituted service granted?

[24] Although Ms. Rueter’s submits it is an oversight, no affidavit of attempted service has been filed regarding attempts to serve Curtis MacFarlane with the statement of claim in Court File No. CV-21-656901. Similarly, the affidavits of service filed for Ms. Rueter’s motion materials do not indicate service on Mr. MacFarlane. Absent proof of service of the motion on Mr. MacFarlane, I have treated the motion as against him as being brought without notice.

[25] Ms. Rueter argues that the same service on Brian Kumar should be validated as against Curtis MacFarlane, who is argued to live with Mr. Kumar’s at the address where Mr. Kumar was served. I am not satisfied the evidence supports that assertion.

[26] Validating service under Rule 16.08 of the Rules of Civil Procedure may be done in two circumstances: (a) where the court is satisfied that the document came to the notice of the person to be served; and (b) where the court is satisfied that the document was served in a manner that would have come to the notice of the person to be served, except for the person’s own attempts to evade service. Neither has been demonstrated here.

[27] There is no affidavit of attempted service or other evidence confirming specific attempts to serve Mr. MacFarlane. There is no evidence of any efforts to locate or serve Mr. MacFarlane. Mr. MacFarlane cannot “evade” service if it has not been attempted.

[28] I am also not satisfied that Curtis MacFarlane has actual notice of the statement of claim. The evidence does not support a finding that Mr. MacFarlane is, in fact, Mr. Kumar’s roommate, as alleged. Anna McGrath’s affidavit confirms only that, in June 2021, she understood Mr. MacFarlane to be “the occasional roommate of Kumar’s, and who lives with Kumar from time to time.” An Amazon package addressed to “Kurt MacFarlane” taken from the recycling bin at Mr. Kumar’s current residence is not evidence that Curtis MacFarlane lives there or has notice of the claim. There is no evidence that “Kurt MacFarlane” is the same person, so evidence of a telephone call to “Kurt MacFarlane” using the number taken from the Amazon package does not assist Ms. Rueter. Regardless, since there is no proof of attempted service in the record before me, I am not prepared to infer that Mr. MacFarlane was provided with a copy of the statement of claim by Mr. Kumar and thereby validate service on Mr. Kumar as also being sufficient service on Mr. MacFarlane.

[29] Ms. Rueter seeks substituted service in the alternative. Rule 16.04 expressly requires that it must be impractical to effect prompt service of the statement of claim by personal or alternative to personal service. Based on the record filed, no efforts have been made to locate or verify a current address for Curtis MacFarlane and minimal efforts have been made to personally serve him. Further service efforts are required.

Should Mr. Kumar be compelled to provide contact information for Curtis MacFarlane?

[30] Ms. Rueter seeks an order compelling Mr. Kumar to provide contact information for Curtis MacFarlane. I find no basis to grant the relief sought. The record before me does not support any efforts being made by Ms. Rueter to independently locate an address for service for Curtis MacFarlane, nor does it support that he cannot be located without information from Mr. Kumar. Once efforts to locate and serve Mr. MacFarlane have been made, such an order may be appropriate. Until then, it is not.

Is it premature to impose a timetable before the close of pleadings?

[31] The plaintiffs in Court File Nos. CV-20-647461, CV-21-657951, and CV-21-656901 argue that, since Mr. Kumar repeatedly evaded service of their claims and motion materials and given Mr. Kumar’s conduct in Court File No. CV-19-615736, a timetable order for delivery of pleadings, exchanging affidavits of documents, and examinations for discovery is required to ensure these actions move forward. I have been specifically pointed to O’Brien J.’s reasons for awarding substantial indemnity costs against Mr. Kumar following an opposed motion for extension of the Mareva injunction and Anton Pillar orders in Court File No. CV-19-615736. O’Brien J. found that Mr. Kumar’s conduct had been unacceptable and that he had repeatedly failed to comply with court orders: Allen v. Kumar (4 August 2020), Toronto CV-19-615736 (ON SC) (unreported).

[32] I agree with Mr. Kumar that a timetable is premature. Although he was found to have breached court orders requiring production of financial information in a separate proceeding, Mr. Kumar has not yet defaulted under any of his obligations pursuant to the Rules of Civil Procedure in the three newer actions.

[33] Both Sandra Arnott’s and Sandra Rueter’s actions in Court File Nos. CV-21-657951 and CV-21-656901 have been brought under the simplified procedure, which has stricter timeliness and rules regarding documentary and oral discoveries than an action under the regular procedure. Usha Kumar’s action in Court File No. CV-20-647461 is stayed, so it would be inappropriate to order a timetable for next steps until a lift stay order has been obtained.

[34] In my view, before the parties are compelled to comply with a court-ordered timetable in any of these proceedings, there must be a need. Until Mr. Kumar or the plaintiffs are in default of their obligations under the Rules of Civil Procedure, I see no need or basis to fix a timetable to complete pleadings and discoveries.

Disposition

[35] In Court File No. CV-19-615736, I order as follows

(a) On consent, the plaintiffs’ motion to strike Mr. Kumar’s defence and counterclaim is adjourned to be heard in accordance with the following timetable:

(i) Brian Kumar’s responding motion record shall be served by August 23, 2021;

(ii) The plaintiffs’ reply record, if any, shall be served by September 3, 2021;

(iii) Cross-examinations on affidavits and any examinations pursuant to Rule 39.03 shall be completed by September 24, 2021;

(iv) Answers to any undertakings and positions on advisements, if any, shall be given by October 8, 2021;

(v) Any motions on undertakings and refusals from cross-examinations or Rule 39.03 examinations shall be served by October 15, 2021;

(vi) The plaintiff’s moving factum and book of authorities shall be served by October 29, 2021;

(vii) Brian Kumar’s responding factum and book of authorities shall be served at least ten (10) days prior to the return of the motion; and

(viii) A case teleconference shall proceed before me on Friday, October 15, 2021 at 9:15 a.m. for thirty (30) minutes to provide further directions and schedule the motion. Counsel for one of the parties shall provide a conference call-in number to my Assistant Trial Coordinator at least three (3) days prior to the conference call.

(b) On consent, the examination for discovery of Brian Kumar by the plaintiffs shall be completed by October 29, 2021.

(c) On consent, the requirement for mandatory mediation in Court File No. CV-19-615736 is hereby dispensed with.

(d) The balance of the plaintiffs’ motion, to the extent not already withdrawn, is dismissed.

[36] In Court File No. CV-20-647461, I order as follows:

(a) The time to serve the statement of claim is hereby extended to July 27, 2021 and service of the statement of claim on Brian Kumar is validated effective that date.

(b) The balance of the plaintiff’s motion is dismissed.

[37] In Court File No. CV-21-657951, I order as follows:

(a) Service of the statement of claim on Brian Kumar is validated effective July 27, 2021.

(b) The balance of the plaintiff’s motion is dismissed.

[38] In Court File No. CV-21-656901, I order as follows:

(a) Service of the statement of claim on Brian Kumar is validated effective July 27, 2021.

(b) The balance of the plaintiff’s motion is dismissed, without prejudice to moving again to seek substituted service, validating service, or compelling disclosure of Curtis MacFarlane’s contact information following further attempts to serve him.

Costs

[39] The parties are encouraged to settle costs of these motions. If they cannot, then they may book a case teleconference with me to make oral submissions as to costs, which may be arranged through my Assistant Trial Coordinator, Christine Meditskos. Unless I otherwise direct, the various plaintiffs (collectively) and Mr. Kumar will each be entitled to fifteen (15) minutes for their submissions, with five (5) minutes of reply. Case law and any offers to settle shall be exchanged and filed directly with my Assistant Trial Coordinator at least five (5) days prior to the case teleconference.

[40] Unless a case teleconference has been booked (but not necessarily heard) within thirty (30) days of the date of these reasons for decision, the parties shall be deemed to have agreed on costs.

MASTER TODD ROBINSON

DATE: August 12, 2021