Trade Capital Finance Corp v. Cook, 2021 ONSC 7134

COURT FILE NO.: CV-15-2110-00

DATE: 2021 11 01

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TRADE CAPITAL FINANCE CORP. Plaintiff

• and -

PETER COOK also known as PETER WILLIAM COOK, MARC D’AOUST also known as JEAN MARC D’AOUST, THOMAS BARKER also known as THOMAS RICHARD BARKER (personally and carrying on business as LC EXCHANGE, GLOBAL MEDICAL and GREENLINK CANADA GROUP), ROCKY RACCA, BRUNO DIDIOMEDE also known as BRUNO DIAIOMEDE, ALAN KEERY also known as ALAN JOHN KEERY, CHRIS BENNETT JR. also known as CHRIS BENNETT also known as CHRISTOPHER BENNETT (personally and carrying on business as CJR CONSULTING), TODD CADENHEAD, DAYAWANSA WICKRAMASINGHE, BONNY LOKUGE also known as DON BONNY LOKUGE, VIRTUCALL INC., VIRTUCALL INTERNATIONAL LLC, DEBT RESOLVE-MORTGAGE FUNDING SOLUTIONS INC. carrying on business as DEBTRESOLVE INC., THE CASH HOUSE INC., 1160376 ONTARIO LIMITED operating as THE CASH HOUSE, 2242116 ONTARIO INC. carrying on business as SUPERIOR MEDICAL SERVICES INC. and SUPERIOR MEDICAL SERVICES, CARLO MR. DE MARIA also known as CARLO VINCE DE MARIA also known as CARLO VINCENT MR. DE MARIA also known as CARLO VINCENZO MR. DE MARIA, MATTEO PENNACCHIO, FRANK ZITO also known as FRANCESCO ZITO, SIMONE SLADKOWSKI, JOBEC TRADE FINANCE INC., 1461350 ONTARIO INC., 2299430 ONTARIO INC., WF CANADA LTD., JOBEC INVESTMENTS RT LTD., GREEN LINK CANADA INC., 2339989 ONTARIO INC., 2252364 ONTARIO INC., 2224754 ONTARIO LTD., 6980023 CANADA INC. operating as LIVING BENEFITS and MILLWALK ENTERPRISES INC., OAK HILLS WATER DURHAM INC., JOSHUA COOK, ELIZABETH COOK, REBECCA COOK, MARK PINTUCCI, MARCO SANTONATO also known as MARC SANTONATO and NEW ERA RESOLUTIONS & CONSULTING INC.

Defendants

BEFORE: Emery J.

COUNSEL: Peter W. G. Carey and Christopher R. Lee, for the Plaintiff

Alexander Melfi, for the Defendant Carlo Vincent De Maria

HEARD: March 19, 2021

REASONS FOR DECISION

(On motion for Carlo De Maria to produce documents)

1Trade Capital Finance Corp. brings this motion to compel the defendant Carlo De Maria to make full disclosure of, and to produce all documents relating to the operation of the defendants The Cash House Inc. (“TCHI”), 2454904 Ontario Inc. (“245”) and any other corporation in which he had an interest that operated the “Cash House” business between 2010 and 2013. Trade Capital seeks those documents on the basis they are relevant to its claims in this action that it was defrauded of up to $5.2 million and US$2.1 million by several defendants. Trade Capital alleges that substantial amounts of the missing funds were deposited or funneled through TCHI or related corporations operating as the Cash House. Trade Capital has been consistent in its position throughout this litigation to recover its loss that the Cash House business and the corporations behind it were owned at all material times by Mr. De Maria.

2The motion focuses on documents that fall into three categories:

1. The disclosure and production of documents ordered by MacKenzie J. on a motion for contempt against TCHI, Osman Khan and his corporation 245, for reasons dated January 21, 2016 (the “first MacKenzie decision”);

2. While the Amended Notice of Motion sought the production of documents relating to all transactions and the business of TCHI between 2010 and 2013, Trade Capital’s request was narrowed to production of those documents listed in Schedule “A” to the affidavit of documents of Carlo De Maria sworn on November 7, 2018; and

3. Disclosure and production of documents 9 to 22 listed by counsel for Trade Capital in his letter dated May 14, 2019.

3Trade Capital takes the position that most, if not all the requested documents are included in the disclosure ordered by Ricchetti J. as part of a Mareva injunction against Mr. De Maria, corporations involved in the Cash House business and other Mareva parties made on May 6, 2015 (the “first Mareva Order”).

4The same disclosure is now required from Mr. De Maria as Trade Capital alleges that he has always been the controlling mind of TCHI and related corporations involved with running a chain of payday stores known as the Cash House. Trade Capital claims Mr. De Maria retained control of the Cash House business even after the business was purportedly sold to Mr. Khan in March 2015.

5On this motion, Trade Capital asks for an Order that Mr. De Maria serve a further and better affidavit of documents to disclose every relevant document in his possession, control or power. Trade Capital also requires Mr. De Maria to produce an electronic copy of all documents in “native form,” which means with all metadata preserved.

Background facts

6I do not propose to describe the facts in evidence on previous motions and the findings made on those motions. They have been often recited in earlier decisions and are well known to all parties in this action. However, it is helpful for context to provide the following review of the case with a view to focusing on the fraud alleged, and the litigation that has followed.

The fraud alleged

7Trade Capital is a factoring company. Factoring is a financial transaction in which the party who has issued an invoice for providing goods or services (the “Invoicer”) sells that invoice to the factoring company for less than the amount of the invoice charged to the customer. The factoring company makes an advance payment, also known as a funding, to the Invoicer in an amount that is approximately 70% to 90% of the face amount shown on the invoice.

8The factoring company becomes the owner of the invoice through this process, and is entitled to collect the full amount invoiced to the customer. The factoring company may then pay the balance of the amount it collects from the customer to the Invoicer after deducting its commission and other charges, depending on the contract between them.

9Peter Cook was the president of Trade Capital between November 2011 and September 2013. Mr. Cook and Darcy Thompson, the Chief Executive Officer of Trade Capital, managed Trade Capital’s business from its inception until Trade Capital discovered the alleged fraud.

10When an Invoicer would approach Trade Capital to purchase an invoice prior to September 2013, it was Mr. Cook’s responsibility to contact the customer of the Invoicer to determine whether the invoice was valid and genuine. It was Mr. Cook’s responsibility to make this determination before Trade Capital proceeded with purchasing invoices from a particular Invoicer, or making advance payments.

11Essentially, Trade Capital alleges that the fraud was perpetrated in the following manner:

1. The Defendants, Peter Cook, Thomas Barker, Marc D’Aoust, Todd Cadenhead, Alan Keery, and/or others working with them would create a fictitious invoice.

2. A notification sheet certifying the legitimacy of the invoice purportedly signed by an officer of the Invoicer’s customer would be provided to Trade Capital.

3. Mr. Cook and his accomplices would take other steps to make it appear as though the invoice was legitimate, which included:

(i) making representations to officers of Trade Capital that the invoice was valid;

(ii) forwarding emails supposedly from a representative of the customer confirming the validity of the invoice (Trade Capital now believes that most of these emails were actually drafted by the fraudsters);

(iii) making payments from a bank account controlled, either directly or indirectly, by the fraudsters;

(iv) using internet domain names and email accounts that appear to belong to the supposed customer; and

(v) having actual or apparent employees at major corporations (such as Wells Fargo, Enbridge and Bell) participate in confirming the validity of the invoices.

12From 2011 to 2013, Trade Capital was induced to advance $5,051,721.79 CDN and $1,479,515.12 USD to purchase fraudulent invoices by way of,

1. twelve fundings to Virtucall Inc. (“Virtucall”) in amounts ranging from $77,000 USD to $176,295.75 USD;

2. sixteen fundings to Superior Medical Services Inc. (“Superior”) (four of which Trade Capital was directed to advance to other parties) in amounts ranging from $35,000 CAD to $292,456.69 CAD;

3. ten fundings to Greenlink Canada Inc. (“Greenlink”) (one of which were Trade Capital was directed to pay to LC Exchange) in amounts from to $74,905 CAD to $375,504 CAD; and,

4. five fundings to 2339989 Ontario Inc. (“233”) (two of which were Trade Capital was directed to pay to Millwalk Enterprises Inc.) in amounts ranging from $125,000 CAD to $245,430.21 CAD.

13Trade Capital obtained a Norwich order in 2013 to trace the transfer and migration of various funds it had advanced to certain parties. Trade Capital was entitled to obtain bank statements and back up documents related to TCHI accounts from major banks and from Buduchnist Credit Union Limited (“BCU”) under the Norwich Order. This Order allowed Trade Capital to determine where the funds had been paid, transferred or deposited, and to make further requests for documents.

14Trade Capital was able to trace its funds to a number of recipients to which Invoicers had distributed fundings from Trade Capital. The evidence of Trade Capital shows that a significant portion of Trade Capital’s funds was paid to the Cash House, which received $1,171,260.50 directly from the following entities:

(a) Superior - $412,050.00;

(b) Greenlink - $512,777.50; and,

(c) 233 - $246,435.00.

15Trade Capital contends that it traced further amounts from various fundings to a Canadian dollar account at the Toronto Dominion (“TD”) bank open in the name of Virtucall (the “TD Virtucall Canadian Account”). Trade Capital’s funds were difficult to trace in and out of the TD Virtucall Canadian Account given the number of transactions. However, transactions showed that after Virtucall received funds from parties from whom Trade Capital had purchased invoices, Virtucall transferred the funds to other defendants, including the Cash House. Trade Capital claims that during the period of time that it was defrauded, Virtucall transferred funds from the TD Virtucall Canadian Account to the TCHI bank account in the amount of $2,722,222.50.

The action

16On May 6, 2015, Trade Capital commenced this action in Brampton. The statement of claim was subsequently amended on May 31, 2016.

17The original statement of claim spanned 84 pages and contained allegations of a large, sophisticated fraud involving 35 defendants. Chief among those allegations was the description of the role that TCHI played in the alleged fraud. The statement of claim describes TCHI as a money services business that provided, in part, “pay-day loan” and third party cheque cashing services.

18TCHI was owned from 2011 to 2013 directly or indirectly by Mr. De Maria. Trade Capital alleges that Mr. De Maria knowingly received funds that were obtained by the fraud, and that TCHI had “laundered” that stolen money.

19TCHI and Mr. De Maria deny those allegations in their statements of defence. In their defence, they state that if stolen funds were received or flowed through TCHI, it occurred in the normal operation of TCHI’s business. Mr. De Maria states that he had no knowledge of the fraud, and that TCHI received no benefit from those transactions other than charging the standard transaction fees for providing money based services.

20In the amended statement of claim, Trade Capital seeks damages against Virtucall, Superior, Green Link and 233 in the amount of $20,000,000 for civil fraud, fraudulent misrepresentation and negligent misrepresentation. Trade Capital also claimed:

(a) a Mareva injunction restraining these defendants from disposing of assets;

(b) a declaration that they received funds belonging to Trade Capital that were fraudulently converted by some or all of the defendants;

(c) a declaration that the defendants received funds belonging to Trade Capital;

(d) a declaration that all money, property and other assets transferred to the defendants were held on a resulting and/or constructive trust basis for Trade Capital;

(e) damages for breach of constructive trust or resulting trust; and

(f) other relief including various tracing orders against these few defendants, among many.

21Trade Capital has pleaded the following causes of action against some or all defendants, including TCHI:

1. Conspiracy;

2. Conversion;

3. Unjust Enrichment;

4. Breach of Trust;

5. Knowing receipt of trust funds ;

6. Knowing assistance of breach of trust; and

7. Intentional interference with economic interests.

22The amended statement of claim seeks damages against it’s former president, Peter Cook, specifically, and as against various defendants including Mr. Cook, Virtucall, Superior, Greenlink, 233 and others for fraud, fraudulent and negligent misrepresentation. The Cash House and Mr. De Maria were not included in this group of defendants. However, they were included in the claims made by Trade Capital as against all defendants for fraudulent conspiracy, conversion and other causes of action. Trade Capital pleads in paragraph 177 of the Amended Statement of Claim that the defendants are jointly and severally liable, making each of them liable to Trade Capital for the entire loss claimed.

23Mr. De Maria and 116 filed a statement of defence to defend the action. They have been represented in this action at various times by different counsel, but never by the same counsel representing TCHI.

24Several of the other defendants have defended the action. Some, such as Virtucall and Superior, have not.

The Mareva Orders

25On May 6, 2015, Trade Capital obtained an interim Mareva injunction from Justice Ricchetti on an ex parte basis (the “first Mareva Order”). Justice Ricchetti made the following order against the Mareva defendants described in that order, including TCHI:

1. THIS COURT ORDERS that each Mareva Defendant and its servants, employees, agents, assigns, officers, directors, affiliates and anyone else acting on their behalf or in conjunction with any of them, and any and all persons with notice of this injunction, are restrained from directly or indirectly, by any means whatsoever:

(a) Selling, removing, dissipating, alienating, transferring, assigning, encumbering, or similarly dealing with any assets of any of the Mareva Defendants, that are located in Canada or the United States, including but not limited to the assets and accounts listed in Schedule “A” hereto;

(b) Instructing, requesting, counselling, demanding, or encouraging any other person to do so; and

(c) Facilitating, assisting in, aiding, abetting, or participating in any acts the effect of which is to do so.

26Justice Ricchetti ordered each Mareva defendant to provide a statement of assets to Trade Capital within 10 days of the date his order was served. This order required each Mareva defendant, including TCHI, to disclose information relating to assets and accounts held by or on behalf of those parties, other than those assets and accounts listed in schedule “A” to the order.

27In the written reasons given for his decision to grant the Mareva injunction, Ricchetti J. made the following findings on the evidence put forward by Trade Capital:

(a) Trade Capital has satisfied the court that a strong prima facie claim of fraud has been made out;

(b) the evidence established that each of the Defendants, including Cash House, perpetrated, facilitated or received the proceeds of a fraudulent scheme against Trade Capital;

(c) this was a very complex fraud. The Defendants went to great lengths to perpetrate the fraud; and

(d) unless the injunction was granted, there was a very real risk that the proceeds from the fraud would be disposed of or transferred beyond the jurisdiction of this court.

28Mr. De Maria and 116 brought a motion to set aside the Mareva Order as against them shortly thereafter. For reasons given by Ricchetti J. dated June 1, 2015 at 2015 ONSC 3745, the motion was dismissed (the “Ricchetti decision”).

29On March 24, 2016, I made another Mareva Order on an ex parte basis (the “second Mareva Order”). This Order was ordered to come back on notice before MacKenzie J. on March 30, 2016. The second Mareva Order extended the reach of the first Mareva Order to other parties, including Mr. Khan and 245.

Disclosure requirements to date

30The history of this litigation is remarkable for bursts of intense activity, followed by periods of relative calm. Trade Capital has concentrated on the search for information that it can use as evidence to assist with proving the case as well as to facilitate judgment recovery.

31On October 28, 2013, Trade Capital obtained the Norwich order through which it detected the fraudulent activity committed at its expense, identified prospective defendants and traced the funds allegedly obtained by fraud through various financial institutions. Trade Capital obtained the first Mareva Order on May 6, 2015 against all defendants to freeze assets and to preserve evidence in their respective hands.

32As part of the first Mareva Order, Ricchetti J. ordered all Mareva defendants to disclose and produce all documents in their possession, control or power to Trade Capital. Those Mareva defendants included Mr. De Maria, TCHI and 1160376 Ontario Ltd. (“116”), a corporation owned by Mr. De Maria and his father, Vincenzo De Maria.

33The background facts to the parties and the alleged fraud were set out extensively in the Ricchetti decision. In that decision, Justice Ricchetti found on the record before him as follows:

15Clearly, Cash House was the recipient of substantial amounts of the fraudulently obtained monies from Trade Capital. Equally important, the monies received by Cash House were from most of the major fraudulent entities used to commit the fraud on Trade Capital. This fact defies coincidence.

16It was established that De Maria's companies, the Cash House and 116 were the largest recipients of Trade Capital's monies.

34The first Mareva order required the Mareva defendants, including Mr. De Maria and TCHI, to produce all documents concerning their involvement with the fraud.

35Mr. De Maria made certain disclosure required of him under the first Mareva Order, but took the position that in 2015 he had sold TCHI to Osman Khan and his corporation 245. He reasoned that because of this sale, he did not have the obligation to make disclosure on behalf of TCHI as it was not his to give.

36Trade Capital took the position that the first Mareva Order was expansive enough to capture Mr. Khan and his corporation 245 in the court ordered obligations to disclose all documents relating to the Cash House in their possession, power and control. After Mr. Khan refused to make that disclosure, Trade Capital brought a motion to have TCHI and Mr. Khan found in contempt. On the return of the motion on December 4, 2015, Osman Khan and his corporation 245 were ordered by MacKenzie J. to deliver an updated list of assets of the Cash House, together with all current and supporting documents by 5 p.m. on December 7, 2015. Mr. Khan was also required to attend on December 11, 2015 for an examination pursuant to paragraph 5 of that Order.

37Counsel acting for Mr. Khan at the time delivered a list of bank accounts for the Cash House that was current, and no documents for 245. While Mr. Khan attended at the examination scheduled for December 11, 2015, he did not produce the documents that were subject to the first Mareva Order.

38When TCHI or Mr. Khan did not produce the required documents as ordered, MacKenzie J. continued the hearing of Trade Capital’s contempt motion on January 8, 2016. In the first MacKenzie decision, MacKenzie J. found TCHI, Mr. Khan and 245 in contempt and put the sentencing phase over to a date to be scheduled. In the interval, MacKenzie J. made a number of Orders at paragraph 55 of his reasons that would allow the contemnors to purge the contempt.

39Justice MacKenzie would later make Orders at the sanction phase of the contempt hearing to strike the statement of defence and crossclaim of TCHI, and to sentence Mr. Khan to serve a term of imprisonment of 90 days intermittently. These sanctions were imposed in separate reasons dated May 24, 2016 (collectively, the “second MacKenzie decision”). In his reasons, MacKenzie J. describes a “torrent” of correspondence between counsel for Trade Capital and counsel for the contemnors in which Trade Capital is offered access to approximately 1,000 banker’s boxes of Cash House documents in a storage facility. MacKenzie J. characterized documentary production proffered this way to be tantamount to the “dump truck” concept of documentary production. He concluded that for the contemnor’s counsel to contend that Trade Capital had an obligation to sort through the contents of 1,000 boxes in order to identify and classify documents without any sort of road map or chart was simply untenable.

40The Orders made by MacKenzie J. on January 21, 2016 and his Order for sanctions dated May 24, 2016 were upheld by the Court of Appeal on April 4, 2017 at 2017 ONCA 281. Leave to appeal the dismissal of the appeal to the Supreme Court of Canada was denied on December 7, 2017.

41Since commencing this action, Trade Capital has brought several motions in which the disclosure ordered by Ricchetti J. on the Mareva motion, and then by MacKenzie J. in the contempt proceedings have been a re-occurring issue. In 2019, Penny J. heard the motion of Mr. De Maria and 116 to set aside the first Mareva injunction after the motion for similar relief had been heard by Ricchetti J. in 2016. At the same time, Penny J. heard the cross-motion for summary judgment made by Trade Capital. For reasons dated September 24, 2019 at 2019 ONSC 4950, Penny J. dismissed both motions (the “Penny decision”) largely because of the lack of disclosure by Mr. De Maria to date.

Analysis

Guiding principles

42The motion that Trade Capital has brought is a long overdue step to compel Mr. De Maria, as the principal of TCHI at the time the alleged fraud was committed, to produce documents relevant to the matters at issue that are in his possession, control or power.

43This is a motion of first instance. It is different in that sense from the order under appeal in Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310. In Falcon Lumber, the court below had struck the statement of defence of the Lotey defendants and permitted the plaintiff to proceed to judgment when those defendants failed to deliver a further and better affidavit of documents disclosing specified documents. The Court of Appeal, however, took the opportunity to summarize the law of disclosure and the obligations of parties to a civil action under the Rules of Civil Procedure. Those principles are directly applicable here.

44At paragraphs 41 and 42, D.M. Brown J.A. sets out the obligations of every party in a civil action to make the required disclosure:

41At the heart of the rules governing actions in the Superior Court of Justice lie the obligations of every party to an action to disclose every document relevant to any matter in issue in an action that is or has been in its possession, control or power, whether or not privilege is claimed in respect of a document, and to produce all such documents, unless privilege is claimed in respect of a document: Rules of Civil Procedure, rr. 30.02(1)-(2).

42Three requirements imposed by the Rules of Civil Procedure emphasize the importance of the obligation to disclose and produce relevant documents to the proper and fair functioning of the civil litigation process:

• First, the obligation to disclose all relevant documents is not limited to documents upon which the party intends to rely to establish its claim or defence. A party must disclose “every document relevant to any matter in issue”, whether or not the document helps or hurts the party’s case: r. 30.02(1);

• Second, in order to ensure that a party fully understands its obligation to disclose and produce all relevant documents, the party’s lawyer must certify in the party’s Affidavit of Documents that the lawyer has explained “the necessity of making full disclosure of all documents relevant to any matter in issue in the action” and “what kinds of documents are likely to be relevant to the allegations made in the pleadings”: Forms 30A and 30B; rr. 30.03(4) and 76.03(4). Courts expect that a party has received from its counsel legal advice that the documents it must disclose and produce are determined by their relevance to the issues pleaded, not by whether the party regards the document as favourable or harmful to its case. No doubt this advice may rub against the litigation instincts of some parties, who would prefer to “deep-six” relevant documents that might undermine their claims or defences; and

• Third, the obligation to disclose and produce is not a “one-time” obligation. It is a continuing one: Tripp v. Ontario (Ministry of Transportation) (1999), 1999 CanLII 3762 (ON CA), 123 O.A.C. 278 (C.A.), at para. 22. Where, after serving an affidavit of documents, a party comes into the possession or control of a relevant document or discovers that its Affidavit of Documents is inaccurate or incomplete, the party must “forthwith” serve a supplementary affidavit of documents “specifying the extent to which the affidavit of documents requires modification and disclosing any additional documents”: Rules of Civil Procedure,r. 30.07.

Taken together, these key rules are designed to ensure that parties make full disclosure of all relevant documents and production of all relevant non-privileged documents well in advance of the examinations for discovery permitted in Superior Court actions or, in the case of newly discovered documents, “forthwith” – i.e. within a few days – after their discovery.

45The Court goes on to address the cost to the civil process where non-compliance of a party’s disclosure obligations is at issue on a motion to strike out pleadings:

54Parties who default on their documentary disclosure and production obligations impede the ability of our civil justice system to provide the fair, timely, and cost-effective adjudication of civil disputes on their merits. Their defaulting conduct promotes the culture of complacency towards delay decried by the Supreme Court, in the context of the criminal justice system, in R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, at para. 40. As well, such conduct undermines on-going efforts to shift the Canadian civil litigation culture in the direction of providing more accessible justice to the public. As the Supreme Court pointed out in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 27, the “developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted.” (emphasis added) In Hryniak, the Supreme Court called for a civil justice system that not only provides a fair process that results in the just adjudication of disputes, but also is “accessible — proportionate, timely and affordable,” for without an accessible process, a fair process is illusory: at para. 28.

46This court put the importance of enforcing the rules governing disclosure obligations of a party in Seelster Farms Inc. v. Ontario, 2015 ONSC 908 this way:

75Parties to an action are frequently in an unequal position to either bargain or to litigate because one side holds most, if not all of the relevant information. The disclosure of documents under the Rules is often an instrument to equalize access to potential evidence, which in turn enables the litigants to fully and fairly advance their respective interests in the case. In a very real way, the entitlement to disclosure is a question of access to justice.

47Disclosure is the form of documentary discovery provided by the Rules of Civil Procedure. The scope of documentary discovery under Rule 30.02 and the corresponding obligation to disclose every document relevant to any matter at issue in the action that is, or has been, in the possession, control or power of a party in an affidavit of documents is mandatory under Rule 30.03.

48In Sobeski v. Mamo, 2011 ONSC 2153, Perell J. held that the phrase “power, control or power” as it is used in Rule 30.02(1) means that “only those documents which a party owns, or over which the party can claim sole legal possession, must be produced. For the purpose of documentary production, sole legal possession means the right and power to deal with documents, not just the fact of physical possession” (at para. 52). See also Taberner Investments Ltd. v. Price Waterhouse, [2000] O.J. No. 2596, at para. 39.

Proposed approach

49The threshold issue for the court to first determine on this motion is whether Mr. De Maria is a party who should be ordered to produce those documents Trade Capital claims are relevant. The legal framework for resolving this threshold issue is premised on Rule 30.01, which requires that a party to a civil action disclose relevant documents in his or her possession, control or power.

50If certain documents are found to be in Mr. De Maria’s possession, control or power, there are two questions that bear on his legal obligation to disclose or produce those documents. The first question is whether those documents at issue are relevant. This question involves a document focused approach, as to whether documents relate to TCHI and the alleged fraud pleaded in the amended statement of claim.

51The second question concerns whether Mr. De Maria has already produced those documents that are found relevant, or if they are within Mr. De Maria’s ability to produce.

52I approach the determination of these questions on two levels. At the first level, I propose to address the documents categorically to answer the question whether various documents are relevant, and whether Mr. De Maria should disclose or produce those documents. I will then move on to the second level to determine what documents the court should order within each category of documents, and on what documents the motion for disclosure or production should be dismissed. The determinations made on this level are shown on the Charts 1, 2 and 3 that accompany these reasons as Appendix A.

The threshold issue

53To determine the threshold issue, I must make a finding on the ability of Mr. De Maria to make the disclosure and to produce the documents at issue on this motion. This inquiry involves a consideration of the sale of TCHI to Mr. Khan in March 2015.

54Mr. De Maria has given evidence for this motion and others before it that he sold TCHI to 245 and Mr. Khan. Mr. De Maria has consistently taken the position that he has had no documents relating to TCHI in his power, possession or control since that time.

55Earlier in this action, 245 brought a motion along with Red Quest Holdings Inc. (“Red Quest”), a non-party, to vary the second Mareva Order to allow 245 to purchase the shares of TCHI back from 245. That corporation, owned by Mr. Khan, was bound by the second Mareva Order, whereas Red Quest was not.

56The shares in Red Quest are held exclusively by Mr. De Maria’s mother, Linda De Maria. Mr. De Maria had sold the shares he held in TCHI to Red Quest in 2010, but remained a director after the sale.

57In the summer of 2016, I heard a motion brought by Trade Capital to compel Mr. De Maria to answer undertakings given on the cross-examination of his affidavit given on the motion to vary. The decision on that motion is found at 2016 ONSC 5353. In paragraph 31 of that decision, I observe that Mr. De Maria deposed in his affidavit dated March 23, 2016 that Mr. Khan had demanded the sale agreement (for the shares of TCHI) be “rescinded.” He also states that Mr. Khan had advised Red Quest that he will not be making any further payments under the sale agreement.

58Mr. De Maria went on to state in his affidavit that he can advise, in his capacity as agent for Red Quest, that Red Quest consents to the recission of the sale agreement. At paragraph 33 of the decision, I observe that Mr. De Maria states at paragraph 32 of his affidavit that “he and Red Quest will assume responsibility for the continuing obligations of The Cash House Inc. under the terms of the first Mareva Order, and the Orders of Justice MacKenzie once the sale of shares has been reversed.”

59In the Ricchetti decision, the court was satisfied on the evidence filed with respect to Mr. De Maria’s motion to set aside the first Mareva Order that the transfer of the Cash House to Mr. Khan ‘has all the indicia of a “fake” transaction.’ This finding has never been successfully refuted by evidence to convince the court to make a contrary. To the contrary, the evidence given on the undertakings motion in connection with the motion to vary in 2016 only served to strengthen that conclusion. The evidence suggests that Mr. Khan was prepared to give back the shares in TCHI to Red Quest, and that Mr. De Maria was ready to resume ownership of a corporation he had always controlled. Therefore, if the transaction was fake, Mr. Khan did not become the owner of TCHI in 2015 and Mr. De Maria should still retain power and control, if not possession of TCHI documents.

60Four years later, Mr. De Maria engaged Ken Froese, a forensic accountant at Froese Forensic Partners LLP, to provide a report for use on the pending motions that would be heard by Justice Penny in August 2019. Despite Mr. De Maria’s previous evidence and the finding of the court on the propriety of the sale, a former TCHI employee, Grace Barbosa, was evidently able to provide Mr. Froese with access to 200 boxes of TCHI records in 2018 and 2019. Mr. Froese indicated in his report that he was engaged by Mr. De Maria to provide forensic services for those motions.

61Mr. De Maria takes the position that he could not direct Ms. Barbosa to deliver the TCHI records to Mr. Froese as he was no longer the owner of the corporation. He stated in evidence that he only called her to request that she provide that access. The records included electronic Quickbooks and MoneyMate records for TCHI as well as various emails and documents related to its business.

62If Mr. De Maria did not have those documents in his possession, control or power as a de facto owner or director of TCHI to direct Ms. Barbosa to deliver those documents to Mr. Froese, the fact that Ms. Barbosa delivered 200 boxes of documents to Mr. Froese must mean that she would have otherwise obtained authority from Mr. Khan.

63There is no evidence that Mr. Khan gave that authority to Ms. Barbosa. I find on the balance of probabilities that Mr. Khan did not and would not give that authority as he had already served a sentence for contempt for his refusal to comply with an Order to disclose TCHI documents in 2016. On the other hand, the inference can be drawn that Mr. De Maria would have authorized Ms. Barbosa to provide those TCHI documents to Mr. Froese because it suited his purposes at the time.

64Penny J. concluded that Mr. De Maria was principally responsible for the delay in proceeding with the action in his decision dismissing the motion of Mr. De Maria and 116 to set aside the Mareva injunction for want of prosecution. Penny J. also found that Trade Capital had been delayed in moving forward with the case because of Mr. De Maria’s “persistent failure to cause the Cash House (TCHI) and other companies to make full production of documents.” He reached this finding after making similar findings in paragraphs 27 and 28:

27This evidence, when put together with prior findings of the Superior Court in previous motions, satisfies me that Mr. De Maria retains sufficient power, possession or control over the Cash House and Cash House records, that he could cause Cash House records to be produced or made available when it suits his purpose to do so.

28The more recent evidence, including the receipt of substantial funds transferred by Mr. Khan to Mr. De Maria’s company, Vicar, supports, rather than detracts from Ricchetti J.’s conclusion that the Cash House transaction bears the indicia of a fake transaction. The provision of access to Cash House records to Mr. Froese at Mr. De Maria’s request makes it obvious that Mr. De Maria has access to these documents, if and when he wishes.

65I accept the findings made in the Ricchetti decision that the sale of TCHI to Mr. Khan or 245 in 2015 had every indication of a fake transaction, and those in the Penny decision that Mr. De Maria has access, which I take to mean power and control, if not possession of all documents and records of TCHI for the purpose of this motion. I reach this conclusion for two reasons.

66First, the authorities have now settled the principle that an element essential for a Mareva injunction, such as the risk of the removal or dissipation of assets, can be established by inference and that inference can arise from the evidence of the fraud itself: Sibley & Associates LP v. Ross, 2011 ONSC 2951 (SCJ). I extrapolate that principle to include the evidentiary basis on which to find that documents relevant to prove or disprove the fraud are within Mr. De Maria’s possession, control or power to produce in this case.

67Second, there are no other facts in evidence that would support a finding that contradicts those findings except for Mr. De Maria’s affidavit dated December 21, 2020 and his evidence when he was cross-examined on that affidavit that approximately 1,000 boxes of documents have been removed from storage.

68In paragraph 38 of his affidavit, Mr. De Maria states that sometime in late 2017 or in early 2018, he became aware that the records of TCHI previously stored at 267 Caledonia Road in Toronto had been moved to an undisclosed location. Those records are the same as the documents stored in the 1,000 boxes at 267 Caledonia Road by Mr. Khan and 245 identified in the second MacKenzie decision on May 24, 2016.

69The existence and location of those records were confirmed in a letter dated January 28, 2015 (2016) from Andrew Parley to Mr. McWilliams and Mr. Carey, counsel for Trade Capital. In that letter, Mr. Parley states that “the records relating to the operation of the Cash House during the applicable period are voluminous. My understanding is that there are over 1,000 boxes.” Later in the letter, Mr. Parley states that “These documents are stored together in a building located at 296 Rogers Rd. in Toronto”.

70267 Caledonia Road and 296 Rogers Road are described by Mr. De Maria as properties that are back to back. 267 Caledonia Road is owned by 116, which in turn is owned by Mr. De Maria and his father. According to Mr. De Maria, title to 296 Rogers Road is held in the name of his grandparents. His grandmother Rosina De Maria passed away in 2014 and his grandfather Carlo De Maria died in November 2020.

71Whether the documents relating to the Cash House business at relevant times were stored at 267 Caledonia Road or at 296 Rogers Road, they were stored in one facility or another owned by members of the De Maria family and located in close proximity to each other.

72Mr. De Maria stated at his cross-examination on February 5, 2021 that Mr. Khan kept the documents at 267 Caledonia Road after TCHI was sold to him. This evidence differs from Mr. De Maria’s earlier answers given under oath at a cross-examination on July 25, 2019 that every Cash House location had its own document storage location. This evidence was inconsistent at the time with Mr. Khan’s evidence that there was a central location for document storage in a warehouse owned by Mr. De Maria’s uncle.

73Mr. De Maria changed his evidence when he was cross-examined for this motion to say that every store had its own storage, which would then be centralized in the one warehouse. By expanding this description of how TCHI records and documents were stored, Mr. De Maria described how all documents relating to the Cash House business were brought under one roof.

74It was when Mr. Khan went to jail to serve an installment of his custodial sentence for contempt that Mr. De Maria attended at 267 Caledonia Road and discovered all the TCHI boxes had been removed. He states that Mr. Khan left the keys for 267 Caledonia Road and another property at Mr. De Maria’s office to effectively abandon both properties.

75For the purpose of this motion, I find that all documents and records of TCHI and the Cash House business were stored, or had ultimately been consolidated for storage, in one central location at 267 Caledonia Road. I also find that Mr. De Maria had power and control, if not possession of these documents and records after Mr. Khan declared his intention to “rescind” the sale agreement and surrendered his keys in 2016.

76This revelation that the records and documents of the Cash House stored at 267 Caledonia Road had been removed was first made known to Trade Capital in Mr. De Maria’s affidavit dated December 21, 2020. Despite the affidavits filed on the motions before Penny J. heard in August 2019 and the submissions made on those motions, it appears that Mr. De Maria never made reference to that fact.

77It has not escaped the notice of this court that Mr. De Maria has not stated or made any allegation that the 1,000 boxes of TCHI and Cash House records and documents have been lost or destroyed. They are only described as removed, or missing. The ability of Ms. Barbosa to provide 200 boxes of material to Mr. Froese for his report in 2019 leaves little to the imagination about how and when those boxes were removed, or who would know of their current location.

78The court is understandably reluctant to make a finding of credibility against a party to a motion, particularly on a written record only, and especially where there is no conflicting affidavit. However, in respect to the location of the missing documents allegedly moved to an undisclosed location and by unknown parties between 2017 and December 21, 2020 when he made his affidavit, I do not find Mr. De Maria’s evidence believable. He would have made it known that the documents and records of the business were missing in his affidavits filed, and when he was examined on pending motions had he detected they were missing prior to December 21, 2020.

79Mr. De Maria admitted under cross-examination that the property at 267 Caledonia Road in Toronto is situated next door to the bakery owned and operated by members of his own family. Mr. De Maria’s evidence given a short time prior to this motion that 1,000 boxes formerly stored at one location or another owned by his family have been removed without his knowledge or involvement lacks an air of reality to it.

80The evidence that the TCHI records have been removed, given in the greater context of the alleged fraud and the specific issues on this motion, lead me to draw the inference that Mr. De Maria has power and control, if not possession, of all documents relating to TCHI and the Cash House business. Any refusal to produce existing documents that this court orders Mr. De Maria to disclose or produce will result in providing a basis for the trial judge to draw adverse inferences befitting the circumstances.

Document by category

1. Documents MacKenzie J. ordered TCHI and Osman Khan to produce

81MacKenzie J. found that the documents he ordered Mr. Khan and TCHI to produce are relevant to the matters at issue between the parties in this action. This determination was made on the nature of the documents and their relevance to the claims made by Trade Capital in the action. The claims made in the amended statement of claim relate to Mr. De Maria, who at the time the causes of action arose, was an instrumental figure at TCHI. Those causes of action include claims of conspiracy, conversion and knowing receipt of funds by or through TCHI. The relevance requirement for production of these documents is therefore established.

82The motion for contempt was brought against TCHI, Mr. Khan and his corporation 245 because they failed to produce documents that Ricchetti J. ordered TCHI to produce in the first Mareva Order. In the course of the contempt motion, MacKenzie J. found that Mr. Khan and TCHI had 1,000 boxes of financial records for TCHI. Mr. Khan was ordered to produce those records through 245 as the purported purchaser of TCHI from Mr. De Maria.

83The documents at issue in the second MacKenzie decision are the same as those at issue for Mr. Khan to produce in relation to the first Mareva Order. They are therefore relevant to the allegations of fraud made against TCHI and Mr. De Maria in the action. I find it more likely than not that Mr. De Maria would have these documents in his possession, control or power to disclose and to produce if compelled to do so.

84There is no evidence on which to draw an inference that the 200 boxes that Mr. Froese had access to review were part of the 1,000 boxes. Mr. Froese examined the contents of those boxes to prepare his report dated March 14, 2019 for the motions heard later that year by Penny J. There was no further evidence from Mr. Froese or Ms. Barbosa that the 200 boxes of TCHI records, or any other documents at issue on this motion, are retained by Mr. Froese or his firm in paper or electronic form. If they are retained by Froese Forensic Partners LLP, or they have been returned to Ms. Barbosa or to Mr. De Maria himself, they are within the possession, control or power of Mr. De Maria to disclose and produce.

85Mr. De Maria has not provided an affidavit of documents that discloses the records and other documents of TCHI and The Cash House business to the standard for disclosure required under Falcon Lumber. Mr. De Maria is therefore ordered to comply with the disclosure mandated by Rule 30.02, and shall serve a further and better affidavit listing those documents under Rule 30.06(b). He is further ordered to produce all such documents listed in Schedule A of that further affidavit of documents for inspection under subrule 30.06(c) pursuant to Chart 1.

2. Documents disclosed but not produced in Mr. De Maria’s affidavit of documents sworn on November 7, 2018

86The relevance of the documents Mr. De Maria has listed in Schedule A to his affidavit of documents in November 2018 is acknowledged by Mr. De Maria himself. By operation of Rule 30.03(1) and (2)(a), he was to list those documents relevant to the matters at issue between the parties that he does not object to producing. This implies that these documents are within Mr. De Maria’s possession, control and power to produce.

87Documents in this category need not be “disclosed”, as they have already been disclosed by Mr. De Maria in his affidavit of documents dated November 7, 2018. However, it must be determined if those documents have been produced to date. The rulings for production are set out on Chart 2.

88In making any determination about ordering the production of specific documents, I have taken into account the letter written by Mr. Melfi to Mr. Carey dated February 12, 2021 that he attached as Schedule “C” to the Factum filed on behalf of Mr. De Maria and 116. Although Mr. Melfi ought to have filed an affidavit to put that letter before the court as evidence, I am accepting the letter from Mr. Melfi as an officer of the court as to the date it was sent and the recipient to whom it was addressed. In any event, Mr. Carey did not take serious objection to introducing the letter on the motion in this way.

3. Further documents requested on May 14, 2019

89The letter from Mr. Carey dated May 14, 2019 requested further documents from Mr. De Maria as a part of a larger exchange of correspondence with lead counsel Milton Davis and two other lawyers at Fogler, Rubinoff LLP, the lawyers representing Mr. De Maria at the time. In this letter, Mr. Lee repeated the request on behalf of Trade Capital for 22 categories of documents required by its own expert for the upcoming motions in August 2019. Mr. Davis responded in a letter dated June 5, 2019, addressing items 1 to 9 and setting out the position Mr. De Maria continued to take on items 9 to 22 for which Trade Capital now seeks production. Items 9 to 22 are as follows:

9. All original emails in native format for all employees of Cash House for the period 2010 to 2014 (including the select emails between Grace Barbosa and Rocky Racca as identified in Exhibit C of the Froese Report), in particular the following, but not limited to: Carlo De Maria; and, Grace Barbosa.

10. The Cash House bank statements and 116 (BCU) bank statements from November 2011 to September 2012. The Froese Report only provides Cash House and 116 bank statements for the period October 2012 to May 2013 and does not cover the entire period as it relates to this matter.

11. Supporting documents (i.e. cancelled cheques, deposit slips, wire transfers etc.) for each transaction recorded in the Cash House Bathurst location bank statements for the period November 2011 to June 2014.

12. The same information (bank statements, cancelled cheques, deposit slips, wire transfers, MoneyMate records, QuickBooks etc.) that were provided for the Cash House Bathurst location for the other Cash House locations (to show transfers of money between locations).

13. QuickBook, MoneyMate, and bank statements for Cash House (and all the locations) and 116/BCU for the period post Froese' "relevant period" (i.e. June 2013 to December 2013) to as recent as possible.

14. Supporting documents (i.e. invoices, wire transfer records; sale of money orders etc.) for the entries in MoneyMate, which includes the transactions referenced in Section 1.2 of the Froese Report, as follows: (i) Cash forwarded to & from Head Office; (ii) Proceeds from the sale of money orders; (iii) Western Union funds received & paid; (iv) Cash paid out on cashing cheques; (v) Cash received for foreign currency transactions; (vi) Payroll services; (vii) Prepaid credit cards; and, (viii) Related fees.

15. Monthly bank reconciliations for Cash House Bathurst location and all other Cash House locations for the period November 2011 to December 2014.

16. Supporting documentation to support the payment from Cash House to the Trade Capital customers as it relates to the NSF cheques.

17. Supporting documentation (such as agreements) outlining the terms and conditions (i.e. when cheques will be cashed and fees to taken) between Cash House/116 and the Trade Capital Customers.

18. Rocky Racca's records related to fulfilling his agency relationship (i.e., related to transfer of funds from customers to Cash House and back).

19. Agency agreement between Rocky Racca and the Cash House and Trade Capital Customers.

20. Account opening records for all Trade Capital Customers (the Froese Report only references Virtucall (Item 11 of the Froese scope of review).

21. Cash House customer agreements/service fee listing setting out fees for services such as cheque cashing for the Trade Capital customers and for the Money Service Business.

22. For each Trade Capital customer, the detailed transaction listing in native format from November 2011 to December 2015.

90I have ruled on which of these documents are relevant to the matters at issue between the parties in Chart 3. Mr. De Maria is ordered to serve a further and better affidavit of documents under Rule 30. 06, or a supplementary affidavit of documents under Rule 30.07 listing the documents found to be relevant. The affidavit of documents in either form shall list those documents in the appropriate Schedule as required by the Rules, and Mr. De Maria is further ordered to produce a copy of all documents listed in Schedule A under subrule 30.06(b).

Charts with rulings

91I have determined that Mr. De Maria has documents and records from TCHI and the Cash House business in his possession, control or power to disclose. I have now made rulings in Charts 1 and 3 of the documents and records Mr. De Maria is ordered to disclose in a further affidavit of documents. Charts 1,2 and 3 also show what documents he is ordered to produce, and those documents he does not have to disclose or produce.

92The ruling that grants or dismisses the relief in respect of each item requested by Trade Capital is described in the “Order” column on the relevant Chart. Where Trade Capital indicated on the motion that it was satisfied with the disclosure given, that item is marked “satisfied.”

93The disclosure and production of documents ordered pursuant to the rulings in the Charts are subject to the following terms:

(a) Documents may be produced in electronic form. All documents produced electronically shall be produced in a form that includes metadata, where available;

(b) Any ruling that requires Mr. De Maria to disclose or to produce any document or record, or any series of documents or records, also means that where he has made partial disclosure or production to date, he is required to disclose or produce the balance of that documentation to comply with this Order;

(c) A ruling that a document or record be disclosed requires that Mr. De Maria list that document in a further and better affidavit of documents or a supplementary affidavit of documents, as the case may be, in proper form that meets the requirements of Rule 30.03(2) and (3);

(d) The production of a document or record that is ordered may be served through Dropbox or a similar, widely used document sharing application, provided the productions are organized and listed in a manner that correlates to an affidavit of documents of Mr. De Maria, and are easily downloaded for making paper copies; and

(e) For any document or record Mr. De Maria does not disclose or produce, he shall provide an affidavit setting out the steps he took to obtain that document or record, the reason he cannot produce that document or record, and an explanation of what may be required to obtain that document or record to comply with this Order.

94Mr. De Maria is ordered to comply with all aspects of this Order on or before December 1, 2021.

Conclusion

95Order to issue accordingly.

96A timetable for any submissions on costs may be spoken to at the next case management conference.

Emery J.

Date: November 1, 2021

ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No. CV-15-2110-00

B E T W E E N:

TRADE CAPITAL FINANCE CORP.

Plaintiff

• and –

PETER COOK ET AL.

Defendants

APPENDIX A

CHARTS OF RULINGS AND ORDERS

Chart 1 - Cash House documents that The Cash House Inc. and Osman Khan were ordered to produce in the Order of MacKenzie J. dated January 21, 2016

Chart 2 - Documents disclosed in Carlo De Maria’s Affidavit of Documents sworn on November 7, 2018

Chart 3 - Documents requested by Trade Capital on May 14, 2019

Chart 1

Chart 1: Cash House documents that MacKenzie J. ordered for production

Documents

Ruling

Order

Annual audited financial statements or, if the financial statements have not been audited, unaudited annual financial statements from January 1, 2010 onwards (Schedule A, paragraph (a))

Disclose in proper affidavit of document form, and produce all audited financial statements for TCHI, and 116 where available for years 2010 to date. If only unaudited financial statements available, disclose and produce for those corporations for the years 2015 to date.

245 was not Mr. De Maria’s corporation.

Granted, except for financial statements of 245, which is dismissed.

Accountant's supplementary analysis, adjusting entries and notes from January 1, 2010 onwards (Schedule A, paragraph (b))

Unopposed.

Granted

Internal financial statements from January 1, 2010 onwards (Schedule A, paragraph (c))

Produce again.

Granted

Monthly financial statements from January 1, 2010 onwards (Schedule A, paragraph (d))

Produce again. The evidence of documents produced through Mr. Parley’s letters dated January 29, February 1 and 24, 2016 is unclear.

Granted

Documents

Ruling

Order

Complete and detailed general ledgers from January 1, 2010 onwards (Schedule A, paragraph (e))

Produce complete sets of these books and records.

Granted

Corporate banking agreements from January 1, 2010 onwards (Schedule A, paragraph (f))

Unopposed.

Granted

Statements for all accounts at a bank, any other financial institution or intermediary or any other entity, including cancelled cheques from January 1, 2010 onwards (Schedule A, paragraph (g))

Disclose in proper affidavit of document form these documents, including those statement from 2010 to October 2012, and after May 2013 to December 31, 2018

Granted

Corporate income tax returns with all schedules from January 1, 2010 onwards (Schedule A, paragraph (h))

Disclose and produce for TCHI and 116.

Granted

Documents

Ruling

Order

Minute books including articles of incorporation, by-laws, shareholders' register and register of officers and directors from January 1, 2010 onwards (Schedule A, paragraph (i))

Disclose and produce for TCHI and 116 for the years 2010 to date.

Granted

Shareholder agreements from January 1, 2010 onwards (Schedule A, paragraph (j))

Mr. De Maria states that he believes there were no shareholder’s agreements.

Dismissed

A full list of past and current shareholders and beneficial owners and specifying the period during which they have held such shares or a beneficial interest from January 1, 2010 onwards (Schedule A, paragraph (k))

Disclose and produce as to TCHI and 116, as it relates to the remedies Trade Capital is seeking.

The owners and shareholders of 245 are not relevant as 245 is not a party.

Granted, except as it relates to owners of 245.

All credit card statements for credit cards used for corporate purchases from January 1, 2010 onwards (Schedule A, paragraph (l))

Granted, except as these documents for 245.

Copies of T4s, T4As, contracts and records of employment for all employees from January 1, 2010 onwards (Schedule A, paragraph (m))

2015 and 2016 are relevant to the operations of TCHI and 116. These documents have been provided from 2010 to 2014. All such documents for employees of TCHI and 116 for 2010 to 2016 inclusive to be disclosed and produced.

Granted

Documents

Ruling

Order

Payroll ledgers/payroll reconciliation, list of staff earnings detailing wages, commissions, bonuses, and benefits for all employees from January 1, 2010 onwards (Schedule A, paragraph (n))

Same as #13.

Granted

Listing of declared performance bonuses, management bonuses, director bonuses and dividends from January 1, 2010 onwards (Schedule A, paragraph (o))

Same as #13.

Granted

Valuation reports (business valuation, real estate or equipment) from January 1, 2010 onwards (Schedule A, paragraph (p))

Disclose and produce as relevant to the veracity of the sale to 245, and the retention of value from the alleged fraud.

Granted

Unredacted printouts of "Moneymate loan software" daily tills for each branch for each business day of the period from January 1, 2010 onwards (Schedule A, paragraph (q))

Disclose and produce all documents, codes and passwords discussed in Mr. Parley’s letter dated February 24, 2016 and Schedule A to that letter, with updated codes and passwords to access the MoneyMate system with respect to each Cash House location and the overall operations of the Cash House business between January 1, 2010 to the present.

Granted

Documents

Ruling

Order

An accounting of all receipts and revenues, including, without limiting the generality of the foregoing, an itemization of:

(i) a list of all Other Companies, including their names, and jurisdiction of incorporation;

(ii) all amounts received by the Cash House, 245 and the Other Companies;

(iii) the source of all amounts received by the Cash House, 245, and the Other Companies, including the identity of all persons and entities who have made payment of any amounts to Cash House, 245, and the Other Companies;

(iv) the date of receipt by Cash House, 245, and the Other Companies of all such amounts;

(v) all bank accounts or other locations into which any funds received by Cash House, 245, and the Other Companies have been deposited; and,

(vi) an accounting of the disposition of all such funds received by Cash House, 245, and the Other Companies.

From January 1, 2010 onwards (Schedule A, paragraph (r))

This request for disclosure is too broad as it includes documents or information of a non-documentary nature from 245, which is not a De Maria owned corporation.

The request also seeks “an accounting” before that remedy has been adjudicated or awarded. An accounting as a remedy is not a document or set of documents for listing in an affidavit of documents. However, if TCHI or 116 has completed an accounting or a reconciliation of the accounts at issue and that document exist in paper or electronic form, that document shall be disclosed.

The disclosure, and production ordered in respect of this item is limited to the documents required of and from the specified corporations, except 245, that Trade Capital could use to either provide its own accounting or use as an evidentiary basis to seek an order for an accounting from the court.

Granted, as modified.

Chart 2

Chart 2: Documents disclosed in Carlo De Maria’s AOD sworn on November 7, 2018

Documents

Ruling

Order

August 19, 2012 letter from Grace Barbosa to Imran Kahn re: compliance action plan.

(Schedule A, item 5)

Produced by Dropbox, as described in Alexander Melfi’s letter dated February 12, 2021, subject to proof.

Satisfied

Emails from Grace Barbosa of The Cash House to various parties for October 2012 to May 2013 in zipped format.

(Schedule A, item 6)

Same as #1.

Dismissed.

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for 1160376 (O/A The Cash House) BCU 37922 USD #1 - October 2010 to October 2013.

(Schedule A, item 8(a))

Same as #1.

Dismissed

Documents

Ruling

Order

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for 1160376 (O/A The Cash House) BCU 37922 CDN #1 - chequing January 2010 to May 2016.

(Schedule A, item 8(b))

Same as #1.

Dismissed

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House Armored Transport & Service BCU 63457 - October 2010 to September 2013.

(Schedule A, item 8(c))

Same as #1.

Dismissed

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for 1160376 (O/A The Cash House) BCU Sub Accounts for October 2010 to September 2013.

(Schedule A, item 8(d))

Same as #1.

Dismissed

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228407, October 2010 to closing December 6, 2012.

(Schedule A, item 8(e))

Produce statements from October 2010 (in the absence of a correcting affidavit of documents to amend this start date to October 2012 per the letter of Alexander Melfi).

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228466 October 2010 to closing December 6, 2012.

(Schedule A, item 8(f))

Same as #7.

Granted

Documents

Ruling

Order

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228385 October 2010 to closing December 6, 2012.

(Schedule A, item 8(g))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228377 October 2010 to closing December 6, 2012.

(Schedule A, item 8(h))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228415 October 2010 to closing December 6, 2012.

(Schedule A, item 8(i))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228393 October 2010 to closing December 6, 2012.

(Schedule A, item 8(j))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228423 October 2010 to closing December 6, 2012.

(Schedule A, item 8(k))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228431 October 2010 to closing December 6, 2012.

(Schedule A, item 8(l))

Same as #7.

Granted

Documents

Ruling

Order

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5228474 October 2010 to closing December 6. 2012.

(Schedule A, item 8(m))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House TD account 5211347 October 2010 to closing December 6, 2012.

(Schedule A, item 8(n))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House Scotiabank account 1461818 October 2010 to closing February 2013.

(Schedule A, item 8(o))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House Scotiabank USD account 0746118 October 2010 to closing February 2013.

(Schedule A, item 8(p))

Same as #7.

Granted

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House RBC account 100-240-1 opening January 25 to closing April 16, 2013 with no activity.

(Schedule A, item 8(q))

Produce again, in the absence of proof these appendices to the Froese report have been produced already.

Granted

Documents

Ruling

Order

Bank statements downloaded in hard copy or original copies, with copies of cancelled cheques where applicable, for Cash House BCU 66701 Sub Accounts for April 2013 to September 2013.

(Schedule A, item 8(r))

Same as #1.

Dismissed

March 7, 2014 Review Engagement Report from Formusa Zuccaro LLP listing compliance deficiencies, and an October 17, 2016 letter from Formusa Zuccaro LLP to Carlo re: relationship between Cash House and 1160376 Ontario Limited.

(Schedule A, item 10)

Same as #1.

Satisfied

Various pdf files containing Rocky Racca related documents. (Schedule A, item 11)

Same as #1.

Dismissed

Chart 3

Chart 3: Trade Capital’s requests for documents dated May 14, 2019 – items 9-22

Item

Documents

Ruling

Order

All original emails in “native format” for all employees of Cash House for the period 2010 to 2014 (including the select emails between Grace Barbosa and Rocky Racca as identified in Exhibit C of the Froese Report), in particular the following, but not limited to:

(i) Carlo De Maria; and,

(ii) Grace Barbosa.

Disclose and produce. These documents are relevant to Trade Capital’s claims of conspiracy, conversion, unjust enrichment and knowing receipt of, or assistance with converting trust funds.

Granted

The Cash House bank statements and 116 (BCU) bank statements from November 2011 to September 2012. The Froese Report only provides Cash House and 116 bank statements for the period October 2012 to May 2013 and does not cover the entire period as it relates to this matter.

Disclose and produce, subject to the provision in Chart 2, #7.

Granted

Supporting documents (i.e. cancelled cheques, deposit slips, wire transfers etc.) for each transaction recorded in the Cash House Bathurst location bank statements for the period November 2011 to June 2014.

Disclose and produce. These documents for TCHI and 116 are relevant to the claims made by Trade Capital involving TCHI ,116 and himself for conspiracy, conversion, unjust enrichment, and knowing receipt of, and assisting with converting trust funds.

Granted

The same information (bank statements, cancelled cheques, deposit slips, wire transfers, MoneyMate records, QuickBooks etc.) that were provided for the Cash House Bathurst location for the other Cash House locations (to show transfers of money between locations).

Same as #11.

Granted

Item

Documents

Ruling

Order

QuickBook, MoneyMate, and bank statements for Cash House (and all the locations) and 116/BCU for the period post Froese' "relevant period" (i.e. June 2013 to December 2013) to as recent as possible.

Disclose and produce, as these documents are relevant to liability issues.

Granted

Supporting documents (i.e. invoices, wire transfer records; sale of money orders etc.) for the entries in MoneyMate, which includes the transactions referenced in Section 1.2 of the Froese Report, as follows:

(i) Cash forwarded to & from Head Office;

(ii) Proceeds from the sale of money orders;

(iii) Western Union funds received & paid;

(iv) Cash paid out on cashing cheques;

(v) Cash received for foreign currency transactions;

(vi) Payroll services;

(vii) Prepaid credit cards; and,

(viii) Related fees.

Disclose and produce as these documents relate to TCHI or 116 between 2010 to 2016.

Granted

Monthly bank reconciliations for Cash House Bathurst location and all other Cash House locations for the period November 2011 to December 2014.

Same as #11.

Granted

Supporting documentation to support the payment from Cash House to the Trade Capital customers as it relates to the NSF cheques.

Same as #11.

Granted

Supporting documentation (such as agreements) outlining the terms and conditions (i.e. when cheques will be cashed and fees to taken) between Cash House/116 and the Trade Capital Customers.

Disclose and produce, as these documents are relevant to liability as well as damages.

Granted

Rocky Racca's records related to fulfilling his agency relationship (i.e., related to transfer of funds from customers to Cash House and back).

Disclose and produce, as these documents are relevant to contractual obligations and relationship based duties allegedly breached.

Granted

Item

Documents

Ruling

Order

Agency agreement between Rocky Racca and the Cash House and Trade Capital Customers.

Same as #18.

Granted

Account opening records for all Trade Capital Customers (the Froese Report only references Virtucall (Item 11 of the Froese scope of review).

Disclose and produce these documents from TCHI and 116, as they are relevant to liability and damages.

Granted

Cash House customer agreements/service fee listing setting out fees for services such as cheque cashing for the Trade Capital customers and for the Money Service Business.

Same as #20.

Granted

For each Trade Capital customer, the detailed transaction listing in “native format” from November 2011 to December 2015.

Same as #20.

Granted

COURT FILE NO.: CV-15-2110-00

DATE: 2021 11 01

SUPERIOR COURT OF JUSTICE - ONTARIO

B E T W E E N:

TRADE CAPITAL FINANCE CORP.

Plaintiff

• and –

PETER COOK also known as PETER WILLIAM COOK, MARC D’AOUST also known as JEAN MARC D’AOUST, THOMAS BARKER also known as THOMAS RICHARD BARKER (personally and carrying on business as LC EXCHANGE, GLOBAL MEDICAL and GREENLINK CANADA GROUP), ROCKY RACCA, BRUNO DIDIOMEDE also known as BRUNO DIAIOMEDE, ALAN KEERY also known as ALAN JOHN KEERY, CHRIS BENNETT JR. also known as CHRIS BENNETT also known as CHRISTOPHER BENNETT (personally and carrying on business as CJR CONSULTING), TODD CADENHEAD, DAYAWANSA WICKRAMASINGHE, BONNY LOKUGE also known as DON BONNY LOKUGE, VIRTUCALL INC., VIRTUCALL INTERNATIONAL LLC, DEBT RESOLVE-MORTGAGE FUNDING SOLUTIONS INC. carrying on business as DEBTRESOLVE INC., THE CASH HOUSE INC., 1160376 ONTARIO LIMITED operating as THE CASH HOUSE, 2242116 ONTARIO INC. carrying on business as SUPERIOR MEDICAL SERVICES INC. and SUPERIOR MEDICAL SERVICES, CARLO MR. DE MARIA also known as CARLO VINCE DE MARIA also known as CARLO VINCENT MR. DE MARIA also known as CARLO VINCENZO MR. DE MARIA, MATTEO PENNACCHIO, FRANK ZITO also known as FRANCESCO ZITO, SIMONE SLADKOWSKI, JOBEC TRADE FINANCE INC., 1461350 ONTARIO INC., 2299430 ONTARIO INC., WF CANADA LTD., JOBEC INVESTMENTS RT LTD., GREEN LINK CANADA INC., 2339989 ONTARIO INC., 2252364 ONTARIO INC., 2224754 ONTARIO LTD., 6980023 CANADA INC. operating as LIVING BENEFITS and MILLWALK ENTERPRISES INC., OAK HILLS WATER DURHAM INC., JOSHUA COOK, ELIZABETH COOK, REBECCA COOK, MARK PINTUCCI, MARCO SANTONATO also known as MARC SANTONATO and NEW ERA RESOLUTIONS & CONSULTING INC.

Defendants