Court File and Parties

COURT FILE NO.: CV-20-652919 DATE: 20210201 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Rogers Communications Canada Inc. AND: Active Security and Cable Inc. and Naresh Mohabir

BEFORE: Mr. Justice Chalmers

COUNSEL: M. Byers and J. Schneer, for the Applicant T. Nguyen and A. Bogossian, for the Respondents

HEARD: Telephone case conference

ENDORSEMENT

[1] Rogers Communications Canada Inc. (“Rogers”) brings this Application against Active Security and Cable Inc. (“Active Security”) and the principal of that company, Naresh Mohabir (“Mohabir”). Rogers states that on November 5, 2020, the sum of $876,095.04 (the “Funds”), was paid to Active Security was made in error. In this Application, Rogers seeks, among other things, a mandatory order compelling Active Security to return the Funds, a declaration that the Funds are held by the Respondents in a constructive trust for the benefit of the Applicant, and an injunction.

[2] Rogers engaged Active Security as a contractor to service its network infrastructure between 2013-2016. In 2016, Rogers terminated its contract with Active Security following an investigation in which it concluded that Active Security had engaged in conduct that included improperly charging Rogers by inflating amounts, billing Rogers for activities that had not actually been performed, and billing Rogers for activities which it could not substantiate had been completed. At the time the contract was terminated, there were unpaid Active Security invoices. Rogers put a hold on the payment of the disputed invoices. On December 4, 2017, Active Security commenced an action against Rogers; Court File No. CV-17-587752 (the “Action”). In the Action, Active Security is seeking damages of $1.45 million on the basis of breach of contract and unjust enrichment. Rogers defended the Action and brought a Counterclaim in which Rogers seeks damages for fraud, breach of contract, conversion and unjust enrichment in the amount of $1.8 million.

[3] The Examinations for Discovery in the Action were scheduled for December 2, 2020. According to Rogers, it learned for the first time during the discoveries that the payment of the Funds had been made to Active Security. Rogers conducted an internal investigation and learned that during routine maintenance of the Shared Services department of Rogers the hold on the invoices was temporarily lifted. After the service was completed, the status was not changed back. As a result, there was an automatic payment of the unpaid invoices on November 5, 2020. Rogers argues that Active Security must have known the payment was made in error when there was no involvement of counsel and the parties continued with the litigation. Active Security and Mohabir take the position that the Funds are theirs and they are entitled to make use of the money. Active Security argues that the fact Rogers paid the invoices does not necessarily lead to the conclusion that the payment was made in error.

[4] The Applicant brought a motion seeking an interim order for the payment of the Funds into court, for the benefit of this Application. By endorsement dated December 11, 2020, Justice Myers ordered a case conference to take place before me at 3 p.m. on December 11, 2020. Justice Myers put the parties on notice that under R. 50.13(6) I may make any interlocutory order concerning scheduling, including interim terms if so advised. No order was made pursuant to R. 77 to have the Application subject to case management.

[5] At the case conference on December 11, 2020, I made an interim order enjoining the Respondents from disbursing any money from the Funds. I also ordered that if monies had been disbursed, the Respondents were to provide an accounting of how the monies were disbursed and to whom and in what amounts. On December 15, 2020, counsel for Active Security advised that Active Security received the Funds on November 5, 2020. It then transferred the Funds to 2449920 Ontario Ltd., a company controlled by Mohabir. All but $19,515.22 was disbursed by 2449920 Ontario Ltd. to creditors of Active Security (which included Active Security’s lawyer) and Mohabir’s family members.

[6] On December 21, 2020, I made a further order with respect to the Funds. On the consent of the parties, I ordered the lawyer for Active Security and Mohabir’s family members to return certain monies to Active Security and that Active Security pay the money into court for the benefit of this Application. A total of $382,868.46 was ordered paid into court. I also ordered that the Respondents are prohibited from directly or indirectly, selling, conveying, encumbering or in any way disposing of certain equipment, pending the outcome of this Application.

[7] The Applicant requested this further case conference to schedule the Application. The Respondents raise several objections to scheduling the Application at this time.

[8] The Respondents argue that as the case management Judge I am precluded from hearing the Application. I was referred to R. 77.06 which provides that a judge designated as a case management judge shall not preside at the hearing of the Application except with the consent of the parties. The Respondents do not consent to me hearing the Application. It is my view that R. 77.06 does not apply. There was no order made pursuant to R. 77 to have the Application subject to case management and I was not appointed as the case management judge. I was directed to be preside over a case conference on December 11, 2020 at which time I scheduled the interim injunction. Although I am of the view that I am not prohibited from hearing the Application I acknowledge I have been performing some of the same functions as a case management judge in scheduling the motions and hearing the injunction. I will not hear the Application.

[9] The Respondents also argue that it would be more appropriate to schedule the Application through Civil Practice Court rather than on this case conference. It is the Respondents’ position that I am precluded from hearing the Application because I am performing a case management function. The scheduling and timetabling of the Application is a case management function. I am of the view that it is more efficient that I schedule the Application at this time than to require the parties attend at CPC. I schedule the Application for May 4, 2021 for a full day appointment. The following timetable is established:

a. Responding record to be delivered by March 5, 2021;

b. Cross examinations on affidavits to be completed by March 23, 2021;

c. Rule 39 examinations to be completed by April 9, 2021;

d. Applicant’s factum to be delivered by April 20, 2021;

e. Respondents factum to be delivered by April 27, 2021;

f. Reply factum to be delivered by April 30, 2021; and

g. Hearing May 4, 2021.

[10] The Respondents also argue that the Application should not be scheduled until after the Respondents bring a motion to consolidate this Application with the Action. The Respondents take the position that both the Application and the Action involve the same subject matter, namely the disputed invoices. Rogers states that the two issues are separate and the fact that a payment was erroneously made has no impact on whether the invoices tendered by Active Security were valid. It is my view this motion can be heard before the Application. It is appropriate that I hear the motion to consolidate. I schedule the motion to be heard by me on March 16, 2021 for a two-hour appointment. The Respondents shall deliver their motion record by February 26, 2021. Rogers shall deliver its responding motion record by March 5, 2021.

[11] If any issues arise with respect to the schedule for the Application or the motion to consolidate, the parties may arrange a further case conference with me.

Date: February 1, 2021