Court File and Parties

COURT FILE NO.: CV-22-0108-00 DATE: 2022 04 26 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: KASHMIR KAUR RANDHAWA and SUKHDEV SINGH RANDHAWA – and – JASWANT DASS, GURPREET DASS and 5048942 ONTARIO INC.

BEFORE: Daley J.

COUNSEL: Bhupinder Nagra, for the Plaintiffs Kevin Sherkin and Nathan Lean, for the Defendants

HEARD: In writing

COSTS ENDORSEMENT

[1] The defendants successfully moved for an order discharging a Certificate of Pending Litigation (“CPL”) – See: Randhawa v. Dass, 2022 ONSC 1554.

[2] Having been successful on their motion, the defendants now seek costs on a substantial indemnity basis in the all-inclusive sum of $31,122.07.

[3] It is submitted on behalf of the plaintiffs that if costs are awarded to the defendants, they should be payable in the order of $3,000-$3,500, all-inclusive.

[4] As the successful parties on the motion to discharge the CPL, the defendants are presumptively entitled to costs. The plaintiffs, by their submissions acknowledge this, however, there remains to be determined the appropriate scale of costs and quantum of same.

[5] The plaintiffs proceeded by way of an ex parte motion and were granted leave to register a CPL on the title to the subject property and following service of the order upon the defendants, the defendants then moved to discharge the CPL primarily on the basis of the plaintiffs’ nondisclosure of material facts and information on the ex parte motion. It was further urged on behalf of the defendants that in any event the plaintiffs had no interest in the subject property as was asserted before the motion judge.

[6] My reasons for decision on the motion to discharge the CPL set out, in brief terms, the relevant history to the motion for leave to register the CPL as well as the material facts which I concluded were not properly disclosed to the motion judge.

[7] It is submitted on behalf of the defendants that as a result of the material nondisclosure by the plaintiffs, the court should exercise its discretion and award costs of the motion on a substantial indemnity basis.

[8] Motions without notice seeking leave to register a CPL are provided for in rule 42.02 (2) of the Rules of Civil Procedure.

[9] However, this rule is governed by rule 39.01 (6) as to the nature of the evidence to be adduced on an ex parte motion.

[10] Rule 39.01 (6) provides as follows:

39.01 (6) – Full and fair disclosure on motion or application without notice – Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside an order obtained on the motion or application.

[11] The evidence adduced before the motion judge clearly led the court to conclude that there would be serious consequences in the event leave was not granted to register a CPL. Furthermore, implicit in the court’s decision to grant leave was a conclusion that the court’s immediate intervention was necessary and that granting the order sought was in the interests of justice.

[12] In determining the appropriate scale and quantum of costs, the court’s discretion is fully engaged as provided for in section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and rule 57 of the Rules of Civil Procedure.

[13] It has been long accepted that a party proceeding by way of an ex parte a motion for injunctive relief and any other extraordinary remedy must meet the highest standard of candour and disclosure to the court: Yang v. Mao, [1995] O.J. No. 1323 (Winkler J, as he then was). In my view this heightened standard of full and frank disclosure applies equally to an ex parte motion seeking leave to register a CPL.

[14] As detailed in my endorsement of March 10, 2022, granting the defendants motion, I outlined the material facts and information which were in the possession of the plaintiffs, and which were not disclosed by the plaintiffs on their motion: see paras. [4] to [12] of decision.

[15] A material fact is one that the judge may need to know in coming to her or his decision and that if not disclosed may affect the outcome of the motion: Pazner v. Ontario, [1990] O.J. 1089.

[16] While there remains a dispute and controversy between these parties as to whether certain documents were executed and what effect those documents may have had so far as the plaintiffs’ claims are concerned – the plaintiffs’ evidentiary record before the motion judge failed to disclose material evidence as referenced in my decision. It is incumbent upon a party moving without notice to ensure that the evidentiary record submitted is fair, balanced and discloses all material evidence, including evidence that may be relied upon by the absent party. Only after making full and frank disclosure, it is open to the moving party to demonstrate that, on the whole of the evidentiary record available, the court’s discretion should be exercised in granting leave to register a CPL.

[17] In this case, the evidentiary record adduced on behalf of the plaintiffs was incomplete and misleading in that it failed to disclose facts that would likely be relied upon by the defendants in opposing the plaintiffs’ motion including their assertion that they had an interest in the subject property such that they would be entitled to register a CPL.

[18] Rule 57.01 (1) sets out several considerations that are to be examined by the court when exercising its discretion under section 131 of the Courts of Justice Act.

[19] The considerations in rule 57.01 (1) inform the level and quantum of costs in this matter.

[20] The plaintiffs’ action seeks a variety of relief allegedly based on oppressive corporate conduct on the part of the defendants and their principles and the plaintiffs further seek damages in the sum of $10 million.

[21] Thus, the claims being asserted by the plaintiffs are very significant in terms of the relief being sought and as well the quantum of damages claimed.

[22] Given the now fully disclosed evidentiary history of the relationship between the plaintiffs and the defendants, this action and the CPL motion are relatively complex both factually and at law.

[23] As to the importance of the issues at stake on the CPL motion, the moving defendants are in the process of developing the subject property and the evidence on the motion was uncontradicted that they have financing in place in the order of $20 million, which would be jeopardized as a result of the registration of the CPL. Flowing from that the defendants would be unable to continue the development of the subject property if they were found to be in breach of their financing arrangements. Thus, apart from the significant claims being made on behalf of the plaintiffs, the registration of the CPL posed a very serious impediment to the defendants in their continued development of the subject property.

[24] Although failure to make full and frank disclosure of material facts on an ex parte motion is not expressly identified as a consideration in rule 57.01 (1), pursuant to section 131 of the Courts of Justice Act, the court has the jurisdiction to award substantial indemnity costs as a result of the plaintiffs’ conduct in introducing a misleading and incomplete evidentiary record before the motion judge.

[25] For the reasons set out, I have concluded that this is an exceptional case where costs should be awarded to the defendants on a substantial indemnity basis as a result of the plaintiffs’ clear breach of their obligations to make full, fair and frank disclosure of material facts on their ex parte motion.

[26] As to the quantum of costs, it is urged on behalf of the plaintiffs that the costs sought by the defendants are excessive and at a level that were not reasonably contemplated by the plaintiffs in the event they were unsuccessful in defending the motion.

[27] Having considered the costs outline and submissions filed on behalf of the defendants, and absent any specific dispute by counsel on behalf of the plaintiffs as to the time spent by counsel for the defendants on this motion, I am satisfied that the costs as outlined on a substantial indemnity basis, are reasonable, fair and in keeping with the issues at stake on the defendants’ motion when taking into account the nature of this litigation, the amounts in dispute and the financing in place with respect to the property.

[28] Furthermore, there is necessarily no symmetry between the time spent by counsel for the defendants in bringing this motion as compared to the time spent by counsel for the plaintiffs in responding to it. Counsel for the defendants assembled a substantial evidentiary record to fill in the gaps in the material facts relevant to the plaintiffs’ claim of entitlement to a CPL.

[29] No issue was taken by the plaintiffs with respect to the hourly rates charged by counsel for the defendants, specific time spent devoted to this motion nor with respect to any disbursements incurred.

[30] Notably, senior counsel reasonably assigned aspects of this case on the defendants’ motion to a more junior counsel with a lower hourly billing rate.

[31] Therefore, I have concluded that the defendants are entitled to their costs of this motion on a substantial indemnity basis in the amounts set out in their costs outline namely in the sum of $31,122.07 which is payable by the plaintiffs, jointly and severally. These costs shall be paid within 30 days from the date of release of this endorsement.

Daley, J. Released: April 26, 2022