COURT FILE NO.: CV-15-522676

DATE: 20220919

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Syed Abid Hussain and Rubina Abid

Plaintiffs

– AND –

Daya Singh Flora and Balbir Flora

Defendants

Simon Bieber and Rebecca Kennedy, for the Plaintiffs

Doug Bourassa, for the Defendants

HEARD: May 24, 2022 – June 3, 2022

reasons for judgment

E.M. Morgan J.:

[1] This is a trial – essentially a credibility contest – between two close friends, or, unfortunately, former friends.

[2] For more than a decade, the Plaintiff, Sayed Abid Hussein, and the Defendant, Daya Singh Flora, were close enough that Mr. Hussein freely helped out Mr. Flora with his business and Mr. Flora provided a place for Mr. Hussein to stay when he temporarily separated from his spouse. In fact, they were such good friends that they invested in property together without bothering to document who owns what percentage.

[3] The inevitable dispute over ownership of one of the properties – 869 Broadview Ave., Toronto (the “Broadview Property”) – has now set the friends at odds and spawned this litigation.

I. Background of the dispute

[4] Mr. Hussein and Mr. Flora met in 2001. Mr. Flora, who is originally from India, was already established in the real estate business in Canada. His business consisted for the most part of buying older properties, renovating them, and leasing them out. Mr. Hussein was newly arrived in Canada, having been a career military officer and then a lawyer in Pakistan. He was contemplating re-qualifying as a lawyer in Ontario (and after a few years did re-qualify), but first became a licensed mortgage broker dealing mostly with investment properties.

[5] As indicated, Mr. Hussein and Mr. Flora eventually began investing together. Their first purchase was a property located at 2454 Kingston Road, Toronto (the “Kingston Property”), followed by the Broadview Property. The Kingston Property was registered on the name of a company wholly owned by Mr. Hussain’s wife, the Plaintiff Rubina Abid, while the Broadview Property was registered on Mr. Flora’s name. In a nutshell, Mr. Hussain claims that there was an agreement between him and Mr. Flora that Mr. Hussain had a 50% ownership interest in the Broadview Property, while Mr. Flora claims that their 50-50 agreement was only with respect to the Kingston Property.

[6] Mr. Hussain testified that Mr. Flora found the Kingston Property and wanted to purchase it. As Mr. Flora was unable to obtain financing for the purchase on his own, he asked Mr. Hussain and Ms. Abid, to help him acquire the property. Mr. Hussain hesitated in accepting this request as he did not consider the Kingston Property to be a good investment.

[7] Eventually, after Mr. Flora paid a visit to Mr. Hussein’s and Ms. Abid’s home to personally ask them to reconsider, an agreement between them was struck. The Kingston Property was purchased on behalf of both Mr. Flora and Mr. Hussain. Title was taken in the name of a corporation owned by Ms. Abid, as she guaranteed the loan that was obtained for the purchase.

[8] Mr. Hussain gave evidence that he and his spouse were not required to contribute any money to the purchase of the Kingston Property. He testified that the arrangement was that by guaranteeing the loan needed to acquire the property and by Mr. Hussein agreeing to manage it once purchased, he and Ms. Abid would receive a 40% beneficial interest in it.

[9] Mr. Flora testified that Mr. Hussain and Ms. Abid were required to pay 40% of the acquisition costs in order to obtain their 40% interest. It was his position at trial that payment of 40% of the purchase price is the only commercially reasonable way that Mr. Hussein and Ms. Abid could have acquired a 40% interest in the Kingston Property. Mr. Flora testified, and Defendants’ counsel submits, that no one would give away a 40% interest in any property without a financial investment by the recipient of that interest.

[10] It is a common understanding between the parties that the cost of acquiring the Kingston Property breaks down as follows: a $10,000.00 deposit paid by Mr. Flora, a second $15,000.00 deposit paid by Mr. Flora, a further $124,000.00 paid on closing by Mr. Flora, and $59,400.00 paid by Mr. Flora in order to put bank financing in place. Mr. Flora testified that Mr. Hussein was to repay him 40% of the overall acquisition cost once he succeeded in selling some property he owned in Pakistan. That repayment, if made by Mr. Hussein and/or Ms. Abid, would come to $83,360.00.

[11] The two sides are in agreement that the amount Mr. Hussein eventually paid Mr. Flora was $69,000. That payment was delivered in three instalments: a $30,000.00 cheque in December 2010, another $20,000.00 cheque in May 2011, and a cash payment of $19,000.00 in August 2011.

[12] The uncontested evidence at trial was that the Broadview Property was purchased in early 2010 by Mr. Flora taking an assignment of an Agreement of Purchase and Sale already entered into by an acquaintance of his. The overall purchase price was $625,000.00.

[13] According to Mr. Flora’s testimony, which is not contested by Mr. Hussein, the out-of-pocket costs of the Broadview Property entailed a $50,000.00 deposit paid by Mr. Flora, a further $113,250.00 paid by Mr. Flora on closing, less $23,250.00 refunded to Mr. Flora by the assignor. This total expense of $140,000.00 is confirmed by the amended statement of adjustments and trust ledger statement enclosed in the reporting letter from Shil K. Sanwalka, the lawyer who acted on the purchase of the Broadview Property. The balance of the purchase price was paid by obtaining a first mortgage.

[14] It is Mr. Hussein’s evidence that the $69,000.00 that he paid to Mr. Flora was for an agreed-upon 50% interest in the Broadview Property. He explained that the money he made by selling property in Pakistan fell short by $1,000 of his half of the acquisition cost of $140,000.00, which was to be adjusted for later. It is Mr. Hussain’s understanding that he paid Mr. Flora $69,000.00 for a 50% interest in the Broadview Property.

[15] Mr. Hussain’s position is that this is the only commercially reasonable explanation for his $69,000.00 payment. His counsel submits that as a matter of simple mathematics, the $69,000 payment reflects an amount that is almost exactly what was required to obtain a 50% interest in the Broadview Property. On the other side of the coin, that amount would fall far short of the $83,360.00 he would have had to pay to purchase a 40% interest in the Kingston Property.

[16] As indicated above, Mr. Flora testified, and his counsel submits, that Mr. Hussain’s understanding must be that he got a 40% interest in the Kingston Property for free, which is a deal that no one ever gets or could expect to get. On the other hand, Mr. Hussein testified, and his counsel submit, that since the Broadview Property was the only one of the two properties that Mr. Hussein actually wanted to invest in, it is the only one for which he would have made any payment at all.

II. The credibility contest

[17] As indicated, Mr. Flora claims that Mr. Hussein received 40% ownership of the Kingston Property because he contributed funds to its acquisition. But the fact is that Mr. Hussein never gave Mr. Flora more than $69,000.00, which would amount to roughly 33% of the cost of the Kingston Property. Mr. Flora provided no explanation for why he would have credited Mr. Hussein with 40% of a property for which Mr. Hussein paid only 33% of the acquisition price.

[18] On the other hand, Mr. Hussein claims that he owns 50% of the Broadview Property because he contributed just about 50% of the acquisition price, less a minor $1,000 shortfall in his which he freely concedes must be adjusted for. Mr. Flora confirmed in cross-examination that the out-of-pocket costs to acquire the Broadview Property amounted to $140,000.00. Mr. Hussain’s investment of $69,000 for a one-half interest in a property that cost the two partners a $140,000 investment makes mathematical sense.

[19] Moreover, Mr. Hussain’s explanation for having an unpaid-for 40% interest in the Kingston Property, while unusual, makes some sense in the context of the two parties’ relationship. Mr. Hussein testified, and Mr. Flora concedes, that Mr. Hussein often helped his friend with his properties whether or not Mr. Hussein had invested in them or held any interest in them. Although Mr. Flora was a longer time in Canada and was already established in the real estate business when Mr. Hussein arrived, Mr. Flora appears to have needed Mr. Hussein’s help in a number of respects.

[20] It is certainly the case that Ms. Abid’s guaranteeing of the mortgage on the Kingston Property and Mr. Hussein’s agreeing to manage that property were instrumental to its acquisition. Whether Mr. Hussein’s and Ms. Abid’s services were, objectively speaking, worth 40% of the Kingston Property’s value is a matter of conjecture. But it is at least possible, and, in any case, Mr. Hussain’s evidence was that these services were subjectively worth 40% of the Kingston Property to Mr. Flora.

[21] Whatever else one can say about the arrangement described by Mr. Hussain, his explanation for his and Ms. Abid’s interest in the Kingston Property is more credible than Mr. Flora’s explanation, which makes no real sense at all. Mr. Flora testified that the services provided by Mr. Hussain and Ms. Abid were worth nothing in monetary terms, leaving him with no explanation at all as to why Mr. Hussein paid 33% of the price and received 40% of the ownership.

[22] Overall, Mr. Flora’s position seems to have been crafted to meet the circumstances of the case as it evolved. By contrast, Mr. Hussein’s position has been consistent since the outset of this matter.

[23] Likewise, Mr. Hussein’s testimony was delivered in a forthright and credible manner, and he was willing to concede his marital difficulties and his business naivety despite the fact that those are not his proudest moments. By contrast, Mr. Flora was willing to concede very little that he did not think would advance his case. Indeed, at the outset of his testimony he was not even willing to acknowledge that he and Mr. Hussein had been friends, until it was put to him that he and his spouse gave Mr. Hussein a place to sleep and a roof over his head when he temporarily separated from his spouse.

[24] Moreover, the record shows that Mr. Flora has contradicted his own position on the ownership of the two properties on a number of occasions. In his examination for discovery, Mr. Flora asserted that he “made hundred percent payment on [the Kingston Property], but [Mr. Hussain] didn’t put even one penny in there.” In an affidavit dated September 5, 2013, which Mr. Flora swore for the purpose of registering a caution on title to the Kingston Property, Mr. Flora stated that, “I am the one who contributed [to the Kingston Property] all of the proceeds that were not from a mortgage for the initial acquisition of the subject property.” At the time that the September 5, 2013 affidavit was signed, Mr. Flora had received the $69,000.00 payment from Mr. Hussain; despite that, Mr. Flora stated in his affidavit that it was he who had himself “contributed all of the proceeds that were not from a mortgage”.

[25] In yet another affidavit dated September 6, 2013 and filed in the context of litigation over the Kingston Property, Mr. Flora deposed that, “The natural Defendants took my money, brought [sic] property with my money, the Kingston Road property, set up a corporation, transferred the property into that company or took title to the property in the company’s name (the Defendant corporation), and I have received no benefit or bonus whatsoever from parting with my money for the subject property.” Since, again, this affidavit was affirmed after Mr. Flora received the $69,000.00 payment from Mr. Hussein, the upshot of the affidavit must be that those funds were for the Broadview Property. There can be no other explanation for Mr. Flora’s assertion that Mr. Hussein and Ms. Abid bought the Kingston Property with Mr. Flora’s money and with no contribution from themselves.

[26] In a number of pieces of correspondence from Mr. Flora’s former counsel to Mr. Hussein’s former counsel, including in letters dated May 17, 2013 and July 25, 2013, Mr. Flora specifically claimed to be entitled to 100% of the Kingston Property and demanded that the entire property be transferred to him. In cross-examination, Mr. Flora was unable to provide any explanation as to how he could claim a 100% share ownership of the Kingston Property if, as he says, the $69,000.00 payment he received from Mr. Hussain had been for that property.

[27] Furthermore, in separate litigation over the Kingston Property, Mr. Flora swore under oath that the $69,000 paid to him by Mr. Hussain was not for an interest in the Kingston Property. In his examination for discovery in the Kingston Property litigation, Mr. Flora deposed: “I made hundred percent payment on it [Kingston Property], but he didn’t put even one penny in there… I’m saying he never put a penny in the property and I put it on the property, all the money, so.”

[28] These sworn statements were put to Mr. Flora in cross-examination. Understandably, he was asked how he could now say that Mr. Hussain’s $69,000 was in respect of his investment in the Kingston Property and not the Broadview Property.

[29] Mr. Flora’s response was that he didn’t understand what he was saying when those previous statements in the Kingston Property litigation were made. Frankly, that is not a believable explanation. Mr. Flora is a successful businessman whose English is fluent and who to all appearances understood every document or statement put to him at trial.

[30] What his answer signals is not that he did not understand what he was saying and writing at the time. Rather, it suggests that what he did not understand was how those statements made in the Kingston Property litigation might work against him in the Broadview Property litigation.

[31] Mr. Flora’s explanations reinforce my impression that he will say anything if he thinks at that moment that it will advance his position. Mr. Flora’s attempts to explain away the contents of his affidavits and his lawyer’s correspondence lead me to the conclusion that Mr. Flora’s evidence on crucial points – especially on the financial interest of Mr. Hussein in the properties that they owned together – cannot be relied on.

[32] Mr. Hussein, on the other hand, was a rather impressive witness who provided what I conclude to be reliable evidence. He did not shy away from his own foibles and errors but was forthright in providing a cogent explanation for the various transactions in issue, including all of their oddities. True to his professional background, he testified with some military precision on the details of the transactions between himself and Mr. Flora, and with a lawyer’s care for truth and accuracy.

[33] The documentary record produced at trial, together with the testimony of the two primary witnesses, all lead me to conclude that Mr. Hussein and Ms. Abid paid for and own a 50% interest in the Broadview Property. They also owned a 40% interest in the Kingston Property, which I understand has now been sold and the proceeds divided without prejudice to my determination of the ownership of the Broadview Property.

[34] There is one other piece of evidence that reinforces this conclusion. Mr. Flora filed an annual report to the Canada Revenue Agency entitled “Statement of Real Estate Rentals” beginning in 2011, the year following the purchase of the Broadview Property. The 2011 Statement was, in fact, the only one prepared by Mr. Flora and his bookkeeper prior to the ownership dispute erupting between the parties, and so it can be relied on as the one CRA filing in respect of the Broadview Property that is not tainted by Mr. Flora’s position in the dispute with Mr. Hussain.

[35] The 2011 Statement of Real Estate Rentals, prepared by Mr. Flora’s bookkeeper on Mr. Flora’s instructions, expressly states that Mr. Flora owns 50% and Mr. Hussain owns 50% of the property, and credits each of them with one-half of the rental income and one-half of the expenses. It is as close to a ‘smoking gun’ as one could produce in a case of this nature, and entirely supports Mr. Hussain’s claim while it entirely undermines Mr. Flora’s claim.

[36] I am aware that in concluding that Mr. Hussain owns an undocumented 50% interest in the Broadview Property, the bar on undocumented property interests found in section 4 of the Statute of Frauds, RSO 1990, c S 19, may be triggered. That section provides that no action for an interest in land is enforceable “unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.”

[37] That said, I am also aware that equity will not permit the Statute of Frauds “from being used as a variant of the unconscionable dealing which it was designed to remedy”: Erie Sand and Gravel Ltd v Seres Farms Ltd, 2009 ONCA 7, at para 49. To this end, the courts have held that acts of part performance can fulfil the same purpose as a written document, being that they diminish the opportunity for fraudulent dealings in land.

[38] In short, a party to an oral contract for an interest in land will not be permitted to stand by while the other party performs their obligations under the agreement, and then subsequently deny the enforceability of the agreement on the basis that it was not in writing: Steadman v Steadman, [1974] 2 All ER (HL). Accordingly, a verbal agreement that has been partly performed will be enforceable by the performing party: Hill v Nova Scotia (Attorney General), [1997] SCR 69, at para. 11.

[39] Following their agreement to purchase the Broadview Property, Mr. Hussain travelled to Pakistan to sell property he owned there in order to free up the funds for payment to Mr. Flora. He then made three installment payments to Mr. Flora in the total amount of $69,000. After that, the evidence shows that Mr. Hussain spent considerable time managing the Broadview Property. He dealt with difficult tenants, negotiated with MPAC over the assessed value of the property for tax purposes, and arranged for new tenants with publicly guaranteed rental payments to move into the building.

[40] In the meantime, Mr. Flora, having received the benefit of Mr. Hussain’s contributions, stood by and denied Mr. Hussain’s entitlement. The performance by Mr. Hussain and the acceptance of them by Mr. Flora were all done unequivocally in reference to the ownership of the Broadview Property. In fact, Mr. Flora’s accounting of the Broadview Property, which showed that Mr. Hussain’s $69,000.00 payment had been allocated as his 50% contribution to the acquisition costs, closed the circle with respect to performance of the agreement.

[41] The conduct of the parties goes a long way toward confirming the agreement that each of Mr. Hussain and Mr. Flora own an equal one-half interest in the Broadview Property: Deglman v Guaranty Trust Co of Canada, 1954 CanLII 2 (SCC), [1954] SCR 725, at para 21. As a result of this part performance, the Statute of Frauds does not present a bar to Mr. Hussain’s claim to an undocumented 50% interest in the Broadview Property.

III. The libel claim

[42] On May 14, 2013, Mr. Flora’s previous counsel, Roman Botiuk, wrote to Mr. Hussain’s previous counsel, Marvin Ellison, setting out allegations by Mr. Flora that Mr. Hussain had been involved in criminal activities. Mr. Botiuk stated that he was advised that Mr. Hussain had brandished a knife and threatened the superintendent of the Broadview Property. Subsequently, Mr. Hussain and his counsel were advised that the alleged incident took place at the Broadview Property on May 13, 2013, around 6:00-6:30 p.m.

[43] An independent witness and mutual friend of Mr. Hussain’s and Mr. Flora’s, Ishfaq Ahmed, testified that several days later – on or about May 17, 2013 – he met with Mr. Flora, and that in the course of that meeting Mr. Flora made the same allegations to Mr. Ahmed about Mr. Hussain being involved in criminal activities. According to Mr. Ahmed, Mr. Flora said that Mr. Hussain had also made threats towards Mr. Flora and that Mr. Flora was concerned for his life and personal safety.

[44] Another independent witness, Tariq Mahmood, also gave evidence at trial that Mr. Flora had made similar allegations to him. Mr. Mahmood testified that on May 16, 2013 he spoke with Mr. Flora to inquire about the availability of accommodation at a building owned by Mr. Flora at 1063 Gerrard Street. Mr. Mahmood said that during that conversation he mentioned to Mr. Flora that he knows Mr. Hussain. Mr. Mahmood related in his testimony that Mr. Flora then asked him if he was aware of Mr. Hussain’s criminal conduct.

[45] Mr. Mahmood went on to testify that Mr. Flora said that “Abid [i.e. Mr. Hussain] took two persons with him and attempted to enter Flora’s property by force”, and that “Abid or the two persons with him used a knife and that Abid or the two people fought with the superintendent of the Broadview property.” Mr. Mahmood also stated that Mr. Flora told him that Mr. Hussain had threatened Mr. Flora and that Mr. Hussain’s conduct had caused Mr. Flora to be concerned for his own safety.

[46] Although the details of the encounter at the Broadview Property had never been clearly spelled out by Mr. Flora or anyone else on his behalf, at discovery he changed his story slightly to say that the person Mr. Hussain allegedly attacked was another mutual acquaintance, Mahinder Manhas. It was not a superintendent at the property as Mr. Botiuk had said in his letter and as Mr. Flora had apparently repeated to Mr. Mahmood.

[47] Mr. Manhas, the immediate victim of the alleged attack by Mr. Hussain, testified at trial that he knows both Mr. Flora and Mr. Hussain, and that he sometimes did odd jobs and small work tasks for them. He said that he encountered Mr. Hussain on May 13, 2013 at the Broadview Property, where he had gone, presumably at the request of Mr. Flora, in order to prevent Mr. Hussain from physically accessing the property. He indicated that Mr. Hussain would need Mr. Manhas’ keys in order to get into the building, and that it was his intention to bar him from gaining entrance. Mr. Manhas claimed that, to his surprise, Mr. Hussain arrived at the property carrying a knife and accompanied by two associates.

[48] Mr. Manhas’ narration of the May 13, 2013 encounter at the Broadview Property makes little sense. Evidence in the trial, including from Mr. Flora, clearly established that Mr. Hussain had his own set of keys and would not have needed Mr. Manhas or anyone else to give him physical access to the Broadview Property. Moreover, it was clear from Mr. Manhas’ testimony that Mr. Hussain did not know that Mr. Manhas would be at the Broadview Property at that time; there was, therefore, no reason for Mr. Hussain to have arrived at the property armed with a knife and accompanied by two people, as Mr. Manhas testified.

[49] During his testimony, it became clear that Mr. Manhas was anxious to meet Mr. Hussain for reasons of his own. Mr. Manhas said that he was angry with Mr. Hussain about a previous job he had done. According to Mr. Manhas, Mr. Hussain had some time ago hired him to do some repair work but had never paid him. Mr. Manhas made it clear that his anger with Mr. Hussain had not subsided, and that he wanted to confront him and to seek a form of retribution for Mr. Hussain having previously failed to pay him for his work. He conceded in cross-examination that he was confrontational and “stubborn” when confronting Mr. Hussain at the Broadview Property.

[50] Mr. Manhas also testified that he was slashed with a knife by Mr. Hussain and that he sustained a wound on his side or his ribcage. He stated on the witness stand that this wound was so severe that it took two months to heal and that he still has a scar years later. This wrinkle to the story emerged for the first time at trial; neither Mr. Botiuk nor Mr. Flora had ever mentioned that Mr. Manhas had been stabbed or slashed; they had only ever said that Mr. Hussain “brandished” a knife and uttered threats.

[51] Despite describing a serious knife wound to his torso, Mr. Manhas indicated that he did not seek medical attention. Rather, he apparently called Mr. Flora after what must have been a vicious attack and asked Mr. Flora to come by with his car to drop him of at a local eatery as he was feeling hungry. For his part, Mr. Flora testified that he was in Milton, Ontario when he got the call from Mr. Manhas, and that it took him about an hour to drive to the Broadview Property to meet Mr. Manhas.

[52] Instead of calling the police or going to the hospital, Mr. Manhas apparently waited for an hour for Mr. Flora to arrive and then went to grab a bite to eat. Since he had not cleaned up or changed clothing, he presumably sat down for this meal with an open stab wound on his side and wearing a shirt that he had already described as having been torn from being slashed with Mr. Hussain’s knife. Likewise, Mr. Flora presumably arrived to find a wounded and disheveled Mr. Manhas, and instead of notifying the police or attending to Mr. Manhas’ supposedly severe injuries he dropped him off somewhere for a meal or, at least, a little snack.

[53] Interestingly, prior to trial Mr. Flora had refused to provide any detailed information about this incident, stating through Mr. Botiuk that he was remaining silent as he feared for his safety. In fact, in his letter of May 17, 2013, Mr. Botiuk not only indicated Mr. Flora’s fear of Mr. Hussain, but also passed on Mr. Flora’s demand that Mr. Hussain transfer title to the Kingston Property to Mr. Flora’s name by no later than May 23, 2013.

[54] Along similar lines, Mr. Ahmed testified at trial that Mr. Flora told him that if Mr. Hussain transferred the Kingston Property into Mr. Flora’s name, he would not press charges against Mr. Hussain with respect to the alleged knife brandishing incident. Mr. Ahmed was not cross-examined and so there is nothing in the record to suggest that such a conversation did not occur.

[55] I do not know whether Mr. Flora paired the allegation of criminal wrongdoing with a demand for title to the Kingston Property as a form of coercion. There is some evidence of this, but I would hesitate in drawing that conclusion even though the pairing of these two things – the allegation of criminality and the demand for property title – does seem to suggest that kind of blackmail.

[56] As far as I can tell, the story about Mr. Hussain’s attack on Mr. Manhas could just as likely have originated with Mr. Manhas. That is, I do not know whether the tall tale of Mr. Hussein’s alleged criminal conduct was concocted by Mr. Manhas as payback for Mr. Hussein not paying a bill (and was then joined enthusiastically by Mr. Flora who had his own bone to pick with Mr. Hussein), or whether it was concocted by Mr. Flora as a way of pressuring Mr. Hussein in his property disputes (and was then joined enthusiastically by Mr. Manhas who, likewise, had a bone to pick with Mr. Hussein).

[57] But either way, I have no hesitation at all in concluding that the allegation of criminality against Mr. Hussain is false. Mr. Manhas’ testimony did not just lack credibility, it lacked all credulity.

[58] In short, Mr. Hussain had no reason to think that he would be meeting Mr. Manhas on May 13, 2013, and so had no reason to bring along a weapon and two associates; Mr. Hussain did not need a key to the Broadview Property, and so Mr. Manhas had no reason to meet him there except to entrap him into his tale of criminality; Mr. Manhas did not suffer a slashing knife wound and then in a bloodied and disheveled state take himself out for a bit because he was feeling a bit peckish; and Mr. Flora did not find Mr. Manhas in a bloodied and disheveled state and simply drop him at a local café.

[59] Nothing about the Manhas/Flora story of a knife-wielding encounter with Mr. Hussain rings true. Mr. Hussain himself has no history of any kind of violence or erratic behaviour. To the contrary, Mr. Hussain is a lawyer qualified in two different jurisdictions, who gives the impression and has a track record of being an intelligent, rational person. I conclude from the evidence presented at trial that the supposed knife incident never happened. It was fabricated by either Mr. Manhas or by Mr. Flora, and then adopted by the other, for their own personal ends.

[60] This, then, raises the question of whether the way in which the false story was related amounts to actionable libel. In Grant v. Torstar Corp, 2009 SCC 61, [2009] 3 SCR 640, at para. 28, the Supreme Court of Canada reconfirmed the three essential elements necessary to find liability for libel: a) that the impugned words were defamatory in the sense that they would tend to lower the Plaintiff’s reputation in the eyes of a reasonable person; b) that the words in fact referred to the Plaintiff; and c) that the words were communicated to at least one person other than the defamed person himself.

[61] I conclude without hesitation that the impugned words were defamatory. Mr. Hussain, who was at the time in the process of re-qualifying as an Ontario lawyer, was falsely accused of violent criminal conduct. That accusation would be disastrous for his reputation as a competent and trustworthy professional, and could potentially have undermined his legal career. As the Supreme Court observed in Hill v. Church of Scientology, 1995 CanLII 59 (SCC), [1995] 2 SCR 1130, at para 118, “[t]he reputation of a lawyer is of paramount importance to clients, to other members of the profession and to the judiciary. A lawyer's practice is founded and maintained upon the basis of a good reputation for professional integrity and trustworthiness. It is the cornerstone of a lawyer's professional life.”

[62] Intentional falsehoods of the type imparted by Mr. Flora would certainly lower Mr. Hussain in the eyes of the public and of the legal profession. No one would hire an untrustworthy and erratic lawyer who responds to a challenge with violence. The words spoken by Mr. Flora about Mr. Hussain were certainly aimed at Mr. Hussain, and they effectively attacked his reputation for rational, analytic, and measured conduct. In doing so they threatened to destroy Mr. Hussain’s livelihood and his prospects as a lawyer in Ontario. The words are clearly defamatory of him.

[63] The only real question is whether the defamatory words were published, or disseminated/communicated in a way that qualifies them for liability. Mr. Manhas and Mr. Flora spoke about them with each other, but they are part and parcel of the accusation itself. Mr. Flora obviously communicated the defamatory accusation to his lawyer, Mr. Botiuk, who in turn communicated it to Mr. Hussain’s lawyer. But this does not constitute communication to a third party. The lawyer in such instances is agent for, and stands in the shoes of, the client. To instruct one’s lawyer to write to one’s opponent’s lawyer is to do little more than to write to one’s opponent oneself. For this reason, such communication is considered privileged and is not actionable: Dingwall v. Lax (1988), 1988 CanLII 4716 (ON SC), 63 OR (2d) 336 (Ont HCJ).

[64] In terms of publicizing the libel to third parties, both Mr. Mahmood and Mr. Ahmed testified that they were told by Mr. Flora that Mr. Hussain made criminal threats against the “superintendent” and Mr. Flora. Mr. Flora himself concedes that he relayed his description of the May 13, 2013 incident to them. The description, however, does not appear to have made much of an impression on either of them.

[65] Mr. Mahmood testified that he was a friend of Mr. Hussain’s and that he knew Mr. Hussain in the context of his pre-law occupation as a mortgage broker. According to Mr. Mahmood, the information imparted to him about Mr. Hussain by Mr. Flora did not lower the esteem in which he held Mr. Hussain. In fact, he stated that he continued to send mortgage deals to Mr. Hussain, and that he knew him well enough that nothing Mr. Flora said to him impacted on his continued relationship with Mr. Hussain.

[66] Likewise, Mr. Ahmed learned of Mr. Hussain’s allegedly violent behaviour from a conversation he had with Mr. Flora. He testified that he nevertheless continues to hold Mr. Hussain in high regard and has considerable respect for him. In fact, Mr. Ahmed stated that he does not know if the supposedly violent incident really happened. In all, the story told to him by Mr. Flora may have lowered Mr. Flora in his eyes more than it lowered Mr. Hussain, as it does not appear to have lowered his view of Mr. Hussain at all.

[67] Communication to two unrelated individuals – Mr. Mahmood and Mr. Ahmed – does amount to a “publication” of the defamatory words in the strictest sense of the term. Under the circumstances, however, there is no discernable damage resulting from this form of publication. As the court observed in Magno v. Baita Media Inc. 2018 ONSC 3230, at para 36, although “[g]eneral damages for harm to one’s reputation are presumed from the very publication of the false statements…an assessment of damages takes into account…the nature and circumstances of the publication of the libel [and] the nature and position of the victim of the libel”.

[68] Given the circumstances of the libel’s publication, its impact was de minimis. The Supreme Court has stated in various contexts that the de minimis principle applies in order to ensure that individuals are not saddled with liability for trivialities: Canadian Foundation for Children, Youth and the Law v. Canada (Attorney General), 2004 SCC 4, [2004] 1 SCR 76, at para 132. While I do not want to understate the potential for egregious harm that could have been caused to Mr. Hussain by Mr. Flora’s impugning of his reputation, the way in which the libel was communicated served to vastly reduce, if not eliminate, all harm.

[69] Given the circumstances of the publication of the libel – i.e. the very limited dissemination of the information to two individuals who are friendly with and remain supportive of Mr. Hussain – the publication comes close to being no publication at all. Further, given the position of the victim of the libel – i.e. a person of solid reputation that is unshaken in the eyes of the two recipients of the publication – the impact of the defamatory words comes as close to nil as it possibly can.

[70] Communicating a libelous falsehood to two individuals whose respect for the target of the falsehood is unshakable is ethically wrongful conduct, but it is not legally actionable. The potential harm has not been actualized, and so the de minimis principle prevents the otherwise defamatory words from being a tortious libel.

[71] Mr. Flora should not have fabricated a story about Mr. Hussain engaging in criminal conduct, and the court does not condone the concoction of falsehoods. But the negligible dissemination of the defamatory story prevents the incident from generating any liability.

IV. Remedy/Damages

[72] Given the history between the parties, counsel for Mr. Hussain and Ms. Abid submits that the Broadview property be partitioned and sold at fair market value. I agree that that is the only workable approach to take in addressing what has transpired.

[73] In the years since acquiring the Broadview Property in 2010, Mr. Flora has managed it as if he were a sole owner. For one thing, in 2016 he obtained from the Royal Bank of Canada a second mortgage in the amount of $1,150,000.00 secured by the Broadview Property without advising, consulting, or seeking authorization from Mr. Hussain.

[74] There is no evidence that the mortgage funds have been invested into improvements in the Broadview Property or have been in any way used in relation to the Broadview Property. Mr. Flora appears to have kept all of the Royal Bank mortgage funds and to this date has refused to account for those funds. This was a breach of Mr. Flora’s fiduciary duty to Mr. Hussain as his partner or co-owner.

[75] Mr. Flora has treated the mortgage funds received from the Royal Bank of Canada as his personal money. Accordingly, the mortgage debt owed to the Royal Bank is to be treated as his personal debt and is not shared by Mr. Hussain and/or Ms. Abid.

[76] Mr. Flora has also been reluctant to disclose the income and expenses for the Broadview Property. During the course of the litigation, what Mr. Flora produced were for the most part summaries created by himself and his bookkeeper which he says reflect the income and expenses. Eventually, he did produce some of the underlying receipts that he says support the income and expense summaries, but they are insufficient to allow anyone to actually verify the expenses. Mr. Flora has also refused to produce bank statements, which would have allowed Mr. Hussain (and the court) to verify the net income.

[77] I reviewed the pre-trial skirmishes over disclosure in an endorsement following a motion brought by Mr. Hussain and Ms. Abid at the opening of trial: Hussain v. Flora, 2022 ONSC 3207. I observed there that I might have to draw some adverse inferences from Mr. Flora’s pattern of non-disclosure in the event that the proper income and expenses cannot be established on the evidence at hand. I also indicated, however, that where the financial evidence falls short the parties may in any case be in a position to estimate the figures for the purposes of calculating damages.

[78] Ultimately, at trial Mr. Hussain gave evidence that he would agree to some of the figures for the Broadview Property provided by Mr. Flora. Specifically, he stated that he is prepared to accept the following:

(a) the total rental income for 2010-2020 comes to $1,253,304.55, as indicated in a chart produced by Mr. Flora which forms trial exhibit no. 56 and in profit and loss statements produced by Mr. Flora which form trial exhibits no. 57 and 58;

(b) the total expenses for property taxes, insurance, and utilities for the years 2010-2020 come to $677,404.91, as set out in trial exhibits 56, 57, and 58; and

(c) the net income from the Broadview Property for 2010 through 2020 was $575,899.64.

[79] Given my finding that Mr. Hussain and Ms. Abid are beneficial owners of a 50% share of the Broadview Property, their share of the net income for the relevant years is $287,949.82. From this should be deducted the $1,000 shortfall in Mr. Hussain’s initial investment in the Broadview Property, which he has acknowledged all along.

V. Limitation period

[80] The Statement of Claim for the present action was issued on February 23, 2015. Counsel for Mr. Flora and Ms. Flora submits that this is beyond the relevant limitation period.

[81] It is not. Indeed, it is well within the limitation period, even if the shorter of the two potentially applicable limitation periods is applied to the case.

[82] In my view, the applicable limitation period for a dispute over ownership of real property is contained in the Real Property Limitations Act, RSO 1990, c L.15, section 4. That section provides:

No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.

[83] The parties purchased the Broadview Property in 2010. By any counting, the Statement of Claim was issued within 10 years of the commencement of their dispute.

[84] Counsel for Mr. Flora submits that it is rather the two-year limitation period in the Limitations Act, 2002, SO 2002, c 24 that applies here. I note, however, that section 2(1)(a) of the Limitations Act, 2002, specifically states that it only applies to claims other than proceedings to which the Real Property Limitations Act applies. Accordingly, the Limitations Act, 2002 excludes itself from a dispute like this over ownership of real property.

[85] Even if the two-year period applies, the Statement of Claim was issued within the allotted time. The important date for counting the limitation period is the date of discovery of the claim. Section 5 of the Limitations Act, 2002, provides that a claim is discovered on, inter alia, “…[t]he day on which the person with the claim first knew…[t]hat the injury, loss or damage had occurred…”

[86] The initiating moment for discoverability in this case is the first indication that ownership of the Broadview Property was a matter of dispute. Mr. Hussain states that Mr. Flora first denied that Mr. Hussain has an interest in the Broadview Property in his Reply and Defence to Counterclaim in the litigation over the Kingston Property. That pleading is dated April 15, 2013. Prior to that, Mr. Flora seemed to recognize Mr. Hussain’s interest in the Broadview Property, as evidenced by the accounting for the Broadview Property provided by Mr. Flora and by Mr. Flora’s reporting of a 50-50% co-ownership of the Broadview Property in his CRA filing.

[87] In Mr. Flora’s view, Mr. Hussain should have known that Mr. Flora was disputing the fact that they were partners in both the Broadview Property and Kingston Property when he was served with Mr. Flora’s Statement of Claim in the Kingston Property dispute. That pleading was issued February 25, 2013.

[88] This earlier date of discovery of the claim does not assist Mr. Flora. As indicated, the pleading in the present dispute over the Broadview Property was issued on February 23, 2015. Accordingly, two years from the issuance of the Kingston Property pleading on February 25, 2013 had not yet passed.

[89] No matter which way one counts it, the present claim is not limitation barred.

VI. Disposition

[90] Mr. Flora and/or the Defendant Balbir Flora shall pay $286,949.82 to Mr. Hussain and Ms. Abid forthwith.

[91] The Broadview Property is to be sold through an independent, non-arm’s length real estate broker/agent at fair market value. The proceeds of that sale are to be shared between the parties, with 50% going to Mr. Hussain/Ms. Abid and 50% going to Mr. Flora/Ms. Flora.

[92] For the purposes of distributing the proceeds of sale of the Broadview Property, the second mortgage amount owing to the Royal Bank of Canada is not to be deducted from the proceeds of sale. As between the parties hereto, the amount owing under the second mortgage to the Royal Bank is to be treated as a personal debt owing to the Royal Bank by Mr. Flora and/or Ms. Flora. The Royal Bank loan is to be repaid to the lender/second mortgagee by Mr. Flora and/or Ms. Flora, without participation by Mr. Hussain and/or Ms. Abid.

[93] The libel claim brought by Mr. Hussain is dismissed.

VI. Costs

[94] Mr. Hussain and Ms. Abid are entitled to costs of the action relating to the Broadview Property dispute.

[95] There will be no costs for or against any of the parties for the portion of the action relating to the libel claim.

[96] I would ask counsel for Mr. Hussain and Ms. Abid to send written submissions as to quantum of costs by email to my assistant within three weeks of today. I would likewise ask counsel for Mr. Flora and Ms. Flora to send written submissions by email to my assistant within three weeks of receiving Plaintiff’s counsel’s submissions. Counsel are, of course, to copy each other on these submissions as well.

Released: September 19, 2022 Morgan J.

COURT FILE NO.: CV-15-522676

DATE: 20220919

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Syed Abid Hussain and Rubina Abid

Plaintiffs

– AND –

Daya Singh Flora and Balbir Flora

Defendants

REASONS FOR JUDGMENT

E.M. Morgan J.

Released: September 19, 2022