Court File and Parties

COURT FILE NO.: CV-21-00670065 DATE: 20220809 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Cassels Brock & Blackwell LLP AND: 665750 Ontario Limited, Nanaksar Thath Ishar Darbar, and Armstrong Petroleums Limited

BEFORE: Justice Chalmers

COUNSEL: A. Gorys and J. Shepherd for the Applicant P. Mand for the Respondent, Darbar E. Upenieks for the Respondent, Armstrong Petroleums Limited

HEARD: In-writing

ENDORSEMENT

Overview

[1] The Applicant, Cassels Brock & Blackwell LLP (Cassels) seeks an Interpleader Order with respect to the sum of $83,831.83. The Respondents, Nanaksar Thath Ishar Darbar (Nanaksar) and Armstrong Petroleums Limited (Armstrong) consent to the relief sought. The Application has been abandoned as against the Respondent, 665750 Ontario Limited (665).

[2] For the reasons that follow, I grant the interpleader order.

Background Facts

[3] Nanaksar is the owner of the property located at 9954 The Gore Road in Brampton (the “Property”). In late 2008, Nanaksar commenced a construction project on the Property. 665 provided services for the project including demolition, excavation grading formwork and other concrete work, installation of gravel, compaction and paving of the parking lot, sewers and water mains. 665 was not fully paid for its work and it registered a construction lien on the estate and interest of Nanaksar on the Property. In addition to Nanaksar, two other contractors registered liens; 1392248 Ontario Ltd. c.o.b. Toraci Construction, and Mechanical and Municipal Mechanical Contractors Limited.

[4] The Royal Bank of Canada (RBC) had registered a mortgage against title to the Property. On August 30, 2012, 665 brought an action against Nanaksar. RBC was named as a defendant to the extent that if there was deficiency in the holdback retained by Nanaksar, 665 claimed priority over the RBC mortgage.

[5] Nanksar defaulted on its mortgage and a receiver was appointed with respect to all of the assets and undertakings of Nanaksar. Nanaksar obtained financing to pay out the indebtedness to RBC. RBC was not prepared to consent to the financing unless the lien claimants were willing to discontinue or dismiss their claims against RBC.

[6] The lien claimants were not prepared to dismiss their actions without due consideration from Nanaksar. Nanaksar raised $1,100,000 as security of its maximum holdback obligations to the lien claimants. Nanaksar and the lien claimants entered into an escrow agreement dated November 21, 2013. The escrow amount was deposited in Cassels’ trust account.

[7] In the spring of 2019, Cassels received an executed acknowledgement from 665 advising that 665 and Nanaksar had reached a settlement in 665’s lien action. 665 advised that it had no further right to the escrow funds held by Cassels. Cassels then received a written direction from the remaining lien claimants directing the escrow funds be released to Nanaksar’s counsel.

[8] Unrelated to the project, Armstrong brought a separate action against 665. Armstrong obtained judgment in the amount of $83,831.83. Armstrong served a Notice of Garnishment on Cassels on November 15, 2016. Cassels retained $83,831.83 from the escrow funds that were paid to Nanaksar’s counsel.

[9] Both Armstrong and Nanaksar claim entitlement to the withheld amount of $83,831.83. Cassels is unable to determine which party is entitled to the disputed amount. Cassels seeks an interpleader order permitting it to pay the disputed amount into court. Cassels claims no interest in the disputed amount.

Analysis

[10] Rule 43.02 provides that a person may seek an interpleader order if:

a. there are two or more claims in respect to property,

b. the person has no beneficial interest in the property other than a lien for costs, fees or expenses; and,

c. is willing to deposit the property into court.

[11] The applicant must provide notice to the claimants. The affidavit in support of the application, must identify the property, set out the names and addresses of every claimant and state that the applicant claims no beneficial interest in the property, does not collude with any of the claimants and is willing to deposit the money with the court: R.43.03.

[12] I am satisfied that Cassels is entitled to the order for the payment of the sum into court. It holds a specific fund, namely the amount of $83,831.83. There are two competing claims for the disputed amount; Armstrong and Nanaksar. Cassels claims no interest in the disputed amount and is prepared to pay the amount into court.

[13] The Respondents consent to the relief sought.

Disposition

[14] I grant the interpleader order.

[15] Order to go in accordance with the draft order filed and signed by me.

Date: August 9, 2022