COURT FILE NO.: CV-21-118
DATE: 2023-09-01
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SAUGEEN OJIBWAY NATION FINANCE CORPORATION
Plaintiff
– and –
DARRELL MICHAEL JACOB LINKLATER a.k.a. JAKE LINKLATER
Defendant
Counsel: Harvey Dorsey, for the plaintiffs/moving party Darrel Linklater, defendant/responding party on his own behalf
HEARD: February 9, 2023
REASONS FOR JUDGMENT
Rahman, J.
1. Introduction
[1] The plaintiff brings a motion for summary judgment. The defendant was the president and sole officer and director of the plaintiff for over six years, between April 2014 and December 2020. The plaintiff alleges that the defendant engaged in a scheme where he charged the plaintiff for services he did not provide, and disbursements that were excessive or non-existent. In its statement of claim, the plaintiff alleges that it is entitled to damages for “breach of trust, breach of fiduciary duties, misappropriation, fraud, breach of contract and unjust enrichment.” The plaintiff seeks judgment against the defendant in the amount of $835,050. The plaintiff also seeks “a declaration that the judgment is not discharged on the discharge of a bankruptcy of the defendant, pursuant to Section 178(1) of the Bankruptcy and Insolvency Act.”
[2] The defendant represented himself on this motion. He did not file any materials and believed he could rely on his statement of defence. His main submission was that the company had been audited by BDO and those audits showed no irregularities. Regarding the allegation that, as part of the scheme, he caused signatures to be forged, the defendant pointed out that the documents in question were signed by two chiefs and that the plaintiff had only filed evidence alleging that one chief had not signed the documents. His position is that he did the job that was asked of him and did not forge any signatures or take any money fraudulently.
[3] For the reasons that follow, the motion is dismissed. The plaintiff has not established that there is no genuine issue for trial. The plaintiff relies heavily on the opinion of a forensic accountant who opines that the defendant charged the plaintiff excessively. However, the plaintiff has failed to produce evidence that supports the facts underlying the accountant’s opinion. To establish the various claims it advances (including misappropriation, fraud and breach of contract), there must be some evidence that the defendant did not do the work, or did not incur the expenses that he says he did. The plaintiff has filed only two short affidavits from two individuals who have knowledge of the plaintiff’s affairs. That evidence does not support the findings of fraud and misappropriation that underlie the plaintiff’s lawsuit. The plaintiff’s reliance on the alleged absence of evidence supporting the defendant’s expense and remuneration claims cannot support a finding that the defendant engaged in a fraudulent scheme.
2. The plaintiff’s evidence
[4] Because the defendant did not file evidence on the motion, the only evidence on this motion comes from the plaintiff. I summarize that evidence below.
[5] The plaintiff is a bare trustee jointly owned for the benefit of the Chippewas of Saugeen First Nation and the Chippewas of Nawash First Nation. The shares of the plaintiff are held by the Chiefs of both First Nations as trustees for the benefit of those First Nations. The plaintiff’s role is to represent the financial interests of the two First Nations in a joint venture/limited partnership with B2M LP. That limited partnership operates transmission circuits from the Bruce Power Generation Station to Hydro One Networks’ Milton Switching Station.
[6] The defendant was the plaintiff’s sole officer and director from April 2014 until December 2020. He is a member of the Nawash First Nation. The terms of the defendant’s employment are set out in Greg Nadjiwon’s affidavit. Mr. Nadjiwon was Chief of the Chippewas of Nawash Unceded First Nation from August 2015 to August 2021.
[7] The terms of the defendant’s employment were as follows:
i. The position was on a contract basis.
ii. The Defendant was to be paid on an hourly basis at $35 per hour throughout his tenure.
iii. The Defendant was to report to the Chiefs and Councils of both Saugeen and Nawash and in addition to Saugeen Ojibway Nation Joint Chiefs and Councils.
iv. The Defendant was obligated to submit invoices to the Saugeen Ojibway Nation Office Manager and Nawash Finance Manager.
v. The estimated total annual per diem was between $20,000 to $30,000.
vi. All expenses incurred by the defendant on behalf of the plaintiff were to be reimbursed upon submission of invoices and other supporting documentation particularizing the amounts and nature of the expense.
[8] The defendant’s employment ended on December 2, 2020, when Jonathan Araujo took over his role. Mr. Araujo deposes in his affidavit that, shortly after assuming his executive role, he noticed financial irregularities relating to the defendant. Mr. Araujo believed that the defendant had been improperly paid monies by the plaintiff. The plaintiff then retained a forensic accountant, Alan Zysman to conduct an investigation and determine what payments the defendant had received from the plaintiff. The plaintiff relies heavily on Mr. Zysman’s report to support its position that the court should grant this motion.
[9] Mr. Zysman concludes in his report that the plaintiff received $835,050 in “excess payments” from the plaintiff. The principal conclusions from the report on which the plaintiff relies, are set out at paragraph 14 of the plaintiff’s factum. I will not set out all 21 of the “findings” summarized in that paragraph. I set out the principal ones that are relevant to my decision on this motion. I have underlined the portions I will return to in my analysis.
i. The Defendant charged and was paid for work performed on behalf of the plaintiff that appears not to have been performed.
ii. The Defendant submitted reimbursement of expenses that appears not to have been incurred.
iii. The Defendant misrepresented to BDO that payments received in 2019 from B2M LP/Hydro One were to reimburse the Defendant’s expenses when in fact, the $223,506 payment from B2M LP/Hydro One, to the plaintiff, was an adjustment, in respect to depreciation and has nothing to do with the Defendant’s expenses.
iv. The Defendant misrepresented to BDO that payments received from B2M LP/Hydro One, to reimburse legal costs, incurred by the Plaintiff was reimbursement for the Defendant’s expenses.
v. The Defendant submitted claims for expenses and work performed that appears not to have supporting documentation.
vi. The proposed and approved hourly rate for the Defendant’s remuneration is $35 per hour which, it appears, did not change throughout the Defendant’s tenure. The hourly rates charged by the Defendant for periods after 2015 and paid by the Plaintiff are more than $35 per hour.
vii. Greg Nadjiown, the Chief of Nawash during the relevant time period, has given sworn evidence, in documents approving the Defendant’s expenses are not his signature.
viii. The Defendant caused the Plaintiff, to make payments to the Defendant, signed by the Defendant, for services rendered and expenses which were not supported with any source documentation and appear to be, in some instances, charges for services not performed or alternatively double charges for the same work.
ix. In the period 2017 and 2018 and 2019, it appears that the Defendant on Confirmation Reports submitted to BDO either himself or had someone else [sic] falsely, execute the signature of Chief Greg Nadjiwon which was required approval to support payments to the Defendant.
[10] Mr. Zysman does not have first-hand knowledge of any of the facts upon which his opinions are based. In his report, he lists several assumptions that he made in coming to his conclusions. Mr. Araujo lists eight assumptions in his affidavit that he can attest are accurate and true. Most of the assumptions he attests to relate to appendices that are attached to Mr. Zysman’s report.
3. Analysis
[11] The question on this motion is whether there is a genuine issue requiring a trial. There will be no genuine issue requiring a trial where a judge “is able to reach a fair and just determination on the merits on a motion for summary judgment.” A judge will be able to reach a fair and just determination where “the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”[^1] The moving party has the onus of proving that there is no genuine issue for trial. Where the moving party establishes that there is no genuine issue for trial, the onus shifts to the responding party to show that there is a genuine issue requiring a trial.[^2] Both parties are expected to put their best foot forward.[^3] As the Court of Appeal observed in Da Silva v. Gomes, “the court can reasonably assume that ‘the parties have placed before it, in some form, all of the evidence that will be available for trial.’”[^4]
[12] The plaintiff’s motion fails because the record it has filed does not allow the court to make the necessary findings of fact that would support its claims.
[13] As mentioned above, the plaintiff seeks damages for the following: breach of trust, breach of fiduciary duties, misappropriation, fraud, breach of contract, and unjust enrichment. Although all of the above claims may have slightly different elements, the common element is that the defendant got money to which he was not entitled, and that he did so through some form of misrepresentation. As the plaintiff calls it, a fraudulent scheme. If the plaintiff’s evidence does not show that the defendant misrepresented his hours of work and/or his expenses, the lawsuit must fail. The plaintiff’s record on this motion does not contain evidence that would support a finding that the defendant misrepresented anything.
[14] The plaintiff relies heavily on Mr. Zysman’s report to succeed on this motion. The problem with this approach is that Mr. Zysman does not have knowledge of the facts that the plaintiff must prove to establish the fraudulent scheme. To draw a conclusion that the defendant received money by misrepresenting the work he did or the expenses he claimed, there must be some evidence that he either did not do the work he said he did, the work he said he did was non-existent, or the expenses he claimed were not related to his work. That evidence cannot come from Mr. Zysman. That evidence must come from someone with knowledge of the work that the defendant was hired to do. Indeed, the underlined portions of Mr. Zysman’s conclusions set out above (in paragraph 9) make clear that Mr. Zysman can only say that work “appears not to have been performed,” that an expense “appears not to have been incurred,” or that an expense “appears not to have supporting documentation.” Mr. Zysman could only rely on the information that he was given.
[15] The evidence from Mr. Araujo and Mr. Nadjiwon in their short affidavits[^5] is not sufficient, even when considered alongside Mr. Zysman’s report, to support the allegations set out in the statement of claim. I will next explain why the evidence in their affidavits is insufficient to support the assertion that the defendant engaged in a fraudulent scheme.
[16] In his affidavit, Mr. Araujo attests that certain assumptions listed in Mr. Zysman’s report are true and accurate. However, these assumptions do not support a finding that the defendant committed fraud against the plantiff. While Mr. Araujo deposes that he has submitted “all supporting documentation for reimbursable expenses, submitted by the Defendant and paid by the plaintiff, to the Defendant,” this does not support the conclusion that the submitted expenses were not incurred. It also does not support a conclusion that the defendant engaged in a fraudulent scheme. There are usually two parties involved in an expense claim. The person submitting the claim, and the person (or entity) paying the claim. Without evidence from the latter that the claim was somehow improper, a court cannot find the kind of misrepresentation that underlies the various claims that the plaintiff is suing the defendant for.
[17] Mr. Nadjiwon’s affidavit provides some evidence that he did not sign certain documents purporting to contain his signature (Confirmations and Approvals of Expenses and an Expense Report). Mr. Nadjiwon also deposes that an expense report (Exhibit E to his affidavit) lists a project he was not aware of, and that even if such a project existed it would not have taken a year. The inference that the plaintiff seeks to rely on is that the defendant either forged Mr. Nadjiwon’s signature or otherwise caused someone else to forge it and that the defendant billed for work he did not do. Evidence like this could support a finding that whoever submitted or relied on such a document was trying to commit fraud. However, there is no evidence from Mr. Nadjiwon, or anyone else, what these documents are, and who, if anyone, relied on them. Though the letters purport to be confirmations and approvals of expenses, there is no evidence explaining where they came from and how they figure into the fraudulent scheme being alleged. Without knowing what purpose these documents served, whether these documents were actually relied on by someone (and if so by whom), it is not possible to say whether they were part of any kind of misrepresentation or fraud. For a document to be material to a fraud, there must be some evidence that it was used, or intended to be used, to deceive someone. The evidentiary record is bereft of any details about how these documents figured into the defendant’s alleged fraudulent scheme.
[18] An exchange between plaintiff’s counsel and the court is illustrative of the deficiencies in the plaintiff’s evidentiary record. During the motion hearing, I asked plaintiff’s counsel where in the record I could find evidence that the project the defendant billed 1,000 hours for did not exist. Counsel’s response was to take the court to a letter that he, himself, had sent to the defendant asking the defendant to provide proof of these expenses. Plaintiff’s counsel said that since there was no response included in the record, I could infer that the expense was not legitimate.[^6] There are two significant problems with counsel’s suggested approach. First, counsel’s letter simply appears as an attachment to Mr. Zysman’s report. There is no evidence about when it was sent, how it was sent, and whether anyone (including the defendant) acknowledged receipt of it. That letter is not properly evidence on this motion. It does not become evidence because it was appended to an expert’s report. Consequently, the absence of a response to it in the record is irrelevant. Second, I cannot rely on counsel’s assertion that, as an officer of the court, that he sent the letter and received no response. It is one thing for counsel to make such an assertion on some uncontested matter. It is completely another for counsel to make himself a witness in the proceedings by asserting something to establish an essential fact.[^7]
[19] In the same vein, the fact that the defendant did not file anything in response to this motion does not help the plaintiff. The plaintiff’s record is missing what is necessary to support its claims. The mere fact that the defendant has not filed anything does not mean that the plaintiff’s claims can be established.[^8] The plaintiff has not put forward enough evidence on this motion to establish that there is no genuine issue for trial. In the circumstances, the defendant’s failure to file evidence is of no significance. As Kimmel J. observed in Growth Capital Corp. v. 2221448 Ontario Inc. d.b.a. Caliber Express:
A moving party also cannot fill an evidentiary gap in its case by inference from the absence of affirmative evidence from the respondent. The onus never shifts from the moving party to demonstrate that there is no genuine issue for trial through proof of the facts necessary to make its case. It remains open to the responding party to defeat the motion based on the failure of the plaintiff to meet its burden.[^9]
[20] The plaintiff’s suit alleged that the defendant engaged in a fraudulent scheme. The plaintiff’s evidence on this motion does not allow this court to find that the defendant engaged in a fraudulent scheme to deprive the plaintiff of money.
4. Conclusion and order
[21] The plaintiff has failed to establish that there is no genuine issue for trial. The motion for summary judgment is dismissed.
[22] As a self-represented party, the defendant would be entitled to costs only if he could show that he a) devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation, or b) as a result, incurred an opportunity cost by foregoing remunerative activity. Because the defendant did not file any responding material on this motion, he clearly did not devote time and effort to do work that would have been done by a lawyer. Simply giving up time appearing for the various scheduled motion hearings does not entitle him to a costs award even if he had to give up some other paid activity. Consequently, I will make no costs award on this motion.
Rahman, J.
Released: September 1, 2023
COURT FILE NO.: CV-21-118
DATE: 2023-09-01
ONTARIO
SUPERIOR COURT OF JUSTICE
SAUGEEN OJIBWAY NATION FINANCE CORPORATION
– and –
DARRELL MICHAEL JACOB LINKLATER a.k.a. JAKE LINKLATER
REASONS FOR JUDGMENT
Rahman J.
Released: September 1, 2023
[^1]: Hryniak v. Mauldin, 2014 SCC 7, at para. 49. [^2]: Sweda Farms Ltd. et al. v. L.H. Gray & Son Limited et al., 2013 ONSC 4195, at para. 26. [^3]: Chernet v. RBC General Insurance Company, 2017 ONCA 337, at para. 12. [^4]: Da Silva v. Gomes, 2018 ONCA 610, at para. 18. [^5]: Each affidavit is less than three and a half pages, not including exhibits. [^6]: To be clear, counsel’s letter was not a request to admit under Rule 51.02. [^7]: I appreciate that Mr. Nadjiwon’s affidavit refers to a project that the defendant worked on for a year in 2019. Mr. Nadjiwon said that he knew of no such project. Again, the difficulty is that Mr. Nadjiwon makes this statement in relation to a document (Exhibit E) whose provenance, purpose, and reliance on is not explained. [^8]: Pereira v. Contardo, 2014 ONSC 6894, at para. 43. [^9]: Growth Capital Corp. v. 2221448 Ontario Inc. d.b.a. Caliber Express, 2020 ONSC 1880, at para. 59.