Court File and Parties
COURT FILE NO.: CV-23-2709-0000 DATE: 2024 12 11 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOGINDER ATHWAL, AMRITPAL ATHWAL and RANJIT ATHWAL Plaintiffs
- and -
8529710 CANADA LTD BAHNIWAL, PARDEEP GILL, NARINDER GILL, SANDEEP DHALIWAL Defendants
COUNSEL: Paljinder Mahaar, for the Plaintiffs Monty Dhaliwal and Adam Ostermeier, for the Defendants
HEARD: October 4, 2024, at Brampton
REASONS FOR JUDGMENT
LEMAY J.
[1] This was a motion for particulars brought by the Defendants and heard by me on October 4th, 2024. At the conclusion of the Defendants’ arguments and after taking the lunch break, I dismissed the motion without calling on Plaintiff’s counsel and provided oral reasons for my decision. At the conclusion of those reasons, I noted that I reserved the right to add to or edit the transcript of the oral reasons.
[2] I have provided the parties with a copy of the actual transcription. What follows are the lightly edited reasons for my decision. They are the finalized version of my reasons for decision.
Background
[3] The facts set out in this background summation are taken from the Statement of Claim and from other documents I have received. They are not final findings of fact and are not binding upon the trial judge or any subsequent judge that hears from the parties on an appeal or other motion.
[4] This summation is for the purposes of understanding my disposition of the motion.
A. The Parties
[5] The personal plaintiffs and defendants have known each other for some period of time. The plaintiff Joginder is the father of the plaintiff’s Amritpal and Ramjit.
[6] The corporate defendant, PSW, is a corporation incorporated pursuant to the laws of Canada. It was apparently carrying on business as a trucking company. The defendants Hardeep Bahniwal, Narinder Gill and Sandeep Gill, were owners and operators of the company, and Joginder was a longstanding friend of the three of them.
[7] On October 2021, all of the plaintiffs started working for PSW in some capacity. According to the Statement of Claim, in and around January of 2022, the individual defendants personally and on behalf of PSW proposed to the plaintiffs, Joginder and his sons that they should become 50 per cent shareholders of PSW. Paragraph 11 of the Statement of Claim states:
“Herein about January 2022, the plaintiffs accepted the defendants’ proposal and entered into a verbal contract with the defendants and the PSW to operate and manage the business of the PSW equally.”
[8] The pleading then goes on to set out the terms of that agreement. The business operated for some time and assets were put into this business by both the defendants and the plaintiffs.
[9] The assets that were put in to PSW are particularized in some detail in the Statement of Claim, but it is not necessary for me to specifically enumerate them in this summary.
[10] In addition, PSW purchased new assets.
B. The Claim
[11] In the summer of 2022, the plaintiffs asked for the business records of the company. The defendants:
a) refused to provide those records; b) claimed the business was operating at a loss; and, c) terminated the contract and gave back equipment to the plaintiffs. On this third point, I would note that the specifics are listed in the Statement of Claim.
[12] The plaintiffs took the view that the return of their equipment was not all that they were entitled to. The plaintiffs were of the view that they were entitled to some of the profits of the business as well. The plaintiffs made a number of requests to obtain the records of PSW, both themselves and through their counsel. They were rebuffed on all occasions.
[13] As a result, they started the claim. The nature of the claim is in its essence, a claim for breach of contract, unjust enrichment and fraudulent payment of sums by the defendants to themselves from the business.
[14] Described in those claims and in this claim of fraudulent behaviour, are various claims in respect of the oppression remedy and a request to pierce the corporate veil and hold the individual defendants liable for any losses.
C. Procedural History
[15] The Statement of Claim in this matter was issued August 3rd, 2023 and served shortly thereafter. There was a request to inspect documents, and a demand for particulars. The response to this demand for particulars was provided January 11th, 2024. Email exchanges filed on the record outlined show that, from the defendants’ perspective, the Plaintiff’s responses were not sufficient.
[16] The back and forth between the parties resulted in an Amended Statement of Claim, dated June 21st, 2024. I pause to note that in the materials it is suggested that this amendment was not made on consent. I would note that you can amend a Statement of Claim at any time prior to the closing of pleadings, and the pleadings were not closed in this particular case. Throughout the rest of these reasons, my references to the Statement of Claim are to this Amended Claim.
[17] This Amended Statement of Claim outlined additional facts and details of various transactions. It resulted in a further demand for particulars that is some 26 paragraphs in length.
[18] The plaintiffs outright refused to respond to this additional request for particulars at all, which resulted in this motion.
Disposition
a) The Law
[19] A number of cases were filed, and I have reviewed them both prior to Court and during the lunch break. A number of principles emerge from these cases. First, the procedure for particulars is set out in Rule 25.10 of the Rules of Civil Procedure and gives the court the power to order or not to order particulars.
[20] Second, the case law is well summarized in a decision of then Master McGraw, now Associate Judge McGraw, in 3 Dogs Daycare Inc. v. Dogtopia Enterprises Canada Inc., 2021 ONSC 514. At paragraph 21 of that decision, there are a number of different principles that are summarized as follows:
i. an order for particulars is discretionary and the court must make the order, which is just, reasonable and fair in the circumstances of each case;
ii. the party seeking particulars bears the onus of establishing that the particulars are not within their knowledge and are necessary to enable the party to plead;
iii. the court should ask itself in reference to the whole of the statement of claim: “are there sufficient facts present to formulate a defence”?
iv. any determination of the minimum level of material fact disclosure will vary depending on the kind of action and pleading under review including the relief sought;
v. while recognizing the need for defendants to understand the case they have to meet, the courts take a realistic and pragmatic approach when considering whether to order particulars recognizing that not every claim is capable of being pleaded with the same degree of particularity and that subsequent stages in the litigation process may also function to clarify and narrow the issues;
vi. Rule 25.06(1) of the Rules of Civil Procedure requires that a pleading be a concise statement of the material facts, not all of the material facts;
vii. Rule 25.10 of the Rules of Civil Procedure requires that a claim be sufficiently particularized.
viii. in order to allow the defendant to understand the case it is to meet and to provide an adequately prepared statement of defence; unparticularized pleadings which work against the purpose of pleadings to define the issues between the parties as precisely as possible will not be permitted. Particulars should be considered in light of the principle that each party is entitled to know the case that is intended to be made against it at trial and that particulars help to ensure that litigation is conducted fairly, openly and without surprise;
ix. if a specific fact is not set out, but can be properly inferred from other statements in the pleading, that is sufficient for the purposes of a statement of claim;
x. particulars also help to limit the generality of allegations, define and narrow the scope of issues to be decided, guide the discovery process and help to streamline the litigation process, however, they are not akin to an examination for discovery which should not be seen as a substitute for particulars but nor should a demand for particulars be used to compel a plaintiff to disclose evidence or the legal nature of its argument;
xi. it is especially important that the court adopt a realistic and pragmatic approach at the pleadings stage in complex litigation to ensure that litigation is not unduly delayed;
xii. particulars should not be permitted to turn into a delay tactic or a substitute for what can be obtained through a request to inspect documents or oral and documentary discovery, otherwise, litigation will be stonewalled at an early stage through excessive particularization;
xiii. to strike a balance between competing considerations in large and complex litigation, case management judges must have some “elbow room” to keep the litigation moving forward and prevent it from getting bogged down in interlocutory matters, such that litigation management orders can sometimes be more effective than particulars in providing an efficient structure to determine a claim;
xiv. a court should not order a party to provide particulars that are in the nature of evidence because to do so would offend Rule 25.06(1) of the Rules of Civil Procedure;
xv. Rule 25.06(1) of the Rules of Civil Procedure mandates a minimum level of material fact disclosure which if not reached calls for a motion to strike the pleading as irregular, not a motion for particulars. It is only where the minimum level of material fact disclosure has been reached that the pleading becomes regular and thereafter the remedy of particulars under Rule 25.10 of the Rules of Civil Procedure becomes available;
xvi. if a party is limited in terms of the detail it can include in its pleading because it does not have access to the books and records of the other party, this is an important factor in determining the extent of particulars that may be required.”
[Citations omitted]
[21] In respect to point, xiv, in terms of the minimum level of material fact disclosure, although there has been no motion to strike before me in this matter, I do not see anything that would cause me to find that there was a lack of particularity sufficient to justify a motion striking the pleading as irregular.
[22] In addition, one of the other points that is made in the case law comes from Ballard v. Stavro (1997), Carswell Ont. 3424. At paragraph 83 of that decision, Madam Justice Epstein, of our court as she then was, was quoting from a previous case, a decision of H.A. Imports of Canada Ltd. v. General Mills, Inc. et al., (1985), 42 OR (2d) 645 (Ont.) In the H.A. Imports decision, Justice O’Brien stated,
“The requirements of a pleading alleging conspiracy are succinctly outlined in Bullen, Leake and Jacob's, Precedents of Pleadings, 12th ed. (1975), p. 341, as follows:
“Pleading. The statement of claim should describe who the several parties are and their relationship with each other. It should allege the agreement between the defendants to conspire, and state precisely what the purpose or what were the objects of the alleged conspiracy, and it must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy; and lastly, it must allege the injury and damage occasioned to the plaintiff thereby.”
[23] With these background principles in mind, I now turn to the specifics.
b) Application
[24] I wish to start with some general issues. The most important of the general issues that are raised in this motion is the question of conspiracy. The defendants claim that there is a lack of clarity and precision in the pleadings in this regard. In that respect, during the course of this argument Mr. Ostermeier he directed my attention to two specific questions:
a) what is the relationship between the parties, and b) what is the agreement between and among the defendants in terms of the conspiracy?
[25] In that respect he directed my attention to the decision in Van-Rob Inc. v Rapid Metals LLC, 2016 ONSC 1321.
[26] However, in Van-Rob Inc., the court stated at paragraph 6 as follows,
“A motion for particulars usually will not be granted unless the moving party deposes that the particulars are not within his or her knowledge and that they are needed to plead; however, a supporting affidavit is not required if the allegations are so general and bald that it is clear that particulars of them are necessary.”
[27] In this respect, this decision also references the decision in Pennyfeather v. Timminco Ltd., [2011] ONSC 4257.
[28] In their factum, the Defendants made a number of statements in respect of the conspiracy. In that regard, I particularly note the statement that was made at paragraph 31 of the Defendants’ factum which reads,
“In leave of these necessary particulars that support a conspiracy allegation, the plaintiffs made vague, unsupported claims that the defendants were “directing wrongful things to be done”, that “PSW was a sham company”, that the defendants used corporate funds for personal benefits, and that they exercised preference to themselves in payments of funds with the intention to defraud the plaintiff, among other things.
When asked for further particulars to clarify what was meant by these claims in both the first Amend and the second Amend, the plaintiff simply refused to provide further particulars.”
[29] There are a number of problems with this submission, in my view. The first one is that the paragraph that reads, “directing wrongful things to be done” actually comes from paragraph 48 of the Amended Statement of Claim. That paragraph goes on to say “namely to misappropriate money owing to the plaintiffs for the defendants’ personal use.” That paragraph of the Statement of Claim clearly provides more particulars than the Defendant’s factum asserts.
[30] The second problem with this argument, is that the facts with respect to the conspiracy, are not known with precision by the Plaintiffs and they cannot be known by precision by the Plaintiffs, because the Plaintiffs have asked for access to the materials and they have been refused that access.
[31] It is interesting to me to note in that regard what comes immediately after Madam Justice Epstein produces the quote from the decision of Justice O’Brien (set out at paragraph 22, above). At paragraph 84 of the Stavro decision, she goes on to say:
“[84] While I agree that the allegations of conspiracy are somewhat less detailed than might be optimum, it does describe the parties and their relationship, alleges the agreement to conspire, states the objects and purpose of the conspiracy, sets out the overt acts in furtherance of the conspiracy and alleges the damage suffered by the plaintiffs. I observe that given the deliberate attempt to exclude William from the affairs of MLGL, as found by Farley, J., in the oppression action and as pleaded in this action, it would be surprising if, prior to discovery, the plaintiffs would be in a position to provide greater detail than that which is pleaded. Certainly, they ought not to be prevented from proceeding with an otherwise valid claim through an order for particulars that cannot be satisfied.”
[32] In my view, that paragraph is completely applicable to the circumstances I have before me.
[33] In this case, the Statement of Claim describes in detail the parties’ and their relationship. It alleges that there was an agreement to conspire between the three defendants to deny the plaintiffs their share of the profits. It states the objectives and purposes of the conspiracy, which were to deny the plaintiffs their share of the profits in the company. It sets out the overt acts in furtherance of the conspiracy, to the extent that they are known, and alleges the damage suffered by the plaintiffs again to the extent that they are known.
[34] From my perspective, permitting a further motion on particulars on this matter would prevent the plaintiffs from advancing their otherwise valid claim by requiring them to respond to requests for particulars that cannot be satisfied. In my view, that applies to all of the Defendants’ concerns about the conspiracy allegations in the Statement of Claim.
[35] The other general argument that was advanced was that, after the Defendants asked for further particulars of the Amended Statement of Claim in June of 2024, the Plaintiffs simply provided a blanket denial of these further requests. The Defendants argue that the blanket response from the Plaintiffs was unreasonable and should not be permitted.
[36] I do not share the Defendants’ concerns for two reasons: a) there was a previous request for particulars, that was answered in part, and; b) there was a fresh as Amended Statement of Claim that outlines various things in more detail. Even a cursory review of that pleading reveals that there are very specific changes and additions that the Plaintiffs have made to that pleading to address issues of particulars.
[37] At that point, having provided both a detailed response and an amended pleading, unless there is something specific that was missing, it was open to the plaintiffs to say enough, you have what you need and it is time for you to plead.
[38] From that conclusion, it follows that I am not going to accede to the Defendants’ request that an order simply requiring an answer to the requested pleading be provided. In my view, acceding to that request would be permitting particulars to be used as a delay tactic, as set out in point (xi) from Three Dogs.
[39] In short, granting an order requiring an answer, would almost inevitably result in further requests for particulars that would result in additional delay. It must be remembered that the facts underlying this matter are now more than two years old, and the action itself is more than a year old.
[40] In that respect, I would direct the parties to the Report of the Committee conducting a review of the Rules of Civil Procedure. One of the things that the first phase of the report makes clear is that there are problems with delays, as a result of motion culture. In that respect, they outline the goals of their reforms, and they say at the bottom of page 19 of their phase 1 report,
“The goals of the proposed reforms is to reduce the time, cost and resources being spent on nonresponsive motions that can be grouped into three categories.”
[41] From my perspective, it is the first category that is most important in this particular case. Specifically, the report speaks to pursuing “reforms that may reduce existing motion/factum culture, even mandating presumptive efforts, inferences arising from improper refusals and impose a cap on the number of non-dispositive motions.”
[42] This is the kind of non-dispositive motion that, from my perspective, is something that I am concerned will cause too much delay. It has long been a feature of the civil litigation motions culture.
[43] Having made those general observations, I am going to now to turn to a review of some of the specifics of the 26 paragraph document that I’ve been provided with. It sets out the particulars that are requested. As I begin this review, however, I would note that it is possible, and I emphasize possible, some of these might benefit from some further clarification.
[44] However, it must be remembered that orders for particulars are discretionary and the court must be satisfied that the order is just in the circumstances of each case. See: Fairburn v. Sage (1925), 56 O.L.R. 462, and Watson v. Trojan Unlimited, 2016 ONSC 2740. This brings me to the specifics in the Demand for Particulars.
[45] The first three paragraphs of the specifics sought in the Defendants’ particulars all relate to employment issues. I am of the view that the employment issues are sufficiently particularized and that nothing further is needed.
[46] As an example of why I have reached this conclusion, attention should be paid to the second request for particulars which reads, “With respect to paragraph 9 of the Amended Statement of Claim, particularly with respect to Ranjit’s alleged work with PSW as a mechanic, i.e. in what capacity was he working with PSW?” From my perspective, it would seem to be obvious that the response to that request was that Ranjit was working as a mechanic.
[47] Given this type of request, it is difficult to see how additional particulars can be provided. However, if something is missing, it will come out during the discovery process.
[48] Moving to paragraph 4 of the request for particulars, there is a series of questions in terms of the definition of the word “share” and the definition of the word “profit”. From my perspective, those appear to me to be legal questions that are not required to be provided as particulars.
[49] The Defendants’ have also asked for particulars of the employment agreements. That is information that can be obtained in the course of discovery. The terms of the agreements are also facts that should be within the knowledge of the Defendants.
[50] Paragraph 5 of the request for particulars seeks further particulars about various payments that have been made. I would note in respect of these paragraphs, and they are paragraphs 5A to H, there are significant details already contained in the Statement of Claim. Any missing information can be obtained at discovery.
[51] This brings me to paragraph 6 of the request for particulars, which states “with respect to paragraph 13 of the Amended Statement of Claim, particulars of which corporation and their entity is being alleged to have benefited from the alleged purchase of the assets in which business account is alleged to have contributed to the funds for the mechanical service standard”. This request for particulars must be remembered in the context of the other allegations that have been made, which include an allegation that the defendants have refused to provide the plaintiffs to access to any books and records.
[52] In my view, this is a glaring example of the type of question that can best be answered by the defendants. In other words, it is covered by Madam Justice Epstein observation that there are going to be documents that within the purview of the defendants.
[53] With respect to paragraph 7, there are further requests for further particulars on VIN numbers. This request is repeated elsewhere in the pleadings requests. From my perspective, these requests can be dealt with by either an inspection request or through discovery.
[54] Given the delay in this case, however, I will not permit a request to inspect to be served before a Statement of Defence is served and filed. There is nothing that I see in the Statement of Claim or in the Demand for Particulars that would justify the further delay that would inevitably be attendant upon.
[55] Paragraph 8 deals with transfers of shares in PSW or any other shareholders and to the plaintiffs. Again, that’s a question that the Plaintiffs will not know, and the Defendants will know, because the Defendants appear to be in possession of the share register.
[56] Paragraph 9 raises that can be answered with respect to the discovery. I would note that this observation applies to many of the other requests for particulars and I do not intend to review them all. They can all be answered with the observations that the information has already been provided, is already in the knowledge of the Defendants or can properly be asked on discovery. However, in order to emphasize these points, I will provide a few more examples.
[57] For example, I would note paragraphs 12 and 13 read as follows, “Paragraph 12, with respect to paragraph 22 of the Amended Statement of Claim full particulars regarding the allegations of the improperly withdrawn funds”. “Paragraph 13 with respect to paragraph 23 of the Amended Statement of Claim, full particulars of the allegations that are included, the wages and profit share being alleged to have been unpaid.”
[58] Again, those are documents that are going to be part of the corporation’s books and records. From my perspective, they are not something that the Defendant can keep all of the books and records and then require the Plaintiff to provide particulars of what are in those books and records.
[59] Ultimately, I am dismissing all of these requests because they are all within the purview of the defendants, have been sufficiently particularized or can be obtained on discovery. In the circumstances, an order for particulars would not be just on the facts of this case.
Conclusion
[60] Therefore, for all of these Reasons, the motion brought by the defendants is dismissed. Their Statement of Defence is due within 20 days. I retain jurisdiction over this matter to address any issues if there are any reasons why the Statement of Defence cannot be delivered within 20 days from today’s date.
[61] In terms of costs, the parties were directed to provide costs submissions of no more than 3 pages each, single spaced, exclusive of case law, bills of costs and offers to settle. The plaintiffs’ were due seven days from the date the motion was heard, the defendants’ were due 7 days thereafter. There is no need or right to reply to those cost submissions without leave of the court, and if I do not receive cost submissions in that timetable, there will be no order as to costs.
LEMAY J.
Released: December 11, 2024