Court File and Parties
Court File No.: CV-24-00714214-0000
Date: 2025-02-24
Ontario Superior Court of Justice
Between:
Saqib Minhas and Rija Saqib, Plaintiffs (Respondents)
– and –
Arsalan Minhas, Iffat Minhas, and Mukkarm Khalid Minhas, Defendants (Appellants)
Appearances:
Yadvinder Toor and Mandeep Toor, for the Plaintiffs (Respondents)
Patrick Summers and Star Deak, for the Defendants (Appellants)
Heard: January 16, 2025
Endorsement
Callaghan
[1] Introduction
The Defendants (Appellants), Arsalan Minhas (“Arsalan”), Iffat Minhas (“Iffat”), Mukkarm Khalid Minhas (“Mukkarm”), and A.A.M. Logistics Inc. (“AAM”), appeal the Order of Associate Justice McAfee, dated October 4, 2024 (the “Decision”), granting the Plaintiffs’, Saqib Minhas’ (“Saqib”) and Rija Saqib’s (“Rija”), motion for leave to issue certificates of pending litigation (“CPLs”) on two properties, one in Brampton, Ontario (the “Brampton Property”) and one in Morriston, Ontario (the “Morriston Property”).
Background
[2] The Plaintiffs, Saqib and Rija, are husband and wife and live in the City of Islamabad, Pakistan. They lived in Canada from March 2023 to March 2024.
[3] Saqib is a cousin of the Defendant, Arsalan, and a nephew of the Defendant, Mukkarm. Saqib’s father is the brother of Mukkarm. The Defendant, Iffat, is Mukkarm’s wife and Arsalan’s mother.
[4] The dispute arises out of certain dealings between the parties whereby the Plaintiffs advanced $1,400,000 to the Defendants. The money was in part used to fund a trucking business, being AAM. The parties agree that approximately $800,000 went toward the trucking business (although there appears to be no formal accounting). The Plaintiffs contend that the remainder was used to help fund the purchase of the Morriston Property.
[5] Arsalan, Iffat, and Mukkarm are the registered owners of the Morriston Property. The purchase of the Morriston Property closed on March 22, 2023. It was bought as a preconstruction home for more than $4,200,000. There is a first mortgage of $1,750,000 in favour of MCC Mortgage Holdings Inc. There is also a vendor take-back second mortgage in favour of the developer, Gemini Homes Inc. (“Gemini”) of $1,450,000.00.
[6] The Brampton Property was purchased in 2019 by Iffat and Mukkarm.
[7] On June 12, 2023, the Plaintiffs and Iffat and Mukkarm entered into an agreement styled Constructive Trust Agreement (“CTA”). The CTA was signed after Iffat and Mukkarm received independent legal advice.
[8] The CTA stipulates that $700,000 of the $1,400,000 provided by the Plaintiffs was used to purchase the Morriston Property. There is a debate if this is so. The Plaintiffs assert that not only is it so but that the Defendants have failed to produce records that would show that money provided by the Plaintiffs to AAM was used to purchase the Morriston Property.
[9] The CTA states that in exchange for the $700,000 used for the Morriston Property, Iffat and Mukkarm transferred their beneficial interest in the Brampton Property to the Plaintiffs. Legal title remained in the names of Iffat and Mukkarm, although the Plaintiffs could demand the transfer of the title at any time. The CTA provided that Iffat and Mukkarm continued to be responsible for the upkeep and for all liabilities of the Brampton Property and could not sell the property without the consent of the Plaintiffs.
[10] The Plaintiffs assert that at the time the CTA was executed, they were advised by the Defendants that the property was encumbered with a mortgage in the amount of $1,400,000. The property had been purchased in 2019 for $1,570,000.
[11] The Plaintiffs subsequently learned that contrary to what they say was represented by the Defendants, the Brampton Property was encumbered with a second mortgage of $1,450,000. This mortgage is in favour of Gemini and is a collateral mortgage to the vendor take-back mortgage securing the Morriston Property.
[12] The Plaintiffs sued the Defendants for, among other things, a declaration that the Plaintiffs are the sole beneficial and/or equitable owners of the Brampton Property and have an equitable interest in the Morriston Property, an order vesting title in the Brampton Property and the Morriston Property in the Plaintiffs, an accounting, a tracing order, judgment and/or restitution against the Defendants in the amount of $700,000.00, partition and sale, and other relief. The Plaintiffs allege, among other things, a constructive trust and/or resulting trust with respect to the properties.
[13] In order to provide notice of their claim to third parties, the Plaintiffs brought an urgent motion seeking certificates of pending litigation (“CPLs”) over both properties. Associate Justice McAfee granted the CPLs with reasons dated September 24, 2024. It is the orders granting the CPLs that are being appealed by the Defendants.
Standard of Review
[14] Both parties agree that the standard of review is the general appellate standard as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235. That standard applies to this Court’s review of an Associate Judge’s decision: Zeitoun v. The Economical Insurance Group, 2009 ONCA 415.
[15] The appellate standard for questions of law is correctness. Findings of fact are not to be reversed unless the judge below made a “palpable and overriding error”. The palpable and overriding standard is highly deferential. The error must be so significant as to undermine the entire decision or, as one court said, “The entire tree must fall”: Canada v. South Yukon Forest Corp., 2012 FCA 165, at para 65. As noted by the Supreme Court, weighing evidence also gives rise to appellate deference: “The essential point is that making a factual conclusion, of any kind, is inextricably linked with assigning weight to evidence, and thus attracts a deferential standard of review”: Housen, at para. 24.
[16] The deferential standard also applies for findings of mixed fact and law, unless there is an extricable error with respect to the characterization of the legal standard or its application, including the failure to consider evidence or if there is an absence of evidence on the point, in which case the error may amount to an error of law, subject to a review standard of correctness: Housen, paras. 11 and 36.
[17] For the reasons that follow, I find that Associate Justice McAfee made no error that “can be attributed to the application of an incorrect standard, a failure to consider a required element of a legal test, or similar error in principle” (see Housen v. Nikolaisen, 2002 SCC 33 at para. 36). Nor can I conclude that the Associate Judge made a palpable and overriding error in her assessment of the evidence.
Analysis
[18] The defendants assert in their factum that:
a. Her Honour failed to apply the proper factors to allow for leave to issue the CPLs and/or gave insufficient weight to the proper factors. Her Honour also failed to properly consider whether equitable grounds favoured not granting leave to issue the CPLs;
b. Her Honour erred in failing to find that there was no evidence that the Plaintiffs had a triable interest in the Morriston Property;
c. Her Honour erred in failing to find that the fact that the Brampton Property was under power of sale proceedings was a factor against granting leave to issue a CPL against the Brampton Property, rather than finding the opposite;
d. Her Honour erred in failing to give sufficient, or any, weight to the factors normally considered on a motion for a CPL such as the uniqueness of the property, whether the Plaintiffs were a “shell corporation”, the sufficiency of damages, and the harm that would result if leave for a CPL was or was not granted; and
e. Her Honour misconstrued and failed to consider important facts in considering the nature of the Plaintiffs’ claim, particularly involving the Morriston Property.
[19] As evident from the wording of the issues set out above, much of the Defendants’ complaints relate to Her Honour’s assessment of the evidence and its application to the legal test. As noted, unless there is an absence of evidence, the failure to consider evidence or an extricable legal principle, the deferential standard applies, and the Defendants must establish a palpable and overriding error.
[20] First, the motion’s judge set out the accepted test for a CPL as summarized in Perruzza v. Spatone, 2010 ONSC 841, para 20. I see no error in her identifying the applicable legal principles.
[21] The defendants say there is “no evidence whatsoever” to support that the plaintiffs have raised a triable issue. Her Honour correctly identified the test for a CPL. In doing so, she correctly addressed whether the statement of claim raised a triable issue in respect of an interest in land and that the standard for establishing such a triable issue, at this stage of the proceedings, is a low one: Halliday v. Bromley, 2019 ONSC 1670, para 19. She correctly noted that at this stage, all that is required is to establish a triable issue, not to resolve the issues in dispute.
[22] Her Honour reviewed the evidence regarding the loan, the use of funds for the Morriston Property, the CTA which not only creates a beneficial interest in the Brampton Property but also evidences that the Plaintiffs’ money was used for the Morriston Property, and the alleged misrepresentation as to the mortgages on the Brampton Property. She concluded that there was sufficient evidence to establish a reasonable claim to an interest in land and that the Plaintiffs could well succeed at trial. For example, as pointed out by the Defendants’ counsel, the use of the Plaintiff’s money to purchase the Morriston Property could well give rise to a finding of constructive trust over that property: Nishi v. Rascal Trucking Ltd., 2013 SCC 33, para 1. Similarly, the CTA clearly creates an interest in the Brampton Property and the claim for a vesting order is a triable issue.
[23] In my view, Her Honour correctly held that the claims asserted by the Plaintiffs meet the low standard applied for establishing a triable issue involving land. Her decision was supported by the evidence. There was no error in this regard.
[24] The Defendants go on to say that Her Honour failed to consider various inconsistencies in the CTA and that a review of the CTA would “not withstand judicial scrutiny at trial”. This is not the standard to be applied at this stage. As Her Honour noted in the Decision, her role is not to resolve disputed questions of fact or issues of credibility: G.P.I. Greenfield Pioneer Inc. v. Moore, paras 18-21. The motions judge correctly addressed the CTA for the purpose of the motion.
[25] It is argued that Her Honour failed to consider that the Plaintiffs are foreign residents and have not posted security for costs. In this argument, the Defendants leverage off the test as set out in Perruzza v. Spatone, that says that in weighing whether to discharge a CPL, a judge may consider whether the plaintiff is a “shell corporation”. This is just one factor to be weighed in considering the discharge or granting of a CPL. I was pointed to no case where this factor was applied to a person, rather than a corporation.
[26] Nonetheless, Her Honour considered this factor and rejected it. She expressly noted that the Plaintiffs had advanced significant funds to the Defendants. She further noted that the Defendants have yet to bring a motion for security for costs. In my view, Her Honour turned her attention to these issues and was not persuaded that they were detrimental to the issuance of the CPLs. This was part of her weighing of the various applicable factors, an exercise to which deference is owed. I see no legal error and no palpable and overriding error in her consideration of these issues. Moreover, in my view, where the Plaintiffs have advanced $1,400,000 to the Defendants, all of which was advanced within this jurisdiction, it is difficult to comprehend how the Plaintiffs cannot be said to have assets in the jurisdiction. The difficulty is that the assets appear to be within the control of the Defendants, an issue which will be canvassed further when this matter goes to trial.
[27] It is argued that Her Honour failed to give sufficient weight to the fact that the Brampton Property is under power of sale and that the CPL could impede the ability of the Defendants to refinance. Her Honour considered the fact that the Brampton Property was under power of sale but was persuaded that the greater risk was that there would be a transmission of interest by the Defendants of the Brampton Property that would prejudice the Plaintiffs. Again, this was part of her judicial weighing of the competing factors for which deference is owed. I see no error in Her Honour’s analysis. Moreover, I am not convinced that a CPL would impede refinancing of the existing first mortgage and there is no evidence from the mortgagee or an expert saying so. Moreover, from a practical perspective, there would be little incentive for the Plaintiffs to oppose refinancing of the first mortgage, as the alternative would be the sale of the property in circumstances where they have no control.
[28] In respect of the remainder of the issues raised, it is argued that Her Honour did not provide adequate consideration to other factors such as the ability to claim damages, the uniqueness of the property, and the damage of leaving the CPL on the properties. She considered each of these factors and weighed them as she saw them. She found the property was not unique; she considered that “Arsalan and Mukkarm have no income and that AAM has suffered severe financial losses and is not profitable” and “absent the CPLs there may be transmissions of interest”. In my view, I find there was no error of law in doing so and no palpable and overriding error in her weighing of these various factors.
Disposition
[29] For the above reasons, this appeal is dismissed.
Costs
[30] I encourage the parties to agree on costs. If they cannot, I will receive costs submissions as follows:
a. Any party claiming costs shall file written submissions of no more than four pages, plus a bill of costs and any offers to settle, within ten days of the release of these reasons.
b. Any responding submissions shall be limited to three pages, plus a bill of costs and any written offers to settle and shall be delivered within one week of receipt of the other party’s costs submissions.
c. Any reply to submissions shall be delivered within two business days of receipt of responding submissions and shall be no more than one page in length.
d. All submissions shall be uploaded to Case Center and delivered to me by way of email to my assistant from whom you received this decision.
Callaghan
Released: February 24, 2025
Court File No.: CV-24-00714214-0000
Date: 2025-02-21
Ontario Superior Court of Justice
Between:
Saqib Minhas and Rija Saqib, Plaintiffs (Respondents)
– and –
Arsalan Minhas, Iffat Minhas, and Mukkarm Khalid Minhas, Defendants (Appellants)
Endorsement
Callaghan
Released: February 21, 2025