Superior Court of Justice – Ontario

Court File No.: CV-21-00655418-00CL
Date: 2025-04-25

RE:
Sakab Saudi Holding Company, Alpha Star Aviation Services Company, Enma Al Ared Real Estate Investment and Development Company, Kafa'at Business Solutions Company, Security Control Company, Armour Security Industrial Manufacturing Company, Saudi Technology & Security Comprehensive Control Company, Technology Control Company, and New Dawn Contracting Company and Sky Prime Investment Company, Plaintiffs

AND:
Saad Khalid S Al Jabri, Dreams International Advisory Services Ltd., 1147848 B.C. Ltd., New East (US) Inc., New East 804 805 LLC, New East Back Bay LLC, New East DC LLC, Jaalik Contracting Ltd., Nadyah Sulaiman A Al Jabbari, personally and as litigation guardian for Sulaiman Saad Khalid Al Jabri, Khalid Saad Khalid Al Jabri, Mohammed Saad Kh Al Jabri, Naif Saad Kh Al Jabri, Hissah Saad Kh Al Jabri, Saleh Saad Khalid Al Jabri, Canadian Growth Investments Limited, Gryphon Secure Inc., Infosec Global Inc., QFive Global Investment Inc., Golden Valley Management Ltd, New South East Pte Ltd., Ten Leaves Management Ltd., 2767143 Ontario Inc., Nagy Moustafa, HSBC Trustee (C.I.) Limited, in its capacity as Trustee of the Black Stallion Trust, HSBC Private Banking Nominee 3 (Jersey) Limited, in its capacity as a nominee shareholder of Black Stallion Investments Limited, Black Stallion Investments Limited, New East Family Foundation, New East International Limited, New South East Establishment, NCOM Inc. and 2701644 Ontario Inc., Defendants

Before: Mark L. Cavanagh

Counsel:
Munaf Mohammed K.C., Jonathan G. Bell and Douglas Fenton for the plaintiffs
John Adair, Sean Pierce and Robert Trenker for the Defendants Khalid Saad Khalid Al Jabri

Heard: 2025-04-02

Endorsement

(April 2, 2025)

Introduction

[1] Saad Aljabri ("Dr. Aljabri"), 1147848 B.C. Ltd., 2701644 Ontario Inc., and certain of Dr. Aljabri's family members (the "Counterclaim Plaintiffs") move for an order granting them leave to issue a counterclaim in the form of the proposed Amended Statement of Defence and Counterclaim (the "Counterclaim").

[2] For the following reasons, this motion is dismissed.

Background

[3] The Counterclaim Plaintiffs seek leave to advance claims against the plaintiffs and the additional defendants by counterclaim Public Investment Fund ("PIF"), Tahakom Investment Company ("TIC"), Yassir Al-Rumayyan, Mohammed Al Al-Sheikh, Sky Prime Investment Company, Nabil Al Omar ("Al Omar") and Abulnasser Al Kheraif ("Al Kheraif") (collectively, the "Counterclaim Defendants").

[4] In the Counterclaim, the Counterclaim Plaintiffs claim damages in the amount of one hundred million dollars for abuse of process and unlawful means conspiracy.

[5] The Counterclaim Plaintiffs also seek leave to advance the Counterclaim against Al Omar and Al Kheraif for:

(a) a declaration that Al Omar and Al Kheraif are jointly and severally liable for any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action; and, in the alternative,

(b) contribution and indemnity from Al Omar and Al Kheraif towards any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action, up to the amount that Al Omar and Al Kheraif received from the funds that the plaintiffs allege in the main action were misappropriated from them.

[6] The plaintiffs oppose this motion. They submit that they will suffer material, non-compensable prejudice if the Counterclaim is allowed to issue at this stage of the action. First, the plaintiffs submit that the claims made through the causes of action pleaded in the Counterclaim are statute barred and, in any event, the causes of action are untenable at law, such that they will suffer non-compensable prejudice if the proposed Counterclaim is allowed to proceed. Second, they submit that allowing the Counterclaim to proceed at this stage of the action will inevitably result in the loss of the March 2026 trial dates for the action, and years of additional delay, which constitutes non-compensable prejudice.

Analysis

Legal Principles

[7] Rule 27.07(2) of the Rules of Civil Procedure provides that a defendant who has delivered a statement of defence that does not contain a counterclaim and who wishes to counterclaim against the plaintiff and another person who is not already a party to the main action may, with leave of the court, have the registrar issue an amended statement of defence and counterclaim.

[8] Rule 26.01 of the Rules of Civil Procedure provides that on a motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. This rule is mandatory and an amendment is to be permitted even in the face of unfairness and prejudice unless the prejudice cannot be compensated for in costs or an adjournment. The court is entitled to inquire into the merits of the proposed amendment to ensure that it at least meets a basic threshold of legal soundness, that is, the amendment is tenable at law. See 1588444 Ontario Ltd. (c.o.b. Alfredo's) v. State Farm Fire and Casualty Co., 2017 ONCA 42, para 25; Re/Max Omega Realty v. Ross Draper, 2012 ONSC 4477, paras 22, 24.

[9] Rule 5.04(2) of the Rules of Civil Procedure provides that at any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. In motions under rule 5.04(2), the courts retain a discretion to deny an amendment in a proper case, even in the absence of non-compensable prejudice, when it is sought to change the parties to a proceeding. See Mazzuca v. Silvercreek Pharmacy Ltd., para 25.

[10] The court will not conduct a detailed examination of the evidentiary merits of a proposed amendment. The court is only required to ensure that the proposed amendment is meritorious in the sense of raising a tenable plea. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true. Where it is plain and obvious that the amendments disclose no reasonable cause of action, or lack a legal foundation, the amendment should be refused. Stated another way, an amendment is untenable if it is not prima facie meritorious, or if it is not sufficiently particularized. The amendments are to be read generously with allowance for deficiencies in drafting. See Re/Max Omega Realty v. Ross Draper, 2012 ONSC 4477, paras 22, 24; Marsh, Christopher and Blockchain Markets Inc. v. Electronica AI Inc. and Aristotle Andrulakis, 2024 ONSC 5869, para 12.

[11] The passing of a limitation period automatically gives rise to the presumption of prejudice. Generally, if a limitation period has expired, an amendment is not permitted, and the moving party must show the existence of special circumstances that, in the context of the existing claim, rebut the presumption that the responding party will suffer prejudice from the loss of a limitation defence. See Marsh, Christopher and Blockchain Markets Inc. v. Electronica AI Inc. and Aristotle Andrulakis, 2024 ONSC 5869, paras 13-14.

Are the Claims Pleaded in the Counterclaim Plainly and Obviously Untenable or Statute Barred?

Claim for Abuse of Process

[12] At the hearing of this motion, the Counterclaim Plaintiffs, through their counsel, agreed that if the causes of action for abuse of process and conspiracy pleaded in the Counterclaim are governed by Ontario law, the two year limitation period in the Limitations Act, 2002 applies and the claims based on these causes of action are statute barred.

[13] In the Counterclaim, the Counterclaim Plaintiffs make allegations under the heading "Abuse of Process / Unlawful Means Conspiracy". They allege that from June 2017 through January 2021, the Crown Prince of Saudi Arabia, Mohammed Bin Salman ("MBS"), Mr. Al-Rumayyan (an official with the Saudi Public Investment Fund), Mr. Al Al-Sheikh (an official with the Saudi government) and the other Counterclaim Defendants carried out MBS's instructions to take steps to pursue the Aljabri family through judicial and extra-judicial means, which they did with the malicious intent to and for the purpose of harming, silencing, and ultimately destroying the Aljabri family.

[14] The Counterclaim Plaintiffs allege that the Counterclaim Defendants have committed and are liable for the tort of abuse of process. They allege that the Counterclaim Defendants have either commenced or participated in deciding to commence this litigation in bad faith for the sole purpose of carrying out MBS's threat to harm Dr. Aljabri and his family by any means necessary. The Counterclaim Plaintiffs allege that the Counterclaim Defendants have committed overt acts in furtherance of that improper purpose as pleaded in the Counterclaim.

[15] The Counterclaim Plaintiffs submit, citing Harris v. GlaxoSmithKline Inc., 2010 ONCA 872, paras 27-28, that the tort of abuse of process requires that: (i) the plaintiff is a party to a legal process initiated by the defendant; (ii) the legal process was initiated for the predominant purpose of furthering some indirect, collateral and improper objective; (iii) the defendant took or made a definite act or threat in furtherance of the improper purpose; and (iv) some measure of special damage has resulted.

[16] The Counterclaim Plaintiffs submit that they have made factual allegations in the Counterclaim which satisfy the requirements identified in Harris.

[17] The relevant dates for assessing whether the limitation period has clearly expired for the conspiracy and abuse of process claims is November 2023 when the notice of motion for leave to amend the statement of defence and add a counterclaim was served. See Computer Enhancement Corporation v. J.C. Options, 2013 ONSC 4548, para 20.

[18] The Counterclaim Plaintiffs submit that their claims based on causes of action pleaded in the Counterclaim are governed by the law of Saudi Arabia.

[19] In Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, La Forest J., writing for the majority, held that the rule of private international law that should generally be applied in torts is the law of the place where the activity occurred—the lex loci delecti.

[20] The Counterclaim Plaintiffs submit that they are parties to a legal process initiated by the Counterclaim Defendants—this action. They submit that this process is alleged to have been initiated for an indirect, collateral and improper purpose—political persecution—and that the Counterclaim Defendants took or made definite acts or threats in furtherance of that process, as pleaded in the Counterclaim.

[21] The Counterclaim Plaintiffs submit that the wrongful conduct alleged in the Counterclaim occurred in Saudi Arabia and, applying the lex loci delecti choice of law rule, the law of Saudi Arabia applies, including the law with respect to limitation periods. They submit that admissible evidence on this motion establishes that under Saudi law, there is either no limitation period or a limitation period of five years and, therefore, this claim is not statute barred.

[22] I do not accept the Counterclaim Plaintiffs' submission that the abuse of process claim is governed by Saudi law. With respect to this claim, the legal process that the Counterclaim Plaintiffs plead was initiated by the plaintiffs (some of the Counterclaim Defendants) for the alleged predominant purpose of furthering some indirect, collateral and improper objective is this action that was commenced in Ontario. When I apply the lex loci delecti choice of law rule, I conclude that the place where the wrongful act alleged in support of the abuse of process claim—the commencement and prosecution of this action—occurred in Ontario.

[23] The question of whether an action commenced in Ontario is an abuse of the process of the court in Ontario would need to be decided under the law of Ontario, and not under the law of Saudi Arabia.

[24] Under s. 4 of the Limitations Act, 2002, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

[25] The Counterclaim Plaintiffs agree that they discovered the claim for abuse of process more than two years before the notice of motion seeking leave to issue the Counterclaim was served. As a result of my conclusion that Ontario law governs the abuse of process claim, this claim is statute barred.

[26] If I am found to have erred in this respect, I go on to address whether the claim of the Counterclaim Plaintiffs based on the factual situation pleaded for the cause of action of abuse of process, if it is governed by the law of Saudi Arabia, is barred by the passing of the limitation period.

[27] If I had concluded that the claim for abuse of process is governed by the law of Saudi Arabia, I would need to determine whether the alleged wrongful conduct gives rise to liability under the law of Saudi Arabia. If I had determined that the wrongful conduct alleged in respect of the abuse of process claim gives rise to liability under Saudi law, I would need to determine whether the claim for abuse of process is barred under Saudi law with respect to limitation periods.

[28] In the Responding Motion Record of the plaintiffs filed in opposition to this motion, the plaintiffs filed the affidavit of Lorraine Klemens, a law clerk with the law firm representing the plaintiffs. In paragraph 5 of her affidavit, Ms. Klemens states: "Attached as Exhibit '4' is the affidavit of Abdulaziz Al Fahad dated January 17, 2021 (without exhibits)". This document was attached to Ms. Klemens affidavit as an exhibit.

[29] This affidavit of Mr. Al Fahad was filed by the plaintiffs for use on their motion for a Mareva injunction in this action.

[30] The Counterclaim Plaintiffs rely on statements that are included in the copy of the affidavit of Abdulaziz Al Fahad that was attached as an exhibit to Ms. Klemens' affidavit in support of their submission that Saudi law contains either no limitation period or a limitation period of five years for a claim based on the wrongful conduct alleged in the Counterclaim for the cause of action pleaded as abuse of process. The Counterclaim Plaintiffs submit, based on these statements, that the claim for abuse of process (and the claim for conspiracy) is not barred by a limitation period.

[31] I disagree that the Counterclaim Plaintiffs are entitled to rely on the copy of Mr. Al Fahad's affidavit attached as an exhibit to Ms. Klemens affidavit as proof of Saudi law. By attaching a copy of Mr. Al Fahad's affidavit affirmed on January 17, 2021, without exhibits, to her affidavit, Ms. Klemens identified this document as having been previously filed for use on a motion in this action. This is one of many documents she identified and appended to her affidavit as an exhibit. By introducing Ms. Klemens' affidavit into evidence where she identified a copy of Mr. Al Fahad's affidavit, the plaintiffs did not tender into evidence on this motion Mr. Al Fahad's affidavit as proof of its contents. The plaintiffs did not tender any evidence of Saudi law into evidence on this motion. Neither did the Counterclaim Plaintiffs.

[32] If I had found that the abuse of process claim is governed by Saudi law, then, in the absence of evidence proving the law of Saudi Arabia, I would conclude that Saudi law is the same as Ontario law in respect of the abuse of process claim. See Vale Canada Limited v. Solway Investment Group Limited et al., 2021 ONSC 7562, para 119, and authorities cited. Under Ontario law, the Counterclaim Plaintiffs' abuse of process claim is statute barred.

[33] I conclude that the plaintiffs have shown that if the amendment is granted to allow the Counterclaim Plaintiffs to make a claim for abuse of process, there is a presumption that the plaintiffs would suffer prejudice because the claim based on this cause of action is statute barred. The Counterclaim Plaintiffs have not shown that there are special circumstances that rebut the presumption of prejudice. This is prejudice that cannot be compensated for by costs or an adjournment.

Claim for Civil Conspiracy

[34] In the Counterclaim, the Counterclaim Plaintiffs claim damages of one hundred million dollars for unlawful means conspiracy. They make factual allegations in the Counterclaim under the heading "Abuse of Process/Unlawful Means Conspiracy".

[35] As noted, the Counterclaim Plaintiffs allege that from June 2017 through January 2021, MBS, Al-Sheikh and Al-Rumayyan, together with the other Counterclaim Defendants, carried out MBS's instructions to take steps to pursue the Aljabri family through judicial and extra-judicial means, which they did with the malicious intent to and for the purpose of harming, silencing, and ultimately destroying the Aljabri family. The Counterclaim Plaintiffs plead the steps through which, they allege, the Counterclaim Defendants did so which include allegations of steps taken in Saudi Arabia to punish and persecute Dr. Aljabri and in service of MBS's political goals.

[36] The Counterclaim Plaintiffs allege that this conduct amounts to a conspiracy by the Counterclaim Defendants and the non-defendant co-conspirator MBS who, they allege, by his own admission, has been responsible for directing the entire unlawful campaign. The Counterclaim Plaintiffs allege that the times, dates and locations of the meetings and discussions among the conspirators in furtherance of the conspiracy are known only to the Counterclaim Defendants and include certain pleaded meetings and discussions.

[37] The Counterclaim Plaintiffs submit that when the lex loci delecti choice of law rule is applied, the law of Saudi Arabia governs the claim pleaded in civil conspiracy because the material steps in furtherance of the alleged conspiracy occurred in Saudi Arabia.

[38] The Counterclaim Plaintiffs do not expressly plead in the Counterclaim that the wrongful acts alleged to give rise to claims sounding in conspiracy are, under the applicable choice of law rule, governed by the law of Saudi Arabia. They identify the causes of action pleaded using nomenclature used in Ontario law. I accept, however, that the applicable choice of law rule, lex loci delecti, must be applied to the factual situation alleged in the Counterclaim to determine which law governs the alleged wrongful conduct. I accept that the Counterclaim Plaintiffs have pleaded factual allegations in the Counterclaim of steps taken in Saudi Arabia in furtherance of the alleged conspiracy, including at paragraph 236 of the Counterclaim. The Counterclaim Plaintiffs also plead in this paragraph that the commencement of this action is a step taken in furtherance of the conspiracy.

[39] Although this action was commenced in Ontario, many other steps alleged to have been taken in furtherance of the conspiracy occurred in Saudi Arabia. The commencement of this action is alleged to have followed from the agreement by the Counterclaim Defendants to pursue the Aljabri family with malicious intent for the purpose of harming them. I conclude that when the applicable choice of law rule is applied to the wrongful conduct pleaded as a cause of action in conspiracy, the claim based on this cause of action is governed by the law of Saudi Arabia.

[40] With respect to proof of Saudi law, the Counterclaim Plaintiffs rely on an excerpt from a report of Chibi Mallat, an expert witness who submitted a report and gave evidence on behalf of the Counterclaim Plaintiffs on their prior motion to set aside the Mareva Order against Dr. Aljabri. This report is dated June 30, 2021 and a copy was attached as an exhibit to the affidavit of Ms. Klemens that was filed by the plaintiffs in the main action in their responding motion record in opposition to this motion. As I have noted, the Counterclaim Plaintiffs also rely on excerpts from the expert affidavit of Mr. Al Fahad dated January 17, 2021, a copy of which was appended, without exhibits, as an exhibit to the affidavit of Ms. Klemens.

[41] The Counterclaim Plaintiffs submit that under Saudi law, as proven through the evidence of these witnesses, the factual situation pleaded in the Counterclaim for the claim in conspiracy gives rise to liability on the parts of the Counterclaim Defendants. As I have noted with respect to the claim for abuse of process, the Counterclaim Plaintiffs submit that the limitation period for the conspiracy claim is also governed by Saudi law and they rely on the partial copy of Mr. Al Fahad's affidavit attached as an exhibit to Ms. Klemens’ affidavit as proof that under Saudi law, there is either no limitation period or a five year limitation period which has not passed.

[42] The plaintiffs object to the admissibility of the copy of Mr. Mallat's report as evidence on this motion to prove the truth of its contents. The plaintiffs submit that if the Counterclaim Plaintiffs intended to rely on expert evidence to prove Saudi law, they were required to properly tender such evidence through an expert affidavit delivered on this motion, where responding evidence could be filed and the deponent of the evidence tendered by the Counterclaim Plaintiffs could be cross-examined.

[43] In their notice of motion, the Counterclaim Plaintiffs list, as required by rule 37.06(c) of the Rules of Civil Procedure, the documentary evidence to be used at the hearing of the motion. The list is (a) the omnibus motion record on this motion and the moving parties' motion under rule 36 (heard the day after the hearing of this motion); (b) rule 39.03 examinations of such persons as may have relevant evidence on the motion; and (c) such further and other evidence as the lawyers may advise and this Honourable Court may permit. The omnibus motion record of the Counterclaim Plaintiffs does not include evidence from an expert witness proving the law of Saudi Arabia and no examinations under rule 39.03 were conducted on this motion of a witness giving evidence of the law of Saudi Arabia.

[44] In addition to evidence in their own motion record, the Counterclaim Plaintiffs are at liberty to use evidence properly tendered by the plaintiffs in the main action, responding parties on this motion, in opposition to this motion. However, on this motion, Mr. Mallat's report was not tendered as evidence of its contents. The plaintiffs' responding motion record does not contain an affidavit from Mr. Mallat. Mr. Mallat was not qualified on this motion to give expert evidence. He was not subject to cross-examination, since the only deponent who tendered evidence for the responding plaintiffs is Ms. Klemens. I conclude that the copy of Mr. Mallat's report that is appended as an exhibit to Ms. Klemens’ affidavit is not evidence that is admissible on this motion as proof of the law of Saudi Arabia.

[45] Mr. Al Fahad gave evidence of Saudi law on another motion in this action in a different context. If the Counterclaim Plaintiffs intended to rely on this motion on evidence from Mr. Al Fahad, or from another expert on Saudi law, to prove the law of Saudi Arabia, they were required to deliver an expert affidavit from him or her. The partial copy of the affidavit of Mr. Al Fahad affirmed in January 2021 for use on another motion that was appended as an exhibit to Ms. Klemens' affidavit (without exhibits) is not evidence on this motion of the law of Saudi Arabia, including whether the factual allegations pleaded in the Counterclaim, if proven, give rise to liability under Saudi law.

[46] The Counterclaim Plaintiffs have failed to tender evidence of the law of Saudi Arabia on this motion. In the absence of proof of the law of Saudi Arabia, it is deemed to be the same as the law of Ontario. See Vale Canada Limited v. Solway Investment Group Limited et al., 2021 ONSC 7562, para 119, and authorities cited.

[47] Under Ontario law, the Limitations Act, 2002 is the statute which determines the limitation period for claims pursued in court proceedings.

[48] The Counterclaim Plaintiffs agree that if the limitation period for their claim in conspiracy is determined by the Limitations Act, 2002, this claim is statute barred because the notice of motion for leave to issue the Counterclaim was served more than two years after the claim was discovered.

[49] The plaintiffs have shown that if the amendment is granted to allow the Counterclaim Plaintiffs to make a claim for conspiracy, there is a presumption that the plaintiffs would suffer prejudice because the claim based on this cause of action is statute barred. The Counterclaim Plaintiffs have not shown that there are any special circumstances which rebut the presumption of prejudice. This is prejudice that could not be compensated for by costs or an adjournment.

Claim for a Declaration that the Proposed Added Defendants by Counterclaim, Messrs. Al Omar and Al Kheraif, are Jointly and Severally Liable

[50] As I have noted, in the Counterclaim, the Counterclaim Plaintiffs claim against Al Omar and Al Kheraif for:

(a) a declaration that Al Omar and Al Kheraif are jointly and severally liable for any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action; and, in the alternative,

(b) contribution and indemnity from Al Omar and Al Kheraif towards any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action, up to the amount that Al Omar and Al Kheraif received from the funds that the plaintiffs allege in the main action were misappropriated from them.

[51] The Counterclaim Plaintiffs submit that these claims are governed by Saudi law. The Counterclaim Plaintiffs have not tendered evidence to prove Saudi law. As a result, on this motion, Saudi law is deemed to be the same as Ontario law in respect of the claim against Al Omar and Al Kheraif for a declaratory order and, in the alternative, for contribution and indemnity.

[52] In the Counterclaim, the Counterclaim Plaintiffs refer to the plaintiffs' allegations in the main action that Dr. Aljabri and other co-conspirators, both named and unnamed, misappropriated funds from the plaintiffs and conspired together to implement the fraud.

[53] The Counterclaim Plaintiffs allege in the Counterclaim that Al Omar and Al Kheraif each received substantial funds from the plaintiffs under precisely the same circumstances as certain of the defendants. They allege that if there is no legal or other justification for the payments to Dr. Aljabri, which they deny, then there is no legal or other justification for the payments to Al Omar or Al Kheraif. The Counterclaim Plaintiffs allege that if the payments to Dr. Aljabri and the co-conspirators were fraudulent, which they deny, then so, too, were the payments to Al Omar and Al Kheraif. The Counterclaim Plaintiffs submit that the allegations made by the plaintiffs in the main action against the defendants who allegedly engaged in a fraudulent scheme to defraud the plaintiffs apply equally to Al Omar and Al Kheraif.

[54] The Counterclaim Plaintiffs submit that the plaintiffs' claims against the alleged defendant conspirators are for joint and several liability and that if the claims are successful, Al Omar and Al Kheraif, as co-conspirators, should be held jointly and severally liable to the plaintiffs in the main action, with the Counterclaim Plaintiffs, for the entirety of the claims against the joint tortfeasors, and not just for the amounts each of them received.

[55] The plaintiffs in the main action have given the following undertaking to the defendants through an email dated March 13, 2025 from their legal counsel to counsel for Saad Aljabri and counsel for Mohammed Aljabri:

Subparagraph 234(b) of your clients' proposed counterclaim claims contribution and indemnity from Mr. Al Omar and Mr. Al Kheraif towards any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action, up to the amount that Al Omar and Al Kheraif received from the funds that the plaintiffs allege in the main action were misappropriated from them. As you are aware, the plaintiffs position in this litigation is that Saad Aljabri was in a very different position than either CEO of the plaintiff companies, but to be clear, the plaintiffs are not seeking any amounts from any of the defendants that were ultimately received by either Mr. Al Omar or Mr. Al Kheraif. Lest there be any doubt, the plaintiffs agree not to pursue any such amount to the extent that there is a finding that either Mr. Al Omar or Mr. Al Kheraif ultimately received any payments from the impugned payments that give rise to the action against the Defendants. Hopefully that helps streamline issues.

[56] I observe that the plaintiffs have not undertaken not to advance claims against the Counterclaim Plaintiffs, defendants in the main action, for any and all amounts for which Al Omar and Al Kheraif, as joint tortfeasors, may be found liable to the Counterclaim Plaintiffs for contribution and indemnity. The undertaking is limited to the amounts "ultimately received by either Mr. Al Omar or Mr. Al Kheraif". [1]

[57] As a result of the plaintiffs' undertaking, the Counterclaim Plaintiffs advised the court at the hearing of this motion that they do not seek to make a claim for the alternative relief claimed in the Counterclaim for contribution and indemnity for amounts for which the Counterclaim Plaintiffs are found liable to the plaintiffs in the main action"up to the amount that Al Omar and Al Kheraif received from the funds that the plaintiffs allege in the main action were misappropriated from them".

[58] The Counterclaim Plaintiffs still seek a declaration that Al Amar and Al Kheraif are jointly and severally liable "for any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action".

[59] The plaintiffs' limited undertaking does not cover the entire amount for which Counterclaim Plaintiffs' may have a claim against Al Amar and Al Kheraif for contribution and indemnity, that is, to the extent of these persons' relative degrees of fault as joint wrongdoers.

[60] The Counterclaim, like any action, must have a substantive component. It must assert a cause of action. See Hengeveld v. Personal Insurance Co., 2019 ONCA 497, para 19. A cause of action is a factual situation the existence of which entitles one person to obtain from the court a remedy against another person. See 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848, para 19. The contribution and indemnity provisions of the Negligence Act allow a wrongdoer to recover indemnity from another wrongdoer to the extent of the latter's relative degree of fault: Hengeveld, at para. 22.

[61] The plaintiffs in the main action have not sued Al Omar and Al Kheraif and do not seek a judgment against them. With the withdrawal of their alternative and limited claim for contribution and indemnity, the Counterclaim Plaintiffs are left with a claim for "a declaration that Al Omar and Al Kheraif are jointly and severally liable for any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action". By withdrawing the alternative and limited claim in the Counterclaim for contribution and indemnity, and without making a claim for contribution and indemnity under the Negligence Act to the extent of the relative degree of fault of Al Amar and Al Kheraif, the Counterclaim Plaintiffs seek no remedy against Al Amar and Al Kheraif. The claim for declaratory relief is untethered from a pleaded cause of action, and serves no purpose.

[62] In the absence of a claim for a remedy against Al Omar and Al Kheraif for contribution and indemnity, the Counterclaim for a declaration that they are jointly and severally liable for any amount that the Counterclaim Plaintiffs are found liable to pay to the plaintiffs in the main action discloses no tenable cause of action against Al Omar and Al Kheraif.

[63] Given my conclusion that the Counterclaim does not plead a factual situation which gives rise to a tenable cause of action against Al Amar and Al Kheraif, I do not decide on this motion whether, had a tenable cause of action been pleaded, a claim based on such a cause of action would be statute barred.

Prejudice from Loss of the Trial Date

[64] I have concluded that the plaintiffs have shown that they would suffer prejudice that cannot be compensated for by costs or an adjournment if the Counterclaim Plaintiffs are allowed to amend their pleading to make the Counterclaim. As a result, it is not necessary for me to address other grounds of prejudice.

[65] If I am found to have erred in this respect, I go on to address the plaintiffs' submission that if the requested amendments are granted, they will suffer prejudice through the loss of the trial date for a twelve week trial beginning in March 2026.

[66] At the hearing of this motion, the Counterclaim Plaintiffs did not forcefully submit that if the requested amendments to allow the Counterclaim to proceed are allowed, the procedural steps to allow the Counterclaim to be tried with the main action could be completed without delaying the trial. They submit that the hearing of this motion was delayed because of the time taken for the Court to decide a motion to validate service on proposed added defendants by counterclaim, and the proper time at which any prejudice from delay caused by the amendments should be assessed, without accounting for systemic delay for which they are not responsible, is when they moved for an order validating service in February 2024.

[67] The Counterclaim would add several additional parties as defendants to the counterclaim including officials with the PIF and senior officials with the Kingdom of Saudi Arabia. If the Counterclaim were allowed to proceed, there would, in all likelihood, be challenges to the jurisdiction of this Court over the added parties, including challenges based on state immunity. Once these jurisdictional challenges, including any appeals, were concluded and if the Counterclaim were to be allowed to proceed, there would need to be pleadings, documentary discovery, oral examinations for discovery, and exchanges of expert reports before the Counterclaim would be ready for trial. These procedural steps have been highly contentious in the main action and have involved many interlocutory motions resulting in the passage of several years from the commencement of the action to the scheduled trial date.

[68] Even with active case management, the main action will have taken several years before it is ready for trial. It is not reasonable to expect that the Counterclaim could be ready to be tried together with the main action while preserving the existing trial dates. To allow the Counterclaim to proceed, and to direct it to be tried with the main action, would reasonably lead to a delay of the trial for at least eighteen months to two years, and probably longer. Although not certain, in my assessment, it is highly doubtful that the trial date could have been preserved even if this motion was heard earlier, in mid-2024.

[69] The Counterclaim Plaintiffs knew of the factual basis for the proposed claims sounding in abuse of process and conspiracy when, or soon after, the main action was commenced and the statement of claim was served in January 2021. They waited until November 29, 2023 to move to amend their pleading to make the Counterclaim. This delay has contributed to the risk that the scheduled trial date could not be met if the Counterclaim were allowed to proceed and tried with the main action. This is relevant in considering prejudice. See Cappellaro-Zavaleta v. Cappellaro-Zavaleta, 2024 ONSC 5886, para 10.

[70] In Marsh, the defendants moved for leave to amend their statement of defence and to commence a counterclaim against the plaintiffs and to add two new parties as defendants by counterclaim. The motion judge concluded that the applicable limitation period for the claims proposed to be made by counterclaim had expired. The motion judge, at paras. 51-53, also addressed other prejudice upon which the plaintiffs in that action relied, being an imminent trial date and the risk of loss of this trial date. The motion judge was satisfied in the circumstances of that case that there would be real prejudice from allowing the amendments because the plaintiffs would lose their trial date (three months hence) in an action that was already four years old. The motion judge was satisfied that the loss of the trial date, itself, may form non-compensable prejudice, particularly where the litigation has already been significantly delayed.

[71] A trial date for this action was set by another case management judge for the trial to begin in March 2025. This was done on the consent of the parties. This trial date was vacated in late 2024, because the parties were not ready for trial. Later, a new trial date was set on the consent of the parties for the trial to begin in March 2026.

[72] The legal expenses that will be incurred for the main action if the trial is delayed until the Counterclaim is ready for trial will undoubtedly be considerably higher than if the trial proceeds as scheduled. The assets of the Counterclaim Plaintiffs are frozen by Mareva orders and are subject to the plaintiffs' proprietary claims. These orders were varied to allow the Counterclaim Plaintiffs to access frozen funds to pay for legal costs for defence of this action through the trial of the main action.

[73] If I had held that the claims pleaded in the Counterclaim are based on tenable causes of action that are not barred by the expiry of a limitation period, I would conclude that where the plaintiffs have shown that (i) the Counterclaim Plaintiffs did not move for leave to issue the Counterclaim until the passage of two years and ten months after the statement of claim was served, (ii) allowing the Counterclaim to be tried with the main action will result in an inevitable loss of the trial date in March 2026, the second fixed trial date, and a lengthy delay of the trial, and (iii) the legal expenses for the trial of the main action (that will be funded for the defence of the Counterclaim Plaintiffs through money that is subject to the plaintiffs' proprietary claim), if the trial is delayed until the Counterclaim is ready for trial, will substantially exceed those that would be incurred if the trial were to proceed as scheduled, the plaintiffs have shown that they would suffer prejudice from allowing the Counterclaim to be issued that could not be compensated for by costs or an adjournment.

[74] For this reason, if I had found that the claims made in the Counterclaim are based on tenable causes of action that are not barred by the expiry of a limitation period, I would not have granted leave for the Counterclaim Plaintiffs to issue the Counterclaim.

Disposition

[75] For these reasons, the Counterclaim Plaintiffs' motion is dismissed.

[76] If counsel are unable to resolve costs, I may be spoken to.

Mark L. Cavanagh
Date: 2025-04-25

[1] In the plaintiffs’ factum, they cite this email and say that they “have agreed not to pursue that portion of the claim for which there could be any claim for contribution”. This statement of the plaintiffs’ undertaking is broader than the undertaking given in the March 13, 2025 email. I treat the undertaking given in the March 13, 2025 email as the operative undertaking, as opposed to the statement in the plaintiffs’ factum.