Court File and Parties

Court File No.: CV-17-570214
Date: 2025-01-29
Court: Superior Court of Justice - Ontario

Between:
Syed Bahauddin, Plaintiff
and
New Lahore Tikka House Inc. o/a Lahore Tikka House and 2294671 Ontario Incorporated, Defendants

Before: Paul B. Schabas
Counsel:

• Shane Greaves, for the Plaintiff
• Michael Simaan, for the Defendants and the Garnishee
  Heard: 2025-01-27

Endorsement

Background

[1] The plaintiff was employed as a chef at the defendants’ restaurant for over 20 years, before being dismissed without cause in 2016. He was given only 8 weeks pay in lieu of notice. The plaintiff sued for wrongful dismissal. The action was settled on March 4, 2022. The defendants paid the plaintiff $25,000 over the next five months, and consented to a judgment requiring them to pay the plaintiff $150,000.

[2] The defendants are owned and operated by Gulshan Allibhai (“Allibhai”), who took over operation of the restaurant in 2013 after her husband, Alnoor Sayani, died.

[3] The restaurant is located at 1365 Gerrard Street East in Toronto (“the Property”). The Property is owned by 1436318 Ontario Ltd. (“the Garnishee”), of which Allibhai is the sole director and officer. In 2015, the Property was mortgaged to the defendant New Lahore Tikka House (“NLTH”) for $754,988.37. The mortgage provides for monthly payments of $4,718.68 which reflected interest only, at 7.5% per annum.

[4] On July 13, 2023, a Notice of Garnishment was issued directing the Garnishee to pay the Sheriff of the City of Toronto all debts to NLTH up to $154,257.05, reflecting the post-judgment interest to that date at 2% per annum.

[5] Despite being properly served, the Garnishee has made no payments to the Sheriff.

[6] Although Allibhai stated that she sold the assets of the restaurant in the summer of 2022 for $25,000, they were sold to a corporation, 1000217532 Ontario Inc. (“1000 Ontario Inc.”), of which she is an officer. That corporation’s head office is at the Property. Allibhai continued to work at the restaurant as General Manager following the sale. The restaurant was closed for a period of time following a fire in June 2023. It reopened in September 2024 after the assets were purchased in August 2024 by Adam Sayani, Allibhai’s son, for $75,000.

The Motion

[7] As the Garnishee has failed to make payments as required, pursuant to rule 60.08(17) of the Rules of Civil Procedure, the plaintiff seeks an order that the Garnishee forthwith pay the plaintiff the full amount contained in the Notice of Garnishment.

[8] For the reasons that follow, I grant the relief sought by the plaintiff.

Analysis

[9] In Lawyers’ Professional Indemnity Company v. Nicol, 2014 ONSC 4748, paras. 32-38, Perell J. stated that “garnishment is a means to enforce a judgment for the payment of money.” Where a garnishee fails to pay, the creditor is entitled, on motion to the court, for an order for payment. As garnishment is an equitable and discretionary remedy, the Court “may make any order it deems just in the particular circumstances.”

[10] Here, the mortgage is evidence of a debt. It is registered on title and contains a requirement that the mortgagor pay a monthly sum to the mortgagee which is also the Garnishee.

[11] The Garnishee and the defendants are, of course, related parties. Through Allibhai, they claim that the mortgage is not a real debt but was just placed on the property for protection against fraudulent activity.

[12] A similar position was advanced and rejected in Turchiaro v. Liorti, 2004 CarswellOnt 8212, a decision upheld by the Court of Appeal: Turchiaro v. Liorti. In that case the motion judge found that the evidence that the debt was not real was not sufficient to rebut the inference created by the mortgage that there is a debt.

[13] In this case, weighing all the evidence, I reach the same conclusion, and find for the plaintiff. Further, and in any event, I would exercise my discretion to apply equitable principles in favour of the plaintiff.

[14] The mortgage is strong evidence of a debt. Regardless of the purpose of a mortgage, it is a public document, registered on title. Any person inspecting title would see the mortgage and should reasonably expect it to be a valid and enforceable charge or debt.

[15] Put against this are Allibhai’s corporate arrangements and her assertions that certain documents do not mean what they say.

[16] In an examination in aid of execution conducted in June 2023, Allibhai denied that she is an officer of 1000 Ontario Inc., to which she purported to sell the assets of the restaurant in 2022. However, the corporate profile lists her as an officer. Allibhai has attempted to explain this away in a supplementary affidavit filed a few days before this motion was heard, saying this was due to a lawyer’s error.

[17] However, Allibhai admits that she continued to work at the restaurant as General Manager and, she says, she was also “very preoccupied dealing with insurance companies, adjustors, consultants and contractors in order to repair and renovate the Garnishee’s property that was damaged in the fire.” This statement suggests she has had ongoing involvement, if not control, over the restaurant, despite her claim to have sold it.

[18] Further, the person Allibhai says is behind 1000 Ontario Inc., Shahin Paroo, is the same person who, it was disclosed last week, sold “the restaurant” back to Allibhai’s son in August 2024. No evidence has been tendered from Paroo. In these circumstances, in my view, there is good reason to doubt the veracity of Allibhai’s evidence and there is a well-founded basis for the plaintiff’s assertion that, in 2022, Allibhai, effectively sold the assets to herself.

[19] I therefore do not accept Allibhai’s assertion that the mortgage is a sham; her evidence does not rebut the evidence of a valid mortgage registered on title, in which monthly payments are to be made by the judgment debtor, NLTH, to the Garnishee.

[20] In addition, I conclude that the equities favour granting the relief sought.

[21] The asset sale in 2022, and the more recent sale of the restaurant “back” to Allibhai’s son, suggests that Allibhai has been ordering her affairs in a manner to avoid the payment of the judgment to the plaintiff, while protecting her value in the Property and the restaurant itself, re-opening the restaurant using yet another corporate vehicle.

[22] In Nicol, Perell J. used his equitable power to pierce the corporate veil to make an individual liable for garnishment. I do not need to go so far in order to achieve a just result. To do justice in this case I simply am treating the mortgage as meaning what it says.

Disposition

[23] Accordingly, the motion is granted. I order that 1436318 Ontario Ltd. shall forthwith pay the plaintiff $154,257.05. This amount shall bear interest at the rate of 5% per annum commencing today.

[24] The defendants shall pay the plaintiff’s costs fixed at $7,500.00, including disbursements and HST.

Paul B. Schabas
Date: January 29, 2025