Kumra v. Luthra, 2010 ABQB 772

Court of Queen ’ s Bench of Alberta Citation: Kumra v. Luthra, 2010 ABQB 772 Date: 20101203 Docket: 9703 10692 Registry: Edmonton Between: Usha Kumra Plaintiff/ Respondent - and - Romesh Luthra, Ancieta Luthra Defendants/Applicants - and - Harjit S. Judge Defendant (Not a Party to this Application) Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee

_______________________________________________________ Introduction [ 1 ] Usha Kumra ( “ Kumra ” ) is the Respondent in the Application by the Defendants Romesh Luthra and Ancieta Luthra to transfer title to the Defendants in Plan 7823024, Block 8, Lot [...] municipally described as [...] - 17 Avenue, Edmonton, Alberta. This property is according to Kumra her current residence. Kumra is also applying for

summary dismissal of the Defendants Romesh Luthra and Ancieta Luthra ’ s counterclaim against her. [ 2 ] The specific relief Kumra seeks is: – (

a) An Order granting

summary dismissal of the Luthras ’ counterclaim. (

b) An Order discharging Ancieta Luthra ’ s caveats filed against the Kumra ’ s current residence at the Land Titles office on 3 December 1996 as instrument 962 333 542, and on 22 October 2008 as instrument 082 464 457. In these caveats, Ancieta Luthra claims an interest as equitable owner pursuant to an agreement of August 6, 1996, by which she alleges to have purchased the land and fully paid for it. [ 3 ] In 1996 Kumra, a widow, says that she was approached by Romesh Luthra and Kul Bhatia to work in a restaurant called the Sirloiner Restaurant.

She agreed to do so as they promised to pay her more than the $11.00 per hour she was making at her job with the Good Samaritan Society. [ 4 ] A few months later it is alleged that Romesh Luthra asked to borrow $10,000 from Kumra, and Kul Bhatia asked for a $25,000 loan, and that Kumra complied with both requests, and lent the monies requested to both individuals. [ 5 ] In August 1996 Romesh Luthra took Kumra to sign some papers at Harjit Judge ’ s office, who is a legal agent.

Kumra says that she signed these papers without Romesh Luthra or Harjit Judge explaining them to her because at the time she says that she trusted Romesh Luthra. She also did not receive any independent legal advice, and apparently did not have any idea of what she was signing. [ 6 ] Kumra was later told by her current lawyers that she had signed documents transferring the shares of 699566 Alberta Ltd., which operated the Sirloiner Restaurant, to her. [ 7 ] On October 4, 1996 the City of Edmonton seized most of the restaurant ’ s assets due to 699566 Alberta Ltd. ’ s failure to pay business taxes.

Kumra also discovered that 699566 Alberta Ltd. was being sued by the owner of the trade name “ Sirloiner ” . The restaurant had to be shut down as a result of these matters. Kumra believes that Romesh Luthra and Kul Bhatia schemed to have the shares of the company which was clearly on its last legs, transferred to her so that they could avoid both of these problems. [ 8 ] One of the documents that Kumra was asked to sign by Harjit Judge was apparently a transfer of title of one of her properties to Ancieta Luthra.

Again she now alleges that the documents were not explained to her, she did not receive any independent legal advice, and she received no monies for the transfer. [ 9 ] Kumra says that she first discovered her property had been transferred when she saw a “ For Sale ” sign in front of it. One of the documents Romesh Luthra allegedly had Kumra sign was a Real Estate Purchase Contract dated August 6, 1996, which agreement purported to sell Plan 4997TR, Block 3, Lot [...] to Romesh Luthra.

Kumra submits that that property was mistakenly described in the agreement as [...] - 17 Avenue, Edmonton, Alberta, which is the municipal address for Kumra ’ s current residence legally described as

Plan 7823024, Block 8, Lot [...]. [ 10 ] Plan 4997TR, Block 3, Lot [...] was another property owned by Kumra, and is municipally described as [...] - 86 Street, Edmonton, Alberta (the “ Revenue Property ” ).

It is submitted that the municipal address in the Purchase Contract did not match the legal description given in the agreement. [ 11 ] It is submitted that the Kumra residence described as [...] - 86 Street, Edmonton, Alberta was mistakenly transferred to Ancieta Luthra pursuant to a transfer signed at Harjit Judge ’ s office, being one of the documents she was not aware of what it was she was signing, instead of the property described as [...] - 17 Avenue, Edmonton, Alberta. [ 12 ] Subsequently Master Wacowich ’ s Order of December 10, 2003 transferred the Revenue Property to Kumra, and the Kumra residence Plan 7823024, Block 8, Lot [...] described as [...] - 17 Avenue, Edmonton, Alberta to Ancieta Luthra.

Master Wacowich ’ s Order also ordered the Luthras to pay security for costs of $10,000. [ 13 ] When that Order was not complied with, Kumra obtained an Order before Justice Clackson on December 19, 2006 which transferred Plan 78323024, Block 8, Lot [...] described as [...] - 17 Avenue, Edmonton, Alberta back into Kumra ’ s name. My colleague Clackson, J. later set aside his first Order of December 19, 2006 by another Order dated October 17, 2008.

The Court of Appeal confirmed the October 17, 2008 Order due to the procedural deficiencies in service of notice of the Orders on the Luthras by Kumra. [ 14 ] Kumra wishes to determine the merits of the respective parties ’ claims now through

summary dismissal of the Luthra ’ s counterclaim. [ 15 ] It is submitted that the only document founding Ancieta Luthra ’ s claim to Plan 7823024, Block 8, Lot [...] municipally described as [...] - 17 Avenue, Edmonton, Alberta is the Real Estate Purchase Contract of August 6, 1996. [ 16 ] It is submitted that the Real Estate Purchase Contract does not give Ancieta Luthra any interest in Plan 7823024, Block 8, Lot [...] municipally described as [...] - 17 Avenue, Edmonton, Alberta for the following reasons: – (

a) The agreement is fatally uncertain as it refers to a sale of [...] - 17 Avenue, Edmonton, Alberta but refers to a legal description of Plan 4997TR, Block 3, Lot [...], which is not the correct legal description for [...] - 17 Avenue; (

b) Ancieta Luthra is not a party to that agreement as that document is signed solely by Romesh Luthra. Ancieta Luthra never entered into any agreement with Usha Kumra; (

c) Paragraph 10 of the Luthra ’ s original Statement of Defence confirmed that: “ Ancieta Luthra denies that she had appointed Romesh Luthra, either expressly or impliedly, to act as her agent with respect to any dealings with the Plaintiff and expressly denies that she had given to Romesh Luthra any authority to make representations on her behalf with respect to sale of the shares of the Corporation owned by her ” ; (

d) Romesh Luthra was not the owner of any shares in 69956 Alberta Ltd., and as such could not effect the transaction; and (

e) Neither of the Luthra ’ s assumed or paid off the CIBC mortgage of approximately $56,000 as part of the consideration for the Agreement.

[ 17 ] It is submitted that the entire Counterclaim by the Luthras is founded on the allegation that the Luthras are entitled to a conveyance of “ a rental property at 4807 - 17 Avenue, Edmonton, Alberta and legally described as Plan 7823024, Block 8, Lot [...] pursuant to an agreement in writing dated August 6, 1996 ” , where there is no such agreement since the Real Estate Purchase Contract refers to a property legally described as Plan 4997TR, Block 3, Lot [...], and is invalid for all the reasons set out above. [ 18 ] It is submitted that as Ancieta Luthra has never entered in any Agreement dated August 6, 1996 as alleged in her caveats, and has no interest in the lands caveat, her two caveats are invalid and should be discharged.

Analysis [ 19 ] This is an application by the Luthras, further to the written decision of the Court of Appeal of May 6, 2009 for an Order to re- establish the status quo ante of the property legally described as Plan 7823024, Block 8, Lot [...] and municipally described as [...] - 17 Avenue, Edmonton, Alberta as reflected in the Order of Master Wacowich of December 10, 2003 pending the determination of the within Action. [ 20 ] Specifically the Defendants seek an Order directing the Registrar of Land Titles to re-register the Revenue Property in the name of Aniceta Luthra, subject to existing encumbrances on title. [ 21 ] In addition the Defendants also seek an Order appointing MacDonald Realty Edmonton East as the Receiver/Manager of the Revenue Property, to manage and obtain a fair market value rent for each of the two suites located on the Revenue Property pending the determination of the within Action. [ 22 ] The Luthras ’ application is supported by the Affidavit of the Defendant Romesh Luthra. [ 23 ] Kumra advances a cross-application for

summary judgment and

summary dismissal of the Luthras ’ counterclaim. The cross- application is supported by Affidavit of Kumra. [ 24 ] Prior to 1996 Kumra was the owner of two properties in Edmonton, one being Plan 7823024, Block 8, Lot [...] municipally described as [...] - 17 Avenue, Edmonton, Alberta, and the other a property legally described as Plan 4997TR, Block 3, Lot [...] municipally described as [...] - 86 Street, Edmonton, Alberta. [ 25 ] The Sirloiner Restaurant was owned jointly by Ancieta Luthra and Kul Bhatia who each owned 50 shares in 699556 Alberta Ltd., the company that operated the restaurant.

Romesh Luthra and Aniceta Luthra lived in Vancouver, British Columbia. Kul Bhatia resided in Edmonton, Alberta.

Bhatia retained the services of Kumra to manage the restaurant. [ 26 ] As manager of the restaurant, Kumra was apparently conversant with the financial operations of the restaurant and allegedly made a request to purchase Aniceta Luthra ’ s shares in the restaurant. [ 27 ] It is alleged that as Kumra did not have liquidated funds to effect the purchase, she suggested that as part payment for the proposed purchase of the shares, she would transfer the title to the so called Revenue Property to Aniceta Luthra. [ 28 ] The Defendant Harjit Judge ( “ Judge ” ) who is not a party to this application operates as a legal agent in Edmonton under the business name of “ Judge & Associates ” , and he prepared the transfer documents at issue in this action for the transfer of shares and properties.

[ 29 ] Unknown to the Parties, Judge then apparently mistakenly transferred the Kumra residence to Aniceta Luthra instead of the Revenue Property as agreed by the parties. [ 30 ] On or about September 18, 1996 Aniceta authorized Kumra as her agent to receive rent on the Revenue Property and to apply such rent to the mortgage to be assumed by Aniceta Luthra with effect from October 10, 1996. [ 31 ] Once the error was discovered, Aniceta Luthra allegedly offered on or about September 27, 1996 to transfer title in the Kumra residence back to Kumra, and requested Kumra effect the proper transfer of the Revenue Property as originally agreed. [ 32 ] Aniceta Luthra executed a transfer of the Kumra residence back to Kumra, but Kumra apparently refused to execute her transfer, although she recovered title to the residence under the transfer by Aniceta Luthra. [ 33 ] On or about December 19, 2006 my colleague Clackson, J. granted an Order on an ex parte application by Kumra (the “ 2006 Order ” ) which directed: – (

a) Judgment of $10,000 against the Defendant Romesh Luthra; and (

b) The Registrar of Land Titles to register and issue a new certificate of title in the name of the Plaintiff for the Revenue Property. [ 34 ] On or about October 17, 2008 Clackson, J. gave another Order (the “ 2008 Order ” ): – (

a) Rescinding the 2006 Order; (

b) Setting aside the amending Order of Master Wacowich dated October 11, 2006, which had amended his earlier Order dated December 10, 2003 regarding the Provision of Security for Costs; and (

c) Granting leave for the Luthras to file a caveat against the Revenue Property. [ 35 ] Kumra continues to refuse to transfer the Revenue Property to Aniceta Luthra based on her ex post facto argument of changed circumstances regarding the restaurant business in which she purchased shares. [ 36 ] Although claiming that the business was sold to her under fraud and misrepresentations, Kumra has not filed any claim against Bhatia who also sold his 50% shareholding to her under similar terms as to the condition of the business. [ 37 ] On or about May 6, 2009 our Court of Appeal dismissed the appeal filed by Kumra against the 2008 Order. [ 38 ] The effect of the Court of Appeal ’ s decision is that both properties were restored to their pre-December 19, 2006 status.

The December 10, 2003 Order of Master Wacowich paraphrased below sums up that status quo ante : (

a) The Property legally described as Lot [...], Block 3, Plan 4997TR and municipally described as [...] - 86 Street, Edmonton AB is in the name of Usha Kumra;

(

b) The Property legally described as Lot [...], Block 8, Plan 7823024 and municipally described as [...] - 17 Avenue Edmonton AB is transferred to Aniceta Luthra; (

c) Security for Costs are to be paid into Court by the Luthras; (

d) Costs were awarded against the Luthras in the amount of $750.00; and [ 39 ] However the Court of Appeal in approving Clackson, J. ’ s decision also stated at paragraph 13: “ The Chambers judge, wisely in my view, did not decide on a final basis whether or not the respondent ’ s had, as a result of that rescission, an enforceable interest in that land. ” [ 40 ] It is the above decision of our Court of Appeal dismissing the Kumra appeal that the Luthras seek to enforce in this application. [ 41 ] The Luthras have since paid the Security for Costs in the amount of $10,000.00 into Court, and paid the costs of $750.00 to the Kumra. [ 42 ] Kumra recently sold the property municipally described as [...] - 86 Street legally described as Plan 4997TR, Block 3, Lot [...]. [ 43 ] Since the within Action was filed, the Luthras have been deprived of any rents, use, or enjoyment of the Revenue Property. [ 44 ] The Luthras allege that the two suites in the Revenue Property have been tenanted over the years, and despite Kumra ’ s authorization to receive rent on behalf of Aniceta Luthra, Kumra has not accounted for the rents received thereon.

Kumra says that she now lives in the Revenue Property, and that there are no tenants or rentals. [ 45 ] On October 25, 2010 Kumra filed a Notice of Motion for

Summary Judgment of the Luthras ’ Statement of Defence, and she seeks

summary dismissal of the Luthras ’ Counterclaim. The Notice of Motion was supported by her Affidavits deposed to on August 27, 2010 and December 11, 2006. [ 46 ] Kumra then received notice of the Luthras ’ intention to cross-examine her on her Affidavits, however she allegedly refused to cooperate in arranging a date for her cross-examination despite several repeated requests.

On or about October 12, 2010 the Luthras served Kumra with an Appointment for Cross-Examination on her Affidavits. [ 47 ] On the afternoon of October 25, 2010 the day before the scheduled cross-examination of Kumra, Kumra informed the Luthras that she would be availing herself of the services of a third party to be her interpreter. [ 48 ] The Luthras objected arguing that the third party was not-at-arms length, and was not a Court recognized interpreter.

Due to the decision by Kumra to hire an interpreter for herself, and to avoid the generation of disjointed evidence tainted by arguments on both sides, the Luthras on the morning of the scheduled cross-examination retained the services of an independent interpreting and translations company, Able Translations Ltd. [ 49 ] On the morning of October 26, 2010 Kumra attended at her scheduled cross-examination on her Affidavits but she refused to

subject herself to cross-examination, unless she had the assistance of being examined through her interpreter. If this third-party was not allowed to participate, she refused to be cross-examined. [ 50 ] Kumra argues that her interpreter was “ arms length ” , and better qualified than the Luthras ’ interpreter in the Punjabi language. In any event the cross-examination on Kumra ’ s Affidavits never occurred. Law [ 51 ] Rule 159 of the Alberta Rules of Court govern orders for

summary judgment. The test is set out in Royal Bank of Canada v. McLean , 1997 CanLII 24631 (AB KB) , [1997] A.J. No. 1172 at paragraphs 29 to 31 which reads as follows: – 29 The plaintiff, as applicant, must prove each fact required to make out its cause of action ( Bank of Montreal v. Kalin (1992), 1992 ABCA 278 (CanLII) , 131 A.R. 397 (C.A.) ; Principal Savings & Trust Co. (Liquidator of) v. Hunter (1993), 1993 CanLII 7184 (AB KB) , 13 Alta. L.R. (3d) 401 (

M) at 408) . In this case, the plaintiff Bank has shown the details of the mortgage agreements made with the defendants, that the amounts were advanced under the mortgage to the solicitors for the defendants and disbursed on the defendants' direction, and the Bank has proven default. The claim of the plaintiff has been verified by Mr. Gate, an officer of the Bank, on affidavit. Without more, the plaintiff has proved its case. 30 Once the plaintiff has proven its cause of action on a balance of probabilities, it is up to the defendants to satisfy the court that there is a defence on the merits (M. Trussler and F.

Price, Mortgage Actions in Alberta (Calgary: Carswell, 1985) at 106). The plaintiff does not have to disprove each defence. If it is not beyond doubt that there is no genuine issue, the court will not deprive the defendants of a trial ( Investors Group Trust Co. Ltd. v. Royal View Apts. Ltd. (1986), 70 A.R. 47 (Q.B.) ). Moreover,

summary judgment will follow where, "analysis shows that the law is settled and that the conclusions are inevitable in similar cases" ( Suncor Inc. v. Canada Wire & Cable Ltd. (1993), 1993 CanLII 6989 (AB KB) , 7 Alta. L.R. (3d) 182 (Q.B.) at 186) . 31 The defendants must show that they have a genuine issue to be tried. Rule 159(1) requires this be done on affidavit evidence by someone who can swear positively to the facts. The affidavit evidence may be presented by the plaintiff, or by the defendant. It is essential that the plaintiff claim in its affidavit that in its belief, there is no genuine issue to be tried. The plaintiff Bank has done this. [ 52 ] Kumra as the moving party for

summary judgment of the Statement of Defence of the Luthras, and

summary dismissal of the Counterclaim of the Luthras bears the ultimate burden of proving each fact required to make out her cause of action: Bank of Montreal v. Kalin (1992), 1992 ABCA 278 (CanLII) , 131 A.R. 397 at paragraph 2 . [ 53 ] Kumra alleges fraud, misrepresentations and negligent mis-statements claiming that the Luthras are con artists, but advances limited, if any, evidence in support of these assertions. [ 54 ] Kumra also bears the initial evidentiary burden that there is no defence to her claim or that the only genuine issue is as to amount. [ 55 ]

Summary judgment would not ordinarily be granted if opposing Affidavits clash on relevant facts: Shuchuk v. Wolfert , 2003 ABCA 109 at paragraph 10 . Weighing the quality of the evidence is a function reserved for a trial judge. [ 56 ] There are several directly opposing Affidavits that have been filed since the initiation of this action 13 years ago.

[ 57 ] The Luthras bear the corollary burden to satisfy the Court that there is a defence on the merits or that the only genuine issue is as to amount. The Statement of Defence of the Luthras, and the Affidavits of Romesh Luthra filed show an apparent defence on the merits. [ 58 ] Kumra as occupant of the Revenue Property would benefit from any revenue generated by the Property particularly since the mortgage of the Revenue Property has been paid off. Any rental income would exceed any expenditure associated with the revenue. [ 59 ] Section 13(2) of the Judicature Act , R.S.A. 2000, c. J-2 provides that: –

(2) An order in the nature of a mandamus or injunction may be granted or a receiver appointed by an interlocutory order of the Court in all cases in which it appears to the Court to be just or convenient that the order should be made, and the order may be made either unconditionally or on any terms and conditions the Court thinks just. [ 60 ] The test for granting an Interlocutory Order appointing a receiver is whether the Court finds that the Order is “ just or convenient ” : Lindsey Estate v. Strategic Metals Corp. , 2010 ABCA 191 at paragraph 12 . [ 61 ] Various factors ought to be considered by a Court in determining the just and convenient test, and such factors should include: – (

a) Whether irreparable harm might be caused if no order is made; (

b) The risk to the parties; (

c) The risk of waste debtor ’ s assets; (

d) The preservation and protection of property pending judicial resolution; and (

e) The balance of convenience. [ 62 ] Kumra purchased shares to a restaurant and obtained transfer of said shares, but has retained control and enjoyment of the consideration she gave for the shares. Seeing as she has already sold the only other property which was the subject of the within Action, an Order of this Court should preserve the Revenue Property.

The balance of convenience is apparently weighted in favour of maintaining the status quo ante , as but for the mistake of Harjit Judge in the transfer of title to the two properties, title in the Revenue Property would in all likelihood not be in the possession of Kumra. [ 63 ] I conclude that it is just and convenient in the circumstances surrounding this matter notwithstanding Kumra ’ s express current denial that there are any tenants, that a property manager ought to be appointed by this Court, and that the surplus income should be lodged with this Court pending the determination of the within Action. [ 64 ] The basic rules of evidence require the accused to submit to cross-examination because the right to cross-examine is essential to give any weight to an Affidavit. [ 65 ] In Saskatchewan Wheat Pool v.

Steffenson , 2006 SKQB 103 the Court held at paragraph 28 that: –

. . . when the party adducing this affidavit evidence fails to produce the affiant for the purpose of cross-examination, the court must be extremely cautious if it is to rely on the affidavit evidence. Further, when the affidavit evidence is critical to the resolution of the case, and particularly when the opinions contained therein are contradicted by evidence adduced by the opposing party, such caution must be all the greater.

Where the affiant fails to attend to be cross-examined the issue is not one of admissibility but the weight or probative value to be given to such affidavit evidence. [ 66 ] Given the conflicting versions of the evidence before me with respect to what transpired at the cross-examination on Affidavit however, I draw no adverse inference on Kumra for the failure of that examination to take place.

Conclusion [ 67 ] The Luthras ’ request that the property legally described as Plan 7823024, Block 8, Lot [...] and municipally described as [...] - 17 Avenue, Edmonton, Alberta be transferred back to Aniceta Luthra subject to existing encumbrances on title; that the Registrar of Land Titles to re-register the property legally described as Plan 7823024, Block 8, Lot [...] in the name of Aniceta Luthra; and that the Registrar of Land Titles register a new Certificate of Title in the name of Aniceta Luthra notwithstanding the provisions of subsection 191(1) of the Land Titles Act , R.S.A. 2000, c.

L-4 is denied. [ 68 ] Allowing that application by the Luthras would resolve this dispute in favour of them at this time without a trial, although Kumra could again sue the Luthras. Ultimately our Court of Appeal stated what is clear in this case, and that is there has been no final determination of the merits of either Kumra or the Luthras ’ claims in this matter. Granting the Luthras title would also be prejudicial to Kumra as she resides in the property, which she says is her principal residence.

The Luthras ’ caveats will remain on title however. [ 69 ] MacDonald Realty Edmonton East is appointed as the Receiver/Manager of the (Revenue) Property in dispute, and they will manage and obtain a fair market value rent for each of the two suites located on the Revenue Property, and they will collect any rentals, which will be paid into Court. [ 70 ] The cross-application of Kumra for

Summary Judgment and

Summary Dismissal is also dismissed as there are directly contradictory Affidavits in this matter. [ 71 ] The costs of this Application and Cross-Application will be “ in the cause ” . Heard on the 30 th day of November, 2010. Dated at the City of Edmonton, Alberta this 3 rd day of December, 2010. Donald Lee J.C.Q.B.A.

Appearances: Nestor Makuch Wheatley Sadownik for Usha Kumra P. Daryl Wilson, Q.C. Fraser Milner Casgrain LLP for Romesh Luthra and Aniceta Luthra