Bank of Montreal v Cochrane, 2013 ABQB 573

Court of Queen ’ s Bench of Alberta Citation: Bank of Montreal v Cochrane, 2013 ABQB 573 Date: 20131002 Docket: 0901 07347 Registry: Calgary Between: Bank of Montreal Plaintiff - and - Cochrane, et al Defendants _ ________________________________________ ______________ Memorandum of Decision of the Honourable Madam Justice C. A. Kent _________________________________________ ______________ [ 1 ] Most of the defendants in this action have settled as a result of a JDR process that took place last Spring. Those who have not settled will be going to trial.

One group of defendants that will go to trial include Suneet Kumar Sharma, Rajesh Sharma, Anjna Sharma, Sonia Sharma, 916721 Alberta Ltd. carrying on business as Impex Trading Services, 1012807 Alberta Ltd., 1173951 Alberta Ltd., Nuway Real Estate Ltd., 1104079 Alberta Ltd., 1122760 Alberta Ltd., 1247824 Alberta Ltd. and Solidfinance Capital Corp. (the “Sharma Group”). [ 2 ] The Sharma Group applies for an order that the Bank produce the settlement agreements that it reached with the other defendants who have settled, either unedited or with the amounts of the settlement redacted.

They apply for a stay of my case management direction regarding undertakings pending receipt of those documents. [ 3 ] The Statement of Claim is divided into several parts, each dealing with a different group of defendants. At the end there are some other claims that make allegations against a variety of defendants. Specifically dealing with the Sharma Group, paragraph 540 and

569 together allege that Impex Trading Services is a constructive trustee to the extent of $100,000, paragraph 574(

c) alleges that members of the Sharma Group transferred shares and property fraudulently, and paragraph 572 alleges that certain defendants have used proceeds of the fraud to acquire other property. The specific properties are identified in Appendix O. Some members of the Sharma Group have their name beside specified parcels of land. [ 4 ] The prayer for relief seeks judgment and damages arising from each of the Fraudulent Scheme against each of the members, jointly and severally. [ 5 ] The main claim against the Sharma Group starts at paragraph 349.

It alleges fraud against the group, it identifies some lenders who it alleges were part of the fraud and breached contractual and fiduciary duties and it identifies lawyers who it alleges were negligent. It identifies the properties for which the Bank says it suffered a loss at Appendix G. It also alleges other properties which the Bank says may be related to the fraud, and identifies these properties at G.1. [ 6 ] The claim against the Sharma Group is limited to these allegations.

During argument, counsel for the Bank said it would provide redacted copies of the settlement agreements “ so far as they pertain to the Sharma Group ”. I did not ask for a list of those agreements because counsel for the Sharma Group said that was simply not good enough. He wants all of the settlement agreements. [ 7 ] Because the allegations against the Sharma Group are limited to the claims made above, I will not order production of all the settlement agreements. The claims are discrete and identifiable in the paragraphs and schedules related to the Sharma Group.

The Bank will provide redacted copies of the settlement agreements for members of the Sharma Group, including the lenders and the lawyers. With respect to those last two groups, it may be that the agreements include defendants who are not identified as being part of the Sharma Fraudulent Scheme. The Bank may edit the documents to remove any reference to them. If further direction is required, counsel may arrange an appearance before me. That production should occur by October 15, 2013. [ 8 ] The other issue is managing the responses to undertakings that the Bank officer gave during questioning.

Before the JDR process, the lawyers acting on behalf of the lawyers took the lead on questioning the Bank’s officer. Many undertakings were given but not completed because of the settlements. In July, 2013, at a case management meeting, I directed the Bank’s counsel to advise counsel for the Sharma Group which undertakings the Bank was still prepared to answer. The Bank had argued that many of the undertakings were only relevant to parties who had settled.

I also directed that once counsel for the Sharma Group received that advice, he was to advise the Bank’s counsel what other undertakings needed to be answered and why. [ 9 ] The Bank did provide a letter to counsel for the Sharma Group. In July, I had directed counsel for the Sharma Group to set either September 26 or 27 as the date when he was to advise which undertakings are still at issue. It is from that direction that counsel for the Sharma Group applies for a stay pending receipt of the settlement agreements. [ 10 ] Because I reserved this decision, September 27 has passed.

Counsel for the Sharma Group is away until the middle of October. By then, he will have the settlement agreements, subject to any direction the Bank’s counsel requires regarding editing of the agreements. Counsel for the Sharma Group will provide a response to counsel for the Bank, listing any additional undertakings and why they are relevant to the claim against the Sharma Group. That will be done by November 15, 2013. If counsel for the two parties do not agree on any undertakings, they are to advise me in writing with an estimation of the amount of time needed to argue the issues.

I will refer that to the case management officer who will assign one of the other case management judges to hear the application. Heard on the 26 th day of September, 2013. Dated at Calgary, Alberta this 2 nd day of October, 2013. C. A. Kent J.C.Q.B.A. Appearances: Munaf Mohamed for the Plaintiff

Jeffrey Poole for the Defendants