Rathore v Singh, 2016 ABQB 498

Court of Queen’s Bench of Alberta Citation: Rathore v Singh, 2016 ABQB 498 Date: 20160909 Docket: 1301 05986 Registry: Calgary Between: Parmeshworjot Singh Rathore Plaintiff (Defendant by Counterclaim) - and - Jaspal Singh and Balwinder Kaur Defendants (Plaintiffs by Counterclaim) _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J. Strekaf _______________________________________________________ I. Introduction [ 1 ] The Defendants, Jaspal Singh and Balwinder Kaur, are applying for

summary dismissal of an action commenced against them by their son-in-law, the Plaintiff, Parmeshworjot Singh Rathore. In the event that their application is not granted in its entirety, the Defendants are also applying for an order for security for costs. [ 2 ] The claim seeks judgment or a declaration of trust in the amount of $121,500 plus $50,000 damages for pain and suffering. The Defendants filed a counterclaim against Mr.

Rathore for damages for mental anguish in the amount of $50,000. [ 3 ] A December 13, 2013 order of this court ordered that this action be tried at the same time as the divorce action between Mr. Rathore and Harmanpreet Kaur, the Defendants’ daughter. II. Relevant Facts [ 4 ] Harmanpreet Kaur and Mr. Rathore were married in India pursuant to an arranged marriage on November 28, 2008.

Harmanpreet Kaur sponsored Mr. Rathore and he moved to Canada in July 2009, where they resided together in her parents’ home. They separated in December of 2012 after a trip to India where it is alleged by the Defendants that the Plaintiff assaulted Harmanpreet Kaur. In turn, it is alleged by the Plaintiff that Harmanpreet Kaur and her parents falsely alleged that an assault had occurred in an attempt to extort funds from him and his family. [ 5 ] Two properties were purchased in the name of Mr. Rathore and Harmanpreet Kaur and later sold.

A property located at 55 Tarington Road NE, Calgary, Alberta (“Tarington Property”) was purchased on February 5, 2010 for $313,000. A mortgage executed by Mr. Rathore and Harmanpreet Kaur in the amount of $298,000 was registered against the property which was sold on April 19, 2010 for $360,000.

A property located at 236 Martinvalley Road NE, Calgary, Alberta (“Martinvalley Property”) was purchased on April 19, 2011 and sold in October, 2012. [ 6 ] In the Statement of Claim, the Plaintiff seeks judgment or a declaration of trust in the amount of $121,500 which represents the profit on the sale of the two properties that were in his and his wife’s names, which monies he claims were lent to the Defendants, along with a further $9,500 cash.

In the alternative, the Plaintiff claims that the Defendants were unjustly enriched in this amount or that this amount is held for him in a constructive or resulting trust. [ 7 ] The Plaintiff made three additional claims: first, that against his wishes he was forced by the Defendants to work as a janitor for their cleaning company and that he complied to maintain marital and familial harmony; secondly, that they interfered with his marriage and attempted to exert control over him and interfere in his financial affairs which constituted intentional infliction of mental anguish; and thirdly, he alleges that his wife and her parents filed a false allegation against him in India, claiming he had assaulted his wife.

He alleges that this was an attempt to extort funds from the Plaintiff and his family to prevent him from returning to Canada to advance these claims currently before the Court. [ 8 ] The Defendants’ position is that the properties were purchased by them and that they paid the down payments, the mortgages, renovation costs and all expenses relating to the properties. They deny that Mr. Rathore had any legal interest in the properties, notwithstanding that title was in his and Ms. Harmanpreet Kaur’s names. The Defendants refer to a document executed by Mr.

Rathore in October of 2012 acknowledging that the proceeds of sale from the second property were taken as a loan from the Defendants. [ 9 ] The Defendants also deny inflicting any mental anguish on Mr. Rathore. They have filed a counterclaim seeking damages of $50,000 for pain and suffering for the mental anguish they suffered as a result of physical abuse by Mr.

Rathore against their daughter and for bringing this lawsuit against them, which they characterize as frivolous and vexatious. [ 10 ] The evidence filed by the Defendants in support of this application are affidavits of: Jaspal Singh, Balwinder Kaur, Harmanpreet Kaur, Roman Inderbitzin, Mohummed Bhatti, Malkeet Singh, Gurpreet Singh Mann, Birinderpal Randhawa, Randhir Singh Sandhu and Mahammad Hanif. The Plaintiff’s evidence is comprised of the affidavit of Mr. Rathore and the transcript from his questioning on that affidavit. III. Analysis [ 11 ] The Defendants are applying for

summary dismissal of the entire claim pursuant to rule 7.3 of the Alberta Rules of Court (Alta Reg 124/2010), which reads:

(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single and undivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by a referee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as the circumstances require. [ 12 ] The Defendants’ grounds for their

summary dismissal claim are that: the Statement of Claim does not disclose an actionable cause of action; the claim for recovery of the proceeds for the sale of the Tarington Property is barred by the Limitations Act , RSA 2000, c L-12; there is no evidence to support the alleged loan; Mr. Rathore made no financial or other contribution with respect to the Martinvalley Property; Mr. Rathore lived rent free for two years; there is no documentation to support his claims; and finally there is no evidence to support the claims for a constructive or resulting trust or for the claim for unjust enrichment. [ 13 ] The Alberta Court of Appeal provided guidance on when

summary judgment will be appropriate in Whitecourt Power Limited Partnership v Elliott Turbomachinery Canada Inc , 2015 ABCA 252 , at para 9 :

In light of the Supreme Court's decision in Hryniak v Mauldin, 2014 SCC 7 , [2014] 1 SCR 87 and decisions of this court since Hryniak ,

summary judgment is no longer denied solely on the basis that the evidence discloses a triable issue. Rather, the court asks whether there is any issue of merit that genuinely requires a trial or, conversely, whether the claim or defence is so compelling that the likelihood it will succeed is very high such that it should be determined summarily. A second consideration is whether examination of the existing record can lead to an adjudication and disposition that is fair and just to both parties.

See generally W P v Alberta, 2014 ABCA 404 at para 26 , 7 Alta LR (6th) 319 ; Windsor v CPR, 2014 ABCA 108 at para 16 , 572 AR 317 . [ 14 ] While the Statement of Claim is not the most clearly drafted document, it appears that the Plaintiff is advancing two claims: first, he is seeking judgment or a declaration of trust against his in-laws in the amount of $121,500 to recover the proceeds from the sale of the two properties based upon an alleged loan, unjust enrichment or a constructive trust; second, he is seeking damages for pain and suffering in the amount of $50,000 for intentional infliction of mental anguish arising out of alleged attempts by his in-laws to exert control over him, interfere in his financial affairs and the making of false allegations in India that he assaulted his wife.

A. Sale Proceeds From the Two Properties [ 15 ] I will deal first with the claims relating to the sale proceeds from the two properties. [ 16 ] There is conflicting affidavit and documentary evidence regarding the nature of the transactions involving the two properties, who the beneficial owner was intended to be, and who made what financial contributions. Five examples of conflicting evidence are listed below: (

a) Mr. Singh states in his affidavit that he was the one who purchased, renovated and sold the two properties with no contribution from his wife, daughter or son-in-law and that his son-in-law’s only involvement was to sign the documents and be named on title. However, Mr. Singh signed a document on January 21, 2010 addressed to First Calgary Savings & Credit Union Ltd. in connection with the mortgage loan application of the purchase of the Tarington Property which stated in part that he was “providing the sum of $10,000 as a non-repayable gift to Harmanpreet Kaur and Parmeshworjot Rathore.

No part of this gift is being provided by any third party having any interest (direct or indirect) in the sale of the subject property”. That document was also executed by Mr. Rathore. Despite those representations to First Calgary, Mr. Singh states in his affidavit that a total of $15,000 was placed as a down payment on the Tarington Property by he and his wife exclusively. (

b) Balwinder Kaur signed a similar document dated April 20, 2011 in connection with the purchase of the Martinvalley Property that stated that she was making a financial gift of $10,000 to her daughter and Mr. Rathore which stated that the funds were “a genuine gift from the Donors, as such, are not required to be repaid at any time.” That document was also signed by Mr. Rathore and Harmanpreet Kaur. This document is inconsistent with what Mr. Singh now characterizes to be the true relationship with the two properties. (

c) Mr. Singh states that a total of $55,445 was provided to the plaintiff and his daughter after the sale of the first property and that only $19,000 was returned to him and his wife in May 2010. He provides no explanation how those arrangements are consistent with his characterization of the transactions. (

d) Mr. Singh states that he alone renovated the properties without any contribution from the Plaintiff. By contrast, Mr. Rathore states that he was involved in the full renovation of the properties before they were rented out and that he paid for the renovation of the basement using his line of credit. (

e) Mr. Rathore and Harmanpreet Kaur signed a document dated October 12, 2012 which states in part that they “confirm that the amount $57,000 was taken as a loan from Jaspal Singh and Balwinder Kaur. Now we have returned the loan back to Jaspal Singh Balwinder Kaur. There is money owing to them.” Mr. Rathore denies that Mr. Singh lent them any money. He states that he signed papers because his wife told him his in-laws needed documentation to report any moneys they had received as they sent money to India from the loan proceeds. Harmanpreet Kaur states that Mr.

Rathore is “improperly alleging that both of us had some type of agreement with my parents, the defendants, with respect to the properties in the claim. This is false”. However, she signed the document referring to the loan, which would appear to reflect some form of an agreement with respect to the properties. [ 17 ] There is also conflicting evidence with respect to Mr. Rathore’s claim that he did janitorial work for Mr. Singh at various sites including Canadian Tire and the Dalhousie Professional Building. Mr. Singh, Harmanpreet Kaur and various other individuals deny that this work took place.

There is also contradictory evidence with respect to whether Mr. Rathore’s living expenses were subsidized by Mr. Singh and the extent to which Mr. Rathore did chores around the house, which may be relevant in determining whether any unjust enrichment occurred. Mr. Rathore states that his and his wife’s expenses were paid solely by themselves. Mr. Kaur and Ms. Balwinder Kaur state that Mr. Rathore did not contribute to any living expenses during the two years he lived with them. [ 18 ] It is unclear when monies relating to the Tarington Property were transferred to the Defendants.

It is also unclear when and under what circumstances any demands for payment were made. As such, no Limitations Act defence has been established at this stage of the proceedings, even with respect to the sale proceeds from the Tarington Property. [ 19 ] I am satisfied that it would not be appropriate to attempt to make credibility findings based on the record before me given the conflicting evidence with respect to the claims relating to sale proceeds from the two properties; these claims will need to be determined at trial. B. Damages for Intentional Infliction of Mental Anguish [ 20 ] Mr.

Rathore claims that the Defendants exerted control over his life and interfered in his financial affairs, thereby constituting intentional infliction of mental anguish. Mr. Rathore has provided no evidence that he suffered any psychological disturbance as distinct from mere upset, which is a necessary element of this tort. As the Supreme Court of Canada pointed out in Mustapha v Culligan of Canada Ltd , 2008 SCC 27 , at paragraphs 8 and 9 :

Generally, a plaintiff who suffers personal injury will be found to have suffered damage. Damage for purposes of this inquiry includespsychological injury. The distinction between physical and mental injury is elusive and arguably artificial in the context of tort. As LordLloyd said in Page v. Smith, [1996] 1 A.C. 155 (H.L.), at p. 188: In an age when medical knowledge is expanding fast, and psychiatric knowledge with it, it would not be sensible to commit the law to adistinction between physical and psychiatric injury, which may already seem somewhat artificial, and may soon be altogetheroutmoded.

Nothing will be gained by treating them as different "kinds" of personal injury, so as to require the application of differenttests in law. [Emphasis added.] This said, psychological disturbance that rises to the level of personal injury must be distinguished from psychological upset. Personalinjury at law connotes serious trauma or illness: see Hinz v. Berry, [1970] 2 Q.B. 40 (C.A.), at p. 42; Page v. Smith, at p. 189; Linden andFeldthusen, at pp. 425-27. The law does not recognize upset, disgust, anxiety, agitation or other mental states that fall short of injury.

Iwould not purport to define compensable injury exhaustively, except to say that it must be serious and prolonged and rise above theordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept. The need to accept suchupsets rather than seek redress in tort is what I take the Court of Appeal to be expressing in its quote from Vanek v Great Atlantic &Pacific Co. of Canada (1999), (ON CA), 48 O.R. (3d) 228 (C.A.): "Life goes on" (para. 60). Quite simply, minor andtransient upsets do not constitute personal injury, and hence do not amount to damage. [21] Mr.

Rathore claims that he was taken advantage of and interfered with by his in-laws, claims that are somewhat analogous to the type of claims that Nelson, J refused permission to amend the claim to add in Lo v Lo, [2009] OJ No 5620, 70 RFL (6th) 309, (OntSup Ct

J) paragraphs 15 -17: The limitations issue with regards to the tort of intentional infliction of mental suffering is moot, since the Supreme Court of Canada hasstated that this tort should not be brought in a family law context. In Frame v. Smith, Justice Wilson, in dissent, discussed the tort ofintentional infliction of mental suffering at paragraph 47: Finally, and most importantly, the extension of this cause of action to the custody and access context would not appear to be in the bestinterests of children.

Like the tort of conspiracy the tort of intentional infliction of mental suffering would be relatively ineffective inencouraging conduct conducive to the maintenance and development of a relationship between both parents and their children. It isobvious also that such a cause of action, if it were made available throughout the family law context, would have the same potential forpetty and spiteful litigation and, perhaps worse, for extortionate and vindictive behaviour as the tort of conspiracy.

Indeed, the tort ofintentional infliction of mental suffering appears to be an ideal weapon for spouses who are undergoing a great deal of emotional traumawhich they believe is maliciously caused by the other spouse. It is not for this Court to fashion an ideal weapon for spouses whoseinitial, although hopefully short-lived objective, is to injure one another, especially when this will almost inevitably have a detrimentaleffect on the children.

Yet, if this cause of action were extended to encompass the facts of this case, it seems to me that there is norational basis upon which its extension to other areas of family law could be resisted. The gist of the tort is the intentional infliction ofmental suffering regardless of the relationship between plaintiff and defendant. It would be available in respect of all inter-spousalconduct both before and after marital breakdown.

I would therefore not extend this common law tort to the family law context where thespin-off effects on the children could only be harmful. [Emphasis added] This view of the law was approved of by the majority judgment, which states at paragraph 8: Wilson J., in her judgment, has also adequately disposed of the possibility of other existing torts applying to the circumstances of thiscase. I had some difficulty following Mr. Freedman's submission on this issue.

However, if I understand him correctly, he submits that thedecision in Frame should not apply here because the children are now adults and cannot be harmed by the evidence. I do not agree.Justice Wilson, in the decision in Frame, clearly outlined the wider policy considerations as to why this tort should not be ex-tended tothe family law context. Wilson J.'s reasoning is perfectly applicable to this case.

The applicant wife is, therefore, not permitted to amendher application to include this tort in the context of a family law case. [22] The Defendants have demonstrated that it would be inappropriate to extend the tort of intentional infliction of mental anguishto include the circumstances alleged in this case, and that in any event, there is no evidence to establish the necessary damage which isan essential element of the tort. As a result, the Defendants’ application is granted in part: the Plaintiff’s claims for damages for pain andsuffering based on intentional infliction of mental anguish are dismissed. C.

Security for Costs [23] The Defendants also seek security for costs in the amount of $60,000 in the event that their application for

summary dismissalof the entire claim is not granted. [24] Rule 4.22 deals with security for costs: The Court may order a party to provide security for payment of a costs award if the Court considers it just and reasonable to do so, takinginto account all of the following: (

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta; (

b) the ability of the respondent to the application to pay the costs award; (

c) the merits of the action in which the application is filed; (

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the

action; (

e) any other matter the Court considers appropriate. [25] This rule was interpreted and applied in numerous instances by our court, including the leading case of Attila DoganConstruction v AMEC Americas Limited, 2011 ABQB 175 [Attila Dogan] where, given the discretionary nature of this type of relief, anon-exhaustive list of factors was set out. [26] Rule 4.22 of the Rules establishes a two-step security for costs analysis. First, the court must consider all the factors outlinedin Rule 4.22. Second, the court should consider whether ordering the security for costs is just and reasonable (Attila Dogan at paras 24-25). [27] I will consider each of the factors set out in the rule:

a) Likelihood of Enforcing an Order against assets in Alberta [28] The Plaintiff now resides in British Columbia. There is no evidence that he has any assets within Alberta against which theDefendants could seek to enforce an order for costs.

b) Ability of the Plaintiff to pay a costs Award [29] The Plaintiff elected to provide no evidence with regard to either his ability or inability to pay costs.

c) Merits of the Action [30] As Chief Justice Wittman noted in paragraph 17 of Attila Dogan: What Rule 4.22 requires is an inquiry into the merits. In my view, this suggests that a reasonably meritorious defence, when consideredtogether with the other factors set out in Rule 4.22, is sufficient to weigh in favour of granting security for costs. It is neither possible, nordesirable, for the Court at this stage to determine which party's case is stronger. [31] The Defendants have raised a reasonably meritorious defence.

d) Undue Prejudice [32] As Chief Justice Wittman noted in paragraph 19 of Attila Dogan: In the absence of any evidence with respect to the ability [of the Plaintiff] to pay security for costs, it is impossible to conclude that suchan order would unduly prejudice [the Plaintiff’s] ability to proceed with this action. [33] The same concept applies in this case.

e) Other Matters [34] The Plaintiff submits that the Defendants should not be entitled to seek security for costs as they delayed in bringing thisapplication.

However, the plaintiff was apparently an Alberta resident when the claim was brought and there is no evidence regardingwhen he ceased to reside in Alberta or of any prejudice suffered as a result of the delay. [35] The presence of a counterclaim may affect the court’s inclination to award security for costs, as was recognized in paragraph20 of Attila Dogan: The proposition that the mere existence of a counterclaim constitutes grounds for rejecting security was firmly rejected by McMahon J.in Tracer Industries Inc. v. Shell Canada Ltd., 2004 ABQB 484, [2004] A.J. No. 769.

Where the counterclaim is so intimatelyinterwoven with the issues in the statement of claim that those issues would still have be addressed in the counterclaim, it may beappropriate to refuse security for costs: Caskey v. Guardian Insurance Co. of Canada, (AB KB), [1994] A.J. No.109, 148 A.R. 251 (Q.B.). Where the counterclaim adds significant complexity to the action, with the potential to prolong discoveriesand trial, this may be a relevant factor in refusing security or in determining the amount: Frontier Ventures Corp. v InteractiveCommunity Systems Inc., 2007 ABQB 542, [2007] A.J.

No. 988. [36] The factors in Rule 4.22(

a) to (

d) in this case weigh in favour of granting an order for security for costs. The presence of thecounterclaim weighs against granting security as it raises issues that are more closely linked to the claim that was struck rather than to theremaining issues in the claim. The counterclaim brought by the Defendants against the Plaintiff is a claim for mental anguish suffered asa result of actions taken by Mr. Rathore in a family context. While no application to dismiss the counterclaim is before me, it issomewhat similar to the Plaintiff’s claims that I struck at the Defendants’ initiative on this application.

In such circumstances, to theextent that the counterclaim remains outstanding, it would not be just and reasonable for the Plaintiff to be required to post security as hewill be required to participate in the trial to defend himself on the allegations in the counterclaim. [37] However, if the counterclaim were to be discontinued, then it would, in my view, be appropriate for the Plaintiff to berequired to post security for costs in order to continue with the action. However, such security should only be for future steps, not stepstaken to date.

The Defendants’ counsel estimated two additional days of questioning and four days of trial. This was not challenged bythe Plaintiff’s counsel as not being a reasonable estimate. As the amount claimed would put the matter under column 2 of

Schedule C,the taxable costs for two additional days of questioning, trial preparation, and four days of trial would be $13,150. In addition, there

would be disbursements that I estimate would be at least $1,250. [ 38 ] As a result, no security for costs need be posted at this stage. However, if the counterclaim is discontinued within two months of the date of this judgment, then the action will be stayed until the Plaintiff posts security for costs in the amount of $14,400 (either by depositing cash with the Court or in the Defendants’ counsel’s trust account or as otherwise agreed between the parties).

In the event that security for costs is not posted within two months of the Plaintiff being notified that the counterclaim has been discontinued, this action shall be dismissed without further order. [ 39 ] The Plaintiff acknowledged at the hearing of the application that he was only claiming half of the amount claimed in the Statement of Claim on the basis that the amount claimed represented matrimonial property to which he acknowledged he was only entitled to half of.

If the Statement of Claim is amended to reflect that reduction in the amount claimed, then the amount of security for costs should be recalculated under column 1 of

Schedule C. The amount of estimated disbursements would remain the same. IV. Conclusion [ 40 ] The Defendants’ application for

summary dismissal is granted in part: the Plaintiff’s claim for damages for intentional infliction of mental anguish is dismissed. The part of the claim that relates to sale proceeds from the two properties will need to be determined at trial, given the conflicting evidence. [ 41 ] No security for costs need be posted at this stage of the proceedings. If the counterclaim is discontinued within two months of the date of this judgment, then the action will be stayed until the Plaintiff posts security for costs as described above.

In the event that security for costs is not posted within two months of the Plaintiff being notified that the counterclaim has been discontinued, this action shall be dismissed without further order. [ 42 ] Success has been divided on this application. Costs of these applications will be in the cause. Heard on the 27 th day of July, 2016 and judgment delivered orally on the 11 th day of August.2016. Dated at the City of Calgary, Alberta this 9 th day of September, 2016. J. Strekaf J.C.Q.B.A.

Appearances: Satish Narang for the Plaintiff/Defendant by Counterclaim Arman Chak For the Defendants/Plaintiffs by Counterclaim