) ANJU MALHOTRA, SHAUN MALHOTRA, by his Litigation Guardian SURESH MALHOTRA, RAJ CHOPRA, 1299253 ONTARIO INC., PREETI PUNCHHI, YASH PAL CHHABRA, GLOBAL FINANIAL MANAGEMENT INC., GLOBAL INVESTMENT HOLDINGS INC., HARISH SETHI, VRINDA SETHI, NEIL SETHI, ARJUN JASUJA, SUSHILA JASUJA, v. ANIL JASUJA, 2015 ONSC 5136

CITATION : Malhotra v. Mattis, 2015 ONSC 5136 COURT FILE NO.: 06-CV-316483-PD1 DATE: 20151005 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ANJU MALHOTRA, SHAUN MALHOTRA, by his Litigation Guardian SURESH MALHOTRA, RAJ CHOPRA, 1299253 ONTARIO INC., PREETI PUNCHHI, YASH PAL CHHABRA, GLOBAL FINANIAL MANAGEMENT INC., GLOBAL INVESTMENT HOLDINGS INC., HARISH SETHI, VRINDA SETHI, NEIL SETHI, ARJUN JASUJA, SUSHILA JASUJA, and ANIL JASUJA Respondents (Plaintiffs) – and – ATIQ KHOKHAR, WASEEM KHOKAR, IMRAN KHOKAR, RANJIT KHOKAR, a.k.a. RANJIT MARWAH, IHSAN KHOKHAR, MASOOD ELAHI a.k.a.

MAQSOOD ELAHI, MOHAMMED ZAFAR IQBAL, HAWTHORNE INVESTMENT GROUP LTD., HAWTHORNE BUSINESS CENTRE INC., NIPISSING BUSINESS CENTRE INC., 1393282 ONTARIO LTD., DREAM HOME INVESTMENTS CORP., CLAIRE L.

GRAHAM, JULIE JOCELYN NILES, NILES & ASSOCIATES PARALEGAL SERVICES INC., LORAMB & ASSOCIATES LEGAL SERVICES, WINSTON GAUNTLETT MATTIS, and FIONA ANN DOCHERTY, DOMINION MORTGAGE CORPORATION, THE GRABASC GROUP INC., AAMIR MASOOD, VARUN MEDIRRATTA, THE HAWTHORNE INVESTMENT GROUP LTD., SAMIR KHAMISA, MEHNAZ KHOKAR and INDRA MEDIRATTA c.o.b. as SELENA CUSTOM HOMES Appellants (Defendants) ) ) ) ) ) ) ) ) )) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) George Gligoric, for the Respondents (Plaintiffs) Anju Malhotra, Shaun Malhotra by his Litigation Guardian Suresh Malhotra, 1299253 Ontario Inc., Yash Pal Chhabra, Global Financial Management Inc., Global Investment Holdings Inc., Arjun Jasuja, Sushila Jasuja, and Anil Jasuja Robin Squires, for the Appellants (Defendants) Winston Gauntlett Mattis and Fiona Ann Docherty ) HEARD: August 13, 2015 G.

DOW, j reasons FOR DECISION [ 1 ] The defendants, Mattis and Docherty, appeal the Order of Master Pope, March 4, 2015 (Reasons dated April 21, 2015) dismissing their motion to have the action by all plaintiffs dismissed as against them for delay in accordance with Rule 24.01(1)(c). [ 2 ] In those Reasons, the Master summarizes what is a complex action arising from alleged mortgage fraud including fraudulent misappropriation of funds, conspiracy, negligence, negligent misrepresentation, breach of contract, breach of fiduciary duty and vicarious liability in relation to mortgage transactions that took place starting in 2003.

The allegations relate to the purchase, sale or transfer of 33 properties involving at some point 14 plaintiffs against 27 defendants. The defendants, Mattis and Docherty, are the only two lawyers that are parties. [ 3 ] The Statement of Claim was issued August 8, 2006, amended November 17, 2006 and defended by Mattis and Docherty as

of February 13, 2007. There is prompt voluminous document exchange but no examinations for discovery held to date. Mattis andDocherty served the motion to dismiss for delay December 23, 2013 with the hearing delayed due to nine of the plaintiffs changing totheir present counsel.

Master Pope granted the request for dismissal of the action as against Mattis and Docherty by five self-representedplaintiffs (Raj Chopra, Preeti Punchhi, Harish Sethi, Vrinda Sethi, Neil Sethi) one of whom attended and advised they were not opposingthe motion on the date it was argued. [4] The test to be applied on this appeal was not disputed by counsel and is enunciated by the Divisional Court decision inZeitoun v. Economical Insurance Group, (ON SCDC), [2008] O.J.

No. 1771, 91 O.R. (3d) 131, where, at paragraph40, it states “…the decision will be interfered with only if the Master made an error of law or exercised his or her discretion on the wrongprinciples or misapprehended the evidence such that there is a palpable and overriding error.” [5] It is clear from the 14–page, 67-paragraph Reasons that the Master had a clear understanding of the nature and extent of thefacts and arguments before her. The Master reviewed the law on what constitutes the appropriate grounds to dismiss an action for delay. The Master referenced the Court of Appeal decision of Armstrong v.

McCall, (ON CA), [2006] O.J. No. 2055, andthe correct factors to be taken into account being (as I would phrase it) that the action should not be dismissed unless: 1) the delay is intentional and contumelious on the part of the defendant; or 2) the delay is inexcusable and gives rise to a substantial risk that a fair trial might not be possible; 3) there is a presumption of prejudice which the plaintiff must rebut; 4) the defendant leads convincing evidence of actual prejudice (rebutting the presumption would then not be relevant). [6] Most cases do not involve intentional and contumelious delay by the plaintiff.

The Master reviewed the applicable testwhether:

a) the defendant has established the delay has been unreasonable in the sense it is inordinate and inexcusable;

b) as part of determining whether the delay is unreasonable, the Court should consider issues raised by the case such as:

i) the complexity of the issues; ii) the explanation for the delay; iii) all relevant surrounding circumstances;

c) the decision will balance the right of the plaintiff to proceed to trial with the defendant’s right to a fair trial. [7] In reviewing the analysis set out in the Reasons, the Master assessed the delay and particularly two three-year periods ofinactivity between October, 2007 until October, 2010 and from November, 2010 until December, 2013. The Master summarized theplaintiff’s explanation for these delays (at paragraph 38) with a list of seven circumstances and concluded (at paragraph 43) theplaintiff’s evidence was “wholly inadequate”.

As a result, the defendants had met the initial aspect of the test that the delay was notadequately explained. [8] The Master then considered the presumed prejudice and (in my view) the remaining relevant circumstances as part ofdeciding whether the right of the plaintiff to proceed to trial was to be preferred over the claim of the defendants of a substantial risk afair trial might not be possible. [9] The onus to rebut the presumption of prejudice is on the plaintiff and the Master considered the submissions of counsel forMattis and Docherty that the trial would rely heavily on witness recollections about specific transactions, conversations and interactionsand compared this to the plaintiff’s submissions that the primary evidence at trial will be the documents produced (paragraphs 46 and 51of the Reasons).

The Master concluded the trial will be “based equally on the documents and the recollection of individuals” (atparagraph 53). As part of all of the relevant circumstances, the Master considered:

a) the state of the litigation, that is, there has yet to be examinations for discovery, mediation or a pre-trial conference;

b) the absence of any evidence the defendant would not be able to call a witness as a result of death or the inability to locate theperson while acknowledging the litigation was not at a stage where this had likely been canvassed;

c) the absence of any evidence that important evidence had been lost;

d) that the issues were complex and with a large number of parties the action would take longer to get to trial in any event;

e) the introduction of new counsel for the represented plaintiffs and the fact this counsel was someone familiar with the situationhaving acted previously in a related matter;

f) the new counsel was proposing a realistic discovery plan committed to setting down the action within the next 18 months;

g) the drastic nature of a dismissal which should not be done except in exceptional circumstances;

h) the fact that the number of parties and the complexity was being reduced by the unopposed dismissal of claims of five plaintiffs aspart of this motion. [10] Overall, in deciding between the right of the plaintiff to proceed to trial and the substantial risk the defendants’ right to a fair

trial might not be possible, the Master concluded the motion be dismissed. [ 11 ] Counsel for Mattis and Docherty submitted the decision of the Master in this case was either altering the test or an error of law. As I understood his argument, the conclusion by the Master that the plaintiffs’ explanation for the delay was wholly inadequate and the conclusion that the presumption of evidence was not rebutted except with regard to the preservation of documentary evidence ought to have resulted in the opposite result.

To the contrary, plaintiff’s counsel submitted the decision was a choice the Master made following consideration of all of the relevant factors. Palpable and Overriding Error [ 12 ] My conclusion is the test includes consideration of all relevant factors. As set out by Justice Laskin in Langenecker v. Sauvé , 2011 ONCA 803 , all relevant factors must be considered in deciding whether the delay can be excused “at least to the extent that an Order dismissing the action would be inappropriate”.

While the Master did not accept the explanation for the delay, other factors were considered which were relevant, and the result does not constitute, in my view, an error of law or exercise of the Master’s discretion on a wrong principle such that a palpable or overriding error has occurred. [ 13 ] As a result, the appeal is dismissed. Costs [ 14 ] I omitted to obtain from the parties their position on costs.

Rather than decide same on a unilateral basis and without input from the parties, I would request they forward their Costs Outline to my attention in accordance with Rule 57 within the next 10 days subject, of course, to reaching an agreement which I expect would involve payment by the unsuccessful appellant (defendants) to the successful respondent (plaintiffs) subject to any Rule 49 settlement offers which are to be attached to the Costs Outline. Mr. Justice G. Dow Released: October 5, 2015 CITATION: Malhotra v.

Mattis, 2015 ONSC 5136 COURT FILE NO.: 06-CV-316483-PD1 DATE: 20151005 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN:

ANJU MALHOTRA, SHAUN MALHOTRA, by his Litigation Guardian SURESH MALHOTRA, RAJ CHOPRA, 1299253 ONTARIO INC., PREETI PUNCHHI, YASH PAL CHHABRA, GLOBAL FINANIAL MANAGEMENT INC., GLOBAL INVESTMENT HOLDINGS INC., HARISH SETHI, VRINDA SETHI, NEIL SETHI, ARJUN JASUJA, SUSHILA JASUJA, and ANIL JASUJA Respondents (Plaintiffs) – and – ATIQ KHOKHAR, WASEEM KHOKAR, IMRAN KHOKAR, RANJIT KHOKAR, a.k.a. RANJIT MARWAH, IHSAN KHOKHAR, MASOOD ELAHI a.k.a.

MAQSOOD ELAHI, MOHAMMED ZAFAR IQBAL, HAWTHORNE INVESTMENT GROUP LTD., HAWTHORNE BUSINESS CENTRE INC., NIPISSING BUSINESS CENTRE INC., 1393282 ONTARIO LTD., DREAM HOME INVESTMENTS CORP., CLAIRE L. GRAHAM, JULIE JOCELYN NILES, NILES & ASSOCIATES PARALEGAL SERVICES INC., LORAMB & ASSOCIATES LEGAL SERVICES, WINSTON GAUNTLETT MATTIS, and FIONA ANN DOCHERTY, DOMINION MORTGAGE CORPORATION, THE GRABASC GROUP INC., AAMIR MASOOD, VARUN MEDIRRATTA, THE HAWTHORNE INVESTMENT GROUP LTD., SAMIR KHAMISA, MEHNAZ KHOKAR and INDRA MEDIRATTA c.o.b. as SELENA CUSTOM HOMES Appellants (Defendants) REASONS FOR DECISION Mr. Justice G.

Dow Released: October 5, 2015