Meridian Credit Union Ltd. v. Baig, 2016 ONCA 150

JudgeStrathy, C.J.O., LaForme and Huscroft, JJ.A.
CourtCourt of Appeal (Ontario)
Case DateNovember 26, 2015
JurisdictionOntario
Citations2016 ONCA 150;(2016), 346 O.A.C. 57 (CA)

Meridian Credit v. Baig (2016), 346 O.A.C. 57 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. FE.031

Meridian Credit Union Limited (plaintiff/respondent) v. Ahmed Baig (defendant/appellant)

(C59249; 2016 ONCA 150)

Indexed As: Meridian Credit Union Ltd. v. Baig

Ontario Court of Appeal

Strathy, C.J.O., LaForme and Huscroft, JJ.A.

February 25, 2016.

Summary:

Baig agreed to purchase a property from a court appointed receiver and manager for $6.2 million. Unknown to the receiver, and before closing, Baig had agreed to resell the property for $9 million. Had it known, the receiver claimed that it would not have recommended approval of the sale to the court in the receivership proceeding. Meridian Credit Union Ltd. discovered the resale. As Meridian had not recovered the full amount owing to it in the receivership proceeding, the receiver assigned its cause of action against Baig to Meridian. Meridian sued Baig seeking an accounting for the profit made on the resale or, alternatively, damages of approximately $2.1 million for breach of contract, fraudulent misrepresentation, and conspiracy. Baig applied for summary judgment.

The Ontario Superior Court, in a decision with neutral citation 2014 ONSC 4717, dismissed Baig's summary judgment motion and instead found Baig liable for fraudulent misrepresentation. The court seized itself of the matter and directed that a trial be held to determine the issue of damages. Baig appealed, submitting that the court erred by finding him personally liable for fraudulent misrepresentations and that the interveners, Baig's former lawyer and law firm, were denied natural justice when the court made an adverse finding about them in their absence.

The Ontario Court of Appeal dismissed the appeal.

Company Law - Topic 310

Nature of corporations - Lifting the corporate veil - General - Baig agreed to purchase a property from a court appointed receiver and manager for $6.2 million - Unknown to the receiver, and before closing, Baig agreed to resell the property to Yellowstone for $9 million - Had it known, the receiver claimed that it would not have recommended approval of the sale to the court in the receivership proceeding - Meridian, a creditor in the receivership, discovered the resale - As Meridian had not recovered the full amount owing to it in the receivership, the receiver assigned its cause of action against Baig to Meridian - Meridian sued Baig, seeking an accounting for the profit made on the resale or, alternatively, damages of approximately $2.1 million for breach of contract, fraudulent misrepresentation, and conspiracy - Baig applied for summary judgment - The motion judge dismissed Baig's summary judgment motion and instead found Baig liable for fraudulent misrepresentation for two reasons - First, he concluded that Baig was liable for misrepresentations made by his lawyers - Second, he found Baig liable for his own personal conduct - In particular, while acknowledging that Baig did not have an obligation to disclose the agreement with Yellowstone, he concluded that the failure to correct the misimpression that Yellowstone was a corporation created by Baig amounted to a fraudulent misrepresentation - On appeal, Baig resiled from a concession his counsel made at trial that Baig would be liable for any tortious misrepresentation made by his lawyers - Furthermore, Baig argued that the motion judge's reasons did not explain why he pierced the corporate veil to find him personally liable - The Ontario Court of Appeal stated that "... it is inappropriate for the appellant to withdraw the concession and argue, for the first time on appeal, that there was no basis for him to be held liable because he was protected by the corporate veil. It is hardly surprising that the motion judge's reasons do not grapple with that issue. In any case, the motion judge found that the appellant made the fraudulent representations in his personal capacity, and thus implicitly viewed the corporate veil as having no application. ... Subject to an exception that does not apply in this case, '[t]he consistent line of authority in Canada holds simply that, in all events, officers, directors and employees of corporations are responsible for their tortious conduct even though that conduct was directed in a bona fide manner to the best interests of the company ...'" - See paragraphs 36 to 39.

Company Law - Topic 4183

Directors - Liability of directors - For torts - [See Company Law - Topic 310 ].

Company Law - Topic 4566

Officers and agents - Liability - General - For tortious acts - [See Company Law - Topic 310 ].

Company Law - Topic 4665

Officers and agents - Liability to third parties - For torts - [See Company Law - Topic 310 ].

Courts - Topic 598

Judges - Duties - To witnesses (non-parties) re conclusions of misconduct - [See Courts - Topic 2126 ].

Courts - Topic 2126

Jurisdiction - Trial jurisdiction - Re nonparties - Baig agreed to purchase a property from a court appointed receiver and manager for $6.2 million - Unknown to the receiver, and before closing, Baig agreed to resell the property to Yellowstone for $9 million - Had it known, the receiver claimed that it would not have recommended approval of the sale to the court in the receivership proceeding - Meridian, a creditor in the receivership, discovered the resale - As Meridian had not recovered the full amount owing to it in the receivership, the receiver assigned its cause of action against Baig to Meridian - Meridian sued Baig, seeking an accounting for the profit made on the resale or, alternatively, damages of approximately $2.1 million for breach of contract, fraudulent misrepresentation, and conspiracy - Baig applied for summary judgment - The motion judge dismissed Baig's summary judgment motion and instead found Baig liable for fraudulent misrepresentation for two reasons - First, he concluded that Baig was liable for misrepresentations made by his lawyers (the law firm Miller Thomson and one of its lawyers, Kiborn) - Second, he found Baig liable for his own personal conduct - In particular, while acknowledging that Baig did not have an obligation to disclose the agreement with Yellowstone, he concluded that the failure to correct the misimpression that Yellowstone was a corporation created by Baig amounted to a fraudulent misrepresentation - Baig appealed - Miller Thomson and Kiborn were not parties to the action or the summary judgment motion - They were granted leave to intervene as parties to the appeal, their submissions to "deal exclusively with the argument that the motion judge breached the rules of natural justice and procedural fairness by making findings regarding them in their absence" - The Ontario Court of Appeal rejected the interveners' submissions, holding that "... the common law does not provide non-parties with the right to notice, to adduce evidence, or to make submissions whenever an adverse credibility finding may be made in judicial proceedings that involve them. Non-parties are limited to whatever procedural rights they have under the rules." - The court also rejected the interveners' application to adduce fresh evidence, being affidavits sworn by a lawyer with Miller Thomson and by Kiborn, which provided evidence concerning what the interveners knew of the summary judgment motion and why they were not present at it - The fresh evidence was irrelevant to the validity of the process followed by the motion judge - It could not have affected the results below - See paragraphs 41 to 53.

Fraud and Misrepresentation - Topic 6

Fraudulent misrepresentation (deceit) - General principles - What constitutes deceit or fraudulent misrepresentation - Baig agreed to purchase a property from a court appointed receiver and manager for $6.2 million - Unknown to the receiver, and before closing, Baig agreed to resell the property to Yellowstone for $9 million - Had it known, the receiver claimed that it would not have recommended approval of the sale to the court in the receivership proceeding - Meridian, a creditor in the receivership, discovered the resale - As Meridian had not recovered the full amount owing to it in the receivership, the receiver assigned its cause of action against Baig to Meridian - Meridian sued Baig, seeking an accounting for the profit made on the resale or, alternatively, damages of approximately $2.1 million for breach of contract, fraudulent misrepresentation, and conspiracy - Baig applied for summary judgment - The motion judge dismissed Baig's summary judgment motion and instead found Baig liable for fraudulent misrepresentation - Kiborn, a lawyer, acted for Baig in structuring the transaction - To avoid land transfer tax, Kiborn suggested that title to the property be transferred to Yellowstone directly - Baig agreed - Both Baig and his counsel wanted to prevent the receiver from discovering the sale to Yellowstone because the $2.8 million price differential would jeopardize court approval - Kiborn informed the receiver that title was to be directed to Yellowstone on closing - The receiver assumed that Yellowstone was Baig's corporation incorporated for the purpose of the sale agreement in the receivership - Neither Baig nor his lawyers ever corrected that misunderstanding - In the course of closing the transaction, Kiborn delivered to the receiver a draft title direction, a document registration agreement, and a resolution of Yellowstone's board of directors, in which Yellowstone was listed as the purchasing corporation - The documents contained untrue statements and Kiborn admitted that he intended for the receiver to rely on the documents - The motions judge noted a concession by Baig's counsel that Baig could be held liable for tortious misrepresentations by his solicitors - The motion judge found Baig liable for two reasons - First, he concluded that Baig was liable for misrepresentations made by his lawyers - Second, he found Baig liable for his own personal conduct - In particular, while acknowledging that Baig did not have an obligation to disclose the agreement with Yellowstone, he concluded that the failure to correct the misimpression that Yellowstone was a corporation created by Baig amounted to a fraudulent misrepresentation - Baig appealed - The Ontario Court of Appeal dismissed the appeal - Baig was personally liable for misrepresentations made by him and his liability was firmly established without having to rely on vicarious liability or his counsel's concession - See paragraphs 5 to 19, 25 to 35 and 40.

Practice - Topic 304

Parties - General - Nonparty - Rights of - [See Courts - Topic 2126 ].

Practice - Topic 4960

Admissions - Concession on legal point or issue in dispute - [See Company Law - Topic 310 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - Baig agreed to purchase a property from a court appointed receiver and manager for $6.2 million - Unknown to the receiver, and before closing, Baig agreed to resell the property for $9 million - Had it known, the receiver claimed that it would not have recommended approval of the sale to the court in the receivership proceeding - Meridian, a creditor in the receivership, discovered the resale - As Meridian had not recovered the full amount owing to it in the receivership, the receiver assigned its cause of action against Baig to Meridian - Meridian sued Baig seeking an accounting for the profit made on the resale or, alternatively, damages of approximately $2.1 million for breach of contract, fraudulent misrepresentation, and conspiracy - Baig applied for summary judgment - The motion judge dismissed Baig's summary judgment motion and instead found Baig liable for fraudulent misrepresentation - On appeal, the Ontario Court of Appeal noted that "Meridian had not brought a cross-motion asking for summary judgment in its favour. However, the motion judge did not err by granting summary judgment. Counsel for [Baig] submitted that all of the relevant evidence was before the court and explicitly invited the motion judge to render a decision in favour of either party. Two recent decisions from this court make it clear that it is permissible for a motion judge to grant judgment in favour of the responding party, even in the absence of a cross-motion for such relief." - See paragraph 17.

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues or points not previously raised - [See Company Law - Topic 310 ].

Practice - Topic 9031

Appeals - Evidence on appeal - Admission of "new evidence" or "fresh evidence" - [See Courts - Topic 2126 ].

Cases Noticed:

King Lofts Toronto Ltd. et al. v. Emmons et al., [2014] O.A.C. Uned. 201; 40 R.P.R.(5th) 26; 2014 ONCA 215, refd to. [para. 17].

Kassburg v. Sun Life Assurance Co. of Canada (2014), 328 O.A.C. 244; 124 O.R.(3d) 171; 2014 ONCA 922, refd to. [para. 17].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 24].

Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 26].

Alevizos et al. v. Nirula (2003), 180 Man.R.(2d) 186; 310 W.A.C. 186; 2003 MBCA 148, refd to. [para. 30].

Outaouais Synergest Inc. v. Keenan et al. (2013), 310 O.A.C. 120; 116 O.R.(3d) 742; 2013 ONCA 526, refd to. [para. 30].

Self v. Garito (1998), 73 O.T.C. 365 (Gen. Div.), refd to. [para. 31].

Hamilton (City) v. Metcalfe & Mansfield Capital Corp. et al. (2012), 290 O.A.C. 42; 347 D.L.R.(4th) 657; 2012 ONCA 156, refd to. [para. 34].

ADGA Systems International Ltd. v. Valcom Ltd. et al. (1999), 117 O.A.C. 39; 168 D.L.R.(4th) 351 (C.A.), refd to. [para. 39].

R. v. Poulos (J.) (2015), 333 O.A.C. 51; 124 O.R.(3d) 675; 2015 ONCA 182, appld. [para. 44].

R. v. Palmer, [1980] 1 S.C.R. 759; 30 N.R. 181, appld. [para. 45].

Ontario Provincial Police Commissioner v. Mosher et al. (2015), 340 O.A.C. 311; 2015 ONCA 722, refd to. [para. 49].

Hurd et al. v. Hewitt and Trinity College et al. (1994), 75 O.A.C. 205; 120 D.L.R.(4th) 105 (C.A.), refd to. [para. 52].

Counsel:

Milton A. Davis and John Adair, for the appellant;

J. Anthony Caldwell, for the respondent;

Clifford Lax, Q.C., James Renihan and Linda Galessiere, for the interveners, Miller Thomson LLP and Peter Kiborn.

This appeal was heard on November 26, 2015, by Strathy, C.J.O., LaForme and Huscroft, JJ.A., of the Ontario Court of Appeal. LaForme, J.A., delivered the following decision for the court on February 25, 2016.

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49 practice notes
  • Court Of Appeal Summaries (July 18, 2022 ' July 22, 2022)
    • Canada
    • Mondaq Canada
    • July 27, 2022
    ...Inc., 2015 SCC 18, Rahimi v SouthGobi Resources Ltd., 2017 ONCA 719, Maurice v. Alles, 2016 ONCA 287, Meridian Credit Union Ltd. v. Baig, 2016 ONCA 150, Harris v. Leikin Group Inc., 2014 ONCA 479, Miller v. FSD Pharma, Inc., 2020 ONSC 4054 Ferguson v. Ferguson , 2022 ONCA 543 Keywords: Fami......
  • Court Of Appeal Summaries (March 1 ' March 5, 2021)
    • Canada
    • Mondaq Canada
    • March 9, 2021
    ...Corp. v. Canada, [1998] 2 SCR 298, Dawson v. Halpenny Insurance Brokers Ltd., 2017 ONSC 4487, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Drummond v. Cadillac Fairv......
  • Court Of Appeal Summaries (February 14-18, 2022)
    • Canada
    • Mondaq Canada
    • February 22, 2022
    ...City of Toronto, O. Reg. 612/06, Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Seif v. Toronto (City......
  • Court Of Appeal Summaries (February 14-18, 2022)
    • Canada
    • Mondaq Canada
    • February 22, 2022
    ...City of Toronto, O. Reg. 612/06, Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Seif v. Toronto (City......
  • Request a trial to view additional results
33 cases
  • Clearway Construction Inc. v. The City of Toronto, 2018 ONSC 1736
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • March 13, 2018
    ...judgment in favour of the responding party, even in the absence of a cross-motion for such relief: Meridian Credit Union Limited v. Baig, 2016 ONCA 150, 394 D.L.R. (4th) 601, at para. 17, citing King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, 40 R.P.R. (5th), at paras. 14-15, and Kassbu......
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    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • February 7, 2020
    ...grant boomerang orders and that this authority does not depend on the bringing of a cross-motion: Meridian Credit Union Limited v. Baig, 2016 ONCA 150, 394 D.L.R. (4th) 601, at para. 17; King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, 40 R.P.R. (5th) 26, at paras. 14-15; Kassburg v. Sun......
  • Samuel v. Benson Kearley IFG, 2020 ONSC 1123
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • February 20, 2020
    ...in the absence of a cross-motion for such relief: Singh v. Trump, 2016 ONCA 747, at para. 147. See also: Baig v. Meridian Credit Union, 2016 ONCA 150, at para. 17; Kassburg v. Sun Life Assurance Co. of Canada, 2014 ONCA 922, at paras. 50-52; Demide v. Attorney General of Canada et al., 2015......
  • Nagpal v. IBM Canada Ltd., 2019 ONSC 4547
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • July 30, 2019
    ...agreed that the only remaining issue if IBM failed on it motion is to determine damages: see Meridian Credit Union Limited v. Baig, 2016 ONCA 150 at para. 17; King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215 (CanLII), 40 R.P.R. (5th) 26, at paras. 14-15; and Kassburg v. Sun Life Assurance......
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16 firm's commentaries
  • Court Of Appeal Summaries (July 18, 2022 ' July 22, 2022)
    • Canada
    • Mondaq Canada
    • July 27, 2022
    ...Inc., 2015 SCC 18, Rahimi v SouthGobi Resources Ltd., 2017 ONCA 719, Maurice v. Alles, 2016 ONCA 287, Meridian Credit Union Ltd. v. Baig, 2016 ONCA 150, Harris v. Leikin Group Inc., 2014 ONCA 479, Miller v. FSD Pharma, Inc., 2020 ONSC 4054 Ferguson v. Ferguson , 2022 ONCA 543 Keywords: Fami......
  • Court Of Appeal Summaries (March 1 ' March 5, 2021)
    • Canada
    • Mondaq Canada
    • March 9, 2021
    ...Corp. v. Canada, [1998] 2 SCR 298, Dawson v. Halpenny Insurance Brokers Ltd., 2017 ONSC 4487, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Drummond v. Cadillac Fairv......
  • Court Of Appeal Summaries (February 14-18, 2022)
    • Canada
    • Mondaq Canada
    • February 22, 2022
    ...City of Toronto, O. Reg. 612/06, Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Seif v. Toronto (City......
  • Court Of Appeal Summaries (February 14-18, 2022)
    • Canada
    • Mondaq Canada
    • February 22, 2022
    ...City of Toronto, O. Reg. 612/06, Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Seif v. Toronto (City......
  • Request a trial to view additional results

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