Ruwenzori Enterprises Ltd. et al. v. Walji et al., 2006 BCCA 448

JudgeHall, Mackenzie and Levine, JJ.A.
CourtCourt of Appeal (British Columbia)
Case DateOctober 12, 2006
JurisdictionBritish Columbia
Citations2006 BCCA 448;(2006), 231 B.C.A.C. 166 (CA)

Ruwenzori Ent. Ltd. v. Walji (2006), 231 B.C.A.C. 166 (CA);

    381 W.A.C. 166

MLB headnote and full text

Temp. Cite: [2006] B.C.A.C. TBEd. OC.022

Ruwenzori Enterprises Ltd., Cale Holdings Limited and Norsham Inc. (respondents/plaintiffs) v. Zulfikar Walji (appellant/defendant)

(CA032076)

Ruwenzori Enterprises Ltd., Cale Holdings Limited and Norsham Inc. (respondents/plaintiffs) v. Yasmin Walji, 1118174 Ontario Limited (dba Best Western Roehampton Hotels & Suites), 1392275 Ontario Inc. (dba Markham Hilton Gardens), 3465632 Canada Inc. (dba Days Inn Montreal Airport), Humble Capital Group LLC (dba Humble Hampton Inn), YZ Enterprises Inc. (dba Classic Cleaners and dba Designamatics) (appellants/defendants) and Zulfikar Walji (respondent/defendant)

(CA032065)

Zulfikar Walji (appellant/plaintiff) v. Farhana Charania, Personal Representative of Noordin Charania, Deceased, Nor-Sham Hotels Inc., Nor-Sham Developments Inc., Nor-Sham (Markham) Hotels Inc., and Nor-Sham Management Inc. (respondents/defendants)

(CA032077; 2006 BCCA 448)

Indexed As: Ruwenzori Enterprises Ltd. et al. v. Walji et al.

British Columbia Court of Appeal

Hall, Mackenzie and Levine, JJ.A.

October 12, 2006.

Summary:

Two actions arose out of the North American business activities of an extended family. In the first action, Ruwenzori Enterprises Ltd. (Ruwenzori) and its subsidiary companies, Nor Sham Inc. (Nor Sham U.S.) and Cale Holdings Ltd. (Cale), sued Zuli and Yasmin (husband and wife) alleging various acts of misfeasance related to the management of Nor Sham U.S., the management and sale of a Toronto apartment complex owned by Cale, and the acquisition of certain hotel interests in Canada. In effect, the plaintiffs claimed that Zuli and Yasmin and corporate entities controlled by them had acted as faithless fiduciaries. In the second action, Zuli was plaintiff and the defendants were Farhana, personal representative of Zuli's uncle, Noordin, deceased, Nor Sham Hotels Inc., Nor Sham Developments Inc., Nor Sham (Markham) Hotels Inc. and Nor Sham Management Inc. Zuli claimed he was entitled to management fees and a share in hotel properties located in the Toronto area. He claimed that he had been instrumental in procuring the hotel properties. He had managed these hotels for a time. He asserted that he had been promised a share in the properties by Noordin.

The British Columbia Supreme Court, in a decision reported at [2004] B.C.T.C. 741, granted the proprietary remedies sought by the plaintiffs in the first action. Although Zuli was largely unsuccessful in the claims that he advanced in the second action, he was granted relief by way of quantum meruit concerning his management services. Zuli and Yasmin and certain corporate entities appealed against the judgment granted in the first action. Zuli also appealed against the dismissal of a number of his claims in the second action. An appeal was also brought on behalf of parties who held a minority share interest in one of the corporate defendants.

The British Columbia Court of Appeal, Hall, J.A., dissenting in part, dismissed the appeal.

Evidence - Topic 1183

Relevant facts - Relevance and materiality - Res gestae (incl. narrative) - Accompanying acts or statements - Appellants submitted that the judge ought to have held a separate voir dire each time an issue arose about the admissibility and treatment of the evidence of Noordin, now deceased - The British Columbia Court of Appeal rejected the submission - It was a matter of discretion for a judge to decide how to approach such an evidentiary issue - This was not a trial by jury and it would make no sense and be a dreadful waste of judicial time to proceed as the appellants suggested - The trial judge fairly and properly considered the evidence of what might be termed the verbal acts of Noordin as testified to by others or as tendered by affidavit or transcript - This was part of the narrative of events relied upon by all parties to the litigation - The evidence of what was said or done by Noordin was but one facet of the multi-faceted evidence - See paragraphs 46 and 59.

Evidence - Topic 1540

Hearsay rule - Exceptions and exclusions - Procedure - Voir dire - [See Evidence - Topic 1183 ].

Evidence - Topic 1626

Hearsay rule - Statements of deceased persons - General principles - [See Evidence - Topic 1183 ].

Trusts - Topic 2308

Constructive trusts - Circumstances when imposed - Ruwenzori Enterprises Ltd. (Ruwenzori) and its subsidiary companies, Nor Sham U.S. and Cale Holdings, sued Zuli and Yasmin (husband and wife) alleging various acts of misfeasance related to the management of Nor Sham U.S., the management and sale of a Toronto apartment complex owned by Cale, and the acquisition of certain hotel interests in Canada - In effect, the plaintiffs claimed that Zuli and Yasmin and corporate entities controlled by them had acted as faithless fiduciaries - The trial judge allowed the action and granted the proprietary remedies sought by the plaintiffs - The defendants appealed, submitting that the trial judge erred in granting a proprietary remedy against assets acquired through the use of funds of Nor Sham U.S where the assets were purchased from a mixed fund and not solely by employing Nor Sham U.S. funds - Further, the trial judge should have considered whether a monetary remedy would have been more appropriate than a proprietary remedy - The British Columbia Court of Appeal dismissed the appeal - To allow the plaintiffs to profit from their own wrongdoing by receiving any increase in the asset value of the Canadian hotel property purchased with Nor Sham U.S.'s funds would be a strange result - There was no principled reason why a person whose monies were in part used to buy an asset could not obtain a proportional proprietary interest in the asset - The trial judge was not only entitled to make the award he did, he was almost obligated to do so - Otherwise, it would amount to permitting wrongdoers to profit from their wrongful conduct, a result that a court of equity could not countenance - See paragraphs 36 to 44 and 59.

Trusts - Topic 2344

Constructive trusts - Basis for imposition - Breach of confidence or fiduciary relationship - [See Trusts - Topic 2308 ].

Cases Noticed:

Citadel General Life Assurance Co. et al. v. Lloyd's Bank of Canada et al., [1997] 3 S.C.R. 805; 219 N.R. 323; 206 A.R. 321; 156 W.A.C. 321; 152 D.L.R.(4th) 411, refd to. [para. 33].

Alers-Hankey v. Solomon et al. (2002), 166 B.C.A.C. 237; 271 W.A.C. 237; 2002 BCCA 227, refd to. [para. 34].

Air Canada v. M & L Travel Ltd., Martin and Valliant, [1993] 3 S.C.R. 787; 159 N.R. 1; 67 O.A.C. 1; 108 D.L.R.(4th) 592, refd to. [para. 33].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81; 101 D.L.R.(4th) 621, dist. [para. 36].

British Columbia Teachers' Credit Union v. Betterly (1975), 61 D.L.R.(3d) 755 (B.C.S.C.), refd to. [para. 36].

Soulos v. Korkontzilas et al., [1997] 2 S.C.R. 217; 212 N.R. 1; 100 O.A.C. 241; 146 D.L.R.(4th) 214, refd to. [para. 36].

Foskett et al. v. McKeown et al., [2001] 1 A.C. 102; 257 N.R. 294 (H.L.), refd to. [para. 37].

Alers-Hankey v. Solomon et al. (2006), 226 B.C.A.C. 129; 373 W.A.C. 129; 2006 BCCA 224, refd to. [para. 37].

Hallett's Estate, Re; Knatchbull v. Hallett (1880), 13 Ch. D. 696, not folld. [para. 42].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577; 2002 SCC 33, refd to. [para. 50].

Counsel:

P. Gemmink, for the appellant, Zulfikar Walji, in Actions Nos. CA032076 and CA032077 and for the respondent, Zulfikar Walji, in Action No. CA032065;

R.R. Hira, Q.C., and A. Leoni, for the appellants, Yasmin Walji, 1118174 Ontario Limited (dba Best Western Roehampton Hotels & Suites), YZ Enterprises Inc. (dba Classic Cleaners and dba Designamatics), in Action No. CA032065;

S.C. Fitzpatrick, for the appellants, 1392275 Ontario Inc. (dba Markham Hilton Gardens), 3464632 Canada Inc. (dba Days Inn Montreal Airport), Parviz Dhanani and Parviz Dhanani, Separate Property, in Action No. CA032065;

D.G. Cowper, Q.C., and M.E. Fancourt-Smith, for the respondents, Ruwenzori Enterprises Ltd., Cale Holdings Limited and Norsham Inc., in Actions Nos. CA032076 and CA032065 and for the respondents, Farhana Charania, personal representative of Noordin Charania, deceased, Nor-Sham Hotels Inc., Nor-Sham Developments Inc., Nor-Sham (Markham) Hotels Inc., and Nor-Sham Management Inc. in Action No. CA032077.

This appeal was heard at Vancouver, B.C., on June 13-16, 2006, by Hall, Mackenzie and Levine, JJ.A., of the British Columbia Court of Appeal. The court delivered its decision on October 12, 2006, which included the following opinions:

Hall, J.A. (dissenting in part) - see paragraphs 1 to 57;

Mackenzie, J.A. (Levine, J.A., concurring) - see paragraphs 58 and 59.

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26 practice notes
  • Asset Preservation Orders - Mareva Injunctions
    • Canada
    • Irwin Books The Law of Equitable Remedies - Third edition
    • November 18, 2023
    ...Island, Rules of Civil Procedure, rr 44 & 45. 11 Ruwenzori Enterprises Ltd v Walji , 2004 BCSC 741 at paras 243 and 249 (BCSC), af’d 2006 BCCA 448; Attorney General for Hong Kong v Reid , [1994] 1 AC 324 (PC) [ Reid ]. 12 Discussed in Chapter 11, Section E. 13 Discussed in 663309 Ontario Lt......
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    ...Brothers Ltd (1923), 53 OLR 558 (CA) .....................................308 Ruwenzori Enterprises Ltd v Walji, 2004 BCSC 741, af’d 2006 BCCA 448 ..... 163 RWDSU Local 558 v Pepsi-Cola Canada Beverages (West) Ltd, 2002 SCC 8 .......................................................................
  • Asset Preservation Orders - Mareva Injunctions
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    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
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    ...once an action was launched and sought an 7 Ruwenzori Enterprises Ltd. v. Walji , 2004 BCSC 741 at paras. 243 and 249 (B.C.S.C.), aff’d 2006 BCCA 448; and Attorney General for Hong Kong v. Reid , [1994] 1 A.C. 324 (P.C.). 8 Discussed in Chapter 11, Section E. 9 Discussed in 663309 Ontario L......
  • Table of Cases
    • Canada
    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...Brothers Ltd. (1923), 53 O.L.R. 558 (C.A.) .............................. 208 Ruwenzori Enterprises Ltd. v. Walji, 2004 BCSC 741, aff’d 2006 BCCA 448 ................................................................................... 105 Ryan v. Kaukab, 2011 ONSC 6826 ............................
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2 books & journal articles
  • Asset Preservation Orders - Mareva Injunctions
    • Canada
    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...once an action was launched and sought an 7 Ruwenzori Enterprises Ltd. v. Walji , 2004 BCSC 741 at paras. 243 and 249 (B.C.S.C.), aff’d 2006 BCCA 448; and Attorney General for Hong Kong v. Reid , [1994] 1 A.C. 324 (P.C.). 8 Discussed in Chapter 11, Section E. 9 Discussed in 663309 Ontario L......
  • Table of Cases
    • Canada
    • Irwin Books Archive The Law of Equitable Remedies. Second Edition
    • June 18, 2013
    ...Brothers Ltd. (1923), 53 O.L.R. 558 (C.A.) .............................. 208 Ruwenzori Enterprises Ltd. v. Walji, 2004 BCSC 741, aff’d 2006 BCCA 448 ................................................................................... 105 Ryan v. Kaukab, 2011 ONSC 6826 ............................

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