Title v. Canadian Asset Based Lending Enterprise (Cable) Inc. et al., (2011) 285 O.A.C. 167 (CA)

• Judge: Sharpe, Juriansz and Watt, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 18, 2011
• Jurisdiction: Ontario
• Citations: (2011), 285 O.A.C. 167 (CA);2011 ONCA 715

Title v. Cdn. Asset Based Lending (2011), 285 O.A.C. 167 (CA)

MLB headnote and full text

Temp. Cite: [2011] O.A.C. TBEd. NO.032

David Title (plaintiff/respondent) v. Canadian Asset Based Lending Enterprise (CABLE) Inc., 7178255 Canada Inc., 9208 - 9945 Quebec Inc., Druker & Associates Inc., Allen Rubin, Michael Leiberman, Fred Leiberman and Joel Leiberman (defendants/appellants)

(C53396; C53398; C53400; 2011 ONCA 715)

Indexed As: Title v. Canadian Asset Based Lending Enterprise (Cable) Inc. et al.

Ontario Court of Appeal

Sharpe, Juriansz and Watt, JJ.A.

November 15, 2011.

Summary:

The plaintiff, an Ontario resident, sued the defendants alleging that they conspired to take fraudulent bankruptcy proceedings in Quebec respecting two companies with the intention to cause damage to him. The plaintiff owned one-third of the shares of one of the companies and was its president and a director. The Lieberman defendants each owned one-third of the shares of the same company and all of the shares of the second company and were also directors of each. The defendants moved to have the action dismissed on the grounds that Ontario did not have jurisdiction over the claims or, alternatively, that Quebec was the more appropriate forum. The defendant Druker & Associates Inc. (Druker), a trustee in bankruptcy in Quebec, also sought an order dismissing the action on the basis that the plaintiff has failed to obtain leave prior to commencing the action required by s. 215 of the Bankruptcy and Insolvency Act. The personal defendants were all residents in Quebec. The corporate defendants all had their head offices in Quebec.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 922, dismissed the motions. The defendants appealed.

The Ontario Court of Appeal allowed Druker's appeal respecting a stay pursuant to s. 215 of the Act. The appeals of the other defendants were dismissed.

Bankruptcy - Topic 2686

Trustees - Liability - General - Action against - Requirement of leave - The plaintiff, an Ontario resident, sued the defendants, including a trustee in bankruptcy (Druker) alleging that they conspired to take fraudulent bankruptcy proceedings in Quebec respecting two companies with the intention to cause damage to him - The Ontario Court of Appeal held that a motion judge erred by failing to stay the action against Druker on the ground that leave had not been obtained pursuant to s. 215 of the Bankruptcy and Insolvency Act - The court agreed with the motion judge's conclusion that failure to obtain leave was an irregularity that could be cured - However, until that irregularity had been cured, the action could not proceed in the face of s. 215 - See paragraphs 21 to 23.

Conflict of Laws - Topic 603

Jurisdiction - General principles - Jurisdiction simpliciter (territorial competence) - The plaintiff, an Ontario resident, sued the defendants alleging that they conspired to take fraudulent bankruptcy proceedings in Quebec respecting two companies with the intention to cause damage to him - The plaintiff owned one-third of the shares of one of the companies and was its president and a director - The Lieberman defendants each owned one-third of the shares of the same company and all of the shares of the second company and were also directors of each - The assignments in bankruptcy were made within one day of the plaintiff giving notice of his motion for partial default judgment on an Ontario action alleging breach of contract and oppression - The defendants moved to have the action dismissed on the grounds that Ontario did not have jurisdiction over the claims or, alternatively, that Quebec was the more appropriate forum - The Ontario Court of Appeal held that the motion judge did not err in holding that Ontario had jurisdiction simpliciter - The plaintiff was an Ontario resident who, when employed by one of the companies, worked from his home in Ontario - The claim alleged a fraudulent conspiracy to deprive him of the legal rights he asserted in the first Ontario action - The personal defendants were all Quebec residents - The corporate defendants all had their head offices in Quebec - However, the defendants also had a strong connection with Ontario - The Leibermans had attorned to the first action in Ontario and were alleged to have conspired to, in effect, defeat the process of the Ontario courts and were thus "actively involved" in Ontario - The Quebec bankruptcy was simply a factual ingredient to the action - There was no direct or collateral attack on the Quebec bankruptcy - The defendants failed to establish that Quebec was clearly a more appropriate forum for the action - See paragraphs 9 to 14 and 16 to 20.

Conflict of Laws - Topic 643

Jurisdiction - Submission to jurisdiction - What constitutes - The plaintiff, an Ontario resident, sued the defendants alleging that they conspired to take fraudulent bankruptcy proceedings in Quebec respecting two companies with the intention to cause damage to him - The defendants included the trustee in bankruptcy (Druker) - The defendants moved to have the action dismissed on the grounds that Ontario did not have jurisdiction over the claims - Druker also sought an order staying the action against it on the basis that the plaintiff had failed to obtain leave prior to commencing the action required by s. 215 of the Bankruptcy and Insolvency Act - The Ontario Court of Appeal agreed with the motion judge that Druker attorned to Ontario jurisdiction by asking the Ontario court to stay the proceedings - It was inconsistent to ask the court to assume jurisdiction to the extent necessary to enforce s. 215 and at the same time assert that the court had no jurisdiction over the case - See paragraph 15.

Conflict of Laws - Topic 643

Jurisdiction - Submission to jurisdiction - What constitutes - [See Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 1664

Actions - General - Forum conveniens - Considerations - [See Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 7601

Torts - Jurisdiction - Forum conveniens - [See Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 7605

Torts - Jurisdiction - Real and substantial connection - [See Conflict of Laws - Topic 603 ].

Cases Noticed:

Van Breda et al. v. Village Resorts Ltd. et al. (2010), 264 O.A.C. 1; 2010 ONCA 84, refd to. [para. 9].

Charron v. Bel Air Travel Group Ltd. - see Van Breda et al. v. Village Resorts Ltd. et al.

Beals v. Saldanha et al., [2003] 3 S.C.R. 416; 314 N.R. 209; 182 O.A.C. 201; 2003 SCC 72, refd to. [para. 12].

Wolfe et al. v. Wyeth et al. (2011), 282 O.A.C. 64; 332 D.L.R.(4th) 157; 2011 ONCA 347, refd to. [para. 15].

Sauer v. Canada (Attorney General) et al., [2008] O.T.C. Uned. I57; 79 O.R.(3d) 19 (Sup. Ct.), refd to. [para. 15].

Jones (M.J.) Inc. et al. v. Kingsway General Insurance Co. et al. (2004), 189 O.A.C. 272; 72 O.R.(3d) 68 (C.A.), refd to. [para. 15].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 18].

TeleZone Inc. v. Canada (Attorney General), [2010] 3 S.C.R. 585; 410 N.R. 1; 273 O.A.C. 1; 2010 SCC 62, refd to. [para. 18].

New Alger Mines Ltd. v. Thorne Riddell Inc. (1986), 14 O.A.C. 25; 54 O.R.(2d) 562 (C.A.), refd to. [para. 22].

Counsel:

Howard Borlack and Lisa LaHorey, for the appellants, Druker & Associates Inc.;

Jeffrey A.L. Kriwetz, for the appellants, Canadian Asset Based Lending Enterprise Inc. and Allan Rubin;

François Sauvageau, for the appellants, 7178255 Canada Inc., 9208 - 9945 Quebec Inc., Druker & Associates Inc., Allen Rubin, Michael Leiberman, Fred Leiberman and Joel Leiberman;

Michael Gayed, for the respondent.

This appeal was heard on October 18, 2011, before Sharpe, Juriansz and Watt, JJ.A., of the Ontario Court of Appeal. Sharpe, J.A., released the following decision for the court on November 15, 2011.