Subramaniam v. Gupta

2019 BCSC 2019 Subramaniam v. Gupta

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Subramaniam v. Gupta, 2019 BCSC 2019 Date: 20190927 Docket: S189086 Registry: New Westminster Between: Rajkumar Subramaniam Plaintiff And Raj Kumar Gupta and Harmadan Singh Gadhri Defendants Before: The Honourable Mr. Justice Armstrong Oral Ruling Re Application to Strike out a Response to Civil Claim and Counterclaim In Chambers Counsel for the Plaintiff: J.E. Shragge Counsel for the Defendant Gupta: R. Davidson Appearing on his own Behalf: H. Gadhri Place and Date of Hearing: New Westminster, B.C. September 27, 2019 Place and Date of Ruling: New Westminster, B.C. September 27, 2019 [1] THE COURT: I am going to deal with the application first. This is an application by the plaintiff to strike out the response to civil claim and counterclaim of the defendant Mr. Harmadan Gadhri and to continue the proceeding as if no response had been filed. The defendant Raj Gupta supports the plaintiff's claim. [2] The civil claim in this case was filed in 2017, and the respondent filed a response to civil claim and counterclaim on August 2, 2017. The claim involves a purchase and sale agreement made in 2011 for lands on 191A Street in Surrey. Mediation involving these parties and these lands proceeded to trial in another proceeding with reasons for judgment of Madam Justice Burke given in Gadhri v. 0760815 B.C. Ltd., 2016 BCSC 521. [3] The

2011 contract of purchase and sale required the defendants to sell the lands to the plaintiff for $305,000. At the completion date I am told the defendants were unable to provide clear title in October of 2011 because an encumbrance remained registered against the title, being an option to purchase. The defendants were thus not ready, willing and able to complete. [4] In the spring of 2016 the parties, or some of them, agreed to reset the completion date for the sale of the lands to June 22, 2016. The option to purchase remained registered against the title, and the defendants could not clear title by that date and could not complete the transaction. [5] Counsel for Mr. Gupta invited the plaintiff to stipulate for a new completion date, which was eventually stipulated to be September 12, 2016. Notwithstanding representations by Mr. Gadhri's counsel that he would sign the conveyance at that time, he failed to do so and the date passed. [6] The actual counterclaim relates to the wrongful filing of a certificate of pending litigation that Mr. Gupta argues caused damage. It is hard to conceive of how any claim for damages for filing of the certificate of pending litigation in the absence of an application made under the Land Title Act, R.S.B.C. 1996 c. 250 to cancel that document could succeed, particularly insofar as Mr. Gupta was a co‑owner of the property and he insists on

completing the 2011 contract of purchase and sale. [7] In July 2018 the plaintiff applied for judgment under Rule 9‑7. Mr. Gadhri filed and served a lengthy response to these materials the day before the hearing date. The summary trial was adjourned. [8] On February 6, 2019, the plaintiff applied for judgment on admissions under Rule 7‑7, returnable for February 22, 2019. On February 21, 2019, counsel for the plaintiff was contacted by the defendant Mr. Gadhri and asked for an adjournment due to inadequate preparation time available to him. That hearing was adjourned and costs ordered against Mr. Gadhri for the late application to adjourn and being unprepared for the hearing. [9] At a May 10th, 2019 trial management conference, Master McDiarmid ordered Mr. Gadhri to file a trial brief and to set out certain particulars of his counterclaim. The trial management brief was to be served by June 17th. Mr. Gadhri failed to comply. [10] This proceeding was set for trial for July 9, 2019. Mr. Gadhri attended on that date without counsel and without an interpreter. He argued that he had been let down by his previous counsel who had recently come off the record and that he had been unable to retain counsel and prepare for the trial date. Thus he needed an adjournment of the trial in order to be able to prepare himself and to respond to the order of Master McDiarmid. [11] The trial was

adjourned, and each of the plaintiff and Mr. Gupta were awarded costs of $2,500. A new trial date for four days commencing October 29, 2019, was set peremptorily on Mr. Gadhri. Mr. Gadhri has not yet complied with Master McDiarmid's order, nor my order to serve a trial brief, either by August 7th, which was the first date, or the September 13th date. On August 7th and up until September 13th, Mr. Gadhri was represented by counsel. He actually filed a trial brief in August that failed to comply with Master McDiarmid's order. It also raised issues that were extraneous to the existing pleadings. [12] On August 28, 2019, the parties attended a further trial management conference before Mr. Justice Ball. He again ordered Mr. Gadhri to file a trial brief that complied with Master McDiarmid's order and included only those issues properly set out in the current pleadings. A document was to be filed by September 13, 2019. Mr. Gadhri failed to provide that required trial brief. [13] This application was brought by the plaintiff, again to strike out the defence and counterclaim. Mr. Gadhri did not appear at that application at the appointed time at 9:00 a.m. He arrived at 10:00 a.m. and was permitted an adjournment for the purposes of filing a responsive affidavit and to seek a counsel. The plaintiff and Mr. Gupta argue that Mr. Gadhri has shown a complete disregard for his obligations

under the Rules of Court and under orders of the court concerning the trial manage, conference. [14] Mr. Gadhri had informed the other parties earlier in September that he had retained Mr. Randhawa, but Mr. Randhawa was unavailable for the application. He said that Mr. Randhawa had asked for a different date but counsel had refused. That request did not appear reflected in correspondence between counsel. Plaintiff's counsel informed the court that Mr. Randhawa had been solicitor of record for Mr. Gupta but on September 13th, the day the new trial brief was due, Mr. Gadhri signed a notice of intention to act in person. Mr. Gadhri informed the court that he had not learned about the September application until the night before and was not in the position to argue the matter. Although he did have an affidavit which had not been filed. [15] Mr. Gadhri has not paid the costs for the orders made in June of 2019 or in August. He claims he has no funds to make those payments and will not be in any funds unless he succeeds in his lawsuit to set aside or to avoid the October 2011 agreement and be permitted to proceed to sell the property at current market values. Mr. Gadhri filed his new trial management brief on September 24, 2019. In my view his new trial brief does not comply with the terms of the order required by Master McDiarmid or Mr. Justice Ball. [16] On reviewing the trial

management brief filed by Mr. Gadhri at this time, the only references he makes to is damages resulting from the filing of the CPL were: The CPL prevented the owners of the property to sell the property in open market. Thus, depriving me of my right to claim my interest in the property. This has caused loss of profits. Damages include profit loss in the amount of $500,000 if sold in open market. [17] The law on this point is not set out in the counterclaim. It is important to note that Mr. Justice Ball's order also required Mr. Gadhri to particularize his damages, provide a summary of the evidence he intended to lead and provide any authorities he intended to rely on in support of these damages. In his submissions today, Mr. Gadhri tells me that in essence that he does not know about any authorities because he relies on his lawyer to provide those and he has no lawyer at the present. Nor will he expect to have a lawyer by the trial, and thus he will not be in any position to provide authorities to the trial judge. The summary of evidence he intended to lead regarding his claim for damages on the counterclaim is very slim and, in my view, does not assist in meeting his obligations as prescribed by Master McDiarmid. [18] At this stage the plaintiff's frustration with Mr. Gadhri is palpable and obvious from the affidavit material. The evidence points to his irresponsible in his

behaviour throughout his litigation. Although he contended that Mr. Randhawa was continuing to act for him but not available, he was unable to explain why he had signed no new notice of appointment of solicitor after he had signed the notice of intention to act in person. [19] The trial is one month away. Mr. Gadhri's failure to file a proper trial management brief with specific details concerning his counterclaim presents an obstacle to the trial management process and the efficient conduct of the trial. Rule 12‑3.2 provides that failures to serve a trial brief in accordance with subrule (3), a trial management judge may order costs against the party. In this case that has happened on two occasions. The plaintiff now invokes Rule 22(5) and (6) that permit the court to dismiss a proceeding which a person has refused or neglected to comply with the direction of the court. [20] In Breberin v. Santos, 2013 BCSC 560, the court summarized the underlying principles dealing with breaches of procedure and orders: The desire to address claims on their merits is the preeminent objective of the courts. The Rules are written with a view toward achieving that objective in a just and efficient manner. At some point non‑compliance with the Rules [and orders of the court] frustrates the pursuit of a just outcome and the result will be the dismissal of the claim. [21] This is a blunt tool,

draconian in nature, to be used sparingly and in the most egregious cases. The party at fault bears the onus of proving lawful excuse for non‑compliance or non‑observance. If due to negligence, the degree of negligence required is more than moderate. Fundamental failures such as failure to produce documents are a serious default. A dismissal order will not usually be granted on the first application, and there must have been a warning of the result. Lesser sanctions may be considered if available and appropriate. A persistence pattern of non‑compliance preventing the litigation from progressing and causing losses of trial dates may have irreparable negative effect. Causing adjournments of trials is seriously prejudicial to the two other parties in this case. Refusal to follow court orders in the face of rejected reasons is an overt and deliberate flouting of the order. [22] In Dhillon v. Pannu, 2008 BCCA 514, the BC Court of Appeal addressed the question of multiple breaches of court's orders at paragraph 35. [35] There is nothing in the reasons of the chambers judge to indicate that he misdirected himself. It is not manifest from his reasons that the judge gave no weight, or insufficient weight, to relevant considerations. He was aware of the availability of lesser sanctions because he had imposed a lesser sanction when the dismissal application first came before him on

November 6, 2007. It may have amounted to an injustice had the chambers judge dismissed the action on November 6, but I am not persuaded that it was an injustice to dismiss the action of a plaintiff who failed to comply with two successive orders, especially when the chambers judge clearly warned the plaintiff on November 6 of the prospect of the dismissal of his action if he failed to comply with the order made on that day. [23] In House of Sga'nisim v. Canada (Attorney General), 2007 BCCA 483, the court also discussed the issues as follows: [24] Over-arching both of these complaints is their submission that dismissal of the action was disproportionate in the circumstances, and that the judge erred in failing to consider lesser sanctions. Those circumstances include their partial compliance with the order and the fact that full compliance required obtaining information from the respondents who sought the particulars, that is, that the desired information was already in the hands of the Nisga'a Nation. [24] The court then concluded: [26] Nevertheless, the chambers judge was required to consider proportion in weighing the degree of the delict with the degree of sanction imposed. In my view, his reasons do not reveal the required consideration. Indeed, the chambers judge stated that "no reply [to the order of Mr. Justice Cullen] has been provided by the plaintiffs" and "[the

plaintiffs have] not complied with my order, and are therefore in contempt of it." However, both of these statements fail to reflect the partial compliance with the orders in evidence before him and do not address the request for a short period of time within which to completely respond. This led to a disproportionate response, which unfortunately was in symmetry with the foreshadowing comments of September 30, 2005. [25] Striking a claim or defence is a blunt tool to be used sparingly. As Madam Justice Southin said, this is a draconian remedy only to be invoked in the most egregious cases because it deprives the litigants of a trial on the evidence. The defendant Gadhri has behaved poorly throughout this litigation. The trial, as I have said, is one month away and the claimant demonstrates that Mr. Gadhri has not complied with two of this court's orders to provide a fulsome trial management brief. The purpose and goal of that order was to require Mr. Gadhri to focus on his claim for damages for wrongful filing of the CPL and the effect that it had caused. Counsel points out that in the absence of Mr. Gadhri taking an application under the Land Title Act, his damages for filing the CPL can only be found if there was malicious intent and an intent to abuse the process of the court. [26] In consideration of Mr. Gadhri's most recent trial management brief and his failure to

address the questions that were required of him by Master McDiarmid and Mr. Justice Ball and the adjournment of the application brought by the plaintiff, it is my view that Mr. Gadhri has demonstrated the egregious conduct in failing to properly address the counterclaim he wishes to bring. It is fairly obvious, and Mr. Gadhri acknowledged that if he fails in the defence and the plaintiff is entitled to pursue and enforce the October 2011 agreement, he will have suffered no losses because he would never have had any entitlement to sell. He says that if he succeeds in that claim, then he will have suffered damages by reason of his inability to sell the property. [27] He spoke to me about the evidence of a witness, a Mr. Sohi, who he said would be a person he would call on that point. Regrettably Mr. Sohi is not listed in Mr. Gadhri's list of witnesses in his most recent trial management brief. That factor coupled with his failure to meet these obligations under the previous orders tells me that the trial management brief that he has filed is of limited or little use in allowing the court to manage this trial that is currently set for October 29th. [28] In my view if Mr. Gadhri, on an aside and looking to the merits of the claim, and in my view the merits are not particularly significant in this stage of the process, but looking at the merits of the claim if Mr. Gadhri is

successful, then the October 2011 contract of purchase and sale will be unenforceable and he and Mr. Gupta will be free to sell the property at current market values. I am told that those current market values are in the order of $800,000. It may even be as much as $1 million. If Mr. Gadhri is successful in the litigation and he and Mr. Gupta are free to sell the property to incur market prices, Mr. Gadhri seemingly will have suffered no loss and, in fact, will have achieved a benefit by the delay that has transpired since the CPL was placed against the property. [29] In my view Mr. Gadhri's failure to address his obligations in preparation for this trial are more likely than not caused by the fact that he does not have the information or the facts available to support his claim. He has been represented by counsel for a considerable part of the time since Master McDiarmid's order, and counsel would clearly have been in a position to respond and provide the trial management brief information required. His explanation to me today concerning his damages claims does not inspire any confidence that he has the evidence or information, nor that he has any legal authority that will support his claim. [30] Accordingly, I am satisfied that applying the test is set out in the authorities that I have referred to, Breberin v. Santos and Dhillon v. Pannu and House of Sga'nisim v. Canada

(Attorney General), 2007 BCCA 483 (CanLII), 286 D.L.R. (4th) 557 (the "Chief Mountain" case), that Mr. Gadhri, insofar as his counterclaim is concerned, has demonstrated a complete disregard for his obligations and the Rules of Court. [31] I sympathize with Mr. Gadhri to this extent: he tells me that the reasons behind his failures are that he has not got a lawyer and cannot afford to pay for a lawyer in order to defend this claim for him. He says that all of his resources are tied up in the equity of the very land which is the subject matter of this litigation. While the court can be sympathetic to Mr. Gadhri's financial circumstances, he has had counsel throughout much of the time when these orders have been outstanding, and I do not accept that his inability to retain a counsel at this stage is, in fact, an excuse or an explanation for not complying with the orders. [32] In the result, I am satisfied that this is a case where it would be appropriate to dismiss Mr. Gadhri's counterclaim. I will not dismiss his defence or strike his defence of the claim. I am satisfied that the issues are sufficiently separate that he should not be deprived of his right to defend this case. If he is successful in that defence of the case, he will achieve a remedy which is essentially the remedy that he would achieve if there was a finding of an abuse of process in the filing of the CPL. If he is unsuccessful in this case, his remedy would evaporate in any event. Thus notwithstanding the admonition of the court, the draconian order should only be exercised in the most egregious cases, it is my view this is one of those cases. [33] Based on all of the evidence, I am satisfied the counterclaim should be dismissed. "Armstrong J."