



COURT OF APPEAL FOR
    ONTARIO

CITATION: Mann v. Saini, 2014 ONCA 27

DATE: 20140114

DOCKET: C55761

Rouleau, van Rensburg and Benotto JJ.A.

BETWEEN

Gurdev Singh Mann

Appellant (Plaintiff)

and

Gurpal Singh Saini, Joseph Stanford and Karl
    Stanford

Respondents (Defendants)

Joseph Markin, for the appellant

James S.G. MacDonald, for the respondent Gurpal Saini

E. Anthony Ross Q.C., for the respondents Joseph and
    Karl Stanford

Heard: January 6, 2014

On appeal from the judgment of Justice Carole J. Brown of
    the Superior Court of Justice, dated June 13, 2012.

ENDORSEMENT

[1]

At trial, the appellant made numerous claims regarding deals with the
    respondents involving two businesses, CCSI and CASI. The appellant first
    acquired a 35% interest in both businesses from the respondents sometime in
    2003 or early 2004. The appellant also became the President and CEO of both
    companies. The respondents Saini and Karl Stanford each maintained equal 32.5%
    interests in the companies (Karl Stanford held the 32.5% interest in trust for
    his father Joseph), and Joseph Stanford became the head of Customer Service.

[2]

A Shareholders Agreement was signed in February of 2004. That agreement
    contained a detailed process for the purchase and sale of the interests held by
    the appellant, Saini, and Karl Stanford.

[3]

In July of 2004, Joseph Stanford resigned as an employee. His son Karl
    did not relinquish his shares in the companies. However, the appellant and
    Saini treated their interests in the companies as 50% each. They did not seek
    any legal advice regarding the effect of Joseph Stanfords resignation on the ownership
    of the business.

[4]

Soon after, it was agreed that the appellant would purchase Sainis shares
    in the companies for $100,000. A preamble in the share purchase agreement between
    them states that each of the appellant and Saini owned 50% of the shares, even
    though  Karl Stanford continued to hold a 32.5% interest in the companies as
    trustee for his father Joseph. Neither Karl nor Joseph Stanford was a party to
    the share purchase agreement between the appellant and Saini. By the time of
    trial, the appellant had paid only $50,000 of the money due to Saini pursuant
    to this share purchase agreement.

[5]

Thereafter, the appellant continued to operate both companies. By
    December 2004, however, CCSI was having financial difficulties. CASI continued
    to operate successfully and provided income to the appellant until 2009, when
    CASI was dissolved. At that time, the appellant took all the remaining capital,
    which he estimated at $250,000.

[6]

The appellant sued the respondents for alleged misrepresentations made
    to him when he initially purchased an interest in the companies. Saini
    counterclaimed for the outstanding balance of $50,000 on the share purchase
    agreement he concluded with the appellant. The Stanfords alleged that they were
    wrongfully deprived of their interests in the businesses and counterclaimed for
    extensive relief, including damages for lost profits, harassment, emotional
    distress, and punitive damages.

[7]

The trial judge made findings of fact based on her assessment of the
    parties credibility. She dismissed the appellants action and allowed the
    counterclaims in part. She awarded Saini the outstanding funds of $50,000, and
    awarded Karl Stanford $50,000 flowing from his interest in CASI.

[8]

The appellant appeals the dismissal of his action based on the alleged misrepresentations
    and also appeals the judgment on the counterclaims.

Appellants Claim for Misrepresentation

[9]

The appellant contests most of the factual findings made by the trial
    judge. The appellant argues that this court should not show deference to the
    findings of the trial judge and that numerous factual errors rendered the trial
    judges reasons inadequate. The appellant, however, has been unable to point to
    any error in the trial judges reasons. All of the trial judges findings are
    well supported in the record. This case was largely based on credibility. The
    trial judge correctly identified and applied the relevant legal principles
    relating to credibility assessments. She appropriately considered the evidence
    in assessing credibility and identified the contradictions in the appellants
    evidence. Her finding that the appellants evidence was inconsistent,
    contradictory, improbable, and evasive was well supported in the evidence. The
    trial judges credibility findings are entitled to deference, and we see no
    basis to interfere.

Counterclaim of Saini

[10]

The
    appellant argues that there was no basis for the trial judge to award Saini the
    remainder of the money owed pursuant to the share purchase agreement between
    them. He argues that Saini represented to him that Saini was selling 50% of the
    companies, which would make the appellant an owner of 100% of the shares. The
    appellant argues that because the trial judge determined that Karl Stanford
    still owned 32.5% of the companies, Saini was purporting to sell something he
    did not own and was therefore in breach of the share purchase agreement.

[11]

We
    would not give effect to this submission. The trial judge noted the recital in
    the share purchase document indicating that each of the appellant and Saini were
    owners of 50% of the company. She preferred and accepted Sainis evidence regarding
    the share purchase agreement and that he was advised by the appellant that they
    each owned 50% of the businesses after Stanfords resignation. Saini simply
    accepted the appellants advice in that regard and proceeded to sell his shares
    to the appellant. There was no misrepresentation by Saini. Both parties
    understood that Saini was selling his interest in the companies to the
    appellant. This is what the appellant received.

Counterclaim of Stanford

[12]

The
    appellant argues that it was an error for the trial judge  to award Karl
    Stanford $50,000. He argues that the award is a forced purchase of Karl Stanfords
    shares. In the appellants submission, the reasons of the trial judge make it
    plain that she dismissed all of the claims that were advanced in the Stanfords
    counterclaim. Moreover, as the statement of defence and counterclaim of the
    Stanfords did not seek to compel the appellant to purchase Karl Stanfords
    interest in the companies, it stands to reason that the trial judge could not
    make the award she did.

[13]

We
    disagree. Joseph Stanford has never been paid for his interest in the
    businesses nor did he receive any dividends or return of capital before CASI
    was dissolved. She found that Karl Stanford maintained his interests in the
    companies after his father Josephs resignation in 2004. The trial judge also
    found that the appellant operated CASI profitably until 2009 without any
    consideration of the Stanfords ownership interest. The appellant then
    dissolved CASI in 2009, withdrawing about $250,000 in capital. Although the
    trial judge rejected the Stanfords claim for $434,702 in lost profits as
    lacking in detail and supporting documents, she did not dismiss all of the Stanfords
    claims.

[14]

The
    Stanfords defence and counterclaim does not seek a forced purchase of Karl
    Stanfords shares in CASI by the appellant. However, it contains a broad claim
    for relief and damages. The Stanfords allege that the appellant falsely
    represented that Joseph Stanford had abandoned his interests in CASI, and that
    the effect of the appellants actions was to illegally deprive the Stanfords
    of their financial and equitable interests in the businesses in issue.

[15]

Based
    on the trial judges findings that Karl Stanford maintained an interest in CASI
    after his fathers resignation, and that the appellant operated CASI profitably
    and provided no accounting to the Stanfords upon dissolving the company in
    2009, it was open to the trial judge to make an award to Karl Stanford flowing
    from his ownership interest.  In our view, the trial judge did not, as the
    appellant suggests, order a buyout of Karl Stanfords shares. She simply used
    the value ascribed to Sainis interest in CASI at the time of the share
    purchase agreement between the appellant and Saini as a guide in arriving at
    the $50,000 award to Karl Stanford.

[16]

It
    was within her discretion to make the award she did.

Summary

[17]

For
    these reasons, the appeal is dismissed.  Costs are fixed at $7,000 inclusive of
    disbursements and applicable taxes payable by the appellant to each of the respondents
    for a total of $14,000.

Paul Rouleau J.A.

K. van Rensburg J.A.

M.L. Benotto J.A.


