Aly v. Halal Meat Inc. et al, 2012 ONSC 1806 (CanLII)

ITATION: Aly v. Halal Meat Inc. et al; 2012 ONSC 1806

CITATION: El Feky v. Halal Meat Inc. et al, 2012 ONSC 1807

CITATION: El Feky v. Tohamy, 2012 ONSC1808

COURT FILE NOS.: CV-10-0138-00; CV-11964-00; FS-09-0953-00

DATE: 20120318

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Nashaat Aly et al v. Nader Halal Meat Inc. et al (CV-10-0138-00)

AND:

Naima Mohamed El-Sayed Mohamed El Feky v. Nader Halal Meat Inc. et. al. (CV-11964-00)

AND:

Naima Mohamed El-Sayed Mohamed El Feky v. Adel Mohamed Tohamy (FS-09-0953-00)

BEFORE: Ricchetti, J.

COUNSEL: Counsel for Ms. El-Feky in FS-09-0953-00– J. Lagoudis

Counsel for Ms. El-Feky in CV-11964-00– J. Polyzogopoulos

Counsel for Mr. Tohamy in all actions – A. Farooq

Counsel for Nader Halal Meat Inc., Tamer Investment Inc. and Nader Fine Food Inc. in all actions – A. Farooq

Counsel for Nader Tohamy and Tamer Tohamy in CV-11964-00 and

CV-10-0138-00 – A. Farooq

Counsel for Nashaat Aly and Taghreed Aly in CV-10-0138-00 – R. Fisher

HEARD: March 16, 2012

ENDORSEMENT ON CONSOLIDATION

THE PARTIES
[1] Mr. Tohamy and Ms. El-Feky were married in February 1982 and separated on November 2, 2004. They were divorced in 2006.
[2] Nader Tohamy and Tamer Tohamy are the children of Mr. Tohamy and Ms. El-Feky. Both are adults.
[3] Nashaat Aly and Taghreed Aly are married and are related to Mr. Tohamy and Ms. El-Feky.
[4] Nader Halal Meat Inc. (Nader Halal) is a company. Prior to separation, Mr. Tohamy and Ms. El-Feky and each of their children held 25% of the shares in Nader Halal. Nader Halal has carried on the supermarket business since the early 1990’s. As a result of a reorganization subsequent to the separation, Mr. Tohamy and each of his two sons became approximately 33% shareholders in Nader Halal. Ms. El-Feky no longer held any shares in Nader Halal.
[5] Tamer Investment Inc. is a company (Tamer Investments). Prior to separation, Mr. Tohamy and Ms. El-Feky and each of their children held 25% of the shares of Tamer Investments. Tamer Investments owns a commercial plaza acquired in the early 2000’s. As a result of a reorganization subsequent to the separation, Mr. Tohamy and each of his two sons became approximately 33% shareholders in Tamer Investments. Ms. El-Feky no longer held any shares in Tamer Investments.
[6] Nader Fine Foods Inc. (Nader Restaurant) is a company. It was incorporated in 2006. The shareholdings of Nader Restaurant are not clear from the pleadings but are alleged to be owned or controlled by Mr. Tohamy and/or his adult children.
[7] The allegations are that the Companies have substantial value in the millions of dollars.
[8] Nader Halal, Tamer Investments and Nader Restaurant are hereafter referred to as the Companies.
THE ACTIONS
FS-09-0953-00 (the Family Law Action)
[9] Ms. El-Feky commenced an application in March 2009. Mr. Tohamy is the sole respondent. Ms. El-Feky claims, inter alia, the following relief:
a) Setting aside a Divorce Settlement Agreement dated November 2, 2004;

b) Setting aside a Final Agreement dated July 2008;

c) Equalization of net family properties which includes the shares and/or value in Nader Halal and Tamer Investments; and

d) Spousal support.

[10] At the heart of the Family Law Action is Ms. El-Feky’s claim to shareholdings or the value of Nader Halal and Tamer Investments. It is not clear whether Ms. El-Feky claims an interest in Nader Restaurant.
[11] In addition to other claims such as spousal support, Ms. El-Feky seeks to set aside the Divorce Settlement Agreement and the Final Agreement which is the basis upon which Mr. Tohamy claimed that Ms. El-Feky relinquished her shares in Nader Halal and Tamer Investments. Alternatively, Ms. El-Feky claims that the Divorce Settlement Agreement did not relinquish her property interest in her shares in Nader Halal or Tamer Investments. In the further alternative, Ms. El-Feky claims that Nader Halal and Tamer Investments are family property to
which she is entitled to an equal division of Mr. Tohamy’s interests. If successful, this would result in Ms. El-Feky recovering her 25% interest in Nader Halal and Tamer Investments including, if successful, claims for profits retroactively and in the future. This would be a significant financial impact on anyone with an interest in Nader Halal and Tamer Investments.

[12] Nader Tohamy and Tamer Tohamy, Ms. El-Feky’s adult children and the other shareholders of Nader Halal and Tamer Investments are not parties to this action. This is somewhat surprising given that Nader Tohamy and Tamer Tohamy, knew of the Divorce Settlement Agreement and relied on it to increase their shareholdings in Nader Halal and Tamer Investments after the separation. If they wish to keep their shareholdings in Nader Halal and Tamer Investments, Nader Tohamy and Tamer Tohamy have an interest in ensuring that the Divorce Settlement Agreement is upheld and interpreted in a manner that permitted the reorganization.
CV 11964-00 (Ms. El-Feky’s Oppression Action)
[13] Ms. El-Feky commenced this action seeking to establish that she is the rightful owner of 25% of Nader Halal and Tamer Investments and to recover her pro-rata share of the profits of these companies. While the legal basis upon which the relief claimed is different that the Family Law Action, essentially, the same claims are being made by Ms. El-Feky regarding Nader Halal and Tamer Investments.
[14] Again, Ms. El-Feky appears to have made no claim regarding Nader Restaurant.
[15] The respondents to Ms. El-Feky’s Oppression action are Nader Halal, Tamer Investments, Mr. Tohamy and her two adult children.
[16] The respondents in Ms. El-Feky’s Oppression action do not include Nashaat Aly and Taghreed Aly. If tried separately, any determination or findings of fact regarding Nader Halal and Tamer Investments in this proceeding would not be binding on the Aly’s since they are not parties to this proceeding.
CV10-0138-00 (Aly Oppression Action)
[17] In 2008, Nashaat Aly and Taghreed Aly (the Aly’s) commenced an action claiming damages for breach of contract or, in the alternative, a 20% interest in the Companies.
[18] The Defendants in the Aly Oppression action does not include Ms. El-Feky. As a result, any determination or findings of fact regarding Nader Halal and Tamer Investments in this proceeding would not be binding on Ms. El-Feky since she is not a party to this proceeding.
The History of the Proceedings
[19] The two oppression proceedings had been commenced in other jurisdictions but have since been transferred to Brampton. All three actions are now to be tried in Brampton.
[20] The three proceedings have been case managed but have proceeded independently.
[21] The Family Law Action trial started on March 13, 2012 before me as the presiding judge. The only parties before this court were Mr. Tohamy and Ms. El-Feky. Two issues immediately became a concern to this court:
a) Despite the fact that at the core of the issues to be tried was the validity of the two separation agreements and Ms. El-Feky’s entitlement to a 25% interest and profits in Nader Halal and Tamer Investments, neither of the adult children, Tamer Tohamy or Nader Tohamy were before the court. Counsel for Mr. Tohamy made it clear that he did not act for Tamer Tohamy or Nader Tohamy in the Family Law Action. Further, counsel for Mr. Tohamy confirmed that the shares of Nader Halal and Tamer Investments were re-distributed after the separation relying on the Divorce Settlement Agreement. If the two separation agreements are set aside or interpreted so that Ms. El-Feky’s shareholding interests in the Companies were not relinquished, then the shareholdings of Tamer Tohamy and Nader Tohamy would be affected. Counsel suggested that Tamer Tohamy and Nader Tohamy might choose, in those circumstances, to look to Mr. Tohamy’s shares for any reduction in their shares. The difficulty is that Mr. Tohamy’s shares might not be available after the court determined a proper equalization of net family property (assuming the Companies are net family property assets) or Mr. Tohamy’s shares might be encumbered by any support arrears which might be ordered. Simply put, the adult children, Nader Tohamy and Tamer Tohamy interests in the Nader Halal and Tamer Investments could be affected by decisions or findings in the Family Law Action; and

b) The Aly’s are not parties to the Family Law Action. The Aly’s allege that they are entitled to 20% of Nader Halal and Tamer Investments since the early 1990’s. The issue is, whether Ms. El-Feky owned 25% or 20% or some other percentage based on the transfers to her adult children, as of the date of separation. Ms. El-Feky’s claim, if successful, would impact the shareholding and profits in the Companies. I raised with counsel, by way of example, the value of what Ms. El-Feky gave up under the Divorce Settlement Agreement one of the issue to be considered by this court under the Miglin test. Given the claims by the Aly’s, it is presently unknown what interest Ms. El-Feky had at the date of separation. Even if you could determine the issue of the validity of the separation agreements in a vacuum, if Ms. El-Feky is successful, she would become a necessary and proper party in the Aly Oppression Action.

[22] After an opening by Ms. El-Feky’s counsel and some brief background and non-contentious evidence by Ms. El-Feky in chief, I stopped the trial. The court requested that counsel for all parties in the three proceedings to attend before the court on March 16, 2012. I made it clear that I was considering consolidating the three proceedings, each of which involved the ownership of shares and profits in the Companies.
[23] The Aly Oppression Action had been scheduled to commence on May 14, 2012 for a three week period before another trial judge. This increases the possibility of inconsistent findings regarding the shareholdings, value and profits of the Companies.

[24] The El-Feky Oppression Action had not yet been scheduled for trial.
ONE TRIAL
The Law
[25] Rule 6 of the Rules of Civil Procedure provide as follows:
Rule 6.01:

(1) Where two or more proceedings are pending in the court and it appears to the court that,

(a) they have a question of law or fact in common;

(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or

(c) for any other reason an order ought to be made under this rule,

the court may order that,

(d) the proceedings be consolidated, or heard at the same time or one immediately after the other; or

(e) any of the proceedings be,

(i) stayed until after the determination of any other of them, or

(ii) asserted by way of counterclaim in any other of them.

(2) In the order, the court may give such directions as are just to avoid unnecessary costs or delay and, for that purpose, the court may dispense with service of a notice of listing for trial and abridge the time for placing an action on the trial list.

Rule 6.02:

Where the court has made an order that proceedings be heard either at the same time or one immediately after the other, the judge presiding at the hearing nevertheless has discretion to order otherwise.

(emphasis added)

Analysis
[26] Counsel on behalf of all parties in these proceedings appeared before this court on March 16, 2012.
[27] There was no objection by counsel to consolidating these proceedings so that one trial is held dealing with all the issues in these proceedings. The concerns of counsel were scheduling issues or the order in which the court would try the various issues.
[28] The court is satisfied that:

a) There are common issues of fact, namely share ownership of the Companies and the value of the Companies;

b) The remedies regarding the profits from the Companies will have an impact on and, in some cases, limit the remedies available to other parties in these proceedings, depending on whether they are successful in their claims. It is necessary that all of the above parties have an opportunity to present evidence, cross-examine and make submissions on the issues which might affect the relief which they seek in these proceedings;

c) There would be duplication, unnecessary expense and the real likelihood of inconsistent findings if all these proceedings are not consolidated into one trial and heard by one trial judge; and

d) A common trial with all parties in these proceedings will achieve the “just, most expeditious and least expensive determination” and final determination of the issues in these proceedings. See Rule 1.04.

[29] A common trial of these proceedings will ensure that all the parties involved in the issues regarding the ownership and remedies associated with the Companies will be before the court, can lead evidence and make submissions. This will permit the court to “adjudicate effectively and completely on the issues in the” proceedings. See Rule 5.03.
[30] The remedies which may be ordered at the conclusion of the trial will be consistent with all of the findings regarding the ownership of the shares in the Companies over the respective period of time. There will be no inconsistency in the judgment or the relief granted by this court with respect to the claims regarding Nader Halal and Tamer Investments.
[31] As a result, an order will issue that these proceedings will be tried at the same time under Rule 6.01 (d). There will be one trial with all parties able to participate in the entire trial to the extent they choose to do so.
[32] The opening and evidence in the Family Law Action heard on March 13, 2012 is not evidence in the consolidated trial.
[33] All the parties agree they may not have an interest in all parts of the trial. It is for this reason that the parties were proceeding with separate trials. For example, the Aly’s may not have any interest in Ms. El-Feky’s claim to set aside the two separation agreements if they have established an equitable entitlement to an interest in the Companies and provided that the Aly’s remedies are not impacted if the trial judge grants any remedies in the Family Law Action.
[34] In order to accommodate this concern of the parties, the following directions are given with respect to the common trial in this consolidated proceeding:
I. If there are any further pleadings to be filed, they are to be served and filed by March 26, 2012 at 4 pm. The Family Law Action will proceed with the existing Trial Record. Ms. El-Feky Oppression Action will proceed based on the Application and

Responding Record. A Trial Record will be filed in the Aly Oppression Action by April 30, 2012;

II. The common trial will commence on May 14, 2012. All counsel have acknowledged they have or will be able to set aside four weeks to try these proceedings. I expect counsel to continue to be available these weeks for trial;

III. In order to accommodate the ability of the parties to attend some or all of the trial, I agreed that the court would identify the order of the issues to be tried. The parties could not agree on the order of the issues to be tried. Counsel for Ms. El-Feky and the Aly’s have made oral submissions on the order of the issues to be tried. Counsel for Mr. Tohamy, Nader Tohamy and Tamer Tohamy, will make written submissions on the order of issues to be tried by March 21, 2012 at 4 pm. Remaining counsel will have until March 22, 2012 at 4 pm to make reply submissions on the order of issues to be tried. I will make an order setting out the order in which the issues will be tried by this court. However, notwithstanding that there will be an order of the issues to be tried, I want to make it perfectly clear to the parties that:

i. The evidence heard by the court during the trial (regardless of which issue is being tried at the time) will be evidence in all proceedings. If the parties choose not to be present or to monitor the trial through their clients, junior counsel or clerks or simply listen to the daily recordings, they do so at their own risk; and

ii. Given the attempt at separating issues and trying them one after the other, the court will permit previously called witnesses to be recalled to deal with the specific issues relating to the current issue being tried. However, the evidence of the witness will be limited to the specific issues of the trial and not to go over the prior evidence – whether in examination in chief or in cross examination. Any repetition will be avoided if at all possible and, if not, it will be limited to the extent possible;

IV. With the consent of all the parties, the court will try to accommodate the parties by releasing decisions on the issue before proceeding with the portion of the trial on the next issue provided the court is in a position to do so from a time perspective and provided the court is satisfied that the decision is discrete and not dependent on other evidence that may come later in the trial or the decision is dependent on the determination of other issues yet to be tried or decided;

V. Any motions are to be served and filed by March 30, 2012. Responding materials are to be served and filed by April 4, 2012. Reply materials are to be served and filed by April 6, 2012. If any party requires more time to respond to the motion(s), a written request may be forwarded to me by email copied to all counsel. I will deal with all motions appropriate for a trial judge to hear during the week of April 9, 2012;

VI. Based on submissions by counsel, I agree that the following anticipated motions will be dealt with by a judge, other than myself as the trial judge or the pre-trial judge:

a) Any motion to remove Messrs. Simpson Wigle LAW LLP as counsel of record; and

b) Any motion by Ms. El-Feky for funding from the Companies.

These motions must adhere to the schedule set out above. I will arrange for the motions to be heard by another judge.

VII. If Nader Tohamy and/or Tamer Tohamy, who previously not been a party to the Family Law Action, choose to retain other counsel in light of the order herein that there will be one trial involving these three proceedings, they shall advise other counsel by March 30, 2012 and shall advise the court by April 3, 2012 if new counsel seeks an adjournment of the May 14, 2012 trial date; and

VIII. Such further and other directions as may be given by this court.

[35] Costs of the aborted Family Law Action trial and the attendance on March 16, 2012 shall be reserved to the end of the trial.

Ricchetti, J.

Date: March 19, 2012

CITATION: Aly v. Halal Meat Inc. et al; 2012 ONSC 1806

CITATION: El Feky v. Halal Meat Inc. et al, 2012 ONSC 1807

CITATION: El Feky v. Tohamy, 2012 ONSC1808

COURT FILE NOS.: CV-10-0138-00; CV-11964-00; FS-09-0953-00

DATE: 20120318

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Nashaat Aly et al v. Nader Halal Meat Inc. et al (CV-10-0138-00)

AND:

Naima Mohamed El-Sayed Mohamed El Feky v. Nader Halal Meat Inc. et. al. (CV-11964-00)

AND:

Naima Mohamed El-Sayed Mohamed El Feky v. Adel Mohamed Tohamy (FS-09-0953-00)

BEFORE: Ricchetti J.

COUNSEL: Counsel for Ms. El-Feky in FS-09-0953-00– J. Lagoudis

Counsel for Ms. El-Feky in CV-11964-00– J. Polyzogopoulos

Counsel for Mr. Tohamy in all actions – A. Farooq

Counsel for Nader Halal Meat Inc., Tamer Investment Inc. and Nader Fine Food Inc. in all actions – A. Farooq

Counsel for Nader Tohamy and Tamer Tohamy in CV-11964-00 and

CV-10-0138-00 – A. Farooq

Counsel for Nashaat Aly and Taghreed Aly in CV-10-0138-00 – R. Fisher

ENDORSEMENT

Ricchetti J.

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