British Columbia (Attorney General) v. Malik

British Columbia (Attorney General) v. Malik
Collection
Supreme Court Judgments
Date
2011-04-21
Neutral citation
2011 SCC 18
Report
[2011] 1 SCR 657
Case number
33266
Judges
McLachlin, Beverley; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise; Rothstein, Marshall; Cromwell, Thomas Albert
On appeal from
British Columbia
Subjects
Civil procedure
Notes
SCC Case Information: 33266
Decision Content
SUPREME COURT OF CANADA
Citation: British Columbia (Attorney General) v. Malik,
2011 SCC 18, [2011] 1 S.C.R. 657
Date: 20110421
Docket: 33266
Between:
Her Majesty The Queen in Right of the Province of British Columbia
as represented by the Attorney General of British Columbia
Appellant
and
Ripudaman Singh Malik, Raminder Malik and Jaspreet Singh Malik
Respondents
Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
Reasons for Judgment:
(paras. 1 to 66):
Binnie J. (McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ. concurring)
British Columbia (Attorney General) v. Malik, 2011 SCC 18, [2011] 1 S.C.R. 657
Her Majesty The Queen in Right of the
Province of British Columbia as represented by
the Attorney General of British Columbia Appellant
v.
Ripudaman Singh Malik,
Raminder Malik and Jaspreet Singh Malik Respondents
Indexed as: British Columbia (Attorney General) v. Malik
2011 SCC 18
File No.: 33266.
2010: October 15; 2011: April 21.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
on appeal from the court of appeal for british columbia
Civil procedure — Anton Piller order — Evidence — Admissibility — Crown bringing action against respondents to recover monies advanced to fund defence costs — Crown obtaining ex parte Anton Piller order — Chambers judge relying on facts found against respondents in prior judicial proceedings — Whether Superior Court judge hearing ex parte application for interlocutory order may admit findings and conclusions of prior judicial decision into evidence — Whether prior decision admissible only where respondents precluded by issue estoppel or abuse of process from relitigating the facts adduced — Whether sufficient admissible evidence adduced to justify order.
The Province seeks reimbursement of more than $5.2 million it paid to fund Mr. Malik’s defence in the Air India bombing trial in which Mr. Malik and a co-accused were acquitted. The Province’s action is based on claims of debt, breach of contract, conspiracy, and fraud. In granting an Anton Piller order authorizing the search of the business and residential properties of the Malik family for evidence that they helped conceal Mr. Malik’s assets, the chambers judge relied in part on facts found against the Malik family in prior judicial proceedings brought by Mr. Malik to obtain non-repayable provincial funding for his defence (the “Rowbotham application”). The British Columbia Court of Appeal set aside the Anton Piller order because in its view the Rowbotham findings and conclusion were, for the most part, inadmissible even on an interlocutory application. In the absence of the Rowbotham facts there was insufficient admissible evidence to justify the order.
Held: The appeal should be allowed.
The requirements for an Anton Piller order were set out by this Court in Celanese Canada Inc. v. Murray Demolition Corp. to include (i) a strong prima facie case; (ii) serious damage to the plaintiff as a result of the defendant’s alleged misconduct, potential or actual; (iii) convincing evidence that the defendant has in its possession incriminating documents or things; and (iv) a real possibility that the defendant may destroy such material before the discovery process can do its work. This stringent test was met in this case.
In December 2000, Mr. Malik applied for bail. It was in his interest at that time to show that he was a man of substance. He filed evidence that he and his wife had a net worth of over $11 million. Less than a year later, claiming to be without resources, Mr. Malik sought non-repayable government funding on Rowbotham principles. The application was rejected by the B.C. Supreme Court on the basis that “Mr. Malik remains a multimillionaire despite leading evidence to suggest his net worth is zero”. Further, it was held, “[t]he assets of Mr. Malik and his family are so interconnected as to be fused” and “Mr. Malik was, and still remains the patriarch of the Malik family which operated as a single financial entity. Mr. Malik jointly owns with his wife two businesses that gross millions each year”. In summary, the Rowbotham judge concluded, “[t]he evidence shows that Mr. Malik and his family have tried to arrange his financial and business affairs to minimize the value of his estate, to render him insolvent, and to therefore limit the amount of his contribution [to the costs of his defence], or to eliminate that obligation entirely”. The question is whether these findings and conclusions were admissible in the interlocutory proceedings.
An Anton Piller order is, in effect, a private search warrant and should only be granted on clear and convincing evidence. Such an order is available in British Columbia under the inherent jurisdiction of the Superior court. The Province comes before the Court as an ordinary civil litigant and its application for an Anton Piller order should be judged by the same rules as any other litigant. The Province enjoys no special Crown privilege or priority.
A judgment of a prior civil or criminal case is admissible, if considered relevant, as evidence in subsequent interlocutory proceedings as proof of its findings and conclusions, provided the parties are the same or were themselves participants in the prior proceedings on similar or related issues. The weight to be given to the earlier decision will rest not only on the identity of the participants, the similarity of the issues, the nature of the earlier proceedings and the opportunity given to the prejudiced party to contest it but on all the varying circumstances of the particular case. The issue of admissibility is separate and distinct from whether, once admitted, the prior decision is conclusive and binding. The prejudiced party or parties will have an opportunity before the reviewing judge to lead evidence to contradict the earlier findings or lessen their weight unless precluded from doing so by the doctrines of res judicata, issue estoppels or abuse of process.
There is a strong public interest in the avoidance of an unnecessary multiplicity of proceedings. Duplicative litigation creates the potential risk of inconsistent results. Inefficient procedures not only increase costs unnecessarily, but result in added delay, and can operate as an avoidable barrier to effective justice. The view that earlier judicial pronouncements should be inadmissible on the basis of concerns about hearsay and opinion evidence — the so-called rule in Hollington v. F. Hewthorn & Co. — is based on indefensible technicalities and its extension to interlocutory proceedings in a civil case is not consistent with more modern concerns about the avoidance of a needless multiplicity of proceedings.
In this case, the Rowbotham judgment was properly put before the chambers judge keeping in mind, of course, that it was for him, taking into account the whole of the interlocutory record, to make the factual and legal determinations necessary to issue or to decline to issue the orders sought by the Province. It was for him to determine, at the interlocutory stage, what weight to place on the Rowbotham findings and conclusions.
The earlier proceeding had been initiated by Mr. Malik and involved the other members of his family. The same series of family transactions, and allegations of asset manipulation, had thus earlier been examined by a judge of the Supreme Court of British Columbia. The issue before the chambers judge was (the Province claims) whether Mr. Malik was without funds to pay his debt to the Province as a result of asset manipulation and fraudulent dealings within the Malik family as initially explored in the Rowbotham application.
The court’s earlier decision was a judicial pronouncement after the contending parties had been heard. It had substantial effect on their legal rights. It would have been wasteful of litigation resources and potentially productive of mischief and inconsistent findings to have required the chambers judge to require the Province to litigate the Rowbotham facts de novo at the ex parte stage of an interlocutory motion.
On the interlocutory record considered admissible, the Anton Piller order was properly granted. It is evident that the chambers judge made his own decision on the matters he was required to determine in relation to the Anton Piller application and did not abdicate his judgment to the Rowbotham judge. It was open to the chambers judge on the whole of the interlocutory record to issue the Anton Piller order ex parte. On the facts of this case, the four “essential conditions” that must be met to justify an Anton Piller order were satisfied. First, it was open to the chambers judge to conclude that the Province had made out a strong prima facie case to establish Mr. Malik’s debt and the Malik family’s conspiracy to defraud the Province and to assist Mr. Malik to avoid his obligations under the Defence Counsel Agreement. Secondly, a claim of over $5.2 million against a debtor who, prima facie, exhibits a continuing history of evading payment by fraud and conspiracy with other members of his family to cover their financial tracks is very serious. Thirdly, it was open to the chambers judge to conclude on the ex parte application that incriminating documentation was in the possession of the Malik family. Finally, the evidence suggests, on a prima facie basis, that Mr. Malik has failed to respect court orders before, and that there was a “real possibility” that he and members of his family would do so again if they consider it is in their financial advantage. Given a history of refusal to provide proper disclosure of financial information despite an agreement and court orders to do so, it was open to the chambers judge to conclude that the Malik family might if forewarned continue the pattern of refusal and obfuscation by destroying relevant material before the discovery process could do its work.
It was open to the Malik family to challenge any of the “Rowbotham facts” when they brought before the chambers judge their application to set aside the Anton Piller order. They did lead some evidence, but their evidence did not relate to the financial transactions said to demonstrate the manipulation of family assets that lay at the heart of the ex parte order. The chambers judge was entitled to take into account this lack of any contest in affirming his ex parte orders and dismissing the Malik family’s review application.
Cases Cited
Applied: Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189; not followed: Hollington v. F. Hewthorn & Co., [1943] 1 K.B. 587; discussed: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460; Toronto (City) v. Canadian Union of Public Employees, Local 79 (2001), 55 O.R. (3d) 541, aff’d Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77; referred to: R. v. Rowbotham (1988), 41 C.C.C. (3d) 1; Anton Piller KG v. Manufacturing Processes Ltd., [1976] 1 Ch. 55; Yousif v. Salama, [1980] 3 All E.R. 405; R. v. Smith, [1992] 2 S.C.R. 915; Re Del Core and Ontario College of Pharmacists (1985), 51 O.R. (2d) 1; Saskatoon Credit Union Ltd. v. Central Park Enterprises Ltd. (1988), 47 D.L.R. (4th) 431; Arthur J.S. Hall & Co. v. Simons, [2000] U.K.H.L. 38, [2002] 1 A.C. 615; Jorgensen v. News Media (Auckland) Ltd., [1969] N.Z.L.R. 961; Harvey v. The King, [1901] A.C. 601; Memphis Rogues Ltd. v. Skalbania (1982), 38 B.C.L.R. 193; Litchfield v. Darwin (1997), 29 B.C.L.R. (3d) 203; Capitanescu v. Universal Weld Overlays Inc. (1996), 46 Alta. L.R. (3d) 203; Catalyst Partners Inc. v. Meridian Packaging Ltd., 2007 ABCA 201, 76 Alta. L.R. (4th) 264.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms, s. 24(1) .
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 45.01.
Supreme Court Civil Rules, B.C. Reg. 168/2009, r. 22‑2(13).
Supreme Court Rules, B.C. Reg. 221/90, rr. 46(1), 51.
Authors Cited
Cross and Tapper on Evidence, 12th ed. by Colin Tapper. New York: Oxford University Press, 2010.
McCormick on Evidence, vol. 2, 5th ed. by John W. Strong, General Editor. St. Paul, Minn.: West Group, 1999.
Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 3rd ed. by Alan W. Bryant, Sidney N. Lederman and Michelle K. Fuerst. Markham, Ont.: LexisNexis, 2009.
APPEAL from a judgment of the British Columbia Court of Appeal (Finch C.J.B.C, Frankel and Tysoe JJ.A.), 2009 BCCA 201, 92 B.C.L.R. (4th) 78, 53 C.B.R. (5th) 1, 270 B.C.A.C. 178, 454 W.A.C. 178, 69 C.P.C. (6th) 205, [2009] 7 W.W.R. 61, [2009] B.C.J. No. 915 (QL), 2009 CarswellBC 1193, setting aside the Anton Piller order affirmed by McEwan J., 2008 BCSC 1027, 46 C.B.R. (5th) 41, [2008] B.C.J. No. 1454 (QL), 2008 CarswellBC 1621. Appeal allowed.
Jonathan Noel Eades, Matthew S. Taylor and Robert N. Hamilton, for the appellant.
Bruce E. McLeod, for the respondents Ripudaman Singh Malik and Raminder Malik.
Jaspreet Singh Malik, on his own behalf.
The judgment of the Court was delivered by
Binnie J. —
I. Introduction
[1] The issue on this appeal is whether the Supreme Court of British Columbia erred in issuing an Anton Piller order to permit the Province to conduct a “private search” of the respondents’ premises on the basis of an “information and belief” affidavit. The Province sought this interlocutory order in connection with its action against the respondents alleging debt, breach of contract, conspiracy, and fraud. It is seeking reimbursement of more than $5.2 million it paid to fund the respondent Ripudaman Singh Malik’s defence in the Air India bombing trial, in which Mr. Malik and a co-accused were acquitted. The other respondents are Mr. Malik’s wife Raminder, and their son Jaspreet Singh Malik (“Jaspreet”), a Vancouver lawyer.
[2] In granting the Anton Piller order to search the business and residential properties of the respondents for evidence that they helped conceal Mr. Malik’s assets, and a Mareva injunction to freeze their existing assets, the chambers judge relied in part on facts found against the Malik family in prior judicial proceedings brought by Mr. Malik to obtain non-repayable provincial funding for his defence. Mr. Malik’s Rowbotham application had been rejected on the basis that “Mr. Malik remains a multimillionaire despite leading evidence to suggest his net worth is zero” (2003 BCSC 1439, 111 C.R.R. (2d) 40, at para. 71).
[3] The current proceedings are still at the interlocutory stage. The seizure of documents has occurred but the documents are in the control of the independent solicitor and have not been seen by the Province. The British Columbia Court of Appeal set aside the Anton Piller order and limited the Mareva injunction to Mr. Malik himself (2009 BCCA 201, 92 B.C.L.R. (4th) 78). The Province appeals only the refusal of the Anton Piller order to this Court.
[4] The procedural question that divided the courts below is whether a Superior Court judge hearing an ex parte application for an interlocutory order may admit into evidence the findings and conclusions of a prior judicial decision (here the Rowbotham proceeding between Mr. Malik and the Province) or whether, as the Court of Appeal held, the prior decision was not admissible to prove the truth of its contents unless the Province could establish that the respondents were precluded by issue estoppel or abuse of process from relitigating the facts thus adduced. On that basis the Court of Appeal permitted only three “facts” to be extracted from the Rowbotham judgment, namely “that Mr. Malik could look to his own assets to raise funds, that Mr. Malik could look to the income and assets of his family to fund his defence costs because their assets were fused and that, as a result, Mr. Malik had the means to pay for, or make a contribution towards, his defence costs” (para. 63). On the record thus truncated the Court of Appeal held that there was insufficient admissible evidence to justify the Anton Piller order.
[5] An Anton Piller order is an exceptional remedy and should only be granted on clear and convincing evidence. It is a highly intrusive measure that, unless sparingly granted and closely controlled, is capable of causing great prejudice and potentially irremediable loss. The fact the Province was the applicant here conferred no special Crown privilege or priority. The Province comes before the Court as an ordinary civil litigant and its application should be judged by the same rules as any other litigant, as should be the merits of the position taken by the Malik family respondents.
[6] Nevertheless, I believe that the Court of Appeal was wrong to insist that the same series of financial transactions as had been exhaustively reviewed on the Rowbotham application had to be, in effect, tried de novo and ex parte by the chambers judge as if the Rowbotham proceedings had never taken place, apart from the three “facts”. These facts, as the Court of Appeal held, shed little light on what the chambers judge had to decide here.
[7] In my view, for the reasons that follow, a judgment in a prior civil or criminal case is admissible (if considered relevant by the chambers judge) as evidence in subsequent interlocutory proceedings as proof of its findings and conclusions, provided the parties are the same or were themselves participants in the prior proceedings on similar or related issues. It will be for that judge to assess its weight. The prejudiced party or parties will have an opportunity to lead evidence to contradict it or lessen its weight (unless precluded from doing so by the doctrines of res judicata, issue estoppel or abuse of process).
[8] On the interlocutory record thus considered admissible, the Anton Piller order was properly granted, in my view. The chambers judge was entitled to evaluate, as with any affidavit based on information and belief, the reliability and probative value of the sources relied on by the affiant. The chambers judge was entitled to have regard to the judgment of Stromberg-Stein J. in the Rowbotham proceedings brought by Mr. Malik himself — a contested hearing in which he and members of his family gave evidence and examined witnesses. This was permissible provided of course that the chambers judge himself, taking into account the whole of the interlocutory record, made the factual and legal determinations necessary to issue or to decline to issue the order. It is evident in this case from his reasons that the chambers judge made up his own mind and, in my view, it was open to him on the whole of the interlocutory record to issue the Anton Piller order ex parte.
[9] It was also of course open to Mr. Malik or his wife and Jaspreet to challenge any of the “Rowbotham facts” when they brought before the chambers judge their application to set aside the Mareva injunction and the Anton Piller orders. They did lead some evidence, but their evidence did not relate to the financial transactions said to demonstrate the manipulation of family assets that lay at the heart of the ex parte orders. The chambers judge was entitled to take into account this lack of any contest in affirming his ex parte orders and dismissing the respondents’ review application. I would therefore allow the appeal.
II. Facts
[10] On October 27, 2000, Mr. Malik and a co-accused were charged with multiple counts of murder arising out of bomb explosions on Air India flight 182, which was blown out of the air off the coast of Ireland on June 23, 1985, and a second bomb that exploded on the same date at Narita Airport, Japan, which killed two baggage handlers. Mr. Malik’s criminal trial commenced April 28, 2003 and continued for almost two years. In December 2000, Mr. Malik applied for bail. At the time it was in his interest to show that he was a man of substance. He filed evidence that he and his wife had a net worth of over $11 million. Less than a year later, claiming to be without resources to pay for his own defence, Mr. Malik sought government funding.
A. The Provincial Funding Agreements
[11] Public money was made available to Mr. Malik under a series of funding agreements with the Province. The “Indemnity Agreement”, dated March 21, 2002, contained an acknowledgment that Mr. Malik was not entitled to funding unless he committed all of his resources to his defence, and covenanted not to encumber his assets. The Indemnity Agreement was replaced a few months later by the “Defence Counsel Agreement”, dated August 6, 2002, which contained similar provisions but provided as well that Mr. Malik would transfer all his assets to the Province and for that purpose would assist in the identification of those assets. The Province’s claim for approximately $5.2 million relates to funds paid out under the August 6, 2002 agreement.
[12] In January 2003, being of the view that Mr. Malik was not living up to his undertakings, the Province notified him that it would terminate his defence funding unless he executed an indemnity. Mr. Malik refused to do so unless he could obtain a Rowbotham funding order under s. 24(1) of the Canadian Charter of Rights and Freedoms .
[13] On May 14-15, 2003, Tysoe J., then of the Supreme Court of British Columbia, ordered Mr. Malik to provide financial disclosure. Some disclosure was made, but not to the Province’s satisfaction.
B. The Rowbotham Application
[14] In August 2003, Mr. Malik brought an application seeking relief pursuant to the decision in R. v. Rowbotham (1988), 41 C.C.C. (3d) 1 (Ont. C.A.), seeking to compel the Province to provide funding or to stay the criminal proceedings. The other respondents provided supportive testimony.
[15] On September 19, 2003, the applications judge, Stromberg-Stein J., held that Mr. Malik had not demonstrated that he was financially eligible for funding and dismissed his application. As stated, she found that “Mr. Malik remains a multimillionaire despite leading evidence to suggest his net worth is zero” (para. 71). In particular, she held:
The assets of Mr. Malik and his family are so interconnected as to be fused. The Malik family has conducted its affairs such that all assets were jointly held for the benefit of all. Assets and income are pooled for one common enterprise. Title is meaningless. [para. 25]
[Further,] Mr. Malik was, and still remains the patriarch of the Malik family which operated as a single financial entity. Mr. Malik jointly owns with his wife two businesses that gross millions each year. He and his wife jointly own millions in real estate, although there is little equity because it is heavily mortgaged. [para. 31]
The legitimacy of Mr. Malik’s claims that he owes more than $1 million to family members is questionable. The claims are imprecise, none were documented until after Mr. Malik’s arrest, and there is no proper proof of legitimacy. [para. 72]
[16] In summary, Stromberg-Stein J. concluded, “[t]he evidence shows that Mr. Malik and his family have tried to arrange his financial and business affairs to minimize the value of his estate, to render him insolvent, and to therefore limit the amount of his contribution, or to eliminate that obligation entirely” (para. 82).
[17] In support of these conclusions Stromberg-Stein J. made a number of findings of fact regarding the Malik family finances (the “Rowbotham facts”). It is the attempted use in the Anton Piller proceedings of the Rowbotham findings and conclusions that lies at the heart of this appeal.
C. The “Rowbotham Facts”
[18] The findings of Stromberg-Stein J. that informed the belief of Mr. Gordon Houston, who filed the Province’s principal affidavit on the interlocutory motions, were summarized by the chambers judge as follows:
At his bail hearing in December, 2000, a Personal Net Worth Statement was filed on behalf of Mr. and Mrs. Malik indicating a net worth of $11,648,439.85 [p. 3, para. 5];
In November, 2001, Mr. Malik approached the AG to fund his defence and asserted that he had assets but those assets were not in cash form and liquidating them would require time [p. 4, para. 6];
In February, 2002, negotiations between Mr. Malik’s counsel and the AG led to an interim funding agreement [p. 4, para. 6];
The funding agreement was entered into so funding could commence immediately and the AG advanced funds in good faith based on Mr. Malik’s representations [p. 4, para. 7];
Subsequently, Mr. Malik claimed he was insolvent because his assets were insufficient to discharge his liabilities, including debt owed to unsecured creditors who were all family member [p. 5, para. 10];
The evidence establishes a collective effort by Mr. Malik and the Malik family members to diminish the value of his estate [p. 10, para. 21];
The assets of Mr. Malik and his family are so interconnected as to be fused. The Malik family has conducted its affairs such that all assets were jointly held for the benefit of all. Assets and income are pooled for one common enterprise [p. 16, para. 25];
Title to the Marguerite Street home is in Mrs. Malik’s name alone. The land was purchased and the home constructed from joint funds. The Maliks shared all expenses [p. 19, para. 35];
It appears that since Mr. Malik’s arrest, Papillon’s annual earnings dropped from $4 million to $2.5 million per year [p. 22, para. 42];
Regarding property in India, the Maliks provided numerous contradictory explanations concerning both the value and the ownership of this property [p. 23, para. 45];
Regarding the allegation that Gurdip Malik loaned Mr. Malik $330,000 US, the evidence shows these funds were received from Gurdip Malik’s company, Papillon Eastern Imports Ltd. in Los Angeles, and used to pay business and personal expenses, and to reduce the line of credit [p. 24, para. 48];
Jaspreet Malik was instrumental in obtaining and arranging the registration of a security agreement against Mr. Malik’s shares in the hotel [p. 25, para. 49];
There is evidence of collusion to secure Gurdip Malik’s loan before [the Rowbotham] hearing and to reduce Mr. Malik’s equity in the hotel [p. 25, para. 50];
There is no record of outstanding wages now claimed [by the Malik children] dating as far back as 1994 up to 1997. No formal records were kept regarding the hours worked by the children [p. 25, para. 51];
Although confusing, the evidence establishes the Maliks never intended to pay their children and the children never contemplated they would be paid [p. 26, para. 53];
Following Mr. Malik’s arrest his family continued to transfer, give away and buy luxury vehicles. A 1999 $108,000 Mercedes, purchased by Mr. Malik with joint funds, was transferred to Mrs. Malik while he was incarcerated. Mrs. Malik elected to repay the car loan before it was due [p. 27, para. 56];
Mrs. Malik gave away her 1998 Land Rover of unknown value [p. 28, para. 57];
Evidence about the purchase of the Lexus is inconsistent and confusing. In March 2001 Hardeep purchased a $35,000 Lexus with joint funds. He then borrowed that amount and lent it to Khalsa Developments Ltd. The loan was paid off by Khalsa Developments Ltd. [p. 28, para. 58];
Darsham purchased a $22,000 Chevy Blazer with joint funds in 2003 [p. 28, para. 59];
The Maliks reported charitable donations for the years 1994 to 2000 of $564,729.97. Of that amount, $512,612.97 was donated to either Satman Education Society or Satnam Trust, which were headed by Mr. Malik [p. 28, para. 60];
In violation of a court order not to dispose of any assets, $72,000 from Mr. Malik’s income tax refund was placed in a joint account and used to pay business debt. This money was repaid to the Province during this application [p. 29, para. 63];
About the end of December 2000, the Maliks voluntarily elected to pay a franchise cancellation penalty of $100,000 when the hotel changed its affiliation from the Quality Inn to the Executive Inn [p. 29, para. 64];
Mr. Malik’s agreement to contribute to the cost of his defence, as outlined in the Defence Counsel Agreement is a compelling consideration. Malik failed to liquidate his assets [p. 30, paras. 69-70];
Mr. Malik and Mrs. Malik have manipulated facts to suit their particular needs as evidenced by the representations at the bail hearing about the value of the Malik’s assets [p. 31, para. 75];
The evidence shows that Mr. Malik and his family have tried to arrange his financial and business affairs to minimize the value of his estate, to render him insolvent, and to therefore limit the amount of his contribution, or to eliminate that obligation entirely [p. 34, para. 82];
Any perceived cash shortage is artificial and contrived [p. 34, para. 83].
(2008 BCSC 1027, 46 C.B.R. (5th) 41, at para. 43)
[19] In respect of the value and ownership of certain properties in India Stromberg-Stein J. noted that
[a]t the bail hearing Mr. and Mrs. Malik provided affidavits claiming to own property in India valued at $200,000. Two years later their in-house accountant, Mr. Singh, provided a letter indicating the property was burdened with a tenant who had failed to pay rent. Mr. Malik maintains he does not know whether he owned it, whether he made lease payments, or whether it earned rental income. This is inconsistent, and unlikely behaviour for an astute business person, particularly one looking for a potential source of income. [para. 45]
D. The Payment Agreement
[20] Following the dismissal of the Rowbotham application, the Province and Mr. Malik entered into the “Payment Agreement”, dated October 17, 2003, which set out terms for the provision of future fees and required Mr. Malik to provide security for these fees and to acknowledge his indebtedness to the Province for the sums advanced under the previous agreements.
[21] The Province paid Mr. Malik a total of $5,200,131 under the Defence Counsel Agreement and $1,681,526 under the Payment Agreement. The latter has been repaid. However, the Province claims that Mr. Malik has not transferred the assets (alleged to be his at least beneficially) to the Province. The debt of $5,200,131 under the Defence Counsel Agreement is still outstanding. The Province demanded repayment on December 13, 2005.
[22] In March 2007, Mr. Malik issued a writ against the Province for malicious prosecution. At the time of the Province’s application for the Mareva injunction and Anton Piller order that writ had not been served.
[23] On October 23, 2007, the Province commenced the present action in debt, breach of contract, conspiracy, and fraud against six members of the Malik family and four corporations owned by them. It claims that all these individuals made false statements (mainly concerning debts said to be owed by Mr. Malik to other members of the family) and conspired to conceal Mr. Malik’s assets. On the same day the Province applied ex parte to obtain an Anton Piller order authorizing independent lawyers to enter three business and residential premises to search for and take away any documents or computer files relating to the assets and liabilities of the respondents, including numerous specified documents. The three premises were the home of Mr. Malik and his wife; the law office at which their son Jaspreet practices law; and the office of Papillon Eastern Imports Ltd. (where Jaspreet also previously carried on the practice of law).
III. Relevant Enactments
[24] Supreme Court Rules, B.C. Reg. 221/90, r. 51
Rule 51 — Affidavits
. . .
(10) Contents of affidavit — An affidavit may state only what a deponent would be permitted to state in evidence at a trial, except that, if the source of the information is given, an affidavit may contain statements as to the deponent’s information and belief, if it is made
(a) in respect of an application for an interlocutory order, or
(b) by leave of the court under Rule 40(52)(a) or 52(8)(e).
IV. Judicial History
A. Supreme Court of British Columbia (McEwan J.), 2008 BCSC 1027, 46 C.B.R. (5th) 41
[25] On the respondents’ motion to set aside the Anton Piller order and Mareva injunction, the Maliks claimed “witness immunity” in respect of their earlier testimony in the Rowbotham proceedings. The chambers judge distinguished between the factual findings in the Rowbotham proceedings, which he held were admissible to establish a prima facie case, and the legal arguments that the Province sought to base on these facts, including issue estoppel and abuse of process. In his view, the latter issues did not need to be decided on the interlocutory application in light of the respondents’ decision not to lead evidence to contradict the Rowbotham findings:
The facts which the Province outlined in its original [ex parte] submissions have not been shown to be materially misleading.
From the perspective of a court assessing the evidence with a view to ensuring that the positions of the parties are protected until the facts can be determined at trial, arguments about the legal limits of res judicata and witness immunity will not defeat a strong fact based prima facie case that the defendants have acted in ways that are inconsistent with their contractual and other legal obligations. The allegation that aspects of the defendants’ dealings or behaviour have been the subject of a series of adverse rulings in another proceeding, will not, in the absence of material facts demonstrating that the rulings were effectively unfounded or irrelevant, be negated by abstract arguments unattached to actual findings of fact. [paras. 60-61]
[26] Accordingly, the chambers judge affirmed the Anton Piller order and the Mareva injunction.
B. Court of Appeal (Finch C.J.B.C. and Frankel and Tysoe JJ.A.), 2009 BCCA 201, 92 B.C.L.R. (4th) 78
[27] Tysoe J.A., writing for a unanimous court, set aside the Anton Piller order in its entirety and the Mareva injunction against all respondents but Mr. Malik. In that court’s view, the chambers judge should not have relied on the Rowbotham proceedings apart from the three findings already mentioned, namely “that Mr. Malik could look to his own assets to raise funds, that Mr. Malik could look to the income and assets of his family to fund his defence costs because their assets were fused and that, as a result, Mr. Malik had the means to pay for, or make a contribution towards, his defence costs” (para. 63). However, Tysoe J.A. held:
The remaining Rowbotham findings were not admissible because the doctrines of issue estoppel and abuse of process do not prevent the defendants from relitigating those facts. [Emphasis added; para. 38.]
[28] In the court’s view, the limited admissible Rowbotham findings, together with the supplemental facts contained in the affidavits filed by the Province, did not establish a strong prima facie case of fraud or a real risk of dissipation of assets by the Malik family. The appeals were therefore allowed. As stated, only the Anton Piller order is in issue before this Court.
V. Analysis
[29] An Anton Piller order is, as our Court emphasized in Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189, a thoroughly “draconian” measure equivalent to a private search warrant reserved for “exceptional circumstances” (para. 30) where “unscrupulous defendants” may if forewarned make “relevant evidence disappear” (para. 32). Accordingly:
There are four essential conditions for the making of an Anton Piller order. First, the plaintiff must demonstrate a strong prima facie case. Second, the damage to the plaintiff of the defendant’s alleged misconduct, potential or actual, must be very serious. Third, there must be convincing evidence that the defendant has in its possession incriminating documents or things, and fourthly it must be shown that there is a real possibility that the defendant may destroy such material before the discovery process can do its work . . . . [para. 35]
It bears repeating that the Province enjoys no special status in this application. It appears as a civil litigant and is to be treated no differently than any other applicant for an Anton Piller order.
[30] The Province’s argument is that this is a case of “exceptional circumstances” because Mr. Malik and other members of his family have, over a period of 8 years, misrepresented his net worth and conspired to move assets around within the family to create the appearance that Mr. Malik is without financial resources. It alleges that Mr. Malik breached his undertakings in the Indemnity Agreement of March 21, 2002 not to encumber his assets. Nor, according to the Province, did Mr. Malik respect the undertaking in the Defence Counsel Agreement of August 6, 2002 to identify and transfer assets to the Province. Although at his bail hearing in December 2000, a Personal Net Worth Statement was filed on behalf of Mr. and Mrs. Malik indicating a net worth of $11,648,439.85, Mr. Malik took the position at his Rowbotham application in August 2003 that he was unable to contribute anything to his own defence. Stromberg-Stein J. rejected this claim on the basis of detailed factual findings in respect of intra-family transactions. The Province alleges that the Rowbotham application itself was an act in furtherance of the family conspiracy. The Province claims the Malik respondents, given their track record, cannot be trusted to produce relevant documents in the ordinary way. In the absence of an Anton Piller order “there is a real possibility that the defendant[s] may destroy such material before the discovery process can do its work” (Celanese Canada, at para. 35).
[31] An issue was raised in the court below whether Anton Piller orders were available in British Columbia to preserve evidence relevant to a dispute as opposed to preserving property that is the subject matter of the dispute. Celanese Canada was an appeal from Ontario, and a difference was noted in wording between r. 46(1) of the British Columbia Supreme Court Rules, which deals with preservation of “property that is the subject matter of a proceeding or as to which a question may arise”, and r. 45.01 of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which deals somewhat more broadly with the preservation of “property in question in a proceeding or relevant to an issue in a proceeding”. I agree with Tysoe J.A. that Anton Piller orders for the preservation of evidence are available in British Columbia under the inherent jurisdiction of the Superior Court, which indeed is the source identified by Lord Denning in the eponymous case of Anton Piller KG v. Manufacturing Processes Ltd., [1976] 1 Ch. 55 (C.A.), and endorsed in Yousif v. Salama, [1980] 3 All E.R. 405 (C.A.). Accordingly, the particular wording of British Columbia’s r. 46(1) does not assist the respondents.
A. The Evidentiary Record
[32] The issue on this appeal is whether the plaintiff (the Province) adduced sufficient admissible evidence on which the chambers judge could make the necessary findings on a balance of probabilities. The Province was required to show that it had a strong prima facie case and that absent such an order, there was a real possibility that relevant evidence would be destroyed or made to disappear: Celanese Canada, at para. 1. I agree with the respondents that if the Province failed to adduce sufficient admissible evidence at the ex parte hearing to justify the orders there was no obligation on them to adduce any evidence at all at the hearing before the chambers judge to set aside the ex parte orders.
[33] The Province’s principal affiant in the Anton Piller application, Mr. Gordon Hous