ontario superior court of justice (commercial list ... · 2120 dundas holdings inc. respondents...

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Court File No. CV-18-596879-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

B E T W E E N:

BUSINESS DEVELOPMENT BANK OF CANADA Applicant

- and -

1645494 ONTARIO LIMITED, 8320373 CANADA LTD., 7822022 CANADA CORPORATION, 7925336 CANADA CORPORATION, 7925344 CANADA CORPORATION, 7822812 CANADA CORPORATION, 7905335 CANADA CORPORATION; 7905351 CANADA CORPORATION, 7905394 CANADA

CORPORATION, 8085234 CANADA CORPORATION and 2120 DUNDAS HOLDINGS INC.

Respondents APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

REPLY RECORD OF BUSINESS DEVELOPMENT BANK OF CANADA

May 25, 2018 CHAITONS LLP 5000 Yonge Street, 10th Floor Toronto, Ontario M2N 7E9 Maya Poliak (LSO #54100A) Tel: 416-218-1161 Fax: 416-218-1844 Email: maya@chaitons.com Lawyers for the Applicant

TO: SERVICE LIST

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SERVICE LIST (as at May 17, 2018)

CHAITONS LLP 5000 Yonge Street, 10th Floor Toronto, ON M2N 7E9 Maya Poliak Tel: (416) 218-1161 Fax: (416) 218-1844 Email: maya@chaitons.com Lawyers for Business Development Bank of Canada BUSINESS DEVELOPMENT BANK OF CANADA 70 York Street, Suite 1202 Toronto, ON M5J 1S9 Ruth Thomson Tel: (416) 952-8690 Fax: (416) 973-8283 Email: ruth.thomson@bdc.ca AIRD & BERLIS LLP Brookfield Place 181 Bay Street, Suite 1800 Toronto, ON M5J 2T9 Steven L. Graff Tel: (416) 865-7726 Fax: (416) 863-1515 Email: sgraff@airdberlis.com  

Lawyers for BDO Canada Limited in its capacity as proposed Court-appointed Receiver

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DEPARTMENT OF JUSTICE (CANADA) The Exchange Tower 130 King Street West, Suite 3400 Post Office Box 36 Toronto, ON M5X 1K6 Diane Winters Tel: (416) 973-3172 Fax: (416) 973-0810 Email: diane.winters@justice.gc.ca Lawyers for Canada Revenue Agency LANDY MARR KATS LLP Barristers & Solicitors 2 Sheppard Avenue East, Suite 900 Toronto, Ontario M2N 5Y7 Samuel S. Marr Tel: (416) 221-9343 Fax: (416) 221-8928 Email: smarr@lmklawyers.com Raman Dhillon Tel: (416) 221-9343 Fax: (416) 221-8928 Email: rdhillon@lmklawyers.com Lawyers for the Respondents   

MINISTRY OF FINANCE LEGAL SERVICES BRANCH Michael Starr Building 33 King Street West, 6th Floor P.O. Box 627, Station A Oshawa, Ontario L1H 8H5 Kevin O’Hara Tel: (905) 433-6934 Email: kevin.ohara@ontario.ca THE TOWN OF RICHMOND HILL 22 East Beaver Creek Richmond Hill ON L4B 3P4 Clerk’s Office Email: clerks@richmondhill.ca THE CITY OF MISSISSAUGA

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300 City Centre Drive, 2nd Floor Mississauga, ON L5B 3C1 Office of the City Clerk Email: info@mississauga.ca THE TOWN OF MILTON 150 Mary Street Milton, ON L9T 6Z5 Town Clerk Email: townclerk@milton.ca

INDEX

Court File No. CV-18-596879-00CL

ONTARIO SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

B E T W E E N:

BUSINESS DEVELOPMENT BANK OF CANADA Applicant

- and -

1645494 ONTARIO LIMITED, 8320373 CANADA LTD., 7822022 CANADA CORPORATION, 7925336 CANADA CORPORATION, 7925344 CANADA CORPORATION, 7822812 CANADA CORPORATION, 7905335 CANADA CORPORATION; 7905351 CANADA CORPORATION, 7905394 CANADA

CORPORATION, 8085234 CANADA CORPORATION and 2120 DUNDAS HOLDINGS INC.

Respondents APPLICATION UNDER Section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

INDEX

Document TAB Affidavit of Ruth Thomson sworn May 25, 2018 1 Exhibits: Certificate of Corporate Authority, dated June 20, 2016 A Affidavit of Svitlana Khodyryeva, sworn November 22, 2017 B Email correspondence between Navjeet Saini and alleged representatives of 1645494 Ontario Limited C Email correspondence to Navjeet Saini from info@miltonmedicalclinic.ca D Summary of rent seizures E Lease for Unit 102 between 1645494 Ontario Limited and Pediatrics & Family Medicine F

Lease for Unit 102 between 1645494 Ontario Limited and Bayview @ 16 Health Centre G

TAB 1

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2. This affidavit is sworn as a supplement to my Affidavit sworn April 26, 2018 (the “April

Affidavit”) for an order appointing BDO Canada Limited as receiver over the property, assets and

undertakings of the Respondents and in response to the Affidavit of Svitlana Khodyryeva sworn May 22,

2018. All capital terms not otherwise defined herein shall have the meaning ascribed to such terms in the

April Affidavit.

Svitlana’s Misrepresentations Regarding Ownership of 164

3. At paragraph 8 of her Affidavit, Svitlana states that she provided a Letter of Intent to Purchase the

shares of 164 to BDC’s representative in or about February 2016 and the Agreement of Purchase and Sale

in or about May 2016.

4. Following the receipt of Svitlana’s affidavit, I spoke with Kris Smith, Assistant Vice President,

Fraud Prevention and Oversight with BDC. I am advised by Mr. Smith that, as part of BDC’s investigation

into the loans made to the Respondents, Mr. Smith: (i) interviewed Navjeet Saini, BDC’s former account

manager with carriage of the Respondents’ loan files; and (ii) conducted a detailed review of Ms. Saini’s

emails on BDC’s server. I am also advised by Mr. Smith that his investigation did not disclose any evidence

that Svitlana or 164 disclosed to Saini or any other BDC representative, that Svitlana was not the

shareholder, director or officer of 164 at the time that the 164 Loan was made.

5. I have personally reviewed BDC’s database in connection with the 164 Loan and have not found

any evidence of a Letter of Intent or a Share Purchase Agreement between Svitlana and Barone.

6. At paragraph 7 of her responding Affidavit, Svitlana states that in or around February 2016 she

held shares of 164 in escrow and was “appointed” as president of 164 by Barone to assist in obtaining

financing from BDC. Svitlana did not file any documents supporting these bald statements.

7. At paragraph 10 of her Affidavit, Svitlana states that at the time that she signed the 164 Loan and

Security Documents in June 2016 she was already a director, shareholder and president of 164.

8. In addition to the 164 Loan and Security Documents executed in June 2016, 164 also provided

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BUSINESS DEVELOPMENT BANK OF CANADA -and- 1645494 ONTARIO LIMITED et al

Applicant Respondents

Court File No. CV-18-596879-00CL

ONTARIO

SUPERIOR COURT OF JUSTICE (commercial list)

PROCEEDING COMMENCED AT

TORONTO

REPLY RECORD OF BUSINESS DEVELOPMENT BANK OF CANADA

CHAITONS LLP 5000 Yonge Street, 10th Floor Toronto, Ontario M2N 7E9 Maya Poliak (LSUC No. 54100A) Tel: (416) 218-1161 Fax: (416) 218-1844 Email: maya@chaitons.com Lawyers for the Applicant