The Ontario Superior Court of Justice has ordered payment of a $154,257 wrongful dismissal award to a chef who worked for over 20 years at a Toronto restaurant before being dismissed without cause in 2016.
The chef, S.B., was given only eight weeks’ pay in lieu of notice when dismissed from New Lahore Tikka House. He sued for wrongful dismissal, and the action was settled on March 4, 2022, with the restaurant initially paying $25,000 over five months and consenting to a judgment requiring payment of an additional $150,000.
When the restaurant failed to make the remaining payments, S.B. obtained a Notice of Garnishment against the property owner, 1436318 Ontario Ltd., which held a mortgage from the restaurant. This notice directed the garnishee to pay all debts owed to the restaurant to help satisfy the judgment.
Despite being properly served, the garnishee made no payments to the Sheriff, leading S.B. to seek a court order for immediate payment of the full amount.
Corporate connections raise red flags
The court noted that G.A., who took over operation of the restaurant in 2013 after her husband’s death, was the sole director and officer of both the restaurant and the garnishee company that owned the property.
In 2015, the property was mortgaged to the restaurant for $754,988.37, with monthly payments of $4,718.68 representing interest only at 7.5 percent per annum.
G.A. claimed the mortgage “is not a real debt but was just placed on the property for protection against fraudulent activity,” according to the court’s endorsement.
The court was skeptical of this claim and other aspects of G.A.’s testimony. In summer 2022, G.A. stated she sold the restaurant’s assets for $25,000 to a corporation (1000217532 Ontario Inc.) of which she was an officer, despite previously denying this connection during an examination.
G.A. attempted to explain this discrepancy as “a lawyer’s error” in a supplementary affidavit filed shortly before the hearing.
Continued operational control
After the purported sale, G.A. continued working as the restaurant’s General Manager and was “very preoccupied dealing with insurance companies, adjustors, consultants and contractors in order to repair and renovate the Garnishee’s property that was damaged in the fire” that occurred in June 2023.
The restaurant was closed temporarily following the fire and reopened in September 2024 after the assets were purchased in August 2024 by G.A.’s son for $75,000 from S.P., the same person G.A. claimed was behind the corporation to which she had initially sold the assets.
“In these circumstances, in my view, there is good reason to doubt the veracity of G.A.’s evidence and there is a well-founded basis for the plaintiff’s assertion that, in 2022, G.A., effectively sold the assets to herself,” the court stated.
Court rejects ‘sham’ mortgage argument
The court determined that the mortgage was strong evidence of a debt, regardless of its purpose.
“Any person inspecting title would see the mortgage and should reasonably expect it to be a valid and enforceable charge or debt,” the court noted, adding that G.A.’s “corporate arrangements and her assertions that certain documents do not mean what they say” were insufficient to rebut this evidence.
The court drew parallels to a similar case, Turchiaro v. Liorti, where an argument that a debt was not real was rejected.
Equitable considerations favor payment
The court concluded that “the equities favour granting the relief sought” and that the corporate maneuvers suggested G.A. “has been ordering her affairs in a manner to avoid the payment of the judgment to the plaintiff, while protecting her value in the Property and the restaurant itself, re-opening the restaurant using yet another corporate vehicle.”
Rather than piercing the corporate veil, the court simply treated “the mortgage as meaning what it says” and ordered the garnishee to pay S.B. $154,257.05, plus interest at 5 percent per annum from the date of the ruling.
The defendants were also ordered to pay $7,500 in costs, including disbursements and HST.
For more information, see Bahauddin v. New Lahore Tikka House Inc. et al, 2025 ONSC 637 (CanLII).
