Executive Summary: Key Legal and Evidentiary Issues

• Dispute over the acquisition, financing, and beneficial ownership of a Niagara Falls commercial property through V2 Niagara Inc. and a Contract of Conditional Loan used as security.
• Procedural battle over where and how examinations for discovery should occur, including virtual attendance from Russia with interpreters and the sequencing of party examinations.
• Determination of whether the plaintiff could amend the statement of claim to expand ownership remedies to 100% of the property and shares, and to add tracing and preservation-related relief.
• Judicial rejection of proposed scandalous allegations about an alleged money-laundering purpose as irrelevant and prejudicial, highlighting limits on pleadings.
• Refusal of late amendments introducing a new debt/expense-repayment claim as limitation-barred, emphasizing that new factual debt claims cannot be added after the limitation period.
• Mixed procedural outcome with no damages or costs fixed, only directions on discovery timing, location, and limited leave to amend the claim.

Background and commercial structure

The case arises out of a business arrangement to acquire, finance, and operate a property located at 5145 Centre Street in Niagara Falls, Ontario. V2 Niagara Inc. (“V2”) was incorporated for the specific purpose of purchasing that property. The plaintiff, Valeriy Revura, and defendant Vladimir Meshkov were shareholders in V2. To finance the purchase, V2 obtained a loan from Terminal Ltd. (“Terminal”) under a written Contract of Conditional Loan (the “CCL”). Terminal was controlled by defendant Alexey Vladimirovich Gloukhov (also referred to as Alexey Glukhov). As security for the conditional loan, the shares in V2 were transferred to Glukhov. The property was acquired in or about 2012 using those loan proceeds, and the structure left legal title with V2 while control was effectively in the hands of the lender’s principal by virtue of the share security.

Emergence of the dispute and pleaded causes of action

According to the statement of claim, in March 2022 Revura learned that the Niagara Falls property was to be sold and that he would receive no proceeds from the sale or from any income generated since purchase. He commenced the action in July 2022, alleging he had been defrauded of the value of his interest in the property and of funds it had generated. The claim is wide-ranging and framed in multiple overlapping legal theories. It seeks rescission of the CCL and damages for fraud, fraudulent misrepresentation, conspiracy, misappropriation, breach of contract, breach of confidence, breach of trust, deceit, breach of the duty of good faith, conversion, inducing breach of contract, and intentional interference with economic relations. The plaintiff also advances equitable theories such as unjust enrichment, quantum meruit, constructive and resulting trust, equitable lien, an accounting, and preservation orders. In addition, he seeks declarations aimed at protecting his position in the event of insolvency, by asking the court to declare that his claim falls within non-dischargeable categories under subsections 178(d) and (e) of the Bankruptcy and Insolvency Act.

Nature of the decision and absence of policy wording

This particular decision of the Ontario Superior Court of Justice is not a trial on the merits but a ruling on competing procedural motions. The plaintiff moved for various forms of procedural relief, including directions concerning oral examinations for discovery and permission to amend his statement of claim. The defendants (other than Meshkov, who had not been served) brought a cross-motion seeking the imposition of a discovery plan, timing for the plaintiff’s discovery, and terms governing discovery of the defendants. Although the plaintiff’s claim alleges wrongdoing connected to the Contract of Conditional Loan, the reasons do not reproduce detailed contractual clauses or engage in substantive interpretation of the CCL’s terms. Instead, the court’s focus is on civil procedure under the Rules of Civil Procedure, including rules governing discovery location, teleconferenced examinations, sequencing of examinations, and amendments to pleadings.

Place and manner of examinations for discovery

A central procedural issue concerned where and how the discovery of defendant Glukhov should take place. He resides in Russia but reportedly comes to Canada from time to time. Evidence from his law firm indicated that, given the ongoing war between Ukraine and Russia, travel to Canada for in-person discovery was not possible. The plaintiff, who speaks Ukrainian, and Glukhov, who speaks Russian, would both require interpreters to translate between their respective languages and English. Plaintiff’s counsel argued that examinations should occur in Ontario for both parties, pointing to the complications of multiple interpreters, heavy document use, and a significant time difference between Ontario and Russia. Defence counsel requested that Glukhov be examined in Russia by videoconference, acknowledging the time zone constraints but suggesting that half-day scheduling starting in the Ontario morning could mitigate the issue. The court applied rule 34.07(1) of the Rules of Civil Procedure, which governs examinations of persons outside Ontario and gives the court discretion over time, place, and manner of examinations, including whether they occur in or outside Ontario and whether they proceed virtually. Recognizing that teleconferenced evidence has become routine in Ontario and that credibility can generally be assessed effectively by virtual means, the judge concluded that a virtual examination of Glukhov from Russia was appropriate. The court accepted that using Russian-English and Ukrainian-English interpreters would be somewhat cumbersome, but found that difficulty would not materially differ whether participants met in one physical location or appeared from multiple sites.

Scheduling and logistics of discovery

To advance the litigation without further delay, the judge accepted counsel’s advice that they could secure a Ukrainian interpreter on May 27 and 28, 2026, and presumed that arranging a Russian interpreter would not be problematic. The court therefore fixed those dates for the examination for discovery of Glukhov, to be conducted virtually while he remained in Russia. The discovery was ordered to proceed on behalf of Glukhov personally and on behalf of the corporate defendants V2 and Terminal, with times, facilities, and technical protocols to be arranged by counsel. If additional time proved necessary, counsel were directed to schedule follow-up sessions promptly. As for the plaintiff’s examination for discovery, the judge ordered that, subject to any different agreement between counsel, the examination of Revura would take place in Ontario—either in person or by videoconference—within 30 days after completion of the defendant’s discovery. This ensured that both sides would move through the discovery process on an orderly and timely basis.

Order of examinations and prior cross-examination

Another contested point was which side would be examined for discovery first. It was agreed that Glukhov would be the representative examined for the defendants. The plaintiff wanted to examine him before submitting to his own discovery, emphasizing that credibility would be central and that he wanted the defendant’s answers on the record before giving his own. Defence counsel relied on the default sequencing in rule 31.04(3) of the Rules of Civil Procedure and argued that the order should follow the rule. The judge also considered that Revura had already been cross-examined on his affidavit sworn in support of his motion. In that affidavit he described his relationship with Meshkov, the incorporation of V2, the details of the Contract of Conditional Loan, and what he characterized as the defendants’ fraudulent conduct. Much of that cross-examination had focused on procedural issues and the proposed amendments, but it nonetheless placed significant aspects of his substantive position under oath. Balancing these considerations and exercising the court’s inherent authority to manage litigation in the interests of fairness, the judge concluded that it was reasonable for Glukhov to be examined first. The court so ordered, while also tying the plaintiff’s discovery to a short timeline after completion of the defendant’s examination.

Framework governing amendments to pleadings

The plaintiff sought extensive amendments to his statement of claim, particularly to the prayer for relief and certain factual allegations. The court approached these proposed amendments under rule 26.01 of the Rules of Civil Procedure, which requires the court to grant leave to amend “on such terms as are just” unless the amendment would cause prejudice that cannot be compensated by costs or an adjournment. The judge relied on the Ontario Court of Appeal’s guidance in Klassen v. Beausoleil. That authority confirms that leave should generally be denied only where the responding party would face non-compensable prejudice (such as expiry of a limitation period), where the amendment is scandalous, frivolous, or vexatious, or where it fails to disclose a reasonable cause of action. Klassen also clarifies that an amendment is not a “new cause of action” for limitation purposes if the original pleading already sets out all the necessary facts and the proposed change merely clarifies or adds forms of relief based on those existing facts. Building on this framework, the judge considered each category of proposed change: new wording in the prayer for relief, additional factual allegations about the purpose of the property purchase, and new allegations concerning expenses supposedly incurred by the plaintiff on improvements and maintenance.

Scandalous allegation about money laundering

One striking proposed amendment was a new paragraph alleging that the sole or partial purpose of Glukhov’s desire to purchase the property was to launder money from overseas, likely from the Russian Federation, into Ontario. The judge refused this amendment, characterizing it as scandalous. The court found that Glukhov’s alleged purpose in purchasing the property was not relevant or necessary to the legal issues that would determine the success of Revura’s claim. Instead, the allegation served mainly to embarrass or prejudice the defendant, without adding material facts needed to support an existing cause of action. In doing so, the decision underscores the principle that pleadings must be confined to material facts, and that courts will police attempts to insert inflammatory, reputationally damaging allegations that are tangential to the actual legal claims.

Amendments to ownership and preservation remedies

The court was more receptive to certain remedy-focused amendments that did not alter the core factual matrix. In the prayer for relief, the plaintiff sought to refine and expand requests for relief relating to ownership of the property and preservation of proceeds. Among other things, he proposed amendments to seek a declaration that he is entitled to 100% of the outstanding shares of V2 and thereby to a 100% interest in the property, rather than merely a 49% undivided interest as originally pleaded. He also sought procedural and preservation-type relief, including orders allowing him to use information obtained in the proceeding to trace and preserve the property and a preservation order over all income and revenue earned by the defendants in relation to the property. The judge held that the changes to seek a full 100% ownership interest simply expanded the existing ownership claim without changing the cause of action or underlying facts. Because the factual allegations on which the ownership claim rested remained the same, there was no new cause of action and thus no limitation problem. The court granted leave for these specific amendments—namely to prayer for relief paragraphs 1(h) and 1(k) dealing with 100% interests, and 1(p) and 1(q) dealing with tracing and preservation mechanisms—as they were unobjectionable and did not cause non-compensable prejudice.

Limitation-barred debt and expenditure claims

By contrast, the court rejected amendments aimed at introducing a new debt-type claim for repayment of funds the plaintiff said he had spent on the property. The proposed new paragraphs alleged that over several years after V2’s purchase of the property, the plaintiff expended significant funds on improvements and maintenance, borrowed money personally to cover these costs, and had never been repaid. Another new paragraph purported to explain that he incurred these expenses because he believed, and acted as, an owner in reliance on an alleged agreement that the shares of V2 would be transferred back to him. The judge noted that although the original prayer for relief included a claim for damages based on unjust enrichment and quantum meruit, the body of the original statement of claim did not contain factual allegations describing specific expenditures by the plaintiff and non-repayment by the defendants. In other words, there was no pleaded factual foundation for a debt or reimbursement theory. The proposed amendments would therefore introduce new facts to support a distinct debt claim well after the applicable limitation period. The court concluded that allowing such amendments would create non-compensable prejudice for the defendants, because they would suddenly face a new, out-of-time monetary claim. On that basis, leave was refused for the amendments relating to repayment of expenditures and the explanatory allegation that the plaintiff acted as owner when making those expenditures.

Status of pleadings and effect of an unserved defendant

The plaintiff initially argued that because defendant Meshkov had not been served and thus had not been noted in default, the pleadings were technically not closed, allowing him to amend without leave. Under rule 25.05(b), pleadings are closed when every defendant in default of filing a defence has been noted in default. The court rejected the notion that the mere presence of an unserved defendant could indefinitely keep pleadings open while the action proceeded against other defendants. Finding that such a result would be untenable, the judge concluded that, as between the plaintiff and the defendants who had appeared and answered the claim, leave to amend was in fact required and that rule 26.01 governed.

Overall outcome and absence of monetary award

In the result, the court issued a procedural order that: (1) directed that Glukhov’s discovery proceed virtually from Russia on specified dates (with additional time as needed), on behalf of himself, V2, and Terminal; (2) directed that the plaintiff’s discovery occur in Ontario, in person or virtually, as soon as possible after completion of Glukhov’s examination; and (3) granted leave to amend the statement of claim only to the limited extent of the specific ownership and preservation-related paragraphs (1(h), 1(k), 1(p), and 1(q)) while refusing all other proposed amendments, including the money-laundering allegation and the late debt-repayment claims. All other relief sought on the plaintiff’s motion and on the defendants’ cross-motion was dismissed. On the question of costs, the court did not fix any amount. Instead, it encouraged the parties to agree on costs; failing agreement, it set a schedule for written submissions and provided that if no submissions were filed by a certain date, costs would be deemed settled. As of this decision, there is no quantified damages award, no fixed costs order, and no final determination on liability or ownership. Both sides achieved partial procedural success: the plaintiff secured early virtual discovery of the key defendant and limited amendments enhancing his ownership and preservation remedies, while the defendants successfully resisted scandalous allegations and new, limitation-barred monetary claims. Because the decision is confined to procedural rulings and costs have not yet been determined, there is no clearly defined “successful party” and no ascertainable total monetary amount ordered in favour of any party.