Court of Appeal for Ontario

Date: 2019-03-26

Docket: C64290, C64288, C64289, C64286

Judges: Strathy C.J.O., Feldman and Brown JJ.A.

Parties

First Action

Between

Arlene McDowell and Saverio Aversa Plaintiffs/Appellants

and

Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore, Vincenzo Petrozza, Centro Mortgage Inc., Ildina Galati, FFM Capital Inc., Rosalia Spadafora, Krish Kochkar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti Law Professional Corporation, Olympia Trust Company and Financial Services Commission of Ontario Defendants/Respondents

Second Action

And Between

Arlene McDowell Plaintiff/Appellant

and

Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore, Vincenzo Petrozza, Empire Pace (1088 Progress) Ltd., Building & Development Mortgages Canada Inc., Ildina Galati, Derek Sorrenti, Sorrenti Law Professional Corporation, Olympia Trust Company and Michael Cane Defendants/Respondents

Third Action

And Between

David Martino Plaintiff/Appellant

and

Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore, Vincenzo Petrozza, ADI Developments (Link) Inc., ADI Developments Inc., Building & Development Mortgages Canada Inc., Ildina Galati, FFM Capital Inc., Rosalia Spadafora, Krish Kochkar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti Law Professional Corporation, Olympia Trust Company and Her Majesty the Queen in Right of Ontario Defendants/Respondents

Fourth Action

And Between

Bryan Madryga and Eileen Wallace Plaintiffs/Appellants

and

Fortress Real Capital Inc., Fortress Real Developments Inc., Fortress Kempenfelt Bay Developments Inc., Jawad Rathore, Vincenzo Petrozza, Harmony Village-Lake Simcoe Inc., City Core Developments Inc., Building & Development Mortgages Canada Inc., Ildina Galati, FMP Mortgage Investments Inc., Michael Daramola, Tonino Amendola, Graham McWaters, FDS Broker Services Inc., Glenn May-Anderson, Zafar Iqbal Khawaja, Derek Sorrenti, Sorrenti Law Professional Corporation, Olympia Trust Company, Grant Edwardh Appraisers and Consultants Ltd. and Ian G. McLean Defendants/Respondents

Counsel

For the appellants: Kevin Sherkin and Mitchell Wine

For Fortress Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore and Vincenzo Petrozza: Jeremy Devereux and Jennifer Teskey

For Empire Pace (1088 Progress) Ltd.: Markus Kremer and Ziad Yehia

For Adi Developments (Link) Inc. and Adi Development Group Inc.: Lisa Parliament and Lauren Ray

Hearing and Appeal

Heard: Costs in writing March 25, 2019

On appeal from: The orders of Justice Paul M. Perell of the Superior Court of Justice, dated August 10, 2017, with reasons reported at 2017 ONSC 4791, 2017 ONSC 4789, 2017 ONSC 4790, and 2017 ONSC 4792.

Costs Endorsement

[1] The parties were given the opportunity to file their costs submissions following the release of the court's reasons for decision.

[2] Those submissions advise that the parties have reached agreement regarding the costs of the successful appellants in respect of the Empire Pace (1088 Progress) Ltd. and Adi Developments (Link) Inc. appeals. They have agreed that each of those respondents will pay costs of the appeal in the amount of $10,000 and costs of the motion in the amount of $12,500, all inclusive of disbursements and HST.

[3] The successful respondents, Rathore and Petrozza, seek substantial indemnity costs of $33,275.43, or if substantial indemnity costs are not awarded, then partial indemnity costs of $22,384.53. The appellants submit that partial indemnity costs in the same amount as was agreed for the other parties ($10,000 each), is the appropriate amount to be awarded.

[4] We agree with the submission of the appellants. The issue with respect to the personal liability of corporate directors and officers is a legal issue that depends on the pleaded allegations. The respondents were successful before the motion judge and his conclusion was upheld on the appeal based on the same pleading and legal principles. The complexity of the appeal arose in the context of the corporate actions and wording of the documents.

[5] Costs are therefore ordered as follows: to the appellants from the respondent Empire Pace (1088 Progress Ltd.), $10,000 for the appeal and $12,500 for the motion, both inclusive of disbursements and HST; to the appellants from the respondent, Adi Developments (Link) Inc., $10,000 for the appeal and $12,500 for the motion, both inclusive of disbursements and HST; to the respondent Rathore from the appellants, $10,000 for the appeal inclusive of disbursements and HST; to the respondent Petrozza from the appellants, $10,000 for the appeal inclusive of the disbursements and HST.

G.R. Strathy C.J.O.

K. Feldman J.A.

David Brown J.A.