CITATION: Azar v. Strada Crush Limited, 2022 ONSC 3666
DIVISIONAL COURT FILE NO. 675/21
DATE: 20220725
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
STEWART, MATHESON & AKHTAR JJ.
BETWEEN:
GEORGE AZAR
Appellant
– and –
STRADA CRUSH LIMITED
Respondent
Henry Juroviesky, for the Applicant
Rahool Agarwal and Xin Lu, for the Respondent
HEARD at Toronto: June 22, 2022 (by videoconference)
REASONS FOR DECISION
Matheson J.:
[1] This is an appeal from the decision of Justice E. M. Morgan dated July 5, 2021, with reasons dated July 6, 2021, dismissing a motion to appoint a new representative plaintiff and recertify this action as a class proceeding, and the related costs decision dated August 4, 2021 (together, the “Decision”)[^1].
[2] The motion judge is the class proceedings case management judge for this action and had presided over the series of motions leading up to the Decision. The motion judge decided that the motion to appoint a new representative plaintiff and recertify amounted to an abuse of process. In the Decision, in addition to finding an abuse of process, the motion judge found that both Taylor Wineck (as proposed representative plaintiff) and Henry Juroviesky (as class counsel) were offside their roles.
[3] By a July 2019 decision, not challenged on appeal, the motion judge found that the plaintiff, George Azar, was not an appropriate representative plaintiff. He gave class counsel the requested 60 days to find a new person. Almost two years later, the motion giving rise to the Decision was brought, putting forward Taylor Wineck.
[4] The appeal is said to be brought by the plaintiff, still Mr. Azar. In all the circumstances, this might be better described as an appeal initiated by class counsel, putting forward Mr. Wineck as a new representative plaintiff. Mr. Juroviesky was invited to bring such a motion, albeit within a much shorter period of time. The references to the appellant’s position in these reasons should therefore not be read as Mr. Azar’s position.
[5] The appellant disputes the finding of abuse of process, submits that the motion judge erred in certain findings that gave rise to the Decision, and submits that Mr. Wineck should have been accepted as an appropriate representative plaintiff.
[6] For the reasons set out below, I would dismiss this appeal.
Background
[7] In this proposed class proceeding, it is alleged that the defendant company failed to pay overtime and holiday pay to about 160 employees. In 2018, the motion judge certified the claim as a class proceeding, with Mr. Azar as the representative plaintiff. Mr. Juroviesky was class counsel.
[8] By notice of motion dated July 17, 2019, Mr. Juroviesky brought a motion, as class counsel, seeking an order appointing a litigation guardian for Mr. Azar and, if required, an order that Mr. Azar submit to psychiatric and psychometric testing. The grounds for the motion, as put forward by Mr. Juroviesky, were that Mr. Azar’s WSIB file “Reveals that [Mr. Azar] is Severely Developmentally Delayed in Mathematics and Logic and Suffers from Post-Traumatic Stress Disorder (“PTSD”); severe Anxiety, severe Depression and suicidal Ideation.” Mr. Juroviesky submitted in the notice of motion that these disabilities prevented Mr. Azar from instructing counsel.
[9] In support of his motion, Mr. Juroviesky put forward the affidavit of a lawyer who said that he had reviewed Mr. Azar’s WSIB file and expressed his opinion about what disorders Mr. Azar most likely suffered from. Mr. Juroviesky also put forward the affidavit of another lawyer who consented to act as Mr. Azar’s litigation guardian and also commented on Mr. Azar’s mental health based upon a review of the WSIB file. Mr. Juroviesky relied on these affidavits to submit that Mr. Azar suffered from “one or more Mental Hygiene/severe Neurosis issues” and had “Severe developmental delays in pivotal categories of intelligence”.
[10] By notice of motion dated July 21, 2019, Mr. Azar and new counsel, Darryl Singer from Diamond & Diamond, brought a motion to replace Mr. Juroviesky as class counsel. On his motion, Mr. Azar made a number of allegations against Mr. Juroviesky. Among other things, Mr. Azar expressed his support for a Robert Nunes, a former business partner of Mr. Juroviesky. From Mr. Azar’s standpoint, Mr. Nunes had been unfairly treated by Mr. Juroviesky and Mr. Juroviesky owed him money. Mr. Azar also referred to Mr. Juroviesky’ s handling of the issue of adverse costs indemnification and an attempt by Mr. Juroviesky to replace him as representative plaintiff. Mr. Azar attested that he had lost confidence in Mr. Juroviesky. Mr. Azar swore a further affidavit about the motion brought by Mr. Juroviesky to appoint a litigation guardian, which left him “shocked, appalled, humiliated and insulted.”
[11] By order dated July 23, 2019, the motion judge dismissed the requests for the appointment of a litigation guardian and for the appointment of new class counsel. The motion judge did not accept the challenge to Mr. Azar’s competence. However, he did find that Mr. Azar failed to meet the requirements of a suitable representative plaintiff because he had proceeded with the motion to replace class counsel for personal reasons and was not acting in the best interests of the class.
[12] The motion judge gave Mr. Juroviesky 60 days to find a suitable person to fulfill the role of representative plaintiff, failing which the respondent was free to move to decertify the proceeding. The period of time – 60 days – was the length of time requested by Mr. Juroviesky.
[13] The motion judge further ordered that Mr. Azar provide Mr. Juroviesky all the names and particulars of class members in his possession, power or control. Although requested, the motion judge did not order that the defendant produce a class list. Mr. Juroviesky had not brought a motion against the defendant.
[14] The motion judge also noted that Mr. Azar had raised a legitimate complaint about Mr. Juroviesky’ s representation because the existing retainer agreement did not adequately address the plaintiff’s potential exposure to an adverse costs award. The motion judge strongly encouraged Mr. Juroviesky to address that frailty going forward mandating that “[s]ome provision must be made to indemnify the Plaintiff (or any future representative Plaintiff in this matter).”
[15] The July 23, 2019 order (the “Sixty Day Decision”) was not the subject of appeal proceedings.
[16] Mr. Juroviesky did not put forward a new person within 60 days. At the end of that time period, he brought a motion to vary the Sixty Day Decision and reinstate Mr. Azar as the representative plaintiff. Before this court, Mr. Juroviesky described this step as a “rinse and repeat”.
[17] On this motion, Mr. Azar swore an affidavit saying that he had reconciled with Mr. Juroviesky and that the allegations made in his prior sworn evidence were false. This time, Mr. Azar attested that Diamond & Diamond were “unscrupulous professionals” who victimized him as part of a plan to impugn Mr. Juroviesky and oust him as class counsel.
[18] Mr. Azar’s affidavit included information from Mr. Juroviesky that Mr. Juroviesky had spent “many hours” making mainly online efforts to find another plaintiff and had succeeded in finding potential plaintiffs. Mr. Azar’s affidavit recounted information from Mr. Juroviesky that his efforts to find a new person were unsuccessful because former employees did not want to relive their experiences and current employees were fearful of the defendant.
[19] As permitted by the Sixty Day Decision, the defendant moved to decertify the action. That motion was addressed together with the motion to reappoint Mr. Azar.
[20] By decision dated January 27, 2020, the motion judge found that nothing had changed to make Mr. Azar more suitable. After reviewing the different positions put forward by Mr. Azar in his evidence, the motion judge concluded that Mr. Azar had “changed his position radically and erratically from one piece of sworn testimony to another.” Mr. Azar had previously made far reaching allegations against Mr. Juroviesky. Mr. Azar had attested that changing to Mr. Singer of Diamond & Diamond would give the class a fair chance. Yet now Mr. Azar said that was all wrong and Mr. Singer and his firm were the culprits and had poisoned his mind against Mr. Juroviesky.
[21] The motion judge found that Mr. Azar’s outlandish allegations against Mr. Juroviesky and Mr. Singer did not have an air of credibility and that they reflected more on Mr. Azar than on either lawyer.
[22] The motion judge found that Mr. Azar was not capable of leading the class as representative plaintiff and tended to focus on himself rather than on the interests of the class. He found that Mr. Azar was “too volatile, too self-focused, and too easily manipulated and distracted from the class’ interest to qualify as a representative Plaintiff.”
[23] Given the history of the matter and the lack of a representative plaintiff, one of the mandatory criteria for certification, the motion judge decertified the action. That order was not the subject of appeal proceedings.
[24] There was then a protracted discussion between counsel about the form of the order, mainly due to the defendant’s request that Mr. Juroviesky be personally responsible to pay the costs order of $37,800.
[25] In the costs dispute, Mr. Juroviesky put forward an affidavit of Mr. Azar in support of the position that Mr. Juroviesky should not be liable to pay the costs order. The affidavit stated that Mr. Azar had participated in a “lockout campaign” instigated by Messrs. Nunes and Singer asking Mr. Azar to disseminate Mr. Singer’s legal opinion about Mr. Juroviesky’s use of the trust funds from class members. Mr. Azar’s affidavit said that he spread the false information about Mr. Juroviesky in order to convince other class members to refuse to cooperate in becoming representative plaintiff. However, when later examined on this affidavit Mr. Azar testified that he did not recall reading or signing it and did not recall a lockout campaign or spreading false information about Mr. Juroviesky.
Motion to appoint Mr. Wineck
[26] Over a year after decertification, Mr. Juroviesky told the defendant that a Taylor Wineck would be the new lead plaintiff. Mr. Juroviesky then brought the motion to recertify with Mr. Wineck as the representative plaintiff, by notice of motion dated April 27, 2021. Mr. Wineck had previously been involved in this litigation and had been known to Mr. Juroviesky since the time of the original certification motion in 2018.
[27] Mr. Wineck was cross-examined on his affidavit in support of the motion to appoint him as the representative plaintiff. His cross-examination was characterized by refusals on significant subjects. Mr. Juroviesky refused to permit Mr. Wineck to answer questions about the history of the proceedings or his understanding of the role of a representative plaintiff. Mr. Juroviesky also refused to allow Mr. Wineck to answer questions about whether he had an indemnity agreement with counsel, a topic that was of express concern to the motion judge as set out in the Sixty Day Decision.
[28] In an affidavit dated April 26, 2021, Mr. Wineck mentioned a “lockout campaign” by Mr. Azar, which Mr. Juroviesky relied upon to explain the failure to find a representative plaintiff earlier. The evidence about the lockout campaign first came from Mr. Azar in the costs dispute as discussed above. The costs dispute ultimately settled.
[29] On Mr. Wineck’s cross-examination, Mr. Juroviesky refused to allow Mr. Wineck to answer questions relating to the April 26, 2021 affidavit and the “lockout campaign”.
Defendant’s position
[30] The motion judge found that the defendant and its counsel had acted appropriately in the course of the above steps, watching respectfully from the sidelines during the disputes between the plaintiff and Mr. Juroviesky.
[31] When it came to the motion to appoint Mr. Wineck, the defendant took the position that given the background, the motion was an abuse of process.
Decision at issue
[32] The motion judge reviewed the unusual history of this matter in his reasons for decision. The motion judge noted that about two years earlier, Mr. Juroviesky had been given 60 days to put forward a new plaintiff. Instead, there was a motion to reappoint Mr. Azar. The case was then decertified due to “the myriad of self-serving and false testimony that the Plaintiff’s side [had] presented.”
[33] The motion judge noted that the time frame in his Sixty Day Decision was intended to ensure finality in the face of what had already been “a very unusual intra-plaintiff’s side fight.” The motion judge found that the motion to recertify was relitigation of his prior rulings that would render them meaningless. He concluded that to allow this very late change of representative plaintiff would be not only unfair to the defendant but also an abuse of the process of the court. The motion judge held that the finality principle should be taken seriously and enforced.
[34] The motion judge highlighted other issues with the request to appoint Mr. Wineck. Of most concern was the failure to address the need for a suitable indemnity agreement in the evidence on the motion to recertify. Further, cross-examination questions on that topic had been refused. Questions about the history of the proceedings were also refused. In addition, the motion judge found that the questions Mr. Wineck did answer were even more concerning than those that he did not answer.
[35] The motion judge found that Mr. Juroviesky had been used and turned against in a way that had made him ineffective as class counsel. He found that both Mr. Wineck and Mr. Juroviesky were offside their potential roles as class representative and class counsel.
[36] The motion judge therefore dismissed the motion to appoint Mr. Wineck.
Issues and Standard of Review
[37] The appellant submits that the motion judge erred in concluding that the motion to recertify was an abuse of process and in finding that Mr. Wineck was not a suitable representative plaintiff. More specifically, the appellant submits that the motion judge made these errors:
(1) in relying on Bear v. Merck Frosst Canada & Co., 2011 SKCA 152 (“Bear”);
(2) in finding that the motion amounted to a relitigation of a previously decided issue;
(3) in finding that Mr. Wineck “participated” in the lockout scheme;
(4) in finding that Mr. Wineck was disqualified because Mr. Azar had previously affirmed an affidavit on his behalf;
(5) in finding that Mr. Juroviesky had access to a class list;
(6) in finding that there was no evidence of an indemnity agreement between Mr. Wineck and Mr. Juroviesky; and,
(7) in failing to find that Mr. Wineck was a suitable representative plaintiff.
[38] Although the costs order is included in the notice of appeal, the appellant has not put forward any alleged errors in that decision.
[39] The standard of review on this statutory appeal is as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. Errors of law are reviewed on a correctness standard. For errors of fact, there must be a palpable and overriding error. Errors of mixed fact and law also require a palpable and overriding error unless there is an extricable error of law or principle, which is reviewed on a correctness standard.
[40] The respondent submits that the Decision was discretionary and, therefore, a higher standard of review should be used. I do not find it necessary to invoke a higher standard of review.
Analysis
[41] There is no issue that the motion judge began by citing and relying on an appropriate case regarding the doctrine of abuse of process, specifically Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 (“CUPE”).
[42] As found in CUPE, the doctrine of abuse of process engages “the inherent power of the court to prevent the misuse of its procedure, in a way that would . . . bring the administration of justice into disrepute”: CUPE, at para. 37, quoting Canam Enterprises Inc. v. Coles (2000), 2000 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved [2002] 3 S.C.R. 307, 2002 SCC 63)).
[43] As noted by the motion judge, the doctrine of abuse of process has been applied where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined. As set out in CUPE, at para. 37, Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where allowing the litigation to proceed would violate principles such as judicial economy, consistency, finality and the integrity of the administration of justice.
[44] In addition to CUPE, the motion judge relied on Bear to illustrate the use of abuse of process in the class action context. In Bear, at para. 74, the court observed that it was sometimes necessary and appropriate to look below the surface of class action proceedings in order to preserve the integrity of the administration of justice. The court in Bear noted some “unique features” of that case, concluding that a defendant should not face a “revolving door of representative plaintiffs who serially advance certification application after certification application until they (perhaps) find one that succeeds.” At para. 75, the court held that its concerns were substantially heightened “when the same firm acts in successive certification efforts.”
[45] The motion judge shared these concerns.
[46] Mr. Juroviesky submits to this court that the Bear case is different in many respects. There are differences, beginning with the failure to obtain certification from the outset of that case. However, as noted in Bear itself, at para. 75, each case will depend on its own circumstances.
[47] The motion judge did not err in considering Bear. He found the theme of a revolving door and the concern about the role of plaintiff’s counsel fit within the particular circumstances of the case before him. He was then addressing the third motion regarding a representative plaintiff (beginning with Mr. Azar, and then Mr. Azar again, and now Mr. Wineck). Mr. Juroviesky put each person forward and was personally involved in each of the steps. The motion judge certainly had a factual basis for his concerns.
[48] Mr. Juroviesky further submits that his motion to appoint Mr. Wineck was not “relitigation” nor did it render the prior court decisions “meaningless”. He submits that although the motion judge had given him 60 days to rectify the problem with the representative plaintiff, there was no limit on how often he could move to recertify. He further submits that if any step was contrary to the Sixty Day Decision, it was the motion to reappoint Mr. Azar.
[49] I am not persuaded that the motion judge erred in his characterization of the motion to appoint Mr. Wineck as relitigation that undermined prior orders. The 60 day time period had long passed when this motion was brought. The Sixty Day Decision had also provided that the defendant would be free to bring a motion for decertification if a new person was not put forward in the relevant time period. A new person was not put forward. The decertification motion was brought, granted and not appealed. Further, the motion judge’s prior direction about an indemnity agreement was not complied with on the motion to appoint Mr. Wineck.
[50] As contemplated in CUPE, the motion judge considered whether there was a justifiable reason to deviate from prior rulings, finding none. He considered the new circumstances put forward on the motion to appoint Mr. Wineck. Specifically, Mr. Juroviesky put forward the “lockout” and Mr. Wineck’s failure to return his many telephone calls. Mr. Juroviesky submits that the motion judge erred in his findings regarding the lockout and about Mr. Wineck’s participation in it.
[51] Mr. Juroviesky first disputes the motion judge’s finding that the “only” reason put forward for the failure to get another person was the lockout campaign. On a fair reading of the Decision, the motion judge was referring to the new reason put forward on the motion then before him, seeking to appoint Mr. Wineck. The new reason was the lockout campaign. He was not ruling on the other reasons that had been put forward and accepted on the motion to reappoint Mr. Azar regarding other people who had been located by Mr. Juroviesky and were not willing to participate.
[52] On the subject of the lockout, the motion judge considered Mr. Azar’s affidavit. The motion judge also referenced Mr. Azar’s more recent evidence that he could not recall seeing, reading or affirming his affidavit, could not recall the lockout campaign and could not recall giving Mr. Wineck any false information about Mr. Juroviesky. The motion judge concluded as follows:
There are so many falsehoods in the record that deponents on the Plaintiff’s side seem now to be falsifying the fact that they admitted spreading falsehoods.
[53] The motion judge did not accept that the alleged lockout campaign provided an adequate reason for the motion to be brought almost two years after the Sixty Day Decision.
[54] Mr. Juroviesky further submits that the motion judge erred in finding that Mr. Wineck “participated” in the lockout campaign. However, the motion judge correctly observed that Mr. Wineck was said to be one of the people Mr. Azar attempted to convince. The evidence put forward said that he was called by Mr. Azar, which is some evidence of participation. Mr. Wineck also adopted some of Mr. Azar’s evidence – evidence that Mr. Azar later said he could not recall. Notably, Mr. Juroviesky refused to permit Mr. Wineck to answer questions in cross-examination regarding that evidence. I conclude that there was evidence to support the motion judge’s finding that Mr. Wineck participated in and, as put elsewhere in the reasons, was “taken in” by Mr. Azar. The motion judge did not go on to find that Mr. Wineck, himself, spread falsehoods.
[55] Mr. Juroviesky further submits that there was no unexplained delay and “given the pandemic and all the procedural steps taken”, the first real opportunity to hear the motion regarding Mr. Wineck was when it was heard. This submission does not appear to have been made to the motion judge and is not, in any event, supported by the evidence.
[56] There is no issue that Mr. Juroviesky knew Mr. Wineck long before the Sixty Day Decision. In the original certification motion Mr. Azar affirmed an affidavit on his own behalf and for two other people, one being Mr. Wineck. At the time, Mr. Wineck said that he did not review the final version of the affidavit affirmed by Mr. Azar. The motion judge was then considering Mr. Azar as the proposed representative plaintiff and described these events as a “glitch”. Mr. Juroviesky submits that criticizing Mr. Wineck for the same events is a conflict with that prior ruling. This position overlooks two things – the course of events since that time and the change in focus on to Mr. Wineck. Mr. Juroviesky further submits that the motion judge conflated the earlier issue with the motion to appoint Mr. Wineck. I agree that the reasons on this point could be clearer on the timing, but Mr. Wineck’s evidence about the earlier affidavit remains a valid consideration on a motion to appoint Mr. Wineck.
[57] Mr. Juroviesky then submits that it was an error to find that Mr. Juroviesky had what he described in his factum as a “Defendant Employee Class Member List”. To begin with, that description overstates the motion judge’s reasons. Those reasons say that Mr. Juroviesky had a “list of class members to contact”.
[58] There was some background to support the motion judge’s references to a class list. The motion judge had ordered Mr. Azar to provide all of his class information to Mr. Juroviesky. On this motion, Mr. Juroviesky submits that he asked Mr. Singer for the class information and was refused. However, no proceedings were taken saying that order had been breached. Further, according to the affidavit of Mr. Azar and based on information from Mr. Juroviesky, Mr. Juroviesky had found potential plaintiffs in his search. He therefore had some class information.
[59] Nonetheless, I accept the submission that the motion judge’s reasons could be read to suggest that he wrongly believed that Mr. Juroviesky had been given a class list by the defendant. That order had been requested an earlier stage, but refused. However, to be a palpable and overriding error, it must also be shown to have affected the result. Here, Mr. Juroviesky did not come forward after the 60 day period and say that the absence of a class list was a reason why he could not locate another person. Further, Mr. Wineck had been known to Mr. Juroviesky from the time of the original certification motion. Bearing everything in mind, even if the finding regarding a class list was a palpable error, I am not persuaded that it was overriding.
[60] Moving to the issue of an indemnity, the motion judge held, in his Sixty-Day Decision, that Mr. Azar had raised a legitimate complaint about his representation by Mr. Juroviesky. The existing retainer did not appear to adequately address the plaintiff’s exposure to an adverse costs award. The motion judge encouraged Mr. Juroviesky to address that frailty going forward and left it to Mr. Juroviesky and any potential client to work out what form it would take.
[61] No evidence of an indemnity was put forward on the motion to appoint Mr. Wineck. Further, in cross-examination, Mr. Wineck did not appear to understand his costs exposure and all questions about an indemnity were refused.
[62] Mr. Juroviesky submits that there was no mandatory direction about an indemnity and the topic is subject to privilege. He submits that the motion judge erred when he said, in his reasons, that a costs indemnity clause was a “condition” of Mr. Juroviesky proceeding with another representative plaintiff.
[63] The motion judge’s discussion is more fully set out in that same paragraph of the reasons for decision, including the following:
At paragraph 18 of my July 23, 2019 reasons for judgment, I specifically said: “Some provision must be made to indemnify the Plaintiff (or any future representative Plaintiff in this matter) for an adverse costs award”. That was not made an option for any new Plaintiff and his or her counsel and was not a matter of confidentiality that was off limits for Defendant’s counsel to inquire about.
[64] The motion judge went on to explain, as follows:
I did not think it appropriate for a new Plaintiff to have to bear the risk of costs in class action litigation the way that Mr. Azar had been made to do in his retainer agreement. For Mr. Juroviesky to refuse to allow any information in that regard to be part of the record effectively put Mr. Wineck offside as a potential representative Plaintiff and put Mr. Juroviesky offside as a potential class counsel in any re-certification. [Emphasis added.]
[65] I am not persuaded that the motion judge erred in requiring evidence of an indemnity in these circumstances.
[66] Mr. Juroviesky further submits that everyone, including the motion judge, has “assumed” and proceeded on the basis that there is an indemnity. He relies on the later costs endorsement. In that later step, Mr. Juroviesky’s factum stated that Mr. Wineck is “Not responsible for Costs (he is indemnified)”. The Motion judge accepted that representation by counsel for the purposes of the costs order. This is a significantly different step than the question before the court on the motion to appoint Mr. Wineck to fulfill the role of representative plaintiff.
[67] I am not persuaded that the motion judge’s decision on the indemnity issue was in error. Further, it alone provided sufficient reason not to appoint Mr. Wineck. There were other reasons as well, as set out above and in the reasons for decision, including the refused questions about his role as representative plaintiff and the history of the proceedings and his contradictory evidence.
[68] I therefore see no reason to interfere with the Decision.
Order
[69] This appeal is therefore dismissed. The appellant shall pay costs in the agreed amount of $20,000, all inclusive.
Justice W. Matheson
I agree _______________________________
Justice E. Stewart
I agree _______________________________
Justice S. Akhtar
Released: July 25, 2022
CITATION: Azar v. Strada Crush Limited, 2022 ONSC 3666
DIVISIONAL COURT FILE NO. 675/21
DATE: 20220725
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
STEWART, MATHESON & AKHTAR JJ.
BETWEEN:
GEORGE AZAR
Appellant
– and –
STRADA CRUSH LIMITED
Respondent
REASONS FOR DECISION
Released: July 25, 2022
[^1]: 2021 ONSC 4758; 2021 ONSC 5358