ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: 05-CV-294205
Date: 20120405

BETWEEN:

S.I.A.S.I. TRADING LIMITED, PAUL JANKEL and SAUL KENTON
Plaintiffs

– and –

MARTIN TEPLITSKY and MESSRS. TEPLITSKY COLSON
Defendants

David M. Goodman, for the Plaintiffs

Harvey T. Strosberg, for the Defendants

Heard: March 19, 2012

j.s. o’neill

REASONS ON MOTION

[ 1 ] On this motion counsel is seeking a second instalment or payment for security for costs, as outlined on Exhibit F to the Affidavit of Craig Allen sworn January 19, 2011. Costs requested total approximately $894,960.00. That cousel would seek additional costs could be foreseen from a review of Stach J.’s ruling on October 25, 2006. He awarded $125,000.00, “sufficient to carry the defendants through to the end of the discovery process.”

[ 2 ] The Plaintiff corporation has no income or assets and the Plaintiff Saul Kenton is now ill, and he sold his home in order to fund the previous order of Stach, J. It is conceded that these two plaintiffs are now impecunious. An order requiring them to pay further security for costs monies would be unjust.

[ 3 ] The Plaintiff Paul Jankel is in a different position to some extent. I generally accept the submissions made by counsel for the Defendants in paragraphs 39 through 44 of the Defendants’ Factum. Having said this, it is difficult to quantify or measure any discretionary or real income Mr. Jankel may hold, or control. He certainly knew that after October 2006, the Defendants’ would likely return for more post discovery security costs.

[ 4 ] Neither the Plaintiffs nor the Defendants have obtained or requisitioned a Damages report. A mediation and pre-trial will occur next in this litigation.

[ 5 ] I am satisfied that having regard to Justice Stach’s ruling, and the statement made by Lisa Brownstone on July 8, 1997, that while liability may be provable, the great difficulty in this case will be proving and assessing damages.

[ 6 ] Access to justice, and justice itself demands that this lawsuit proceed, to the extent that it can. It may well settle at a mediation or a pre-trial if Damage reports are available and if the parties abandon rigid positions and look to compromise their claims and defences in the interests of a settlement.

[ 7 ] In my view, with a mediation and pre-trial forthcoming, a security for costs order should focus on the need to obtain an expert report on damages. It must be remembered that the defendants face a $100,000,000 claim. I do not accept, however, that $500,000 more be paid as security for costs, and in the interests of justice, towards such a report at this time. I appreciate the costs estimate outlined in the accountants letter referred to, but with no reports yet prepared, and with the Plaintiffs’ themselves having expended no monies for a Damages report, and in light of the financial situation of the Plaintiffs’ generally, justice does not support such an order as herein sought.

[ 8 ] Having regard therefore to these reasons, the security for costs rule, Justice Stach’s earlier order and the Plaintiffs’ financial situation, as herein outlined, I hereby order that the Plaintiffs (jointly or severally) pay a total of $25,000 for security for costs on or before June 30, 2012 at 12 noon. Assuming that an accounting firm could undertake work on a damages report at $400.00 an hour, a partial indemnity security for costs order would thereby permit such firm to complete almost 100 hours of work towards preparation of such a report. I view the preparation of a Damages report as critically important in potentially resolving this long outstanding matter and a security for costs order in the sum of $25,000 ought to enable this process to be initiated sooner rather than later.

[ 9 ] The Defendants are at liberty to move for a further order for security if the Plaintiffs’ financial circumstances should change, or if it develops that the Plaintiffs expend a substantial or significant amount greater than $25,000 in securing their own Damages report for use at the upcoming mediation or pre-trial.

[ 10 ] I make no order herein as to costs. Although a security for costs order has been made against the Plaintiffs, it is in an amount substantially less than that requested on the motion before me.

[ 11 ] Order accordingly.

J.S.O’NEILL

Released: April 5, 2012

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: S.I.A.S.I. TRADING LIMITED, PAUL JANKEL and SAUL KENTON Plaintiffs – and – MARTIN TEPLITSKY and MESSRS. TEPLITSKY COLSON Defendants REASONS on motion Justice J.S. O’Neill

Released: April 5, 2012