COURT FILE NO.: CV-09-392083

DATE: 20131009

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sayed Farid Sadat and Food Source Ltd., Plaintiffs/Appellants

– AND –

Westmore Plaza Inc., Zev Schmerler, Highway 27 & Albion Flea Market Inc., Highway 27 & Albion Flea Market Corp., and Allen Koffman, Defendants/Respondents

BEFORE: E.M. Morgan J.

COUNSEL: Julian Heller and Zabi Yaqeen, for the Plaintiffs/Appellants

Glenn E. Cohen, for the Defendants/Respondents, Highway 27 & Albion Flea Market Inc., Highway 27 & Albion Flea Market Corp., and Allen Koffman

Aaron Blumenfeld, for the Defendants/Respondents, Westmore Plaza Inc. and Zev Schmerler

HEARD: May 30, 2013, additional submissions re costs submitted Oct. 3 and 7, 2013

COSTS ENDORSEMENT

[1] On June 3, 2013 I released my endorsement dismissing the appeal of the ruling of Master R.A. Muir requiring the corporate Plaintiff, Food Source Ltd. (“FSL”), to post security for costs. I awarded costs to the Defendants in the total amount of $30,000.

[2] The motion before the Master had been heard together with a security for costs motion against the individual Plaintiff, Sayed Farid Sadat (“Sadat”). The Master dismissed the motion for security for costs as against Sadat, and so he did not appeal that motion.

[3] The matter has been brought back before me in order to settle the formal Order resulting from my endorsement. There is a disagreement among counsel as to whether one or both of the Plaintiffs is responsible for the costs. Mr. Heller and Mr. Cohen (with whom Mr. Blumenfeld agrees) have provided me with written submissions on the point.

[4] Sadat is the principal behind FSL. Indeed, this was the gist of the Plaintiffs’ position before the Master. As a matter of strategy, if not form, Sadat and FSL brought this appeal jointly. It is worth repeating para 6 of my endorsement in its entirety:

At first instance, this motion was argued by the Defendants on the basis that, inter alia, Sadat is a nominee plaintiff and all of the claims being advanced in the action are actually those of FSL. The Plaintiffs successfully argued against that point, and established to the Master’s satisfaction that, despite the fact that the Statement of Claim is pleaded as if the two Plaintiffs are one and the same, Sadat has a number of claims that are all his own. It is ironic that now at the appeal stage the Plaintiffs argue that, in fact, Sadat and FSL are joint claimants in every respect.

[5] Mr. Cohen’s view is that FSL and Sadat had a joint interest in this appeal, despite the fact that the Master’s dismissal of the request that Sadat post security for costs was not itself at issue in the appeal. The material in FSL’s appeal record – the affidavits, cross-examinations, pleadings, etc. – makes no distinction between the two Plaintiffs. Early in the Statement of Claim the two Plaintiffs are collectively defined as “FSL”. Moreover, as Mr. Cohen points out, the case law generally makes principals behind corporate parties ordered to post security for costs responsible by refusing to recognize a corporate party’s impecuniosity if the principals are able to fund the security. Creative v Marin, 90 OR (3d) 212 (Div Ct).

[6] The two Plaintiffs, both represented by Mr. Heller, argued the FSL appeal together. Their interests and the substance of their appeal were joint. For that reason, I did not distinguish between them in awarding costs. Moreover, this was not a case in which the endorsement was drafted without the judge turning his mind to the fact that there are two Plaintiffs and two Defendants. In addressing costs, I specifically used the plural in referring to the Plaintiffs collectively and then specifically did not use the plural in referring to the Defendants but rather distinguished between the two of them. Paragraph 30 of my endorsement provides:

The Plaintiffs shall pay costs to the Defendants in the total amount of $30,000, inclusive of disbursements and HST, to be divided $15,000 for Highway 27 and $15,000 for Westmore.

[7] The second and third paragraphs of Mr. Cohen’s draft formal Order therefore correctly reflect the fact that the endorsement made both Plaintiffs responsible for paying the costs. Both of the Plaintiffs are ordered to pay $15,000 to each of the Defendants.

[8] The preamble of the Order, however, should reflect the fact that, formally speaking, the only appellant was the corporate Plaintiff. The words “Plaintiff, Food Source Ltd.” should replace the word “Plaintiffs” in the first line of Mr. Cohen’s draft preamble.

Morgan J.

Date: October 9, 2013