Court File and Parties

NEWMARKET COURT FILE NO.: CV-15-00124898-00 DATE: 20160922 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

OLEG RASSOLOV and SVETLANA RASSOLOVA Applicants – and – AMIR MIZRAHI, BRIDLEPATH and PROGRESSIVE REAL ESTATE INC. and MARK LATHEM Respondents

Counsel: Jason R. Cherniak, for the Applicants Jeremy K. Sacks, for the Respondent Amir Mizrahi and Bridlepath

Heard: Written Submissions

RULINGS ON COSTS and PROCEDURAL ISSUES

DOUGLAS, J.

[1] In my Reasons for Decision released May 25, 2016, apart from an evidentiary ruling in favour of the Applicants, I concluded that the evidence was too inconsistent to support a judgment without the benefit of a trial; accordingly, I directed a trial of the issues pursuant to Rule 38.10(1) of The Rules of Civil Procedure and I invited written submissions as to the procedural components of that order in addition to costs of the proceedings before me.

[2] As to additional orders of a procedural nature in furtherance of the trial objective, there is some common ground between the parties. The parties are agreed that the matter should be transferred to the Small Claims Court for trial. I shall address this in my orders below.

[3] The Respondent asks that I direct that my findings in my Reason for Decision dated May 25, 2016 are “final”. I decline to make any such order as such would run afoul of the parties’ rights of appeal.

[4] The Applicants ask that the facts referred to in paragraph 7 to 19 and 23 to 27 of my reasons for decision bind the trial judge. I decline to make that order as the trial judge may receive better evidence than I had before me and may rightly come to different factual conclusions. If these facts are not in dispute it is open to the parties to prepare an Agreed Statement of Facts.

[5] The Applicants invite me to order that “no adverse inference shall be drawn against either party for failing to produce Kais Mestiri as a witness”. I also decline to make this order, preferring instead to defer to the trial judge’s discretion on this issue.

[6] The Applicants further request that Mr. Lathem release the $3,189.60 he is holding in trust for this matter as determined at trial in Small Claims Court. The Respondents do not appear to oppose this relief, which appears necessary from the Applicant’s perspective given a possible issue of jurisdiction of a Deputy Judge to make such an order. I will therefore address this below as well.

[7] Regarding the issue of costs, Rule 57.01 outlines some of the considerations that are relevant to determination of this issue.

[8] I note that the issues before me were not particularly complex.

[9] I also note that there are no offers to settle which in my view trigger cost consequences under the Rules of Civil Procedure.

[10] The Applicants seek costs against Mizrahi and Bridlepath in the amount of $10,216.75 plus HST, arguing an application to the Superior Court of Justice was necessitated as the Small Claims Court cannot make a declaratory order regarding rights to trust funds and the Respondents failed to respond to the Applicants’ initial entreaties to discuss settlement and in particular the jurisdictional issue.

[11] The Respondents argue they were successful as my order to proceed to trial “is effectively a dismissal of the application” or “dismissal of a summary judgment motion.” It is submitted that commencing proceedings in the Superior Court of Justice was unnecessary as a “declaratory order regarding trust funds is not necessary… given that everyone that was holding trust funds was made a party…” Further, the Respondents proposed transfer to the Small Claims Court promptly following service of the application materials. The Respondents seek costs of $13,131.63.

[12] As to proceedings before me, I note that Respondent’s counsel expended approximately 15.8 hours in relation to items 3, 4 and 5 of the Bill of Costs, amounting to $5,293.00 on a full indemnity scale and $3,950.00 on a partial indemnity scale.

[13] The balance of the fees and disbursements referred to in the Respondent’s Bill of Costs may be referable to the Application as a whole rather than the appearance before me. As a claim for those additional fees and disbursements will be restricted by the Courts of Justice Act to those recoverable in Small Claims Court, and as a transfer of these proceedings to the Small Claims Court ends this court’s jurisdiction on costs, I will include in my costs award a consideration of these factors.

[14] Prior to the proceedings before me there were cross-examinations conducted.

[15] I have reviewed the parties’ respective offers to settle. None triggers costs consequences.

[16] I have concluded that an Application was not the correct format for placing these issues before the court, given the dispute regarding material facts. The Applicants must accept responsibility for this.

[17] I reject the Respondent’s submission that my order is somehow akin to dismissing the application. The substantive relief sought has not been addressed, only the format within which the claims will be adjudicated. The matter before me was more akin to a motion for summary judgment which, upon dismissal, leaves the substantive issues for determination another day.

[18] I consider the amount at stake and the issue of proportionality. This is a claim within the monetary jurisdiction of the Small Claims Court; however, cross-examinations were conducted, increasing the costs.

[19] Ultimately, the question is what is fair and reasonable in the circumstances.

[20] Considering all of the foregoing, I award costs to the Respondents Mizrahi and Bridlepath fixed in the amount of $5,500.00 plus HST plus disbursements associated with cross-examinations fixed in the amount of $1,194.84, payable within 60 days.

[21] In addition, I order as follows:

• a. This matter shall be transferred to the Small Claims Court having jurisdiction over these proceedings. The Application Record shall be treated as the Plaintiff’s claim and the Responding Application Record shall be treated as the Defence.
• b. The evidentiary ruling at paragraph 61(b) of my Reasons for Decision will bind the trial judge.
• c. Mr. Lathem shall release the $3,189.60 he is holding in trust to the party determined entitled by the trial judge.
• d. The cross-examinations completed to date may be used in the trial proceedings.

Douglas, J. Released: September 22, 2016