Citation: Martino v. Fortress Real Capital Inc., 2017 ONSC 5755
COURT FILE NO.: CV-16-561293CP
DATE: 20170928
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DAVID MARTINO
Plaintiff
– 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 KOCHHAR, TONY MAZZOLI, SAUL PERLOV, DEREK SORRENTI, SORRENTI LAW PROFESSIONAL CORPORATION, OLYMPIA TRUST COMPANY and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO
Defendants
Mitchell Wine for the Plaintiff
Lisa Parliament and Lauren Ray for the Defendants Adi Developments (Link) Inc. and Adi Development Group Inc.
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
REASONS FOR DECISION - COSTS
PERELL, J.
[1] In this proposed class action, Adi Developments (Link) Inc. and Adi Development Group Inc. brought a pleadings motion to strike various claims or paragraphs from David Martino’s Statement of Claim and to have the action dismissed against them. There were companion pleadings motions in three other proposed class actions that had some common parties and many common issues and legal themes. The motions were argued together over two days.
[2] I granted Adi Developments’ motion; see Martino v. Fortress Real Capital Inc., 2017 ONSC 4790. The Reasons for Decision in the other motions were: McDowell v. Fortress Real Capital Inc., 2017 ONSC 4789; McDowell and Aversa v. Fortress Real Capital Inc., 2017 ONSC 4791; and Madryga v. Fortress Real Capital Inc., 2017 ONSC 4792.
[3] In the result, the claims against the Adi Developments Defendants were struck out without leave to amend. Adi Developments seeks partial indemnity costs and HST in the amount of $62,011.08, plus disbursements and HST in the amount of $2,454.07. The total claim for costs is $64,465.65.
[4] By way of comparison, it may be noted that: (a) I awarded the Defendants FFM Capital, Rosalia Spadafora, Krish Kochhar, Tony Mazzoli, and Saul Perlov, whose pleading motion was settled save for costs, the sum of $17,500, all inclusive; (b) Empire Pace (1088 Progress) Ltd. claims approximately $60,000, all inclusive, for the motions and for the dismissal of the action against it; and (c) Olympia Trust Company claims approximately $41,000, all inclusive, on a partial indemnity basis and approximately $61,000, all inclusive, on a substantial indemnity basis for the motions.
[5] To explain why it claims approximately $65,000 for a pleadings motion, Adi Developments submits: (a) it was entirely successful; (b) Mr. Martino was suing for millions of dollars; (c) apart from the monetary exposure, it was confronted with a very serious reputational interest to protect since there were very serious allegations of impropriety being made against it and its project; (d) as pleaded, the case was extraordinarily complex and difficult to comprehend; and (e) it is no longer a party to the action.
[6] For his part, Mr. Martino submits that the costs claimed by the Adi Developments Defendants are excessive and beyond the reasonable expectations of the unsuccessful party on what was just a pleadings motion. He submits that the amount of the award would be contrary to the fundamental objective of access to justice. In regard to the allegedly excessive claim for costs, Mr. Martino makes the following points:
a. He is a person of modest means seeking access to justice for a group of investors who all lost money that they could not afford to lose.
b. Had he been the successful party on the pleadings motion, his Bill of Costs would have been for $37,682.73 of which the fee portion was $33,176, HST was $4,335.18, and disbursements $175.55; approximately $42,000, all inclusive. The Bill of Costs was for services associated with eight motions brought by the Defendants in the four proposed class actions. Mr. Martino submits that it was reasonable for him to expect that the Costs Outline of each of the Defendant’s lawyers would be less, not more, than the Costs Outline of his own counsel. Mr. Martino submits that any award to Adi Developments should be no more than the award to the FFM Capital Defendants plus the costs of arguing the motion.
c. Since the factual underpinnings of the four proposed class actions is similar, he submits that Adi Developments exaggerates the amount of time required to apprise itself of the other proceedings, and Adi Developments, in any event, was involved in only one of the four actions.
d. The claims were not vexatious and whatever the frailties of the pleadings, he submits that the Defendants would have been able to understand the case that they were being called on to meet.
e. He submits that his counsel made a genuine and concerted effort to address the criticisms of the pleadings and commendably attempted to resolve the pleadings motion before the hearing.
f. Three lawyers and two students were engaged on the file for Adi Developments and the fee claim is for 230 hours of work, which he submits is excessive for a straightforward pleadings motion.
g. Junior counsel, while in attendance at the motion, did not participate in the argument.
[7] Mr. Martino submits that having regard to the above circumstances and extrapolating from the amount awarded to the FFM Capital Defendants and taking into account that: (a) Adi Developments’ lawyers have less seniority; (b) Adi Developments’ pleading motion was argued and not settled; and (c) Adi Developments was successful and is no longer a party to the action, the appropriate costs award is $22,000 inclusive of disbursements and taxes.
[8] I set out the principles about costs in class actions in Das v. George Weston Limited, 2017 ONSC 5583 in some detail and I incorporate by reference those principles for the case at bar.
[9] Applying the principles that govern the court’s discretion in awarding costs to the circumstances of the immediate case, the nub of the dispute between Mr. Martino and Adi Developments is about what Mr. Martino, as the unsuccessful party, would have reasonably expected to pay for costs of a motion that resulted in Adi Developments being removed as a party to this litigation.
[10] Mr. Martino characterizes the motion as just a pleadings motion; however, it obviously was much more than that for Adi Developments, whose success is dispositive of this litigation from its perspective but not for the other Defendants against whom the action will continue.
[11] From Adi Developments’ perspective, it was joined to an inherently complicated action that was over-complicated by the manner in which it was pleaded. It was confronted with a very substantial claim, and in my opinion, Mr. Martino ought to have expected that the Adi Developments Defendants would defend themselves vigilantly. I do not accept the proposition that Mr. Martino reasonably expected that Adi Developments’ lawyers would do less work in defending Adi Developments than his lawyers would expend in prosecuting the case against Adi Developments. I disagree that the award to the FFM Capital Defendants or his own Bill of Costs establishes some sort of parameter for the appropriate award for the other parties. I disagree with his submission that it would be contrary to the fundamental objective of access to justice to make a substantial costs award to Adi Developments; defendants as much as plaintiffs are entitled to access to justice and adverse costs consequences are applicable to both plaintiffs and defendants.
[12] I, therefore, disagree with Mr. Martino’s submission that the appropriate award is $22,000, all inclusive. In my opinion, applying the normal principles for a costs award, the appropriate award is $50,000, all inclusive.
[13] Order accordingly.
Perell, J.
Released: September 28, 2017
CITATION: Martino v. Fortress Real Capital Inc., 2017 ONSC 5755
COURT FILE NO.:CV-16-561293CP
DATE: 20170928
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DAVID MARTINO
Plaintiff
– 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 KOCHHAR, TONY MAZZOLI, SAUL PERLOV, DEREK SORRENTI, SORRENTI LAW PROFESSIONAL CORPORATION, OLYMPIA TRUST COMPANY and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO
Defendants
REASONS FOR DECISION - COSTS
PERELL J.
Released: September 28, 2017