Davydov v. Niyazov et al, 2018 ONSC 7082

Court File and Parties

NEWMARKET COURT FILE NO.: CV-16-126841-SR DATE: 20181126 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Michael Davydov, Plaintiff AND: Ariel Arsen Niyazov and Ilya Aharon, Defendants

BEFORE: The Honourable Mr. Justice C.F. de Sa

COUNSEL: Adam Somogyi, Counsel for the Plaintiff Bill Michelson, Counsel for the Defendant, Ariel Arsen Niyazov Khalil Bheriani and Derek Sederoff, Counsel for the Defendant, Ilya Aharon

HEARD: October 24, 2018

Endorsement

Background Facts

1The parties to this action are all known to each other and have been friends and business associates for over 15 years.

2The plaintiff Mr. Davydov asked the defendant Mr. Aharon to assist him with an outstanding debt owed by a former business associate, Mr. Troitschanski and Axis Auto. Mr. Davydov agreed to provide Mr. Aharon half the amount he obtained in exchange for settling the matter.

3Mr. Aharon retained the services of co-defendant Mr. Niyazov, another associate of Mr. Davydov, to assist. Mr. Niyazov negotiated a settlement of the dispute for an all-inclusive amount for $32,500. On the basis of the negotiated settlement, Mr. Davydov signed a release with the third party resolving the dispute on August 28, 2015. However, Mr. Davydov never received the funds from the settlement.

4The defendants have filed an Authorization Letter and Promissory Note in their defence. The Promissory Note documents a $50,000 interest free loan from Mr. Aharon to Mr. Davydov. The Authorization from Mr. Davydov authorizes Mr. Aharon to act on Mr. Davydov’s behalf in regard to the hiring a lawyer, settling the business dispute, and paying settlement funds from the aforementioned business dispute.

5The plaintiff disputes the Promissory Note and Authorization. The plaintiff alleges negligence on the part of Mr. Niyazov in releasing the funds to Mr. Aharon. The plaintiff also alleges Mr. Aharon and Mr. Niyazov together improperly converted the settlement funds.

Decision on Undertakings/Refusals

6Both defendants were examined for discovery. The plaintiff takes the position that there are a number of outstanding issues under advisements, and refusals that should be ordered answered.

7In relation to Mr. Niyazov, I have listed below the items sought, and my decision on each:

1. A copy of any and all communications between Mr. Niyazov and Mr. Aharon. If the communications are not available, the plaintiff seeks call logs showing the extent of their communications during the relevant period.

   • I order that any communications relating to this matter between Mr. Aharon and Mr. Niyazov be disclosed.
   • I also order the logs to be disclosed. They can be requested from the service provider.

2. A receipt or copy of a cheque of the payment from Mr. Niyazov to Mr. Aharon.

   • A copy of the cheque and/or a receipt of the transfer from Mr. Niyazov regarding the payment is ordered to be produced.

3. To produce the original email dated March 16, 2016 which attached the documents located at Tabs 5 and 15 of Mr. Niyazov’s Affidavit of Documents. The plaintiff seeks to examine the original email for metadata.

   • The email referenced above in its original electronic form is ordered to be produced.

4. To produce a complete copy of Mr. Niyazov’s Law Society of Ontario’s file in respect of this action, including any documents relating to Mr. Niyazov acting for the plaintiff or as his agent and any documents relating to whether or not the Law Society conducted an investigation.

   • This file, as it pertains to the retainer by the plaintiff, is ordered to be produced.

5. To produce Mr. Niyazov’s financial statements and income tax returns in the United States for the last three years;

   • I will not order the financial statements and returns. I don’t see the relevance.

6. To advise of any insurance policy that potentially covers Mr. Niyazov or may be liable for Mr. Niyazov’s actions.

   • This has been provided. I am satisfied that what has been disclosed is sufficient in the circumstances.

8In relation to Mr. Aharon, I have listed below the items sought, and my decision on each:

1. A copy of any and all communications between Mr. Niyazov and Mr. Aharon. If the communications are not available, the plaintiff seeks call logs showing the extent of their communications;

   • I order that any communications relating to this matter between Mr. Aharon and Mr. Niyazov be disclosed.
   • I also order the logs to be disclosed. They can be requested from the service provider.

2. Tax returns for the three years preceding 2014 to establish whether he could even lend the plaintiff $50,000.

   • Mr. Aharon’s income may be relevant to the issues including motive. I order the tax returns to be produced for the three years preceding 2014.

3. Any record indicating where Mr. Aharon was when he sent the documents to Mr. Niyazov. The plaintiff believes that Mr. Aharon sent these documents (Promissory Note and Authorization) from Israel. If he did, there is a strong inference the documents were manufactured.

   • I order Mr. Aharon to produce any documentation he has available to show where he was on the date that the Authorization and Promissory Note were sent to Mr. Niyazov.

9The documents are ordered to be produced by the Defendants within 60 days of this order.