Court File and Parties

COURT FILE NO.: CV 18-603172-00 DATE: 20190416 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jonathan Haim Javitt AND: Henry Shiner

BEFORE: Koehnen J.

COUNSEL: Kevin Sherkin, for the Applicant Henry Shiner, Counsel on his own behalf

HEARD: April 8, 2019

Endorsement

[1] This is an application by Jonathan Javitt to recognize and enforce a default judgment in the amount of $1,500,000 that he obtained in Israel against the respondent Henry Shiner.

[2] Mr. Shiner opposes the application for three reasons. First, Mr. Shiner submits the action on the merits should be heard in Ontario. Second, the Israeli judgment offends principles of natural justice. Third, the application should be stayed while Mr. Shiner sets the judgment aside in Israel.

A. Should the action be heard on the merits in Ontario?

[3] I cannot agree that the action should be heard on the merits in Ontario. The claim against Mr. Shiner was brought in Israel. There is no claim in Ontario to advance nor can I compel parties living in Israel to bring an action in Ontario. Moreover it is abundantly clear that the Israeli action has a real and substantial connection with Israel. The action involves Israeli corporations and conduct that occurred almost entirely in Israel. There is no evidence before me to suggest that the allegations in the Israeli action have any real and substantial connection with Ontario.

B. Does the Judgment Offend Principles of Natural Justice?

[4] Generally speaking, there are three defences to the enforcement of a foreign judgment: breach of natural justice, fraud or breach of public policy: Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416.

[5] Mr. Shiner raises the defence of natural justice. He does not raise issues of fraud or public policy.

[6] The principles underlying the natural justice defence were set out in Beals. The defence of natural justice requires Mr. Shiner to prove on a balance of probabilities that the Israeli proceeding was unfair and contrary to Canadian notions of fundamental justice: Beals at paras. 59 and 61. A fair process is one that reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing participants in the judicial system: Beals at para. 62.

[7] Mr. Shiner raises no objections to the fairness of the Israeli legal system generally. He bases his natural justice defence on the merits of the case and on the lack of opportunity to defend himself in Israel.

[8] Mr. Shiner spent considerable time in his materials and in his argument addressing the merits of his defence. He asked me to draw an adverse inference against the applicant because the applicant did not engage on the merits. I decline to draw any such inference. While the merits of a defence may be relevant for me to consider when determining whether to set aside a default judgment granted in Ontario, it is not a matter for me to consider when addressing a default judgment issued in the circumstances of this case: Beals at para 64.

[9] The merits of the underlying claim or defence should be determined by Israeli courts. It would amount to a breach of international comity for me to re-open and second-guess the determination of an Israeli court without requiring Mr. Shiner to make those submissions to the courts of Israel.

[10] I turn then to Mr. Shiner’s submission that he was not given an opportunity to defend the action in Israel. I cannot accept that submission.

[11] Mr. Shiner agrees that he was served with materials in the Israeli action on December 8, 2016. Mr. Shiner suggests that he was served with a motion to add him as a defendant but that he was not served with a statement of claim that required him to defend. I say Mr. Shiner suggests this because he does not actually say it. Rather, he wants me to infer from his materials that he was served merely with a motion to amend the claim. In paragraph 29 of his affidavit Mr. Shiner states:

“To the best of my recollection, the notice did not indicate that a trial date had been sent or otherwise warned me of the consequences of not responding. The notice served on me indicated that it was sought to reinstate me as a defendant. I gave/showed the materials to a Toronto lawyer friend of mine, and can locate now only some of the documents that were served on me. I must have misplaced the others. As a result, I do not have all of the materials that were served on me, but I did not notice or appreciate a warning that judgment could be rendered against me if I did not respond or make an appearance. I did not immediately seek counsel in Israel at the time, but was not aware or did not appreciate that judgment could be awarded against me.

[12] In other words, Mr. Shiner does not say that the materials with which he was served did not indicate he was obliged to defend the action in Israel but merely that he does not remember them doing so and no longer has all of the materials.

[13] Mr. Shiner then attaches a two page motion to amend in the Israeli proceeding but does not state that the two page motion is the only thing that he has retained of the materials served on him.

[14] The applicant has, however, attached an affidavit of service to its materials which indicates that Mr. Shiner was served personally with an amended statement of claim and various other documents including a motion to amend the statement of claim. It therefore appears that Mr. Shiner was served with the statement of claim in which he was joined as a party as well as the supporting materials that led to the amended claim.

[15] Although Mr. Shiner took those materials to a lawyer, he does not provide the name of the lawyer, does not provide any evidence about what the lawyer said and does not provide any evidence from the lawyer about the content of the materials served on Mr. Shiner.

[16] In any event, if Mr. Shiner has issues about the nature of the materials with which he was served, that is an issue for the Israeli courts. International comity demands that I first allow Israeli courts to determine whether their judicial process has been satisfied. Given that Mr. Shiner has not yet raised any such arguments before Israeli courts and given the absence of any evidence to suggest that Israeli courts lack a fair process, I am not prepared to find that Mr. Shiner has been denied natural justice.

[17] Indeed, if anything, Mr. Shiner’s materials indicate that Israeli courts have not deprived him of natural justice because they provide a mechanism to set aside default judgments where proper service was not effected or where the court is satisfied that there are exceptional circumstances to justify setting aside the default judgment.

[18] I pause here to note that I have pointed out deficiencies in Mr. Shiner’s materials on several occasions even though Mr. Shiner is self-represented. Although Mr. Shiner has no formal counsel of record, he has received considerable legal assistance in preparing his materials. By way of example, when it came to the issue of costs, Mr. Shiner handed me a costs outline reflecting over 44 hours of time preparing Mr. Shiner’s responding materials. The lawyer involved is a litigator called in 1989 who practices at a known litigation boutique.

C. Stay of Proceedings

[19] In the alternative to the foregoing, Mr. Shiner asks that I stay this proceeding pending resolution of his efforts to have the matter adjudicated on the merits in Israel. Mr. Shiner submits that he has retained a lawyer in Israel to set aside the judgment and that a preliminary hearing is scheduled in the Israeli proceeding on May 16, 2019.

[20] The granting of a stay is discretionary and should be governed by the equities of the situation: Hollinger International Inc. v. Hollinger Inc. (2004), 11 C.P.C. (6th) (Ont. S.C.J. [Commercial List]), leave to appeal refused [2005] O.J. 708 (Ont. Div. Ct.); Catalyst Fund Ltd. Partnership II v. IMAC Corp., [2008] O.J. No 3776 at para 21, 23.

[21] On the material before me I am not inclined to grant a stay. The equities demand balancing the interests of Mr. Shiner against those of Mr. Javitt. Mr. Javitt cannot be delayed indefinitely in the enforcement of what appears to be a judgment granted in accordance with Israeli procedures which seem generally consistent with those of Ontario courts. [1] Mr. Shiner has not persuaded me that he is moving expeditiously to set aside the Israeli judgment.

[22] Mr. Shiner was served in Toronto with a copy of the Israeli judgment on April 20, 2017. Mr. Shiner took no steps to set aside the judgment. Instead he says he consulted an Israeli lawyer and was:

“…left with the impression that, for procedural, not substantive, reasons (in that the 30 day appeal period had expired), the chances of me avoiding judgment were dubious. (As I have recently determined, this was not entirely correct and there is scope under Israeli court procedure to review and possibly set aside the judgment.)”

[23] Mr. Shiner does not indicate when he consulted with the Israeli lawyer, whether he retained the lawyer, whether he received the advice casually in a conversation at a social gathering or whether it was a formal opinion or what it is about the advice that was not “entirely correct.”

[24] In May 2018 Mr. Javitt demanded payment of the judgment from Mr. Shiner. The latter responded by indicating that the judgment had been wrongfully obtained but took no steps to set it aside.

[25] In December 2018 Mr. Shiner was served with the application record in this proceeding. Still Mr. Shiner took no steps to set aside the Israeli judgment. Indeed, he did not take meaningful steps even to retain Ontario counsel. The matter came before me on February 14, 2019. At that time Mr. Shiner asked that the matter be adjourned to permit him to complete the retainer of Ontario counsel. By that point Mr. Shiner had consulted one lawyer already with whom a retainer did not proceed. He told me on February 14 that he was in the process of completing a retainer with a second lawyer which retainer could be completed that day.

[26] I adjourned the matter to a conference call before me on March 1, 2019 at which a case timetable would be set with Mr. Shiner’s new lawyer. In my endorsement of February 14, 2019 I stated:

“Given the lapse of time, that timetable will be an aggressive one. I have urged Mr. Shiner to finalize his retainer with counsel today and to begin putting in place immediately any steps necessary to respond to the application .” (Emphasis added)

[27] Although the adjournment was granted for the purpose of allowing Mr. Shiner to retain counsel and give counsel the chance to get up to speed, Mr. Shiner attended the conference call on his own behalf. The lawyer referred to in paragraph 18 above, was not the one for whom the hearing on February 14 was adjourned but is a third lawyer.

[28] Mr. Shiner delivered responding materials on March 15, 2019. In his accompanying affidavit he states that he has

“retained a law firm in Israel to bring a motion to set aside the Israeli judgment as against me, or alternatively to confirm that the judgment was satisfied. I fully intend to pursue a motion in Israel to set aside the Israeli judgment against me.”

[29] Mr. Shiner provided no details and did not even provide the name of the Israeli lawyer he had allegedly retained.

[30] On March 25, 2019 Mr. Javitt filed a reply affidavit together with a letter from his Israeli counsel indicating that his Israeli counsel had not been contacted by anyone on behalf of Mr. Shiner to set aside the Israeli judgment.

[31] At the hearing of the motion, Mr. Shiner handed up a further affidavit from himself dated April 8, 2019, the day of the motion. It attached two letters, both dated April 8, 2019, from Roiy Cohen, an Israeli lawyer.

[32] The first of the two letters was addressed to Mr. Javitt’s Israeli lawyer. The face of the letter indicates that it was sent by fax on April 8, 2019. There is no accompanying fax confirmation sheet. The letter indicates that it is “without prejudice”. It advises that Mr. Shiner retained Mr. Cohen’s firm to set aside the default judgment. Mr. Cohen then asks for an update on the status of the proceedings.

[33] The second letter from Mr. Cohen is addressed to me. It also confirms that Mr. Shiner has retained Mr. Cohen’s firm to set aside the default judgment. Mr. Cohen indicates that it is possible to set aside a default judgment if proper service was not effected or if the court is satisfied that there are exceptional circumstances to justify overturning the judgment. He then indicates that:

“According to the Israeli court’s electronic system, the captioned claim is scheduled for a preliminary hearing on 16 May 2019 at the Tel Aviv District Court before the Honourable Justice Hana Flinner.”

[34] There are a number of things of significance in these communications that are relevant to the equities of this case and in particular, relevant to Mr. Shiner’s obligation to move with speed.

[35] First, Mr. Cohen does not indicate when he was retained. Second, he provides no information about whether service was effected in this case. Third he provides no information about what extraordinary circumstances might justify overturning the judgment under Israeli law. Fourth, the hearing on May 16, 2019 is not a hearing to set aside the default judgment; it is a preliminary hearing in the Israeli proceeding that has continued against the other defendants. Fifth, Mr. Cohen does not indicate when he will move to set aside the default judgment, what steps that involves and how much time that will take. The correspondence certainly does not indicate that he will be moving to set aside on May 16.

[36] Given that Mr. Shiner had notice of the default judgment in April 2017 and given that I had directed him on February 14, 2018 “to begin putting in place immediately any steps necessary to respond to” this application, I would have expected Mr. Shiner to move with utmost energy to in Israel to set the judgment aside. There is no suggestion of that in the materials Mr. Shiner has delivered.

[37] In my view, a fair balancing of the equities between the parties would be to grant an order recognizing and enforcing the Israeli judgment but adding a term which provides that, if an Israeli court sets aside the default judgment, then further enforcement of the Israeli default judgment in Ontario would be stayed pending any appeal of the set-aside award in Israel or pending expiry of any appeal period in Israel. My order to recognize and enforce the Israeli judgment in Ontario would be vacated if the set aside of the Israeli judgment is upheld on appeal or if no appeal is taken from any set-aside order in Israel. This would allow Mr. Javitt to proceed as he is prima facie entitled to but would also incent Mr. Shiner to move energetically to protect his rights in Israel if he is in fact minded to do so.

[38] I may be contacted if there are any issues in the finalization of an order to this effect.

Costs

[39] The applicant seeks costs of $12,000. Mr. Shiner does not object to the amount sought. Mr. Shiner’s cost outline came out to just a little more than that. Costs in favour of the applicant are fixed at $12,000 including disbursements and HST.

Date: April 18, 2019 Koehnen J.

Footnotes

[1] In that phraseology I do not mean to suggest that natural justice requires a procedure similar to that of our courts but merely to indicate that a procedure similar to that of Ontario courts is probably more difficult to impugn on the grounds of natural justice than a dissimilar procedure.