Court File and Parties

COURT FILE NO.: CV-18-595574 DATE: 20190107 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Erickson Donis, Plaintiff AND: Paragon International Wealth Management Inc., James Gagliardini, Maryanne Terzis, Ronald Kleinberg, Michael Shumak, Edward Rosenberg and Antonio Palazzola, Respondents

BEFORE: A.J. O’Marra, J.

COUNSEL: Matthew Stroh, for the Plaintiff Anisah Hassan, for the Respondents, James Gagliardini and Paragon International Wealth Management Inc. Daniel McConville, for the Respondent, Maryanne Terzis Liam McNeely, for the Respondent, Ronald Kleinberg Alexandra Grishanova, for the Respondent, Michael Shumak Brendan Monahan, for the Respondent, Antonio Palazzola

HEARD: November 13, 2018 - Given orally.

COSTS ENDORSEMENT

[1] The plaintiff Erickson Donis brought a motion to obtain a worldwide Mareva injunction to freeze the assets of the responding parties and/or in the alternative, an order for interim possession of a “jewellery set”, comprised of identified diamonds to be held by the Toronto Police Service pending the conclusion of outstanding criminal matters involving the responding parties, with the exception of the corporate entity Paragon International Wealth Management Inc. (“Paragon International”) and Maryanne Terzis, alleged to have committed multiple counts of fraud involving transactions of coloured diamonds.

[2] The plaintiff alleges that the responding parties, with the exception of Maryanne Terzis, were involved in a fraudulent scheme to deprive him of his investment and diamonds, over which he claims ownership, contained in the “jewellery set”.

[3] The plaintiff’s motion for the Mareva injunction was dismissed having failed to satisfy the criteria set out in RJR-Macdonald Inc. v. Canada (Attorney General), 1995 64 (SCC), [1995] 3 SCR 199. However, the order for interim possession of the jewellery set was made on satisfying the criteria set out in Rule 44.01 of the Rules of Civil Procedure for the “jewellery set” to be held by the Toronto Police Service pending completion of the outstanding criminal charges against several of the respondents.

[4] In the result, the plaintiff and respondents obtained partial success on the motions. At the conclusion of the hearing the parties were invited to seek agreement amongst themselves as to costs, failing which they were invited to make submissions. No agreement was reached and each have submitted cost claims. The plaintiff asserts that his success on the motion was greater than that of the respondents, and conversely so too do the respondents.

[5] The plaintiff seeks costs on a substantial indemnity basis in the amount of $37,782.41, inclusive of HST and disbursements, citing in what he characterizes as the defendants’ “reprehensible conduct” in not turning over the jewellery set to him when requested.

[6] Counsel for Paragon International and Gagliardini claim costs thrown away in preparing costs, plaintiff not having agreed to a no costs order as a result of divided success, and because the plaintiff knows that the civil claim as against Gagliardini is stayed as a bankrupt pursuant to s. 69.3 of the Bankruptcy and Insolvency Act RSC 1985. Costs claimed on behalf of Paragon International and Gagliardini are $1,652.63 with HST on a substantial indemnity basis.

[7] Counsel for Maryanne Terzis asserts complete success on the motions having successfully opposed the overbroad worldwide Mareva injunction and having taken no position with respect to the interim possession of the jewellery set motion. Counsel seeks costs on a partial indemnity basis in the amount of $8,697.95 inclusive of HST and disbursements.

[8] It was only counsel for Paragon International, James Gagliardini and Maryanne Terzis on the motion who responded with materials and facta. It was only counsel for Paragon International and Gagliardini who opposed the interim possession order of the jewellery set. The other respondents appeared and adopted their positions and made only brief oral submissions.

[9] Counsel for Michael Shumak seeks costs in the amount of $1,466.17 for opposing only the Mareva injunction motion.

[10] Similarly, counsel for Ronald Kleinberg seeks costs on a partial indemnity basis in the amount of $1,337.19 on the basis that his client was more successful than the plaintiff on the motion as the blanket request for a Mareva injunction was the predominate issue of the two orders sought by the plaintiff. In the alternative, counsel submits that the parties ought to assume their own costs and the court should forego awarding costs considering how success was divided.

[11] Counsel for Antonio Palazzola seeks partial indemnity costs in the amount of $2,101.80 on the basis that the plaintiff was unsuccessful on the predominate issue, a matter of greater complexity than the question of interim possession of the jewellery set. Further, he contends that the plaintiff’s objection to his participation in the motion having been noted in default was unreasonable. I find no merit to the position in that counsel was permitted to appear and make oral submissions.

[12] Pursuant to s. 131(1) of the Courts of Justice Act, costs of and incidental to a proceeding are at the discretion of the court. The factors the court should consider in its exercise of discretion in the award of costs are set out in Rule 57 of the Rules of Civil Procedure. In the exercise of my discretion to award costs the court is to consider an amount that is fair and reasonable for the unsuccessful party to pay, (see Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 OR (3d) 291 (CA) at para. 26).

[13] In considering the plaintiff’s success on the interim possession motion I note that it was only the parties Paragon International and Gagliardini who responded in opposition to it. In their outline of costs to respond to the entire matter, counsel claims substantial indemnity costs of $11,105.65, an amount that is less than one-third of the costs sought by the plaintiff for his partial success for the interim possession order.

[14] Considering the factors as set out in Rule 57.01 I find the costs award sought by the plaintiff to be excessive. Several of the respondents submit that where success is substantially divided the general rule is that no costs are awarded. I agree.

[15] In the result, the parties shall bear their own costs on the motion.

A.J. O’Marra J.

Date: January 7, 2019