Court File and Parties

2020 ONSC 119 Court File No.: 04-CV-026293 Date: 2020/01/09

Ontario Superior Court of Justice

Between:

OZ Merchandising Inc., Plaintiff – and – Canadian Professional Soccer League Inc., Eastern Ontario District Soccer Association, The Ontario Soccer Association, Canadian Soccer Association, Canadian Soccer League Inc., CSL Association Inc., Ira Greenspoon, Vincent Ursini, Cary Kaplan, and Stan Adamson, Defendants

Counsel: Nicholas Karnis and Rose A. Faddoul, for the Plaintiff Jordan Goldblatt, for the Defendants Eastern Ontario District Soccer Association and The Ontario Soccer Association Andrew K. Lee, for the Defendant Canadian Soccer Association

Heard: In writing

Reasons for Decision on Costs

RYAN BELL j.

Overview

[1] OZ Merchandising Inc. claimed against the Eastern Ontario District Soccer Association (“EODSA”), The Ontario Soccer Association (“OSA”), and the Canadian Soccer Association (“CSA”) for negligence and intentional interference with its economic interests. The action proceeded to trial before a jury on April 15, 2019. I discharged the jury on June 11, 2019. [1] On August 27, 2019, I dismissed all of OZ Merchandising’s claims against EODSA, OSA, and CSA. [2]

[2] Counsel agreed that costs would be dealt with in writing. I directed that submissions were not to exceed five pages, excluding any bills of costs and authorities. I have received the parties’ costs submissions. OZ Merchandising requests leave to be permitted to file submissions in excess of five pages. Its submissions are nine pages. I have reviewed and considered the entirety of the submissions and documentation filed on behalf of all parties.

Positions of the Parties

[3] EODSA and OSA seek an order fixing counsel fees in the amount of $460,395.59 (partial indemnity costs to August 17, 2017, the date of their offer to settle, and substantial indemnity costs thereafter), and an order fixing disbursements in the amount of $128,056.01, for a total amount of $599,451.60. EODSA and OSA also request that their costs of the trial in the amount of $188,797.91 be jointly and severally awarded against OZ Merchandising and Omur Sezerman.

[4] CSA seeks an order fixing costs in the amount of $281,993.89 (partial indemnity fees to September 20, 2017, the date of its offer to settle, and substantial indemnity costs thereafter), inclusive of disbursements. CSA also seeks an order that Mr. Sezerman be jointly and severally liable with OZ Merchandising for CSA’s costs. CSA’s trial costs are $132,330.77, inclusive of fees calculated on a substantial indemnity basis and disbursements.

[5] OZ Merchandising’s primary position is that the determination of costs should be deferred pending the outcome of its appeal or, in the alternative, until the claims against the remaining defendants have been disposed of on a final basis. In the further alternative, OZ Merchandising submits that the payment of costs should be deferred because this is an appropriate case for a Bullock or a Sanderson award. If the determination of costs is not deferred, OZ Merchandising submits that the circumstances warrant an award of partial indemnity costs to the plaintiff until the date of service of these defendants’ offers to settle, with costs to these defendants on a partial indemnity basis thereafter.

Issues

[6] The issues are the following:

i) Should my determination of costs be deferred pending the outcome of the appeal? ii) Should my determination of costs be deferred pending the disposition of the claims against the remaining defendants? iii) Is this an appropriate case for a Bullock or Sanderson order? iv) What is the appropriate scale of costs? v) What is the appropriate quantum of costs? vi) Should costs be awarded against OZ Merchandising and Mr. Sezerman on a joint and several basis?

Procedural History and Motions at Trial

[7] A brief overview of the relevant procedural history of the action and the various motions at trial is necessary to situate the analysis that follows.

[8] I begin with a summary of the relevant procedural history:

• The notice of action was issued on January 2, 2004. The original plaintiffs were OZ Merchandising, Ottawa Wizards, OZ Dome Soccer Club, and Omur Sezerman. The original defendants were the Canadian Professional Soccer League Inc. (“CPSL”), EODSA, OSA, CSA, Vincent Ursini, Stan Adamson, Harry Gauss, and Bruno Ierullo.
• The statement of claim was filed on February 2, 2004.
• CSA filed its statement of defence in March 2004, and EODSA and OSA filed their defence in April 2004.
• The action against Messrs. Ursini, Adamson, Gauss, and Ierullo was dismissed in October 2005.
• In May 2008, the plaintiffs to the original action served a fresh amended statement of claim. Further amendments followed, including a “Further Fresh Amended Statement of Claim” served in December 2012, which added the Canadian Soccer League Inc., and Messrs. Greenspoon, Ursini, Kaplan, and Adamson as defendants; a “Further Further Fresh Amended Statement of Claim” served in June 2016; and a “Fresh Statement of Claim” amended in accordance with the order of Hackland J., dated July 12, 2018. EODSA, OSA, and CSA defended the claim in its various iterations, as required.
• On July 13, 2010, Master MacLeod, as he then was, established a timetable for the action. The initial timetable required that the action be set down for trial on or before December 30, 2011. The timetable was amended on consent on several occasions to extend the date by which the action was to be set down for trial.
• In August 2010, the original plaintiffs served a jury notice.
• On January 7, 2015, Master Roger, as he then was, ordered that all undertakings and refusals motions be filed by no later than November 30, 2015.
• On August 8, 2015, Master MacLeod granted leave to Mr. Sezerman to withdraw as a plaintiff on terms, including that “[h]e will remain liable to the defendants for any costs awarded against either Ottawa Wizards or OZ Dome Soccer Club unless any such costs awards are paid.” I will return to this term in my discussion of whether Mr. Sezerman should be held jointly and several liable with OZ Merchandising for the costs of the trial.
• On October 23, 2015, Master MacLeod fixed an eight-week trial, with judge and jury, for October 16, 2017.
• In February 2016, Master Fortier dismissed the refusals motion of OZ Merchandising. Master Fortier found that the motion was in breach of Master Roger’s January 7, 2015 order. Parfett J. dismissed OZ Merchandising’s appeal of Master Fortier’s order.
• On August 17, 2017, EODSA and OSA served their offer to settle.
• On September 20, 2017, CSA served its offer to settle.
• On September 27, 2017, Master Fortier dismissed OZ Merchandising’s motion to amend its statement of claim. In her reasons, Master Fortier observed that “[t]he Plaintiff is seeking to amend its claim on the eve of trial in one of this jurisdiction’s longest running civil litigation files to plead new causes of action for claims that amount to fraud and conspiracy…The proposed amendments do not contain material facts but are rather allegations based on speculation and assumptions.” [3] Master Fortier also observed that “it is the Plaintiff’s 8th attempt to amend the Statement of Claim. The Plaintiff cannot be allowed to keep reinventing the claim.” [4]
• On September 27, 2017, CSA served its request to admit. OZ Merchandising provided no response to the request.
• The trial did not proceed on October 16, 2017 because “the plaintiff was not ready to proceed.” [5] This resulted from “an ill-advised last minute attempt to amend the statement of claim (for the 8th time) and medical issues with the two in-house counsel who have carriage of this action.” [6]
• A new, eight-week trial was set for April 15, 2019.
• On July 11, 2018, Hackland J. dismissed the plaintiff’s appeal from the order of Master Fortier dismissing the plaintiff’s motion to amend the statement of claim.
• In November 2018, OZ Merchandising moved to amend its statement of claim to allege (i) the vicarious liability of OSA and CSA for the acts of the CPSL; and (ii) to increase the claim for transfer fees from $100,000 to $42,000,000. On December 12, 2018, Hackland J. dismissed the plaintiff’s motion to amend, but permitted certain minor changes and edits to the pleading to proceed. [7]
• On February 21, 2019, the Divisional Court quashed the plaintiff’s appeal from the decision of Hackland J. for lack of jurisdiction and refused to exercise its discretion to transfer the appeal to the Court of Appeal. A motion by the plaintiff to extend the time for filing its notice of appeal was dismissed by Tulloch J.A. on March 28, 2019. Leave to appeal to the Court of Appeal from the Divisional Court’s order was refused on July 8, 2019. [8]

[9] I turn next to the conduct of the trial. The jury was selected on April 15, 2019. Thereafter, I heard a number of motions, including the following:

• OZ Merchandising’s motion to compel the production of certain documents listed in schedule B of the affidavit of documents of EODSA and OSA, documents over which these defendants claimed privilege. I dismissed the plaintiff’s motion, with costs to be paid by the plaintiff in any event of the cause.
• EODSA and OSA’s motion regarding whether OZ Merchandising would be permitted to adduce at trial (i) EODSA’s proposal to its creditors under the Bankruptcy and Insolvency Act; and (ii) evidence relating to the default issues against the remaining defendants. I heard and determined this motion together with the motion by EODSA, OSA, and CSA regarding the scope of the claims OZ Merchandising would be permitted to advance at trial. I ruled in favour of these defendants and ordered as follows: that no evidence would be permitted to be led at trial regarding EODSA’s bankruptcy proposal; that no evidence would be led at trial with respect to the claims against the defendants noted in default; that the claim based on the group enterprise theory of liability would not go before the jury; and that OZ Merchandising would not be permitted to advance claims relating to “unnamed other players” at trial. I ordered that the costs of these motions would be to EODSA, OSA, and CSA in any event of the cause.
• Cary Kaplan’s motion that he be permitted to file written submissions on the law as it relates to his personal liability. I ordered that Mr. Kaplan’s defence be restored and that he be permitted to file written submissions as requested. I made no order as to the costs of Mr. Kaplan’s motion.
• OZ Merchandising’s motion for my recusal as the trial judge, alleging a reasonable apprehension of bias. I dismissed the motion, with costs to EODSA, OSA, and CSA in any event of the cause. In my ruling, I noted that the submissions made by plaintiff’s counsel were largely an effort to relitigate prior motions.
• OZ Merchandising’s motion for production of certain documents from OSA. I dismissed the motion for several reasons, including that it constituted a collateral attack on Master Fortier’s decision of February 16, 2017 and Parfett J.’s dismissal of the plaintiff’s appeal from that decision. I ordered costs of the motion to OSA in any event of the cause.
• OZ Merchandising’s motion for directions on the portions of the plaintiff’s opening statement that “need[ed] to be removed” from the draft. Counsel for OZ Merchandising confirmed that, without the requested rulings, he had been instructed not to proceed with an opening statement. I determined that the approach proposed would not be workable and dismissed the motion.
• OZ Merchandising’s motion for a mistrial. I dismissed the motion and awarded costs to EODSA, OSA, and CSA on a substantial indemnity basis, payable forthwith. In my reasons, I noted that the plaintiff’s motion was, in large measure, a repeat of the recusal motion and an effort by the plaintiff to relitigate certain issues on the preliminary motions. I found that the plaintiff’s motion was an abuse of process, frivolous, and vexatious.
• OZ Merchandising’s motion for reconsideration and leave to amend. I dismissed the motion with costs to EODSA, OSA, and CSA in any event of the cause. I observed that the motion was an effort to relitigate, in some instances for the fourth time, previous rulings with which the plaintiff did not agree. I ruled that the motion to amend was a direct attack on Hackland J.’s decision of December 12, 2018.

[10] On June 3, 2019, after the evidence was in, EODSA, OSA, and CSA moved for non-suit, and a determination as to whether a duty of care existed in law between each defendant and the plaintiff. The parties agreed that I should reserve my decision on these matters until after the jury rendered its verdict.

[11] Following the plaintiff’s closing address, EODSA, OSA, and CSA moved to strike the jury. I discharged the jury on June 11, 2019.

[12] My reasons for judgment were released on August 27, 2019. The claims against the remaining defendants are still outstanding, as is the matter of costs against certain of the remaining defendants. In my reasons, I directed counsel for the plaintiff to schedule a case conference with respect to these matters. No case conference has been scheduled.

Issue 1: The Plaintiff’s Appeal and Costs of the Proceeding

[13] OZ Merchandising submits that the determination of the costs of the proceeding against these defendants should be postponed until its appeal has been determined. I disagree. In my view, the appropriate time to determine and fix the costs of an action is following the disposition at first instance – when the matter remains fresh in the minds of counsel and the trial judge.

Issue 2: Claims Against the Remaining Defendants

[14] OZ Merchandising submits that the determination of the costs of this trial against these three defendants should await the disposition of the claims against the remaining defendants. Again, I disagree.

[15] The claims against the remaining defendants (noted in default according to the trial record) are distinct from those that were advanced against EODSA, OSA, and CSA. The causes of action are different, and the underlying facts are different. OZ Merchandising alleges that, by ceasing to operate the CPSL, and by transferring the business of the CPSL to the Canadian Soccer League and the CSL Association, these corporations and their directors (defined as Messrs. Greenspoon, Ursini, Kaplan, and Adamson) carried on and conducted the business of the corporations in a manner that is oppressive and unfairly prejudicial to, and that unfairly disregards the plaintiff’s interests, contrary to s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16.

[16] OZ Merchandising also claims against the CPSL, the Canadian Soccer League, and the CSL Association for negligent and/or deliberate misrepresentations in soliciting the plaintiff to enter a team in the CPSL. It claims as well for “breaches of legal duties.” OZ Merchandising claims that it was denied the right to make submissions and the right to vote at league meetings in respect of matters that were decided in ways that unfairly affected the plaintiff’s interests.

[17] The claims against EODSA, OSA, and CSA were claims in negligence and claims based on the unlawful means tort. The claims against these defendants were only in relation to international transfer certificates, the invitational tournament application, and the operation of soccer leagues, rentals, and related activities at the OZ Dome facilities. The claims asserted against EODSA, OSA, and CSA were not based on vicarious liability. There was no pleading of agency, a point conceded by counsel for the plaintiff during arguments on the preliminary motions relating to evidentiary issues and the scope of the trial. There was no claim against EODSA, OSA, or CSA for the revocation of the Ottawa Wizards’ franchise by the CPSL.

[18] In support of its position that the costs of these proceedings against these defendants should be determined only after the claims against the remaining defendants are addressed on a final basis, OZ Merchandising relies on the fact that EODSA and OSA crossclaimed against the CPSL. The crossclaim was solely for contribution and indemnity in the event that EODSA and OSA were determined to be liable to OZ Merchandising. I expressly rejected the plaintiff’s group enterprise theory of liability advanced in its statement of claim and on at least three motions before me. In addition, in the course of submissions on the evidentiary issues and scope of trial motions, counsel for OZ Merchandising conceded that the deemed admissions of the defendants noted in default (including the CPSL) would have no application to EODSA, OSA, and CSA. The mere fact that a crossclaim for contribution and indemnity was made against the CPSL is no justification to defer the determination of the costs of these proceedings.

[19] As the successful parties at trial, EODSA, OSA, and CSA are presumptively entitled to their costs. It would not be fair or reasonable to defer the issue of the costs of this trial and the proceedings against these defendants until the determination of unrelated claims against the remaining defendants.

Issue 3: Bullock or Sanderson Order

[20] A Bullock order directs an unsuccessful defendant to reimburse the plaintiff for the recovered costs of a successful defendant, while a Sanderson order directs that the payment go directly to the successful defendant. The rationale behind both orders is the same: where the allocation of responsibility is uncertain, usually because of interwoven facts, it is often reasonable to proceed through trial against more than one defendant. In those circumstances, a Bullock or a Sanderson order is appropriate (Rooney (Litigation Guardian of) v. Graham (2001), 53 O.R. (3d) 685 (Ont. C.A.), at para. 6).

[21] There is no blanket rule that a Bullock or a Sanderson order can never be made when the causes of action are independent, or when separate actions are instituted. The proper approach is to consider each case in context. There may be times when the causes of action are independent or the actions separate, but it is nevertheless fair that the responsible defendant be called upon to pay for the inclusion of others in the trial proceedings (Rooney, at para. 8). In Rooney, the Court of Appeal for Ontario concluded the trial judge erred in failing to recognize that, despite multiple causes of action and separate actions, the plaintiffs were in substance pursuing two potential perpetrators of negligent conduct. In that case, where the plaintiffs had acted reasonably throughout, the Court of Appeal awarded a Sanderson order, stating at para. 17 that,

[f]airness dictates that the party found to be responsible pay for the consequences of her negligent conduct; those consequences being in part the trial that was held in order to determine who, in fact, was responsible for the collision.

[22] There are at least three reasons why neither order is appropriate in this case. First, although the plaintiff submits that the defendants noted in default are liable for the plaintiff’s losses, their liability, if any, remains to be determined and should not be assumed. In particular, because of my ruling at the outset of the trial, Mr. Kaplan is no longer in default and is entitled to provide written submissions in respect of the claims against him.

[23] Second, as I have already discussed, the claims against the remaining defendants are different than those that were asserted against EODSA, OSA, and CSA. The facts are not interwoven.

[24] Third, and related to the second reason, whatever the outcome of the default judgment proceedings, because the underlying facts giving rise to the causes of action against the remaining defendants differ from the facts underlying the very different causes of action against EODSA, OSA, and CSA, it cannot be said that there is a “responsible defendant” that should be called upon to pay for the inclusion of others in the trial proceedings. The fairness point that arose in Rooney simply does not apply in this case.

Issue 4: Scale of Costs

[25] Elevated costs may be warranted in two circumstances. The first is where, as a result of an offer to settle under r. 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, substantial indemnity costs are explicitly authorized. The second circumstance is where the unsuccessful party has engaged in behaviour worthy of sanction. Both circumstances are engaged in this case.

(i) Offers to Settle

[26] EODSA and OSA served their offer on August 17, 2017: they offered to settle the plaintiff’s claim against them on the basis that they would pay $326,790 in exchange for a release and a Pierringer agreement.

[27] CSA served its offer on September 20, 2017. In it, CSA offered to settle the plaintiff’s claim against it based on a payment of $150,000 in exchange for a full and final release.

[28] OZ Merchandising agrees that both offers to settle were significant.

[29] Manifestly, these defendants achieved a better result at trial than their respective offers to settle.

[30] Rule 49.10(2) sets out the costs consequences of a plaintiff’s failure to accept a defendant’s offer to settle:

(2) Where an offer to settle, (a) is made by a defendant at least seven days before the commencement of the hearing; (b) is not withdrawn and does not expire before the commencement of the hearing; and (c) is not accepted by the plaintiff, and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

[31] OZ Merchandising submits that the appropriate application of r. 49.10(2) to this case should result in the plaintiff being awarded its costs up to the dates of the offers to settle, and these defendants being awarded their partial indemnity costs thereafter. OZ Merchandising also relies on r. 57.01(2) in support of its position. Rule 57.01(2) permits the court to award costs against a successful party “in a proper case.” It is of no assistance to the plaintiff here.

[32] OZ Merchandising’s interpretation of r. 49.10(2) is inconsistent with the Court of Appeal for Ontario’s decision in S. & A. Strasser Ltd. v. Richmond Hill (Town) (1990), 1 O.R. (3d) 243 (C.A.). As the Court of Appeal observed in that case, r. 49.10(2) assumes that the plaintiff recovered a judgment of some value. Without the rule, that plaintiff would normally recover partial indemnity costs. With the rule, the plaintiff is given a “bonus” for an offer by the defendant that is lower than the plaintiff’s recovery. This is done by elevating costs to a substantial indemnity basis following the defendant’s offer. The defendant that makes an offer is given a “bonus” if its offer is higher than the plaintiff’s recovery at trial. In that case, the defendant pays no costs following the offer and, in addition, recovers its costs on a partial indemnity scale for that period of time (S. & A. Strasser, at p. 3).

[33] This rationale does not apply where the plaintiff is totally unsuccessful. As noted by the Court of Appeal,

without the rule, the defendant is normally entitled to party-and-party costs. The words in the rule “and the plaintiff obtains a judgment as favourable” make it clear that the rule has no application where the plaintiff fails to recover any judgment (S. & A. Strasser, at p. 3).

[34] In S. & A. Strasser, the plaintiff failed to accept a significant offer to settle by the defendant, and the action was subsequently dismissed. The Court of Appeal awarded the defendant partial indemnity costs to the date of the offer and substantial indemnity costs thereafter.

[35] I see no reason to adopt a different approach in this case. These defendants made significant offers to settle that were not accepted by the plaintiff. The plaintiff recovered no judgment at trial. As the successful parties, these defendants are entitled to their partial indemnity costs up to the date of their respective offers, and, based on the general principles set out in r. 57.01, substantial indemnity costs thereafter (S. & A. Strasser, at p. 6). This approach is consistent with the purpose of r. 49: to encourage parties to make reasonable offers to settle and to consider such offers seriously.

(ii) OZ Merchandising’s Litigation Conduct at Trial

[36] Where a party has engaged in conduct that is reprehensible, scandalous, or outrageous, a court may sanction this conduct through an award of elevated costs (Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 28). Substantial indemnity costs are to be awarded “in rare and exceptional cases to mark the court’s disapproval of the conduct of the party in the litigation” (Hunt v. TD Securities Inc. (2003), 66 O.R. (3d) 481 (Ont. C.A.), at para. 123).

[37] In my view, this is one of those rare and exceptional cases. OZ Merchandising’s conduct during the trial was egregious and worthy of sanction. That conduct included:

i) the plaintiff’s motion seeking my recusal because it disagreed with my prior rulings – in fact, while the motions were under reserve, plaintiff’s counsel wrote to the court to advise that it was considering a motion for recusal or mistrial depending on the outcome of the motions; ii) the plaintiff’s collateral attack on Master Fortier’s decision, upheld by Parfett J., through its motion for production of certain documents from OSA; iii) the plaintiff’s frivolous and vexatious motion for a mistrial based on irrelevant grounds; iv) the plaintiff’s motion for reconsideration and leave to amend – the former being an effort to relitigate previous rulings with which the plaintiff did not agree, and the latter being a direct attack on Hackland J.’s decision; v) the plaintiff’s decision to deliberately ignore previous evidentiary rulings made during the trial; [9] vi) statements made during the trial by counsel for OZ Merchandising, and by Mr. Sezerman, which resulted in a number of mid-trial instructions to the jury; [10] and vii) the misstatements in the plaintiff’s closing address – the vast majority of which were “blatant transgressions” [11] – which resulted in the jury being discharged.

[38] It also bears repeating that OZ Merchandising’s claims against EODSA, OSA, and CSA included claims for intentional interference with its economic interests. OZ Merchandising alleged that these defendants’ intentional wrongful conduct included the “deliberate disregard” of the terms of Mr. Mponda’s and Mr. Yobe’s contracts; “improperly” telling interested teams not to participate in the proposed invitational tournament; and “blacklist[ing] OZ Dome events.” There was no case for any of these defendants to meet in relation to the plaintiff’s claims based on the unlawful means tort. [12] OZ Merchandising pursued unfounded allegations of improper conduct against EODSA, OSA, and CSA. Unfounded allegations of intentional misconduct by another party may by themselves warrant the imposition of substantial indemnity costs (Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 26).

[39] I have no hesitation in concluding that OZ Merchandising’s litigation conduct, including its pursuit of unfounded allegations of improper conduct, is deserving of judicial sanction. Even if these defendants had not served r. 49 offers to settle, I would have awarded them their substantial indemnity costs from the commencement of trial.

Issue 5: Quantum of Costs

[40] I have reviewed the bills of costs and the supporting documentation provided by EODSA, OSA, and CSA. I am satisfied that the costs and disbursements claimed do not overlap with previously recovered fees and disbursements.

[41] I find that the rates claimed for counsel are reasonable. I also find that the amount of time spent by counsel is reasonable, having regard to the fact that the litigation lasted fifteen years and culminated in a nine-week jury trial.

[42] I am also satisfied that the disbursements claimed by these defendants were properly incurred, including the two experts retained by EODSA and OSA.

[43] At this juncture, it is necessary for me to address certain statements made in the plaintiff’s submissions on costs. First, in relation to the importance of the issues, OZ Merchandising submits that the issues were “of importance to the administration of professional soccer across the country,” in addition to being important to the plaintiff. This statement is akin to statements made by counsel in the plaintiff’s closing address that improperly invited the jury to consider the consequences of its verdict.

[44] Second, OZ Merchandising fails to distinguish between these defendants and the remaining defendants when it submits that “fault for the 14 years to set this matter down for trial falls to all parties.” In awarding costs to EODSA, OSA, and CSA as a result of the adjournment of the trial in October 2017, Hackland J. was clear that the trial did not proceed because OZ Merchandising was not ready to proceed, and that “in the final analysis, it is the plaintiff’s responsibility to bring its case to trial within a reasonable time frame.” [13]

[45] Third, OZ Merchandising submits that EODSA attempted to escape liability by filing for bankruptcy. There is nothing before me to support this allegation. I ruled that EODSA’s bankruptcy proposal was irrelevant to the issues at trial.

[46] Fourth, OZ Merchandising alleges that the CPSL formed successor corporations to avoid liability. This is nothing more than a bald allegation. It is also irrelevant to my determination of costs in relation to these defendants.

[47] Fifth, OZ Merchandising denies that it failed to respond to CSA’s “extensive Request to Admit.” At the same time, however, it admits that its counsel was not available to review and respond to the request. The request to admit was not extensive. It set out 35 facts and requested that the authenticity of fifteen documents be admitted. I recognize that the parties did work cooperatively to prepare a joint electronic book of documents.

[48] Sixth, OZ Merchandising submits that the defendants were successful in having the issues for trial “whittled down significantly” such that the time necessary for trial was drastically reduced. This is incorrect. The time set aside (twice) for this judge and jury trial was eight weeks. In the end, the trial spanned nine weeks. The issues at any trial are determined by the pleadings, and these defendants expected and were entitled to defend based on the pleadings, not based on what the plaintiff wanted its claim to say. It was the plaintiff that repeatedly sought to redefine its claim against these defendants.

[49] Seventh, OZ Merchandising maintains that it “fought hard against…CSA’s motion to strike the jury notice prior to trial.” There was no such motion.

[50] The costs fixed by the court “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant” (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), at para. 24). OZ Merchandising’s own partial indemnity fees and disbursements total $853,842.37, and its substantial indemnity fees and disbursements total $1,128,702.64. Given the magnitude of its own fees and disbursements, OZ Merchandising cannot have been taken by surprise with the quantum of costs now claimed by EODSA, OSA, and CSA.

[51] In the circumstances, and having regard to the principles enunciated in Boucher, as well as the factors listed in r. 57.01, I find that the fees and disbursements claimed by these defendants are fair and reasonable.

Issue 6: Costs Against Mr. Sezerman Personally

[52] The remaining issue is whether Mr. Sezerman should be jointly and severally liable with OZ Merchandising for some or all of these defendants’ costs. For the following reasons, I have concluded that Mr. Sezerman should be jointly and severally liable with the plaintiff for the costs of the trial.

[53] Superior courts have the inherent jurisdiction to order non-party costs in situations where the non-party has initiated or conducted litigation in a manner that amounts to an abuse of process: “[s]ituations of gross misconduct, vexatious conduct, or conduct that undermines the fair administration of justice…can be envisioned” (1318847 Ontario Ltd. v. Laval Tool & Mould Ltd., 2017 ONCA 184, 134 O.R. (3d) 641, at paras. 66, 76). Strathy C.J.O. described the policy rationale for such an award as follows:

[S]afeguarding public confidence in the fair administration of justice depends on preserving the availability of court facilities for justifiable proceedings and not permitting the costs of proceedings to be needlessly inflated, particularly at a time when delays and costs of litigation are so concerning from the perspective of access to justice (1318847 Ontario Ltd., at para. 87).

[54] Mr. Sezerman’s conduct throughout the course of the trial can fairly be described as conduct which “undermines the fair administration of justice.” His conduct served to inflate the litigation costs for all parties. Mr. Sezerman bears direct responsibility for instructing counsel to give a closing address to the jury that was so improper it resulted in the jury being discharged. I have little doubt that the plaintiff’s closing address was crafted in large part by Mr. Sezerman given counsel’s request that Mr. Sezerman be permitted to give OZ Merchandising’s closing address to the jury himself, contrary to r. 52.07(4). And, in response to a query from the court, it was Mr. Sezerman who advised counsel as to the anticipated length of the plaintiff’s closing address.

[55] Mr. Sezerman was granted leave to sit at counsel table. He then proceeded to abuse that privilege. In the absence of the jury, Mr. Sezerman repeatedly spoke over counsel for the defendants during their submissions. He also spoke over the court. At least twice, he referenced his intention to appeal. He drafted questions for counsel during the course of the trial. During the voir dire on one expert’s qualifications, Mr. Sezerman audibly instructed counsel to “just ask the question” and stated, “we will ask them, every one of them,” in blatant disregard for my rulings that the questions were irrelevant to the issue of the expert’s qualifications.

[56] During his evidence, Mr. Sezerman made statements regarding the relationship between EODSA, OSA, and CSA. He was on notice that these comments ought not to be made. He also made statements about a “cover-up.” He provided his own opinion about what was “legally right or wrong” and what was “morally right or wrong.” Each such statement resulted in a mid-trial instruction to the jury. Mr. Sezerman made it clear on cross-examination that he would follow his own conscience and ignore directions from the court.

[57] The plaintiff now attempts to excuse Mr. Sezerman’s behaviour as an effort to “assist his counsel who had very little knowledge of the case as he came on at the eve of trial.” I reject this submission. Mr. Sezerman’s conduct at trial cannot be fairly described as merely assisting counsel. He controlled counsel to the point where the jury had to be discharged.

[58] The plaintiff emphasizes the “potential pitfalls and misunderstandings which may accompany the interpretation of cross-cultural communication” and submits that as “a naturalized immigrant, [that] could make it rather difficult for a jury and the Court to assess the true intent of [Mr. Sezerman’s] conduct.” With due respect, the repeated attempts to relitigate issues already determined, the repeated attempts to elicit evidence previously ruled irrelevant, the motion for recusal, the motion for mistrial, and the blatant transgressions in the plaintiff’s closing address to the jury resulting in their discharge, is not behaviour that is open to interpretation or question. It is behaviour that directly serves to undermine the fair administration of justice in this province.

[59] EODSA and OSA describe Mr. Sezerman as the “puppet master” for the plaintiff’s counsel throughout the trial. I agree with this characterization. As such, Mr. Sezerman bears responsibility for the plaintiff’s litigation conduct at trial – conduct I have determined to be egregious and worthy of the court’s sanction.

[60] OZ Merchandising submits that an order making Mr. Sezerman jointly and severally liable for a portion of the costs would “effectively change” the order of Master MacLeod granting leave to Mr. Sezerman to withdraw as a plaintiff “without the benefit of an appeal.” This is incorrect. Master MacLeod’s order does not operate as a constraint on my determination of liability for the costs of the trial.

[61] Therefore, there will be an order that Mr. Sezerman is jointly and severally liable with OZ Merchandising for the costs of the trial.

Summary

[62] I make the following orders:

i) Costs are to be paid by OZ Merchandising to EODSA and OSA in the total amount of $599,451.60, inclusive of disbursements and taxes. Mr. Sezerman shall be jointly and severally liable with OZ Merchandising for the trial costs of EODSA and OSA in the amount of $188,797.91. ii) Costs are to be paid by OZ Merchandising to CSA in the total amount of $281,993.89, inclusive of disbursements and taxes. Mr. Sezerman shall be jointly and severally liable with OZ Merchandising for CSA’s trial costs in the amount of $132,330.77.

Madam Justice Robyn M. Ryan Bell

Released: January 9, 2020

Footnotes

[1] Reasons reported at OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2019 ONSC 3882, 35 C.P.C. (8th) 352 [OZ Merchandising 2019, Reasons on Motions to Strike the Jury].

[2] Reasons reported at OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2019 ONSC 5017 [OZ Merchandising 2019, Reasons for Judgment].

[3] Master Fortier’s endorsement released September 27, 2017 (unreported), at para. 26.

[4] Ibid., at para. 29.

[5] OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., et al, 2018 ONSC 1980 [OZ Merchandising 2018], at paras. 2 and 7.

[6] Ibid., at para. 7.

[7] OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2018 ONSC 7468.

[8] OZ Merchandising 2019, Reasons for Judgment, at para. 12, n. 7.

[9] OZ Merchandising 2019, Reasons for Judgment, at para. 13.

[10] OZ Merchandising 2019, Reasons on Motions to Strike the Jury, at para. 14.

[11] Ibid., at para. 19.

[12] OZ Merchandising 2019, Reasons for Judgment, at paras. 91, 111, and 133.

[13] OZ Merchandising 2018, at para. 1.