Court File and Parties

COURT FILE NO.: CV-18-00596927-0000 CV-20-636500-0000 DATE: 20200805 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ISAAC (“IKE”) PERLMUTTER and LAURA PERLMUTTER, Applicants AND: DAVID SMITH, Respondent AND HAROLD PEERENBOOM, Applicant AND DAVID SMITH, Respondent

BEFORE: Lederer, J.

COUNSEL: Winston K. Fogarty and Pavle Masic, Counsel, for the Applicants, Isaac and Laura Perlmutter Jordan Goldblatt and Jordan Katz, Counsel, for the Respondent, David Smith Jerome R. Morse and David Trafford, Counsel, for the Applicant Harold Peerenboom

HEARD: In Writing

Endorsement

[1] This was an application to enforce two Letters of Request issued by a court in Florida. Both were directed to David Smith, one on behalf of Harold Peerenboom and one on behalf of Harold Peerenboom in company with Isaac Perlmutter and his wife Laura Perlmutter.

[2] They arise out of the same circumstances. Harold Peerenboom alleges he was the victim of a hate mail campaign orchestrated by Isaac Perlmutter. They were dealt with together. This was treated as a single application resulting in one order dealing with both of the Letters of Request.

[3] The campaign is said to have been undertaken as part of a dispute between Isaac Perlmutter and Harold Peerenboom founded in their disagreement over the management of a “private” community in which they both owned homes, in particular concerning its tennis facility. It is alleged that David Smith was a party to the effort to discredit Harold Peerenboom to his neighbours in Florida and in Canada as well, as to clients of a business he owns, all in an effort to have him sell his home in Florida and move elsewhere. David Smith has been identified as the sender of a package said to have been intended as part of the material that made up the hate mail. The package was sent by courier from a store, in Toronto, operated by the courier service.

[4] Isaac Perlmutter has acknowledged that during June 2011 he sent letters that form part of what is said to be the hate mail campaign. But he says it was not hate mail, it was just the result of an internet search he undertook when Harold Peerenboom became active in the affairs of the community in which they both live. As Isaac Perlmutter would describe it, this material dealt, in large part, with the activities of Harold Peerenboom, in the political sphere, in Ontario.

[5] Harold Peerenboom’s response has been to launch two law suits in the United States, one against Isaac and Laura Perlmutter and another against David Smith.

[6] Needless to says David Smith has said nothing as to his involvement in these matters. He has opposed every effort to involve him in the proceedings that have been commenced.

[7] This Court ordered that the Letters of Request be enforced. That is to say, an order was made requiring the examination of David Smith upon certain terms.

[8] The parties now seek their costs.

[9] All three: Isaac Perlmutter in company with his wife Laura Perlmutter, Harold Peerenboom and David Smith ask to be awarded costs of these applications, each in the following scales and amounts:

• Harold Peerenboom on a partial indemnity scale, $57,458.64
• Isaac and Laura Perlmutter on a partial indemnity scale, $97,017.60
• David Smith on a substantial indemnity scale, $154,462.78

[10] None of the three are clear or precise as to who they say should pay:

• Harold Peerenboom makes no specific request but indicates he was the successful party in that David Smith is to be deposed and points all of his concern for the delay and obfuscation at David Smith, presumably as the unsuccessful party.
• Isaac and Laura Perlmutter submit that Harold Peerenboom “…compounded the complexity of this matter through the unusual procedural step of suing Mr. Smith as opposed to adding him to the main Florida Action”. They spend more space directing blame at David Smith and include in their submissions as a heading “Application of the Law: The Respondent Should Pay Costs to the Perlmutters”. David Smith is the named Respondent.
• David Smith points out that he was required to respond to two applications, that as a non-party he is presumptively entitled to costs but makes no assertion as to which of the two or if both of the other parties should pay.

[11] The uncertainty as to who should receive costs and who should be required to pay them underscores a fundamental difficulty in determining how the issue of costs should be dealt with.

[12] If Harold Peerenboom is unsuccessful in his actions as against the Perlmutters and David Smith he will have involved people in serious allegations concerning their conduct and taken them through protracted, expensive and possibly unnecessary proceedings. If this proves to be the case, he should not be awarded costs in respect of any part of the action. He will wrongly have accused them of dealing in hate.

[13] On the other hand, if the Perlmutters engaged in a hate campaign with or without the assistance and participation of David Smith they stand as the catalyst for all that has followed. Given the nature of the claims made against them they would, in such circumstances, have no legitimate claim for costs against those they attacked or any others that took part.

[14] In the same vein, I do not accept that David Smith stands in this case as a disinterested third party but with evidence to contribute. Identified as the party who sent the package of material being letters alleging serious, even criminal activity on the part of Harold Peerenboom and threatening his family and former colleagues if Harold Peerenboom does not move, David Smith has a direct interest in the outcome. Like the Perlmutters, if that is the case, if he is a party to a hate campaign it would not be appropriate to award him costs for any part of the action. This would be particularly true of costs that arose, in large part, from his attempts to avoid taking part.

[15] In the circumstances of this case it is not possible to meaningfully decide the issue of costs without knowing the ultimate results of the two actions. This difficulty is demonstrated by an attempt to assess what is being requested against what has taken place.

[16] I start from the premise that no one questions the hours spent or rates charged by any of the other parties. Having noted this, I go on. First, I would not, in any event, award costs to David Smith on a substantial indemnity scale. He has a direct interest in these proceedings. He has made plain through his actions, both here and in Florida, that his fundamental goal is not to work to a solution but rather to avoid being involved. At the same time that he was opposing the enforcement of the Letters of Request, he was undertaking an appeal of an order finding that he could be sued in Florida despite the fact that he was resident in Canada.

[17] His costs on a partial indemnity scale were $105,342.87. This is only slightly more than the $97,017.60 requested by the Perlmutters. I point out that this arises in a situation where, part way through, David Smith changed law firms. Accounts from both make up his claim ($77,032.41 from the first + $28,310.46 from the second). There is a substantial gap in the time between the end of the first retainer and the beginning of the second. The Bill of Costs for the first firm ends with the following notation: “Costs assessed and allowed at [blank], this 24th of October, 2018”. There is no suggestion that these costs were ever assessed but the work they represent ended before the date referred to. The first reference in the accounts of the second firm is to a case conference which took place on January 22, 2020:

January 22, 2020 Case Conference before Justice Lederer, all necessary correspondence with opposing counsel regarding scheduling of case conference, and negotiation of issues to be determined therein, review and consider letters to Court requesting case conference and updating of status of applications; review of materials and preparation of case conference memorandum; receipt and review of case conference memoranda of Applicants; attendance at case conference.

(Emphasis added)

[18] It does not seem unreasonable to suggest that the “review of materials” referred to would include some duplication of effort that would have been unnecessary but for the change. I say this only in furtherance of the conclusion that the costs demonstrated on behalf of David Smith and the Perlmutters are close in value.

[19] The costs asked for by Harold Peerenboom are substantially less.

[20] The amount sought by Harold Peerenboom for fees has been rounded down to $50,000, the actual amount of fees on a partial indemnity scale is $57,541.50. The Perlmutters claim $72,355.50. The difference in the amount claimed is ($72,355.50-$50,000) $22,355.50. If the Perlmutters had done what Harold Peerenboom has done and rounded their claim down in the same measure (approximately $7,000) to $65,000 the difference is reduced to $15,000.

[21] For his part David Smith asks for fees valued at $86,481.88. If this is rounded down to allow the comparisons to match, this number would be reduced to say $80,000 or $30,000 more than is being requested by Harold Peerenboom and $15,000 more than the Perlmutters. This does not take account of the possible duplication of effort occasioned by David Smith’s change of counsel.

[22] The differences, while material, are not necessarily out of line or outside a consideration of the role the parties have played. I return to the idea that, in the absence of the final result, it is not possible to assess the contribution of each of the parties and to determine who should pay and who should receive costs and at what value. In the circumstances I am drawn to a proposition found in the submissions of Isaac and Laura Perlmutter:

It may be opportune, given that the parties are embroiled in ongoing litigation where they will have a chance to claim costs in the cause, to rule that the parties should bear their own costs.

[23] This is the appropriate resolution.

[24] The amounts related to activities in the Court in Florida will be assessed there, based on the law that applies. The differences that remain as a result of the work attributable to proceedings before this Court are not so great that anyone will be unduly prejudiced. Any suggestion that this should be left to be dealt with at the end, leaving this Court to unravel, understand and assess the result and impact of the Florida proceedings is neither appropriate nor practical. Each of the parties has contributed to these issues. Isaac Perlmutter has conceded that he sent the first batch of material that confirmed the concern of his involvement in a possible hate mail campaign against Harold Peerenboom. It is not yet known whether he knows or involved David Smith. Harold Peerenboom caused the determination that a second set of Letters of Request was necessary by commencing a separate law suit against David Smith, thus changing the relationship of David Smith to the matters at hand. At the request of the judge in Florida Harold Peerenboom and the Perlmutters, through their respective counsel, contributed to the drafting of the Letters of Request. Before this court there was a need for clarification as to what they required. David Smith has refused to take part or contribute to finding a resolution to the issues raised.

[25] There will be no order as to costs. Each party is to bear its own.

Lederer, J. Date: August 5, 2020