Court File and Parties

COURT FILE NO.: CV-14-512809

MOTION HEARD: 20201028

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ruslan Korlyakov, Plaintiff

AND:

Thomas H. Riesz, Alden M. Dychtenberg and Shekter Dychtenberg LLP, Defendants

BEFORE: Master Jolley

COUNSEL: David Rubin, Counsel for the Moving Party Plaintiff Alexander Melfi, Counsel for the Responding Party Defendant Thomas Riesz Mathieu Belanger, Counsel for the Responding Party Defendants Alden M. Dychtenberg and Shekter Dychtenberg LLP

HEARD: 28 October 2020

REASONS FOR DECISION

[1] The plaintiff seeks an order (a) granting leave to amend his statement of claim to reduce his claim to $35,000, to plead the settlement of a related action, referenced below, and to plead the implications of that settlement on his claim against these defendants; (b) dismissing the third party claim of the Dychtenberg defendants against RE/Max and Lana Martinovic; and (c) transferring the action to small claims court after the claim is amended.

Background

[2] The plaintiff was the proposed purchaser in a real estate transaction that failed to close. Thomas Riesz (“Riesz”) was the plaintiff’s real estate lawyer for the transaction. On Riesz’ referral, the plaintiff retained Mr. Dychtenberg and Shekter, Dychtenberg LLP in 2012 to commence an action against the vendor of the property and the real estate broker for the return of his $50,000 deposit. The defendants counterclaimed for damages of roughly $75,000, alleged to be their loss due to the plaintiff’s failure to close.

[3] In 2014 he sued these defendants for $50,000 in damages relating to his deposit and for an indemnity relating to the vendor’s counterclaim. He limited his $125,000 claim to $100,000 to come within the monetary jurisdiction of simplified procedure claims.

[4] The plaintiff settled the 2012 vendor action in 2017 and received $25,000, which he says left him with net damages of $34,704.09 after accounting for legal fees he spent in that action. He argues that he properly commenced the claim in this court, but now wishes to transfer the matter, given the reduction in his damages and the recent increase of the monetary jurisdiction of the small claims court to $35,000.

Amendments to the statement of claim

[5] No party opposes the amendments to the claim and the relief sought in that regard is granted. The plaintiff shall have leave to amend his statement of claim in the form indicated at Schedule “A” to his motion record.

Dismissal of the Dychtenberg third party claim

[6] No party opposes the dismissal of the third party claim without costs and that relief is hereby granted.

Transfer to small claims court

[7] The court has authority pursuant to section 23(2) of the Courts of Justice Act to transfer an action to small claims court. As a general matter, cases should ordinarily be transferred unless there is prejudice that cannot be remedied (Ali v Schrauwen 2011 ONSC 2158).

[8] Both defendants oppose the transfer to small claims court. They argue that they are prejudiced because of the delay COVID-19 has caused small claims court actions. They also argue that they have already incurred costs in defending this action well in excess of what will be recoverable in small claims court.

[9] In determining this matter, I have applied the principles set out by Master Muir in Mehrabi v. Colangelo 2019 ONSC 7208. In considering that criteria, I first find it was not unreasonable for the plaintiff to have commenced and continued his action in this court as his claim of $100,000 exceeded the small claims court monetary limit. Subject to the defendants’ arguments on prejudice, I find it is also reasonable to now request that the matter be transferred to small claims court since that court’s monetary jurisdiction was increased in January 2020 to an amount that encompasses the plaintiff’s alleged damages.

Prejudice caused by COVID-19

[10] The defendants argue they would be prejudiced if the action were transferred to small claims court, given that court’s operations were suspended in March 2020. The recent expansions in services apply only to matters in which a defence was filed prior to 16 March 2020.

[11] I cannot say with any degree of certainty that the delay in reaching a trial will be any greater in small claims court than if the action remains in this court. I acknowledge that in August 2020 the parties agreed to a timetable that will see the action set down for trial by 31 March 2021. But the matter still needs to be pre-tried and then added to the trial list, albeit as a simplified rules matter. It would be pure speculation to find that an action set down in this court on 31 March 2021 will reach trial significantly faster than a matter transferred to small claims court on 2 November 2020.

[12] To deal with the defendants’ concern of delay in small claims court, I offered counsel the opportunity to consent to have the action remain in this court, provided costs were treated as though the action proceeded in small claims court, but they declined.

Costs

[13] In its discretion to transfer an action to small claims court, this court may require a party to pay the costs incurred by the other side for steps that would not have been necessary in a small claims court action (see Mehrabi v. Colangelo, supra).

[14] The plaintiff argues that the defendants have incurred no unnecessary costs or costs thrown away. There have been no discoveries or mediation. The