Court File and Parties

COURT FILE NO.: CV-17-581322-00CP DATE: 2021-08-04 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GEORGE AZAR, Plaintiff – and – STRADA CRUSH LIMITED, Defendant

BEFORE: E.M. Morgan, J.

COUNSEL: Henry Juroviesky and Antonio Rito Vacca, for the Plaintiff Rahool Agarwal, Vlad Calina, and Maya Bretgoltz, for the Defendant

HEARD: Costs submissions in writing

COSTS OF rE-CERTIFICATION MOTION

[1] On July 6, 2021, I issued my endorsement in this motion and dismissed the Plaintiff’s request for re-certification under section 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”): Azar v. Strada Crush Limited, 2021 ONSC 4758.

[2] In that ruling I reviewed the difficult history of the action and concluded that the newly proposed representative plaintiff was not a proper plaintiff and that the replacing of the representative Plaintiff in that way would not cure all of the problems the case had encountered. More specifically, at para 30, I stated:

In light of all that has transpired, to allow this very late change of representative plaintiff, especially given the circumstances that he was a known class member previously and was taken in by the fraudulent mayhem sewn by Mr. Azar, would work considerable unfairness to the Defendant. It would also abuse the processes of the court.

[3] Given this ruling, Mr. Agarwal and his colleagues, for the Defendant, submit that the case is an appropriate one for a substantial indemnity scale of costs. They point out that courts have previously held that a motion that amounts to an abuse of process is a candidate for costs on a substantial indemnity bases: Canadian International Petroleum Corp. v Dover Investments Ltd., 2017 ONCA 120 at para 7. Certainly, an elevated scale of costs is the most pointed way to express disapprobation of the conduct leading up to the costs award: Close Up International Ltd. v 1444943 Ontario Ltd., [2006] OJ No 4225 at para 14 (SCJ).

[4] Mr. Juroviesky and his colleague, for the Plaintiff, take an unusual approach to the underlying motion, and look at it piece-by-piece rather than as a totality with a negative result. They submit that their motion sought re-certification under all of the issues addressed by section 5(1) of the CPA, and that it passed all of the certification hurdles but the one (and only one) that was vigorously argued – the section 5(1)(e) requirement of a proper representative plaintiff. On that basis, they contend that although the motion was dismissed, the results were really divided between the parties and therefore there should be no costs awarded for or against either party.

[5] True story: a friend born in what was then Leningrad (now St. Petersburg) once related to me that in the old Soviet Union days, people were told after the 1972 summit series that Team Canada’s hockey victory was not really a victory, but rather was more of a draw. The explanation for this was that the Soviet team had scored more goals than the Canadian team over the course of the series, and that all the Canadians had done was to win more games. But of course, that is not how the hockey series worked, and it is not how the CPA works either. It is not considered a success if you score a few goals of your own before being on the receiving end of Paul Henderson’s winning shot; and it is not a partial victory to pass a few initial hurdles before being denied certification altogether.

[6] Costs are discretionary under section 131 of the Courts of Justice Act. Generally speaking, the Court’s discretion is to be exercised in accordance with the criteria listed in Rule 57.01 of the Rules of Civil Procedure. These include the importance of the issues and complexity of the proceedings, the principle of indemnity for the successful party, and various matters going to the conduct of the proceeding – whether the unsuccessful party prolonged the proceeding unnecessarily, failed to admit things it should have admitted, etc. The award is not formulaic, but rather is aimed at expressing the Court’s view of reasonableness and fairness in the circumstances: Boucher v. Public Accountants Council of Ontario, 2004 CanLII 14579 (ON CA), [2004] OJ No 2634, at para 26 (Ont CA).

[7] Using round figures, Defendant’s counsel seek a total of $72,000 on a substantial indemnity basis or $50,000 on a partial indemnity basis. Plaintiff’s counsel’s Bill of Costs is slightly lower than this, although not entirely out of range. Had the Plaintiff been successful, his counsel would seek $52,500 on a substantial indemnity basis or $35,000 on a partial indemnity basis. The respective requests are close enough that neither would take the other by surprise.

[8] Applying the Rule 57.01 criteria, the Defendant has a strong argument that substantial indemnity costs should apply here. The Plaintiff did take positions that were futile and that he should have anticipated in advance would get him nowhere. In fact, Mr. Juroviesky’s entire argument before me was designed to compare Mr. Azar, the original poor representative Plaintiff, to Mr. Wineck, the newly chosen proposed representative Plaintiff. Mr. Juroviesky structured his submissions at the hearing of the motion as if the opponent to the appointment of Mr. Wineck was Mr. Azar. Nowhere did the fact that there is a Defendant in this case even figure into the argument. I understand why the Defendant is of the view that it should have to bear as little of the cost of this proceeding as possible.

[9] Having said that, I assume that it is Mr. Juroviesky, and not Mr. Wineck or Mr. Azar, that will actually be out-of-pocket for any costs award. Plaintiff’s counsel in their factum stated that the motion is being brought by Mr. Wineck, the proposed replacement Plaintiff. Although there is no evidence to support this in the evidentiary record, Plaintiff’s counsel also asserts at p. 8 of their factum that Mr. Wineck is “Not responsible for Costs (he is indemnified)”. I will take this assertion as true, and will expect that it is counsel who will be paying the costs bill. If I am not correct in that, any party hereto is free to move for a remedy.

[10] Having said that, I have some sympathy for the position that Mr. Juroviesky has found himself in. As reviewed in my previous ruling, he did a good job in the original certification motion but was then turned on by his client for reasons that still remain mysterious to me. He was then apparently the victim of a smear campaign among the class members, which made it impossible for him to find a replacement plaintiff in a timely fashion. When he finally found one in Mr. Wineck, it turned out that he was tainted by the original Plaintiff and was not appropriate for the role.

[11] While in other ways, Mr. Juroviesky is the author of his own lack of success in attempting to have the case re-certified, he is as much of a victim of the class as he is its lawyer. I understand that he has already had to pay at least one previous costs order from his own pocket.

[12] None of this exonerates Mr. Juroviesky for bringing ill-conceived motions with ill-qualified representative Plaintiffs. The Defendant deserves costs and Mr. Juroviesky is committed to paying them. However, I am willing to exercise my discretion to the extent that I will order costs payable on a partial indemnity basis rather than a substantive indemnity basis. To witness counsel having to do battle with his own clients in order to try to achieve a result for them is to witness a sad state of affairs. I want to compensate the Defendant without augmenting this sad situation any further.

[13] The Plaintiff – who I expect to be covered by an indemnity agreement with his counsel as suggested in the factum – shall pay the Defendant costs in the all-inclusive amount of $50,000.

Date: August 4, 2021 Morgan J.