COURT FILE NO.: CV-19-629366
DATE: 20210831
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GEORGE GALE and GEORGE GALE MEDICINE PROFESSIONAL CORPORATION, Plaintiffs
-and-
ROTHBART CENTRE FOR PAIN CARE LTD., SILVER MEDICAL GROUP CENTRE FOR PAIN CARE, DUFFERIN DOCTORS GROUP, DR. PETER ROTHBART, DR. ALI KAJDEHI, JOHN DOE DIRECTOR, 2066959 ONTARIO INC., 2179452 ONTARIO LIMITED, 2561404 ONTARIO LIMITED, JOHN DOE NUMBERED COMPANY, STAN SWARTZ, ALAN SLOAN, JERRY PASKOWITZ and CARMELLA SEREBRYNAY, Defendants
BEFORE: Justice Edward Belobaba
COUNSEL: Kenneth Kraft, Chloe Snider and Meredith Bacal for the Defendants Dufferin Doctors Group, 1066959 Ontario Inc., 2179452 Ontario Limited, 2561404 Ontario Limited, Stan Swartz, Allen Sloan, Jerry Paskowitz and Carmela Serebryany / Moving Parties
Jonathan Roth for the Defendant Dr. Ali Kajdehi / Moving Party
Andrew Monkhouse and Walter Yoo for the Plaintiffs / Responding Parties
No one appearing for the Defendants Rothbart Centre for Pain Care Ltd., Silver Medical Group Centre for Pain Care or Dr. Peter Rothbart
HEARD: June 8, 2021 by Zoom video
Cost Awards
[1] At the conclusion of the hearing on June 8, 2021, I ruled in favour of the moving defendants and permanently stayed the plaintiff’s Second Action for abuse of process. I advised counsel that written reasons would follow shortly. I released the written reasons on July 5, 2021 and invited cost submissions.[^1]
[2] I soon received two cost outlines from the successful defendants — one from the Dentons firm that represented all of the participating defendants but Dr. Kajdehi; and another from the Roth firm that represented Dr. Kajdehi. Their cost outlines as initially submitted did not comply with the hourly rates as set out in the Grid so I asked counsel to submit a revised version. As I have previously explained:[^2]
The Grid rates may well need updating. But I continue to use the Grid rates as one factor to consider because, as it turns out, they reflect the Court of Appeal’s suggested up-date, namely “55 to 60 per cent of a reasonable actual rate.”[^3] And 60 per cent of a reasonable actual rate is pretty much the rate that is set out in the Grid.[^4]
[3] For ease of reference, I will refer to the defendants represented by Dentons as DD. On a partial indemnity basis (as revised) DD incurred $46,144 in costs and Dr. Kajdehi incurred $18,362 in costs — inclusive of disbursements and taxes. However, both DD and Dr. Kajdehi ask for costs on a substantial indemnity basis. Their cost requests on a substantial indemnity basis (as per the 1.5 multiplier in the Rules) are $69,216 and $27,543 respectively.
[4] The basis for DD’s request for elevated costs is two-fold: the plaintiff’s unfounded allegation of fraud (fraudulent conveyance) that was only abandoned in a last-minute responding factum; and DD’s Rule 49 offer. Dr. Kajdehi’s justification for substantial indemnity is more specific. The plaintiff was repeatedly advised that Dr. Kajdehi was neither a director nor officer of any of the corporate defendants and thus there was basis for any of the liability claims directed at him. Even when the plaintiff was provided with uncontroverted evidence in this regard (all easily confirmed by a review of the public record), the plaintiff refused to release Dr. Kajdehi from the action.
[5] The plaintiff responds first, that the appropriate scale is partial not substantial indemnity. DD did not ‘beat or match’ their Rule 49 offer. The Rule 49 offer required the plaintiff to sign a full and final release, which would have prohibited him from continuing his 2015 action. The decision herein, however, allowed the plaintiff to continue his 2015 action. Thus, DD did not beat or match their Rule 49 offer.[^5] As for the fraudulent conveyance allegation, the plaintiff says this claim was never adjudicated. The claim was stayed because it should have been brought under the bankruptcy proceeding. Therefore, says the plaintiff, there is no basis for elevated costs.
[6] I am inclined to agree with the plaintiff on both points. The appropriate scale, in my view, is partial indemnity. The plaintiff submits that a reasonable cost award for DD should be $30,000 and, because of a wasteful duplication of effort, only $5000 for Dr. Kajdehi.
[7] I do not accept this latter submission. In my view, the suggested partial indemnity amounts are neither fair nor reasonable for either DD or Dr. Kajdehi. Dr. Kajdehi was entitled to retain separate counsel. His counsel’s contribution added important refinement to the matters in dispute and was not unreasonably duplicative.
[8] Subject to the comment that follows, the appropriate all-inclusive cost award is $46,144 payable to DD and $18,362 payable to Dr. Kajdehi. However, as I noted in the concluding paragraph of my decision:
[It] is sufficient for the purposes of these motions to stay the Second Action for abuse of process. Although I am inclined to agree with the moving defendants’ detailed submissions that the oppression, common employer, unjust enrichment and piercing the corporate veil claims should also be struck under Rule 21.01(1)(b) (“no reasonable cause of action”), I make no formal ruling in this regard.
I shall, however, remain available to the parties. Given my familiarity with the subject-matter, defence counsel has asked that I remain seized should any pleading motions be brought with respect to the 2015 Action. This is a sensible request and I am pleased to oblige.
[9] The “abuse of process” submissions and supporting material, in my estimation, accounted for about one-half of the costs sustained by the successful defendants — the other half can be attributed to the “no reasonable cause of action” issues which have all been deferred. It follows that the prima facie cost totals set out above must be reduced to reflect this deferral.
[10] In my view, it is fair and reasonable, in all the circumstances, to reduce the $46,144 and $18,362 amounts by one-quarter — leaving an all-inclusive cost award payable by the plaintiffs to DD in the amount of $34,608 and to Dr. Kajdehi in the amount of $13,722.
Disposition
[11] The all-inclusive costs payable by the plaintiffs to DD are fixed at $34,608 and to Dr. Kajdehi at $13,722, payable within 30 days.
Signed: Justice Edward Belobaba
Notwithstanding Rule 59.05, this Judgment [Order] is effective and binding from the date it is made and is enforceable without any need for entry and filing. Any party to this Judgment [Order] may submit a formal Judgment [Order] for original signing, entry and filing when the Court returns to regular operations.
Date: August 31, 2021
[^1]: Gale v. Rothbart Centre for Pain Care, 2021 ONSC 4535. [^2]: Maginnis and Magnaye v. FCA Canada et al, 2020 ONSC 6498. [^3]: Bain v. UBS Securities Canada Inc., 2018 ONCA 190, at para. 32. [^4]: Maginnis, supra, note 2, at para. 11. And see the discussion in Goldsmith v. National Bank of Canada 2015 ONSC 4581, at para. 9-12, and Mask v. Silvercorp Metals Inc., 2015 ONSC 7780, at paras. 8-10. [^5]: Dundas v. Schafer, 2014 MBCA 92, at paras. 64 and 71.```