Court File and Parties

COURT FILE NO.: CV-22-676929

DATE: 2022-11-23

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jalil Dornajafi and Annie Varbedian

AND:

Michael Decauni, Callian Capital Private Equity Inc., Callian Capital Group, Osiris Group Inc. and 102618 P.E.I. Inc.

BEFORE: J.T. Akbarali J.

COUNSEL: Marc Kestenberg and Hunter Norwick, for the plaintiffs

No one appearing, for the defendants

HEARD: November 22, 2022

ENDORSEMENT

Overview

[1] This action arises out of the plaintiffs’ allegations that their investment advisor, the individual defendant, Michael Decauni, on his own and through the corporate defendants, misled the plaintiffs into believing they were making a safe investment into a start-up company with guaranteed returns, when in fact the defendants misappropriated the plaintiffs’ funds. They seek damages to put them in the position they would have been in but for the alleged theft of their funds. They also seek punitive damages and full indemnity costs.

[2] The defendants were not in attendance at the motion before me. I have presided over a number of attendances in this proceeding, described in detail in my most recent endorsement of October 3, 2022: Dornajafi v. Decauni et al., 2022 ONSC 5576. In that endorsement, I granted the plaintiffs’ motion to strike the defendants’ statement of defence, seized myself of this motion for default judgment, and ordered the defendants to pay $18,500 in costs, all-inclusive to the plaintiffs within thirty days.

[3] I am advised that the defendants have appealed my October 3, 2022 order. However, no defendant has moved for a stay of my order. Under r. 63.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the filing of a Notice of Appeal stays any provision for the payment of money, with certain exceptions. The appeal of my order of October 3, 2022 stays the provision ordering the payment of costs. However, the order striking the statement of defence has not been stayed. Accordingly, notwithstanding the appeal, in the circumstances, the plaintiffs are entitled to proceed with their motion for default judgment.

The Plaintiffs’ Burden on the Motion

[4] Having been noted in default, the defendants are deemed to have admitted the truth of the allegations in the statement of claim: r. 19.02(1)(a) of the Rules of Civil Procedure. They are not deemed to admit allegations of law, or mixed fact and law: Churchill v. Aero Auction Sales Inc., 2019 ONSC 4766, at para. 14. As Charney J. put it in Churchill, at para. 18:

Rule 19.06 provides that a plaintiff is not entitled to judgment on a motion for judgment merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment. In other words, the deemed admissions of fact, together with any facts adduced at the hearing, must entitle the plaintiff to judgment on the claim as a matter of law. To the extent that the plaintiff claims unliquidated damages, the court must be persuaded, based on the deemed admissions and other evidence adduced, that the quantum of damages claimed is fair and appropriate in the circumstances.

[5] On this motion, in addition to the deemed admissions in the statement of claim, the plaintiffs have given affidavit evidence, and evidence of a proposed expert, in support of their default judgment motion.

Analysis

Liability

[6] The plaintiffs’ statement of claim pleads civil fraud, breach of fiduciary duties, breach of contract, negligence, conversion, fraudulent misrepresentation, negligence misrepresentation, breach of trust and unjust enrichment. In oral argument, counsel concentrated on civil fraud, fraudulent misrepresentation, conversion, and breach of fiduciary duty.

[7] The facts, which I draw from the deemed admissions and the evidence filed on the motion, are as follows.

[8] The plaintiffs are unsophisticated investors. Mr. Dornajafi is currently 71 years old. He works as a hairstylist. English is his second language. Ms. Varbedian is a real estate agent.

[9] For about fifteen years, the plaintiffs engaged the individual defendant, Mr. Decauni, as their investment advisor. They came to know Mr. Decauni because he was a friend of their son; they had come to trust Mr. Decauni. For fifteen years, Mr. Decauni, operating through the Callian Capital Group and Callian Capital Private Equity Inc., had placed them in conservative investments.

[10] In November 2019, Mr. Decauni made a presentation to the plaintiffs in which he encouraged them to remove all their savings from their RRSPs —some $450,000 — to invest in an Israeli start-up company. He promised a safe investment and returns of at least 40% annually.

[11] The plaintiffs agreed to redeem $350,000 from their RRSP. Withdrawal requests were made on behalf of the plaintiffs by Mr. Decauni in his capacity as “President & CEO” of Callian Capital Group. Callian Capital Group’s corporate profile indicates that Mr. Decauni is its sole officer and director.

[12] After withholding of taxes at source, and additional taxes that the plaintiffs had to pay on the withdrawal of RRSP funds over and above the withholding, they had $248,000 net left to invest.

[13] At Mr. Decauni’s request, the plaintiffs provided a $200,000 cheque in favour of Osiris Group Inc. for the alleged investment. The corporate profile for Osiris Group Inc. indicates that Mr. Decauni is its sole officer and director.

[14] The plaintiffs also provided a second cheque for $90,000 payable to Osiris Group Inc. However, after taking into account the taxes payable on the RRSP withdrawal in addition to the withholding, the plaintiffs did not have the funds to clear the second cheque. As a result, Mr. Decauni indicated he would become a co-investor with the plaintiffs; Mr. Decauni deposited $42,000 into the plaintiffs’ account so that the $90,000 cheque would clear.

[15] Thus, in total, the plaintiffs provided $248,000 in net funds to Osiris Group Inc., as directed by Mr. Decauni for the investment.

[16] Within the first month, the plaintiffs sensed something was wrong with the investment. They received subscription agreements for a fund they had never heard of before – not documentation relating to the supposed Israeli start-up. Mr. Decauni did not ask them to sign the subscription agreements, although the agreements themselves indicated that they had to be completed in full, and an incomplete subscription agreement would not be accepted. Moreover, Mr. Decauni had allegedly invested their funds a month before they received the subscription agreements. The subscription agreements also referred to a term sheet, which they never received. Moreover, neither plaintiff received communications from the fund confirming their investment, despite the subscription agreement indicating that certain communications would be delivered.

[17] On December 3, 2019, Mr. Dornjafi asked Mr. Decauni for documentation of their investment, and also expressed concerns about the investment. Mr. Decauni was unable to assuage the plaintiffs’ concerns about where their money was. On December 18, 2019, Mr. Dornajafi asked for their money to be returned.

[18] What followed was a series of communications in which Mr. Dornajafi asked, and even begged, for a return of their money. The plaintiffs’ economic situation grew precarious with the pandemic. As a hairstylist, Mr. Dornajafi had lost his source of income. He pleaded with Mr. Decauni to return their funds.

[19] Mr. Decauni promised to return the investment, although at times he indicated he needed more time to do so because he was dealing with other matters, or making other financial arrangements. At other times, he did not respond to the communications at all.

[20] Between July 2020 and February 2021, Mr. Decauni returned $70,000 to the plaintiffs. Then on February 12, 2021, Mr. Decauni provided the plaintiffs with a cheque for $178,000, a sum which would have fully reimbursed them for the net capital they had provided to Mr. Decauni through their cheques to Osiris Group Inc. The cheque was written on the account of the defendant Callian Capital Private Equity Inc. Callian Capital Private Equity Inc.’s corporate profile indicates that Mr. Decauni is its sole officer and director.

[21] After providing them with the cheque for $178,000, Mr. Decauni advised the plaintiffs that Callian Capital Private Equity Inc. did not have sufficient funds in its account to clear the cheque. He asked the plaintiffs not to cash it, and they did not.

[22] Over the following two months, Mr. Decauni returned another $25,000 to the plaintiffs, for a total of $95,000 returned. Mr. Decauni and/or the corporate defendants retained $152,761.52 of the funds that the plaintiffs had provided for the investment.

[23] Of note, within days of delivering the $178,000 cheque to the plaintiffs, on April 29, 2021, the defendant 102618 P.E.I. Inc. (“PEI Co.”) purchased a home at 137 Rochester Avenue, North York, for $4,945,000. PEI Co.’s corporate documents indicate that Mr. Decauni is its director, president, secretary, treasurer and shareholder.

[24] Several months later, on November 21, 2021, Mr. Decauni had a telephone conversation with Ms. Varbedian where he indicated that he was in the process of obtaining a mortgage, from which proceeds he would repay the plaintiffs. The parcel registry for 137 Rochester Avenue indicates that, the next day, PEI Co. placed a mortgage on the property for $4,700,000. Together with a subsequent mortgage for $400,000, the property appears to be heavily leveraged. The charge documentation for the mortgages indicate that PEI Co. is responsible for monthly payments between the two mortgages of over $38,000 per month.

[25] On March 24, 2022, Myers J. granted a Mareva injunction over the property. The Mareva injunction was sought on notice. While Mr. Decauni attended and asked for an additional thirty days to retain counsel, Myers J. in effect granted the relief sought by the plaintiffs on an interim basis. The defendants were free to return the motion, but it was never brought back. I note that costs of this motion are reserved to me based on Myers J.’s endorsement. I also note that, as a matter of efficiency, the plaintiffs seek an order, if judgment is granted, allowing them to vacate the Mareva injunction once a writ is registered on the property.

[26] The evidence before me indicates that, on May 13, 2020, another dissatisfied client of Mr. Decauni’s obtained a consent judgment in the amount of $500,000 arising out of his claim that he was defrauded by Mr. Decauni and Callian Capital Private Equity Inc. Since the Mareva injunction in this case was ordered, the plaintiff in the other action sought and obtained a vesting order from Miller J. of this court, vesting all the right, title, estate and interest of PEI Co. in 137 Rochester Ave. in Callian Capital Private Equity Inc. in fee simple. The most current parcel register of the property reflects the vesting of the property in accordance with the court’s order.

[27] From this recitation of facts, I conclude that the plaintiffs have established liability of all the defendants for civil fraud, fraudulent misrepresentation and conversion.

[28] Mr. Decauni fraudulently represented that he was investing the plaintiffs into a start-up, when in fact, he misappropriated their funds.

[29] The corporate defendants, each of which is controlled by Mr. Decauni, were participants in the fraudulent scheme to appropriate the plaintiffs’ funds.

[30] Through Callian Capital Group, Mr. Decauni arranged the withdrawal of the plaintiffs’ RRSP funds. Through its actions, Callian Capital Group misrepresented the purpose of the withdrawal of the RRSP funds, and facilitated the misappropriation of those funds.

[31] Osiris Group Inc. received the plaintiffs’ funds, ostensibly for the purposes of investing into a (fictitious) investment. By its conduct, it fraudulently led the plaintiffs to believe that it was acting legitimately in furtherance of the (fictitious) investment. As such, it also facilitated the misappropriation of the plaintiffs’ funds.

[32] Callian Capital Private Equity Inc. is part of Callian Capital Group and is the entity that provided the $178,000 cheque to the plaintiffs, which they were later induced not to cash. By providing the cheque, Callian Capital Private Equity Inc. acknowledged its responsibility for the funds owing to the plaintiffs.

[33] I infer that PEI Co. was the eventual beneficiary of the plaintiffs’ misappropriated funds. The company appears to have been incorporated for the purposes of holding the property, and has facilitated the hiding of the other defendants’ assets from their creditors. As such, PEI Co. was involved in the fraudulent scheme to misappropriate the plaintiffs’ assets.

[34] The plaintiffs relied on the false representations of the defendants, and as a result, lost their net funds provided to the plaintiffs.

[35] I also find Mr. Decauni and the Callian defendants liable for breach of fiduciary duty. As the plaintiffs’ investment advisors, Mr. Decauni and the Callian defendants, were in a position of trust and had the duty to act honestly and in good faith with a view to the plaintiff’s best interests. However, Mr. Decauni and the Callian defendants preferred their own interests to the plaintiffs’ interests when they fraudulently misappropriated the plaintiffs’ funds for their own benefit.

[36] It is not necessary to consider additional bases for liability. I have focused on those bases on which counsel focused during oral argument. The question is what measure of damages flow from the defendants’ wrongdoing. I turn now to the calculation of the plaintiffs’ losses.

Damages

[37] In addition to the net funds that were not returned, the plaintiffs claim the opportunity loss from not having their funds invested in the market through their respective RRSPs, and the losses resulting from having to pay taxes at the highest rate on the funds withdrawn from their RRSPs.

[38] To quantify these losses, the plaintiffs retained Peter Macaulay, a CPA-designated specialist in investigative and forensic accounting in Canada and the United States, who specializes in damage quantification. Mr. Macaulay’s curriculum vitae indicates that, in addition to being a CPA, and Chartered Accountant, he holds an MBA and is Chartered Professional Accountant (Canada) and a Certified Public Account (U.S.). He has given evidence in this court, as well as before the International Chamber of Commerce in Paris and the Copyright Board of Canada. He has been the principal of his own firm since 1998, before which he worked in the litigation support group at Deloitte for nine years.

[39] Mr. Macaulay has prepared a report that considers the quantum of the plaintiffs’ losses having regard to: (i) the withdrawals from their RRSPs; (ii) the withholding tax, and additional tax cost of the withdrawals; (iii) the market value of the investments the plaintiffs held immediately before the withdrawals from their RRSPs; (iv) the partial repayment the plaintiffs received from Mr. Decauni; and (v) the tax benefit the plaintiffs would receive by reinvesting their recovered damages into their RRSPs.

[40] There is a two-stage analysis that a judge must apply to the admission of expert evidence. In the first stage, the court applies the criteria from R. v. Mohan, 1994 80 (SCC), [1994] 2 S.C.R. 9, at pp. 20-25 to determine if the four threshold requirements are met. I conclude that they are. First, Mr. Macaulay’s evidence is relevant to the quantification of the plaintiffs’ losses. Second, given the complexity inherent in the calculation due in particular to the tax implications of the withdrawals from and deposits to the plaintiffs’ RRSP accounts, his evidence is necessary to assist me in determining the plaintiffs’ losses. Third, there is no exclusionary rule that would operate in this case. Finally, I am satisfied based on his curriculum vitae that Mr. Macaulay is a properly qualified witness. I note he has signed an acknowledgement of expert’s duty as well.

[41] Moving on to the second stage, I must consider whether to exercise my residual discretion to exclude proposed expert evidence when its probative value is outweighed by its prejudicial effects. At this stage, I must consider the expert’s independence and impartiality: White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, at paras. 24, 54. Here, I see no prejudicial effects to admitting Mr. Macaulay’s evidence. I am satisfied that the evidence is helpful and ought to be admitted.

[42] As a result, I qualify Mr. Macaulay as an expert witness qualified to give evidence on the calculation of the plaintiffs’ losses.

[43] In his evidence, Mr. Macaulay considers the situation the plaintiffs would have been in had they never withdrawn their funds but stayed invested in the same securities. The report is current, as it calculates damages as of November 10, 2022. As such, it takes into account the current state of the market.

[44] Mr. Macaulay’s approach considers both, the tax cost to the plaintiffs of withdrawing their funds (including the taxes withheld at source), and the tax benefit to the plaintiffs of depositing their damages into their RRSPs. To do so, Mr. Macaulay considered the plaintiffs’ respective tax brackets based on their annual income.

[45] Mr. Macaulay also properly accounts for the repayments made by Mr. Decauni, first by offsetting the repayments (made in net tax dollars) against the tax the plaintiffs’ paid over and above that withheld at source (again, in net tax dollars). He then allocates the remaining payments pro rata to the plaintiffs according to their losses.

[46] In the result, Mr. Dornajafi’s damages are calculated as $242,566, while Ms. Varbedian’s damages are calculated at $71,594. These are the sums that, if received and invested into their RRSPs, would put them in the same position they would have been in had they never withdrawn their funds, taking into account the repayments already received and the tax consequences of the withdrawals and intended reinvestment.

[47] However, Mr. Dornajafi turns 71 in just under two years. Mr. Macaulay’s report also makes clear that, as of his 71st birthday, Mr. Dornajafi will no longer be entitled to deposit funds into his RRSP. Accordingly, if Mr. Dornajafi in fact receives the funds he is owed after his 71st birthday, his damages calculation must be adjusted to account for the fact that he will not be able to take advantage of the tax benefit of a deposit into his RRSP. Accordingly, if Mr. Dornjafi is not made whole before his 71st birthday on October 1, 2024, Mr. Macaulay calculates his damages at $307,732.

[48] I accept Mr. Macaulay’s evidence regarding the quantum of the plaintiffs’ losses.

Punitive Damages

[49] The plaintiffs seek punitive damages in the amount of $100,000 from the defendants.

[50] The plaintiffs rely on Borrelli v. Chan, 2018 ONSC 1429, at para. 1048, where Penny J. found that punitive damages are available “where there is high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour”.

[51] The purpose of punitive damages is to “deter the defendant and others from similar misconduct in the future, and to mark the community’s collective condemnation of what has happened”: Borelli, at para. 1048. Penny J. went on to find that where there is fraud and breach of fiduciary duty, as here, punitive damages are appropriate “where the actions of the fiduciary are purposefully repugnant to the beneficiary’s best interests”, and “the impugned activity is motivated by the fiduciary’s self-interest”: Borelli, at para. 1048.

[52] In Elekta Ltd. v. Rodkin, 2012 ONSC 2062, Justice Brown reviewed the applicable law on punitive damages and provided a helpful summary. Among other things, he noted that punitive damages should receive careful consideration, and discretion to award them should be most cautiously exercised: Elekta, at para. 25, citing from Honda v. Keays, 2008 SCC 39, at para. 62.

[53] Brown J. also noted the importance of rationality. In other words, the facts of the particular case must be related to the underlying purposes of punitive damages. The court must consider how, in particular, an award would further one of the objectives of the law, and what is the lowest award that would serve the purpose. Moreover, the governing rule for quantum is proportionality. In other words, compensatory damages plus punitive damages plus any other punishment related to the same misconduct should be rationally related to the objectives of the punitive damages award: Elekta, at para. 26.

[54] In Gennett Lumber Co. v. John Doe aka Milton Harvey et al., 2019 ONSC 1345, at para. 50, Sossin J. (as he then was) adopted Elekta and found that an appropriate punitive damages award for a fraud that caused the plaintiff to suffer approximately $200,000 in damages was $100,000, or half the total. Sossin J. reasoned that an award of punitive damages that is a minor fraction of the plaintiff’s actual losses, or could be factored in as a modest risk in participating in an organized fraud, would not sufficiently reflect the goals of retribution, denunciation and deterrence.

[55] In this case, the defendants’ fraudulent scheme came close to wiping out the plaintiffs’ retirement savings, and caused them to incur significant tax consequences. For Mr. Dornajafi, this occurred during a period of time when he was coming towards the end of his working life. The defendants abused the trust that the plaintiffs had placed in them for their own benefit. The defendants’ actions were high-handed, malicious and highly reprehensible.

[56] In these circumstances, simply returning the funds would not be enough. Moreover, making them whole for the losses they incurred (including the tax and investment consequences, as outlined in Mr. Macaulay’s report) is also insufficient. Exposure to making good the plaintiffs’ loss at that level did not deter the defendants from their fraudulent conduct at the outset; I do not see why it would deter them now.

[57] That is particularly so given Mr. Decauni’s history defrauding other clients. It appears that more deterrence is needed in this case.

[58] Taking into account the amount the defendants wrongly appropriated, and the plaintiffs’ overall losses, I find a punitive damages award in the amount of $75,000 is rational and proportional. It amounts to about 50% of the amounts the defendants misappropriated, and, together with the compensatory damages awarded, leads to an overall award of $389,160, before any costs orders are taken into account. In my view, an award of that magnitude ought to operate as a deterrent to the defendants, who wrongly pocketed about $150,000 through their scheme once their repayments are taken into consideration.

[59] Accordingly, I conclude that the plaintiffs are entitled to punitive damages in the amount of $75,000 from the defendants. In finding that all defendants are responsible for punitive damages, I consider the fact that each defendant, including PEI Co., facilitated the fraud and concealment of the plaintiffs’ funds, and each is deserving of the condemnation that comes with a punitive damages award.

Costs

[60] The plaintiffs are the successful parties and they are entitled to their costs. Costs are in my discretion pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. In exercising my discretion, I am guided by the factors laid out in r. 57.01 of the Rules of Civil Procedure, including the principle of indemnity, the reasonable expectations of the unsuccessful party, and the complexity and importance of the issues. Overall, costs must be fair and reasonable: Boucher v. Public Accountants’ Council for the Province of Ontario, 2004 14579 (Ont. C.A.), 71 O.R. (3d) 291, at paras. 4, 38. A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4.

[61] The plaintiffs seek costs on a full indemnity scale. They rely on the decision in NDrive, Navigation Systems v. Zhou, 2021 ONSC 7772, at para. 22, where Healey J. held that full indemnity costs require particularly egregious conduct that goes beyond the conduct that would merit a substantial indemnity costs award. Full indemnity costs are only rarely awarded. Where they are, the “overriding common thread…is the strong sentiment that the matter, or the issue at least, should never have been brought before the court in the first place, leading to a reaction that the innocent party should not have had to pay a penny toward the cost of litigation.”

[62] Healy J. went on, at para. 23, to set out the types of considerations that have attracted full indemnity costs, all of which the plaintiffs submit are present in this case:

a. “Grave positive misconduct” on the party of the blameworthy party;

b. But for the blameworthy party’s conduct, the matter, or at least a significant component of the litigation, should never have reached the courts;

c. The non-offending party did nothing to hinder, delay or confuse the litigation;

d. The blameworthy party’s conduct was contemptuous, forcing the “aggrieved party to exhaust legal proceedings to obtain that which was obviously his”; and

e. The matter involved a scurrilous attack on the administration of justice or waste of scarce judicial resources.

[63] I agree that all of these considerations are present in this case.

[64] First, the defendants took advantage of the trust the plaintiffs placed in them to engage in a deliberate fraud, which not only deprived the plaintiffs of their retirement funds, but caused them to incur a significant tax liability, all to enrich themselves at the plaintiffs’ expense.

[65] Second, had the defendants not embarked on their fraudulent scheme, the matter never would have come to court. The plaintiffs would have left their retirement funds in their RRSPs where they would have risen and fallen with the market.

[66] Third, the plaintiffs have done nothing to hinder, delay or confuse the litigation. Rather, they have at each step along the way attempted to move the litigation forward responsibly.

[67] Fourth, the plaintiffs’ efforts to advance the litigation have been frustrated repeatedly by the conduct of the defendants. I set out at length the procedural roadblocks that the defendants have thrown up in an attempt to delay this litigation in my endorsement of October 3, 2022: Dornajafi v. Decauni et al., 2022 ONSC 5576. I do not propose to repeat the full procedural history here. It suffices to say that the defendants conducted this litigation with frequent and often last-minute requests for adjournments, and last-minute appeals, some of which were frivolous on their face. They caused the plaintiffs to incur unnecessary costs due to their failure to communicate with the plaintiffs about the litigation process, including when they were represented by counsel. I repeatedly found that the defendants were weaponizing the justice system and abusing the court’s process to delay the progress of the litigation and cause the plaintiffs frustration and wasted costs. The defendants consistently failed to comply with their basic obligations under the Rules of Civil Procedure, including obeying court orders. They failed to adduce evidence that might provide an explanation for their behaviour. At every step, they did what they could to draw out the process rather than cooperate to move the matter towards a hearing on the merits, forcing the plaintiffs to take complicated steps that should have been unnecessary to address the defendants’ procedural manoeuvres.

[68] Finally, the defendants’ approach to the litigation also resulted in an unnecessary waste of this court’s resources, and multiple attendances that should not have been required.

[69] In my view, this is one of those rare cases where the conduct of the defendants rises to the level that justifies an award of full indemnity costs.

[70] The costs outline filed by the plaintiffs seeks full indemnity costs in the amount of $97,079.25. It avoids duplication for the matters for which costs have already been awarded.

[71] In determining a fair and reasonable quantum for full indemnity costs in this case, I note the following:

a. The issues in this case were very important to the plaintiffs, relating, as they do, to the recovery of the bulk of the funds the plaintiffs had saved for retirement. Mr. Dornajafi does not have a long runway left to save for retirement, so the loss for him was particularly important;

b. The matter was factually complex as it required unpacking the roles of the different corporations that facilitated the fraudulent scheme, and because it required an expert analysis of loss quantification, in particular due to the complicated tax losses and benefits;

c. Mr. Decauni’s efforts to hide his assets from creditors by purchasing a home through PEI Co. necessitated the bringing of a Mareva injunction, thus adding to the costs;

d. As I have already noted, the defendants’ conduct during the litigation unnecessarily complicated the proceeding and caused significant wasted costs;

e. The division of labour between the plaintiffs’ counsel was reasonable. The least expensive timekeeper did the bulk of the work, with reasonable time spent by senior counsel supervising and finalizing the work product, which was of a high quality;

f. The hourly rates of counsel are reasonable;

g. Disbursements are reasonable, particularly considering that Mr. Macaulay did an expert report, and then updated it to make it current for this motion.

[72] While overall, costs may seem high, I note that the most significant fees sought relate to the Mareva injunction which, had Mr. Decauni not been trying to hide his assets, would never have had to be brought.

[73] In the result, I conclude that full indemnity costs of $92,000 are fair and reasonable in these circumstances.

Conclusion

[74] In summary, I make the following orders:

a. The defendants, jointly and severally, shall pay to the plaintiff Annie Varbedian, the sum of $71,594;

b. The defendants, jointly and severally, shall pay to the plaintiff Jalil Dornajafi the sum of $242,566 if payment is made prior to October 2, 2024. If payment is made after October 1, 2024, the defendants, jointly and severally, shall pay Jalil Dornajafi $307,732;

c. The defendants, jointly and severally, shall pay to the plaintiffs the sum of $75,000 in punitive damages;

d. Upon registration by the plaintiffs in the Land Titles Division of the Toronto Registry Office of a Writ of Seizure and Sale of Land of the property municipally known as 137 Rochester Avenue, Toronto, Ontario, the Land Registrar is authorized and shall delete the Restrictions Order dated April 25, 2022 in its entirety;

e. The defendants, jointly and severally, shall pay the plaintiffs their costs of this action fixed in the amount of $92,000.

[75] The order shall go in accordance with the draft, filed, and amended by me, which I have signed.

J.T. Akbarali J.

Date: November 23, 2022