Court File and Parties

COURT FILE NO.: CV-21-00665673 DATE: 20230308 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DOMINIK KAWA, Plaintiff AND: 1PLUS12 CORPORATION, GLENN ESTRABILLO, MOHAMMED JIWANI, JAMES DESTEPHANIS, JONATHANE RICCI, XAFIRA LAW PROFESSIONAL CORPORATION, ELIEZER KARP a.k.a. ELI KARP, DJD PROFESSIONAL CORPORATION, LANDMARK WORLDWIDE LLC, ESPO CONSULTING INC., ESPO PROPERTIES MI INC. (USA), LAYA MANAGEMENT CORPORATION, LAYA HOLDINGS INC., ARASH MISSAGHI, LAYLA ALIZADEH, WORLD CORPORATION INC., CANADA CAPITAL CORPORATION, CANADA INVESTMENT CORPORATION, CROWN CAPITAL CORPORATION, WORLD PROPERTIES CORPORATION, TROY WILSON, 2496050 ONTARIO CORP. o/a A13MG, AURUM MORTGAGE INVESTMENT CORPORATION FUND, AURUM CAPITAL CORPORATION, 2424884 ONTARIO CORP. o/a CURAH CAPITAL CORPORATION, ABRAXAS CORPORATION, ABRAXAS VIII CORP., 1PLUS12 INTERNATIONAL DEVELOPMENT BELIZE LTD., OXFORD CONDO CORPORATION LTD., AGORAPYTH X CORPORATION, ARCHEX CORPORATION, Defendants

BEFORE: Justice A.P. Ramsay

COUNSEL: Tim Gleason, for the Defendants/Moving Parties, Eliezer Karp and DJD Law Corporation Justin H. Nasseri, Eric Brousseau, and Gordon Vance, for the Plaintiff Hilary Book and Lia Boritz, for the Defendants, 1Plus12 Corporation, Glenn Estrabillo, Mohammed Jiwani, James DeStephanis, Espo Consulting Inc., Laya Holdings Inc., 2496050 Ontario Corp. o/a Curah Capital Corporation, Espo Properties M1 Inc. (USA), Laya Management Corporation, Abraxas Corporation, Abraxas VIII Corp., 1Plus12 International Development Belize Ltd., Oxford Condo Corporation, Agorapyth X Corporation and Archex Corporation James Zibarras, for the Defendants, Layla Alizadeh, World Corporation, Canada Capital Corporation, Canada Investment Corporation, Crown Capital Corporation, World Properties Corporation and Troy Wilson Brian Shiller, for the Defendants, Jonathane Ricci, Xafira Law Professional Corporation and 2496050 Ontario Corp. o/a A13M

HEARD: In Writing

COSTS ENDORSEMENT

A. Overview

[1] In my endorsement dated November 12, 2022, I granted various relief with respect to motions initiated by three group of defendants pursuant to Rules 21.01(1)(b), 21.01(3)(d), 25.06(8), and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, in respect of the plaintiff’s fresh as amended statement of claim. This included: substantially granting the motion by the 1Plus12 Corporation defendants to strike certain paragraphs in the proposed pleading, dismissing the motions brought by both the Ricci defendants and the Karp defendants to strike the statement of claim as against them, and also striking the affidavit of the plaintiff delivered in response to the various motions to strike.

[2] I set a timetable for the delivery of costs submissions and subsequently received submissions on behalf of all parties. I now make the following order with respect to each of the parties claiming costs.

i. The Plaintiff

[3] The plaintiff submits that his costs to respond to all three motions brought by the groups of defendants amounts to $31,505.64 on a partial indemnity scale.

[4] The plaintiff’s position with respect to costs, is dealt with below, in relation to each group of defendants.

ii. The 1Plus12 defendants

[5] In my view, the 1Plus12 were substantially successful on the motion. The pleadings sought to be struck by these defendants were struck, other than the claim for breach of fiduciary duty as against them, and, for the most part, the alternative fresh as amended statement of claim suggested by these defendants was ordered. In this case, there is no basis to depart from the general rule that a party who substantially succeeds is entitled to their costs.

[6] The plaintiff submits that there should be no award of costs to the 1Plus12 defendants as success was divided or, alternatively, that $10,000 would be a reasonable amount.

[7] The 1Plus12 defendants seek partial indemnity costs of $41,966.15 inclusive of HST and disbursements. Legal fees are being sought for reviewing motion materials, communications with counsel and with client, attending two cases conferences, research and attending at the hearing. Four lawyers with hourly rates ranging between $300 to $650, or an average of $438, were involved with the motion. This is a pleadings motion with established jurisprudence, though in this case, I appreciate that the number of parties involved, and the number of challenges would have taken some time to respond to. The plaintiff’s Bill of Costs to respond to all three motions was $31,500, and it was not in the reasonable expectation of the parties that a pleadings motion, on which there was a single short affidavit and no cross-examinations, might generate over $40,000 in partial indemnity costs. I do agree with 1Plus12 that this motion was complex, involving, as it did, over 30 defendants and hundreds of paragraphs. I adopt Ms. Book’s own comments in her Submissions as follows: “The plaintiff was open to distribute the work for this motion to a more junior counsel and an articling student, resulting in lower costs.” The same would apply to the 1Plus12 defendants.

[8] The 1Plus12 defendants were substantially successful on the motion and is therefore entitled to their costs. In determining costs, one of the overarching considerations is whether the costs award is reasonable, fair, and proportionate in the circumstances of the case, having regard to the factors set out in r. 57.01(1) and the reasonable expectations of the party: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) (C.A.), at para. 26. A reduction in the amounts of costs may be appropriate to reflect divided success: Georgian Flooring Centre Ltd. v. Goslin & Goslin, 2018 ONSC 1189, at para. 37; Copeland & Soucie v. H.M.Q., 2014 ONSC 1098, at para. 6; Smith v. Kearns, 2011 ONSC 754.

[9] 1Plus12 took the lead on the motion and drafted the proposed alternative pleading. 1Plus12 made appropriate concessions which no doubt reduced the time of the hearing. I do not think it is appropriate to include time for costs thrown away for the original Notice of Motions or the case conferences but 1Plus12 is not precluded from pursuing those costs, thrown away, as part of the action. In general, parties intending to seek costs associated with a case conference to address a pending motion should ask the case conference judge to direct those costs of that step be addressed by the judge ultimately hearing the matter. A case conference may be an effective tool in narrowing issues, establishing schedules, or summarily resolving matters, in appropriate circumstances. Considering the amount of the plaintiff’s costs for all three motions, the 1Plus12 defendants are entitled to costs fixed in the amount of $17,000, inclusive of HST and disbursements, payable by the plaintiff to 1Plus12, within 90 days of the date of this order.

iii. The Ricci defendants

[10] The plaintiff seeks costs of $10,000 on a partial indemnity basis from the Ricci defendants on the basis that their motion to stay the action against them was entirely dismissed.

[11] The Ricci defendants seek costs, payable by the plaintiff, in the amount of $9,000 on a partial indemnity basis, which they argue is 50% of their partial indemnity costs. They submit that although they failed on the additional relief, beyond that sought by 1Plus12, the motion was necessary as the plaintiff’s statement of claim was fatally flawed.

[12] Although the motion to stay the claim against them was dismissed, I agree with the Ricci defendants that they should be entitled to some costs. The allegations of criminal conduct against the Ricci defendants warranted a response and were struck. The 50% reduction of the partial indemnity costs is appropriate and reasonable given their divided success. The amount being sought is fair, reasonable, and within the reasonable expectation of the parties.

[13] The plaintiff shall pay the Ricci defendants costs fixed in the amount of $9,000, inclusive of HST and disbursements, and payable within 90 days of the date of this order.

iv. The Karp defendants

[14] The Karp defendants moved for an order striking out the statement of claim, in whole or in part, and for an order striking out the affidavit of Mr. Kawa.

[15] The plaintiff seeks costs of $10,000 on a partial indemnity basis from the Karp defendants on the basis that they were unsuccessful on their motion.

[16] The Karp defendants seek their costs of the motion on a partial indemnity basis, in the amount of $21,210.48, inclusive of disbursements and HST.

[17] There shall be no costs awarded to or against the Karp defendants for the following reasons.

[18] Despite the dismissal of the Karp defendants’ motion to dismiss the action against them, they too were beneficiaries of portions of the statement of claim being struck, and had to attend on the motion; they were successful in having the plaintiff’s affidavit struck, though this was a minor aspect of the motions. The Karp defendants, however, have failed to set out in their submissions, whether portions of the statement of claim that were struck related to the Karp defendants. It is therefore difficult to accept the Karp defendants’ argument that their “motion was successful in part, and was necessary, because, as the Court confirmed, the pleading was deficient.” I am, however, mindful, that both Sharma J., on December 8, 2021, and Sugunasiri J., on February 23, 2022, had previously afforded the plaintiff an opportunity to amend his statement of claim to avoid the very motion that was before, and he failed to heed their warning. There is no evidence before me that counsel for the Karp defendants had any involvement in the alternative proposed fresh as amended statement of claim filed by the 1Plus12 defendants.

A.P. Ramsay J. Date: March 8, 2023