COURT FILE NO.: CV-21-664585-0000

DATE: 09-06-2023

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MIDLAND RESOURCES HOLDING LIMITED, ALEX SHNAIDER and EDUARD SHYFRIN

Kenneth Prehogan, Mak Skrow, Kayla Theeuwen, Symn Zucker for the plaintiffs

Plaintiffs

– and –

MICHAEL SHTAIF, THE ESTATE OF ANTHONY GROAG, GREGORY ROBERTS, EUGENE BOKSERMAN, ILYA ENTIN, IRWIN BOOCK a.k.a. IRWIN KRAKOWSKY and STANTON DEFREITAS and PATRICIA GROAG as Executrix of the Estate of Anthony Groag

Defendants

Michael Shtaif, Gregory Roberts, Eugene Bokserman, on their own behalf

HEARD: May 10, 2023 (virtual hearing), May 19, 26, 30, and June 12, 2023 (in writing)

REASONS FOR JUDGMENT

KOEHNEN J.

OVERVIEW

[1] On this motion, the plaintiffs seek a declaration that the defendants Michael Shtaif, Gregory Roberts and Eugene Bokserman (the “Judgment Debtors”) are vexatious litigants and should be prohibited from making any further motions in this proceeding without leave of the court. In the alternative, the plaintiffs seek an order requiring the Judgment Debtors to post security for costs for any further motions they may bring.

[2] The plaintiffs’ motion is prompted by a motion of the Judgment Debtors to set aside a judgment against them issued by Sanderson J. on February 19, 2014 as varied by the Court of Appeal on April 20, 2017 (collectively the “Judgment”) based on allegedly new evidence. By order of Justice Centa dated October 11, 2022, the plaintiffs’ motion to have the Judgment Debtors declared vexatious litigants was directed to proceed before the motion of the Judgment Debtors to set aside the Judgment.

[3] As a defence to the motion to have them declared vexatious litigants, the Judgment Debtors submit that their motion to set aside the Judgment is well-founded and is based on new evidence.

[4] In the result, I declare Michael Shtaif and Eugene Bokserman to be vexatious litigants. I do not declare Gregory Roberts to be a vexatious litigant because he did not participate in the various steps that Shtaif and Bokserman have taken to warrant the declaration. It may well be that the underlying motion to set aside the Judgment of Sanderson J. may constitute enough to have Roberts declared a vexatious litigant if it is pursued in the matter it was before me. To be clear, the set aside motion is not before me. The only relevance that it has on the motion that is before me, is to determine whether the set aside motion provides a defence to the motion to have the Judgment Debtors declared frivolous and vexatious. I conclude that it does not. The Judgment Debtors have not demonstrated that their motion to set aside the Judgment has enough merit to stop me from concluding that bringing the motion, in combination with past steps they have taken, warrants a declaration that Shtaif and Bokserman are vexatious litigants.

[5] I recognize, however, that even vexatious litigants can have legitimate claims. The order I grant is therefore without prejudice to Shtaif and Bokserman to seek leave to set aside the Judgment. If any of the Judgment Debtors wish to pursue the motion to set aside the Judgment, they will be required to seek a case conference at which they will have to demonstrate that the motion to set aside has enough merit to warrant the court scheduling time for it. In the case of Shtaif and Bokserman, the case conference judge will have to be persuaded that the information is sufficiently strong and focussed to warrant scheduling a motion for leave to bring a motion to set aside the Judgment. In the case of Roberts, the case conference judge will have to be persuaded that the actual motion to set aside the Judgment should be scheduled. I impose the case conference requirement because of the inadequacy of the materials and argument put before me in that regard on this motion. If the material on any such case conference is similar in lack of focus or explanation to the material before me, no further motion should be scheduled. The case conference will be limited to 30 minutes. It will be preceded by case conference memos of up to five double spaced pages that set out the party’s position and why they should succeed.

[6] In any event, if any of Shtaif or Bokserman wishes to bring a motion for leave or, in the case of Roberts, bring a motion to set aside the Judgment, they will be required to pay into court security for costs in an amount sufficient to pay any costs awarded against them on this motion, any other outstanding costs orders against them, (except costs of the trial or appeals from the judgment of Sanderson J.) and costs of the motion to set aside the Judgment which I fix at $ 96,689.58.

Frivolous and Vexatious Litigants

[7] The Court has the power to prohibit a party from instituting any further proceedings without leave of the court where the party has persistently and without reasonable grounds, instituted vexatious proceedings in any court; or conducted a proceeding in any court in a vexatious manner.[^1]

[8] In Lochner v Ontario Civilian Police Commission, the Ontario Court of Appeal described the common characteristics of a vexatious litigant as including:

(a) bringing multiple proceedings to re-determine issues that have already been determined;

(b) rolling forward grounds and issues from earlier proceedings;

(c) persistent pursuit of unsuccessful appeals;

(d) failure to pay costs awards; and

(e) inappropriate submissions in both form and content.[^2]

[9] As set out in more detail below, the defendants Shtaif and Bokserman have amply demonstrated these characteristics.

[10] Justice Sanderson’s decision was issued in February 2014 and arose out of conduct by the Judgment Debtors that she found to be deceitful, conspiratorial and unlawful. Among other things, she awarded judgment against Roberts and Shtaif in the amount of US$59,559,512.97 and against Bokserman in the amount of US$1,500,000.

[11] The Judgment Debtors appealed. The Ontario Court of Appeal released reasons in April 2017 in which it reduced the judgments against Shtaif and Roberts to US$8.27 million and dismissed Bokserman's appeal. Roberts applied for leave to appeal to the Supreme Court of Canada. His application was dismissed with costs in December 2017. Up to this point the Judgment Debtors had not behaved in a frivolous or vexatious manner.

[12] Shtaif and Bokserman then began acting in person, and began embarking on a course of conduct which, as a whole, rises to the level that makes them frivolous and vexatious litigants.

[13] They first moved before the Court of Appeal to have it reconsider its judgment based on an alleged “miscalculation” by Justice Sanderson. The Court of Appeal dismissed the motion with costs holding that Shtaif and Bokserman were advancing a theory of damages not argued on the appeal.[^3]

[14] Shtaif and Bokserman, then moved before the Court of Appeal a second time asking it to reconsider its initial decision, this time based on alleged fraud, mistake and/or the existence of “significant new material facts”, including the reported laying of criminal charges in Russia against Valentin Vinogradov, one of the plaintiff’s witnesses at trial. The Court of Appeal dismissed the motion holding that Shtaif and Bokserman were “recycling” their earlier arguments and that the alleged charges against Vinogradov were unrelated to the issues in the trial and were therefore irrelevant.[^4] The Court of Appeal also held that the second motion for reconsideration was an abuse of the process of the Court and prohibited Shtaif and Bokserman from bringing further motions to the Court of Appeal in this proceeding without first (i) paying the costs previously ordered by the Court of Appeal, and (ii) obtaining leave of the Court of Appeal.

[15] The two motions for reconsideration demonstrate the characteristics of frivolous and vexatious litigants in that they amount to multiple proceedings to determine issues already determined, rolling forward issues from prior proceedings, pursuit of unsuccessful appeals and inappropriate submissions.

[16] The plaintiffs then discovered that, several weeks after Justice Sanderson’s trial reasons were released, Bokserman transferred a property owned jointly by him and his wife to his wife alone. When the plaintiff Midland commenced a fraudulent conveyance action and moved for summary judgment, Shtaif sought to intervene to challenge Midland’s standing.

[17] In October 2020, Shtaif and Bokserman brought a motion to stay the enforcement of the Judgment because the plaintiff Midland has assigned its rights under the Judgment to a related entity, Midland BVI. They alleged in Ontario that the assignment did not comply with the Guernsey Law of Property Act, 1979. Shtaif and Bokserman brought the motion even though the assignment was authorized by the competent court in Guernsey and even though the assignment was never challenged in Guernsey. After delivering motion materials, Shtaif and Bokserman never scheduled the motion.

[18] On the eve of Midland’s summary judgment motion in the fraudulent conveyance action, Bokserman and his wife terminated their lawyers and sought an adjournment. Justice Pinto granted the adjournment but ordered that no further material could be filed on the motion.

[19] Bokserman and his wife then moved to admit fresh evidence. Justice Morgan rejected the fresh evidence.[^5] Here too Bokserman was trying to re-determine what had already been determined.

[20] Justice Morgan heard the summary judgment motion, concluded that Midland BVI had standing, that the transfer from Bokserman to his wife was fraudulent and ordered $175,000 in costs against Bokserman and his wife.[^6] In addition, Morgan J. ordered costs of $30,000 against Shtaif, noting that the Court of Appeal had found Bokserman and Shtaif to have pursued “an excessive number of repeated procedures.”[^7] These costs have not been paid.

[21] Bokserman, his wife and Shtaif appealed the order of Justice Morgan to the Court of Appeal. Midland successfully moved for security for costs in both appeals. In ordering Bokserman, his wife and Shtaif to post security, Justice Hourigan noted:

“Bokserman and Shtaif have a history of abusing the court process, which suggests that they will take whatever steps they can, be they legitimate or illegitimate, to delay the enforcement of orders against them. … it is important to remember that these proceedings are focussed on the collection of judgments that have been outstanding for years, that nothing has been paid and that there is a history of fraudulent and abusive conduct.”[^8]

[22] While these proceedings were going on, Midland BVI had been trying to enforce the Judgment against Shtaif in Alberta, where he resides and had obtained Certificates of Judgment to do so.

[23] While the appeal of Justice Morgan’s decision was pending, Shtaif served a motion to have the assignment to Midland BVI and the Certificates of Judgment issued to Midland declared null and void. Shtaif also obtained a stay of proceedings against him in Alberta pending disposition of the appeal of Justice Morgan’s decision and pending disposition of Shtaif’s motion challenging the assignment to Midland BVI.

[24] On January 28, 2022, the Court of Appeal dismissed the appeals from Justice Morgan's decisions and ordered substantial indemnity costs.[^9] Bokserman and his wife applied for leave to appeal to the Supreme Court of Canada, which was denied on September 29, 2022.

[25] On May 26, 2022, Associate Justice Robinson dismissed Shtaif’s motion to set aside the assignment to Midland BVI, finding, among other things, that the motion amounted to a collateral attack on the decisions of Justice Morgan and the Court of Appeal.[^10] In doing so, Associate Justice Robinson awarded Midland costs of $25,2781.21 and stated:

I agree with Midland BVI that Mr. Shtaif has demonstrated both an unwillingness to pay the judgment against him and an intention to delay its enforcement, including rehashing arguments and positions that he has previously raised in this and other courts. Midland BVI submits it is an abuse of process. I agree. Arguments made before me were previously made before Morgan J. and the Court of Appeal and rejected. I held that advancing the same arguments amounted to a collateral attack on those prior decisions. Mr. Shtaif's ongoing conduct in Ontario and Alberta is consistent with taking whatever procedural steps he can to avoid paying his judgment debt and outstanding costs awards. It is not conduct that the court should condone.[^11]

[26] Shtaif, in turn, appealed Associate Justice Robinson’s order to the Divisional Court. As part of that appeal, Shtaif served a motion in the Divisional Court to, among other things, introduce adduce fresh evidence (including affidavits sworn by Vinogradov to resist the motion before me) and to stay the Divisional Court appeal pending a determination of the Shtaif’s motion to set aside the Judgment. In response, Justice Corbett issued a notice that the Divisional Court was considering an order staying or dismissing Shtaif’s motion in the Divisional Court under Rule 2.1.02 because it appeared, on its face, to be frivolous or vexatious or otherwise an abuse of the process of the Court. Shtaif then withdrew his motion to the Divisional Court.

[27] Midland then obtained an order from the Divisional Court for security for costs of the appeal. In granting the order, Schabas J. noted, among other things, that there was good reason to believe that the appeal was frivolous and vexatious, that Shtaif had insufficient assets in Ontario to pay the costs of the appeal, that the appeal “appears to be yet another attempt to avoid paying the Sanderson Judgment and to use and abuse the justice system to cause Midland to incur legal costs” and that Shtaif “shows no intention or ability to pay anything to anyone.” [^12]

[28] The foregoing circumstances amply demonstrate that Shtaif and Bokserman have brought multiple proceedings to try to re-determine issues that have already been determined, have rolled forward grounds and issues from prior proceedings, have persisted in the pursuit of unsuccessful appeals, have failed to pay costs awards and have made inappropriate submissions.

[29] Apart from participating in the motion to set aside the Judgment, Roberts has not yet done anything to warrant the designation of a frivolous or vexatious litigant. Roberts has not been involved in any litigation with the Plaintiffs other than in the underlying proceeding before Justice Sanderson and the subsequent appeals and service of his rule 59.06 motion. I do not think it would be fair to declare Roberts to be a vexatious litigant simply because he has moved to set aside the judgment of Sanderson J.

The Motion to Set Aside the Trial Decision

[30] The Judgment Debtors defend the motion to declare them to be frivolous and vexatious litigants by arguing that they have a legitimate case to set aside the Judgment of Sanderson J. based on new evidence. While I do not make any final determination about whether the alleged new evidence is sufficient to set aside the Judgment. I do assess that new evidence to determine whether it has a sufficient air of reality and credibility to provide a defence to the motion to have the Judgment Debtors declared to be frivolous and vexatious litigants. I conclude that it does not.

[31] To set aside a judgment based on new evidence, the moving party must be able to state precisely what the new evidence is, explain why that new evidence could not have been introduced at trial and explain how the new evidence could be expected to affect the result at trial.[^13] When reopening a judgment for fraud, as the Judgment Debtors seek to do here, the new evidence must go to the foundation of the case.[^14]

[32] The Judgment Debtors have failed in that regard.

[33] The “new” evidence consists of two affidavits from Vinogradov and one affidavit from Sergei Kvashuk, a stranger to the litigation who did not give evidence at trial. Vinogradov’s affidavits purport to recant some (but not all) of his evidence at trial.

[34] I will first address the affidavits at a high level.

[35] The high-level challenge with the affidavits (and the factum of the Judgment Debtors) is that they do not segregate and specifically identify new evidence and never explain how that new evidence would have had an impact on Justice Sanderson’s or the Court of Appeal’s reasons. Instead, the affidavits and the Judgment Debtors’ factum contain a lengthy description of complex facts. Many of those facts are ones that were introduced at trial and are facts in respect of which Justice Sanderson made specific findings.[^15]

[36] In some cases the Judgment Debtors cite lengthy documents in support of a proposition without providing a pinpoint citation,[^16] thereby leaving the court to parse through the document to find the evidence. In other cases they provide exhibits in a foreign language without translation.[^17] Their materials contain many assertions, adjectives and adverbs but are short on the specific identification of new evidence and devoid of any explanation about how that new evidence would have affected the result at trial.

[37] The affidavits and the Judgment Debtors’ factum contain a lengthy list of complaints which describe how evil the plaintiffs are. They allege that the plaintiffs bribed Russian officials, concocted criminal prosecutions against at least one defendant and make many other allegations about the plaintiffs’ generally bad character. Even if I were to accept that the plaintiffs are generally “bad” people, that does not assist the Judgment Debtors. To set the Judgment aside, the Judgment Debtors must demonstrate that the plaintiffs’ bad acts were directly relevant to critical findings in the underlying decisions and that the new evidence of bad acts would have affected the results of those decisions. Although the Judgment Debtors state baldly that they believe the new evidence would have affected Justice Sanderson’s decision, they do not explain how it would have done so.

[38] In the absence of a specific explanation to that effect, I would be required to read Justice Sanderson’s 165 page single spaced decision as well as the Court of Appeal’s 36 page single spaced decision, then try to determine what in the defendants’ lengthy materials is new evidence and then try to piece together an explanation for why this allegedly new evidence would have affected the results of Justice Sanderson’s or the Court of Appeal’s decisions. I have read the Judgment Debtors’ 40 page factum, three new affidavits of Mr. Vinograd which came to 54 pages without exhibits, the 11 page affidavit of Sergei Kvashuk, have listened to the Judgment Debtors’ submissions on the motion and have read the two sets of post hearing submissions from the Judgment Debtors. That has left me little wiser about what is new or old evidence or how that allegedly new evidence would have changed the result at trial or at the Court of Appeal.

[39] The matter came to me as a two hour motion. The plaintiff’s motion record is 1738 pages long. The Judgment Debtors’ motion record is 2,795 pages long. Their supplementary responding record is a further 207 pages.

[40] At the hearing, I was concerned that the Judgment Debtors’ inability to articulate pithily what I needed might have been a function of the limited time and the fact that they were acting on their own behalf. I therefore explained to the Judgment Debtors that for them to make any headway on re-opening the judgment I needed (i) one specific instance of a finding or conclusion of Justice Sanderson that was induced by the plaintiff’s fraud; (ii) which instance was supported by new evidence in the record before me; and (iii) a concise explanation of how that new evidence would have affected the result of Justice Sanderson’s decision. For purposes of this motion I needed only one instance of that and encouraged the Judgment Debtors to focus on their single best instance of such new evidence. I then allowed them to provide additional submissions, based on evidence that was already before me, that explained the one instance they relied on.

[41] In response, Shtaif delivered a 19 page supplemental submission. It did not do what I asked. Instead, it repeated much of what was already in his initial factum. That is to say a jumble of facts including many that were before Justice Sanderson without any specific identification of what the new evidence was and how it would have led to a different result before Justice Sanderson. In addition, and contrary to my instructions, the Judgment Debtors delivered a further affidavit of Mr. Vinogradov to which Mr. Vinogradov attached a new document without explaining why the new document was not attached to his earlier affidavits and in which he went on to state:

I have additional contemporaneous documents that I am prepared to file with the Court attached to a sworn affidavit that unequivocally prove that Shnaider and Shyfrin committed fraud on Justice Sanderson and Bokserman, Roberts and Shtaif.

[42] After the plaintiff responded to Shtaif’s further submissions, Shtaif submitted a further 18 page supplemental reply. After reviewing all of that I am left in the same position that I was at the hearing of the motion. The new evidence has not been precisely segregated nor do I have any explanation about how the new evidence would have affected the result at trial. The closest the Judgment Debtors came to this was to note that Justice Sanderson preferred the evidence of the plaintiffs at trial over that of the Judgment Debtors, thereby implying that if Justice Sanderson had been aware of all of the collateral bad acts of the plaintiffs, she would not have preferred their evidence. That is not the sort of information that warrants setting aside a trial judgment.

[43] A closer look at the alleged new evidence does not assist either.

[44] The first Vinogradov affidavit purports to attach witness statements made by Peter Ganus and Vasily Iordan. Those statements are not in affidavits and amount to hearsay without having attempted to meet the test of necessity and reliability to warrant admission.

[45] Many of the exhibits appended to the Vinogradov affidavits are in a language other than English or French and are not accompanied by a translation.

[46] Kvashuk, says in paragraph 33 of his affidavit that he has no personal knowledge of the dispute between the parties and only knows details from Vinogradov and Ganus.

[47] The need for specific precision in regard to new evidence and how it would have affected the result at trial is particularly important given my understanding of the Judgment after the Court of Appeal decision. As counsel for the plaintiffs explained on the motion, the essence of the decision is as follows: Justice Sanderson found that the Judgment Debtors had induced the plaintiffs to give them US $50 million through fraudulent representations. The plaintiffs were able to recover $37 million, leaving $13 million outstanding. Mr. Shtaif was found to have taken $12 million of that amount and wrongfully deposited it into a safety deposit box which he or his representative controlled. The plaintiffs managed to recover approximately $6 million of those funds which the trial judge credited to the amount owing by the Judgment Debtors. As a result of the Court of Appeal’s decision, the judgment is essentially for the unrecovered amount that was put into the safety deposit box plus interest. On the argument of the motion, the Judgment Debtors did not disagree with this description of the essence of the judgment.

[48] I infer from the materials that the Judgment Debtors allege, as new evidence, that in order to recover the $6 million from the safety deposit box, the plaintiffs paid a bribe of approximately $500,000 to a representative of the Russian FSB (the successor to the KGB). The plaintiffs say the $500,000 was a fee paid to a consultant who was able to find and recover the funds. Justice Sanderson dealt with this allegation in her reasons.[^18] Even if the new evidence establishes that the $500,000 was a bribe paid to a Russian official, I do not see how that would affect the result at trial. As I understand it, the Judgment is based on a finding that the Judgment Debtors wrongfully took money that belonged to the plaintiffs. The plaintiffs recovered some of that money and the Judgment Debtors were credited with that recovery. Whether the plaintiffs paid a bribe to recover the money or paid a consulting fee to recover the money is irrelevant to the finding that the Judgment Debtors wrongfully took the money.

[49] It appears that a further piece of “new evidence” to re-open the judgment is that the plaintiffs allegedly misled Justice Sanderson by stating that they sold a company named Reef Energy Ltd, (“Reef”) for $5 million to SK Join Trading Limited, (“SK Join”), when in fact they surreptitiously sold Reef for over $82 million. The Judgment Debtors assert that they were entitled to $26.9 million of the larger sale price. To support this allegation the plaintiffs point to a copy of an unsigned agreement for a sale at this higher amount.

[50] Justice Sanderson appears to have addressed this allegation, but not the unsigned agreement, in her reasons. She found that the sale occurred at a price of $5 million. She further found that the Judgment Debtors had no complaint because the plaintiffs had offered to sell Reef to the Judgment Debtors for $5 million. If the Judgment Debtors believed it was worth more, they could have purchased it. It was only when the Judgment Debtors refused that the plaintiffs sold Reef.

[51] The Judgment Debtors complain that they could not have purchased Reef because they had alternatively been forced out of Russia or because had they purchased Reef, the plaintiffs would have used their alleged connections to deprive the Judgment Debtors of the benefit of the purchase. Those, however, are arguments that the Judgment Debtors presumably could have raised before Justice Sanderson. If they did, they are precluded from re-raising them again. If they did not, they have not provided any explanation for why they could not have raised those arguments.

[52] The Judgment Debtors also argued at trial that the sale of Reef to SK Join was not at arm’s length. The trial judge found otherwise. She found that Koaploma was the owner of Reef, that Koll was the owner of Koaploma and that the shareholders of Koll, which included Mr. Shtaif, were the beneficial owners of Reef.

[53] The Judgment Debtors now appear to rely on “new evidence” to the effect that Koaploma was not beneficially owned by the shareholders of Koll, but by the Plaintiffs through their alleged ownership of two companies, Zoulian Management Ltd and Zoulian Ltd.

[54] However, one of the recitals in the Reef Sale Agreement that was before Sanderson J. states that Koll is the legal and beneficial owner of the Koaploma shares, and that Zoulian Management Ltd and Zoulian Ltd are registered as nominee, trustee shareholders of Koaploma. It is not clear to me whether the evidence at trial indicated that the plaintiffs owned the Zoulian companies. If the owners of Zoulian were not known at trial, the Judgment Debtors have not provided any explanation for why they could not have determined that fact before trial.

[55] In addition, I am reluctant to rely on the evidence of the Judgment Debtors because it is prone to overstatement. By way of example, paragraph 48 of Vinogradov’s first affidavit says:

Shyfrin was emphatic about placing Shtaif on the international most wanted list.

In support of that statement Vinogradov cites what he says is a transcript of a conversation between Shyfrin and the FSB officer that Vinogradov alleges Shyfrin bribed to arrest Shtaif. The actual transcript has Shyfrin saying:

As for Shtaif, isn’t he wanted on an international arrest warrant, at the International department. I tell u that we filed a lawsuit against Shtaif in Canada.

Security for Costs

[56] The Rules empower the Court to order security for costs where it appears that:

(a) the plaintiff or applicant is ordinarily resident outside Ontario;

(b) the plaintiff or applicant has another proceeding for the same relief pending in Ontario or elsewhere;

(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remains unpaid in whole or in part;

(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;

(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent; or

(f) a statute entitles the defendant or respondent to security for costs.[^19]

[57] All three of the Judgment Debtors satisfy at least some of the above criteria:

(a) Shtaif is ordinarily resident in Alberta. He has not paid anything towards the Sanderson Judgment or towards the numerous costs awards against him.

(b) Bokserman has not paid anything towards the Sanderson Judgment and numerous costs awards against him.

(c) There is good reason to believe that the motion to set aside the trial judgment as varied by the Court of Appeal is frivolous and vexatious for the reasons set out above.

[58] Both the Court of Appeal and the Divisional Court have imposed security for costs on Shtaif and Bokserman.

[59] One ground for declining security for costs is impecuniosity. The Judgment Debtors claim they are impecunious. There is, however, a high burden of proof on a party who asserts impecuniosity. The claim of impecuniosity "involves a positive obligation to tender detailed evidence demonstrating that he is 'impoverished or needy'."[^20] Although the Judgment Debtors directed me to allegations of impecuniosity, they did not direct me to evidence to support it.

[60] Given the history of Shtaif and Bokserman, I see no unfairness in requiring them to post security for costs if they wish to bring any further motions in relation to the Judgment.

[61] As noted earlier, Roberts has not engaged in the same degree of conduct as Shtaif and Bokserman have. I nevertheless believe it is appropriate to impose an obligation on him to post security for costs. Roberts is a lawyer. It is not clear to what extent he prepared the factum that the Judgment Debtors relied on for this motion. On its face, the factum was delivered on behalf of all three Judgment Debtors. I would therefore assume that Roberts played a significant role in it, especially given that the bulk of the factum relates to the set aside motion. Roberts has therefore had an opportunity to put the set aside case at its highest. He, like the other Judgment Debtors was given the chance to make supplementary submissions after the motion was argued and after I pointed out the inadequacy of the materials on the motion. The supplementary materials I received were, on their face, only from Shtaif. On the motion before me Roberts was required to show only that there was a real issue to address on the set aside motion. He did not succeed in doing so in his factum. He declined to avail himself of a second chance. Should he seek a third chance, this time to bring the actual motion, it should be only with the posting of security for costs.

[62] The amount of the security for costs that a Judgment Debtor will be required to pay into court to proceed with a motion for leave or motion to set aside will be equal to the outstanding costs awards against that the particular Judgment Debtor bringing the motion except those associated with the trial and the appeal from the judgment of Sanderson J., any costs ordered against the particular Judgment Debtor on this motion, and security for costs for the motion to set aside the judgment which I fix at $ 96,689.58. I fix the last amount based on the partial indemnity bill of costs that the plaintiffs have posed on CaseLines which I have reviewed and find to be reasonable.

Conclusion and Costs

[63] In light of the foregoing, I declare Shtaif and Bokserman to be frivolous and vexatious litigants and require them to seek leave in order to bring any further motions in this proceeding or otherwise insofar as such proceeding relates to the Judgment.

[64] If any of the Judgment Debtors seek to pursue the motion to set aside the Judgment, they will be required to schedule a case conference at which they will have to demonstrate to a judge that the motion to set aside has enough merit to warrant setting aside court time for it. In the case of Shtaif and Bokserman, the case conference judge will have to be persuaded that the information is sufficiently strong and focussed to warrant scheduling a motion for leave to move to set aside the Judgment. In the case of Roberts, the case conference judge will have to be persuaded that the actual motion to set aside the Judgment should be scheduled. I impose the requirement of a case conference on all judgment debtors because of the inadequacy of the materials and argument put before me on this motion. If the material on any such case conference is similar in lack of focus or explanation to the material before me, no further motion should be scheduled.

[65] In addition, if any of the judgment debtors seek to pursue a motion to set aside the underlying judgment, they will be required to post security for costs as set out in paragraph 62 above.

[66] Any party seeking costs as a result of these reasons may deliver written submissions by September 26, 2023. Responding submissions shall be delivered by October 10, 2023. Any reply submissions shall be delivered by October 17, 2023.

Released: September 6, 2023

Koehnen J.

COURT FILE NO.: CV-21-664585-0000

DATE: 09-06-2023

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MIDLAND RESOURCES HOLDING LIMITED, ALEX SHNAIDER and EDUARD SHYFRIN

Applicants

– and –

MICHAEL SHTAIF, THE ESTATE OF ANTHONY GROAG, GREGORY ROBERTS, EUGENE BOKSERMAN, ILYA ENTIN, IRWIN BOOCK a.k.a. IRWIN KRAKOWSKY and STANTON DEFREITAS and PATRICIA GROAG as Executrix of the Estate of Anthony Groag

Respondent

REASONS FOR JUDGMENT

Koehnen J.

Released: 09-06-2023

[^1]: Courts of Justice Act, RSO 1990, c. C.43 [CJA], ss. 140(1)(d) & 140(5); Rules of Civil Procedure, RRO 1990, Reg. 194 [Rules], rr. 2.1.02(1), 25.11(b) & 25.11(c).

[^2]: Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720 at para. 20.

[^3]: Midland Resources Holding Limited v. Shtaif, 2018 ONCA 33 at paras. 9 and 12.

[^4]: Midland Resources Holding Limited v. Shtaif, 2018 ONCA 743 at paras. 4 and 10.

[^5]: Midland Resources Holdings Ltd. v. Bokserman, 2021 ONSC 3077 at para. 30.

[^6]: Midland Resources Holdings Ltd. v. Bokserman, 2021 ONSC 3077 at paras. 19 and 56(b).

[^7]: Midland Resources Holdings Ltd. v. Bokserman, 2021 ONSC 3762 at para. 15.

[^8]: The Court of Appeal’s reasons in this instance are not reported, but are quoted in a subsequent decision of Justice Schabas of the Divisional Court: Midland Resources Holdings Limited v Shtaif, 2023 ONSC 865 at para 10.

[^9]: Midland Resources Holding Limited v. Bokserman, 2022 ONCA 73 at paras. 7-8.

[^10]: Midland Resources Holding Limited v. Shtaif, 2022 ONSC 3161 at para. 20.

[^11]: Midland Resources Holding Limited v. Shtaif, 2022 ONSC 5709 at para. 22

[^12]: Midland Resources Holdings Limited v. Shtaif, 2023 ONSC 865 at paras. 25, 27 and 34.

[^13]: Saggi v. Grillone, 2021 ONSC 2276 at para. 33.

[^14]: Saggi v. Grillone, 2021 ONSC 2276 at para. 35.

[^15]: See for example: Midland Resources Holding Limited v Shtaif, 2014 ONSC 997 at paras. 487, 491, 492, 510, 741, 803, 1103, 1123-4, 1156.

[^16]: See for example paragraph 49 and 54 of the Judgment Debtor's initial factum, para. 26 of Vinogradov first affidavit of February 2022.

[^17]: See for example Vinogradov first affidavit Exhibits 13, 19, 21

[^18]: See trial reasons at paras. 506, 509, and 510.

[^19]: Rule 56.01(1)

[^20]: Willets et al. v. Colalillo 2007 51174