COURT FILE NO.: CV-17-00570365-0000 DATE: 20241213

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Victoria Smith Plaintiff – and – Shaun Rothberg also known as Shaun Rootenberg, B-G Enterprises Inc. operating as B-G Enterprise Real Estate Group Inc., Bonnie Gottlieb and Myron Gottlieb Defendants

Counsel: Brendan O’Grady and Anton Rizor, for the Plaintiff Appearing in person (for Shaun Rothberg)

HEARD: December 2, 2024

REASONS FOR JUDGEMENT

MERRITT J.

OVERVIEW

[1] The Plaintiff Victoria Smith (“Ms. Smith”) brings this summary judgment motion against the Defendant Shaun Rothberg also known as Shaun Rootenberg (“Mr. Rootenberg”) to recover damages for breach of trust.

[2] Ms. Smith set this case down for trial on September 28, 2022. Therefore, Ms. Smith requires leave pursuant to r. 48 of the Rules of Civil Procedure R.R.O. 1990, Reg 194 to bring this motion.

[3] Ms. Smith also seeks a dismissal of the action against the other Defendants without costs because she has settled her claim against them. Mr. Rootenberg does not consent to the dismissal of the action against the other Defendants.

[4] Mr. Rootenberg did not file any materials on the motion but he appeared in person and made submissions. Mr. Rootenberg requested an adjournment because he did not have sufficient time to prepare.

[5] Ms. Smith’s motion record was served at Mr. Rootenberg’s last known address. He acknowledged that he did receive a copy of Ms. Smith’s pre-trial conference memorandum on November 18, 2024 which says that this matter was scheduled for trial today. He also said that on November 21, 2024 he picked up a copy of the motion record for today’s motion for summary judgment.

[6] Ms. Smith also served the motion record by email to Mr. Rootenberg because of the Canada Post strike.

[7] There is no doubt that Mr. Rootenberg was validly served with the motion record pursuant to the Rules.

[8] I denied Mr. Rootenberg’s request for an adjournment because he was aware of today’s date, was validly served, said he did not intend to retain counsel, and had no valid defence to the motion.

DECISION

[9] Ms. Smith is granted leave to bring this motion. Ms. Smith is granted judgment against Mr. Roootenberg for damages in the amount of $595,000.

[10] The action against B-G Enterprises Inc. operating as B-G Enterprise Real Estate Group Inc., Bonnie Gottlieb and Myron Gottlieb (the “Other Defendants”) is dismissed without costs.

BACKGROUND FACTS

[11] This is a case of romance fraud. Ms. Smith met Mr. Rootenberg through the eHarmony dating website in July 2013 and began dating. At that time she knew him as Mr. Rothberg.

[12] Mr. Rootenberg convinced Ms. Smith to invest in two purported investment opportunities. She invested $160,000 on September 17, 2013 for an alleged investment in Social Trivia and $435,000 on October 22, 2013 to invest in second mortgages on her behalf. She gave him her life savings of $595,000.

[13] Mr. Rootenberg made some “interest payments” to Ms. Smith totaling $36,544.

[14] Mr. Rootenberg directed the Defendant Myron Gottlieb (“Mr. Gottlieb) to disburse Ms. Smith’s funds between September 18, 2013 and April 2014 to Mr. Rootenberg, Mr. Gottlieb, Mr. Rootenberg’s sister, to a BMW car dealership and to other associates of Mr. Rootenberg.

[15] In November 2014 Ms. Smith discovered that “Mr. Rothberg’s” real name is Mr. Rootenberg and that he has a criminal record for fraud. The relationship between them ended shortly afterwards.

[16] Ms. Smith did not receive any “interest payments” after September 2015.

[17] On July 19, 2019 Mr. Rootenberg was convicted of fraud over $5,000 contrary to s.380(1) of the Criminal Code R.S.C., 1985, c. C-46 (the “Code”) in relation to the money Ms. Smith gave to him: R. v. Rootenberg, 2019 ONSC 4145.

[18] On September 30, 2020 Mr. Rootenberg was sentenced to six years in prison and ordered to make restitution to Ms. Smith in the amount of $558,456 to be paid no more than 5 years following his release from prison: R. v. Rootenberg, 2020 ONSC 5928 at paras. 124-125 (the “Restitution Order”).

THE ISSUES

[19] There are 4 issues as follows:

1. Should the Plaintiff be granted leave to bring this motion?
2. If so, is this an appropriate case for summary judgment?
3. If so, is the Plaintiff entitled to judgment against Mr. Rootenberg?
4. Should the claim against the Other Defendants be dismissed?

ANALYSIS

Issue 1: Leave to Bring the Motion

[20] Rule 48.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that a party who sets an action down for trial may not initiate a motion without leave of the court.

[21] The test under r. 48.04 is the subject of some disagreement. Some courts have required a change in circumstances, others have determined that leave should be granted if the motion is necessary in the interests of justice, and some courts have considered both a change in circumstances and the interests of justice: Horani v. Manulife Financial Corporation, 2023 ONCA 51, at paras. 16-19.

[22] Leave may be granted for a summary judgment motion which, if successful will bring an end to the action and be faster and cheaper than a trial: Rego v Walmart, 2017 ONSC 812 at para. 13-15 citing Fruitland Juices Inc. v. Custom Farm Service Inc., 2012 ONSC 4902, [2012] O.J. No. 4050.

[23] In this case, the interests of justice require that leave be granted because there is no doubt that the summary judgment motion will provide a faster and cheaper resolution than a trial.

Issue 2: Appropriate Case for Summary Judgment

[24] Rule 20.04(2)(a) is mandatory and provides: “The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”.

[25] There is no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits of the motion. This will be the case where the process (1) allows the court to make necessary findings of fact, (2) allows the court to apply the law to the facts, and (3) is a proportionate, more expeditious, and less expensive means to achieve a just result: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 49; Moffitt v. TD Canada Trust, 2023 ONCA 349, 483 D.L.R. (4th) 432, at para. 39.

[26] The court is entitled to assume that it has all the evidence that would be available at trial related to the matters at issue: Portuguese Canadian Credit Union v. Pires, 2011 ONSC 7448, at para. 11, aff’d 2012 ONCA 335.

[27] In Bank of Montreal v. Woldegabriel, the court found that there was no genuine issue for trial in a claim for damages for fraud in a case where the plaintiff primarily relied on the defendant's criminal convictions of fraud arising out of the same transactions at issue in the civil proceeding: at para. 73, aff’d 2008 ONCA 71, leave to appeal dismissed with costs .

[28] I am satisfied that I can make the necessary findings of fact, apply the law to the facts and come to a just result.

Issue 3: The Plaintiff is Entitled to Judgment

[29] Section 22.1 of the Evidence Act, R.S.O. 1990, c. E.23 provides as follows:

(1) Proof that a person has been convicted or discharged anywhere in Canada of a crime is proof, in the absence of evidence to the contrary, that the crime was committed by the person, if,

(a) no appeal of the conviction or discharge was taken and the time for an appeal has expired; or

(b) an appeal of the conviction or discharge was taken but was dismissed or abandoned and no further appeal is available.

[30] In this case, Mr. Rootenberg was convicted, appealed and lost in the Court of Appeal.

[31] The Criminal Code s. 691 (1)(b) provides that Mr. Rootenberg must seek leave to appeal to the Supreme Court of Canada (the “SCC”). He has not applied for leave to appeal to the SCC.

[32] Under the Supreme Court Act R.S.C., 1985, c. S-26 s. 58(1)(a) the time limit to apply for leave to appeal is 60 days from the date of the judgment of the Court of Appeal decision on June 18, 2024. The month of July is excluded from the calculation. The time for Mr. Rootenberg to apply for leave to appeal expired on September 16, 2024.

[33] Mr. Rootenberg said that he has spoken to his criminal lawyer about the possibility of applying for an extension of time to apply for leave to appeal and therefore s.22.1 does not apply.

[34] I give no effect to this submission. If Mr. Rootenberg is correct then section 22.1 would be meaningless because a further appeal is always a possibility.

[35] Section 22.1 is a rule of evidence intended to expedite the proving of facts decided in a criminal case in a subsequent proceeding. In a civil case, proof of the defendant’s prior conviction is proof of the verdict and the essential facts of the offence: Lambert v. Lambert, 2022 ONSC 6432, at para. 9.

[36] Evidence of the fact of a prior conviction is proof of the fact that the convicted person committed the crime absent “evidence to the contrary.” It is proof of all the facts essential to that conviction absent "evidence to the contrary". “Evidence to the contrary” refers to evidence that contradicts the facts essential to the conviction: Intact Insurance Company v. Federated Insurance Company of Canada, 2017 ONCA 73, 134 O.R. (3d) 241, at paras. 17-19.

[37] While generally, Mr. Rootenberg may lead “evidence to the contrary” to avoid the evidentiary rule in s. 22.1, in this case, the common law doctrine of abuse of process may prevent him from doing so: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at paras. 18-19; Intact Insurance, at paras. 20-22.

[38] The abuse of process doctrine is a broad, flexible common law doctrine developed by the courts to protect the integrity of the adjudicative process. “It serves as an adaptable judicial tool to address circumstances that threaten the fairness and integrity of the court’s process and the administration of justice.”: La Française IC 2 v. Wires 2024 ONCA 171 at para 8. The doctrine precludes re-litigation of decided facts when doing so would undermine the integrity of the adjudicative process.

[39] In Intact Insurance, at para. 28, the court summarized the following principles from the reasons of Arbour J. in C.U.P.E.:

• The abuse of process doctrine is a manifestation of a court’s inherent power to prevent misuse of its process by re- litigation of previously decided facts: C.U.P.E., at para. 37;

• The doctrine is primarily focused on preserving the integrity of the administration of justice rather than protecting the interests of individual litigants: C.U.P.E., at para. 43;

• Re-litigation inevitably has a detrimental effect on the due administration of justice. It can lead to inconsistent and even irreconcilable results, devalue finality, and cause the expenditure of resources, both public and private, on further proceedings with no guarantee that the second result will be more accurate than the first: C.U.P.E., at paras. 38, 51-52;

• Re-litigation should thus be avoided unless “the circumstances dictate that re-litigation is in fact necessary to enhance the credibility and the effectiveness of the adjudicative process as a whole”; C.U.P.E., at para. 52;

• There is no closed list of the circumstances in which re-litigation is necessary. Courts will permit re-litigation if in the specific circumstances “fairness dictates that the original result should not be binding in the new context”: C.U.P.E., at paras. 52-53.

[40] The question is, in the circumstances of this case, whether allowing Mr. Rootenberg relitigate the facts underlying his conviction is fair and whether it will enhance the integrity, credibility and effectiveness of the administration of justice to allow him to do so.

[41] Circumstances in which it may be fair to allow re-litigation include situations where the original case was tainted by fraud or dishonesty, the stakes were too minor to generate a full and robust response, fresh new evidence previously unavailable conclusively impeaches the original results or there was an inadequate incentive to defend: C.U.P.E., at paras. 52-53. Other such circumstances include a lack of fairness or effective representation in the original case or different issues: Hanna v. Abbott (2006), 82 O.R. (3d) 215 (C.A.), at para. 32; Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (C.A.), at para. 57.

[42] Mr. Rootenberg did not suggest his criminal trial was unfair, or was tainted by fraud or dishonesty, or that the stakes were too minor. He does not submit there is fresh new evidence previously unavailable. He does not say he did not have effective representation.

[43] The doctrine of abuse of process bars Mr. Rootenberg from re-litigating the essential facts of the offence. He cannot adduce evidence contrary to the essential facts of the conviction or evidence to displace the conviction: Lambert at para. 10. It would be an abuse of process to allow re-litigation.

[44] The factual findings in the criminal decisions establish the three certainties necessary for breach of trust. The criminal courts in this case found that Ms. Smith and Mr. Rootenberg made an agreement pursuant to which Ms. Smith transferred to Mr. Rootenberg $160,000 to invest in Social Trivia and $435,000 to invest in second mortgages. She gave him the funds to invest on her behalf and for her benefit to earn returns. I find that this was a verbal express trust: Dhillon v Dasta, 2024 BCSC 360 at para. 56.

[45] If I am wrong that there was an express trust, I find this was a resulting trust because Mr. Rootenberg received Ms. Smith’s funds for no value and therefore, he is under an obligation to return them to her: Pecore v. Pecore, 2007 SCC 17 at para. 20.

[46] Mr. Rootenberg breached the trust by diverting the funds for his personal use and the use of third parties as found by the trial judge in the criminal case: Rootenberg (trial decision) at paras. 138 and 321 and Rootenberg (appeal decision) at para. 6.

[47] Mr. Rootenberg submitted that it is not necessary for me to grant summary judgment in favour of Ms. Smith because there is already a Restitution Order from the criminal proceedings.

[48] I reject this submission because the Criminal Code provides that a civil remedy is not affected by reason only that an order for restitution has been made: s. 741.2.

[49] There is good reason to grant summary judgement because the Restitution Order is only enforceable five years after Mr. Rootenberg’s release from prison which is sometime in February 2027 and the Restitution Order does not provide for interest.

[50] There is no risk of double recovery. Accounting for the “interest payments” Mr. Rootenberg made, the balancing owing to Ms. Smith is $558,456. The judgment will provide that Ms. Smith’s entitlement is reduced by any amount recovered under the Restitution Order.

Issue 4: Dismissal Against the Other Defendants

[51] The Plaintiff and the Other Defendants consent to an order dismissing this action against the Other Defendants because they have settled the case as between them.

[52] Mr. Rootenberg does not consent.

[53] Mr. Rootenberg filed his Statement of Defence on August 14, 2017 and has never advanced a cross claim against the other Defendants.

[54] The claim as against the Other Defendants is dismissed because the affected parties are consenting. There is no prejudice to Mr. Rootenberg as he did not cross claim against the Other Defendants and there is no Pierrenger agreement.

COSTS

[55] The Plaintiff seeks costs on a partial indemnity basis in the amount of $100,000. Unfortunately the Bill of Costs provided does not describe any of the work done up until the motion for summary judgment but merely lists the names and experience of the timekeepers, dates (in groups of several months), hours and amounts. The total partial indemnity costs on the Bill of Costs is $150,839.70. For the summary judgment motion the Plaintiff seeks partial indemnity costs of just under $45,000. There were no cross examinations and only the four-page affidavit of a legal assistant in the Plaintiff’s motion record. The Defendant did not file any responding material.

[56] I have considered the factors under r. 57.01(1) including the time spent, rates charged, reasonable expectations of the parties, as well as the amount claimed by the Plaintiff in the statement of claim. In my view, having regard to all of the factors, I find that $50,000 inclusive of HST and disbursements is appropriate.

DISPOSITION

[57] Ms. Smith is granted leave to bring this motion and granted judgment in the amount of $558,456 plus prejudgment interest pursuant to the Court of Justice Act s. 128 calculated from October 22, 2013 in the amount of $49,682.69 and costs in the amount of $50,000 inclusive of HST and disbursements.

Merritt J.

Released: December 13, 2024