Court File and Parties

Court File No.: CV-24-00728060-00ES
Date: 2025-03-10
Ontario Superior Court of Justice

Re: Law Society of Ontario, Applicant
- and -
Shahryar Mazaheri and Mazaheri Law Professional Corporation, Respondents

Before: Frederick L. Myers

Counsel:
Stefanie Anello, for the Law Society of Ontario
Shahryar Mazaheri, for the Respondents

Heard: March 9, 2025

Endorsement

Introduction

[1] Mr. Mazaheri seeks costs of his successful defence of the Law Society’s attempt to place his law practice under trusteeship in accordance with my endorsement dated February 19, 2025, reported at 2025 ONSC 1123.

[2] In its costs submissions, the Law Society has now provided references to by-laws that counsel mentioned during the substantive hearing but she did not have in the record or available to her then.

[3] Costs submissions are not a place to try to bolster the evidence or arguments made at the substantive hearing. “I told you so,” is not a good look.

[4] The by-laws delivered are a mass of inconsistent sections that, at the same time, purport to prohibit a suspended licensee from touching a trust account, yet allowing him or her to undertake some transactions, positively requiring him or her to undertake other transactions, allowing for discretionary exceptions, and requiring a wind-down of the trust account(s).

[5] I am far from interpreting the by-laws as requiring a complete shut down of a lawyer’s practice and trust account(s) on an interlocutory suspension. The wind down provision is inconsistent with even a final suspension of limited duration.

[6] The meaning and intent of the relevant by-laws are in need of interpretation that cannot be performed in a costs decision on three pages of submissions and no evidence.

[7] On that note, it should go without saying that a page of endnotes (or footnotes) cannot be used to extend the page limit. But apparently, it does not go without saying. So, I said it.

Legal Principles Governing Costs

[8] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. The court’s discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario), paras 26, 37.

[9] Costs are normally payable on a partial indemnity basis to the successful party. In this case Mr. Mazaheri succeeded in resisting the trusteeship of his practice for now.

[10] Mr. Mazaheri is representing himself in this proceeding. He is not entitled to costs calculated as if he was paying a lawyer to act for him. Given that he is suspended from practising law, he cannot have given up remunerative time to participate in this proceeding. Fong v. Chan.

[11] The Law Society committed no misconduct deserving censure by an award of punitive costs as discussed in Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239, para 43. As discussed below, the Law Society made a strategic decision to rely on the Law Society Tribunal suspension of Mr. Mazaheri as grounds for the trusteeship order. I held that this was not sufficient. There was nothing reprehensible in the effort.

Costs Award

[12] Mr. Mazaheri incurred disbursements of almost $1,400 in this proceeding. It is fair and reasonable in my view therefore to fix the costs of the hearing payable to Mr. Mazaheri at $2,000 all inclusive.

[13] Mr. Mazaheri seeks costs of $5,437.47 on a full indemnity basis, or alternatively $3,645.00 on a substantial indemnity basis. He gives no recognition to his self-represented status despite my explicit reference to the relevant law in para. 32 of my prior endorsement. I foreshadowed for the parties that a modest costs award could still be in order despite the absence of evidence that Mr. Mazaheri lost remunerative employment to participate in this proceeding.

[14] The Law Society offered to pay costs to Mr. Mazaheri of $3,000. He held out for punitive costs claiming that the proceeding was frivolous and caused him “aggravation.”

[15] The costs claimed by Mr. Mazaheri on a “substantial indemnity basis” were just a few hundred dollars more than what the Law Society offered. An award of costs on a “full indemnity basis” is almost never made unless there is a contractual entitlement to it.

[16] As Justice Gilmore indicated in her initial endorsement, the proceeding was anything but frivolous. The outcome turned on the Law Society’s strategic decision to rely on the interlocutory suspension to support the need for a trusteeship without providing admissible evidence of the desirability, need, or fairness of a full shut down of the respondent’s practice while his conduct charges remain outstanding.

[17] I held that the interlocutory suspension of the respondent by the Law Society Tribunal, on its own, was not a sufficient basis to make a trusteeship order. The few snippets of evidence relied on by counsel as a fallback were all explicable and did not support a trusteeship at this time. That does not mean that the Law Society will not be back later with more or different evidence if circumstances change.

[18] There was no basis for Mr. Mazaheri to expect costs calculated on his hourly rates and I told him as much in my prior endorsement. Moreover, there was no reasonable basis for him to expect punitive costs would be awarded against the Law Society. Neither is his aggravation compensable in this case. A lawyer suspended for alleged serious fraudulent misconduct may indeed suffer aggravation as the regulator acts against him. I am not prepared to attribute monetary value to any accretive aggravation that this particular effort to protect the public may have caused him.

[19] Mr. Mazaheri’s determination to require the Law Society to incur the costs of this costs proceeding was not reasonable. The Law Society offered to pay Mr. Mazaheri more than the quantum of costs that I fixed in his favour. The Law Society incurred costs of $700 (at internal rates) related to the preparation of its costs submissions and its Bill of Costs. Accordingly, I award the Law Society costs of this costs proceeding on a partial indemnity basis fixed at $500.

[20] Overall, the Law Society therefore shall pay net costs to Mr. Mazaheri fixed at $1,500 all-inclusive.

Frederick L. Myers

Release Date: March 10, 2025