Superior Court of Justice – Ontario

Court File No.: CV-22-00683894-0000
Date: 2025-03-28

Parties

Plaintiffs: Albert Carbone and Cathy Horvath
Defendants: Salvatore Boccia, Rosanna Boccia, 215 Holding Corp., Jane Doe, David Shpilt, Pamela Atkinson, John Doe, and Doe Corp.

Before: Rohit Parghi

Counsel:

• Daniel Milton and Sophie Vaisman (student-at-law), for the Plaintiffs
• Eli Smolarcik, for the Defendant Rosanna Boccia

Heard: 2024-11-14

Endorsement

Background

The Plaintiffs allege that the Defendants misappropriated their life savings by deceiving them into lending money to a non-existent business. The background to this matter is aptly summarized in an earlier decision of Morgan J. (Carbone v. Boccia, 2022 ONSC 6528), and I reproduce his summary here:

In early 2021, the Plaintiffs, who are retirees, were introduced to the Defendant, Salvatore Boccia, who was seeking investors for his cannabis business, Sustainable Growth Strategic Capital Corp. (“Sustainable”). Mr. Boccia explained that Sustainable was producing creams, oils, and other cannabis products for pain relief. He told the Plaintiffs that Sustainable was owned by another company, 215 Holding Corp. (“215 Hold Co.”). The President, Secretary, and sole director of 215 Hold Co. is Mr. Boccia’s mother, the Defendant, Rosanna Boccia.

In February and March of 2021, Mr. Boccia took a number of further steps to convince the Plaintiffs of the legitimacy of Sustainable and its operations. These included:
a) producing documents, such as a cannabis license issued by Health Canada and a contract to sell product to a supposed veterans organization in Nova Scotia;
b) taking one of the Plaintiffs on a tour of a facility in North York which Mr. Boccia claimed was being rented by Sustainable; during this time, Mr. Boccia showed off some equipment that he said belonged to Sustainable and introduced the male Plaintiff to a man who was described as a leading chemist working for Sustainable; and
c) taking one of the Plaintiffs on a tour of a facility in Scarborough which was described as Sustainable’s newest production facility.

Based on these representations, the Plaintiffs were persuaded to invest with the Defendants. They provided Mr. Boccia a cheque in the amount of $60,000 dated February 12, 2021, and another cheque in the amount of $290,000 dated March 21, 2021. Both cheques were payable to 215 Hold Co. In return, 215 Hold Co. and the Plaintiffs entered into a Stock Option Agreement dated March 16, 2021 in which the Plaintiffs obtained the right to purchase 10% of the shares of 215 Hold Co. in exchange for the $350,000 they had just paid.

The Plaintiffs subsequently made two more loans to 215 Hold Co. and/or Sustainable: $175,000 on March 23, 2021 and $250,000 on May 2, 2021. Mr. Boccia assured the Plaintiffs that these two loans would be repaid by the end of May 2021.

It has become apparent that Sustainable was never operating out of the facilities that Mr. Boccia showed to the Plaintiffs. Moreover, 215 Hold Co. never owned Sustainable; rather, a company called Agra Ventures Inc. purchased Sustainable in March 2020. It then sub-let Sustainable’s assets and its Health Canada cannabis license to an unrelated company. Accordingly, 215 Hold Co., Mr. Boccia, and Ms. Boccia never had the authority to grant Sustainable stock or stock options to the Plaintiffs. In addition, the purchase order from the veterans association in Nova Scotia turned out to be fake.

Despite repeated requests, none of the funds have ever been returned to the Plaintiffs, nor have they been accounted for in any way. The Plaintiffs have brought an action in fraud, fraudulent misrepresentation, conversion, and unjust enrichment against Mr. Boccia, Ms. Boccia, 215 Hold Co. and other currently unidentifiable actors who were involved in the scheme.

Relief Sought

The Plaintiffs now seek default judgment, or, in the alternative, summary judgment against the Defendants other than Pamela Atkinson, against whom they do not seek relief.

Disposition

For the reasons below, I grant default judgment against Salvatore Boccia and David Shpilt for fraud, conversion, and unjust enrichment, in the amount of $775,000.00. I strike the Statement of Defence of 215 Holding Corp. (“215”) and grant default judgment against it for fraud, conversion, oppression, and unjust enrichment, in the amount of $775,000.00. I grant default judgment against Mr. Boccia, Mr. Shpilt, and 215 for punitive damages, in the amount of $250,000.00. I grant summary judgment against Rosanna Boccia for fraud, conversion, and oppression, in the amount of $775,000.00.

These judgments are granted on a joint and several basis. In the result, Ms. Boccia is jointly and severally liable, together with 215, Mr. Boccia, and Mr. Shpilt, to repay the Plaintiffs the principal amount of the investment of $775,000.00. Additionally, 215, Mr. Boccia and Mr. Shpilt are jointly and severally liable to pay the Plaintiffs punitive damages of $250,000.00.

Motion for Default Judgment Against Salvatore Boccia and David Shpilt

Whether to grant default judgment against Mr. Boccia and Mr. Shpilt was not in dispute before me. These parties have long been noted in default. They have communicated no intention to defend the action. They submitted no materials on the motion and did not appear at the motion.

I grant the motion for default judgment against these Defendants for fraud, conversion, and unjust enrichment, in the amount of $775,000.00. Their deemed admission of facts in the Statement of Claim resulting from their defaults, together with the evidence contained in the affidavits filed in support of the motion, support a judgment on liability and damages.

Motion for Default Judgment Against 215 for Fraud, Conversion, Oppression, Unjust Enrichment

215, unlike the Defendants named above, did initially defend the action. However, it is no longer represented by counsel and does not have leave of the court to be represented by someone other than a lawyer. This is contrary to the requirements of subrules 15.04(6) - (9) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), and the June 19, 2024 Endorsement of Associate Justice Abrams, both of which imposed a deadline on 215 to obtain new counsel or seek leave to be represented by someone other than a lawyer. The Rules and the Endorsement both provide that if 215 did not comply with that deadline, its defence could be struck. 215 did not comply with that deadline. No one purporting to represent 215 appeared before me in the motion or purported to take a position on the motion.

In these circumstances, I strike out 215’s defence. As a consequence of its Statement of Defence being struck, 215 is deemed to have admitted the truth of the allegations against it in the Statement of Claim.

Further, I grant default judgment against 215 for fraud, conversion, oppression, and unjust enrichment in the amount of $775,000.00. The deemed admission by 215 of the facts in the Statement of Claim, together with the evidence contained in the affidavits filed in support of the motion, support a judgment on liability and damages.

Claim for Punitive Damages Against Salvatore Boccia, David Shpilt, and 215

I grant punitive damages against Mr. Boccia, Mr. Shpilt, and 215. Based on the evidence in the record, I agree with the Plaintiffs’ submission that this was an affinity fraud that was perpetrated against unsophisticated parties who were recent retirees. The conduct of Mr. Boccia and Mr. Shpilt in perpetrating this fraud may aptly be called brazen and intentional. Mr. Boccia perpetrated the fraud through the vehicle of 215, and accordingly punitive damages against 215 are also appropriate.

The principles governing punitive damages are articulated in the Supreme Court of Canada decision of Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595. In Whiten, the Court held (at para. 94) that punitive damages are very much the exception rather than the rule and are to be imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are, or are likely to be, inadequate to achieve the objectives of retribution (giving the defendant their just desert), deterrence (deterring the defendant and others from similar misconduct in the future), and denunciation (marking the community’s collective condemnation of what has happened). Punitive damages are to be awarded only where compensatory damages are insufficient to accomplish these objectives.

When punitive damages are awarded, they should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff, and any advantage or profit gained by the defendant; and having regard to any other fines or penalties suffered by the defendant for the misconduct in question (Whiten, at para. 94). They are to be awarded in an amount that is no greater than necessary to rationally accomplish their purpose. The Court held that underlying these principles is “the need to emphasize the nature, scope and exceptional nature” of the punitive damages remedy, and “fairness to both sides” (Whiten, at para. 95).

In my view, the full extent of the Plaintiffs’ loss can only be compensated through a punitive damages award. The loss and harm they suffered cannot be adequately compensated merely by a compensatory damages award equal to their investment. Those damages merely would make them whole for their investment but would not recognize or purport to compensate them for the distress and emotional harm they experienced as a result of their dealings with Mr. Boccia, Mr. Shpilt, and 215. An award of punitive damages is appropriate and indeed necessary, because it offers the only vehicle for redress of the harm and loss the Plaintiffs suffered.

Additionally, punitive damages are appropriate. The behaviour of these Defendants, detailed in the record before me and entirely uncontested, was outrageous and offensive to this court’s sense of decency. It was a marked departure from ordinary standards of decent behaviour. I therefore grant default judgment against Mr. Boccia, Mr. Shpilt, and 215 for punitive damages in the amount of $250,000.00, on a joint and several basis. I consider this quantum of punitive damages to be appropriate in light of the nature of their conduct and the magnitude of the fraud they perpetrated against the Plaintiffs.

Motion for Default Judgment Against Ms. Boccia

At the outset of the hearing, I heard submissions from counsel on whether to grant default judgment against Ms. Boccia rather than proceeding with a motion for summary judgment. Ms. Boccia had engaged counsel late in the day, and well after the deadline imposed by previous Endorsements. The Plaintiffs’ view was that it was appropriate to grant default judgment. Ms. Boccia’s position was that default judgment was inappropriate and that the matter should proceed to a hearing on summary judgment at which her counsel should be able to make submissions based on the Plaintiffs’ materials.

I decided not to grant default judgment and to proceed with the summary judgment motion.

As I explained in my oral reasons, there were several bases on which I could have granted default judgment, including Ms. Boccia’s failure to retain new counsel in accordance with the timeline set forth in the Removal Order, the Rules of Civil Procedure, and Justice Stevenson’s Order; her failure to pay the costs awards made against her in accordance with Justice Morgan’s Order; and the clear language of rule 15.04. I note also that this motion date was set on July 4, 2023, so Ms. Boccia has known about this motion date for a year and four months.

However, I accepted that, at the time of the hearing of the motion, Ms. Boccia was, through her counsel, expressing an interest in defending herself and responding to the motion. In the circumstances, I therefore exercised my discretion to not grant default judgment, and to instead allow the matter to proceed as a motion for summary judgment and allow her counsel to make submissions.

To protect against any potential prejudice to the Plaintiffs arising from the fact that Ms. Boccia had not filed any materials, and had thereby not given any notice of her arguments on the motion, I scheduled the hearing so that we would hear from Ms. Boccia’s counsel before the lunch hour and would then take a lengthy lunch break during which counsel for the Plaintiffs would have adequate time to prepare any reply submissions. Counsel confirmed that this plan was satisfactory and would give him the time he needed. We proceeded accordingly.

Motion for Summary Judgment Against Ms. Boccia

The Law on Summary Judgment

On a motion for summary judgment, I must first determine, based only on the record before me, whether there is a genuine issue requiring a trial. If there appears to be a genuine issue requiring a trial, I am to determine if the need for a trial could be avoided by using my enhanced powers under either rule 20.04(2.1) or 20.04(2.2) of the Rules of Civil Procedure. Rule 20.04(2.1) empowers me to weigh evidence, evaluate a deponent’s credibility, and draw reasonable inferences from the evidence. The power set out in rule 20.04(2.2) allows me to order that oral evidence be presented by one or more parties. I may use these powers at my discretion, as long as their use is not contrary to the interests of justice – that is, as long as they will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole (Hryniak v. Mauldin, 2014 SCC 7, at para. 66).

The responding party must set out, by affidavit or other evidence, specific facts that show there is a genuine issue requiring a trial (r. 20.02(2)). I am entitled to presume that the parties have put forth their best evidence on the motion and that if the case were to proceed to trial, no additional evidence would be presented (TD Waterhouse Canada Inc. (TD Waterhouse Private Investment Advice) v. Little, at para. 15, citing Rogers Cable TV Ltd. v. 373041 Ontario Ltd.).

Summary judgment will be appropriate where (1) I am able to make the necessary findings of fact, based on the record and my enhanced powers under rules 20.04(2.1) and 20.04(2.2); (2) I am able to apply the law to the facts; and (3) the motion process is a proportionate, more expeditious, and less expensive means to achieve a just result than going to trial (Hryniak, at para. 49).

Ms. Boccia did not tender any evidence on this motion. This is so notwithstanding her obligations under rule 20.02(2) and the fact that the motion date was scheduled 16 months before it was heard. Although she did not adduce evidence of her own, she did give evidence in cross-examination, which I have considered in my analysis.

For the reasons below, I am of the view that it is appropriate to grant summary judgment on the claims of fraud, conversion, and oppression against Ms. Boccia. There is no genuine issue requiring trial in respect of any of these causes of action. I make this finding based primarily on the record before me. I also rely on two inferences that I draw based on the record, pursuant to the enhanced fact-finding powers set forth in rule 20.04(2.1).

Factual Findings

The factual issues I need to decide on this motion pertain to Ms. Boccia’s involvement in the fraud against the Plaintiffs, and whether her liability is a genuine issue requiring trial. No evidence has been filed in this matter by Ms. Boccia.

Based on the record before me, I make the following factual findings:

a. Ms. Boccia was at all times the president, secretary, and sole director of 215.
b. 215 was never an operational cannabis company. It never bought, sold, or packaged cannabis or CBD-related products. It did not own any equipment for manufacturing cannabis products.
c. 215 was never a legitimate business of any kind.
d. As the sole director of 215, Ms. Boccia alone had signing authority on behalf of 215. She alone could open bank accounts for 215.
e. In her capacity as the director of 215, Ms. Boccia signed account opening documents for 215 with Royal Bank of Canada and Bank of Nova Scotia. She knew she was opening 215’s bank accounts for Mr. Boccia’s cannabis business. She opened the accounts on Mr. Boccia’s behalf because at the time, his identification had been confiscated by police, and he therefore could not open a bank account himself. She knew his identification had been confiscated by the police and that this meant he could not open an account.
f. On February 17, 2021, Ms. Boccia signed an “Initial Stock Option Agreement” on behalf of 215. The Initial Stock Option Agreement purported to sell Mr. Carbone the option to purchase 10% of the shares of Sustainable. By signing the Initial Stock Option Agreement, Ms. Boccia falsely represented to the Plaintiffs that 215 owned 100% of the shares of Sustainable, when in fact there was no relationship between 215 and Sustainable, and that Mr. Carbone’s purchase of 10% of the shares of Sustainable was a legitimate transaction, when it was not. The purpose of this false representation was to induce the Plaintiffs to pay funds to 215 in consideration for the stock option.
g. Two weeks after Ms. Boccia signed the Initial Stock Option Agreement, Mr. Carbone made a payment of $290,000.00 to 215.
h. On March 22, 2021, Ms. Boccia, on behalf of Sustainable, signed a purported agreement between Sustainable and a veterans’ association in Nova Scotia. By signing the agreement, she falsely represented that, as a director of 215, she had signing authority on behalf of Sustainable, when she did not; that 215 and Sustainable had a relationship with the veterans’ association, when they did not; and that the agreement was legitimate, when it was not. The purpose of this false representation was to induce the Plaintiffs to pay further funds to 215 as a purported investment to enable Sustainable to fulfill the agreement.
i. On March 23, 2021, Ms. Horvath made a payment of $175,000.00, which was deposited by 215.
j. 215 received all of the Plaintiffs’ investment funds into its Royal Bank of Canada and Bank of Nova Scotia accounts, which Ms. Boccia had opened in her capacity as director of 215.
k. The Plaintiffs’ investment funds were disbursed from the 215 bank accounts, which Ms. Boccia had opened. The funds were disbursed for personal matters like luxury items and payments to family and friends.
l. Ms. Boccia would go to the Bank of Nova Scotia with Mr. Boccia and sign whatever documents he wanted her to sign. She signed cheques that depleted the Plaintiffs’ investment. Mr. Boccia would often have her sign multiple blank cheques and would fill in the payee name and cheque amount later by himself. She did not follow up on what the payments were for. Her signature is on many of the suspicious cheques.
m. Ms. Boccia took out bank drafts from 215’s accounts on Mr. Boccia’s direction, even though she could not identify the individuals to whom the bank drafts were payable.
n. Ms. Boccia facilitated the withdrawal of cash from 215’s bank accounts. On several occasions, Mr. Boccia or his acquaintances drove Ms. Boccia to a cheque cashing facility in what she describes as a “little strip plaza,” where she would give her driver’s license to “random strangers” outside the facility and wait in the car while they went into the facility, impersonated her, and emerged with cash from 215’s bank accounts.
o. The Plaintiffs’ money was never used legitimately.
p. Ms. Boccia did not ever look at 215’s bank statements.
q. Ms. Boccia received $6,500 in proceeds from the Plaintiffs’ investment, paid out of the 215 Royal Bank of Canada account, in February and March 2021. She received $30,000 in such proceeds paid out of the 215 Bank of Nova Scotia account in March 2021. She received an additional $43,600 paid by cheques issued from 215’s bank accounts between April 30 and December 1, 2021, in payment for assisting Mr. Boccia with household chores, maintenance, and errands including banking. She received additional cash from the Plaintiffs’ funds. These payments from 215 were not connected to the purported cannabis business or to Sustainable.

In addition, I find that Ms. Boccia knew she was the sole director of 215. I infer this based on the record, pursuant to the enhanced power afforded to me under rule 20.04(2.1) to “draw any reasonable inference from the evidence.” The record makes clear that, in her capacity as director of 215, Ms. Boccia opened its bank accounts at two separate banks. When she opened those accounts, she signed as the director of 215. Moreover, she signed numerous cheques from those accounts, and took out bank drafts from those accounts, again in her capacity as director. She understood that she was the only one who could do these things on behalf of 215. I infer from these facts that Ms. Boccia was aware she was the director of 215. Given that the record reasonably supports this inference, the onus fell on Ms. Boccia to tender affidavit evidence in support of any argument to the contrary, particularly in a summary judgment motion where it is her obligation to “lead trump or risk losing”. She did not do so.

I further infer that Ms. Boccia was not subject to any coercion or pressure to take any of the actions described above, including creating 215, serving as its director, opening its bank accounts, signing cheques including blank cheques from the bank accounts, taking out drafts from the bank accounts, or facilitating the withdrawal of cash from those bank accounts. There is no evidence in the record to suggest that Ms. Boccia was subject to any such coercion or pressure. I infer, from the silence of the record on this point, that she was under no such coercion or pressure. Again, given that the record reasonably supports this inference, it fell on Ms. Boccia to tender evidence to the contrary. She did not do so.

Fraud

I find that there is no genuine issue requiring trial in respect of the allegations of fraud against Ms. Boccia. The elements of civil fraud are made out in the record.

These elements are well established: (a) there must be a false representation made by the defendant; (b) there must be some level of knowledge of the falsehood of the representation on the part of the defendant, whether through knowledge or recklessness; (c) the false representation must have caused the plaintiff to act; and (d) the plaintiff’s actions must have resulted in a loss (Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, at para. 21).

Applying this test here, I find, first, that Ms. Boccia made several false representations to the Plaintiffs. She signed the Initial Stock Option Agreement on behalf of 215. By doing so, she falsely represented that 215 owned 100% of the shares of Sustainable, and that Mr. Carbone’s purchase of 10% of the shares of Sustainable was a legitimate transaction. She affirmed a non-existent relationship between 215 and Sustainable. Additionally, she signed the purported agreement with the Halifax veterans’ organization as a director of Sustainable. By doing so, she falsely represented that she had signing authority on behalf of Sustainable and that the agreement was legitimate.

Second, I find that she either had actual knowledge that these representations were false or was reckless as to their truth or falsity. By signing the “Initial Stock Option Agreement” on behalf of 215, Ms. Boccia falsely represented to the Plaintiffs that 215 owned 100% of the shares of Sustainable and that Mr. Carbone’s purchase of 10% of the shares of Sustainable was a legitimate transaction. By signing the agreement with the veterans’ association, she falsely represented that she had signing authority on behalf of Sustainable, that 215 and Sustainable had a relationship with the veterans’ association, and that the agreement was legitimate. In fact, the record demonstrates that the agreement with the veterans’ association was fraudulent, that there was no relationship between the association and Sustainable or any of the Defendants, that 215 does not own Sustainable, that the “Initial Stock Option Agreement” contained a forged signature from Gennaro Rino Adamo (the part owner of the building housing the facility that Mr. Boccia falsely held out as the Sustainable manufacturing site, and a shareholder in the company that purchased Sustainable), and that none of the Defendants had any signing authority on behalf of Sustainable.

Ms. Boccia’s evidence is clear that she signed whatever Salvatore Boccia put in front of her without scrutinizing it, presumably including the “Initial Stock Option Agreement” and the agreement with the veterans’ association. In my view, she was reckless or willfully blind to have done so. It was certainly open to Ms. Boccia to tender affidavit evidence explaining the circumstances in which she signed these agreements, or what she understood them to mean, or why she believed that they did not amount to false representations. She did not do so.

Third, I find that her false representations caused the Plaintiffs to act. For example, two weeks after Ms. Boccia signed the Initial Stock Option Agreement on behalf of 215, Mr. Carbone provided a payment of $290,000.00, ostensibly to purchase an interest in Sustainable in accordance with that agreement’s terms. Shortly after Ms. Boccia signed the veterans agreement on behalf of Sustainable, Ms. Horvath provided a further payment of $175,000.00, ostensibly to enable Sustainable to fulfill the terms of that agreement. I am satisfied, based on the record, that the purpose of these misrepresentations was to induce these investments by the Plaintiffs and that, given the nature of the misrepresentations and their proximity in time to the Plaintiffs’ subsequent investments, they did so induce the investments. It was open to Ms. Boccia to provide evidence to rebut this understanding. She did not do so.

Finally, I find that Ms. Boccia’s actions resulted in a loss to the Plaintiffs. It is uncontroverted on the evidence before me that the Plaintiffs lost their investments. No money has been paid back to the Plaintiffs by any of the Defendants. Ms. Boccia does not contest this.

I therefore find that there is no genuine issue requiring trial in respect of the claim of fraud against Ms. Boccia.

Conversion

Nor is there a genuine issue requiring trial in respect of the allegations of conversion against Ms. Boccia. The elements of conversion are made out based on the facts before me.

These elements are articulated in the Supreme Court of Canada’s decision in Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce: “The tort of conversion involves a wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner’s right of possession”. Conversion is a strict liability tort, so “it is no defence that the wrongful act was committed in all innocence” (at para. 31).

Ms. Boccia engaged in conversion. The 215 bank accounts, which she opened, received and held the Plaintiffs’ funds. By withdrawing cash and signing cheques and drafts from those accounts, she enabled the Plaintiffs’ funds to be spent on expenses entirely unrelated to the Plaintiffs’ purported investments, without the Plaintiffs’ knowledge or permission. The funds were never recovered. This was an egregious violation of the Plaintiffs’ right of possession of the funds.

I accordingly find that there is no genuine issue requiring trial in respect of the claim of conversion against Ms. Boccia.

Oppression

I am satisfied that there is no genuine issue requiring trial as to whether Ms. Boccia exercised her powers as director of 215 in an oppressive manner. It is clear from the record that she did so.

Section 248(2) of the Business Corporations Act, RSO 1990, c B.16 (“OBCA”) articulates the oppression remedy available to aggrieved creditors against corporations and their directors. It provides:

Where… the Court is satisfied that in respect of a corporation or any of its affiliates - (a) any act or omission of the corporation or any of its affiliates effects or threatens to effect a result; (b) the business or affairs of the corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner; or (c) the powers of the directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in a manner - that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation, the court may make an order to rectify the matters complained of.

The language of this provision, and the jurisprudence, make clear that a creditor of a corporation has status to seek an oppression remedy (Churchill v. Aero Auction Sales Inc., 2019 ONSC 4766 at para 24). The Plaintiffs are creditors of 215, having “invested” (or so they thought) their money in 215 on the basis of fraudulent misrepresentations. They accordingly are entitled to pursue an oppression remedy under this provision on the ground that Ms. Boccia, the sole director of 215, exercised her powers in a way that prejudiced or unfairly disregarded their interests.

The Supreme Court of Canada has held that the oppression remedy is concerned with “harm to the legal and equitable interests of stakeholders affected by oppressive acts of a corporation or its directors” (BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, at para. 45). In assessing an oppression claim, I must consider, first, whether the evidence supports the reasonable expectation asserted by the claimant, considering such factors as general commercial practice, the nature of the corporation, the relationship between the parties, past practice, steps the claimant could have taken to protect itself, representations and agreements, and the fair resolution of conflicting interests between corporate stakeholders. Second, I am to consider whether the evidence establishes that the reasonable expectation was “violated by conduct falling within the terms ‘oppression’, ‘unfair prejudice’ or ‘unfair disregard’ of a relevant interest” on the part of the stakeholders (BCE, at paras. 68, 72).

The evidence supports that the Plaintiffs had a reasonable expectation that 215 would invest their money in a legitimate business opportunity. The Plaintiffs reasonably formed this expectation based on the numerous representations made to them for the purpose of getting them to invest in 215 by various Defendants, including 215 and Ms. Boccia, as described above.

The evidence also establishes that this reasonable expectation was violated by the conduct of 215 and Ms. Boccia. In my view, 215’s conduct meets several of the definitions of oppressive conduct identified in the statute. By not investing the Plaintiffs’ money in Sustainable, not giving the Plaintiffs shares in Sustainable, not repaying the Plaintiffs’ loan with interest by the end of May 2021, as promised or at all, and not using the Plaintiffs’ invested money for the intended purpose business and instead using it for the personal benefit of those connected to the company, 215 committed oppressive acts and carried on its business in an oppressive manner.

In considering whether Ms. Boccia should be held personally liable under the oppression remedy, I am to apply the two-part test established by the Supreme Court of Canada in Wilson v. Alharayeri, 2017 SCC 39, and further articulated by the Court of Appeal for Ontario in FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92.

First, I must find that the oppressive conduct in question is properly attributable to Ms. Boccia, as a director who has exercised or failed to exercise her powers so as to effect the oppressive conduct (Wilson, at para. 47). In FNF Enterprises, the Court of Appeal described this inquiry as turning on whether the director has “the requisite degree of involvement in the oppressive conduct so that it is attributable to them” (at para. 33).

Second, I must find that personal liability on the part of the director is fit in the circumstances (Wilson, at para. 48; FNF Enterprises, at para. 33). This test will be satisfied where an order against a director personally is a fair way of dealing with the situation, goes no further than is necessary to rectify the oppression, and serves only to vindicate the complainant’s reasonable expectations in circumstances where other forms of statutory and common law relief are not more fitting (Wilson, at paras. 47-55; FNF Enterprises, at para. 33). Having regard to the first of these criteria, situations in which it will typically be fair to make a finding of personal liability against a director include where the director has obtained a personal benefit or misused a corporate power (Wilson, at para. 49; FNF Enterprises, at para. 34).

Applying this test to the facts contained in the record before me, I conclude that there is no genuine issue requiring trial in respect of the claim of personal liability for oppression against Ms. Boccia. Ms. Boccia is properly held personally liable for oppression, for the following reasons.

First, the oppressive conduct in question is properly attributable to her. She both exercised, and failed to exercise, her powers as a director in such a way as to effect the oppression. Ms. Boccia was the sole director of 215. She knew she was the director of 215. She knew that she was opening 215’s bank accounts for Mr. Boccia’s business and that he could not open the bank accounts himself because his identification had been confiscated by police. By opening and maintaining the 215 bank accounts, she enabled the Plaintiffs’ invested money to be received, held, and then disbursed improperly. She did so through her actions, which included providing her identification so that others could impersonate her to withdraw cash from the accounts; signing cheques, including blank cheques, from the accounts; and taking out bank drafts on the accounts, including to payees whom she did not recognize. These actions enabled the wrongful depletion of the Plaintiffs’ funds. She also enabled that depletion of funds through her inaction – namely, her failure to properly monitor the corporation’s affairs, for instance by never reviewing 215’s bank statements and not asking any questions about what she was asked to sign.

Simply put, without Ms. Boccia’s involvement, the oppression could not have occurred. 215 would not have been formed. 215’s bank accounts would not have been set up. The Plaintiffs’ money would not have been received, held, or improperly disbursed. Ms. Boccia’s involvement in the oppression was thus neither peripheral nor “one-off”: she engaged in these actions (and inactions) routinely and over an extended period of time. She did not effect the oppression singlehandedly, but she certainly was among those who effected it.

Second, the imposition of a personal remedy is just in the circumstances of this case. It is a fair way of dealing with the situation, particularly in light of the direct personal benefit Ms. Boccia received from the fraud. The remedy only goes as far as is needed to rectify the oppressive conduct that took place – that is, to make the Plaintiffs whole for the investments they made and never recovered – and to rectify the reasonable expectations of the Plaintiffs. Finally, while Ms. Boccia is also liable for fraud and conversion, personal liability under the oppression remedy is a proper means of holding her liable for those aspects of her misconduct that stem directly from her acts and omissions as a director, described above.

It was open to Ms. Boccia to tender affidavit evidence in support of the suggestion that she lacked the requisite degree of involvement in the oppressive conduct, or otherwise addressing the oppression claim against her personally. She did not do so.

I am therefore satisfied that Ms. Boccia exercised her power in a way that prejudiced and unfairly disregarded the interests of the Plaintiffs, and accordingly engaged in oppressive conduct under s. 248(2)(c) of the OBCA. As such, there is no genuine issue for trial in respect of the claim of oppression against her as a director of 215.

Conclusion on Fraud, Conversion, and Oppression Claims

As the discussion above makes clear, in respect of the fraud, conversion, and oppression claims against Ms. Boccia, I am able to make the necessary factual findings and apply the law to those facts. I am also of the view that summary judgment is a proportionate, more expeditious, and less expensive means to achieve a just result than going to trial. I accordingly find that there is no genuine issue requiring trial in respect of the fraud, conversion, and oppression claims against Ms. Boccia. Summary judgment is appropriate.

Other Claims

The Plaintiffs also allege knowing assistance in fraud and unjust enrichment as against Ms. Boccia. In light of my findings on the fraud, conversion, and oppression remedy claims, I do not need to consider these additional claims.

Punitive Damages

I do not grant summary judgment in respect of the punitive damages claim against Ms. Boccia. In my view, as discussed above, her conduct was reckless and willfully blind. It was not knowing or intentional. To draw on the language of Whiten, her conduct was not high-handed or malicious, unlike that of Salvatore Boccia and David Shpilt.

Costs

In exercising my discretion to fix costs on these motions and the action under section 131 of the Courts of Justice Act, RSO 1990, c C.43, I may consider the factors enumerated in Rule 57.01 of the Rules. Those factors include the result achieved, the amounts claimed and recovered, the complexity and importance of the issues in the proceeding, the principle of indemnity, the reasonable expectations of the unsuccessful party, and any other matter relevant to costs. I am also to “step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”. The overarching objective is to fix an amount for costs that is objectively reasonable and fair for the unsuccessful party to pay, and to balance the successful party’s compensation with the goal of fostering access to justice (Boucher v. Public Accountants Council (Ontario), at paras. 26 and 37).

In applying these factors, I note the following:

a. The Plaintiffs were entirely successful on this motion, including the opposed motion against Ms. Boccia. They are, as a consequence, also successful in the action. They are accordingly entitled to their costs on the motion and the action.
b. The only party to oppose the relief sought on the motion was Ms. Boccia, who retained counsel at the eleventh hour and did not file any materials. The in-person hearing was necessary only because of Ms. Boccia; the motion would otherwise have proceeded as an unopposed motion in writing.
c. The matter was relatively complex and entailed, among other things, the compilation and review of affidavits of documents, a Mareva injunction motion, and a motion for the removal of counsel of record. The Applicant’s materials on this motion were of assistance to the court. The time spent by counsel in the motion and the matter generally was reasonable. Their hourly rates are reasonable. Work was appropriately allocated among counsel team members having regard to their seniority. The costs amounts that the Plaintiffs seek are accordingly reasonable.
d. Ms. Boccia demonstrated a pattern of trying to delay these proceedings and evade their hearing on the merits for as long as possible. Additionally, she has failed to pay at least one costs order previously made against her. The record strongly suggests that she tried to make one of her installment payments against that costs order with a counterfeit cheque. Such conduct is unacceptable and is appropriately sanctioned by the court in the form of an order for elevated costs.

Based on the above, I consider it appropriate to award costs on the following basis:

a. The costs associated with pleadings, the affidavit of documents, the notings in default, the cross-examinations on the Mareva motion, and the further Mareva work are to be paid on a partial indemnity basis and shared equally among the four Defendants.
b. The costs associated with Ms. Boccia’s solicitor removal of record motion and her adjournment request are to be paid on a partial indemnity basis by Ms. Boccia.
c. The costs associated with this motion are to be paid by the four Defendants in unequal shares. The full cost of this motion is to be calculated and split into four equal parts. Ms. Boccia is to pay 90% of her share, which will result in payment of her share on a substantial indemnity basis. The remaining Defendants are each to pay 60% of their respective shares, which will result in payment of their respective shares on a partial indemnity basis.

In my view, this allocation of costs reflects the principles set forth in Rule 57.01 and is fair and reasonable in all the circumstances.

The Plaintiffs are directed to provide me with a revised Costs Outline that is organized in accordance with what I have set forth above, and which contains a calculation of the costs amount to be paid by each Defendant based on the above. I will then issue a separate Costs Endorsement.

Order Granted

I order the following:

a. Default judgment against Salvatore Boccia and David Shpilt for fraud, conversion, and unjust enrichment, in the amount of $775,000.00.
b. The striking of the Statement of Defence of 215 and default judgment against 215 for fraud, conversion, oppression, and unjust enrichment, in the amount of $775,000.00.
c. Default judgment against Mr. Boccia, Mr. Shpilt, and 215 for punitive damages, in the amount of $250,000.00.
d. Summary judgment against Rosanna Boccia for fraud, conversion and oppression, in the amount of $775,000.00.

These judgments are granted on a joint and several basis, such that Mr. Boccia, Mr. Shpilt, 215, and Ms. Boccia are jointly and severally liable to pay the Plaintiffs damages of $775,000.00; and 215, Mr. Boccia and Mr. Shpilt are, in addition, jointly and severally liable to pay the Plaintiffs punitive damages of $250,000.00.

A separate costs endorsement will follow.

Rohit Parghi
Date: March 28, 2025