Reasons for Judgment

Court File No.: CV-24-00718306-0000
Date: 2025-05-05
Ontario Superior Court of Justice

Between:
Aird & Berlis LLP, Plaintiff
– and –
Spotlight Development Inc., Spotlight on Ajax Inc., Spotlight Ajax Inc., Spotlight on the Queensway Inc., Spotlight on Queen East Inc., Spotlight on Lawrence Inc., Spotlight on Jacarandah Inc., Spotlight on Courtland Inc., 121 Cavan Street Inc., 2573163 Ontario Inc., 2668860 Ontario Inc., Shahrzad Larjani a.k.a. Sherry Larjani, Idin Rangchi, Shahnaz Ebrahimi, Khosrow Ranchi, Jaleh Sharabiani, Defendants

Appearances:
Pamela Miehls and Josh Suttner, for the Plaintiff
Shahrzad Larjani, self-represented

Heard: May 2, 2025
Released: May 5, 2025
Judge: Julie A. Thorburn Papageorgiou

Overview

[1] Aird & Berlis brings a motion for default judgment in respect of unpaid legal fees.

[2] The action involves several parties related to the Defendant Spotlight Development Inc. (“SDI”) and Shahrzad Larjani a.k.a. Sherry Larjani (“Sherry”) in respect of 29 matters that Aird & Berlis worked on. Sherry is the sole Director of SDI.

[3] Aird & Berlis issued its claim on April 12, 2024 and served it on Sherry and SDI on April 23, 2024.

[4] They have not defended and were noted in default on May 17, 2024. They have taken no steps to set the noting in default aside.

[5] Aird & Berlis only seeks default judgment against two of the defendants at this time, namely, Sherry and SDI.

Decision

[6] For the reasons that follow I grant the judgment as sought set out below.

The Issues

• Issue 1: Do the materials provide a basis for a finding of liability?
• Issue 2: If so, what are the damages to which the plaintiff is entitled?

Analysis

Issue 1: Do the materials provide a basis for a finding of liability?

Consequences of Noting in Default

[7] Pursuant to r. 19.02, having not defended the proceeding, a defendant is deemed to admit the truth of all allegations of fact made in the Statement of Claim.

[8] However, pursuant to r. 19.06 a plaintiff is not entitled to judgment on a motion for judgment or at a trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment.

[9] In particular, r. 19.05 provides that a motion for judgment which involves unliquidated damages shall be supported by affidavit evidence.

The Test on a Motion for Default Judgment

[10] The test on a motion for default judgment was set out in Elekta Ltd. v. Rodkin, 2012 CarswellOnt 2928 (ONSC) as follows:
A. What deemed admissions of fact flow from the facts pleaded in the Statement of Claim?
B. Do those deemed admissions of fact entitle the plaintiff, as a matter of law, to judgment on the claim?
C. If they do not, has the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitle it to judgment on the pleaded claim?

[11] I am satisfied that the plaintiff has established liability for breach of contract based upon the following deemed admissions in the Statement of Claim and the affidavit material provided:

• Aird & Berlis delivered legal services to SDI and Sherry over a number of years in over two dozen matters.
• The SDI matters included general employment matters, an employment dispute, legal advice and services relating to condominium development projects, advice on financing, mortgages and joint ventures, securities and general corporate matters.
• The Sherry matters included advice related to personal guarantees, forbearance agreements, representation in an application against her by a lender and advising her on an insurance matter.
• The joint matters included representing Sherry and SDI in a claim of breach of contract against both of them, and preparation of shareholders’ agreements.
• SDI signed retainer agreements whereby they agreed to pay all fees and disbursements incurred by Aird & Berlis in connection with the legal services. It agreed to pay all fees and disbursements incurred.
• Sherry did not sign retainer agreements.
• Aird & Berlis conducted work at the direction of SDI and Sherry.
• At all times, the defendants were apprised of and approved of the strategy and work performed by Aird & Berlis.
• Aird & Berlis has rendered 101 invoices that have not been paid.
• The details of the invoices as well as the work provided is detailed in the affidavit and there is no need to review them in these reasons. They support what is in the affidavit.
• Aird & Berlis also incurred a significant amount of work that had not been billed and that was in progress. It has provided details of this work.

[12] Aird & Berlis is liable pursuant to the signed retainer agreements.

[13] With respect to Sherry, I find that she is liable to pay Aird & Berlis for services rendered to her on her behalf on the basis of unjust enrichment or quantum meruit.

[14] I note here that paragraph 35 of the Claim specifically pleads and therefore it is deemed admitted that all defendants (which includes Sherry) were enriched, that Aird & Berlis suffered a deprivation and there is no juristic reason as to why she should be able to keep the benefit without payment: Moore v. Sweet, 2018 SCC 52 at para 37; Deglman v. Guaranty Trust Co of Canada and Constantineau.

Issue 2: What are the damages to which the plaintiff is entitled?

[15] A lawyer who seeks payment of outstanding legal accounts can proceed by way of civil action: Roy Wise v. Colaco, 2015 ONSC 3801 at para 21 aff’d 2016 ONCA.

[16] In an action for unpaid legal fees, a judge should consider the same factors which apply on an assessment, namely: the time expended by the lawyer, the legal complexity of the matter, the degree of responsibility assumed by the lawyer, the monetary value of the matters in issue, the importance of the matters to the client, the degree of skill and competence demonstrated by the lawyer, the results achieved, the client’s ability to pay and the expectation of the client regarding the amount of the fees: Roy Wise at para 30.

[17] The overriding consideration is whether the fees were reasonable and appropriate for the services rendered: Roy Wise at para 29.

[18] In this case, the Plaintiff provided legal services with respect to a litany of matters involving substantially all aspects of SDI's business and matters of consequence to Sherry personally, including defending them in multiple proceedings. They directed Aird & Berlis to do this work, received invoices and on the record before me never challenged the work being done or its value. The materials support the work being complex and which required skill and competence.

[19] Aird & Berlis has provided the details of accounts that are owed by Sherry alone, by SDI alone, and by Sherry and SDI jointly including the work in progress as follows:

Defendant	Outstanding Invoices	Work in Progress	Total
Sherry only	$101,455.42	$5,594.07	$107,049.50
SDI and Sherry, jointly/severally	$146,847.90	$21,416.34	$168,264.20
SDI only	$327,243.00	$20,314.33	$347,557.33

[20] I am satisfied based upon the materials before me that the amounts charged were reasonable and commensurate with the work the defendants requested from Aird & Berlis and which Aird & Berlis performed. If these defendants had been unsatisfied with the work or the amount billed, or had any position that the fees charged were unreasonable, they could have participated in this proceeding or sought to assess Aird & Berlis’s account. Having failed to do so or participate in any way, the materials before me satisfy me as to the reasonableness and appropriateness of the services and accounts rendered.

Costs

[21] Aird & Berlis requests costs on a full indemnity basis in the amount of $19,918, $16,023 on a substantial indemnity basis or $10,968 on a partial indemnity basis.

[22] The court has the discretion to award substantial indemnity costs, but such costs are “rare and exceptional” and only warranted where there has been reprehensible, scandalous or outrageous conduct on the part of a party: see DUCA Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601, at para. 5; Foulis v. Robinson (1978); and most recently Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239, at para. 43.

[23] There is no basis to award substantial or full indemnity costs. The partial indemnity costs are fair and reasonable and proportionate to the amount in issue. The rates and time spent is reasonable. I award these costs.

Interest

[24] The plaintiff claims prejudgment interest for 2023 invoices at the rate of 5% and for the 2024 invoices at the rate of 6%, all in accordance with the invoices.

[25] The retainer agreements provide that all invoices will be paid within 30 days and that if they are not, then the applicable rate on the invoice will apply.

[26] However, Aird & Berlis has not pleaded the claim to contractual interest. Therefore, this claim fails: ID Inc. v. Toronto Wholesale Produce Association, 2025 ONCA 22 at para 56.

[27] Therefore, I award prejudgment and post judgment interest at the rates in the Courts of Justice Act which is 5.3%.

[28] I ask that Aird & Berlis provide an amended Judgment that reflects this difference in the decision.

Conclusion

[29] Therefore, I award the following:

• Judgment in favour of Aird & Berlis as against SDI in the amount of $347,557.33
• Judgment in favour of Aird & Berlis as against Sherry in the amount of $107,049.50
• Judgment in favour of Aird & Berlis as against Sherry and SDI on a joint and several basis in the amount of $168,264.20
• Pre-judgment and post judgment interest at the rate in the Courts of Justice Act which is currently 5.3%
• Costs in the amount of $10,968

Papageorgiou

Released: May 5, 2025