Court File and Parties

Court File No.: CV-24-95643 Date: 2025-08-05 Superior Court of Justice - Ontario

Re: V2 Investment Holdings Inc., Applicant And: Sam Mizrahi, Mizrahi Development Group (1451 Wellington) Inc., Mizrahi Developments Inc., and 2659100 Ontario Inc., Respondents

Before: The Honourable Justice C.T. Hackland

Counsel: Gordon Capern, Daniel Rosenbluth, and Ryan Shah, counsel for the Applicant Steven J. Weisz and W. Michael G. Osborne, Counsel for the Respondents

Heard: In Writing

Endorsement (Costs)

[1] The applicant V2 Investment Holdings Inc. was successful in obtaining judgement for the principal and accrued interest on a loan it made to the respondent Sam Mizrahi and his companies in relation to a condominium project which Mizrahi was developing in Ottawa. The loan was approximately $14 million, with accrued interest. The court's Reasons for Decision may be found at V2 Investment Holdings Inc. v. Sam Mizrahi, 2025 ONSC 1715.

[2] As the applicant was fully successful it is entitled to its costs of the application. The applicant seeks full indemnity costs in the sum of $125,890 which is an entitlement arguably found in the loan agreement. The respondents' position is that the applicant should be only entitled to partial indemnity costs "because the loan agreement does not clearly and unequivocally provide for full indemnity". Further, the respondents say the hourly rates of certain of the counsel appearing for the applicant are too high and the overall amount of fees incurred by the applicant is much higher than the costs of the respondents. The respondents submit an appropriate cost award would be $50,000 for fees plus HST and disbursements.

[3] In the court's view the provision in the loan agreement allowing costs to the lender for the enforcement or protection of its rights in connection with this agreement is sufficiently clear to encompass costs for enforcing the loan while in default, which is the normal provision in loan agreements, see Burr v. Tecumseh Products of Canada Limited, 2023 ONCA 135 at para. 130.

[4] Notwithstanding this provision the court retains a broad discretion to fix costs in an amount reflecting fair, reasonable and appropriate compensation having regard to the circumstances of the case and the reasonable expectations of the paying party.

[5] In terms of Rule 57 considerations, this application involved the recovery of a very large debt in circumstances where the amount of the debt was not seriously contested, but was sought to be enforced in circumstances of alleged bad faith, which was the position of the respondent, which was a position not accepted by the court. Both parties were sophisticated in real estate development and commercial lending and were represented by experienced counsel.

[6] In all the circumstances, the court is of the view that costs should be awarded to the applicant on a substantial indemnity scale, in the approximate amounts put forward by the applicant, which, as noted, appear to the court to be reasonable in a proceeding involving a major commercial real estate development, a medium level of complexity due to the unsubstantiated allegations of bad faith, the sophistication of the borrower and an indebtedness of approximately $14 million. I observe as well that the respondent borrower Mr. Mizrahi, may well ultimately earn a significant profit on this project.

Disposition

[7] The applicant will be awarded its costs of this application in the sum of $108,000 inclusive of fees, HST and disbursements, payable forthwith by the respondents.

Justice Charles T. Hackland Date: August 5, 2025