Court File and Parties

Court File No.: CV-25-00735470-0000 Date: September 22, 2025 Superior Court of Justice - Ontario

Re: Mujahed Fraij, Plaintiff And: Prep Doctors Corp., Knurling Dental Inc., South Ontario Developments Inc., Marwan Al Rayes and Firas Abu Saleh, Defendants

Before: Parghi J.

Counsel: Nathan Shaheen and Dylan Yegendorf for the Plaintiff Patrice Cote for the Defendants

Heard: September 15, 2025

Endorsement

Primary Issue

[1] The primary issue before me is whether, pursuant to rule 37.10(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the Plaintiff is entitled to costs as a result of the Defendants' abandoned motion to stay the action. For the reasons below, I find that he is.

Preliminary Observations

[2] I make two observations at the outset.

[3] First, Defendants' counsel asked that I provide detailed written reasons for my decision. I have complied with that request. This Endorsement would otherwise have been briefer.

[4] Second, as detailed below, this proceeding is only nine months old but has already spawned two motions, three Civil Practice Court attendances, two case conferences, a motion for leave to appeal a case conference endorsement to the Divisional Court, and a request for a case conference before the Divisional Court to obtain a stay. There has been a steady stream of disagreements and court attendances. Yet the matter is barely out of the gate on the merits. I cannot imagine that this is an efficient use of the parties' time, energy, and resources. It is certainly not a proper use of judicial resources.

Background and Issues

[5] A brief procedural history is as follows.

[6] On January 23, 2025, the Plaintiff commenced this action. He seeks damages for wrongful dismissal and remedies for oppression arising from his ouster as director and CEO of the Defendant Prep Doctors Corp.

[7] On February 5, 2025, the Defendants commenced a motion seeking a stay of the action in favour of arbitration, based on sections 7 and 17 of the Arbitration Act, 1991, S.O. 1991, C. 17. They say that the parties have signed an arbitration agreement. The Plaintiff states that he is not a party to any of the agreements containing the arbitration provision.

[8] The Defendants did not take steps to schedule their motion after commencing it.

[9] On March 7, 2025, the Plaintiff sought urgent oppression relief, and on March 19, his counsel attended at Civil Practice Court to schedule his motion for such relief. The Defendants, in response, sought for the first time to schedule their motion for a stay, filed six weeks earlier. Schabas J. declined to schedule their motion, noting that they had filed a motion on February 5 but had "not move[d] forward with it." He ordered the production of records the Plaintiff was seeking and instructed counsel to reattend at Civil Practice Court on April 2 to address whether the Plaintiff required further urgent relief.

[10] On the eve of the April 2, 2025 Civil Practice Court attendance, the Defendants delivered a fresh notice of motion that repackaged their motion to stay as a rule 21 motion. The rule 21 motion sought the same relief as the original motion under the Arbitration Act, on the same grounds as the original motion. At Civil Practice Court, they obtained a motion date of September 15, 2025 for their rule 21 motion.

[11] Affidavits were exchanged on the rule 21 motion. The Defendants did not let the Plaintiff cross-examine on a reply affidavit. This resulted in a third Civil Practice Court attendance, in May, at which Merritt J. scheduled an urgent case conference to resolve the cross-examination issue so that the September motion date could be maintained.

[12] That urgent case conference took place in June before Sanderson J. It was scheduled for one hour but took over two hours. In her endorsement, Sanderson J. described the case conference as "lengthy and supercharged." There were two issues before Sanderson J.: what if any materials the Plaintiff could file in the rule 21 motion, and whether the Plaintiff could properly cross-examine on the Defendants' reply affidavit. Counsel for the Plaintiff offered to withdraw the Plaintiff's currently filed responding record and replace it with a much shorter one, and to limit the duration of his proposed cross-examination. Counsel for the Defendant refused both proposals, necessitating a case conference order from Sanderson J. In her endorsement, Sanderson J. ruled that the Plaintiff could replace the existing motion record with the briefer one he had proposed, and allowed both parties to schedule and conduct cross-examinations for up to 90 minutes.

[13] The Defendants did not produce their affiant for cross-examination. They delivered a motion for leave to appeal Sanderson J.'s case conference endorsement. They filed a motion to stay the steps required by Sanderson J.'s endorsement. They refused the Plaintiff's request to expedite the motion for leave to appeal so that matters could continue to move forward.

[14] That brings us to the scheduled hearing date of September 15, 2025. It is uncontested that counsel for the Defendants did not file their motion confirmation form for the hearing on time. The Consolidated Practice Direction for Toronto Region provides, "Note that, although Rules 37.10.1 (1) and 38.09.1 (1) contemplate motion confirmation as late as five days before the hearing, in Toronto, 10 days is required to be sure the matter can be assigned and ready for hearing." It is counsel's responsibility to comply with the requirements of the Consolidated Practice Direction.

[15] The motion confirmation form that was filed, after the deadline, sought an adjournment of the motion date. That adjournment request would have been contested. It is clear that the Plaintiff never consented to an adjournment of the motion and that he has been trying to move matters along so that he may timetable and pursue his request for urgent relief, which he first made in March, now six months ago.

[16] The result of the Defendants' late filing of their motion confirmation form is twofold.

[17] First, under rule 37.10.1(4), the Defendants' motion is presumptively deemed abandoned ("If no confirmation is given under [rule 37.10.1(1)], the motion shall not be heard and is deemed to have been abandoned, unless the court orders otherwise").

[18] Second, under rule 37.09(3), the Plaintiff is presumptively entitled to his costs ("Where a motion is … deemed to have been abandoned, a responding party on whom the notice of motion was served is entitled to the costs of the motion forthwith, unless the court orders otherwise").

[19] Rule 37.10.1(5) provides that where a motion is deemed to have been abandoned and the responding party provides a confirmation form in accordance with the requirements of rule 37.10.1(2), the responding party may speak to costs on the scheduled hearing date. That is what happened here.

The Deemed Abandonment of the Motion under Rule 37.10.1(4)

[20] The Defendants ask me to "order otherwise" under rule 37.10.1(4) – that is, to order that their motion was not abandoned despite not having been confirmed. They ask for an order stating that the motion has been adjourned sine die until their motion for leave to appeal Sanderson J.'s case conference endorsement has been determined or their appeal is heard, and that the motion shall be rescheduled to a date obtained at Civil Practice Court.

[21] I decline to do so.

[22] Rule 37.10.1(4) is clear that presumptively, an unconfirmed motion is deemed abandoned. I see no reason to order otherwise, in the circumstances before me.

[23] The Defendants ask me, against the wishes of the Plaintiff, to convert a motion that has been deemed abandoned into one that is adjourned sine die to a date that may not be scheduled for quite some time. This would be most unfair to the Plaintiff, who has been trying to schedule steps to obtain urgent relief for the last six months. The first time the Plaintiff went to Civil Practice Court to schedule his motion for urgent relief, the Defendants responded with a request to schedule their original motion to stay, which they had filed six weeks earlier and never advanced. The second time the Plaintiff went to Civil Practice Court, the Defendants presented him with their repackaged motion to stay, which has, even now, barely advanced. Now, the Defendants seek to have the court resurrect their motion, which has been deemed abandoned, so that they may adjourn it, to a date to be set in the future, while they pursue a motion for leave to appeal Sanderson J.'s case conference endorsement, which motion they have refused to pursue on an expedited basis.

[24] Viewing the Defendants' conduct as a whole, I am of the view that they are improperly trying to slow the progress of the litigation. They have made eleventh-hour moves, during or on the eve of Civil Practice Court attendances, to stymie the Plaintiff's request for urgent relief. They rejected the Plaintiff's proposed resolution of the procedural issues giving rise to the June case conference. They requested that Sanderson J. issue detailed reasons for her case conference disposition before she had even rendered any decision, which suggests that they were determined to appeal her decision before they even had it in hand. (They have also made the same request of me.) They refused to offer up their affiant for cross-examination, despite Sanderson J.'s order and even though they did not yet have a stay in respect of her order. They refused to ask to expedite their motion for leave to appeal so that the September 15 motion date could be protected. At every turn, they have delayed the progress of this claim on the merits.

[25] Granting an adjournment sine die would only compound this delay and the resulting unfairness to the Plaintiff. It would reward the Defendants' improper delaying tactics. It would also have the effect of rewarding them for non-compliance with the Practice Direction, by giving them, via judicial order, the adjournment that they are seeking and which the Plaintiff opposes, and by thus enabling them to sidestep the natural and presumptive costs consequences of their conduct.

[26] In these circumstances, I see no basis on which to depart from the general principle that an unconfirmed motion is deemed abandoned.

The Costs Award to the Plaintiff under Rule 37.09(3)

[27] The Defendants also state that I should not order costs against them, despite the presumptive language of rule 37.09(3), because any costs decision should be decided when the motion to stay is heard, based on the merits of the motion.

[28] The Defendants' argument presupposes that their stay motion will one day be adjudicated on the merits. Given that they brought the motion, abandoned it, brought it again in repackaged form, failed to meaningfully pursue it, and now seek to adjourn it sine die, it is not clear that the motion would ever be adjudicated if adjourned. If it were not adjudicated, the Plaintiff would lose the opportunity to seek costs after having incurred significant costs to date in anticipation of the motion. That would not be fair.

[29] In any event, the Defendants' argument is not correct at law. Rule 37.09(3) grants the Plaintiff a presumptive entitlement to costs forthwith as a consequence of the motion being abandoned. This court has held that the intention of rule 37.09(3) "is to compensate a responding party who was obligated to go through the time and expense of responding to a motion that did not go ahead" (Nunn v. Asimco Textiles Inc., 2023 ONSC 3396, at para. 12). It is the abandonment of the motion that gives rise to the entitlement to costs. The merits of the abandoned motion have nothing to do with it.

[30] The test for departing from the general rule in favour of awarding costs is whether the party who brought the abandoned motion has demonstrated that there exists some good cause (Re Gudmundsdottir, 2013 ONSC 2138 (S.C.J.), at para. 28) or "exceptional circumstances" (Incola Group Limited v. The Corporation of the City of Brampton, 2017 ONSC 3822, at para. 16) that warrant such a departure.

[31] The Defendants have not met this test. No such good cause or exceptional circumstances is urged upon me. The Defendants merely say that the merits of their motion should carry the day. I reject that claim. On the record before me, I do not see any good cause or exceptional circumstance. To the contrary, this case falls squarely within the ordinary circumstances in which costs are awarded under rule 37.09(3). The Plaintiff incurred costs preparing for a motion that is now deemed abandoned. That is the very harm that the rule seeks to remedy.

[32] The general principles underlying costs awards also underscore that it is appropriate to grant the Plaintiff his costs in accordance with rule 37.09(3). The factors I may consider in making a costs award are enumerated in rule 57.01. They 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.

[33] In Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at para. 60, the Court of Appeal for Ontario restated the general principles to be applied when courts exercise their discretion to award costs. The Court held that, when assessing costs, a court is to undertake a critical examination of the relevant factors, as applied to the costs claimed, and then "step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable".

[34] Applying these principles here, I am even further satisfied that it is appropriate to grant the Plaintiff his costs in accordance with rule 37.09(3). The issues are important in the sense that the Defendants' motion stood to stay the Plaintiff's action altogether, and the Defendants' request for an adjournment sine die stood to further delay the action and the Plaintiff's request for urgent relief. The principle of indemnity, which lies at the core of rule 37.09(3), urges that the Plaintiff be indemnified for the costs he incurred defending a motion that is now deemed abandoned. As for reasonable expectations of the parties, to the extent that the Defendants did not expect to ever have to pay costs in a motion that they brought, abandoned, reformulated, barely moved forward, and then failed to properly confirm, I am respectfully of the view that any such expectation was not reasonable.

[35] Stepping back and considering the result produced, it is fair and reasonable that the presumptive language of rule 37.09(3) be applied to grant the Plaintiff his costs.

Quantum of Costs Award

[36] The Plaintiff seeks costs on a substantial indemnity scale, citing the Defendants' "attempts to game the litigation process to achieve delay while continuing to prejudice the Plaintiff." He notes that he has been unable to advance his motion for urgent oppression relief or seek any other substantive relief.

[37] I agree that it is appropriate to exercise my discretion to award an amount higher than partial indemnity costs. As detailed above, I am of the view that the Defendants have engaged in delaying tactics to the detriment of the Plaintiff. Those delaying tactics have resulted in excessive costs to the parties and a disproportionate consumption of judicial resources. It is appropriate to convey by way of costs order that this approach to litigation is not to be countenanced.

[38] The Plaintiff seeks partial indemnity costs of $25,035.15 and substantial indemnity costs of $37,552.73. The hours incurred are reasonable having regard to everything that has taken place in the litigation to date. Counsel's hourly rates are reasonable. Tasks have been appropriately allocated as between members of the counsel team.

[39] I order costs in the amount of $31,293.94, reflecting the mid-point between the partial and substantial indemnity amounts. In my view, stepping back and considering all the circumstances, this is a fair and reasonable amount. This amount is to be paid forthwith, meaning within 30 days of the date of this order.

Parghi J.

Date: September 22, 2025