Court File and Parties

Court File No.: CV-24-728675

Date: 2026-03-13

Superior Court of Justice - Ontario

Re: Sam Mizrahi, Mizrahi 128 Hazelton Retail Inc., Sam M (180 SAW) LP Inc., Sam M (180 SAW) Inc. and 1000041090 Ontario Inc.

Plaintiffs

And:

Edward S. Rogers III, Robert Hiscox and Constantine Enterprises Inc.

Defendants

And Between:

CV-25-747164

Constantine Enterprises Inc.

Applicant

And:

Sam Mizrahi, Sam M (180 SAW) LP Inc. and Sam M. (180 SAW) Inc.

Respondents

Before: Justice W.D. Black

Counsel: David Trafford & Adam S. Beyhum, for the Plaintiffs Eliot Nelson Kolers & Nicholas Avis, for the Defendants

Heard: March 3, 2026

ENDORSEMENT

Overview

[1] There were two significant motions in these cases before me today:

a. In court file CV-24-00728675-00CL, in which the plaintiffs are Sam Mizrahi, Retail Inc., Sam M Inc., Sam M (180 SAW) Inc., and Mizrahi SPV (the "Mizrahi Plaintiffs" and the "Mizrahi Action"), the defendants Edward Rogers, Robert Hiscox and CEI (the "CEI Defendants") move to strike the plaintiffs' fresh-as-amended statement of claim dated October 14, 2025 (the "Fresh SOC"), without leave to amend; and

b. In court file CV-25-00747164-00CL, in which the applicant is CEI (the "CEI Application"), the respondents Mr. Mizrahi, Sam M Inc. and Sam M (180 SAW) Inc move to convert the CEI Application into an action, and to consolidate the resulting action with the Mizrahi Action.

[2] Throughout this endorsement I will from time to time use these and other terms as defined in the parties' materials.

[3] Both proceedings relate to two real estate development projects in the Toronto region involving the CEI parties and the Mizrahi parties:

a. A nine-story residential condominium at the premises municipally known as 128 Hazelton Avenue in the City of Toronto (the "128 Hazelton Project"); and,

b. A high-rise mixed-use development at the premises known municipally as 180 Steeles Avenue West in the City of Vaughan (the "180 SAW Project", and, together with the 128 Hazelton Project, the "Projects").

[4] CEI financed both projects and is a secured creditor of certain of the Mizrahi parties and other related entities.

[5] On February 23, 2024, CEI brought separate applications for receivership orders in connection with these projects, which were heard by Cavanagh J. on May 13, 2024.

[6] In parallel, the plaintiffs in the Mizrahi Action issued a statement of claim on April 5, 2024, which was amended and re-issued on April 8, 2024 (the "Original SOC"), and which the CEI parties assert was an effort to delay the receivership hearings. On June 4, 2024, Cavanagh J. granted the receivership orders requested by CEI over both Projects.

[7] The defendants in the Mizrahi Action then moved to strike the Original SOC. On July 31, 2025, Cavanagh J. struck the Original SOC on the basis that it disclosed no reasonable cause of action, with leave to amend (Mizrahi v. Rogers, 2025 ONSC 4439).

[8] The Fresh SOC reflects the Mizrahi Plaintiffs' attempt to amend the Original SOC, and the motion to strike herein largely repeats and replicates the CEI Defendants' effort to strike the claim against them.

[9] I address the motion to strike the Mizrahi Action first, inasmuch as the results of that motion determine whether or not and/or to what extent there remains an action to consider consolidating with the CEI Proceeding (if I were to convert the CEI Application into an action).

Overall Conclusions

[10] I have determined that I will strike the Fresh SOC, without leave to amend, meaning that (subject to appeal) there is no existing claim with which to consolidate the CEI Proceeding. I have concluded that, even if the Fresh SOC had not been struck, I would not have consolidated it with the CEI Application, which I decline to convert into an action in any event.

[11] I should note that, nonetheless, I see no reason why, albeit they have been unable to identify and plead proper causes of action, the Mizrahi Parties cannot raise, within their responding materials in the CEI Application, the evidentiary substance of the positions that they sought (unsuccessfully in my view) to characterize as causes of action in the Mizrahi Action. That evidence, even if it does not amount to independent causes of action, may respond (or respond in part) to the CEI parties' claims in the application. The evidence, however, albeit disputing aspects of CEI's evidence (though not disputing the material facts at the core of the CEI Application) does not require or justify converting the CEI Application to an action.

Action vs. Application: General Observations

[12] In my view, all parties, and the court, are better served by having these disputes determined by way of application. I rely, in this assessment, in part on the demonstrated ability of application proceedings to fairly determine disputes in which the salient facts are not truly contested (even if other facts are in dispute). I also rely on the ability of the judge hearing the application to resort, if it proves helpful or necessary to do so, to limited viva voce evidence to resolve any purported factual discrepancies. I cannot currently identify any disputes, let alone disputes of material facts in the CEI Application that would require viva voce evidence, and so I expect that this resort, if required at all, would be limited to one or more of the principals and to discreet issues.

[13] I acknowledge that in even allowing for that possibility I may be pushing against the strict parameters established in Rule 14 and certain caselaw as to the availability and suitability of an application to determine cases in which the principal combatants disagree about a host of matters. However, in my view, the recent trend in the caselaw, borne out by the experience in the civil courts, and in particular the experience on the Commercial List (where these parties have chosen to situate their disputes) shows that an application, particularly potentially augmented by a limited and thoughtful resort to viva voce testimony to resolve apparent disagreements, is up to the task of resolving disputes over factual matters at issue. I hasten to add that the suitability of an application to resolve such disputes requires that, as here, the primary agreements between the parties are straightforward and not particularly open to divergent interpretations, such that, for purposes of Rule 14, there are no material facts at issue requiring a trial.

[14] I also note that the vehicle of an application generally facilitates the ability of the courts to address and determine significant commercial disputes (and other disputes) with a degree of efficiency and expedition often required in the context of fast-moving business litigation. As such, in my view, the court ought not – based on a restrictive reading of Rule 14 - to shy away from matters being determined by way of application, but ought instead to embrace the often considerable advantages of the type of streamlined proceedings that an application can yield (subject to being satisfied that the material issues at the core of the application do not require a trial for determination). The matter at hand has already languished considerably, and converting the application to an action would unnecessarily create further delay.

The Rule 21.01(1)(b) Motion

[15] The motion to strike the Fresh SOC is brought under Rule 21.01(1)(b).

[16] Under Rule 21.01(2)(b), no evidence is admissible on such a motion, and generally speaking I must accept the facts alleged in the statement of claim as proven.

[17] In his decision striking the Original SOC (Mizrahi v. Rogers, 2025 ONSC 4439), Cavanagh J., citing two decisions of D. M. Brown J., (as he then was), summarized the relevant principles governing this type of motion. Justice Cavanagh wrote:

"[15] Rule 21.01(1)(b) of the Rules of Civil Procedure provides that a party may move before a judge to strike out a pleading on the ground that it discloses no reasonable cause of action or defence. Under Rule 21.01(2)(b), no evidence is admissible on such a motion.

[16] In Deep v. M.D. Management, 2007 CanLII 22655 (ON SC), affirmed 2008 ONCA 211, D. M. Brown J., as he then was, at para. 9, summarized the general principles applicable on a motion to strike out a statement of claim under rule 21.01(1)(b):

(i) the power to strike out a claim must be used sparingly, and caution and prudence are to govern the court's exercise of its discretion; only in the clearest of cases should a party be deprived of the opportunity of persuading a trial judge that the evidence and the law entitle it to a remedy or a defence: Atlantic Steel Industries Inc. v. CIGNA Insurance Co. of Canada (1997), 1997 CanLII 12125 (ON SC), 33 O.R. (3d) 12 (Gen. Div.), at p.18;

(ii) the court must accept the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof, and must read the statement of claim generously with allowance for inadequacies due to drafting deficiencies: Nash v. Ontario (1995), 1995 CanLII 2934 (ON CA), 27 O.R. (3d) 1 (C.A.), at page 6;

(iii) when a defendant moves to strike a claim, it is contending that the claim fails to disclose a wrong that is recognized as a violation of the plaintiff's rights, with the result that a court would be unable to grant a remedy even if the plaintiff proved all the facts alleged. The only question on such a motion is the substantive adequacy of the plaintiff's claim: i.e. whether a plaintiff will have established a cause of action entitling it to some form of relief assuming it can prove the allegations pleaded in the claim or, put another way, whether the plaintiff has sought relief for acts proscribed at law: Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 1998 CanLII 4831 (ON CA), 164 D.L.R. (4th) 257 (C.A.), at paras 8 and 9;

(iv) the court hearing the motion cannot consider any evidence: Rule 21.01(2)(b). Instead, the court must consider whether the material facts pleaded in accordance with Rule 25.06(1) disclose a claim in respect of which relief may be granted;

(v) where the level of material facts pleaded fails to meet the level required to disclose a cause of action – i.e. if any fact material to the establishment of a cause of action is omitted – the remedy is a motion to strike the pleading, not a motion for particulars: Balanyk v. University of Toronto, 1999 CanLII 14918 (ON SC), [1999] O.J. No. 2162 (S.C.J.), at para 29; Copland v. Commodore Business Machines Ltd. (1985), 1985 CanLII 2190 (ON SC), 52 O.R. (2d) 586 (Master);

(vi) the novelty of the cause of action or the novelty of the application of a recognized cause of action should not prevent a plaintiff from proceeding with its case. Whether there is good reason to extend a tort to a new context is the kind of question for a trial judge to consider in light of all the evidence. The fact that a pleading reveals an arguable, difficult or important point of law may well make it critical that the action be allowed to proceed: Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, at paras 33, 34, 49 and 52; and,

(vii) the court should not, at this stage of the proceedings, dispose of matters of law that are not fully settled in the jurisprudence: R.D. Belanger & Associates Ltd. v. Stadium Corp. of Ontario Ltd. (1991), 1991 CanLII (ON CA), 1991 CanLII 2731 (ON CA), 5 O.R. (3d) 778, at p. 782 (C.A.).

[17] In Barbara Schlifer Commemorative Clinic v. HMQ Canada, 2012 ONSC 5271, D.M. Brown, as he then was, summarized the principles governing motions to strike out claims as disclosing no reasonable cause of action:

In sum, Rule 21.01(1)(b) operates to weed out the hopeless claims, based on a review of the pleadings, because they fail to state legally sufficient claims. If the pleading asserts a legally sufficient claim, Rule 21.01(1)(b) does not subject the claim to an analysis of the strength or weakness of the evidence advanced by the party in support of its claim. That is why under the Rule a court assumes the facts pleaded in the claim can be proved. Put another way, Rule 21.01(1)(b) does not provide a vehicle by which an opposing party can seek a final disposition of a claim on the evidence – that function falls to a motion for summary judgment or the trial. The purpose of Rule 21.01(1)(b) is more modest – to assess the tenability at law of a pleaded claim."

[18] Apart from his helpful summary of the applicable law, excerpted above, I also take note, to a considerable extent, of Cavanagh J.'s treatment (and ultimate expulsion) of the causes of action pleaded in the Original SOC before him, and necessarily compare His Honour's discussion of those items to the proposed array of causes of action now contained in the Fresh SOC.

Justice Cavanagh's Decision Striking the Original SOC

[19] In that regard, and by way of slight oversimplification, the Original SOC, after reciting more or less the same factual narrative as is now repeated in the Fresh SOC, asserted causes of action arising from those facts primarily bound up in conspiracy claims. There was also an inchoate claim of causes of action attributable to an alleged partnership, but as discussed below, Cavanagh J. found insufficient grounds in the Original SOC to support such claims.

The Fresh SOC and its Focus on Alleged Partnership

[20] The Fresh SOC, from the same factual springboard, now primarily emphasizes and asserts a partnership between the principal parties, and a breach of their (unwritten) partnership agreement, including by way of breaches of fiduciary duties, oppression, lack of good faith, and tortious interference with economic relations.

[21] The essence of the collection of newly asserted causes of action is summarized in paragraphs 11- 17 of the Fresh SOC, excerpts of which say (in part):

"12. In and around 2015, Sam, Rogers, and Hiscox (or, in the alternative, Sam and CEI) formed a partnership to act in concert and jointly develop the Projects with a view to profit (the "Partnership"). The Partnership was not formalized in a written agreement but was evidenced by the parties' conduct, shared decision-making, and mutual contributions.

13. The parties agreed to use corporate vehicles to pursue the Projects as part of the Partnership, including CEI, Mizrahi SPV.

14. In the alternative to the pleading that Sam, Rogers and Hiscox, (or in the alternative Sam and CEI) formed the Partnership in 2015, Sam pleads that the Partnership was formed in December 2021…

15. Rogers and Hiscox, or in the alternative CEI, owed Sam a fiduciary duties (sic) and duties of good faith as partners in the Partnership…

16. Rogers and Hiscox, or in the alternative, CEI, breached the fiduciary duties and duties of good faith owed to Sam as partners. They also conducted themselves in a manner that was oppressive and unfairly prejudicial to Sam's reasonable expectations…

17. Owing to the breaches of fiduciary and good faith duties, oppressive conduct, breaches of contract, and tortious or unlawful interference with economic relations by Rogers, Hiscox or CEI pleaded below, Sam seeks declarations of non-indebtedness, contribution and indemnity, and pecuniary damages, and punitive and aggravated damages."

[22] It is evident that the renewed emphasis on "partnership" in the Fresh SOC likely traces its origins to aspects of Cavanagh J.'s decision to strike the Original SOC. In particular, at paragraphs 19 – 33 of his endorsement, Cavanagh J. reviews and finds wanting the attempt in the Original SOC to describe and assert a claim based on a partnership. The discussion culminates in paragraphs 31-33, where His Honour said:

"[31] The Plaintiffs do not plead, with clarity, factual allegations showing when, how, or on what terms Sam, in his personal capacity, entered into a partnership agreement with the Defendants or when or how particular commercial contracts made between identified corporate entities established, by their terms, a legal partnership relationship between Sam and the Defendants, as opposed to being commercial agreements between corporate entities in connection with the development of the two projects.

[32] It is not sufficient for Sam to submit in response to this motion that the alleged partnership was "amorphous" and somehow emerges from or is subject to unspecified other "intertwined" contracts made between corporate entities. The pleadings in paragraphs 16 and 29 of the Amended Statement of Claim that Sam and the Defendants were "partners" consist of vague and conclusory allegations that do not disclose the existence of a legal partnership relationship among Sam (in his personal capacity) and the Defendants.

[33] I conclude that the Plaintiffs do not sufficiently plead in the Amended Statement of Claim the existence of a partnership among Sam and the Defendants as partners."

The Position of the CEI Defendants

A. CEI's Submissions on Rule 21.01(1)(b)

[23] The CEI Defendants assert that it is "plain and obvious that the facts pleaded in the Fresh SOC, even if accepted as true for the limited purpose of this motion, fail to support any of the Alleged Causes of Action."

[24] The CEI Defendants in their written submissions briefly echo some of the applicable principles excerpted above relative to motions under Rule 21.01(1)(b), and then emphasize, in addition, that where a pleading refers to documents, those documents are incorporated into the pleading and fair game for the court to consider in assessing the viability of asserted causes of action.

[25] They also underline that, while a judge must accept, in a Rule 21.01(1)(b) motion, "well-pleaded factual allegations as true", he or she "need not accept factual allegations that are patently ridiculous, incapable of proof or contradicted by other elements of the pleading. They continue: "Vague or conclusory allegations are insufficient to avoid the pleading being struck. It is incumbent on the claimant to clearly plead the facts upon which it relies and the claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses." The CEI Defendants also cite relevant provisions of Rule 25, and emphasize the importance of preventing untenable claims from proceeding, "particularly given scarce judicial resources and the challenges of systemic delay."

[26] Again in this context, I note the existence of the parallel application proceeding, and the opportunity for the Mizrahi parties to assert in that context the facts on which they rely. I do not mean that the application should be seen as a "safety net" to collect causes of action jettisoned from the Action. It also cannot resurrect and legitimize untenable claims. It does mean, however, that the Mizrahi Parties will yet have an opportunity to assert relevant facts, and to attempt to mount defences or even formulate proper causes of action in relation to those asserted facts.

B. CEI's Submissions on Alleged Partnership

[27] Having briefly recited relevant legal parameters, the CEI Defendants take dead aim at the Mizrahi Parties' claim of partnership.

[28] They note and confirm that there is no written partnership agreement in place between these sophisticated parties, and that the Fresh SOC inconsistently pleads the timing of the formation of the partnership (positing 2015 and 2021 as alternative junctures at which the alleged partnership was formed), and references various documents, created at different times, as alternative bases of that partnership.

[29] The CEI Defendants argue that the Fresh SOC does nothing more than repeatedly assert, without substantiation, that there was a partnership formed. They note that the word "partnership" appears 60 times in the Fresh SOC, and that the notion of the alleged partners working in common with a "view to profit" (a requirement under the Partnership Act) appears 14 times.

[30] In addition to pointing out that the timing of the formation of the alleged partnership is pleaded as alternatives, many years apart, the CEI Defendants also underline that the identities of the alleged partners are also pleaded as distinct and incompatible alternatives. They say that surely, if there was a partnership, it should be possible to identify precisely the partners, and the timing and basis of the partnership

[31] They urge that "It is well-established that a litigant cannot dictate a particular legal result through their choice of terminology" (citing Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24), and that what matters is the substance of what is pleaded.

[32] As the Supreme Court of Canada held in Backman v. R.:

"[…] in determining the existence of a partnership…regard must be paid to the true contract and intention of the parties as appearing from the whole facts of the case." In other words, to ascertain the existence of a partnership the courts must inquire into whether the objective, documentary evidence and the surrounding facts, including what the parties actually did, are consistent with a subjective intention to carry on business in common with a view to profit."

[33] Having considered the objective documentary evidence, and the surrounding facts, I have concluded that the asserted facts in the Fresh SOC do not and cannot demonstrate the existence of a partnership.

[34] Of particular import, again noting that these are highly sophisticated commercial actors, is that the alleged partners, in the complex organizational structure created for the Projects, in fact employed multiple corporations, general partnerships and limited partnerships, all documented, to hold and develop the Projects. The Fresh SOC itself pleads that Mr. Mizrahi and CEI specifically formed a new entity, Hazelton Inc., and a limited liability partnership, 180 SAW LP, for the purposes of pursuing the subject Projects.

[35] The CEI Defendants assert, and I agree, that the fact that the parties intentionally created and inserted "multiple layers of corporate and other legal entities" between the alleged partners and the Projects demonstrates an abiding intention to maintain legal separation from one another, seemingly somewhat at odds with the notion that the alleged partners were acting in common.

[36] More tellingly, various of the agreements pleaded in the Fresh SOC as agreements between some combination of the plaintiffs and CEI explicitly reflect an intention not to form a partnership. That is, in more than one of these agreements there are clauses that:

a. Expressly deny the existence of a partnership between the signatories; and/or

b. Provide that the entire agreement between the signatories is contained in the written contract.

[37] As an example, cited by the CEI Defendants, the plaintiffs plead a unanimous shareholders' agreement relating to the 128 Hazelton Project dated June 19, 2015, between MEI, CEI and Hazelton Inc. This agreement contains the following clause:

"Section 11.6 No Agency or Partnership") "Section 11.6 No Agency or Partnership

Nothing contained in this Agreement shall make or constitute any Party, the representative, agent, principal or partner of any other Party and it is understood that no Party has the capacity to make commitments of any kind whatsoever or incur obligations or liabilities binding upon any other Party."

[38] This same unanimous shareholders' agreement contains an entire agreement clause.

[39] The credit agreement between Hazelton Inc., MEI and CEI also dated June 19, 2015, also pleaded in the Fresh SOC, under which CEI loaned $21 million, also contains a "no partnership" clause and an "entire agreement" clause.

[40] Likewise, the plaintiffs plead a limited partnership agreement dated April 30, 2019, between and among 180 SAW GP, Sam M Inc., and CEI relating to the 180 SAW Project. This agreement contains an "entire agreement" clause.

[41] The CEI Defendants argue, again persuasively, that to the extent a partnership exists with respect to the Projects, it is this limited partnership among 180 SAW GP, Sam M Inc., and CEI, and that it is nonsensical to suggest that the parties could have intended for the (unwritten) alleged partnership to co-exist with this limited partnership agreement.

[42] The Fresh SOC asserts, as an alternative pleading, that the "Waterfall Agreement", the "Contribution Agreement," and the "Hazelton Deficiency Agreement" establish the alleged partnership in 2021. However, none of Mr. Mizrahi, Mr. Rogers or Mr. Hiscox are parties to any of these agreements, and the "Waterfall Agreement" also contains an "entire agreement" clause.

[43] I find, having regard to these items, that the alleged partnership is by way of a bald pleading, repeatedly asserting a partnership but without citing affirmative evidence capable of proving that one exists. As the CEI Defendants say, "It is a transparent attempt to force a partnership framework onto a fact pattern where a partnership clearly does not exist." I strike these claims.

C. Submissions and Conclusions on Other Alleged Causes of Action

1. Breach of Fiduciary Duty

[44] When the partnership premise goes by the wayside, the related claim of a breach of fiduciary duty, which in my view is already pleaded deficiently, also becomes clearly unsustainable.

[45] Justice Cavanagh struck this cause of action in the Original SOC and little has been added to the Fresh SOC to support this claim.

[46] Moreover, the Supreme Court of Canada has clarified that fiduciary obligations are seldom present in the dealings of "experienced businessmen of similar bargaining strength acting at arm's length" because such individuals are not inherently vulnerable and are capable of agreeing as to the scope of the discretion or power to be exercised in the circumstances at hand.

2. Duty of Good Faith

[47] To somewhat similar effect, the plaintiffs claim damages for a breach of "the duty of good faith." This pleading, in my view, misconstrues the nature and purpose of good faith in Canadian common law. That is, the duty of good faith is not a standalone cause of action.

[48] The Supreme Court of Canada has repeatedly confirmed that good faith performance is a general organizing principle of contract law, and that any breaches of the duty of good faith in the performance of a contract are subsumed by a general claim for breach of contract (see in particular Bhasin v. Hrynew, 2014 SCC 71). Even in that setting, the duty has only been found, thus far at least, to require a duty of honest performance and a duty to exercise contractual discretion reasonably and in keeping with the purposes of a given contract.

[49] The cause of action asserted in the Fresh SOC relative to good faith performance is also largely premised on the alleged partnership. Again, in the absence of the alleged partnership, the foundation for the claim based on a duty of good faith also founders.

[50] Similar difficulties beset other purported causes of action.

3. Tortious Interference With Economic Interests

[51] In the Original SOC, the plaintiffs pleaded "tortious interference with economic interests" which cause of action was struck by Cavanagh J. In the Fresh SOC, the plaintiffs now plead "tortious interference with economic relations."

[52] However named – and the Supreme Court of Canada has confirmed in A.I. Enterprises Ltd. v. Bram Enterprises Ltd. (2014 SCC 12) that there is no "generally accepted nomenclature for this tort" – this purported cause of action, as also confirmed by Cromwell J. in A.I. Enterprises, is not on its own recognized as a cause of action under Canadian common law. As Cromwell J. put it in A.I. Enterprises, interference with economic relations, even when intentional and unjustifiable, is not actionable in the absence of unlawful means.

[53] The tort of unlawful means, in turn, allows a plaintiff to sue a defendant for economic loss resulting from the defendant's unlawful act against a third party, and requires the intentional infliction of economic injury on the plaintiff by the defendant's use of unlawful means against that third party (A.I. Enterprises, and see also Pisani v. Smith, 2019 ONSC 727).

[54] It is evident from these authorities that intention, and in particular the intention to cause economic harm, is central to the tort. It is also clear that "unlawful means" is to be narrowly construed.

[55] The Fresh SOC contains no particulars of unlawful conduct by the defendants against a third party, does not identify a third party at all for this purpose, and provides no particulars of an intention on the part of the defendants, or on their behalf, to cause injury to the plaintiffs. The Fresh SOC:

a. Badly alleges that Mr. Hiscox had an "intention of causing" economic harm or an "express intention of harming" Mr. Mizrahi's business interests, without providing any particulars beyond those assertions;

b. Again broadly alleges the CEI "intentionally" interfered with Mr. Mizrahi's economic relations, again without particulars;

c. Alleges that Mr. Hiscox caused harm by unreasonably refusing to require that "180 SAW" close on a letter of intent. The pleading does not define 180 SAW, but if it intends to refer to 180 SAW GP, it should be noted that 180 SAW GP is 50% owned by CEI; and

d. Alleges that Mr. Hiscox harmed Hazelton Inc. which, again, is 50% owned by CEI.

[56] I find that these allegations, lacking as they do in particulars and coherence, fall short of what is required to disclose and constitute a reasonable cause of action.

4. Breach of Contract

[57] The plaintiffs also claim damages for breach of contract. However:

a. The Fresh SOC seeks damages of $50 million for breach of partnership "and contract" without specifying which contract or contracts were breached;

b. The Fresh SOC claims that the "Contribution Agreement" was breached by CEI, but fails to plead which if any of the Defendants were party to this alleged contract;

c. The Fresh SOC claims that the "Term sheet of the Retail Loan" was breached, but does not specify who breached the agreement. Moreover, the Retail Term sheet was expressly subsumed in subsequent agreements, and any cause of action in relation to the Term sheet is thus unavailable or at best unclear;

d. The Fresh SOC also claims by way of "catch-all" summary that the "actionable wrongs as aforesaid" constitute a breach of the "unwritten partnership agreement." Given my conclusions about the alleged partnership agreement, I find that this alleged breach will also not be possible to make out.

5. Oppression

[58] The purported claim for oppression is similarly riddled with shortcomings.

[59] First, the Fresh SOC alleges that Mr. Rogers and Mr. Hiscox engaged in oppressive conduct as against Hazelton Inc. and 180 SAW GP, neither of which is a party in this proceeding.

[60] Second, the Fresh SOC alleges that Mr. Mizrahi and Mizrahi SPV are "complainants" eligible to bring the oppression remedy claim. However, Misrahi SPV is not a party to this proceeding and the pleading provides no facts to establish its standing as a complainant, and nothing to link this alleged oppression to Hazelton Inc. or 180 SAW GP (the alleged victims of the alleged oppression).

[61] Other material facts that would be required to establish reasonable expectations are also absent.

Conclusion: No Reasonable Cause of Action in Fresh SOC

[62] For these reasons, I am striking the Fresh SOC in its entirety as disclosing no reasonable cause of action.

Discussion and Denial of Potential Leave to Amend

[63] In Tran v. University of Western Ontario, 2015 ONCA 295, the Court of Appeal for Ontario held that where there is no reason to suppose that a party could improve its case by further amendment, the court ought not to grant leave to amend.

[64] Here, the plaintiffs have already been given an opportunity to amend their claim, which Cavanagh J. had struck in its entirety, and, after a number of months to do so have again delivered a pleading that is deficient in the various respects set out above.

[65] This same delay in my view causes prejudice to the defendants, whose parallel application is effectively stalled pending the determination (now for the second time) of this motion.

[66] I am not prepared to give "another kick at the can." I decline to allow the plaintiffs (further) leave to amend.

[67] This conclusion renders the Mizrahi parties' consolidation motion academic; there is now no claim with which the CEI action (were the CEI Application converted to an action) could be consolidated.

Consideration of Request for Consolidation

[68] However, even had I allowed the Mizrahi Action to proceed, I would not have ordered the consolidation sought.

[69] Under subrule 6.01(1) of the Rules, the court may order two or more proceedings to be consolidated, heard together or heard one immediately after the other(s) if:

a. They have a question of law or fact in common;

b. The relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or

c. For any other reason an order ought to be made.

[70] Relevant caselaw is clear that the party seeking consolidation has the onus of establishing that the order should be made, and that the onus is a "heavy one" (see Singh v. Trump Sr., 2018 ONSC 4649, and Robert A. Cartier Inc. v. Stocking, 2015 ONSC 3242).

[71] Courts apply a two-part test to determine whether or not to order consolidation. First, the court is to determine whether or not the moving party has established that one or more of the criteria under subrule 6.01(1) are met. Second, if any of the criteria have been met, the court must determine whether the balance of convenience favours a consolidation order.

[72] The language of the subrule and the caselaw that has interpreted it confirm that the consolidation is discretionary. The policy rationale for consolidation is to avoid a multiplicity of proceedings, to promote timely and inexpensive determination of issues, and to avoid inconsistent judicial findings (Windrift Adventures Inc. v. Ontario (Animal Case Review Board), 2023 ONCA 690, CN v. Holmes, 2011 ONSC 4837).

[73] In determining whether or not to consolidate, the court may consider such factors as:

a. The extent of commonality or difference of the factual issues in the proceedings;

b. That status/progress of the proceedings;

c. The convenience (or inconvenience), measured by such parameters as time, money, due process and administration resulting from bringing the proceedings together (Windrift, supra).

[74] The Mizrahi parties assert that the two proceedings (had the Action survived) ought to be consolidated because both proceedings relate to the Projects and share common facts.

[75] The CEI parties maintain that this assertion oversimplifies and distorts the record, that the CEI Application and the Mizrahi Action do not share common questions of law or fact, and that, rather, "these two proceedings are like ships passing in the night."

[76] The CEI parties point out, first, that the parties are different in the two proceedings. Whereas the CEI Application involves a narrow set of parties, the Mizrahi Action includes a number of parties not included in the CEI Application (there are in fact twice as many parties in the Mizrahi Action as compared to the CEI Application).

[77] In terms of the factual matrices for the two proceedings, the CEI parties assert that the CEI Application is based on a "small number of straightforward facts." They say that the CEI Application is, in essence, a debt collection proceeding based on a limited number of uncomplicated contracts.

[78] The straightforward scenario encompassed by those agreements and asserted in the CEI Application is that CEI advanced funds under the Retail Note, the 180 SAW Loan and the 180 SAW Note, and that the amounts owing remain outstanding and payable by Mr. Mizrahi, Mizrahi Partner and Mizrahi Shareholder in their capacities as borrower and/or guarantor.

[79] The CEI parties emphasize that these fundamental facts at issue in the CEI Application are not in dispute. They point out that Mr. Mizrahi's affidavit, albeit "telling a convoluted story" does not dispute that:

a. Mr. Mizrahi guaranteed amounts owing under the Retail Note;

b. Mr. Mizrahi borrowed money under the 180 SAW Loan, and Mizrahi Partner and Mizrahi Shareholder guaranteed amounts owing thereunder;

c. Mizrahi Partner borrowed money under the 180 SAW Note, and Mr. Mizrahi and Mizrahi Shareholder guaranteed amounts owing thereunder; and,

d. The funds that were borrowed/guaranteed were advanced, and remain outstanding under the Retail Note, the 180 SAW Loan and the 180 SAW Note.

[80] The CEI parties say, again persuasively in my view, that since there is no dispute about these outstanding debts, there are no material facts in dispute relative to the essence of the CEI Application.

[81] The facts pleaded and engaged within the Mizrahi Action (had it survived), while also having its roots in the Projects, allege, the CEI parties aptly say, "a convoluted and wandering narrative" involving an alleged common law partnership between Mr. Mizrahi, and Mr. Rogers and Mr. Hiscox, and allegations of breaches of that alleged partnership, duties of good faith, fiduciary duties, as well as intentional interference with economic relations, and oppression.

[82] As discussed above in the context of the motion to strike the Fresh SOC, these various alleged causes of action necessitate evidence and analysis of distinct factual and legal propositions. They go well beyond, and share little common evidentiary ground with the straightforward debt collection sought in the CEI Application.

[83] As one would expect given the goals of their consolidation motion (and the motion to convert), the Mizrahi parties do indeed assert a complex web of unwritten understandings and breaches, and emphasize the disagreements, and need for credibility findings, concerning all manner of such issues. I find, however, that none of these alleged breaches undermine or even particularly take issue with the central asserted facts in the CEI Application confirming the agreements and the breaches thereof.

[84] These same considerations undermine the Mizrahi parties' claim that maintaining separate proceedings would risk inconsistent judicial findings.

[85] That is, as discussed, the CEI Application requires the court to make a narrow and circumscribed set of factual determinations: is the debt owing, and does it remain outstanding?

[86] The Mizrahi Action, on the other hand, would require a separate and wide-ranging set of factual determinations, including: whether Mr. Mizrahi, Mr. Rogers and Mr. Hiscox were in a common law partnership; whether Mr. Rogers and Mr. Hiscox unreasonably rejected the sale of a Project (and what comprised the Project in that context); whether Mr. Rogers and Mr. Hiscox blocked a deal with Hyundai Asset Management, whether Mr. Hiscox and CEI acquired units in the 128 Hazelton Project at less than fair market value and deprived a plaintiff of revenue; and, whether the business affairs of Mizrahi (128 Hazelton) Inc., a non-party in either proceeding, were carried on in a manner that was oppressive and/or unfairly prejudicial to the plaintiff 1000041090 Ontario Inc. These various required factual findings would then have to be considered against the array of causes of action advanced in the claim, to determine if the various legal doctines had been made out.

[87] I find that this array of required determinations in the Mizrahi Action, were it to proceed, would not and does not significantly overlap with the more limited and focused issues to be addressed in the CEI Application, and that therefore there would be no appreciable risk of inconsistent findings.

[88] For these reasons, had I not struck the Fresh SOC, I would not have ordered a consolidation for the two proceedings.

Discussion of Request to Convert CEI Application to Action

[89] It remains to determine whether or not the CEI Application should be converted to an action.

[90] In part based on my findings to this point as set out above, in my view such conversion is not necessary nor appropriate.

[91] Under subrules 38.10 (1)(b) and (2) of the Rules, the court may convert an application to an action but, as recently emphasized in J. Dietrich J.'s decision in Mosaic Transit Constructors General Partnership et al v. Ontario Infrastructure and Lands Corporation et al, 2025 ONSC 3982, "only where there is good reason to do so."

[92] In making that determination, the court is to consider, as set out in Kristjanson J.'s decision in Foundation Asset Corp. v. First Global Data, 2017 ONSC 4780, the following factors:

a. An application should be used when there is no matter in dispute, and when the issues to be determined do not go beyond the interpretation of a document;

b. A good reason to convert an application into an action is when the judge who will hear the matter cannot make a proper determination of the issues on the application record;

c. When issues of credibility are involved the matter should proceed by way of action;

d. Whether material facts are in dispute;

e. The presence of complex issues that require expert evidence and/or weighing of evidence;

f. Whether there is a need for pleadings and discoveries; and

g. The importance and impact of the application and of the relief sought.

[93] There is an important qualification that it cannot be the case that any facts in dispute disqualify an application as the vehicle of choice. Rather, what is important in the determination is whether there are material facts in dispute requiring a trial. Moreover, if there are disputed matters between the parties but those matters are not within the strict confines of the application, then the application can proceed notwithstanding the dispute (Mosaic, supra).

[94] The CEI parties cite Kimmel J.'s decision in Bhatnagar v. Cresco Labs Inc., 2022 ONSC 1745 as illustrative of the distinction between a dispute necessitating an action versus one which can be managed within an application. In that case, Her Honour was required to interpret a share purchase agreement and to decide whether the applicants were entitled to payments under the agreement and whether the respondent had breached its obligations. There was a dispute about whether the applicants could or should have done more to secure their eligibility to receive certain payments. Justice Kimmel decided the matter based solely on the written record, saying:

"This is precisely the type of factual determination that is conducive to a written record. The court had no difficulty making the findings of fact set out at the outset of this endorsement based on the written record. A summary resolution of this application is the most proportionate and fair manner of proceeding."

[95] To similar effect, in 6971971 Canada Inc. et al v. Messica, 2025 ONSC 604, Chalmers J. refused to convert an application into an action, notwithstanding that there were various factual matters in dispute, including, it appears, disputes about whether or not certain work required to be done under a lease renewal agreement had been satisfactorily completed. Justice Chalmers found that the guarantee as the heart of the dispute could be determined on the written record, notwithstanding the parties' differing accounts of peripheral matters.

[96] As set out and discussed above, the CEI Application is in essence a straightforward collection proceeding, seeking to enforce instruments and amounts owing thereunder which are not themselves contested. I find that that relief is appropriately the subject of an application, and that to convert the application to a claim would necessarily bog the matter down in procedural steps that are not warranted nor necessary.

[97] In that regard, the Application record has long since been served, and based on the extensive materials that the Mizrahi parties have prepared and served in connection with the Mizrahi Action and in connection with the two motions before me, I am confident that they can deliver a responding application record expeditiously.

Next Steps

[98] Accordingly, I dismiss both the motion to consolidate and the motion to convert, and, having granted the CEI Defendants' motion to strike the Fresh SOC, I order the Mizrahi parties to deliver responding materials in the CEI Application within 30 days of the date of the release of this decision.

Costs

[99] The CEI parties are entitled to their costs of these motions. I do not see that any party has uploaded a costs outline to Case Center. If the parties cannot agree on costs within 20 days, CEI may deliver its costs outline, together with written submissions not to exceed 5 pages in length (in total for the three motions). Within 10 days thereafter, the Mizrahi parties may deliver their responding written submissions, also not to exceed 5 pages in length. At their option, the Mizrahi parties may also deliver a costs outline.

Justice W.D. Black

Date: March 13, 2026