CITATION: Labyrinth Partners v. Iberbanco et al, 2026 ONSC 2036

COURT FILE NO.: CV-25-00756073-0000

DATE: 20260407

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LABYRINTH PARTNERS LTD. and ATHENA ADVISORY LTD., Applicants

AND:

IBERBANCO LTD., CARL KUUR, JIBRIL GALADIMA HAMIDU and SEKER IBU (also falsely operating as SEKERBANK IBU and SEKER BANK and SEKER INTERNATIONAL), Respondents

BEFORE: Parghi, J.

COUNSEL: Caroline Abela, Macdonald Allen and Hashim Sohail, for the Applicants

Suvendu Goswami and Khalid Arshad, for the Respondents

HEARD: April 7, 2026 (in writing)

ENDORSEMENT

[1] The applicants say they were victims of a complex international fraud scheme in which their funds were diverted through Iberbanco Ltd. (“Iberbanco”), a registered money service business, to a pretender “bank”, Seker IBU, also falsely operating as Sekerbank IBU, Seker Bank, and Seker International (“Seker”). By Endorsement dated February 4, 2026 (Labyrinth Partners Ltd. et al v. Iberbanco Ltd. et al., 2026 ONSC 705), I granted the applicants the relief they sought. As against Iberbanco, the relief granted consisted of orders to disclose various documents and information and to pay USD $371,850.93 into court and USD $68,449.97 to the applicants.

[2] I first comment on the costs submissions provided. In the Endorsement, I ordered the applicants and Iberbanco to work together to attempt to resolve costs. When they could not agree on costs, I established a timetable on consent for the exchange of the applicants’ costs submissions, Iberbanco’s responding submissions, and the applicants’ reply submissions. Iberbanco then retained new counsel, who requested and received an extension of the deadline for their responding submissions. After the submissions contemplated in the timetable were delivered, Iberbanco purported to deliver “supplementary reply” submissions. These were in fact sur-reply submissions that were not permitted by the timetable. I have disregarded them. Iberbanco’s counsel says it would be unfair for me to disregard them. I do not agree. There was never any right to make sur-reply costs submissions. Nor does fairness demand any such right in the circumstances before me.

Costs Principles

[3] In exercising my discretion to fix costs under section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, I may consider the factors enumerated in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. 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.

[4] 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”.

[5] I apply these factors here.

Analysis

Iberbanco’s Submissions

[6] Most of Iberbanco’s submissions appear to take issue with my decision on the merits of the application and as such do not relate to the issue of costs.

[7] Iberbanco’s submissions also assert I should not address costs from the application until a rule 59.06(2)(a) motion they are seemingly contemplating is brought and adjudicated. I am unable to accept this submission. I am aware of no jurisprudential authority in support of it and none is pointed out to me. In my view, this approach would merely create delay, especially since the rule 59.06(2)(a) motion is at this point entirely hypothetical.

[8] The remaining costs submissions made by Iberbanco are addressed below.

Entitlement to Costs

[9] The applicants were entirely successful on the application. They were granted the relief they sought. They are therefore entitled to their costs.

[10] It is not clear from which respondent(s) the applicants seek their costs. Their submissions focus exclusively on Iberbanco, but their costs outline refers to seeking costs from Iberbanco and Mr. Kuur and Mr. Hamidu personally. The applicants articulate no basis on which costs ought to be ordered against Mr. Kuur or Mr. Hamidu personally.

[11] In my view, the applicants are entitled to costs from Iberbanco alone. In my Endorsement, I granted relief only against Seker (which did not participate in the proceedings) and Iberbanco. No relief was granted against either Mr. Kuur or Mr. Hamidu personally. Indeed, my order that the parties work together to try to resolve costs was directed at the applicants and Iberbanco only, and not at Mr. Kuur or Mr. Hamidu. I see no basis for ordering costs against them personally.

Scale of Costs

[12] I find that costs against Iberbanco on an elevated scale are appropriate, for several reasons.

[13] The first is that Iberbanco has displayed an ongoing and willful disregard for orders of this court. On November 26, 2025, Papageorgiou J. issued an order requiring the disclosure of various information by December 12, 2025. Iberbanco did not comply with that order. On December 12, 2025, Dow J. extended the order of Papageorgiou J. to January 8, 2026 and scheduled a further case conference for that date. On January 8, 2026, Chalmers J. issued an order requiring that the outstanding disclosure be provided “forthwith”. Iberbanco did not comply with that order. Its ongoing failure to comply with these disclosure orders was part of what necessitated the appearance before me on January 28, 2026, at which, rather remarkably, Iberbanco took the position that its disclosure obligations had been satisfied. I held that that assertion “stretches credulity”, that Iberbanco had not complied with the disclosure orders, and that it had not offered any satisfactory explanation for its failure to comply. I further held:

It bears repeating that an order of this court is not a recommendation. It is a legally binding obligation. I am concerned that Iberbanco does not appreciate the seriousness of the order or of its own continued, and unexplained, failure to comply with it.

[14] Second, Iberbanco has made misrepresentations to the court. These include a misrepresentation before Papageorgiou J. that Iberbanco was not advancing an interest in the applicants’ funds held in the United Kingdom, when in fact by that time Iberbanco had already commenced proceedings to recover those funds. Iberbanco also represented before Papageorgiou J. that approximately USD $1.15 million remained in the Seker account, which led the applicants to believe that the funds were being preserved pending the hearing of the application before me. Iberbanco later advised Chalmers J. that only $30,000 remained in the Seker account, which suggested the funds were not in fact being preserved. This understandably came as a surprise to the applicants, who had relied on Iberbanco’s representations before Papageorgiou J.

[15] Third, Iberbanco advanced serious and unfounded allegations about the integrity of the applicants, suggesting before me, with no evidentiary basis, that the applicants were involved in the fraud rather than victims of it. I held that this assertion was “as surprising as it is spurious” and “smacks of obfuscation”. In its responding costs submissions, Iberbanco says this allegation was “advanced in good faith” and is now withdrawn. I am not persuaded that an attack on an opposing litigant’s integrity that is advanced with no supportive evidence can reasonably be labelled a “good faith” claim. In any event, this is the first time the court is advised that this rather hefty allegation has been withdrawn. It was advanced with some vigour before me, and properly attracts costs consequences.

[16] Fourth, Iberbanco has impeded the applicants’ efforts to investigate the fraud against them. Iberbanco did not make informed witnesses available to the applicants for examination. Mr. Kuur and Mr. Hamidu are Iberbanco’s director and controlling shareholders. They presumably would have been knowledgeable witnesses, but did not attend their examinations. Iberbanco suggests in its responding costs submissions that these examinations were scheduled unilaterally and on extremely short notice. The record does not bear out that claim, but even if it were true, Iberbanco provides no evidence to suggest it tried to make Mr. Kuur and Mr. Hamidu available for examination on some alternative date on which they were available. To the contrary, the witness Iberbanco chose to make available was new to Iberbanco and had no knowledge of the events at issue and limited knowledge about Iberbanco generally. This has made it exceedingly difficult for the applicants to gain a clear understanding of the fraud and of where their money has gone.

[17] Iberbanco’s improper conduct permeated and complicated virtually every aspect of this proceeding. Iberbanco sought to hide the ball. It abused the court’s processes. Its behaviour threatens to bring the administration of justice into disrepute. It is entirely appropriate to award costs against Iberbanco on an elevated scale, to communicate the court’s strong disapproval of Iberbanco’s conduct.

Quantum of Costs

[18] Iberbanco asserts the applicants’ fees are excessive. I disagree.

[19] The overall time spent was reasonable in the circumstances of this case. Iberbanco failed to comply with court orders, necessitating multiple case conferences and the application hearing before me. When Iberbanco did disclose information, it did so in a haphazard, inadequate, and eleventh-hour manner. It chose to offer up uninformed witnesses instead of informed ones and to generally make it difficult for the applicants to get the information to which they are entitled. This conduct, not surprisingly, made the applicants’ efforts to advance the litigation and investigate the fraud more onerous and time consuming. Iberbanco should have anticipated that its obfuscation, delay, and disregard for court orders would drive up the applicants’ costs. It does not lie in Iberbanco’s mouth to now lament the obvious consequences of its actions.

[20] The hourly rates claimed by applicants’ counsel are reasonable. The work was appropriately allocated among members of the counsel team. The materials on the application were helpful to the court.

[21] The examinations and case conferences (fee categories II, III, IV, and V on the applicants’ costs outline) involved Iberbanco alone, with Seker playing little or no role. For the reasons above, I grant substantial indemnity costs against Iberbanco in respect of those fee categories.

[22] In the application itself (fee categories I and VI), the applicants sought relief against Seker as well as Iberbanco. Some portion of the fees is therefore rightly attributable to Seker. In my assessment, the factual and legal issues pertaining to Iberbanco were more complicated than those pertaining to Seker, and the bulk of the written and oral submissions were concerned with Iberbanco and not with Seker. On this basis, I grant the applicants 80% of their substantial indemnity costs against Iberbanco for these fee categories.

Conclusion

[23] Based on the above, the applicants’ total costs, inclusive of all fees, disbursements, and HST, would be $191,922.18. This amount breaks down as follows:

a. For the application returnable January 28, 2026 (fee category I on the applicants’ costs outline): 80% of the substantial indemnity amount sought, or $82,382.40;

b. For the three case conferences before Papageorgiou, Dow, and Chalmers JJ. (fee categories II, III, and IV): substantial indemnity costs of $27,865;

c. For the examinations (fee category V): substantial indemnity costs of $50,130;

d. For the application hearing: 80% of the substantial indemnity amount sought, or $3,776;

e. HST on the above fees of $21,339.94; and

f. Disbursements in the amount claimed of $6,428.84, including applicable taxes.

[24] I award the applicants their costs as against Iberbanco in the total amount of $185,000, inclusive of fees, disbursements, and HST. Stepping back and viewing the matter as a whole, I consider this a fair and reasonable result.

[25] This amount is to be paid by Iberbanco within 30 days of the date of this endorsement.

Parghi J.

Date: April 7, 2026