Court File and Parties

Court File No.: CV-22-00686920-00CL Date: 2026-05-25 Ontario Superior Court of Justice

Re: Grant Thornton Limited, in its capacities as Trustee in bankruptcy of 2398035 Ontario Inc., 2488123 Ontario Limited, 2538139 Ontario Limited, 2540594 Ontario Limited and Virk Hospitality Corp., Applicants And: 2180366 Ontario Inc., Guardian Real Estate Ventures Limited a.k.a. 345205 Ontario Inc., 2514367 Ontario Inc., 2490793 Ontario Limited, 1809313 Ontario Limited, 2346448 Ontario Inc., Mpire Capital Corporation, Enzo Mizzi, Filippo Mizzi and Mary Campisi and North 44 Property Management Inc., Respondents

Before: F.L. Myers J.

Counsel: George Benchetrit, Maya Poliak, and Maleeha Anwar, for Grant Thornton Inc. in its capacity as Trustee in Bankruptcy of the Applicants Robert G. Zochodne, for Mary Campisi Micheal Simaan, for Enzo Mizzi and all corporate Respondents

Heard: In writing

Costs Endorsement

The Proceeding

[1] The Applicant Trustee in Bankruptcy succeeded in holding the Respondents liable for some $16 million in transfers at undervalue. I held that they stripped the bankrupts of funds borrowed for development projects.

[2] The Trustee seeks its costs on a substantial indemnity basis against the Respondents jointly and severally fixed in the amount of $562,619.10 all-inclusive. This amount includes just over $100,000 for disbursements for litigation support services, cloud service charges, and other disbursements. It also includes over $26,000 for transcripts.

[3] The application record contained a very detailed and comprehensive analysis by the Trustee of the movement of money by the Respondents. The multiple charts prepared by the Trustee detailed movements of funds on various metrics. The correctness of the analysis was not challenged by any of the Respondents.

[4] The Trustee’s unravelling of the complexities of the movements of money made the facts unassailable and greatly simplified the proceeding.

[5] The Trustee submits that the Respondents ought to be held liable for enhanced costs due to their “reprehensible” litigation conduct. First, they failed to make financial disclosure. This left much of their evidence to be unsupportable oral assertions. But it also greatly increased the difficulty of the Trustee’s tracing task.

[6] Of greater significance, it seems to me, is that the position of Enzo Mizzi fundamentally changed at the last second. At first, he created a story about the timing of recognition of profit to claim that all transfers were made for good consideration. He put the Trustee to its proof. At the hearing, however, he conceded that the transfers were made at undervalue subject to one unsustainable argument about unascertained accrual of some piece of future profit.

[7] Mr. Mizzi’s sworn initial position was not sustainable even by him despite his oath. He did not just put the Trustee to the proof of its allegations. He swore to the truth of a fiction. In my view, that meets the test of “reprehensible” litigation conduct as discussed in Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239, at para. 43 and Davies v. Clarington (Municipality) et al., 2009 ONCA 722, at para. 40.

[8] Ms. Campisi submits that her role was limited to the narrower argument that she was not a “privy” to her brother’s transactions. She therefore seeks to pay but a small piece of the Trustee’s costs.

[9] That is not how the costs system works, however. Ms. Campisi defended the claims against her and she did not succeed. As such, she is presumptively liable for the Trustee’s reasonable costs on a partial indemnity basis.

[10] However, in finding her privy to the transfers at undervalue, although she was involved in only a subset of the overall campaign, I found that her acts facilitated the wrongdoing. Moreover, I found that she acted in concert and jointly with her siblings. In my view, she bears the same blameworthiness as her siblings.

[11] Mr. Simaan also makes submissions challenging the reasonableness of the Trustee’s fees and the time spent on aspects of the proceeding. He submits that his clients’ legal fees on a full indemnity basis were $119,339.50 for the steps for which costs are sought by the Trustee.

[12] Before being heard to challenge the reasonableness of the quantum of another party’s claim for costs, objectors are expected to deliver their own Costs Outlines. In establishing the process for these costs submissions, at para. 70 of my prior endorsement, I directed:

The parties shall each deliver Costs Outlines with their submissions.

[13] Enzo Mizzi chose not to follow this direction although Mr. Simaan provided a gross fee figure that he relied upon for comparison purposes. I note that he made no reference to disbursements or taxes to help me draw apples to apples comparisons.

[14] Without any breakdown of the tasks and time spent by Mr. Simaan and his firm, I cannot draw any meaningful conclusions about the relative time spent or the reasonableness of his clients’ fees compared to the Trustee.

[15] It comes as no surprise that Enzo Mizzi incurred far less costs than the Trustee. His lack of disclosure put the Trustee to a substantial tracing task. Moreover, he made unsupported claims that did not require analysis of the evidence. At the end of the day, he admitted the vast bulk of the facts that his initial opposition required the Trustee to prove.

[16] Had Mr. Mizzi wanted to keep his risk of costs liability down, perhaps he should have made his admissions up front rather than after he had put the Trustee to the work of proving the case that Mr. Mizzi knew was true throughout.

[17] The fees claimed by the Trustee are very substantial. However, they are not so high or so surprising that saddling the Respondents with the fees and disbursements could be seen to be an impediment to access to justice. Boucher v. Public Accountants Council for the Province of Ontario.

[18] The Respondents took more than $16 million from the bankrupts. The Trustee’s costs as claimed are just over 3% of the amount in issue. The quantum is the natural result of the Respondents’ misconduct and their unhelpful stance in this proceeding.

[19] While the Respondents may be entitled to put the Trustee through its paces, in civil litigation in Ontario, that comes with a cost especially if the effort proves to have been unnecessarily or unreasonably required. That is the case here.

[20] I have reviewed the Trustee’s Costs Outline. I am not prepared to order costs for prior case conferences in which costs were not reserved to me. I am not finding that costs cannot be ordered for antecedent case conferences. It is quite common to do so. However, costs are often not ordered on case conferences so as to enhance the availability and informality of case management.

[21] The amount claimed for case conferences and Aides Memoires by the Trustee on a substantial indemnity basis is only $9,712.80. It is less than the deduction I would (and do) normally make as a nod to the risk of duplication and some inefficiency endemic to the costs exercise generally. Given the lack of materiality of the quantum, I do not need to consider details about case conferences to assess whether the costs incurred should be compensable now.

[22] In my view, it is fair and reasonable in all the circumstances for all the Respondent to be jointly and severally liable to pay the Trustee its costs of this proceeding on a substantial indemnity basis fixed at $500,000 all-inclusive.

F.L. Myers J.

Date: May 25, 2026