CITATION: Parwicki v. Rosenthal et al, 2026 ONSC 4407

COURT FILE NO.: CV-25-00740365-0000

DATE: 20260729

ONTARIO SUPERIOR COURT OF JUSTICE

MATHEN J.

REASONS FOR JUDGEMENT

OVERVIEW

1The plaintiff seeks default judgment in respect of two loans.

2The main causes of action alleged are breach of contract, fraudulent misrepresentation and breach of fiduciary duty.

3The plaintiff claims:

a. Damages for breach of contract in the amount of $125,371.14;

b. Prejudgment and post judgment interest on the amount claimed in subparagraph 1(a) at the rate of eleven per cent (11.0%) per annum, compounded monthly

c. In the alternative to (b), prejudgment and post judgment interest pursuant to s. 128 and s. 129 of the Courts of Justice Act, R.S.O 1990, c. C-43, as amended;

d. Punitive, aggravated and exemplary damages in the amount of $150,000.00 for fraudulent misrepresentation, breach of trust and/or breach of fiduciary duty;

e. Prejudgment and post judgment interest on the amount claimed in subparagraph1(d) in accordance with s. 128 and s. 129 of the Courts of Justice Act,

R.S.O 1990, c. C-43, as amended; and

f. Costs.

4The defendants failed to defend the proceeding and was noted in default.

5The plaintiff seeks default judgment against John Rosenthal and RZN. The plaintiff does not seek default judgment against Mark Zaretsky after being notified in September 2025 that Mr. Zaretsky has filed an assignment in bankruptcy. The plaintiff reserves the right to continue this proceeding against Mr. Zaretsky in the future.

6On February 19, 2025, Akazaki J. ordered the plaintiff to serve the motion for default judgment and a copy of his endorsement allowing the defendants an opportunity to notify the plaintiff by December 30, 2025, that they seek to respond, failing which the motion would proceed in writing.

7The plaintiff served the endorsement and motion record on each of the defendants on November 25, 2025. The defendants did not respond.

DECISION

8For the reasons that follow I am granting the judgment sought in part.

THE ISSUES

9The main issues are:

a. Do the materials provide a basis for a finding of liability?

b. If so, what are the damages to which the plaintiff is entitled?

ANALYSIS

Issue 1: Do the materials provide a basis for a finding of liability?

Consequences of noting in default

10Pursuant to r. 19.02, having not defended the proceeding, a defendant is deemed to admit the truth of all allegations of fact made in the Statement of Claim.

11However, pursuant to r. 19.06 a plaintiff is not entitled to judgment on a motion for judgment or at a trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment.

12In particular, r. 19.05 provides that a motion for judgment which involves unliquidated damages shall be supported by evidence given by affidavit.

The test on a motion for default judgment

13The test on a motion for default judgement is:

a. What deemed admissions of fact flow from the facts pleaded in the Statement of Claim?

b. Do those deemed admissions of fact entitle the plaintiff, as a matter of law, to judgement on the claim?

c. If they do not, has the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitle it to judgement on the pleaded claim?

Elekta Ltd. v. Rodkin, 2012 ONSC 2062 at para. 14.

14I am satisfied that the plaintiff has established liability based upon the following deemed admissions in the Statement of Claim together with the Affidavit of Michael Parwicki sworn November 21, 2025.

Introductory facts

15The plaintiff Parwicki is an individual residing in the Province of Ontario.

16The defendant, RZN, LLP (“RZN”), is a limited liability partnership which, at all material times, carried on business as a firm of chartered professional accountants providing accounting services in the Province of Ontario and operating from an office located in Toronto, Ontario.

17The defendant, Mark Sheldon Zaretsky, (“Zaretsky”), is an individual residing in the Province of Ontario who was, at all material times, a chartered professional accountant, a registered member of CPA Ontario, and a managing partner of RZN.

18The defendant, John Mark Rosenthal (“Rosenthal”), is an individual residing in the Province of Ontario who was, at all material times, a chartered professional accountant, a registered member of CPA Ontario, and a partner at RZN.

19Between 2019 and 2024, Rosenthal and RZN acted as Parwicki’s personal and corporate accountant and financial advisor. Rosenthal provided those accounting and advisory services to Parwicki and his corporations through RZN.

The First Loan

20In or around November 2023, Rosenthal solicited Parwicki’s investment in a private mortgage transaction on the following terms (the “First Loan”):

a. Parwicki, as lender, would advance the principal sum of $100,000.00 to the Defendants for a 15-month term;

b. The loan would bear interest at the rate of 11.0% per annum, compounded monthly;

c. The defendants would make periodic payments of combined interest and principal to Parwicki in equal monthly installments due on the 21st day of each month during the term; and

d. The entirety of the interest and principal owing under the loan would be repaid to Parwicki by February 21, 2025; and

e. RZN would guarantee Parwicki’s investment.

21On or about November 21, 2023, Parwicki accepted the terms of the First Loan and advanced $100,000.00 to RZN, in trust, in accordance with his obligation under the First Loan.

22Each of the defendants executed a promissory note in favour of Parwicki in which they jointly and severally promised to pay the principal and interest owing to Parwicki in accordance with the terms of the First Loan.

23Parwicki received the following payments in relation to the First Loan on or about the following dates:

(a) $6,518.00 on December 22, 2023;

(b) $7,193.00 on January 31, 2024;

(c) $7,193.00 on February 24, 2024;

(d) $7,193.00 on March 15, 2024;

(e) $7,193.00 on May 1, 2024;

(f) $7,193.00 on June 7, 2024; and

(g) $7,193.00 on June 24, 2024.

24The First Loan has been in default since June 24, 2024. The total sum owed as at April 2, 2025 is $60,025.89. Compounding interest will continue to accrue on this amount until the debt is paid.

The Second Loan

25In or around February 2024, Rosenthal solicited Parwicki’s investment in a second private mortgage transaction on the following terms (the “Second Loan”):

(a) Parwicki, as lender, would advance the principal sum of $75,000.00 to the Defendants for a 15-month term;

(b) The loan would bear interest at the rate of 11.00% per annum, compounded monthly;

(c) The defendants would make periodic payments of combined interest and principal to Parwicki in equal monthly installments due on the 13th day of each month during the term;

(d) The entirety of the interest and principal owing under the loan would be repaid to Parwicki by May 13, 2025; and

(e) RZN would guarantee Parwicki’s investment.

26On or about February 13, 2024, Parwicki advanced $75,000.00 to RZN, in trust, in accordance with his obligation under the Second Loan.

27Parwicki received the following payments in relation to the Second Loan on or about the following dates:

(a) $12,080.00 on July 8, 2024; and

(b) $6,040.00 on July 9, 2024.

28The Second Loan has been in default since July 9, 2024. The total balance owed to Parwicki under the Second Loan as at April 2, 2025 is $65,345.25. Compounding interest will continue to accrue on this amount until the debt is paid.

Other considerations

29Rosenthal knew that Parwicki relied on his qualifications, knowledge and financial advice by virtue of his position as Parwicki’s personal accountant and financial advisor, his designation as a chartered professional accountant, and his partnership in RZN.

30At all material times, Rosenthal held himself out as an agent of RZN, acting in his capacity as a partner at RZN, and used RZN to give the Loan Agreements an air of legitimacy.

31Both of the Loan Agreements were solicited and arranged by Rosenthal using his RZN email address.

32The principal amounts advanced by Parwicki under the Loan Agreements were paid to RZN, in trust.

Issue 2: What are the damages to which the plaintiff is entitled?

33The plaintiff is entitled to be compensated for the loss of bargain, which means he is entitled to be placed in the same position he would have been in if the breaches had not occurred, or in other words as though the contract had been performed without any breaches.

34The deemed admissions and sworn affidavit prove that the defendants breached their contracts with the plaintiff in the amounts cited.

35The plaintiff seeks punitive damages in the amount of $150,000.

36Based on the deemed admissions and Mr. Parwicki’s affidavit, I am satisfied that the defendants held a position of fiduciary duty and trust as regards the plaintiff.

37An award of punitive damages requires an independent actionable wrong and conduct that is so reprehensible, malicious, or high-handed that it offends the Court’s sense of decency. The defendant’s conduct must be so outrageous that punitive damages are rationally required to serve the purposes of punishment, deterrence, and denunciation: Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 SCR 595.

38I am satisfied that the defendants breached their fiduciary and trust duties to the plaintiff. Mr. Rosenthal, in particular, took advantage of a longstanding client relationship in a dishonest and disreputable manner. I find that an award of punitive damages of $75,000 is rationally required to communicate judicial denunciation of the defendants’ behaviour.

39Therefore:

a. The defendants owe the balance of the loans.

b. The defendants owe punitive damages of $75,000.

40The defendants Rosenthal and RZN are jointly and severally liable for all amounts awarded.

COSTS

41The plaintiff requests costs of this motion and of the action, on a partial indemnity basis, fixed at $7,237.50. I have reviewed the rates and time charged and I find them fair and reasonable. I further find that such costs were within the reasonable contemplation of the defendant.

INTEREST

42The plaintiff claims prejudgment interest at the contractual rate of 11%. Generally, courts should give effect to interest rates contained in an agreement unless the terms are vague, unclear or infringe a statutory provision such as the Interest Act, R.S.C., 1985, c. 1-15: Capital One Bank

v. Matovska; Capital One Bank v. Blackwell; Capital One Bank v. Semple, 2007 CanLII 37015, at para. 13 and Gyimah v. Bank of Nova Scotia,2013 ONCA 252, at para. 10. Absent exceptional circumstances, it is appropriate and fair to use a contractual interest rate to which the parties have agreed: Bank of America Canada v. Mutual Trust Co., 2002 SCC 43, at paras.49-50, Professional Court Reporters Inc. v. Pistachio Financier Corp., 2022 ONCA 669.

43The plaintiff is entitled to pre-judgement interest at a rate of 11%.

44The post judgment interest rate is 3.7%.

ORDER

45In conclusion, I make the following order:

a. The motion is granted in part.

b. The defendants, John Rosenthal and RZN, LLP, (“the Defendants”) shall pay to the plaintiff, Michael Parwicki (“the Plaintiff”), damages in the sum of $65,558.24, with respect to the principal and interest owed as at December 21, 2025 under the First Loan, together with prejudgment and post-judgment interest thereon at the rate of 11.0% per annum, compounded monthly on the 21^st day of each month.

c. The Defendants shall pay damages to the Plaintiff in the sum of $70,454.05, with respect to the principal and interest owed as at December 13, 2025 under the Second Loan, together with prejudgment and post-judgment interest thereon at the rate of 11.0% per annum, compounded monthly on the 13^th day of each month.

d. The Defendants shall pay to the Plaintiff punitive damages in the sum of

$75,000.00, together with prejudgment interest thereon at the rate of 3.03% per annum.

e. The Defendants shall pay to the Plaintiff his costs of this motion and of the action on a partial indemnity basis, fixed in the amount of $7,237.30.

f. This judgment bears interest at the rate of 3.7% from the date of this decision.

g. Within 14 days, the Plaintiff may forward for my signature an Order consistent with these reasons that includes amounts for pre-judgment interest.

Mathen J.

Released: July 29, 2026

CITATION: Parwicki v. Rosenthal et al, 2026 ONSC 4407