



COURT OF APPEAL FOR ONTARIO

CITATION: McDowell v. Fortress Real Capital Inc., 2019 ONCA
    239

DATE: 20190326

DOCKET: C64290, C64288, C64289 and C64286

Strathy C.J.O., Feldman and Brown JJ.A.

BETWEEN

Arlene McDowell and
    Saverio Aversa

Plaintiffs/Appellants

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, Centro Mortgage Inc., Ildina Galati, FFM Capital Inc., Rosalia
    Spadafora, Krish Kochhar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti
    Law Professional Corporation, Olympia Trust Company and Financial Services
    Commission of Ontario

Defendants/Respondents

AND BETWEEN

Arlene McDowell

Plaintiff/Appellant

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, Empire Pace (1088 Progress) Ltd., Building & Development
    Mortgages Canada Inc., Ildina Galati, Derek Sorrenti, Sorrenti Law Professional
    Corporation, Olympia Trust Company and Michael Cane

Defendants/Respondents

AND BETWEEN

David Martino

Plaintiff/Appellant

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, ADI Developments (Link) Inc., ADI Developments Inc., Building &
    Development Mortgages Canada Inc., Ildina Galati, FFM Capital Inc., Rosalia
    Spadafora, Krish Kochhar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti
    Law Professional Corporation, Olympia Trust Company and Her Majesty the Queen
    in Right of Ontario

Defendants/Respondents

AND BETWEEN

Bryan Madryga and
Eileen Wallace

Plaintiffs/
Appellants

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc.,
Fortress Kempenfelt Bay
    Developments Inc.
, Jawad Rathore, Vincenzo Petrozza, Harmony Village-Lake
    Simcoe Inc., City Core Developments Inc., Building & Development Mortgages
    Canada Inc., Ildina Galati, FMP Mortgage Investments Inc., Michael Daramola,
    Tonino Amendola, Graham McWaters,
FDS Broker Services Inc.
,
Glenn
    May-Anderson
,
Zafar Iqbal Khawaja
, Derek Sorrenti, Sorrenti Law
    Professional Corporation, Olympia Trust Company, Grant Edwardh Appraisers and
    Consultants Ltd. and Ian G. McLean

Defendants/
Respondents

Kevin Sherkin and Mitchell Wine, for the appellants

Jeremy Devereux and Jennifer Teskey, for Fortress Real
    Capital Inc., Fortress Real Developments Inc., Jawad Rathore and Vincenzo
    Petrozza

Markus Kremer and Ziad Yehia, for Empire Pace (1088
    Progress) Ltd.

Lisa Parliament and Lauren Ray, for Adi Developments
    (Link) Inc. and Adi Development Group Inc. (incorrectly named in the title of
    proceedings as Adi Developments Inc.)

Heard: Costs in writing March 25, 2019

On appeal from the
    orders of Justice Paul M. Perell of the Superior Court of Justice, dated August
    10, 2017, with reasons reported at 2017 ONSC 4791, 2017 ONSC 4789, 2017 ONSC
    4790, and 2017 ONSC 4792.

COSTS ENDORSEMENT

[1]

The parties were given the opportunity to file their costs submissions
    following the release of the courts reasons for decision.

[2]

Those submissions advise that the parties have reached agreement regarding
    the costs of the successful appellants in respect of the Empire Pace (1088
    Progress) Ltd. and Adi Developments (Link) Inc. appeals. They have agreed that
    each of those respondents will pay costs of the appeal in the amount of $10,000
    and costs of the motion in the amount of $12,500, all inclusive of
    disbursements and HST.

[3]

The successful respondents, Rathore and Petrozza, seek substantial
    indemnity costs of $33,275.43, or if substantial indemnity costs are not
    awarded, then partial indemnity costs of $22,384.53. The appellants submit that
    partial indemnity costs in the same amount as was agreed for the other parties
    ($10,000 each), is the appropriate amount to be awarded.

[4]

We agree with the submission of the appellants. The issue with respect
    to the personal liability of corporate directors and officers is a legal issue
    that depends on the pleaded allegations. The respondents were successful before
    the motion judge and his conclusion was upheld on the appeal based on the same
    pleading and legal principles. The complexity of the appeal arose in the
    context of the corporate actions and wording of the documents.

[5]

Costs are therefore ordered as follows: to the appellants from the
    respondent Empire Pace (1088 Progress Ltd.), $10,000 for the appeal and $12,500
    for the motion, both inclusive of disbursements and HST; to the appellants from
    the respondent, Adi Developments (Link) Inc., $10,000 for the appeal and
    $12,500 for the motion, both inclusive of disbursements and HST; to the
    respondent Rathore from the appellants, $10,000 for the appeal inclusive of
    disbursements and HST; to the respondent Petrozza from the appellants, $10,000
    for the appeal inclusive of the disbursements and HST.

G.R.
    Strathy C.J.O.

K. Feldman
    J.A.

David
    Brown J.A.


