As discussed in our recent Walker Law Blog post and by Tanya on CBC Television, conducting thorough research about those you intend to sue is a critical part of the litigation process in order to protect your interests and minimize potential losses. It is imperative that one understands the prospect of ultimately collecting funds and the financial assets available to pursue in the event you are successful in the litigation. This is due to the fact that while the Court has the jurisdiction to order that you receive the payment of money, it does not actively ensure that you receive the funds.
In conducting this research, it is possible that the initial party or parties you intend to sue do not have sufficient assets to allow for a complete recovery. In this situation (or for a number of other reasons), one might seek to expand their lawsuit to include other individuals or companies who were somewhat connected to the matter in an attempt at receiving a decision to recover their funds. Initiating costly litigation based on meritless claims is in direct contention with core values of our civil justice system, and can attract significant cost consequences should a party’s claims prove to be without any supporting evidence. In the Superior Court, the losing side is usually ordered to pay 60-80% of the legal fees of the winning side. The recent Ontario Court decision of Rana et al. v Ramzan, in which Walker Law successfully represented a number of defendants, is illustrative of this notion.
In Rana, Walker Law was successful in defending their client against claims of fraudulent misrepresentation and deceit. The plaintiff paid substantial amounts of money to a company called “ET Zone” during the period of 2014 – 2015, based on two contracts signed between these parties. Walker law did not represent “ET Zone”, but instead another related party Mohammad Ramzan (“Ramzan”). Ramzan, whose business FHS Zoom was located immediately next-door to ET Zone’s offices, was also an investor with ET Zone and had introduced the plaintiff to the same investment opportunity. The plaintiffs claimed that the defendant Ramzan had made certain representations to the plaintiffs that he knew were false, which ultimately encouraged the plaintiffs to enter into the contracts. The plaintiffs lost up to $500,000 upon ET Zone’s eventual insolvency. Among several other investors and lenders, Walker Law’s client, the defendant Ramzan, had also lost approximately $1.426 million.
Among several issues discussed in the decision, the Court ruled that while the Plaintiff sued for fraud or deceit by Ramzan, “the evidentiary record adduced by the plaintiffs failed to present any direct or circumstantial evidence that could reasonably support even the inference of fraud or deceit on the part of the defendant Ramzan.” No evidence was presented by the Plaintiff’s which supported the fact that Ramzan intended to knowingly, recklessly, or fraudulently encourage plaintiffs to enter into contracts with ET Zone.
Stating in its later cost award, the Court said that the “the plaintiffs vigorously asserted their case against the defendant Ramzan in fraud and made many unsupported allegations against him in their statement of claim which ultimately were not supported by evidence.” The Court was clear that this was a factor in awarding closer to 80% of legal fees to Ramzan, known as substantial indemnity costs, in the approximate amount of $264,000. The decision serves as a reminder that lawsuits must only be started when they have merit, and where they are ultimately proven to lack any supporting evidence, can attract significant cost consequences for the losing party. Whether you believe you have been served with a meritless lawsuit, or you believe you have been wronged but are unsure about your options, a Walker Law Litigation Specialist is available to help!”