COURT OF APPEAL FOR ONTARIO
Laskin, MacPherson and Rouleau JJ.A.
BETWEEN
Suzanne Miller
Respondent (Responding Party)
and
Kevin Taylor
Appellant (Moving Party)
Patrick Summers, for the moving party
Joyce Harris, for the responding party
Heard: January 6, 2010
On review of the order of Cronk J.A. dated October 29, 2009.
ENDORSEMENT
1The appellant seeks to review and set aside the order of Cronk J.A. dated 29 October 2009, ordering him to post security for costs of $40,000 ($30,000 for trial costs and $10,000 for potential costs of appeal) in order to proceed with his appeal. The motion judge’s order was made under rule 61.06(1)(a), which provides that where it appears there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal, security for costs may be ordered.
2The appellant contends the motion judge erred by concluding that there is good reason to believe that the appeal is frivolous and vexatious and by drawing an inference from the trial judge’s reasons that the appellant had insufficient assets in Ontario to pay the respondent’s costs of the appeal.
3In our view, the order should be set aside. We do so because the second paragraph of rule 61.06(i)(a) has not been met. The onus of demonstrating that there is good reason to believe that the appellant has insufficient assets in Ontario to pay the costs of the appeal is on the moving party. In this case, neither party filed any evidence respecting the appellant’s financial situation.
4In reaching her conclusion that the appellant lacks sufficient assets to pay the costs of the appeal, the motion judge relied on various comments made by the trial judge in her reasons. The comments, however, all related to the appellant’s need for cash in the 2006 time period, not to late 2008 when the trial took place, or to late 2009 when the security for costs motion was argued.
5Moreover, because someone is experiencing cash flow difficulties does not, in our view, necessarily translate into that person not having assets. The cash flow difficulties do indicate financial problems and, in some circumstances, might signal that the person has no assets to liquidate in order to resolve the cash flow problem.
6In the present case, however, there was evidence that the appellant owned substantial assets. The trial judge’s reasons set out that the appellant was growing the business he jointly owned with the respondent and that in the 2006-2007 period the appellant owned 18 of the 33 Automatic Banking Machines used by the business. The record also shows that in March 2008, the appellant purchased the respondent’s interest in the business for $120,000.
7Although, as noted by the motion judge, the source of the funds for the purchase of the respondent’s interest is not known there is nothing in the record to suggest that the appellant does not now own all or at a minimum 50% of the business and several automatic banking machines. On this record, therefore, we necessarily conclude that the respondent has not met the onus on her to demonstrate that the appellant does not have assets in Ontario sufficient to pay the $10,000 costs of the appeal.
8The appellant brought a motion to introduce fresh evidence on the review. Because we would set aside the order for security for costs, it is unnecessary to consider the fresh evidence. The appellant’s motion to introduce fresh evidence is therefore dismissed.
9In conclusion, we set aside the order for security for costs. We reserve the issue of costs of the initial motion and of the review to the panel hearing the appeal.
“John Laskin J.A.”
“Paul Rouleau J.A.”
MacPherson J.A. (Dissenting):
10With respect, I do not agree with my colleagues’ analysis or conclusion on this motion.
11The moving party submits that Cronk J.A. erred by inferring, rather than explicitly finding, that he had insufficient assets in Ontario to pay the respondent’s costs of the appeal.
12I disagree. The motion judge held that “[t]he record also supports Miller’s claim that Taylor lacks sufficient assets to pay the costs of the appeal should his appeal ultimately fail.” She then reviewed the record in a thorough fashion that amply supports this conclusion.
13It is true that most of the evidence relied on by the motion judge in making her order related to the appellant’s financial situation at the time of the trial in 2006. However, the motion judge was aware of this limitation in the evidence; she put her conclusion no higher than that the observations and findings by the trial judge “paint a strong picture of financial fragility and greed on Taylor’s part.” The motion judge then continued:
I note that at trial, Taylor did not dispute his money troubles. He did not adduce evidence at trial (or before me) to challenge the assertion that he lacks financial resources. Nor do his grounds of appeal attack this assertion or the trial judge’s comments concerning his financial position.
14I can see no error in this reasoning; it permits the inference that the motion judge drew, namely, that in October 2009 it appears that the appellant had insufficient assets to pay the respondent’s costs of the appeal.
15For the sake of completeness, I would record that I see no error in the motion judge’s conclusion that there is good reason to believe that the appeal is frivolous and vexatious.
16I would dismiss the motion to set aside the order for security for costs.
“J.C. MacPherson J.A.”
