COURT FILE NO.: 675/03

DATE: 20031124

SUPERIOR COURT OF JUSTICE - ONTARIO

(Divisional Court)

RE: Susan Howard-Azzeh (Applicant/Plaintiff) v. St. Catherines Standard group Inc., Bob McKenzie, John Harding and Grant LaFleche (Respondents/Defendants)

BEFORE: Then J.

COUNSEL: Rocco Galati for the Applicant/Plaintiff

Ms. Jennifer Guy for the Respondents/Defendants

HEARD: November 13, 2003

E N D O R S E M E N T

[1] This is an application for leave to appeal by the Plaintiff from the decision of Echlin J. wherein he rejected the Plaintiff’s argument that jurisdiction to grant security for costs to defendants under s. 12(1) of the Libel and Slander Act, R.S.O. 1990, c. L. 12 is confined to plaintiffs who are not ordinarily resident in Ontario but rather held that security for costs may be granted irrespective of the residency of the plaintiff provided the requirements for security for costs set out in s. 12(1) are met.

[2] The Plaintiff has not specified which branch of Rule 62.02(4) he relies upon and accordingly I propose to consider both branches.

[3] Section 12(1) of the Libel and Slander Act reads:

In an action for Libel in a newspaper or in a broadcast, the defendant may, at anytime after the delivery of the statement of claim or the expiry of the time written which it should have been delivered, apply to the Court for security for costs, upon notice and on affidavit by the defendant or the defendant’s agent showing the nature of the action and of the defence that the plaintiff is not possessed of property sufficient to answer the costs of the action in case judgment is given in favour of the Defendant, that the Defendant has a good defence on the merits and that the statements complained of were made in good faith, or that the grounds of action are trivial or frivolous, and the Court may make an order for the Plaintiff to give security for costs, which shall be given in accordance with the practice in cases where a Plaintiff resides out of Ontario, and the order is a stay of proceedings until the security is given. (my emphasis)

[4] Before the motions judge the position of Mr. Galati on behalf of the Plaintiff was that in the absence of any prior interpretation of the section by the Superior Court or the Court of Appeal, the motions judge should give the words “in accordance with the practice in cases where a Plaintiff resides out of Ontario” their plain meaning, which Mr. Galati submits confines the jurisdiction to order security for costs under s. 12(1) to plaintiffs who reside outside Ontario.

[5] Echlin J. rejected this submission and held that s. 12(1) also entitles a defendant to make an application for security for costs against a plaintiff if the plaintiff resides in Ontario.

[6] In his concise reasons Echlin J. stated:

In carefully reviewing the wording of s. 12(1) of the Libel and Slander Act, I found no express provision requiring that the party against whom application for security for costs is sought to be resident outside of the jurisdiction. Indeed, the inference can be drawn that the section is intended to apply to those who are resident in Ontario because it proscribes that such costs shall be given “in accordance with the practice in cases where a plaintiff resides out of Ontario”. I read this to mean that the statute intends to apply the tests ordinarily applied to out-of-province Plaintiffs in this instance to those who reside in Ontario. Additionally, it can apply to out-of-province Plaintiffs.

In making this finding, I am well aware of the fact that the law views an individual’s reputation as an important interest to be protected. In many cases the law must balance the interests of freedom of expression against the interests of an individual’s reputation.

Because the Libel and Slander Act provisions contained in Section 12(1) does not expressly prohibit an application for security for costs being brought against a resident of Ontario, and permits same by its language, I must find that Mr. Galati’s attempt to stay such application on a preliminary basis must fail and I make such ruling.

[7] With respect to the test for the granting of leave to appeal to the Divisional Court, Rule 62.02(4) states:

(4) Grounds on which leave may be granted – Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[8] On the first branch of Rule 62.02(4) I agree with the Respondent that there are no conflicting decisions on the issue of whether s. 12(1) of the Libel and Slander Act permits an order for security for costs against a plaintiff who is resident in Ontario. Indeed, the only decision that purports to interpret the words at issue in s. 12(1) is supportive of the interpretation of Echlin J. In Whalen v. Ottawa Sun, [2001] O.J. No. 2751, Master Albert stated at para. 2:

¶ 2 The Libel and Slander Act provides that security for costs shall be given in accordance with the practice in cases where a plaintiff resides outside Ontario. In my view that means that the discretion given the court in security for costs requests involving plaintiffs who reside outside the jurisdiction applies here as well.

[9] Moreover although the precise issue raised here has not been considered in other cases, there are numerous examples in the jurisprudence where security for costs has been granted with respect to plaintiffs ordinarily resident in Ontario. See: Bennett v. Empire Publishing and Printing (1894), 16 P.R. 63; Swain v. Mail Printing Company (1894), 16 P.R. 132; Oshanek v. Toronto Daily Star, 1965 260 (ON SC), [1966] 1 O.R. 492; Nikolic v. Northern Life Publishing, [1976] O.J. No. 1436.

[10] In my view, the application fails under the first branch of Rule 62.02(4).

[11] With respect to the second branch of Rule 62.02(4) I do not consider that there is good reason to doubt the correctness of Echlin J.’s decision. On the contrary, in my view the decision is correct.

[12] I agree with the Defendant/Respondent that it is clear from a plain reading of the statute that s. 12(1) does not require the plaintiff to be resident outside of Ontario. In order for the Court to order security for costs pursuant to s. 12(1) of the Libel and Slander Act, the following requirements must be satisfied:

(1) The plaintiff is not possessed of property sufficient to answer the costs of the action in case judgment is given in favour of the defendant;

(2) The defendant has a good defence on the merits; and

(3) a) the statements complained of were made in good faith or b) the grounds of the action are trivial or frivolous.

[13] The Legislature has specifically not constituted out of Ontario residency a requirement when it readily could have done so. Rather in adverting to the “practice in cases where a Plaintiff resides out of Ontario”, the Legislature has bestowed the same discretion upon the Court to grant security for costs if the requirements of s. 12(1) are otherwise met as the Court has if the plaintiff resides out of province: see Whalen, supra.

[14] When the predecessor to s. 12(1) of the Libel and Slander Act was first enacted in 1887 (An Act respecting the Law of Libel, 50 Vict. Ch. 9, s. 4(1)) in terms identical to the present s. 12(1) a defendant was prima facie but not necessarily entitled to security for costs because the plaintiff resided out of province. See: Doerr v. Rand 20 C.L.J. 33, 71; De St. Martin v. Davis W.N. 1884, 86: 28 Sol. Jour. 392. The nature of this discretion has remained the same to the present day. La Che v. Che (1992), 17 C.P.C. (3d) 181 (Gen. Div.)

[15] In my view the words “in accordance with the practice in cases where the Plaintiff resides out of the Province” simply mean that even if the requirements of s. 12(1) are otherwise made out, the defendant is prima facie entitled to an order for security for costs subject to a discretion in the Court which should be judicially exercised. Echlin J. came to the same conclusion albeit somewhat differently expressed, and was correct in doing so.

[16] In my view, the Plaintiff has failed to bring himself within Rule 62.02(4)(b). The application for leave to appeal is dismissed.

[17] If the parties cannot agree as to costs, the Court will receive brief written submissions within 15 days of the release of these reasons.

THEN J.

DATE: