CITATION: Jolicoeur v. Hawkesbury (City), 2010 ONSC 4007

COURT FILE NO.: 08‑DV‑1427

DATE: 2010/09/15

DIVISIONAL COURT

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Jean Jolicoeur and Huguette Jolicoeur

Self represented

Plaintiffs (Appellants)

‑ and ‑

Corporation de la Ville de Hawkesbury

Marc R. Labrosse

Defendant (Respondent)

‑ and‑

Woods Parisien

Third Party (Respondent)

Daniel Boivin

HEARD: June 15 & 16, 2010

CITATION: Menzies v. Jolicoeur, 2010 ONSC 4007

COURT FILE NO.: 08‑DV‑1433

DATE: 2010/09/15

A N D B E T W E E N:

MENZIES & ASSOCIATES

Douglas G. Menzies

Plaintiff (Respondent)

‑ and ‑

JEAN JOLICOEUR and HUGUETTE JOLICOEUR

Defendants (Appellants)

A N D B E T W E E N:

JEAN JOLICOEUR, HUGUETTE JOLICOEUR, CONSULTOKA SERVICES INC. and INTERNATIONAL JOLIANCE CANADA INC.

Self Represented Mario Proulx Self Represented Mario Proulx

Plaintiffs by Counterclaim (Appellants)

‑ and ‑

MENZIES & ASSOCIATES, DOUGLAS G. MENZIES, JEAN CLAUDE GELINAS, WOODS PARISIEN LANDRY, J.J. EDMOND WOODS, MARC DOUCET and DOUCET McBRIDE

Defendants by Counterclaim (Respondents)

Christine Powell

HEARD: June 15 and 16, 2010

ENDORSEMENT

Nature of the proceedings:

[1] The various claims in the two actions in this appeal are directly and indirectly related to alleged damage suffered by the Appellants Jean and Hugette Jolicoeur and their corporations when the Respondent Corporation de la Ville de Hawkesbury (“Hawkesbury”) allegedly failed to grant a legal non‑conforming use for the Appellants’ building in Hawkesbury.

[2] The first civil action, 99811/96 (the “Hawkesbury action”) was a claim by the Appellants against Hawkesbury. The third party claim in the Hawkesbury action related to legal advice and services provided to Hawkesbury relating to the Appellant’s property.

[3] The second civil action, 00‑CV‑14333 (The Menzies action”) was commenced by the law firm of Menzies & Associates against the Appellants for the recovery of unpaid legal fees. The Appellants counterclaimed in this action against a variety of lawyers and law firms for legal advice received over the years.

[4] The Appellants have appealed the decision of Master (now Justice) Beaudoin released May 26, 2008. In that decision, he dismissed the Hawkesbury action and the counterclaim in the Menzies’ action, for delay. He ordered that the Jolicoeurs would be allowed to maintain their defence of the Menzies claim, but only if they paid the full amount of the Menzies claim for fees ($109,212.89) into court as security.

[5] Although it was not necessary for him to make a determination on the issue, Master Beaudoin went on to consider whether he would have ordered security for costs if he had not dismissed the Hawkesbury action and the counterclaim in the Menzies’ action. He found that he would have ordered security for costs and, had it been necessary to do so, he would have required the Appellants to post security in the amount of $100,000 for each of the moving parties, for a total of $300,000 to be paid in three payments of $100,000, the last one to be 90 days before any trial.

[6] The Appellants have appealed with regards to all issues (the dismissal for delay, the security ordered to defend the Menzies claim and the obiter on security for costs).

[7] The cross‑appeal, which will only become an issue if the main appeal is allowed, relates to Master Beaudoin’s obiter on the issue of security for costs.

The parties:

Jean Jolicoeur and Hugette Jolicoeur (Appellants)

[8] The Jolicoeurs launched a proceeding entered as court file number 99811/96 claiming damages over $5 million from the Corporation de la Ville de Hawkesbury.

[9] Facing the Menzies & Associates’ request that their account be reassessed, the Jolicoeurs brought a motion to have all of these requests handled as a suit in connection with their counterclaim in negligence against several lawyers. They, along with their corporations, Consultoka Services Inc. and International Joliance Canada Inc., are thus the Defendants and the Plaintiffs by counterclaim in case number 00‑CV‑14333 (the “Menzies action”)

[10] Mr. Jolicoeur is representing both of the Jolicoeurs. However, Master Beaudoin noted in his decision that Mr. Jolicoeur understands legal proceedings quite well. According to uncontested evidence that the Master accepted, Mr. Jolicoeur brought 76 civil proceedings in the Province of Quebec in 2007 and Huguette Lachance Jolicoeur brought six.

Consultoka Services Inc. and International Jolliance Canada Inc. (Appellants)

[11] These are the Jolicoeurs’ corporations. These corporate entities are represented by Mario Proulx, a Montreal‑based lawyer, by order of Master Beaudoin that a lawyer be appointed to represent the. Jolicoeurs’ companies.

Corporation de la Ville de Hawkesbury (Respondents)

[12] Hawkesbury filed a defence against the Jolicoeurs’ original claim on June 12, 1996. Hawkesbury issued a third party claim against Woods Parisien alleging that Woods Parisien who had been Hawkesbury’s solicitors at the time that an agreement was reached with the Jolicoeurs in 1995, had failed to obtain release of all claims by the Jolicoeurs. Hawkesbury was a moving party seeking dismissal for delay and is a respondent on this appeal.

Menzies & Associates (Respondent, Cross‑Appellant)

[13] Menzies & Associates was a sole proprietorship owned by Douglas Menzies. Jean Claude Gélinas worked for Menzies & Associates from 1997‑1999 and, during that time, acted for the Jolicoeurs in these proceedings. Hawkesbury alleged that Mr. Gélinas was in conflict, having worked at Woods Parisien, where he advised the Jolicoeurs’ regarding their property. Mr. Gélinas was removed as solicitor of record by order of Master Beaudoin on September 4, 1998.

[14] The Menzies action was commenced on June 26, 2000, seeking payment of legal fees and disbursements by the Jolicoeurs. Menzies & Associates had sought to have their account assessed, but the Jolicoeurs successfully brought a motion to have those claims proceed by way of action having regard to their cross‑claims of negligence.

[15] Menzies & Associates were also moving parties to the motion for dismissal for delay and, in the alternative, security for costs. It is a respondent on appeal and a cross‑appellant with regards to the security for costs question.

Douglas G. Menzies

[16] Mr. Menzies was named as a co‑defendant on a counterclaim by the Jolicoeurs in the Menzies action. The Jolicoeurs alleged negligence against him.

Woods Parisien (formally Woods Parisien Landry) (Respondent)

[17] Woods Parisien defended against Hawkesbury’s third party claim and against the main action in the Hawkesbury matter. Woods Parisien was also a moving party on the decision appealed from and is a respondent on this appeal. Woods Parisien was named as a co‑defendant on a counterclaim by the Jolicoeurs in the Menzies action. The Jolicoeurs alleged negligence.

[18] J.J. Edmond Woods was also named as a co‑defendant on the counterclaim. He passed away on June 30, 2006. When the decision appealed from was rendered, the Jolicoeurs had not sought to continue their action against Mr. Woods’ estate.

[19] Woods Parisien was also a moving party on the decision appealed. It is a respondent on appeal.

Jean Claude Gélinas

[20] Mr. Gélinas was named as a co‑defendant on a counterclaim by the Jolicoeurs in the Menzies action. The Jolicoeurs alleged negligence.

The decision appealed from:

[21] Master Beaudoin heard the motions for dismissal for delay on September 20, 2007, December 17, 2007 and February 1, 2008. He released his reasons for decision on May 26, 2008.

[22] In his reasons, Master Beaudoin outlined the more than 20 year history of the proceedings in detail. He summarized the current status of the file as follows at paras. 25‑27:

25 Since my Reasons for Decision dated October 19, 2005 concerning the conduct of the examinations for discovery, neither Mr. Jolicoeur nor his counsel, Mario Proulx, have made any attempts to resume the examinations for discovery. No responses to undertakings were provided. An amended affidavit of documents was not produced until the very eve of this motion despite promises to do so dating as far back as March 2003. The actions have still not proceeded past the discovery stage, despite the fact that in one of the two actions, discoveries were comenced in 1996. The only parties examined to date are Mr. Jolicoeur and the late J.J. Edmond Woods.

26 Mr. Woods passed away on June 30, 2006, 10 years after the first action was commenced. Mr. Woods was both a party in one action and a key witness in both actions. His examinations were not completed before his death. As of today's date, Mr. Jolicoeur has not made any effort to continue this litigation as against Mr. Woods’ estate.

27 Once Mr. Proulx was appointed, Menzies' counsel on the counterclaim sought discovery dates from Mr. Proulx by way of letters dated August 8, 2006 and September 1, 2006. No response was received. The Menzies' affidavit of documents had not been sworn so he served a sworn copy on January 11, 2007. There have been no other discoveries in that action. Menzies' counsel in that action did not have an opportunity to examine Mr. Woods before his death.

The Jolicoeurs’ position at the time of motion for delay:

[23] Master Beaudoin found that Mr. Jolicoeur’s main complaints were that Hawkesbury had not disclosed relevant documents; had not yet served sworn affidavits of documents; that Woods Parisien had failed to provide a detailed Schedule B to its affidavit of documents; and that Menzies & Associates had not returned his files quickly or in an organized fashion.

Main Issues on this appeal:

[24] The appeal concerns the following main issues:

a) What is the appropriate standard of review for the final order of a Master dismissing an action for delay?

b) What is the applicable law with respect to dismissal of the actions for delay?

c) Has the Master applied the appropriate law?

d) Has the Master properly applied the law to the facts?

Analysis:

The Standard of Review:

[25] The most recent decision on the standard of review from the decision of a master was released on May 28, 2010 and was therefore not included in the facta of the parties. At para 28 of Wellwood v. Ontario Provincial Police, 2010 ONCA 386, Justice Cronk, for the majority, stated the following:

Based on this court’s recent decision in Zeitoun v. Economical Insurance Group (2009) ONCA 415, it is now settled law in Ontario that an appeal from a master’s decision is not a rehearing. Rather, on questions of fact and mixed fact and law, deference applies and the role of the reviewing court is limited. An appellate court cannot substitute its interpretation of the facts or reweigh the evidence simply because it takes a different view of the evidence from that of the master. On questions of law, the correctness standard applies: see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401.

[26] The appropriate standard of review in the present appeal is therefore one of correctness on question of law and palpable and overriding error on questions of fact. This standard does not afford the appellant a rehearing of the evidence, de novo.

[27] The onus is on the Plaintiff to proceed expeditiously in the prosecution of an action, and to show that no injustice would arise by permitting the action to proceed. This onus is heavier where the limitation period has expired.

[28] Prejudice resulting from delay in prosecution does not arise solely from the death or disappearance of witnesses, fading memories, or the loss or destruction of records. A defendant is prejudiced by having the threat of an action hanging over its head indefinitely.[^1]

[29] The appellants agreeing with the proper standard of review, submitted the following issues for this Court’s consideration:

(i) Did the Master err in finding that there was no default on behalf of the Respondents’ with respect to their failure of serving sworn affidavit of documents prior to the hearing of the motion for dismissal; and

(ii) Whether the Master erred in finding no default with respect to the schedule “B” content of the Woods’ affidavit of documents?

(iii) Did the Master err in attributing the delay mainly on the Plaintiffs (Appellants)?

(iv) Did the Master err in finding that the Plaintiffs failed to rebut the presumption of prejudice to the Defendants (Respondents)?

(v) If yes to any of these submissions, this Court ought to allow this “simple” action to proceed with strict set timelines.

Did Master Beaudoin err in finding the Respondents not in default both under (i) and (ii) above?

[30] Master Beaudoin concluded that there was no default on the part of the Respondents with respect to the provision of affidavits of documents.

[31] The evidence before Master Beaudoin was that with respect to Hawkesbury, unsworn affidavits of documents had been served in July and September 1996, a supplementary affidavit was served in November 1996 with sworn copies of the affidavits to be provided at the examination for discovery of the Respondent Hawkesbury, but these discoveries never took place. Copies of all documents listed in Schedule A in the unsworn affidavits of documents were provided to the Plaintiffs (Appellants). Hawkesbury’s affidavit of documents was updated in the summer of 2007, with a sworn copy being served on September 17, 2007. The Appellants never brought a motion for a sworn affidavit of documents until after the Respondents brought their motion for dismissal for delay. Master Beaudoin made a finding of fact that any default had been cured prior to the hearing of the motion to dismiss.

[32] The Appellants argue that this finding of fact is an error in law. Mr. Proulx cites a number of cases such as Mirra v Toronto Dominion Bank, [2002] O.J. No. 1483, para 7 where the Case Management Master MacLeod states:

The onus of complying with the letter and spirit of documentary production remains with the party responsible for producing the document. The Court however expects that counsel will collaborate – especially in a case managed action – to ensure the proper ends of documentary production are met. Counsel as officers of the Court and legal professionals are obliged to maintain a civil and working relationship on procedural issues. In a case managed action, if counsel cannot agree, direction may be sought from the court at a case conference. That, it seems to me, would have been a preferable approach to arguing a full day motion on the sufficiency of the affidavit of documents and is in keeping with the purpose of case management rule.

[33] Mr. Proulx argues that the Respondents have failed to produce all relevant documents in a timely fashion and cites again a number of cases including Grossman et al v. Toronto General Hospital et al, [1983] O.J. No 3001, (H.C.J.) para 16 to 21.

[34] Master Beaudoin considered whether there was a default on the part of the Respondents as argued before him by the Appellants during the motion for dismissal. He found at para 35 of his reasons the following:

It is apparent from my review of the material that Mr. Jolicoeur’s main complaint is that many relevant documents have not been produced by Hawkesbury and that this has stalled the action. From my review of his very lengthy affidavits, it is very difficult to identify which relevant documents he claims have not been produced. He has attached a Schedule “A” to his affidavit of August 20, 2007. There are 55 items requested, the significance of the majority of most of these is not identified. Mr. Jolicoeur is no stranger to court proceedings. He could have easily brought a motion to compel the production of documents. It is also apparent that he already has received many of these documents. He had three volumes of documents in his possession at the time of the motion for directions in 2005. Most of these referred to the Defendant Hawkesbury. He could have easily brought a cross‑motion at that time.

[35] Master Beaudoin clearly addressed the issues of non productions and made appropriate findings of fact that cannot be found to be in error.

[36] The Appellants argue that the Respondents Woods Parisien were also in default because they failed to itemize the documents listed in Schedule “B”. The evidence shows that a sworn affidavit was served in March 2003. There were no complaints about the content of the schedule “B” until after the filling of the motion for dismissal for delay. There was no motion for production of a better Schedule “B” filed.

[37] From the evidence, it appears that 9 volumes of documents (over 500 documents) were produced which included all correspondence between Woods Parisien and Hawkesbury at the relevant time. The only documents which are appropriately claimed as privileged is the correspondence between Woods Parisien and Mr. Boivin as a result of this litigation. Master Beaudoin properly concluded that the argument that Schedule “B” may be deficient was not a basis upon which a defence could be raised to a motion for dismissal for delay. As indicated by counsel during argument, it is not an error in law to allow the possibility of undertakings being given during examinations for discovery. There is no error in law on this finding.

[38] Finally with respect to Gélinas and Menzies, Mr. Gélinas’s sworn affidavit of documents was served on June 17, 2003. An unsworn affidavit for Menzies was delivered in February 2003 with a promise that it would be sworn at the outset of discoveries but these discoveries had not yet taken place. A sworn affidavit of documents was served on January 11, 2007. Schedule “A” documents were available for inspection from February 2003. No error in law or in fact on this issue.

[39] Master Beaudoin found that at the time that the motions were delivered, only Hawkesbury was technically in default of these rules for its failure to deliver a sworn affidavit of documents. All previous counsel for the Jolicoeurs had accepted a draft affidavit with the assurance that it would be sworn at the outset of discoveries. Through no fault of Hawkesbury, discoveries never took place. There was no complaint for 10 years until Mr. Jolicoeur asked for a "certified" affidavit of documents in 2006. Hawkesbury cured any default before the motion was heard and argued. For that reason, Master Beaudoin found that Hawkesbury was not barred from bringing its motion.

[40] This Court cannot find any palpable error on the facts or errors of law. The Master properly reviewed the evidence before him and exercised his discretion appropriately.

Did the Master err in attributing the delay mainly on the Plaintiffs (Appellants)?

[41] Master Beaudoin noted that Rule 77.10 provides that where a party fails to comply with a timetable, the proceedings may be dismissed by either a case management judge or a case management master. He noted that there had been at least five timetables set by either a case management judge or a case management master and that the Plaintiffs (the Appellants) had not complied with any of them.

[42] Master Beaudoin cited the decision of Master Dash in Woodheath Developments Ltd. v. Goldman (2001), 2001 28019 (ON SC), 56 O.R. (3d) 658 (S.C.) at 665, aff'd (2003) 2003 46735 (ON SCDC), 66 O.R. (3d) 731 (Div. Ct.), noting the criteria to be used when considering a motion to dismiss for delay:

(i) There must be an inordinate and inexcusable delay in the litigation for which the plaintiff or his solicitors are responsible.

(ii) The delay must give rise to prejudice to the defendant, in the sense that there is a substantial risk that a fair trial of the issues will not be possible at the time that the action is likely to go to trial.

(iii) Inordinate delay since the cause of action arose will give rise to a presumption of prejudice. It will be presumed that the memories of witnesses will fade over time.

(iv) Undue delay following the passing of a limitation period will also give rise to a presumption of prejudice.

(v) If there is a presumption of prejudice, there is no onus on a defendant to prove actual prejudice. The plaintiff must lead satisfactory evidence to rebut the presumption of prejudice, failing which the action may be dismissed.

(vi) The presumption of prejudice may be displaced by evidence that the issues in the lawsuit do not depend on the recollection of witnesses for their resolution, or that all necessary witnesses are available and they recall their testimony in detail, and that all documentary evidence has been preserved.

(vii) If the presumption is rebutted, the onus shifts to the defendant to lead convincing evidence of actual prejudice.

[43] While he found that the delay had not been intentional and contemptible, he found having regard to the entire history of these proceedings, that there had been inordinate and inexcusable delay and that the delay was attributable to the Jolicoeurs (the Appellants). He did note one brief period in 1998 when Menzies & Associates represented the Appellants and Master Beaudoin had determined that Mr. Gélinas was in a conflict of interest position, that the delay was arguably not attributable to the Appellants.

[44] As case Management Master, he was fully aware of the delays in the various timetables and carefully reasoned that the delay was mainly due to the Appellants. This Court cannot set aside this finding of fact by the Master.

Did the Master err in finding that the Plaintiffs failed to rebut the presumption of prejudice to the Defendants (Respondents)?

[45] Master Beaudoin stated that, where there is inordinate delay, there is a presumption of prejudice and the onus is on the Plaintiff to displace that presumption. He also stated that the onus is heavier where, as in this case, the limitation period had expired.

[46] Master Beaudoin noted the actions were 20 and 11 years old when these motions were filed and that only the Plaintiff Jean Jolicoeur had been discovered. Mr. Woods, a party to one action who was an important witness in the other action, had passed away and no order had been obtained to continue the action against his estate. The appointment of Mr. Proulx for the corporate parties (Appellants) had done nothing to expedite matters. However of note, Mr. Proulx did assist in organizing the Appellants’ arguments in a structured and timely fashion before this Court.

[47] Master Beaudoin found that there was prejudice to the moving parties as a result of Mr. Woods’ death, especially considering that he had passed away before examinations for discovery were completed. He stated that “[h]ad Mr. Jolicoeur not wasted his time during the seven days he had to discover Mr. Woods in 2004, those discoveries would have been completed.”

[48] After a motion for direction in 2005, where Master Beaudion found that Mr. Jolicoeur had conducted himself improperly during the examinations but still allowed him two more days of discovery, no attempt was made by him or Mr. Proulx to book further discoveries. This, despite the fact that Mr. Jolicoeur was aware of Mr. Woods’ failing health.

[49] Master Beaudoin commented at para. 54 and 56 that:

54. It is apparent from Mr. Jolicoeur's protracted examination of Mr. Woods, his far‑reaching search for documents from the City, and the volume of materials he has filed in response to these motions that Mr. Jolicoeur's view of the relevant issues far exceeds the scope of the pleadings. To compound the problem, the Jolicoeurs and their companies have commenced a far‑reaching second action that is inextricably bound to the original claim. At this stage, there is no end in sight.

55. ....Notwithstanding Mr. Proulx's presence, I am satisfied that Mr. Jolicoeur is in complete control of these files but he lacks any capacity to move these actions forward. I conclude that there is a substantial risk that a fair trial of the issue will not be possible.

Disposition:

[50] In order to determine whether Master Beaudoin applied the proper test for whether the matter should be dismissed for delay, this Court must consider his reasons in its entirety and whether he properly applied that law to the facts.

[51] Master Beaudoin did consider the legal question of whether the delay was prejudicial to the Defendants. He referred to the expiry of the limitation periods, to the requirement that witnesses be able to recall “events that took place as far back as 20 years ago”, and to the death of J.J. Edmond Woods, a material witness, the absence of whose testimony “creates a serious and real prejudice for the moving parties that cannot be remedied by the fact that there is a partial discovery transcript.”

[52] Master Beaudoin carefully reviewed the issues for the delay and carefully reasoned why these actions could no longer proceed to a fair trial. Given his position as the Case Management Master at the time, this Court must give a substantial degree of deference to the Case management Master who managed these actions for a considerable period of time. This Court cannot find any palpable or overriding errors on the facts or any errors in law. Master Beaudoin properly exercised his discretion.

[53] If this action was indeed so “simple” as argued by Mr. Proulx, these actions would have been tried at least a decade ago.

[54] This Court cannot set aside Master Beaudoin’s order dismissing the Hawkesbury action and the counterclaims in the Menzies action and therefore the appeal is hereby dismissed.

[55] Given the dismissal of the appeal, the cross‑appeal becomes moot.

[56] There remains the issue of whether the term of Master Beaudoin’s order allowing the Appellants to continue to defend the Menzie’s action should be maintained. The Appellants seek an opportunity to file fresh evidence on the issue of security for costs.

Motion for filing fresh evidence:

[57] The Appellants seek leave to have the following type of evidence introduced on this Appeal:

a) Correspondence with respect to a motion for security for costs in 1996;

b) Financial information with respect to Jean and Huguette Jolicoeur dated July 2009;

c) Financial information with respect to the corporate parties dated June 2004; and

d) Information with respect to the Jolicoeurs’ residence in St‑Eustache, with various dates.

[58] The Respondents resist the admissibility of the proposed fresh evidence because it was available at the time of the hearing of the original motion, and that it is not reliable, and that in any event it would not have affected the result.

Jurisdiction on Motion to Introduce Fresh Evidence

[59] This Court has jurisdiction to receive new evidence pursuant to clause 134(4)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43:

134 (4) Unless otherwise provided, a court to which an appeal is taken may, in a proper case,

receive further evidence by affidavit, transcript of oral examination, oral examination before the court or in such other manner as the court directs

to enable the court to determine the appeal.

The Test for the Introduction of Fresh Evidence on Appeal

[60] In Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources), 2002 41606 (ON CA), [2002] O.J. No. 1445 (C.A.), the Ontario Court of Appeal applied the Supreme Court of Canada’s test for admitting fresh evidence from R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759:

i. The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial provided that this general principle will not be applied as strictly in a criminal case as in civil cases;

ii. The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;

iii. The evidence must be credible in the sense that it is reasonably capable of belief; and

iv. It must be such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

Should the Court allow the fresh evidence to be heard on this appeal?

[61] The evidence sought to be introduced relates to the issue of security for costs. Although the obiter security for costs is no longer an issue, this Court must ascertain whether Master Beaudoin erred in allowing the Appellants to continue to defend the Menzie’s action by imposing a security term under Rule 56.09 of the Rules of Civil Procedure. For that purpose, the motion for fresh evidence must be considered.

[62] Clearly the material with respect to the 1996 motion for security for costs was available at the time of the motion. Also the evidence of the financial situation of the Jolicoeurs and their corporations, and the property in St‑Eustache, was also available and could have been filed at the time of the motion.

[63] Even if the letter from 1996 regarding the security agreement were admissible, this does not help the Appellants whatsoever. The issue of the security is a relief that will continue to evolve with time depending on the circumstances of the Appellants. The fact that a motion for security for costs did not proceed in 1996 does not preclude the Defendants from bringing another motion for security for costs at another time.

[64] As for the financial information of both the Jolicoeurs and their corporations, that information was available and not filed before Master Beaudoin. Clearly the Appellants were taking the position (strategy) that they were residents of Ontario and therefore no security for costs should follow. Master Beaudoin dealt with what the Appellants had presented and rejected it and considered the issue of security for costs as an obiter and he further imposed a term on the Appellants in defending the Menzie’s action.

[65] The Appellants cannot now before this appellate Court decide to change their strategy and attempt to advance that they are impecunious. This is not a hearing de novo.

[66] The request to file the financial information and the evidence of ownership of the St‑Eustache property cannot sustain the third and fourth criteria of the test in the Palmer case, as it is not dependable.

[67] For instance, Ms. Huguette Jolicoeur’s sworn affidavit of February 25, 2010 attaches financial statements of the Jolicoeurs effective July 1, 2009. In those financial statements, the property at 227‑229 Kipling Street in Hawkesbury was valued at $96,000.

[68] A title search conducted by Mr. Gregory Meeds discloses that the 227‑229 Kipling Street was acquired by the Jolicoeurs for nominal consideration from Henri Lachance on May 29, 2008 (three days after the decision of Master Beaudoin). They subsequently sold this property on September 11, 2009 for $35,000.

[69] The information in the financial statements which are personally drafted by the Jolicoeurs is unreliable. Clearly Jean Jolicoeur’s credibility was at issue before Master Beaudoin. Even if the 2009 financial statements were received as evidence before this Court, it deposes that they each have approximately ½ million dollars in net worth. This finding would not support a finding of impecuniosity.

[70] As for what was in front of Master Beaudoin, the issue of impecuniosity was not an issue because of the position taken by the Appellants. If the Appellants wanted to rely on the argument of impecuniosity, they ought to have filed their materials in support before Master Beaudoin, but instead they chose another strategy that did not work.

[71] Further the financial statements of the corporate entities as of 2004 are irrelevant for the original motion (heard in 2008) and as alleged fresh evidence before this Court.

[72] With respect to the issue of the ownership of the St‑Eustache property, it does not much matter, as the issue is one of residency and not ownership. Master Beaudoin had ample evidence before him that showed that the Jolicoeurs were not residents of Ontario. I see no error in law or in fact with respect to that finding.

[73] Accordingly, the motion for leave to file fresh evidence is dismissed.

Security for costs under Rule 56.09 of the Rules of Civil Procedure with respect to the Menzies & Associates action:

[74] Rule 56.09 states:

Despite rules 56.01 and 56.02, any party to a proceeding may be ordered to give security for costs where, under rule 1.05 or otherwise, the court has a discretion to impose terms as a condition of granting relief and, where such an order is made, rule 56.04 to 56.08 apply, with necessary modifications.

[75] Rule 1.05 states:

When making an order under these rules the court may impose such terms and give such directions as are just.

[76] Master Beaudoin stated in para 57 of his decision the following:

I accordingly dismiss the action and the counterclaims for delay. I will allow the Jolicoeurs to maintain their defence of the Menzies claim but only on terms that I now impose. Nothing has taken place in that action since the Menzies firm tried to have their account assessed. Their attempt to recover $109,212.89 in fees has been delayed for nearly 8 years. Pursuant to Rule 56.09, the court has discretion to impose terms as a condition of granting a party relief. In allowing the Jolicoeurs to continue with their defence I order them to pay the full amount of the Menzies claim for fees, namely $109,212.89 into court as security. By posting this amount, they will be encouraged to move diligently in providing dates for discovery so that this matter can be set down for trial without any further delay. This amount is to be paid into court within 90 days, failing which their defence will be struck. [my emphasis added]

[77] Master Beaudoin exercised his discretion in imposing a term on allowing the Jolicoeurs to continue to defend the Menzies’ & Associates action for the recovery of their fees.

[78] Now before this review Court, the only question is whether the term imposed under Rule 56.09 was a palpable or overriding error.

[79] Master Beaudoin stated that, while making an order for security for costs is discretionary, a defendant has a prima facie right to security for costs where he or she can show that the plaintiff meets one of those criteria. In this case, he found that there was overwhelming evidence to conclude that the Jolicoeurs were not ordinarily residents of Ontario and that neither they nor their corporations had sufficient assets in Ontario or in a reciprocating jurisdiction to pay the costs of the Defendants.

[80] The Appellants argued before Master Beaudoin and before this Court that the motion for security for costs was not promptly brought under the Rules. The Respondents argued then and now that they only brought the motion once they discovered evidence that revealed where the Jolicoeurs resided.

[81] Master Beaudoin stated that once a defendant has shown that the plaintiff falls under one of the categories enumerated in Rule 56.01(1), the onus shifts to the plaintiff to demonstrate that it would be unjust for an order for security for costs to be made against it: Stacey v. Barrie Yacht Club, [2003] O.J. No. 4171 (S.C.) at para 21. Given that the Plaintiffs (Appellants) had not disclosed the existence of any assets in Quebec that could be available to satisfy a judgment for costs, and given the Appellants had taken the position that they were resident of Ontario and failed to provide any evidence of impecuniosity, Master Beaudoin exercised his discretion in a proper manner.

[82] Master Beaudoin properly concluded that Jean Jolicoeur put his credibility in issue and misled the opposing parties by claiming under oath, at the time of his examination for discovery, that he lived in Hawkesbury and had no other residences in Canada when the evidence at the motion demonstrated abundantly otherwise.

[83] The Jolicoeurs failed to produce any evidence to satisfy their onus to prove that they or their corporation were impecunious. Where impecuniosity has not been shown, the Court has discretion to permit the Plaintiffs to continue to defend the Menzies & Associates action but on such terms as the court sees fit.

[84] This Court shall not interfere with Master Beaudoin’s term under Rule 56.09 as set out in para 57 of his order.

Disposition:

[85] Accordingly the Appellants shall have 90 days from the date of this endorsement to deposit into Court the sum of $109,212.89 to the credit of Menzies & Associates action # 00‑CV‑014333, failing which their defence shall be dismissed.

[86] The status notice dated March 2, 2010 in the Menzies’ action shall be stayed pending the 90 days hereof as set out above.

Costs:

[87] I am prepared to review brief written submission on the cost of this appeal. Costs of the first instance ought to be remitted to Justice Beaudoin or alternatively to be assessed by an assessment officer.

[88] Submissions for the appeal costs shall be filed by the Respondents by no later than October 15, 2010 and by the Appellants by no later than November 15, 2010, and any reply, if any, by no later than December 1, 2010.

The Honourable Madam Justice J. N. Morissette

DATE: September 15, 2010

[^1]: Biss v Lambeth, Southwark and Lwesiham Health Authority, [1978]2All ER 125 (C.A.)