DIVISIONAL COURT, SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brian Robert Weston Baker and Julia Maurissa McKay, Applicants (Respondents in this Appeal)
AND:
Amanda Sharon Rego, Respondent (Appellant in this Appeal)
AND:
Kevin Leggat, Added Respondent (Respondent in this Appeal)
BEFORE: McDermot J.
COUNSEL: Deborah A. Lyons-Batstone, for the Applicants (Respondents in this Appeal)
Lawrence B. Geffen, for the Respondent (Appellant in this Appeal)
HEARD: May 9, 2013
ENDORSEMENT
Background
1On January 4, 2012, lengthy custody and access proceedings between the Applicants, Brian Baker and Julia McKay (“Baker and McKay”) and the Respondent, Amanda Rego, were resolved by way of a judgment issued by Rogers J. of the Superior Court of Justice. That litigation had involved the parties’ child, Joshua, who is six years of age. Ms. Rego is the natural mother of that child; Mr. Baker is not the natural father of the child; the Added Respondent, Kevin Leggat is, but it was common ground that Mr. Baker had throughout treated Joshua as his own child. Mr. Leggat’s standing concerning Joshua was confirmed by his consent prior to trial to an order for access only; the litigants concerning custody and access were Baker and McKay on one hand and Ms. Rego on the other.
2Rogers J. issued a lengthy written judgment which ultimately gave the Applicants and the Ms. Rego joint custody with primary residence of Joshua being awarded to Baker and McKay. Ms. Rego was not pleased with this result and has appealed the decision to this court. The Notice of Appeal appears to have been filed on January 31, 2012 and a supplementary Notice of Appeal was filed on May 24, 2012. The latter arose out of a costs endorsement issued by Rogers J. which awarded Baker and McKay full recovery costs of the trial against Ms. Rego in the amount of $59,723.27 plus $550.87 for the costs submissions. Those costs have not been paid, and it is acknowledged that, if the costs award is upheld, it is unlikely that Ms. Rego will ever have sufficient resources to pay those costs.
3This motion was brought by the Applicants for an order that Ms. Rego pay security for the costs of the appeal in the amount of $25,000. It was originally returnable on January 17, 2013. There was a further motion brought to strike the appeal because of Ms. Rego’s failure to perfect the appeal within the time limited; as the appeal was actually perfected on January 15, 2013, prior to the return of the motion, that issue was abandoned. The Applicants also requested an order for payment of the costs at trial prior to the appeal proceeding. As pointed out by Mr. Geffen, however, the service of a Notice of Appeal stays all orders for payment of money: see Rule 63.01 of the Rules of Civil Procedure.1 As such, that portion of the relief claimed was also abandoned. The motion proceeded solely on the issue of security for costs.
4As part of their material, the Applicants filed a reply affidavit that was much lengthier than their original motion record. This was because the affidavit appeared to address a number of the grounds for appeal: see paragraphs 74 et sequent. of that affidavit. As many of the grounds of appeal were fact based, the affidavit addressed those specific facts which were under appeal. Mr. Geffen submitted that this was improper reply evidence as this should have been addressed in the original affidavit filed in support of the motion. He requested that substantial portions of the affidavit be struck or redacted.
5I agreed with Mr. Geffen that this constituted improper reply affidavit evidence, but advised him that this motion would not be based upon the specific findings of fact by Rogers J. but whether the appeal surrounding those facts gives rise to a motion for security for costs considering the merits of the appeal. I advised counsel that I would not be basing my decision on the various paragraphs of the reply affidavit which addressed the facts which were the subject matter of the appeal. Mr. Geffen was content with this ruling, and did not wish to proceed with specific expunging of portions of that affidavit.
6Finally, it appears that Kevin Leggat is not participating in the appeal and has no need to as his access award is not the subject matter of this appeal. He did not appear for the argument of this motion.
7For the reasons set out below, I have determined that security for costs are warranted, and shall be ordered to be paid by the Respondent in the amount of $10,000.
Analysis
8There are two issues to be considered on this security for costs motion, which are as follows:
a. Are the Applicants entitled to an order for security for costs of the appeal brought by Ms. Rego; and
b. If the Applicants are so entitled, what is the quantum of the security to be paid into court?
9I will consider each of those issues in turn.
(a) Are the Applicants entitled to an order for security for costs of the appeal brought by Ms. Rego?
10The claim for security for costs of this appeal lies under Rule 61.06 of the Rules of Civil Procedure:
61.06 (1) In an appeal where it appears that,
(a) 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;
(b) an order for security for costs could be made against the appellant under rule 56.01; or
(c) for other good reason, security for costs should be ordered,
a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just.
(1.1) If an order is made under subrule (1), rules 56.04, 56.05, 56.07 and 56.08 apply, with necessary modifications.
(2) If an appellant fails to comply with an order under subrule (1), a judge of the appellate court on motion may dismiss the appeal.
11The two provisions of Rule 61.06(1) which may be applicable to the present matter are subparagraphs (a) and (c). Although the Rule 61.06(1)(b) Rule refers to Rule 56.01, the only provision under that Rule which might be applicable to the present matter is Rule 56.01(1)(e) which is similar in form to Rule 61.06(1)(a) which is the first provision of the Rule relied upon by Baker and McKay in argument of this motion.
12Regarding the claim for security for costs under Rule 61.06(1)(a), it is acknowledged that Ms. Rego has insufficient assets in Ontario to pay the costs of the appeal.2 The second part of the test is satisfied. The issue that accordingly must be determined is whether “there is good reason to believe that the appeal is frivolous and vexatious” in the context of the rule.
13There is little doubt that this appeal has a very small chance of success. Although vigorously argued by Mr. Geffen that there were issues of law raised by Ms. Rego’s Notice of Appeal, that does not appear to me to be the case. In fact, the major issue on appeal surrounds the weight accorded by the trial judge to the report of the investigator from the Office of the Childrens Lawyer in light of Ms. Regos failure to disclose her past relationships to that investigator. Although Ms. Rego stated in her affidavit that the appeal is not about the trial judge`s findings of fact and credibility, she states in the same paragraph that it is “based in large part on the position that the Honorable Madam Justice Rogers failed to give any or sufficient weight to significant significant and considerable amount of evidence that was not in dispute, preferring to focus almost entirely on the fact that I had not offered details about previous relationships which were not in fact requested of me by the OCL investigator”. In fact, the allegation that Rogers J. elected to give little weight to the investigation is, in fact, directly related to her findings of fact and credibility, and as such requires a finding of overriding and palpable error: see Snetzko v. Snetzko, 1996 11326 (Ont. Gen. Div.).
14Moreover, there is a substantial body of case law that indicates that in custody matters, the trial judge is to be accorded a considerable degree of deference by an appellate court. That is apparent from the judgment of Bastarache J. in Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014 where he states, at paragraph 12 of the decision that a “Court of Appeal is not in a position to determine what it considers to be the correct conclusions from the evidence. That is the role of the trial judge.” He later notes at paragraph 13 that “[c]ustody and access decisions are inherently exercises in discretion” and as such a trial judge is accorded “significant deference” by an appellate court.
15Finally, the appeal is based largely upon the failure of Rogers J. to follow the recommendations of the OCL social worker to give custody of Joshua to Ms. Rego. However, the social worker investigation, as with any other expert’s report, is only one piece of evidence before the court and such reports are not determinative of the result; the trial judge is entitled exercise his or her discretion not to follow the expert’s recommendations: see Tyabji v. Sandana, 1994 410 (B.C.S.C.).
16As such, it is apparent to me that the appeal of Ms. Rego as presently constituted stands little chance of success. The issue is whether this is sufficient to allow for a finding under Rule 61.06(1)(a) that the appeal is frivolous and vexatious.
17Mr. Geffen argues on behalf of Ms. Rego that the test is a stringent one. He states that the moving parties in this matter, Baker and McKay, must demonstrate a lack of bona fides. He relies upon Horton v. Joyce (1994), 1994 1373 (ON CA), 20 O.R. (3d) 59 (C.A.), where Finlayson J.A. stated at paragraph 6:
In the course of arguing these motions, the question before the court quickly becomes: Is the appeal frivolous and is the appellant irresponsible? Looked at in this way, the overriding issue becomes one of bona fides. I think the correct approach to the rule is to recognize that there is a burden on the respondents to show that the appeal is not bona fide in two respects: that the appeal is frivolous to the point of being manifestly devoid of merit and that the appellant lacks substance to the point where it would be an injustice to permit the appeal to continue without protecting the respondents with respect to costs.
18He later states that the lack of bona fides must be “virtually palpable” and he appears to limit the remedy to shell corporations, bankrupts, appellants with a history of failed litigation, appellants who usually fail to comply with the rules, or appellants with some hidden or secondary agenda: see para. 7 of the report.
19Later considerations of the rule by the Court of Appeal appear to have softened this position. In Horton, Finlayson J.A. notes that it is impossible for a motions judge to adequately assess the merits of an appeal considering the transcripts and volume of material to be placed before the appellate court: that issue was considered by the full court in Szpakowski v. Kramer, 2012 ONCA 77. There the issue was considered in the context of multiple and meritless actions having been brought by the appellant. The court noted that the motions judge need not determine that the appeal was devoid of merit; he or she need only reach a tentative conclusion that the appeal has those characteristics. Bona fides is not mentioned:
It is not necessary for these purposes that we be satisfied the appeal is in fact without merit and frivolous, vexatious or otherwise an abuse of the process. It is sufficient if it appears to us that there is good reason to believe it has those characteristics. As this Court noted in Schmidt v. Toronto-Dominion Bank 1995 3502 (ON CA), (1995), 24 O.R. (3d) 1, at p. 5:
The words “good reason to believe” qualify the words “frivolous and vexatious” and indicate a finding short of an actual determination that the appeal is frivolous and vexatious. A judge hearing a motion for security for costs may reach the tentative conclusion that an appeal appears to be so devoid of merit as to give “good reason to believe that the appeal is frivolous and vexatious” without being satisfied that the appeal is actually devoid of merit.
20In ordering security for costs, the court stated that “we have grave reservations about the merits of the appeal, which appears to us to have little prospect of success.”
21Another case, however, leads me to believe that the mere fact that there is little prospect of success on the appeal is not sufficient, on its own, to allow a finding that the appeal is frivolous and vexatious within the meaning of Rule 61.06(1)(a). In Perron v. Perron, 2011 ONCA 776, the court considered security for costs for an appeal of a custody order. The appeal was based upon the contention that the appellant’s right to have his children educated in French overrode the best interests of the children as determined by the trial judge. Although Sharpe J.A. stated that the appeal had “a very low prospect of success”, he also stated that this would not suffice to allow for a finding that the appeal was frivolous and vexatious. Sharpe J.A. stated that “considerable deference was owed to the trial judge’s findings” and that he considered it “very unlikely” that the appellate judges would interfere with the trial judge’s findings. However, he also determined that the appeal was not frivolous and vexatious: see paragraph 10 and 21 of the decision which makes that finding apparent. In the end security for costs was ordered but on the basis that they should be ordered for “some other good reason”: Rule 61.06(1)(c).
22Accordingly, there must be something more than a low prospect of success. The words “frivolous and vexatious” imply that the appeal must not only have a minimal chance of success; there must be good reason, on the facts surrounding the litigation, or from the conduct of the appellant, which could lead to a finding that the appeal is without merit and is brought for some other purpose than as is on its face, such as to harm a party or delay the proceedings or a given result. It may require a finding of a mala fides as suggested in Horton. Or it may require a pattern of fruitless and expensive litigation without merit as in Szpakowski where the appeal was found to be not just of having a low prospect of success but the Appellant was found to have a history of non-compliance with costs awards. The expectation of minimal success on the appeal will not alone suffice; the appeal must either be “devoid of merit” or there must be some other factor allowing a finding that the appeal is frivolous and vexatious.
23In the present case, I have already stated that I find that the within appeal has a minimal chance of success. The other factors mentioned above, such as mala fides, a failure to comply with previous costs awards, or some other conduct based issue, are absent. There was no evidence that the appeal is brought for any reason other than the intent of the Appellant to set aside Rogers J.’s decision at trial. The Applicants did not demonstrate any ulterior motives on the part of Ms. Rego; nor did they demonstrate a history of fruitless or otherwise malicious litigation other than the present case under appeal.
24I realize that there are negative findings regarding the Respondent’s conduct by Rogers J.; in her costs endorsement, she made findings of bad faith within the meaning of Rule 24(8) of the Family Law Rules.3 To use those findings to order security for costs, however, begs the question as they are part of subject matter of this appeal.
25Accordingly, I do not believe that this appeal crosses the threshold under Rule 61.06(1)(a) of there being good reason to believe that the within appeal is frivolous and vexatious. As such, the Applicants’ motion under that rule is dismissed.
26Secondly, however, I must consider whether a further ground for security for costs lies under Rule 61.06(1)(c): is there “any other good reason” why security for costs be ordered. As in a motion under Rule 61.06(1)(a), lack of merit of the appeal may also be a consideration under Rule 61.06(1)(c); however, the impecuniosity of the responding party now becomes a defence to an order for security for costs. This was confirmed by the Court of Appeal in Perron, where an order was made under Rule 61.06(1)(c) but only after the court determined that the Appellant was not impecunious: see paragraph 24 wherein the court noted the Appellant to have a good income as a teacher along with his partner, who was also earning income as a teacher.
27In the present case, the Appellant is on Ontario Works and it acknowledged that she has no assets in Ontario or income to satisfy a costs award. However, her father has, throughout, financially assisted her in this litigation. He is a businessman, and he, along with the Appellant’s mother has funded the trial costs, and continues to fund the appeal. Ms. Rego deposes, however, that although her father is willing to assist in the costs of the appeal and has done so, he does not have the funds to pay security for the costs of the appeal due to “difficulties with his business.”
28I find it somewhat offensive for Ms. Rego to state that her father can fund the appeal and the trial, but relies upon her own dire financial situation to avoid payment of costs awards against her, either of the appeal or of the trial. As pointed out by Mr. Baker in his affidavit, this allows the Appellant to litigate with impunity, with her legal costs being covered, yet with no liability for the consequences of that litigation should she be unsuccessful. She has stated that she is not, nor is she likely to ever be, in a position to pay the costs of trial should her appeal fail; neither will she be in a position to ever pay those costs in the foreseeable future.
29I note as well that no direct evidence was provided by Ms. Rego’s father as to his financial circumstances. He did not swear or file an affidavit; nor did he provide details of his business reversals or particulars as to why he could not now afford to pay an award for the security for the costs of this appeal.
30It is unfair that the Appellant can continue to litigate this matter without any fear of negative financial consequences in the event of a dismissal of the appeal. This is especially so considering her faint hope of success on the appeal as noted above. If Ms. Rego’s father can pay his daughter’s costs of the appeal, those costs may include an award for security for costs, which is a potential expense of prosecuting an appeal without obvious merit. And if Ms. Rego’s father can fund her appeal, I do not find her to be impecunious for the purposes of an award of security for costs under Rule 61.06(1)(c); to order otherwise would work an obvious injustice under the circumstances.
31Accordingly, I find that there is “other good reason” that an award of security for costs go in this matter.
(b) If the Applicants are entitled to an order for security for costs, what is the quantum of the security to be paid into court?
32The Respondents have requested security for costs of $25,000, which they have estimated to be the costs of the appeal in this matter. No detail was provided in Mr. Baker’s affidavit as to how this amount was calculated.
33As noted by Mr. Geffen, the costs at trial, ordered on a full recovery basis because of bad faith behaviour, were just under $60,000. These were the costs of a 12 day trial including preparation time. As noted by Mr. Geffen, the costs of this appeal are likely to be substantially less than this, especially as the Respondents on Appeal are not responsible for transcripts and need only prepare a compendium, factum and any supplementary appeal books as well as argue the appeal. The major costs are for attendance and travel costs as well as legal research, some of which I presume was completed for the argument of this motion.
34Accordingly, there shall be an order for security for costs, but in the amount of $10,000 which is a fairer estimate of the costs of the appeal than the $25,000 requested by Ms. Lyons-Batstone.
Order
35There shall therefore be an order to go as follows:
a. The Respondent, Sharon Rego, shall pay security for the costs of the within appeal in the amount of $10,000.
b. The amount for security for costs shall be paid into court within 30 days.
c. In the event that the funds for security for costs are not paid into court within that period of time, the Applicants (Respondents in Appeal) may move before a judge of this court for an order dismissing this appeal.
36The Applicants may request costs of this motion by making costs submissions in writing within ten days, with the Respondent, Sharon Rego, providing responding submissions on a ten day turnaround. Costs submissions to be no more than three pages in length not including any offers to settle or costs memoranda.
McDERMOT J.
Date: June 5, 2013
Footnotes
- R.R.O. 1990, Reg. 194
- See the affidavit of Sharon Rego sworn January 13, 2013, at paragraphs 10, 12, 15 and 27.
- O. Reg. 114/99
