Court File and Parties

COURT FILE NO.: CV-12-112416 DATE: 20170222 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Amadeo Talluto, Plaintiff AND: Sandra Marcus, Defendant

BEFORE: The Honourable Justice J. Di Luca

COUNSEL: Diana M. Edmonds, Counsel for the Plaintiff Michael Knez, Counsel for the Defendant

HEARD: February 6, 2017

Endorsement

[1] The defendant, Sandra Marcus, moves to dismiss, or in the alternative stay, this action due to the plaintiff’s failure to pay costs thrown away stemming from a mistrial granted by McKelvey J. on May 17, 2016. The plaintiff, Amadeo Talluto, brings a cross-motion seeking an order setting aside the costs order of McKelvey J., or in the alternative an order suspending the operation of the order until the action and any related appeal is finally disposed, or in the further alternative an order varying the costs order.

[2] A brief history of this matter is required in order to provide the context for the costs order in question. This is an action arising from a motor vehicle accident that occurred on December 13, 2012 on Highway 401 at Highway 400. The plaintiff was driving a motor vehicle that rear ended the defendant’s vehicle. The plaintiff claims that the defendant caused or at least contributed to the accident and the resulting injuries.

[3] A first trial date was scheduled for the civil trial sittings commencing on November 16, 2015. On November 4, 2015, the plaintiff served the defendant with an expert medical report. The late disclosure of this report resulted in the adjournment of the trial date.

[4] A second trial date was scheduled for the civil trial sittings commencing on May 16, 2016. During the lead-up to the second trial date, the plaintiff disclosed several new documents and medical reports. As well, on March 29, 2016, the plaintiff served an expert report raising for the first time damages relating to loss of pension income in the amount of $180,800. The production of documents and reports continued in the days leading up to the May trial sittings.

[5] On May 16, 2016, the parties attended for trial before McKelvey J. A jury was picked. The parties then made submissions on three issues:

1. The plaintiff’s right to introduce opinion evidence by an economic loss expert on the value of the alleged pension loss;
2. The plaintiff’s ability to have a family doctor opine on whether the motor vehicle accident affected the plaintiff’s pre-existing back condition; and,
3. The plaintiff’s right to file two reports from a treating psychiatrist pursuant to s. 52 of the Evidence Act.

[6] On May 17, 2016, McKelvey J. ordered a mistrial and gave the following brief written Endorsement:

Following jury selection a number of matters were addressed before the opening instructions to the jury. As a result of late delivery of records and an expert report by the Plaintiff, the Defendant elected to adjourn the trial. Costs thrown away are to be paid by the Plaintiff to the Defendant. The quantum of costs payable to be addressed on May 19, 2016. Written reasons for my decision will be released. The trial is adjourned to the November 2016 sittings. And in light of the history of this action, this is the second adjournment necessitated by the Plaintiff’s failure to comply with the rules relating to disclosure. I would request that this action be given priority to be tried at the November 2016 sittings. A mistrial declared on May 17 th .

[7] The parties returned before McKelvey J. two days later to address the quantum of costs thrown away. A transcript of that appearance was provided to me following argument of these motions. It reveals that counsel for the defendant, Mr. Knez, attended on behalf of both parties and advised McKelvey J. that the plaintiff had agreed to pay costs thrown away in the amount of $33,000. The parties also agreed to leave the costs order silent on the time to pay, though presumably the order would then be subject to the standard 30 day rule.

[8] The record was endorsed as follows:

The parties have reached an agreement on costs. On consent, the Plaintiff has agreed to pay the Defendant costs thrown away in the amount of $33,000.00.

[9] It appears that when the Endorsement was reviewed by counsel for the plaintiff, an issue was raised regarding the use of the word “consent.” Following discussions between counsel, a letter was sent to McKelvey J. requesting that the Endorsement dated May 19, 2016, be amended to correctly reflect the agreement between the parties. The parties suggested the following language:

Costs thrown away are to be paid by the plaintiff to the defendant. The parties have reached an agreement as to the quantum of costs, which are fixed in the amount of $33,000, including HST and disbursements.

[10] On May 27, 2016, McKelvey J. issued a further written Endorsement as follows:

I have received correspondence from the Plaintiff’s solicitor requesting with the consent of Defendant’s counsel to amend my order re: costs. On consent of the parties costs thrown away are to be paid by the Plaintiff to the Defendant. The parties have reached an agreement as to the quantum of costs which are fixed in the amount of $33,000 incl. HST and disbursements.

[11] The written Reasons addressing the mistrial were released by email on May 19, 2016 at approximately 3:25 p.m. and revised Reasons were provided that same day at 4:54 p.m. These Reasons were provided after the appearance wherein Mr. Knez advised the Court that the parties had agreed upon a figure for costs thrown away.

[12] In those Reasons, McKelvey J. was critical of the plaintiff for having caused the mistrial/adjournment of the trial. He also addressed the issue of costs thrown away at paragraph 15 of the Reasons:

There must, however, be some recognition that the conduct of the plaintiff in delivering the expert report on the pension loss so close to trial is not an acceptable practice. The rules with respect to delivery of the expert reports were not meant to be ignored. The purpose and intent of the rules is to ensure that expert reports will be delivered well in advance of the pre-trial and the trial itself so there can be a meaningful discussion of the issues in the case and so that counsel will be prepared to try the case if it does not resolve. When counsel deliver expert reports which are not in compliance with the rules it increases the likelihood that an adjournment may be required. In the event that an adjournment is required because of a party’s failure to comply with the rules it is appropriate to make an order with respect to costs that addresses this issue. The plaintiff argues that an order for costs payable forthwith may deprive the plaintiff of his right to pursue his claim through to trial. The plaintiff argues that the injuries caused by the defendant’s negligence have resulted in him not being able to work and that he is required to now live on long term disability benefits as well as a CPP disability pension. However, no evidence has been introduced by the plaintiff with respect to his other assets which would potentially be available to satisfy a judgment for costs. Thus, there is no evidence before me that the plaintiff is in fact impecunious and would not be able to satisfy an order for costs. In light of the absence of adequate evidence before me on the state of the plaintiff’s ability to pay, I leave this issue to be addressed by the court if the situation arises. [Emphasis added]

Discussion and Findings

[13] I will address the cross-motion first. The plaintiff now advances a claim that he is impecunious and cannot satisfy the costs award in advance of trial. The plaintiff has provided affidavit material setting out the details of his financial circumstances and claims that if he is required to comply with the costs order he will be unable to continue the action. This evidence was not tendered before McKelvey J., though it was in existence and known at the time.

[14] The plaintiff agreed that the quantum of costs thrown away would be $33,000 all inclusive. In reaching that agreement, the plaintiff would have been guided by his financial circumstances as well as the other various factors that go into reaching such an agreement. Of course, it would have been open to the plaintiff to argue quantum before McKelvey J. Indeed, that is what was specifically contemplated by the Endorsement of May 17, 2016. The parties were given two days to prepare to argue the costs issue. Two days later, on May 19, 2016, rather than tender the affidavit material now before me, the plaintiff agreed to an amount of costs. The agreement was not contingent or conditional on future proof of impecuniosity.

[15] The plaintiff suggests that paragraph 15 from McKelvey J.’s written Reasons specifically “reserves” the issue of impecuniosity to a later date. There are two problems with this submission. First, the written Reasons were not received until after the agreement to costs was addressed before the Court. Put another way, the parties agreed upon the quantum of costs before reading the Reasons of McKelvey J. Therefore, there is no way the agreement on costs was, in the minds of the parties, subject to further review based on impecuniosity. On this issue, I note it would make little sense for the defendant to agree to a quantum of costs but leave it open to amendment at some future point in time on basis of impecuniosity.

[16] The second problem also relates to the timing of McKelvey J.’s Reasons. Following receipt of the Reasons, the parties wrote to McKelvey J. and sought an amendment of the language used in his Endorsement dated May 19, 2016. The amendment was sought to make it clear that the defendant did not consent to costs, but rather only consented to the quantum of costs that had been ordered. Problematically for the plaintiff, he did not seek to resile from the quantum of costs agreed upon on the basis of impecuniosity, which as he now claims was left open to him in the written Reasons. If, as the plaintiff contends, the intent of McKelvey J.’s Reasons was to leave open to the issue of impecuniosity, one would have expected the plaintiff to have seized the opportunity to address the issue before McKelvey J. in a timely fashion.

[17] The plaintiff, with full knowledge of his financial situation, reached an agreement on costs. In my view, there is no basis to permit the plaintiff to change his position. While the Reasons of McKelvey J. were not provided until after the agreement had been reached, they did no more than express what the Court anticipated might happen on May 19, 2016, which was already known to the parties. I pause to note that while it would have been preferable if the written Reasons had been updated to reflect the agreement reached on quantum, the plaintiff was not misled. The Reasons were written to reflect the state of affairs on May 17, 2016.

[18] In any event, at paragraph 4 of his affidavit sworn in support of this application, the plaintiff asserts that “the issue of my ability to pay any costs order was not addressed in the affidavit material [placed before McKelvey J.] due to the focus on other issues and the short time available to prepare affidavit evidence.” If this assertion is taken at face value, why did the plaintiff not ask for more time to assemble materials on the costs issue rather than make a deal to pay $33,000? The answer is that the plaintiff decided not to seek a judicial determination of the amount of costs. His reasons for doing so do not matter, though one might assume that the certainty of $33,000 in costs was a better option than the potential of an even higher costs award if the issue was to be litigated.

[19] I have some sympathy for the financial predicament the plaintiff is in. It is clear that on the material provided to me, he lives on very modest means. I also accept that he may not be able to pursue this action if the costs order remains extant. That said, the costs order was made because of the plaintiff’s conduct. A mistrial was occasioned and a second trial date was vacated. A more diligent litigation strategy would have avoided this predicament.

[20] I conclude that there is no need to amend the order. It accurately reflects the agreement reached by the parties. I decline to vary or suspend the order as both the quantum and the time to pay were the subject of a freely given consent, and there is nothing new in the evidence before me that justifies the sought after variation or suspension. The cross-motion is dismissed.

[21] I turn now to the defendant’s motion to dismiss or stay the action. The costs order has not been appealed. The quantum of costs agreed upon has not been paid in full or even in part.

[22] Rule 57.03(2) and Rule 60.12 of the Rules of Civil Procedure grant the authority to dismiss or stay an action where a party has failed to pay a costs award. These rules acknowledge that situations arise where the enforcement of interlocutory orders override the general principle that a matter should be heard on its merits; see Stacey v. Barrie Yacht Club, [2003] O.J. No. 4171 (S.C.J.) at para. 15 and Baksh v. Sun Media (Toronto) Corp., 2003 ONSC 68 at paras. 14, 16, 17, 19. While a party may have a meritorious claim, that party’s conduct in the course of the litigation may disentitle it from seeking adjudication on the merits.

[23] In Rana v. Unifund Assurance Company, 2016 ONSC 2502, Dunphy J. set out the following summary of principles that should guide the Court in exercising its discretion under Rule 57.03(2) and Rule 60.12 of the Rules of Civil Procedure:

a. Where there has been non-compliance with an order of the court, the court should be alive to the possibility that its process is being abused; failing to act may deprive the moving party of justice according to law and risks rendering the court a paper tiger: Bottan v. Vroom, 2009 ONSC 100 at para. 24-25; b. The right of access to the courts must be accompanied by the responsibility to abide by the rules of civil procedure and to comply with orders of the court - to exempt impecunious parties from the enforcement of costs orders when made would amount to granting “carte blanche to continue to ignore the rules and orders of the court and take unsupportable steps in the action without fear of consequences” per Master Dash in Heu v. Forder Estate, 2011 ONSC 16198 at para. 19-20; c. The court ought not to sit in appeal of the prior costs awards – the respondent will have had the opportunity to make submissions about impecuniosity at the prior hearings that resulted in the costs orders and seeking to relieve against prior costs orders constitutes a collateral attack on orders previously made: Bottan v. Vroom, 2009 ONSC 100 at para. 23; Visic v. University of Windsor, 2013 ONSC 2063 at para. 36 and 66; Trewin v. MacDonald, [2008] O.J. No. 2821 (ONSC) at para. 26; d. The court may have regard to a pattern of unnecessary and unreasonable steps taken in the proceeding, including appealing numerous orders without chance of success or knowing the risk thereby imposing costs upon the other party: Visic v. University of Windsor, 2013 ONSC 2063 at para. 68; e. If the orders of the court are “cavalierly ignored” and if a litigant “continuously fails to comply with her obligations as a litigant and then fails to abide by the costs consequences attendant upon that behavior, the court is justified in bringing some finality to the action” (per Master Dash in Burrell v. Peel (Regional Municipality) Police Services Board, 2007 ONSC 46173 at para. 63; aff’d 2010 ONSC 1387); f. Impecuniosity is not a shield for unreasonable conduct of litigation and a dismissal order may be made even if it resolves the matter on procedural rather than substantive grounds: Baradaran v. Tarion Corp., 2014 ONSC 6870; g. Self-represented litigants, while entitled to some accommodation and assistance to ensure a fair hearing, are not entitled to abuse the system or the party opposite and failure to enforce orders once made against self-represented parties is unfair to the parties opposite and undermines respect for the court and the civil justice system: per Myers J. in Baradaran v. Tarion Corp., 2015 ONSC 7892; Bilich v. Toronto (City) Police Services Board, 2014 ONSC 6765; h. “Courts usually talk in terms of prejudice that cannot be compensated for by costs. But, at some point, costs themselves become an inadequate form of compensation for prejudice, especially where the party on whom they are imposed refuses to pay them”: per D.M. Brown J.A. in Schwilgin v. Szivy, 2015 ONCA 816 at para. 23.

[24] Turning to the facts of this case. In my view, the Plaintiff cannot use impecuniosity to defend against the request for a dismissal or stay of the action. Without repeating my findings in relation to the cross-motion, the Plaintiff’s conduct, set out in detail in the Reasons of McKelvey J. dated November 19, 2016, clearly explains why he is facing the costs award. More problematically, the plaintiff consented to the quantum of costs and has since made no effort to pay what he agreed should be paid in the circumstances. While I am sympathetic to his financial situation, I find that fairness requires enforcement of the costs award. The defendant has twice prepared for trial. On the second occasion a jury was chosen and then a mistrial was occasioned. He then negotiated a resolution to the costs award that arose as a result. He now seeks to resile from the position he reached, in the absence of any change in circumstances. That is not fair to the defendant.

[25] That said, I am not prepared to order a dismissal of the action. This is not one of those cases where a party has repeatedly abused indulgences granted by the Court. I will, however, stay the action and give the plaintiff an opportunity to rectify the non-compliance. As a result, I order that the plaintiff’s action be stayed pursuant to Rule 57.03(2) and Rule 60.12 of the Rules of Civil Procedure.

[26] I understand that this matter is currently scheduled for the May 2017 trial sittings. I do not want this stay to result in a third adjournment of the trial at the behest of the plaintiff. The stay of proceedings shall only be removed upon payment of the $33,000 in costs ordered by McKelvey J. If the amount is not paid within 60 days of the date of this Endorsement, the plaintiff’s claim shall be dismissed without further notice or motion and the defendant shall be entitled to apply for an order dismissing the action upon filing an affidavit certifying non-payment of costs order of McKelvey J.

Justice J. Di Luca Date: February 22, 2017