COURT OF APPEAL FOR ONTARIO

DATE: 20001108

DOCKET: C34979

M26560

M26570

RE: 1013799 ONTARIO LIMITED (Plaintiff/Respondent) v. KENT LINE INTERNATIONAL LIMITED, CAN-SHIP OVERSEAS INC., NACORA INSURANCE BROKERS LTD., and MARITIME INSURANCE COMPANY, LIMITED (Defendants/Appellants)

BEFORE: ROSENBERG J.A. (In Chambers)

COUNSEL: John C. F. Hunt,

for the appellant

Leah Price,

for the respondent

HEARD: November 3, 2000

E N D O R S E M E N T

[1] This is a motion by the appellant to stay the order of Lamek J. of October 18, 2000 that the sum of $54,177.26 paid into court by the plaintiff (respondent on the appeal) pursuant to an order for security for costs, together with accrued interest, be paid out of court to the plaintiff’s solicitors in trust. The chronology of events leading to this motion is as follows:

August 18, 1997: Order on consent by Master Garfield requiring the plaintiff to post security for costs.

August 16, 2000: Following trial, Lamek J. finds for the plaintiff. (The order has not yet been settled but I am informed that the damages and costs will be in the neighbourhood of $600,000.)

September 14, 2000: Notice of appeal from the judgment of Lamek J.

October 18, 2000: Since the appellant refuses to consent to an order for payment out of the money held in court, Lamek J. makes the order that is the subject of this motion.

October 25, 2000: Supplementary notice of appeal adding as a ground of appeal paragraph 24: “The learned trial judge erred by ordering the payment out of the money paid into court by the plaintiff as security for costs, together with interest accrued thereon.”

[2] Counsel for the plaintiff opposes the motion on a number of grounds. However, her main submission is simply that the plaintiff, having been successful at trial, is entitled to the return of its money. She recognizes that so long as the judgment is under appeal she cannot obtain from the appellant any part of the damage award or the costs (subject to the automatic stay being set aside). However, at the very least, the plaintiff should no longer be required to post its own money for security for costs. She submits that the appellant is attempting to do indirectly what it could not do directly, i.e. obtain security for costs from a respondent.

[3] Counsel for the plaintiff also argues that, in effect, the defendant is attempting to appeal an interlocutory order and this court has no jurisdiction to consider the stay of that order. I need not consider that issue, since I am of the view that the motion to stay the order should be dismissed.

[4] I agree with counsel for the respondent that the plaintiff, having been successful at trial, is entitled to the return of the money that it posted as security for costs. I appreciate the position of the appellants that the concern that originally motivated the order for security for costs still obtains, in the sense that the plaintiff no longer carries on business and may have no assets to pay a costs order should the trial judgment ultimately be reversed. However, as Middleton J. said in Battlecreek Toasted Corn Flake Co. Ltd. v. Kellogg Toasted Corn Flake Co. (1923), 55 O.L.R. 127 (C.A.) at 135, “The defendants must suffer the loss incident to the fact that they are now in the position of unsuccessful litigants. … When a decision is reversed for error, in many cases the erroneous judgment has done much harm that cannot be compensated … [however] I can see no justification for casting the burden and risk on the litigant who is so far successful.”

[5] The motion by the appellants is dismissed with costs.

[6] The respondent brought a cross-motion seeking to strike out paragraph 24 of the supplementary notice of appeal. In light of my decision on the motion by the appellants, it would seem to me that the cross-motion is moot. The respondent does not require any further order from me. The cross-motion is dismissed without costs.

(signed) “M. Rosenberg J.A.”