COURT OF APPEAL FOR ONTARIO

DATE: 20001215

DOCKET: M26713

(C33639)

RE: MACAMID HOLDINGS LTD. (Plaintiff (Respondent)) v. 1013799 ONTARIO LIMITED, 908473 ONTARIO LIMITED AND SAM BERKEL (Defendants (Appellants))

BEFORE: McMURTRY C.J.O. (In Chambers)

COUNSEL: M. Shortreed and M. Sternino

For the appellants

R. G. Chapman

For the respondent

HEARD: DECEMBER 8, 2000

E N D O R S E M E N T

[1] The respondent moves for an order for security for costs of the proceedings below and other relief relating to the examination in aid of execution of Sam Berkel.

SECURITY FOR COSTS

[2] In an earlier application, the motions judge, Charron J.A., ruled that the respondent had demonstrated that there is “good reason to believe” that the appeal is frivolous and vexatious and an order for security for costs should be made under Rule 61.06(1)(a) with respect to the corporate appellants. Charron J.A. further held that while the respondent had raised a suspicion that the individual appellant does not have sufficient assets in Ontario to pay the costs of the appeal, she was not satisfied that the test had been met. Subsequent to her order, the respondent, Berkel, has been examined in aid of execution and the examination reveals that the respondent has now satisfied the test that order for security for costs be made under Rule 61.06(1)(a) in relation to the appellant Berkel.

[3] It was argued before me that pursuant to the authority of the decision of Houlden J.A. in J. G. Drageve et al v. Lampton Estates Ltd. et al (1985) 1985 2227 (ON CA), 2 C.P.C. (2d) 229, that there can be no judgment debtor examinations until judgment has been obtained and any appeal disposed of. I do not know whether this case was brought to the attention of Charron J.A. However, in my view, it is clearly distinguishable as Houlden J.A. expresses the opinion that “ordinarily it would be an abuse of process…” and it is my view that the circumstances of this case are far from ordinary. Furthermore, Charron J.A. did make an order lifting the stay with respect to the individual appellant so as to permit an examination in and of executions and this cannot be ignored.

[4] The costs of the proceedings below have now been assessed in the amount of $242,360.65 although the assessment is under appeal. In the circumstances, it is ordered that the appellants post security for the costs of the proceedings below in the amount of $150,000.00 in the form of cash, letter of credit, or other form acceptable to the respondents on or before January 2, 2001. The appellants submitted that the order of Charron J.A. as entered states that the respondent shall be at liberty to move for a further order for security for costs against the corporate appellants only. The word “only” does not appear in the endorsement of Charron J.A. and, in my view, was included in the order as entered in error.

[5] There will be a further order lifting the stay of execution for the purpose of allowing Mr. Nathan Rotstein, residing at 7 Townsgate Drive, Apartment 415 in the City of Vaughan and a representative of the Canadian Imperial Bank of Commerce to be examined in and of execution.

[6] There will be a further order directing the appellant, Berkel to provide answers to undertakings given in the course of his examination in aid of execution on May 16, 2000 and June 5, 2000 which are summarized in a table prepared by the respondent and attached to this endorsement as Schedule A by no later than January 2, 2001. The application for the answers to the undertakings was not opposed by the appellants. In the event that the undertakings given are not provided, the respondent shall be at liberty to move for an order striking out this appeal.

[7] The parties to this appeal agree that all proceedings related to the execution of the judgment of the Honourable Mr. Justice Nordheimer dated January 14, 2000 and identified by File No. 97-CV-1222637 in the Ontario Superior Court of Justice, shall be presided over by a case management judge or master and it is so ordered.

[8] It is further ordered that in the future, the respondent shall be at liberty to effect service on Rotstein by sending any document to be served, including a Summons to Witness, to him by registered mail in accordance with Rule 16.06 of the Rules of Civil Procedure.

[9] The respondent is entitled to its costs of this motion on a solicitor and client scale.

“McMurtry C.J.O.”