Beals et al v. Saldanha et al. [Indexed as: Beals v. Saldanha]
61 O.R. (3d) 641
[2002] O.J. No. 3888
Docket Nos. M28777, M28855, M28907, (C31065)
Court of Appeal for Ontario
Laskin, MacPherson and Armstrong JJ.A.
October 17, 2002
Civil procedure -- Security for costs -- Foreign plaintiff suing to enforce foreign judgment -- Plaintiff posting security for costs of trial and of appeal -- After successful appeal, plaintiff obtaining judgment -- Defendants granted leave to appeal to Supreme Court of Canada -- Plaintiffs moving for payment out of moneys paid into court as security for costs -- Motion for payment out dismissed -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106.
Civil procedure -- Stay of execution pending appeal -- Stay of execution pending appeal to Supreme Court of Canada -- Irrevocable written guarantee by the Lawyers Professional Indemnity Company ("LPIC") for $1 million adequate security for stay of execution -- Supreme Court Act, R.S.C. 1985, c. S-26, s. 65(1)(d)
The Beals obtained a judgment by default in the Circuit Court of Sarasota County, Florida, against the Saldanhas and the Thivys. The Beals brought an action to enforce the judgment in Ontario, and because they were not Ontario residents, they were ordered to post security for costs both for the trial, where the Beals' action was dismissed, and also for their subsequent appeal, which was successful.
After the Court of Appeal allowed the Beals' appeal and granted them a judgment of approximately $1 million, the Saldanhas and Dominic Thivy were granted leave to appeal to the Supreme Court of Canada. After leave was granted, they brought a motion pursuant to s. 65(1)(d) of the Supreme Court Act for a stay of execution of the Court of Appeal's judgment pending the disposition of the appeal by the Supreme Court of Canada. The Beals brought a cross-motion seeking the return of all moneys paid into court as security for costs. Gillese J.A. dismissed the motion for a stay of exection because she was not satisfied with the security proposed by the Saldanhas and Thivy, and she stayed the Beals' cross-motion for payment out of the security for costs. The Beals moved before a full panel of the court for a variation of Gillese J.A.'s order, and the Saldanhas and Thivy made a fresh application for a stay of execution. In their fresh application, the Saldanhas offered an irrevocable written guarantee for $1 million by the Lawyers Professional Indemnity Company ("LPIC") as security.
Held, the motion to vary should be dismissed; the motion for a stay of execution should be granted.
The judgment of the Court of Appeal in Centaur Cycle Co. v. Hill, where money paid in as security for costs was ordered paid out, was not determinative, and Gillese J.A. was entitled to consider the operation of s. 106 of the Courts of Justice Act, which authorizes the court to "stay any proceeding in the court on such terms as are considered just". Gillese J.A. was correct in concluding for three reasons that at this juncture, it would not be just to order the payment out of the money held in court for costs. First, if their appeal to the Supreme Court were successful, the Saldanhas and Thivy would have difficulty recovering costs from the Beals, who had no assets in Ontario and who would meet any attempt to recover costs in Florida with a claim for set-off under the Florida judgment. Second, there was no evidence that the Beals would suffer any hardship by leaving the money in court. [page642] Third, there was no distinction between an appeal to the Supreme Court of Canada and an appeal to the Court of Appeal that would justify a payment out. Although now respondents, the Beals remained non- resident parties who were prosecuting an action through a hierarchical court system. It was just to maintain the status quo until the Supreme Court of Canada disposed of the appeal.
As for the new motion for a stay of execution, the irrevocable guarantee from LPIC provided appropriate security and the motion should be granted.
MOTION to vary an order pursuant to s. 7(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43; MOTION for a stay of execution of the judgment of the Court of Appeal (Catzman, Doherty and Weiler JJ.A.) (2001), 2001 27942 (ON CA), 54 O.R. (3d) 641, 202 D.L.R. (4th) 630 (C.A.) pursuant to s. 65(1)(d) of the Supreme Court Act, R.S.C. 1985, c. S-26.
Cases referred to Centaur Cycle Co. v. Hill (1904), 7 O.L.R. 411; Day v. Rutledge (1898), 1898 153 (MB CA), 12 M.R. 309 (C.A.); Scandinavian American National Bank v. Kneeland (1914), 1914 767 (MB CA), 6 W.W.R. 1152, 24 Man. R. 439 (C.A.), affg (1914), 1914 459 (MB KB), 6 W.W.R. 729, 17 D.L.R. 43 (Man. K.B.) Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 7(5), 106 Supreme Court Act, R.S.C. 1985, c. S-26, s. 65(1)(d)
Messod Boussidan and James F. Diamond, for appellants. J. Brian Casey, for respondents Geoffrey Saldanha and Leueen Saldanha. Neal H. Roth, for respondent Dominic Thivy.
The judgment of the court was delivered by
MACPHERSON J.A: --
A. Introduction
[1] The Supreme Court of Canada has granted leave to appeal this court's judgment in Beals v. Saldanha (2001), 2001 27942 (ON CA), 54 O.R. (3d) 641, 202 D.L.R. (4th) 630. [See Note 1 at end of document] On July 3, 2002, Gillese J.A., sitting as a chambers judge, dealt with two motions relating to staying the execution of the court's judgment and security for costs pending the disposition of the appeal by the Supreme Court of Canada. The unsuccessful parties on these motions now return to the court, this time before a full panel. The Beals, the successful parties in the appeal to this court, seek the payment out of court of money they deposited as security for costs of the trial and the [page643] appeal. The Saldanhas, and Dominic Thivy, the unsuccessful parties in the appeal, seek a stay of enforcement of the court's judgment. The Beals' motion raises the issue of whether a successful party in an appeal can be required to continue to post security for costs pending a further appeal to the Supreme Court of Canada. The Saldanhas' and Dominic Thivy's motion [See Note 2 at end of document] raises an issue relating to the sufficiency of security for the judgment against them pending the disposition of an appeal by the Supreme Court of Canada.
B. Facts
(1) The parties and the events
[2] The underlying action which gives rise to the present motions was by Frederick and Patricia Beals ("the Beals") for the enforcement of a judgment obtained by default in the Circuit Court of Sarasota County, Florida. At various points in the action up to the trial, the Beals were required to post security for costs totalling $31,755.23. These orders were made on the basis that the Beals were not residents of Ontario.
[3] The trial of the action was heard by Jennings J. In a judgment dated November 6, 1998, he dismissed the Beals' action. [See Note 3 at end of document]
[4] The Beals appealed Jennings J.'s judgment to this court. The respondents sought additional security for costs. In a decision dated December 23, 1999, McMurtry C.J.O. ordered the Beals to post additional security for costs in favour of the respondents Geoffrey and Leueen Saldanha ("the Saldanhas") and Dominic and Rose Thivy ("the Thivys") in the amount of $66,912.89 and $22,616.01 respectively.
[5] The appeal was heard by a panel of this court. In a judgment released on June 29, 2001, the court, by majority (Doherty J.A., Catzman J.A. concurring, Weiler J.A. dissenting) allowed the appeal. [See Note 4 at end of document]
[6] On September 13, 2001, the Beals brought a motion seeking the payment out of court of all moneys posted as security for costs of both the trial and the appeal. In response, the Saldanhas sought a stay of the motion pending the disposition by the Supreme Court of Canada of their application for leave to appeal. [page644] Moldaver J.A. granted the stay on the basis that "the interests of justice are best served by maintaining the status quo . . . for the few months involved in the processing and completion of the leave application."
[7] On May 16, 2002, the Supreme Court of Canada granted leave to appeal.
(2) The motions before Gillese J.A.
[8] After the Supreme Court of Canada granted leave to appeal, the Saldanhas and Dominic Thivy brought a motion, pursuant to s. 65(1)(d) of the Supreme Court Act, R.S.C. 1985, c. S-26 (the "SCA"), for a stay of execution of this court's judgment pending the disposition of the appeal by the Supreme Court of Canada. The Beals brought a cross-motion seeking the return of all moneys paid into court as security for costs of the trial and the appeal.
[9] Both motions were heard and disposed of by Gillese J.A. on July 3, 2002. She dismissed the motion for a stay of execution because she was not satisfied, pursuant to s. 65(1) (d) of the SCA, with the security the Saldanhas and Dominic Thivy proposed to post for the approximately $1 million judgment against them.
[10] Gillese J.A. stayed the cross-motion for payment out of the moneys the Beals had paid into court as security for costs. After reviewing the applicable statutory provisions and case authorities, she concluded, pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the "CJA"): "In all the circumstances of this case, the interests of justice dictate a stay of the Beals' cross-motion for payment out."
[11] The Beals then brought a motion to a full panel of this court for an order varying Gillese J.A.'s order to permit payment out of the moneys they paid into court as security for costs of the trial and the appeal. The Saldanhas and Dominic Thivy ("the respondents"), relying on a passage in Gillese J.A.'s endorsement in which she stated that her decision dismissing the motion for a stay was "without prejudice to the moving parties' right to make a further motion based on different security", brought a fresh motion for a stay of execution of this court's judgment pending the disposition of the appeal by the Supreme Court of Canada.
C. Issues
[12] The issues presented by the two motions are:
(1) Should this court order payment out of the moneys paid into court by the Beals as security for costs of the trial and the [page645] appeal in light of the fact that the Beals succeeded in the judgment of this court currently under appeal to the Supreme Court of Canada?
(2) Is the security for the judgment proposed by the respondents sufficient to justify a stay of the execution of the judgment of this court pending the disposition of the appeal by the Supreme Court of Canada?
D. Analysis
(1) The Beals' motion
[13] The Beals' motion is brought pursuant to s. 7(5) of the CJA, which authorizes a panel of this court to "set aside or vary the decision of a judge who hears and determines a motion". In fact, although the motion employs the language of "vary", the reality is that the Beals challenge the correctness of Gillese J.A.'s decision. In their factum and in oral argument, they contend that the motions judge's decision was in direct conflict with settled law.
[14] The main case relied on by the Beals is the decision of a five-judge panel of this court in Centaur Cycle Co. v. Hill (1904), 7 O.L.R. 411 ("Centaur Cycle"). In that case, the defendants, who had paid money into court as security for costs of an appeal to the Court of Appeal, made a motion for return of the moneys after they were successful on the appeal. The motion was resisted by the plaintiff who contended that the money should remain in the court pending further appeal to the Supreme Court of Canada or the Privy Council. The court granted the motion and MacLennan J.A. said, at p. 412 O.L.R.:
In the present case the appellant has succeeded in his appeal. He has prosecuted it effectually, and no costs have been awarded against him, or in favour of the respondent. The condition of the security has been literally fulfilled. The appellant has performed everything performance of which was intended to be secured by his deposit, and it follows that he is now entitled to a return of his money.
The cases shew that there is a clear distinction between the case of security given in the High Court for the costs of the action, when an appeal is taken by a defendant to the Court of Appeal, and a case of security for the costs of the Court of Appeal to the Supreme Court or to the Privy Council. An appeal to the Court of Appeal is a step in the cause, or action, but a further appeal is not so.
[15] The Beals also rely on two decisions of the Manitoba Court of Appeal to similar effect, Day v. Rutledge (1898), 1898 153 (MB CA), 12 M.R. 309 (C.A.), and Scandinavian American National Bank v. Kneeland (1914), 1914 767 (MB CA), 6 W.W.R. 1152, 24 Man. R. 439 (C.A.).
[16] In my view, Centaur Cycle and its Manitoba equivalents are not determinative of the motion. In Centaur Cycle there was [page646] only a motion to pay out the money held in court as security for costs. In the present case, there was a similar motion by the Beals. However, the respondents rely on s. 106 of the CJA which authorizes the court to "stay any proceeding in the court on such terms as are considered just". Gillese J.A. approached her analysis of the Beals' motion within the context of this provision. In my view, she was correct to do so. The payment into court orders were made in proceedings in the Ontario Court (General Division) and in this court. Accordingly, it was open to a motions judge of this court to consider the continuing operation of those orders under the relevant statutory provisions, including s. 106 of the CJA.
[17] The motions judge concluded that it would not be just to order the payment out of the money held in court as security for costs at this juncture. She cited three reasons in support of this conclusion.
[18] First, the motions judge made reference to the hardship payment out would probably work on the respondents. She reasoned:
The Beals have no assets in Ontario. Thus, the respondents would have to attempt to realize on any costs award in Florida. Any such attempt will be met with a claim for set- off from the Florida judgment which the Beals hold against the respondents. As a result, the respondents would be unable to realize on the costs award.
Moldaver J.A. made precisely the same point in his reasons dismissing the Beals' motion for payment out before the Supreme Court of Canada determined the application for leave to appeal.
[19] Second, the motions judge considered the financial position of the Beals and concluded that there was "no evidence before me to suggest that the Beals would suffer any hardship by leaving on deposit the moneys already paid into court until the appeal is disposed of by the Supreme Court of Canada". Again, Moldaver J.A. relied on the same factor in his earlier endorsement.
[20] Third, the motions judge in effect rejected the component of the analysis in Centaur Cycle that drew a distinction between an appeal to this court and a further appeal to the Supreme Court of Canada. As MacLennan J.A. expressed it in Centaur Cycle: "An appeal to the Court of Appeal is a step in the cause, or action, but a further appeal is not" (at p. 412 O.L.R.). Gillese J.A.'s response to this sharp dichotomy was:
I accept that security for costs was previously ordered because of the Beals' non-residency status and because they were prosecuting the claim. Their non-residency status remains. I accept, as well, that the respondents are responsible for the appeal to the Supreme Court of Canada. That fact, however, does not strip the Beals of their status in the proceedings. To accept the [page647] argument that the Beals are not prosecuting the action is to ignore the fact that the appeal to the Supreme Court of Canada is the culmination of the legal process that the Beals initiated. The respondents are acting upon their right, once they obtained leave to appeal, to have the Supreme Court of Canada rule finally on the case initiated by the Beals.
[21] I agree with all of the motions judge's reasons. The two 'hardship' reasons are amply anchored in the record; indeed, I do not think that the Beals contest them on the merits. The third reason not only displays a practical understanding of the nature of litigation in a hierarchical court system; it is also supported by an examination of the Supreme Court Act, which establishes that the Supreme Court of Canada is closely integrated into, and at the apex of -- not separate from -- the Canadian court system. Three provisions of the SCA illustrate this point:
- The Court shall have and exercise an appellate, civil and criminal jurisdiction within and throughout Canada.
46.1 The Court may, in its discretion, remand any appeal or any part of an appeal to the court appealed from or the court of original jurisdiction and order any further proceedings that would be just in the circumstances.
- The judgment of the Court in appeal shall be certified by the Registrar to the proper officer of the court of original jurisdiction, who shall make all proper and necessary entries thereof, and all subsequent proceedings may be taken thereon as if the judgment had been given or pronounced in the last mentioned court.
[22] In summary, the motions judge took account of a wide range of appropriate factors -- an imminent appeal to the Supreme Court of Canada, the non-resident status of the moving parties, hardship to all parties -- and decided that, in this case, the just result was maintaining the status quo until the Supreme Court of Canada disposed of the appeal. I agree with the motion judge's approach, analysis and conclusion on this issue. Accordingly, I would dismiss the Beals' motion to vary Gillese J.A.'s order.
(2) The respondents' motion
[23] Section 65(1)(d) of the SCA provides that with respect to a money judgment the execution of the judgment will not be stayed pending the appeal to the Supreme Court of Canada unless the appellant provides security for the amount of the judgment below "to the satisfaction of the court appealed from".
[24] The respondents brought a motion to stay the execution of the judgment in this court. The Saldanhas offered, as Gillese J.A. [page648] described it, "to post a very modest amount of security, a few thousand dollars" or, in the alternative, an offer from the Lawyers Professional Indemnity Company ("LPIC") to give an undertaking that, "should the appeal be unsuccessful, it will satisfy the judgment". [See Note 5 at end of document] Dominic Thivy offered to post "some $1,000 to $1,800".
[25] The motions judge was not satisfied that these offers complied with the requirement in s. 65(1)(d) of the SCA that the security satisfy the full amount of the judgment. Since the judgment appealed from was for approximately $1 million, the money the respondents offered to post as security was insufficient. As for LPIC's offer, the motions judge stated that "[a]n undertaking is not security." However, the motions judge left the door open for the respondents to make a further motion for a stay of execution.
[26] The respondents took up the motions judge's invitation and brought a new motion. The Saldanhas offered an irrevocable written guarantee by LPIC for $1 million as security. Dominic Thivy proposed to pay security of $1,000.
[27] In my view, an irrevocable guarantee of $1 million by LPIC, a thoroughly solvent, highly regarded company with exceptionally close links to the profession, is satisfactory security. In light of the guarantee of $1 million, and given the overlap of the interests of the Saldanhas and Dominic Thivy, I think that Dominic Thivy's offer to post $1,000 is also appropriate. Accordingly, I would grant the motion with respect to security for costs.
E. Disposition
[28] I would dismiss the Beals' motion to vary Gillese J.A.'s order. I would grant the Saldanhas' and Dominic Thivy's motion with respect to security for costs. I would award the Saldanhas their costs of the motions fixed at $1,500 and Dominic Thivy costs fixed at $250.
Order accordingly. [page649]
Notes
Note 1: [2001] S.C.C.A. No. 486.
Note 2: In fact, the Saldanhas and Dominic Thivy brought separate motions. However, because they raise the same issue, I will treat them as a single motion in these reasons.
Note 3: Beals v. Saldanha (1998), 1998 14709 (ON SC), 42 O.R. (3d) 127, 27 C.P.C. (4th) 144 (S.C.J.).
Note 4: The court dismissed the appeal against Rose Thivy, an undischarged bankrupt.
Note 5: By agreement dated September 12, 2001, LPIC agreed to pay any judgment and costs incurred by the Saldanhas.