COURT OF APPEAL FOR ONTARIO
2012 ONCA 288
DATE: 20120503
DOCKET: C54192
Weiler, Watt and Epstein JJ.A.
BETWEEN
Tarion Warranty Corporation
Plaintiff (Respondent)
and
1486448 Ontario Inc. and Frederick William Spencer
Defendants (Appellants)
Frederick William Spencer, acting in person
Andrea Hill, for the respondent
Heard: April 30, 2012
On appeal from the order of Justice Parayeski of the Superior Court of Justice, dated July 28, 2011.
ENDORSEMENT
[1] In September 2007, the respondent claimed $123,803.85 against the appellant for alleged infractions under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31.
[2] After two interlocutory motions, the appellant owed the respondent $3,900 in costs.
In October 2010, the appellant unsuccessfully opposed the respondent’s motion to amend its claim and costs in the amount of $1,500 were ordered against him.
On April 26, 2011, the appellant’s motion to strike the respondent’s claim was dismissed as abandoned when he failed to appear at the hearing. The appellant was ordered to pay costs of $2,400.
[3] On June 17, 2011, the respondent’s lawyer wrote to the appellant to advise him that if he did not pay the outstanding costs by July 25, 2011, she would move to strike his defence. The appellant responded that he was unemployed had had no money.
[4] On July 28, 2011, on motion by the respondent, the motion judge struck out the appellant’s statement of defence. His analysis is contained in the following paragraph:
The defendant, Mr. Spencer, is in default in respect of two costs orders of this court...Mr. Spencer’s materials argue, one, impecuniosity, and two, that counsel for the plaintiff failed to advise the court as to why he was not in attendance at the April 2011 hearing. As the Burrell v. Peel Regional Police case makes clear, impecuniosity is not a valid excuse for failing to comply with orders of this court. Those orders have not been appealed or challenged in any formal way.
[5] The appellant has essentially been self-represented throughout these proceedings. On this appeal he relies primarily on his impecuniosity. He also raises various circumstances that he says make the position in which he finds himself unfair.
[6] In our view, the motion judge erred in law by interpreting Burrell v. Peel (Regional Municipality) Police Services Board (2007), 48 C.P.C. (6th) 349 (Ont. S.C.), as standing for the proposition that impecuniosity is not a relevant factor in determining the consequences of a party’s failure to pay a costs order. As Master Dash makes clear, while standing alone, lack of funds cannot justify a failure to pay costs, evidence of impecuniosity is a factor to take into consideration. As is always the case when there are competing interests, the goal is to strike a balance. Here, the competing interests are allowing an impecunious litigant the opportunity to have his or her potentially meritorious claim adjudicated upon, and enforcing court orders. See also Augier v. O’Reilly, 2011 ONSC 4583, [2011] O.J. No. 3468, at para. 20.
[7] Exposing the appellant to a judgment of over $180,000 when there is no suggestion that his defence is without merit, in circumstances where the self-represented appellant had unchallenged evidence before the motion judge that he was impecunious, was a disproportionate response to his failure to pay a relatively small amount of costs that had been outstanding for a relatively small amount of time.
[8] Accordingly, the appeal is allowed, the order of the motion judge is set aside and the appellant’s statement of defence is reinstated on the terms that the appellant pay the $3,900 to the respondent no later than April 30, 2013, failing which the respondent may move, on notice, to have the statement of defence struck out.
[9] There will be no costs of this appeal.
“K.M. Weiler J.A.”
“David Watt J.A.”
“G.J. Epstein J.A.”