Court of Appeal for Ontario

CITATION: Indcondo Building Corporation v. Sloan, 2012 ONCA 502

DATE: 20120718

DOCKET: C54391

Goudge, Sharpe and Juriansz JJ.A.

BETWEEN

Indcondo Building Corporation

Plaintiff (Appellant)

and

Valerie Francis Sloan, David Robin Sloan and Cave Hill Properties Ltd.

Defendants (Respondents)

P. James Zibarras and Trung Nguyen, for the appellant

Philip P. Healey and Miranda Spence, for the respondents

Heard: March 14, 2012

On appeal from the order of Justice Ruth E. Mesbur of the Superior Court of Justice, dated August 30, 2011.

Reasons for Decision

Goudge J.A.:

[1] On March 14, 2012, this court heard two separate matters in this case. The first was the respondents’ motion to review the decision of Armstrong J.A. refusing to order security for costs pending appeal. The order was sought against counsel for the appellant because counsel was acting on contingency and the appeal was said to be frivolous and the appellant impecunious.

[2] The second was the appeal itself. The appellant appeals from Mesbur J.’s order dismissing its action commenced pursuant to an order under section 38(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985 c. B-3 (the BIA). The motion judge found that the action was an abuse of process and barred by res judicata and issue estoppel because of the discharge of the appellant in bankruptcy and the dismissal of a prior action for the same relief brought by the appellant in its own capacity.

[3] Although an order for security for costs pending appeal would have had only short duration, the court acceded to the respondents’ request to hear the motion for review because of the nature of the issue presented. Both matters were reserved.

[4] For the reasons that follow, I would dismiss the motion to review the decision of Armstrong J.A. and allow the appeal.

The Motion to Review

[5] This can readily be disposed of. In seeking security for costs against the appellant’s counsel, the respondents argue, as required by Rule 61.06, that the appeal is frivolous and the appellant is impecunious. They urge that because of the contingency arrangement, counsel has such a stake in the litigation that it would be unjust not to require counsel to post security.

[6] Armstrong J.A. disposed of the respondents’ request without needing to address the requirements of Rule 61.06, because, in his view, to order counsel acting on contingency to post security would chill the very access to justice that is a main objective of the contingency fee regime. He found that while in future, exceptions to this governing principle may arise, this was not such a case.

[7] I agree. Moreover, because of the result I have reached on the appeal itself, it is obvious that this appeal could not be said to be frivolous, and in this respect Rule 61.06 could not be complied with.

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