COURT OF APPEAL FOR ONTARIO

CITATION: Estates Associates Inc. v. 1645112 Ontario Ltd., 2020 ONCA 640

DATE: 20201009

DOCKET: M51428 (C67652)

Strathy C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Estates Associates Inc.

Plaintiff (Appellant/Moving Party)

and

1645112 Ontario Ltd., 1793411 Ontario Ltd., Ronald McCowan and Bryon C. Cohen

Defendants (Respondents/Responding Parties)

Musharraf Iqbal, acting in person for the moving party

David N. Vaillancourt, for the responding party, Bryon C. Cohen

Amandeep S. Dhillon, for the responding parties, 1645112 Ontario Ltd., 1793411 Ontario Ltd., and Ronald McCowan

Heard: October 5, 2020 by video conference

REASONS FOR DECISION

[1] The moving party, Estates Associates Inc. ("Estates"), represented by its principal, Mr. Iqbal, seeks to set aside or vary the order of a judge of this court requiring that it post security for costs of the responding parties in the amount of $100,000 each.

[2] The litigation is more than 10 years old and relates to events that occurred 11 to 12 years ago. Estates made claims for fraud, negligent misrepresentation, conspiracy, and breach of contract against the purchaser, Ronald McCowan and his companies (collectively, "McCowan"), in connection with the sale of a property. Estates also claims against the defendant, Bryon C. Cohen ("Cohen"), for allegedly negligent legal services.

[3] The action was tried over the course of three weeks in 2019 and reasons were released in November 2019, dismissing the claim. The trial judge subsequently awarded costs of $150,000 to McCowan and $175,000 to Cohen.

[4] Estates has appealed the trial judgment to this court.

[5] Rule 61.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, permits this court to order security for the costs of an appeal on several grounds, including (a) where "there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal"; (b) where an order for security for costs could be made under r. 56.01; or (c) where, "for other good reason, security for costs should be ordered".

[6] The motion judge's order for security for costs rests on two foundations: first, a finding that the merits of the appeal are very much in doubt; and second, a finding that Estates failed to establish that, despite its apparent impecuniosity, it did not have access to funds.

[7] The motion judge's order is discretionary and is entitled to deference: Yaiguaje v. Chevron Corporation, 2017 ONCA 827, 138 O.R. (3d) 1, at para. 20. Estates has demonstrated neither an error of law nor an error in principle in the exercise of the motion judge's discretion.

[8] While the appeal may not be frivolous or vexatious, it appears to have a very low prospect of success. The trial judgment is fact-driven, and reflects the trial judge's rejection of much of Mr. Iqbal's evidence and her acceptance of the responding parties' evidence.

[9] While there was little doubt that Estates had no assets, the motion judge properly considered whether Estates had established that it did not have access to funds and would not be able to pay security for costs. There was evidence that Estates had funded its litigation at various times by retaining several different lawyers, retaining an expert witness, and paying for the costs of the trial transcripts. There was also evidence that Mr. Iqbal had received funds in 2018 amounting to approximately $275,000. In the face of this evidence, Estates had an obligation to lead evidence that not only showed that it was without assets, but that it also had no access to funds. Estates failed to do so, and the motion judge properly considered this failure in concluding that security for costs could be awarded.

[10] On this motion, Mr. Iqbal sought to adduce fresh evidence that while he received $275,000 in 2018 from another party in a separate litigation, those funds have since been disbursed. This evidence is not "fresh" because it was available at the time of the motion.

[11] In any event, this evidence, when considered in light of Estates' ability to finance this litigation over the years, does not demonstrate that the motion judge erred in law or in principle.

[12] The motion is dismissed, with costs to McCowan and Cohen, in the amount of $2,500 each, inclusive of disbursements and all applicable taxes.

"G.R. Strathy C.J.O."

"David Brown J.A."

"Grant Huscroft J.A."