Court File and Parties

Court of Appeal for Ontario Date: 20210401 Docket: M52312, M52313, and M52314 (C68695) Paciocco J.A. (Motions Judge)

Between

9383859 Canada Ltd. Plaintiff (Appellant/Responding Party)

and

Kubeskaran Navaratnam, Ronald Lachmansingh and Marilyn Reiter Nemetz Defendants (Respondents/Moving Parties)

and

Musab Saeed, Mian Imran Saeed, Nirmalarajah Gunarajah, Viveka Ramesh, Mohinder Sansoye, Ramesh Senthilnathan Defendants

Counsel: M. Scott Martin, for the moving party Marilyn Reiter Nemetz (M52312) James R.G. Cook, for the moving party Kubeskaran Navaratnam (M52313) Bronwyn M. Martin, for the moving party Ronald Lachmansingh (M52314) Sandeep Singh, as representative of the responding party

Heard: March 29, 2021 by video conference

Endorsement

Overview

[1] The moving parties, Kubeskaran Navaratnam, Ronald Lachmansingh, and Marilyn Reiter Nemetz, each bring motions pursuant to r. 61.06(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to dismiss an appeal brought by 9383859 Canada Ltd., (“938”) from the August 17, 2020 decision of C.J. Brown J. (the “Motion to Strike Order”) on the basis that 938 has failed to comply with the order for security for costs made by Pepall J.A. on December 11, 2020 (the “Security for Costs Order”). The Security for Costs Order required 938 to post security for costs of the appeal in the sum of $15,000 by January 22, 2021. It is not disputed that 938 has not paid this amount into court.

[2] For reasons that follow, it is in the interests of justice to grant the moving parties’ motions and dismiss 938’s appeal, bearing court file number C68695 (the “Main Appeal”).

Material Facts

[3] The actions underlying the instant motions arose from a failed real estate transaction and assignment of an agreement of purchase and sale (the “APS”). 938 was the original purchaser and assignor of the APS.

[4] More than two years after the deal fell through, 938 sued the moving parties, who are all lawyers involved in the failed transaction or related litigation. None of the moving parties acted for 938 in connection with the APS: Ms. Reiter Nemetz acted for the vendor; Mr. Navaratnam acted for the assignee, Musab Saeed, on the transaction; and Mr. Lachmansingh acted for Mr. Saeed in related litigation.

The Motion to Strike Order

[5] On August 17, 2020, pursuant to rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, C.J. Brown J. issued the Motion to Strike Order, which dismissed 938’s actions, without leave to amend, as disclosing no reasonable cause of action. In her reasons, C.J. Brown J. found, inter alia, that none of the moving parties owed a legal duty to 938 that could support legal action, that Mr. Lachmansingh had absolute immunity to the claims made against him, and that all the actions were statute-barred and an abuse of process.

[6] As indicated, 938 has appealed the Motion to Strike Order to this court in the Main Appeal.

The Security for Costs Order

[7] On December 11, 2020, Pepall J.A. granted leave to 938’s sole director and shareholder, Sandeep Singh, to represent 938 on the Main Appeal. She also issued the Security for Costs Order, which required 938 to post security in the amount of “$5,000 per lawyer” before January 22, 2021.

The panel review and extension motions

[8] Rather than comply, 938 attempted to file materials for a panel review of the Security for Costs Order but failed to do so within the required four-day period. 938 then brought a motion for an order extending the time to file materials for the panel review.

[9] On March 9, 2021, van Rensburg J.A. denied the motion for extension of time as contrary to the interests of justice (the “Extension Denial Decision”). On March 22, 2021, 938 filed a request for a panel review of the Extension Denial Decision, evidently in hopes of re-opening the door to persuade a panel to set aside or vary the Security for Costs Order.

[10] While 938 is seeking this domino of rulings, the date set for the Main Appeal is approaching; it is currently scheduled to be heard on May 19, 2021.

Analysis

[11] In Virc v. Blair (2016), 134 O.R. (3d) 795 (C.A.), at paras. 4-5, Juriansz J.A. agreed with the proposition that “[o]nce a failure to comply with an order to pay security for costs is established, the ‘onus then shifts to the appellant to provide compelling reasons why dismissal is not in the interests of justice’”.

[12] It is not disputed that 938 has failed to comply with the Security for Costs Order. I find that 938 has not provided compelling reasons why dismissal is not in the interests of justice. Indeed, I am satisfied in the circumstances of this case that it is positively in the interests of justice to dismiss the Main Appeal.

[13] As Juriansz J.A. recognized in Virc, at para. 5, discretion under r. 61.06(2) should be exercised in light of the particular subsection of r. 61.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 under which the initial order was made:

Different determinations justify an order for security for costs under each of rule 61.06(1)(a), (b) and (c). In paying careful attention and deference to the initial decision, a judge hearing a motion under subrule (2) should be mindful of the different considerations that applied in the particular case.

[14] The Security for Costs Order at issue was made pursuant to rr. 61.06(1)(b) and 56.01(1)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. In her endorsement, Pepall J.A. found there was good reason to believe that if the moving parties were successful in the Main Appeal, they would be unable to recover their costs because 938 is a single-purpose corporation and has no assets.

[15] In my view, Pepall J.A.’s findings are sound. The Security for Costs Order was made based on the admitted fact that 938 was incorporated solely to acquire the property in issue and has no assets.

[16] Further, while I recognize that Mr. Singh is not a lawyer and that this inhibits his ability to identify grounds for appeal, I have closely examined the Motion to Strike Order and see no realistic basis upon which it could have been challenged. Frankly, the actions 938 has commenced are legally without hope, yet they are vexing the moving parties, who are pointlessly incurring significant costs to defend them which they will never recover.

[17] I appreciate the public interest in permitting litigants to have their day in court so that an appeal may be determined by a panel on its merits. However, in the circumstances of this case, particularly 938’s lack of assets and the manifest weakness of the Main Appeal, that interest does not prevail. Moreover, the amount Pepall J.A required 938 to post by way of security is modest and does not unfairly impede 938’s opportunity to access justice. If 938 wanted its day in court, this amount should have been paid.

[18] I have also considered whether these motions for dismissal are premature, given that the panel review of the Extension Denial Decision remains outstanding. In my view, the interests of justice are not served by waiting for that review to play out.

[19] In Susin v. Susin, 2008 ONCA 66, 37 E.T.R. (3d) 159, Laskin J.A. similarly dismissed an appeal for failure to post security for costs while an effort to obtain a panel review was outstanding because the appellant had “not put forward any basis to resist” the dismissal motion: at para. 5.

[20] 938’s position in this case is even more dire than that of the appellant in Susin. 938 has provided no meaningful basis to resist the Security for Costs Order, no meaningful basis to resist the Extension Denial Decision and seek a panel review of the Security for Costs Order, and no meaningful basis to doubt the Motion to Strike Order, which is the subject of the Main Appeal.

Conclusion

[21] Accordingly, it is in the interests of justice to grant the orders sought by the moving parties. The Main Appeal, court file number C68695, is dismissed.

[22] Costs are payable on these motions to each moving party in the amount of $1,500.00, inclusive of disbursements and HST.

“David M. Paciocco J.A.”