Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220211 DOCKET: M53086 & M53113 (C70048)

Tulloch J.A. (Motion Judge)

BETWEEN

Mary Richardson and Kristina Tracey Applicants (Respondents/Moving Parties)

and

John Arsenov and Jan-Lee Hughes-Arsenov Respondents (Appellants/Responding Parties)

Counsel: Michael A. Jaeger, for the moving parties Paul Riddles, appearing as amicus curiae Gerry Smits, for the responding parties

Heard: January 28, 2022 by video conference

REASONS FOR DECISION

[1] The moving parties, Mary Richardson and Kristina Tracey, bring this motion seeking an extension of time to file a cross-appeal under r. 61.07 (a) and (b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. They also bring a second motion seeking security for costs under r. 61.06(1) on the grounds that the responding parties’ appeal is frivolous and vexatious, and the responding parties do not have sufficient assets in Ontario to pay the costs of the appeal. They finally seek costs of the motion on a substantial indemnity basis plus HST.

[2] The moving parties and the appellant John Arsenov are siblings. Their father, Rudy, is elderly and incapable of managing his affairs. The moving parties allege that the Arsenov appellants “engaged in a pattern of serious emotional and financial abuse of Rudy” before placing him in a nursing home. By order dated September 14, 2021, John was removed as Rudy’s power of attorney for property and personal care.

[3] The primary order under appeal by the appellants is the October 25, 2021 judgment of Skarica J. in which the moving parties were successful in obtaining a judgment under r. 49.09 against the appellants. The responding parties have since appealed Skarica J.’s decision.

Analysis

(1) Extension of time

[4] The first motion is for an extension of time to serve and file a notice of cross-appeal. The moving parties also seek an order abridging the time for service and filing.

[5] The moving parties state their notice of appeal was not filed within the appropriate period because the moving parties did not know that, in the event the responding parties’ appeal is granted in whole or in part, if the moving parties wished to obtain relief other than what is specified in the order appealed from, they needed to also file a notice of appeal. The moving parties argued that they always intended to raise arguments regarding alternate relief at the appeal hearing, namely that even if the appeal were to be granted, the appellants should still be liable for partial summary judgment in the amount of $127,498.98. This is due to key admissions made by the responding parties as to the amount owing to Rudy. The moving parties further submit that the responding parties’ then-lawyer confirmed and provided documentation confirming that the above stated balance of $127,498.98 was due and payable to Rudy.

[6] While the moving parties delayed in filing their notice of cross-appeal, I am satisfied that they had every intention of arguing that the responding parties should still be liable for partial summary judgment in the amount of $127,498.98. I note that the length of the delay is not substantial in all the circumstances, as the subject order was dated October 25, 2021. With respect to the issue of prejudice, I am satisfied that the responding parties will not suffer any prejudice if the extension of time is granted. Lastly, the moving parties have raised bona fide issues that were before the court when the order under appeal was made, and I agree with the moving parties that there is merit to this application.

[7] I would therefore grant the motion for an extension of time and grant an order abridging the time for service and filing.

(2) Security for Costs

[8] The second motion seeks an order for security for costs. A court may make an order for security for costs pursuant to r. 61.06(1) where certain circumstances are present:

61.06 (1) In an appeal where it appears that,

(a) 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) an order for security for costs could be made against the appellant under rule 56.01; or

(c) for other good reason, security for costs should be ordered,

a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just.

[9] In addition to the three factors enumerated in s. 61.06(1), a court must also consider whether it would be just to order security, having regard to the circumstances and the interests of justice: Yaiguaje v. Chevron Corporation, 2017 ONCA 827, 138 O.R. (3d) 1, at para. 22.

[10] The moving parties argue that an order for security for costs is justified under ss. 61.06(1)(a) and (c). I am satisfied that such an order should be made. I agree with the moving parties that there is good reason to believe the appeal is frivolous and vexatious. Having reviewed the responding parties’ amended notice of appeal and motion materials, in my view there is good reason to believe the appeal has little prospect of success. The responding parties argue they were not permitted to participate meaningfully in the motion, contrary to equity and fairness and that in the absence of such an opportunity, the case was not adjudicated on its merits. They also take issue with the findings of the motion judge that a valid settlement offer was tendered and accepted. They also appeal the costs awarded.

[11] In my view, each of these grounds has little prospect of success. The responding parties were effectively the architects of their own demise: it is by their own actions in cycling through counsel and in failing to respond in a prompt fashion to the proceedings that the October 25, 2021 order was made with minimal participation by their counsel. The responding parties’ materials and arguments give me good reason to believe that there is little chance of success on the issue of the impugned settlement offer, as well as with respect to the costs award, which is owed significant deference.

[12] As to the vexatious nature of the appeal, I am mindful of the numerous changes to counsel and delays that have been suffered by the moving parties over the past two years. Counsel for the responding parties suggested that a nominal amount of the costs had been paid but no evidence of such payment was provided to the court. Indeed, I find that, as stated by the moving parties, the responding parties have failed to fulfill the terms of previous court orders issued.

[13] As to the responding parties’ ability to satisfy potential costs of the appeal, the responding parties are currently subject to a power of sale proceeding against their residence, which is also their primary asset. I was advised by counsel at the hearing that the responding parties were on the precipice of losing their home. I note also a lack of evidence provided as to the responding parties’ financial state of affairs and any ability to satisfy costs of the appeal. While the responding parties claim they have funds available from John Arsenov’s limousine business, they have not established that these funds constitute sufficient assets for the costs of the appeal. I am prepared to infer on the basis of counsel’s submissions, the appellants’ conduct, and the evidence before me, that there is good reason to believe the responding parties have insufficient assets in Ontario to pay the costs of the appeal.

[14] I am also satisfied that it is in the interests of justice to order security. The moving parties have not delayed in bringing this motion, and the amount of the security sought is not prohibitive. While I am conscious of the responding parties’ current unfortunate situation regarding the power of sale proceedings and counsel’s submissions that the responding parties not be denied the opportunity to pursue their appeal, in my view they have not established impecuniosity or any other legitimate access to justice concerns: Zeitoun v. Economical Insurance Group (2008), 91 O.R. (3d) 131 (Div. Ct.), at paras. 45-46, aff’d 2009 ONCA 415, 96 O.R. (3d) 639.

[15] Given my finding that security for costs is justified under s. 61.06(1)(a), I need not consider s. 61.06(1)(c). I am mindful that resort to this latter section should be used sparingly: Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 633, 268 O.A.C. 172, at para. 8.

Disposition

[16] The motion for security for costs is granted in the amount of $18,000, payable no later than February 28, 2022, failing which the moving parties may move to have the matter struck by the Registrar. The motion for an extension of time is also granted, and I make an order abridging the time for service and filing.

[17] Costs are awarded to the moving parties in the amount of $5,000 all-inclusive, payable by March 11, 2022.

“M. Tulloch J.A.”