COURT OF APPEAL FOR ONTARIO DATE: 20240522 DOCKET: M55101(COA-24-CV-0377)

Zarnett J.A. (Motions Judge)

BETWEEN

One Clarendon Inc. Plaintiff/Defendant by Counterclaim (Respondent/Moving Party)

and

Kathleen Finlay and John Finlay also known as Richard Finlay and J.R. Finlay Defendants/Plaintiffs by Counterclaim (Appellants/Responding Parties)

Counsel: Sanj Sood, for the moving party No one appearing for the responding parties

Heard: May 15, 2024

ENDORSEMENT

This Motion

[1] The responding parties (the “Finlays”) have an appeal pending in this court from two orders of Black J. of the Superior Court. The orders struck their defence and counterclaim, ordered them to pay rental arrears and costs, terminated their tenancy, and granted their landlord (“Clarendon”) leave to obtain a writ of possession for the rented premises.

[2] Clarendon obtained an order from Lauwers J.A. on April 26, 2024 (the “April 26 Order”) requiring the Finlays to post security for costs of the appeal and the proceedings below by May 3, 2024, and lifting the automatic stay that applied to the writ of possession: One Clarendon Inc. v. Finlay, 2024 ONCA 323. I am told that once the stay was lifted, Clarendon proceeded to regain possession of the premises by evicting the Finlays. The Finlays did not apply for a panel review of the April 26 Order.

[3] Clarendon now seeks an order dismissing the Finlays’ appeal under r. 61.06(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that an appeal may be dismissed where an appellant has not complied with an order for security for costs.

The Parties’ Submissions

(1) Clarendon’s Position

[4] There is no issue that the security for costs required by the April 26 Order has not been posted. Although an order dismissing an appeal does not follow automatically from a default in posting security, where the default is established, the onus shifts to the party in default to show a compelling reason why their appeal should not be dismissed. Clarendon argues that no compelling reason has been shown. It submits that an order dismissing the appeal is justified.

(2) The Finlays’ Position

[5] The Finlays did not appear on the motion or file any material in response to it before the day of the motion.

[6] Mr. Finlay sent an email to the court on the morning of the motion. He indicated that he had wanted to appear “in order to categorically dispute the conclusion reached by” Lauwers J.A. in making the April 26 Order, but he was too ill to participate. He went on to make essentially three points: (i) that the April 26 Order was unjust, as the hearing that led up to it ought to have been adjourned for medical reasons; (ii) that the orders of Black J. were made without the Finlays’ case having been heard; and (iii) the April 26 Order imposed an impossible financial hurdle and effectively barred the right to appeal from what Mr. Finlay sees as the injustice of Black J.’s orders.

Analysis

(1) The Effect of Mr. Finlay’s Email

[7] There have been requests by the Finlays for adjournments at earlier stages of the proceedings that have been rejected due to their timing and absence of support.

[8] Prior to the hearing before Black J. on March 27, 2024 which gave rise to the order for payment and possession under appeal, the Finlays provided a letter to the court asking for a “pause” in the proceedings due to Mr. Finlay’s medical condition. Black J. rejected the request stating:

In keeping with recent communications, Ms. Finlay says that her brother, the co-defendant John Finlay, is suffering from a cardiac condition, and that the stress of learning of the outcome of these proceedings, as well as the stress associated with vacating the premises, will risk Mr. Finlay deteriorating further, or even succumbing to his illness.

I am skeptical about this claim. It has been made repeatedly during the course of these proceedings and, despite the court noting at various points that the claim has never been accompanied by credible medical evidence, the claim is being advanced yet again without such supporting evidence. Moreover, despite Ms. Finlay’s contention (in her very articulate letter) that she is necessarily spending all of her time caring for her brother, and that, as noted, involvement in ongoing legal proceedings is stressful and not generally possible given the time constraints and demands of Mr. Finlay’s condition, the defendants were able to, and did in fact, file materials on March 25, 2024, in the context of a motion before the Ontario Human Rights Tribunal (where the defendants have brought a proceeding relative to many of the same matters at issue in this lawsuit).

[9] On the motion that led to the April 26 Order, Lauwers J.A. was faced with an emailed request to adjourn. He denied it, stating:

The Finlays did not appear on the argument of this motion on the basis that Mr. Finlay is ill and is in the hospital and that Ms. Finlay must accompany him. Ms. Finlay sent emails to the court requesting an adjournment. The adjournment request is denied. The lengthy record of proceedings between the landlord and the tenants demonstrates frequent resort by the Finlays to medical reasons for failing to attend proceedings, or to attend to their responsibilities as litigants.

[10] Mr. Finlay’s email does not expressly request an adjournment of this motion. It does not suggest that an adjournment of any reasonable length would allow him to eventually participate or indicate when Ms. Finlay could participate. I interpret Mr. Finlay’s email as an explanation as to why he is not attending, a statement that his non-attendance is not to be taken as non-opposition to the motion, and as a summary of what he would have said had he attended. I have treated it in that way.

[11] It is therefore appropriate to determine the present motion on its merits.

(2) Should the Motion Be Granted?

a. Background and Procedural Context

[12] The Finlays became residential tenants of Clarendon in 2021. They stopped paying rent about four months after they became tenants. In April 2022, Clarendon commenced an action to terminate the tenancy and for rent owing.

[13] It is not necessary to summarize the many steps taken in the litigation. But, of note, an order was made on March 14, 2023 (the “March 2023 Order”) which required payment of rent arrears and ongoing monthly rent. The Finlays did not comply with that order. They brought and abandoned a motion for leave to appeal the March 2023 Order in Divisional Court, and then brought and abandoned an appeal from that order in this court.

[14] On March 12, 2024, due to their breach of the March 2023 Order, Black J. struck the Finlays’ statement of defence and counterclaim and ordered that Clarendon could move for judgment and possession.

[15] On March 27, 2024, Black J. ordered the Finlays to pay Clarendon rent arrears of $153,539.00, ordered their tenancy terminated, declared that Clarendon was entitled to vacant possession within ten days, and gave Clarendon leave to obtain a writ of possession. Black J. described the behaviour of the Finlays, including in the litigation leading up to his judgment, as conduct that “ seems to have been calculated to [allow the Finlays to] live in [Clarendon’s] premises for as long as possible without paying rent, and to make use of the court’s processes to facilitate that effort.”

[16] The Finlays did not vacate the premises within ten days, and on April 5, 2024 served a notice of appeal from Black J.’s March 12, 2024 and March 27, 2024 orders.

[17] Clarendon subsequently obtained the April 26 Order lifting the automatic stay that would otherwise have applied to prevent the eviction of the Finlays under the writ of possession pending their appeal. That order also directed the Finlays to pay security for costs in the amount of $261,374.10 by Friday, May 3, 2024. In his reasons, Lauwers J.A. concluded at para. 8, that “there is good reason to believe that the appeal is frivolous and vexatious and that the [Finlays have] insufficient assets in Ontario to pay the costs of the appeal”. He observed, at para. 9, that the Finlays’ strategy throughout, including in their appeal to this court, was “frivolous, vexatious, and abusive”. As support , he cited the decisions of Black J., a prior costs decision of this court (which stated that the Finlays’ conduct appeared to be abusive of the court system), and the “litany of proceedings” that the Finlays had dragged Clarendon through or required it to bring.

[18] At the hearing of this motion, counsel for Clarendon advised that the writ of possession has been enforced and the Finlays have been evicted from the premises.

[19] Nothing has been paid or posted for security for costs.

b. Discussion

[20] Rule 61.06(2) permits a judge to dismiss an appeal if an appellant fails to comply with an order for security for costs.

[21] Once a failure to comply has been established, the onus is on the defaulting appellant to provide compelling reasons why dismissal of the appeal is not in the interests of justice: 9383859 Canada Ltd. v. Navaratnam, 2021 ONCA 210, at para. 11. In making such a determination, deference is owed to the decision to award security, and the ground on which security was ordered is important. Impecuniosity and the reasons for it may be considered, as may the merits of the appeal: 9383859 Canada Ltd v. Saeed, 2023 ONCA 627, at para. 8.

[22] On my review of the record, taking into account Mr. Finlay’s emailed submissions, I conclude that the Finlays have not provided a compelling reason why their appeal should not be dismissed.

[23] The Finlays complain that the order for security should not have been made, and that the request for it should have been adjourned. However, that submission flies directly in the face of the requirement that, on this motion, deference is to be shown to the decision to award security. As the court stated in Saeed, at para. 8, an “appellant who simply re-argues that security is unwarranted will likely be unsuccessful” in avoiding dismissal.

[24] The ground on which security was ordered, especially as it relates to the merits of the appeal, reinforces the conclusion that a compelling reason to avoid dismissal is absent. The order for security was premised on a finding that the appeal appeared frivolous and vexatious [1]: r. 61.06(1)(a).

[25] In addition to the deference owed to the finding that the appeal appears to be frivolous and vexatious, I note the following. The writ of possession has been enforced and the Finlays have been evicted; the spectre of mootness therefore hovers over those parts of their appeal that relate to termination of the tenancy and possession of the premises. In so far as the notice of appeal complains of the striking of their defence and counterclaim on March 12, 2024, that was based on the Finlays’ failure to pay the rent required by the March 2023 Order – an order that they did not successfully appeal. Once their pleadings were struck, as Black J. noted, Clarendon was entitled to the relief granted on March 27, 2024, and the letter that the Finlays sent to explain their non-attendance on that date did “not contest the substance of Clarendon’s request.” Finally, although the notice of appeal makes allegations of bias against Black J., nothing in the record for this motion supports those allegations.

[26] Finally, I note that under r. 56.05, made applicable to appeals by r. 61.06(1.1), the Finlays are prevented from proceeding with their appeal without leave until the security ordered has been posted. Although Mr. Finlay’s email refers critically to the amount required to be paid under the April 26 Order, the components of the security are primarily amounts the Finlays were previously ordered to pay as rent arrears and costs. Mr. Finlay does not suggest a lesser, or any, amount that the Finlays would post. In other words, the Finlays have not sought leave to continue with the appeal notwithstanding their default nor indicated any basis on which they could successfully obtain leave to proceed. Accordingly, the choice is not between dismissal of the appeal and the appeal proceeding. It is between an appeal which is effectively stayed with no prospect of it proceeding and dismissal.

c. Conclusion

[27] It is in the interests of justice to impose the consequence of dismissal of the Finlays’ appeal as a result of their failure to post security for costs in accordance with the April 26 Order.

Disposition

[28] The appeal is dismissed. Clarendon is entitled to costs of this motion in the all-inclusive amount of $5,000.

“B. Zarnett J.A.”

[1] And that the Finlays appeared to be without sufficient assets in Ontario to pay the costs of the appeal.