COURT OF APPEAL FOR ONTARIO

CITATION: Bogue v. Miracle, 2024 ONCA 643

DATE: 20240828

DOCKET: M55235 (COA-24-CV-0478)

Fairburn A.C.J.O. (Motions Judge)

BETWEEN

Glenn P. Bogue

Applicant/Moving Party

and

Andrew Clifford Miracle, Andrew Clifford Maracle III, Smokin’ Joes and Smokin’ Speedway, Virginia Maracle, Lisa Sexsmith Maracle operating as Smokin’ Speedway and Yolanda Maracle

Respondents

AND BETWEEN

R.A. (Rod) Gram and Glenn Bogue*

Plaintiffs (Respondent/Moving Party*)

and

His Majesty the King (The Crown) and Andrew Clifford Miracle (doing business as Smokin’ Joes)* and Andrew Clifford Maracle III, Virginia Maracle, Lisa Maracle Sexsmith (all 3 doing business as partners in Smokin’ Speedway)

Defendants (Appellant/Responding Party*)

AND IN THE MATTER OF the Arbitration Act, 1991, S.O. 1991, c. 17, as amended; BETWEEN

Andrew Clifford Miracle

Applicant

and

Andrew Clifford Maracle III, Jasmine Johnson, Canadian Imperial Bank of Commerce (CIBC)

Respondents

AND BETWEEN

Andrew Clifford Miracle

Applicant

and

Glenn Bogue

Respondent

AND

In Bankruptcy and Insolvency in the Matter of the Bankruptcy of Andrew Clifford Maracle III of the County of Hastings in the Province of Ontario

Greg Roberts, for the moving party

Ian J. Collins, for the responding party

Heard: August 12, 2024

ENDORSEMENT

[1] Mr. Miracle appeals from the decision of Mew J. who granted summary judgment in favour of Mr. Bogue, who is Mr. Miracle’s former lawyer, in the sum of $2,850,500 on account of outstanding legal fees. Mr. Bogue now brings a motion for security for costs and security for judgment.

(1) Background

[2] In order to understand the relief sought, it is necessary that I first outline some of the history of this litigation, which has been anything but straightforward. In doing so, I rely heavily on the helpful reasons of Mew J., albeit a much more condensed version that is sufficient for the purposes of this motion.

[3] This matter started as a family business dispute. Mr. Miracle and his son, Mr. Maracle, had a business partnership. Both are Mohawks of the Bay of Quinte and therefore subjects of the Indian Act, R.S.C. 1985, c. I-5. The dispute initially centered around the right to profits and ownership of an on-reserve business named “Smokin’ Joes”. Mr. Miracle commenced an action against his son. The parties’ dispute was resolved through arbitration, which resulted in an award in favour of Mr. Miracle in the amount of $11,486,238. The partnership was dissolved through order of the arbitrator and Mr. Miracle ultimately acquired his son’s interest in Smokin’ Joes and the land it is located on.

[4] Mr. Bogue represented Mr. Miracle at the arbitration. He did so on a retainer agreement that reflected a contingency fee of 25 percent of the amount awarded by the arbitrator. Given the size of the settlement, it was a sizeable fee.

[5] To date, Mr. Miracle has not recovered his $11,486,238, although he did acquire Smokin’ Joes.

[6] His son made an assignment in bankruptcy on September 23, 2019, and was discharged on June 24, 2020. The trustee in bankruptcy is Schwartz Levitsky Feldman Inc. (“SLF”). SLF declared a dividend of $1,458,752.16 less a statutory levy of $56,734.08 payable under s. 147 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c B-3. Mr. Miracle is his son’s largest creditor, as his share of the declared dividend is $1,345,636.84.

[7] Mr. Bogue says that he is still owed $2,871,000 in legal fees. Mr. Miracle says he owes Mr. Bogue nothing. This is despite the fact an assignment agreement was entered into by the parties well over a year after the arbitration concluded, which includes Mr. Miracle’s acknowledgement, as reflected by his signature, that he owes Mr. Bogue $2,871,000. Among other things, Mr. Miracle says that he cannot be forced to pay anything when he has not received anything.

[8] In 2019, Mr. Bogue applied to the Superior Court of Justice for the appointment of a receiver, which was granted pursuant to s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Mr. Miracle then appealed the receivership order, asserting various errors made by the motion’s judge: Bogue v. Miracle, 2021 ONCA 278. One of the alleged errors was that the final order for a receiver contravened the Indian Act. This court agreed that this matter had to be resolved and remitted the case back for determination on this point.

[9] The application judge then determined that the appointment of a receiver and manager of Mr. Miracle’s property was permitted by the commercial mainstream exception to s. 89 of the Indian Act. Mr. Miracle again successfully appealed to this court, with the court determining that the Indian Act precluded Mr. Bogue from recouping his fees from on-reserve assets: Bogue v. Miracle, 2022 ONCA 672, 163 O.R. (3d) 641, leave to appeal refused, [2023] S.C.C.A. No. 3 (“Bogue (ONCA 2022)”). The court did not decide the other issues on appeal, including whether Mr. Miracle actually owed Mr. Bogue money under the contingency fee agreement.

[10] The matter then went back to the Superior Court, where Mew J. heard a number of applications and motions: Bogue v. Miracle, 2024 ONSC 1964, 12 C.B.R. (7th) 307. He denied relief to Mr. Miracle, including the request to have Mr. Bogue declared a vexatious litigant, and granted relief to Mr. Bogue, including granting the motion for summary judgment in the amount of $2,858,500. Mew J. ordered that Mr. Miracle could set-off the $30,000 costs award from this court against what he owed Mr. Bogue.

[11] In granting summary judgment, Mew J. noted that Mr. Miracle did not deny that Mr. Bogue represented him before the arbitrator, did not point to any other arrangement for compensating Mr. Bogue for his work, and did not suggest that Mr. Bogue acted for free. As Mew J. put it at para. 129 of his reasons, Mr. Miracle had placed “every possible obstacle” to collecting payment in Mr. Bogue’s way. In the end, Mew J. concluded that Mr. Miracle was bound by the original application judge’s decision as to how much Mr. Miracle owed Mr. Bogue pursuant to the assignment agreement, which is $2,858,500, set off by $30,000 to reflect this court’s costs order.

[12] Justice Mew ordered costs – see Miracle v. Bogue, 2024 ONSC 3028, 13 C.B.R. (7th) 7 – in the following amounts:

• for the vexatious litigant application - $14,938.65

• for the charging order/solicitor’s lien application - $45,748.05

• for the summary judgment motion - $24,340.20

[13] Mr. Miracle has not paid these costs. Nor has he paid the costs in favour of SLF, which total $19,482.33.

[14] Mr. Miracle again appeals to this court. He raises several grounds of appeal. His central position seems to be that a contingency fee does not have to be paid in circumstances where no monies have been collected.

(2) Analysis

[15] Pursuant to r. 61.06(1), Mr. Bogue asks that this court direct that Mr. Miracle pay into court security for costs in the following amounts:

(i) the costs awarded by Mew J. in the total sum of $85,026.90 to Mr. Bogue;

(ii) the costs awarded by Mew J. in the sum of $19,482.33 to SLF; and

(iii) the anticipated costs of this appeal in the amount of $30,000.

[16] Mr. Bogue also asks that this court direct that Mr. Miracle pay into court security for costs in the amount of $1.5 million dollars to “top-up the sum” that is currently held by SLF as a receiver over various assets.

[17] A single judge of this court has discretion to award security for costs of an appeal pursuant to r. 61.06(1):

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.

[18] In Thrive Capital Management Ltd. v. Noble 1324 Queen Inc., 2021 ONCA 474, 156 O.R. (3d) 551, at para. 17, Zarnett J.A. described the two-step reasoning process to be followed in assessing whether to make an order pursuant to r. 61.06(1):

The ordering of security for costs is discretionary; a two-step reasoning process is involved. The first question is whether the requirements of r. 61.06(1)(a), (b), or (c) are met. If so, the second question is whether it would be just to order security, considering the circumstances and the interests of justice: Yaiguaje v. Chevron Corporation, 2017 ONCA 827, 138 O.R. (3d) 1, at paras. 18-19.

[19] Mr. Bogue submits that security for costs may be ordered under r. 61.06(1) (a), (b) and (c).

[20] As for r. 61.06(1)(a), I do not see the grounds of appeal as being entirely frivolous. From the record before me, it appears clear that Mr. Miracle has not received the money awarded by the arbitrator. His chances of recovering any of that money lie, to some extent, with his ability to successfully access his portion of the monies held by SLF. That amount falls many millions of dollars short of what Mr. Miracle is owed under the arbitrator’s decision. Equally, it falls well short of what Mr. Bogue is owed by Mr. Miracle by virtue of the summary judgment motion. And, there are ongoing issues around how that money, held by SLF, is touched by the operation of the Indian Act.

[21] In these circumstances, especially with this court having decided the last appeal on such a narrow basis, it cannot be said that Mr. Miracle’s appeal is frivolous. While I concur in Mew J.’s observations that Mr. Miracle appears to have put up every obstacle possible to Mr. Bogue’s recovery of any money for the work that he did in securing Mr. Miracle such a lucrative result, I cannot say that this appeal is frivolous.

[22] Mr. Bogue also relies on r. 61.06(1)(b) on the basis that r. 56.01(1)(c) applies:

56.01 (1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,

(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part;

[23] Mr. Bogue says that this rule applies since he was a respondent below on Mr. Miracle’s vexatious litigant application and Mr. Miracle has not paid costs awarded by Mew J. on the dismissal of the application.

[24] I would not grant security for costs on this basis. Mr. Miracle’s appeal arises from the summary judgment motion (determining a claim made against him by Mr. Bogue) and not the vexatious litigant application brought against Mr. Bogue.

[25] Turning to r. 61.06(1)(c), there is “other good reason” to grant security for costs.

[26] Under r. 61.06(1)(c), the reason must be a “fairly compelling reason” and one that is related to the purpose for ordering security: Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 633, 268 O.A.C. 172, at para. 8.

[27] This litigation has been, and continues to be, very expensive for Mr. Bogue. He has attempted to get answers from Mr. Miracle about Mr. Miracle’s off-reserve properties and been met with no response at all. This is troubling given that this court clearly said that “s. 89 does not protect Mr. Miracle’s off-reserve assets from seizure” and that the existence and location of those assets would have to be “determined by the receiver”: Bogue (ONCA 2022), at para. 47. This includes real and personal property.

[28] I find that Mr. Miracle has been uncooperative in responding to questions about whether there are enough assets located off reserve to satisfy a costs award arising from the pending appeal should it be dismissed. While a Teraview search has revealed a few assets, they appear to be fully encumbered by a substantial CRA lien and sizable executions, and have no equity. This causes me significant concern, especially given the difficult history of this proceeding. It also causes me concern given Mew J.’s factual finding that Mr. Miracle has done all in his power to prevent Mr. Bogue from receiving any payment at all, despite seeming to acknowledge that Mr. Bogue did work that resulted in the arbitrator’s decision, a decision that resulted in great potential return to Mr. Miracle.

[29] It is for this reason, bearing in mind all of the circumstances, that I conclude that it is just to order security for costs for the outstanding costs orders in favour of Mr. Bogue. Accordingly, I order that costs in the amount of $85,026.90 be paid into court as security for costs before the litigation proceed no later than 30 days after this order issues. In contrast, I would not order security for costs in the amount of $19,482.33 to be paid by Mr. Miracle to SLF. SLF is not here asking for this relief and the amount can await the conclusion of this litigation.

[30] In addition, Mr. Bogue asks for security for costs on the pending appeal. I agree. He should pay security for costs for the appeal he brings to this court, given the history of this matter, Mr. Miracle’s resistance to paying Mr. Bogue almost anything, and the fact that he has been less than cooperative in making it known whether he has any off-reserve assets. Accordingly, he shall pay into court security for costs of the appeal in the amount of $30,000.

[31] Finally, Mr. Bogue asks for security for judgment in the amount of $1.5 million as a “top-up” to the sum that SLF is currently holding. This would effectively ensure that the entire amount that Mr. Bogue says is owing to him is sitting with both SLF Inc. and the court. He says that this is the “only way” in which he will “ever collect the full amount of the judgment” and get the funds off of the reserve.

[32] Security for judgment is an “extraordinary remedy”: Wiseau Studio, LLC. v. Harper, 2021 ONCA 31, at para. 24, motion to review allowed in part, 2021 ONCA 396, leave to appeal refused, [2021] S.C.C.A. No. 464. Such an order should be reserved for the most exceptional circumstances.

[33] Mr. Bogue acknowledges that this is about trying to get money secured into the court that may otherwise be money that rests on reserve. To me, this comes very close, if not crosses over the line into what this court has earlier said cannot be done by virtue of s. 89 of the Indian Act. It is best that all of these issues are sorted out in the normal course and through proper litigation with a proper and complete evidentiary record.

[34] Accordingly, Mr. Miracle shall pay into court security for costs in the total amount of $115,026.90 within 30 days.

[35] The parties may provide me with two pages of submissions regarding their costs of this motion, bearing in mind the partial success of Mr. Bogue.

“Fairburn A.C.J.O.”