Ontario Superior Court of Justice – Divisional Court

Watson v. Boundy

Date: 2000-09-13

J.J. Abdo, for the respondents/defendants/moving parties;

E.P. Polten, for the appellant/plaintiff.

(Court File No. 208/2000)

I. Nature of the Motion

[1] O'Driscoll, J.: The respondents/defendants:

1. move under rule 63.01(5) seeking an order lifting the automatic stay (imposed by rule 63.01(1) by the filing of the appellant's Notices of Appeal) of the award of $84,000 solicitor-and-client costs in favour of the respondents made by Low, J., on March 19, 1999, and

2. move under rule 61.01(1) for an order that the appellant post security for the costs of this appeal in the amount of $14,400.

The first motion fails and the second motion succeeds.

II. Background

[2] In 1993, the Association of Professional Engineers of Ontario (APEO) received a complaint against the appellant, John M. Watson, relating to a report prepared by him in 1989.

[3] The two (2) male respondents, employees of the APEO, processed the complaint and placed it before the Complaints Committee of the APEO. On July 29, 1993, that Committee dismissed the complaint.

[4] Watson, thereupon, filed complaints with the APEO about Boundy and Smythe because they processed the complaint against him. The Complaints Committee of the APEO dismissed those complaints.

[5] On November 10, 1997, Watson brought this action against APEO, Boundy and Smythe and claimed damages for:

1. malicious prosecution,

2. abuse of process, and

3. breach of statutory duty.

[6] On December 6, 1998, after nine (9) days of a non-jury trial, Low, J., dismissed Watson's action against all defendants. On December 17, 1998, Low, J., awarded solicitor-and-client costs to the respondents/defendants. On March 19, 1999, Low, J., fixed those costs at $80,000 for fees, $4,000 for disbursements, plus G.S.T.

[7] On January 5, 1999, Watson's solicitor filed a Notice of Appeal appealing the judgment dismissing the action and also the award as to costs. On March 30, 1999, counsel for Watson filed a Supplementary Notice of Appeal. The Notices of Appeal contain some forty-nine (49) alleged grounds of error by the trial judge.

[8] The material discloses that Watson has been billed $185,000 by his own lawyers regarding this lawsuit and has, to date, paid those lawyers $173,000.

[9] The material also discloses that none of the $84,000 costs has been paid by Watson.

[10] The Factum of the Moving Parties/defendants states as follows:

"16. Watson is seventy-three years old and retired. He has admitted that, as a result of this litigation, he is 'burdened with a staggering financial debt'. Watson has further admitted that the costs of this litigation have consumed his lifetime savings, and he has been required to borrow money in order to 'survive'."

III. The Reasons for Judgment of Low, J.

[11] Low, J., found that the action was devoid of merit. During her reasons, she said:

"This was not a situation where there was a good cause of action which was defeated by statutory immunity. There was no evidence to support any of the causes of action asserted. Reasons for judgment: page 35.

"This action had no merit and was prosecuted, I find, with the oblique purposes I have set out above. Ibid: page 36.

"Solicitor-and-client costs are awarded … (1) where the conduct of the litigant has been oppressive, contumacious or vexatious, and (2) where there have been unfounded allegations of fraud or other improper conduct which is seriously prejudicial to the character or reputation of the party … In my view, those elements are present here." Ibid: page 36.

IV. The Specific Rules of Civil Procedure Applicable to this Motion

(a) "Rule 63.01(1)

The delivery of a notice of appeal from an interlocutory or final order stays, until the disposition of the appeal, any provision of the order for the payment of money, except a provision that awards support or enforces a support order."

(b) "Rule 63.01(5)

A judge of the court to which the appeal is taken may order, on such terms as are just, that the stay provided by subrule (1) … does not apply."

(c) "Rule 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."

V. Issue # 1: Should the automatic stay imposed under rule 63.01(1) be stayed under rule 63.01(5)?

[12] In my view, the respondents/defendants/Moving Parties have not brought forth any evidence of "demonstrable and unusual hardship to the respondent" if the stay remains in place. The material discloses that the APEO, as of December 31, 1994, had holdings of cash and marketable securities net of over $6.9 million.

See: Ryan v. Laidlaw Transportation Ltd. (1994), 1994 616 (ON CA), 74 O.A.C. 67; 19 O.R.(3d) 547 (C.A.), 549, per Austin, J.A.

[13] Accordingly, the application under rule 63.01(5) is dismissed.

VI. Issue # 2: Should security for costs be ordered?

[14] The trial judge was of the view that the action was frivolous, vexatious and without merit. With respect, I agree with the trial judge. The material indicates that the appellant is required to borrow money to "survive".

[15] In Savarin Ltd. v. Fasken & Calvin, [1995] O.J. No. 2685 (Ont. C.A.), Osborne, J.A., said:

"[12] In my view the appeal is frivolous and vexatious and there is good reason to believe that the Savarin has insufficient assets in Ontario to pay the costs of the appeal. In my view the Savarin should post security for costs of the appeal in the amount of $7,500."

[16] The words of Osborne, J.A. (above), are applicable to this application.

VII. Result

[17] The motion under rule 63.01(5) is dismissed.

[18] The motion under rule 61.06(1) is allowed and the amount of $14,400 is to be posted as security for costs of the appeal within thirty (30) days of the date of these reasons.

VIII. Costs

[19] Costs of these motions are reserved to the panel of judges hearing the appeal.

Order accordingly.