Court File and Parties

CITATION: Hordo v. Zweig, 2022 ONSC 4344

DIVISIONAL COURT FILE NO.: 077/22

DATE: 2022-07-26

SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT

RE: Diana Hordo and Michael Hordo, Appellants/Responding Parties

AND:

Arnold H. Zweig, Respondent/Moving Party

BEFORE: Nishikawa J.

COUNSEL: Diana Hordo and Michael Hordo, in person Peter Smiley, for the Respondent/Moving Party

HEARD at Toronto: June 24, 2022 (By videoconference)

Endorsement

Overview and background

[1] The Respondent, Arnold Zweig, brings a motion for security for costs in the amount of $39,350 in relation to the appeal of the Appellants, Michael Hordo and Diana Hordo, of the decision of Associate Justice Jolley dated January 20, 2022 (the “Decision”).

[2] In the Decision, the Associate Justice granted the Respondent’s motion to dismiss the Appellants’ negligence action for failure to pay four outstanding costs orders totalling $29,350.00. The history of the proceeding is detailed in the Decision and will not be repeated here.

[3] At a case management conference before D.L. Corbett J. of this court on May 9, 2022, stated as follows:

10. The respondent has indicated that he wishes to move for security for costs in light of the difficulties he has had moving forward with enforcement of the predicate costs orders. In short, the appellants have not paid the predicate costs orders and appear not to have cooperated with efforts by the respondent to take enforcement steps. An order facilitating enforcement would be less draconian than an order for security for costs requiring or securing payment of the predicate costs orders pending appeal. This court is inclined to take this less draconian path, but only if the appellants agree; otherwise this court will schedule the motion for security for costs, and the moving party will be able to rely on the failure of the appellants to agree to a less draconian remedy in support of the motion for security for costs.

[4] The Appellants did not pay the outstanding costs or agree to an order facilitating enforcement.

[5] At the hearing, the Appellants sought an adjournment to cross-examine the Respondent’s counsel, Mr. Smiley, and R. Leigh Youd. The Respondent stated that the reply affidavit would be withdrawn. While Mr. Hordo raised some health concerns arising from a recent procedure, the Appellants did not seek an adjournment on this basis. I dismissed the adjournment request and proceeded to hear the motion.

[6] The Appellants had previously indicated at a case conference that they would bring a motion for fresh evidence, which was scheduled to be heard with the Respondent’s motion. At the motion hearing, the Appellants confirmed that they had not brought a motion for fresh evidence.

Analysis

The Applicable Principles

[7] Rule 61.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides as follows:

Security for Costs of Appeal

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.

[8] The Respondent relies on r. 61.06(1)(b) but submits that the requirements of r. 61.06(1)(a) would also be met.

[9] Rule 56.01 of the Rules of Civil Procedure further states as follows:

Where Available

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,

(a) the plaintiff or applicant is ordinarily resident outside Ontario;

(b) the plaintiff or applicant has another proceeding for the same relief pending in Ontario or elsewhere;

(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;

(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;

(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent; or

(f) a statute entitles the defendant or respondent to security for costs.

[10] The principles governing a motion for security for costs on appeal are summarized in Yaiguaje v Chevron Corp., 2017 ONCA 827, at paras. 19, 24 and 25:

[19] In determining whether an order should be made for security for costs, the overarching principle to be applied to all the circumstances is the justness of the order sought.

[24] Courts in Ontario have attempted to articulate the factors to be considered in determining the justness of security for costs orders. They have identified such factors as the merits of the claim, delay in bringing the motion, the impact of actionable conduct by the defendants on the available assets of the plaintiffs, access to justice concerns, and the public importance of the litigation.

[25] While this case law is of some assistance, each case must be considered on its own facts. It is neither helpful nor just to compose a static list of factors to be used in all cases in determining the justness of a security for costs order. There is no utility in imposing rigid criteria on top of the criteria already provided for in the Rules. The correct approach is for the court to consider the justness of the order holistically, examining all the circumstances of the case and guided by the overriding interests of justice to determine whether it is just that the order be made.

Application to the Facts

[11] The Respondent seeks security for costs in the amount of $39,350, which consists of $29,350 for the outstanding costs orders and $10,000 for the costs of the Appellants’ appeal.

[12] In this case, I find that the requirements of Rule 56.01(1)(c) are met. It is clear that the Appellants are subject to costs orders totalling $29,350 and that those amounts remain unpaid.

[13] The Appellants take the position that the costs orders are illegitimate or were obtained by fraud. They rely on Rule 59.04(1) of the Rules of Civil Procedure to argue that the orders cannot be enforced because they were not properly issued and entered. Rule 59.01, however, specifically states that an order is effective from the date on which it is made. The Associate Justice expressly found that the orders need not be stamped or entered to be enforceable. I agree. To argue that an order is unenforceable until it is stamped would be to raise form over substance.

[14] The Appellants, relying on s. 106 of the Courts of Justice Act, C. c.43, further submit that the costs orders are all stayed because they have sought leave to appeal to the Supreme Court of Canada. The Appellants’ reliance on s. 106, which states that a court “may stay any proceeding in the court on such terms as are considered just” is misplaced. That provision does not result in an automatic stay of an order upon a party seeking leave to appeal to the Supreme Court of Canada.

[15] In addition, as noted by D.L. Corbett J. in his case management endorsement, a motion for leave to appeal does not have the effect of staying the impugned orders.

[16] Similarly, the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5, which applies to judgments obtained in other province and territories, has no application here.

[17] The remaining issue is the justice of such an order in the circumstances of this case. In my view, the justice of the case supports an order for security for costs. The Appellants commenced an action for solicitor’s negligence against the Respondent in 2013. They repeatedly make serious allegations against him and others that have consistently been rejected by various levels of the courts. Moreover, the proper administration of justice requires that orders of the court be respected and complied with. The Appellants’ obstinacy in refusing to pay the costs orders is puzzling, given that their legal position has been considered and rejected multiple times. At the motion hearing as well, I explained to the Appellants that orders are enforceable when made, and the rationale behind this principle. The Appellants nonetheless maintain their position that the formal requirements of signature and entry are necessary.

[18] As I have found that the requirements under Rule 56.01(1)(c), and therefore Rule 61.06(1)(b), have been met, I need not consider whether the requirements of Rule 61.06(1)(a) have been met.

[19] Finally, the Appellants request that this appeal be elevated to the Court of Appeal under Rule 22 of the Rules of Civil Procedure or that this motion be adjourned so that they may bring a motion to the Court of Appeal because the appeal involves a matter of national or public interest. Rule 22.01(1) states, however, that where the parties to a proceeding concur in stating a question of law in the form of a special case for the opinion of the court, any party may move before a judge to have the special case determined. There is no such agreement here. Even if there were, I would see no basis to elevate this matter to the Court of Appeal.

Conclusion

[20] Accordingly, the motion is granted. The Appellants shall post security for costs in the amount of $39,350.00.

[21] The Respondent seeks full indemnity costs of the motion in the amount of $6,000.00, including disbursements and HST. The Respondent’s partial indemnity costs, including disbursements and HST, are $3,642.89.

[22] As the successful party, the Respondent is entitled to costs. The Respondent seek full indemnity costs on the basis that the Appellants have brought multiple frivolous and vexatious motions and appeals, and that they ought to have facilitated enforcement of the cost orders. While there is some merit to the Respondent’s submissions, in respect of this motion, I do not find that this is an exceptional case of reprehensible, scandalous or outrageous conduct warranting substantial or full indemnity costs. Costs of the appeal are fixed at $3,600.00 on a partial indemnity basis, payable by the Appellants within 30 days.

[23] Based on the Appellants’ prior conduct in refusing to approve orders as to form and content, the order shall be effective from the date it is made, without need for issuance or entry.

“Nishikawa J.”

Date: July 26, 2022