COURT FILE AND PARTIES
COURT FILE NO.: 01-CV-221790
DATE: 20120313
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Frank Esposito, Plaintiff/Appellant
AND:
City of Toronto, Defendant/Respondent
BEFORE: B.P. O’Marra J.
COUNSEL:
Esposito , for the Plaintiff/Appellant in Person
Matthew Certosimo , for the Defendant/Respondent
HEARD: February 16, 2012
ENDORSEMENT
[ 1 ] This is an appeal from the interlocutory orders of Master Hawkins dated October 18, 2011. Those orders were as follows:
The Appellant’s action was stayed as a result of his failure to pay a prior Order of the Honourable Justice Ducharme dated September 19, 2008 for costs in the amount of $10,000 plus GST.
If those costs are not paid and the master’s stay order lifted within six months the Defendant/Respondent may move for an order dismissing the action with costs.
Costs of the motion before Master Hawkins were fixed in the amount of $30,000 and payable within 30 days.
Issue
[ 2 ] At what point does a persistent and defiant refusal to comply with interlocutory orders lead to the termination of a claim without resort to the merits?
Facts
[ 3 ] To put the chronology of this action in historical terms it was commenced on December 10, 2011, one day short of 3 months after the terrorist attacks of 9/11.
[ 4 ] On August 2, 2007 the Honourable Justice Ducharme dismissed an appeal from an Order of Master Hawkins. On September 19, 2008 Justice Ducharme reviewed written submissions on costs and awarded $10,000 on a substantial indemnity basis plus GST payable forthwith. Despite repeated requests for payment of the ordered costs the Appellant has failed or refused to comply with that costs Order.
[ 5 ] On June 25, 2009 Master Hawkins ordered the Appellant to comply with the order of Justice Ducharme by paying costs of $10,000 plus GST by September 29, 2009. Failure to do so would allow the City to move for dismissal of the action.
[ 6 ] The Appellant did not comply with the Order of June 25, 2009 but chose to seek having the Master’s Order set aside.
[ 7 ] The City moved for an Order to dismiss or stay the action for failure to comply with the Master’s order of June 25, 2009 and the failure or refusal to pay the outstanding costs award.
[ 8 ] On June 23, 2010 Master Hawkins decided to proceed first with the City’s motion to stay or dismiss the action based on Rule 60.12 and the failure to pay the costs awarded by Justice Ducharme on September 19, 2008.
[ 9 ] The motion to dismiss or stay the action was heard over 5 days (June 23, Oct. 20, 2010 and Feb. 9, March 30 and Aug. 31, 2011).
[ 10 ] On October 18, 2011 Master Hawkins granted the City’s motion and ordered the action stayed for failure to comply with the Order of Justice Ducharme. If those costs were not paid and the stay lifted within 6 months, the City could moved for dismissal of the action. Master Hawkins also ordered costs in the amount of $30,000 payable within 30 days.
The Order of October 18, 2011
[ 11 ] The Master ruled on June 23, 2010 that he would hear and decide the Defendant’s motion first. He was entitled to do so because if it was successful it would be unnecessary to hear the Plaintiff’s motion. It would be an understatement to characterize the motion before the Master as thorough. The Appellant filed 20 thick volumes of materials, including a 365 page factum. The motion occupied 5 court days. The court reserved for approximately 6 weeks before ruling on Oct. 18, 2011.
[ 12 ] The Master made the following findings based on the extensive materials and submissions before him.
There was no outstanding appeal from the Order of Justice Ducharme
The Appellant had not paid any of the $10,000 in costs awarded by Justice Ducharme
He rejected the Plaintiff’s set off argument because there was no unpaid award of costs in favor of the Appellant that he could set off against the costs awarded by Justice Ducharme.
The Appellant did not raise the issue of impecuniosity with Justice Ducharme
When Justice Ducharme made the $10,000 costs award on Sept. 19, 2008 the Plaintiff had more than $10,000 in two bank accounts. He made large withdrawals from those account in October and November of 2008. He did not use any of that money to pay any of the costs award.
The Appellant certified that he incurred disbursements of $8080.91 resisting the motion. It seemed the Appellant would rather spend money fighting the motion than use his money towards paying the costs award. If he had used these disbursement costs to pay down the $10,000 costs award the sanction of dismissal would clearly be inappropriate.
If the Appellant had paid off nearly all the $10,000 costs award (which he clearly could have done) this motion would have been over in one hour. Instead it took 5 days to argue the motion.
The Appellant had his priorities wrong. The motion was not about inability to pay costs. Rather it was about choices.
This was a case of refusal to pay and not inability to pay.
The Master declined to consider the merits of the action before deciding what sanction to impose. This was based on the choices made by the Appellant as this case languished in the system for almost 10 years.
The Appellant acted unreasonably.
Analysis
[ 13 ] A Master’s interlocutory Order should be shown deference on Appeal unless the Master made an error in law, exercised his discretion on incorrect principles, or misapprehended the evidence such that there is a palpable and overriding error. Zeitoun v. Economical Insurance Group 2000 14727 (ON CA) , [2000] O.J. No. 1771, Div. Crt at para. 40, 41. Aff’d 2009 ONCA 415 () , [2009] O.J. No. 2003 (C.A.)
[ 14 ] Rule 60.12 permits a court to dismiss a proceeding or make such other order as is just where a party fails to comply with an interlocutory order.
[ 15 ] Master Hawkins case managed this case since Sept. 24, 2002. There were over 40 case conferences, most convened at Plaintiff’s request. He was in an ideal position to decide costs and rendered his ruling after an extended hearing with huge filings by the Appellant.
[ 16 ] There will be situations where a claim or action should be determined for procedural reasons arising from the failure of a party to abide by Orders of the Court. If the merits of a case always had to be determined before such remedies could be imposed there would be little room for the effective application of the rules.
Bottan v. Vroom [2001] O.J. No. 2037 at para. 26 (S.C.J.)
Rules 57.03 and 60.12
[ 17 ] A party should not be able to set up his own pecuniosity as a shield against costs sanctions. To allow that would mean a Plaintiff could bring, resist or appeal motions with no fear of consequences, and would emasculate the powers provided in rules 57.03 and 60.12.
Stacy v. Barrie Yacht club [2003] O.J. No. 4171 (S.C.J.) at para. 15 .
[ 18 ] Impecuniosity is not a shield where a party has consistently failed to act reasonably.
Burrell v. Peel (Regional Municipality) Police Services Board 2010 ONSC 1387 , at para 14 (Div. Crt.)
[ 19 ] I am not persuaded that Master Hawkins erred in law in his Orders of Oct. 18, 2011. Further, I am not persuaded he failed to consider all relevant evidence or that he exercised his discretion on incorrect principles. Further, I am not persuaded that he misapprehended the evidence such that there was a palpable and overriding error.
Result
[ 20 ] Appeal dismissed. Costs are fixed at $17,005.75 all in on a partial indemnity basis payable within 30 days. This cost award is eminently reasonable bearing in mind the excessively lengthy material files by the Appellant and his defiant refusal to comply with prior orders as to costs.
B.P. O’Marra J.
Date: March 13, 2012