COURT FILE NO.: CV-08-0234-00
DATE: 2012-06-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sean Gamble
Nancy Erickson, for the responding party
Plaintiff
- and -
Best Western Lakeside Inn and Conference Centre et al
Paul Ratcliffe, for the moving party
Defendant
HEARD: May 31, 2012,
at Thunder Bay, Ontario
Regional Senior Justice H.M. Pierce
Reasons on Motion for Security for Costs
Introduction
[1] The plaintiff alleges that he was assaulted while visiting at the premises of the defendant hotel in 2006. His alleged assailants are also defendants in this action. The plaintiff sued the hotel, claiming that it was negligent in failing to provide appropriate security, monitor the premises or evict the trouble-makers. A trial record has been passed and the case is in the process of being pretried.
[2] The hotel estimates that its substantial indemnity costs to take the case to trial will be $164,000. It moves for an order for security for costs in the amount of $125,000 to secure past and anticipated future costs of a jury trial. It submits that:
• the plaintiff is resident outside Ontario;
• he is not impecunious;
• he does not have a meritorious case against the hotel.
The plaintiff submits:
• that the plaintiff is impecunious;
• that there has been an unconscionable delay on the part of the defendant in bringing this motion;
• that granting the order would stifle a meritorious claim.
The Facts
[3] This action was started in 2008. In August of that year, the plaintiff moved to the island of Saba, a municipality belonging to the Netherlands located in the Caribbean. He remained there during the course of his studies at the medical school. In October, 2010, the plaintiff moved to Kansas City, U.S.A. to further his medical studies. The plaintiff is interning and will begin a medical residency effective July 1, 2012. He anticipates remaining in Kansas City for two further years.
[4] The plaintiff contends that the defendant was aware he was out of Ontario in August, 2009 but took no steps to move for security for costs. In the interim, he has travelled to Thunder Bay for examinations for discovery, incurring legal fees. He has a current debt load of $208,000. His income from the residency will be $46,000 as of July 1, 2012. Pending employment, he survives on a loan from his mother of $19,000 and credit. He says that he is unable to borrow to satisfy an order for security for costs.
[5] The plaintiff admits that he owns no property in Ontario or Kansas City. His budget, including provision for payment of student loans, exhausts his monthly income.
Analysis
[6] This motion is brought pursuant to Rule 56.01(1)(a) of the Rules of Civil Procedure, O. Reg. 194. The relevant part of the rule [check cite] provides:
The court, on motion by the defendant ... in a proceeding may make such order for security for costs as is just where it appears that,
(a) the plaintiff ... is ordinarily resident outside Ontario...
[7] The plaintiff contends that the defendant’s delay in bringing this motion is a threshold issue; that its delay is unjustified and is fatal to the motion. See: Pelz v. Anderson, 2006 CanLII 39571 (ON SC), [2006] O.J. 4726 (Sup.Ct.J.,Master). At para. 23 of Pelz, Master Graham reviewed the principles relating to delay in moving for security for costs. He concluded that the defendant must bring the motion after delivery of the statement of defence and promptly after learning there is a basis for the motion so that the plaintiff does not incur the expense of advancing the lawsuit only to be met with an order to post security for costs.
[8] If the plaintiff can prove that the delay in bringing the motion has prejudiced him, the court may decline to order security for costs. Failure of the defendant to explain the delay, even where there is no prejudice, is still fatal to the motion.
[9] In this case, the defendant has explained the delay in bringing the motion. The plaintiff’s initial examination for discovery took place in August, 2009. His continuing examination for discovery was adjourned on consent to await the decision of the Criminal Injuries Compensation Board concerning the plaintiff’s claim. His second examination took place in June, 2010. At that time, the plaintiff awaited confirmation about an internship in the United States but also anticipated applying for a residency in Canada. His wife had then returned to Kenora, Ontario. Thus, the prospect of the plaintiff’s return to Ontario was not unreasonable.
[10] A litigation timetable was ordered in May, 2011 at a status hearing. The plaintiff was ordered to satisfy his undertakings and to serve his expert reports by October, 2011. The timetable also required completion of outstanding examinations of the defendants with service of expert reports by December, 2011. Pretrial occurred in February, 2012. The hotel contends that at the pretrial it became apparent that the plaintiff would not be returning to Ontario in the near future. Shortly after the pretrial, the hotel sought particulars from the plaintiff about his financial circumstances, which form the evidentiary basis for this motion.
[11] I am not satisfied that delay in bringing the motion is either unexplained or fatal to the motion. The conduct of the litigation has proceeded at a pace facilitating the plaintiff’s medical studies. Apart from his submission that he attended twice in Thunder Bay for examinations at an unspecified cost, there is no evidence about costs he has incurred to date to fund the litigation. There is no other evidence of prejudice to him.
[12] The legal principles governing security for costs are set out at para. 7 of Coastline Corp. v. Canaccord Capital Corp., 2009 CanLII 21758 (ON SC), [2009] O.J. No. 1790 (Sup. Ct. J.,Master).
[13] The onus is on the defendant to establish that the plaintiff is ordinarily resident outside Ontario. This fact is not in dispute. Then the onus shifts to the plaintiff to satisfy the court that an order for security for costs would be unjust. The plaintiff can satisfy the onus by showing that he has sufficient assets in Ontario to pay costs if ordered. The plaintiff concedes he has no assets in Ontario.
[14] Alternatively, the plaintiff may establish that he is impecunious but justice demands that he be permitted to continue with his action on the grounds that it is not “plainly devoid of merit.” In order to prove impecuniosity, a plaintiff must make “complete and accurate disclosure” of his financial position.
[15] If the plaintiff cannot satisfy the court that he is impecunious but he does not have sufficient assets in Ontario to pay a costs order, then he must “meet a high threshold to satisfy the court of its chance of success.” In evaluating the merits of the plaintiff’s case, the court is not required to enter into a detailed inquiry. Rather the court may consider the pleadings and such evidence as is filed on the motion. If the case is complex or turns on credibility, an extensive assessment of the merits is not appropriate on an interlocutory motion.
Is the plaintiff impecunious?
[16] “Impecunious” is defined in Garner’s A Dictionary of Modern Legal Usage, 2nd ed. (Toronto: Oxford University Press, 1995) sub verbo “impecunious” as “poor” or “penniless.” The Canadian Oxford Dictionary (Don Mills, Ontario: Oxford University Press, 2001) sub verbo “impecunious”,defines the word as “having little or no money.” This characterization is apt when applied to the plaintiff. He has a modest budget once he begins his residency. After payment of essential expenses, taxes and student loans, he will have $324 per month surplus. His debt balance is approximately $208,000. His debts are documented and his Canadian income tax returns for 2006 – 2009 that show even more modest earnings. I am satisfied that in relation to his reasonable expenses, the plaintiff has little or no money. He is impecunious.
[17] The next consideration is whether his action is “plainly devoid of merit.” If it is not, the plaintiff should be able to continue his action unimpeded by an order for security for costs.
[18] The defendant hotel does not assert the claim is frivolous or vexatious. Except in the clearest of cases, the court should be reluctant to deprive a litigant of the chance to have his case tried on the merits. In this case, the plaintiff claims that the hotel was negligent in failing to provide appropriate security, monitor the premises or evict the trouble-makers. He alleges that the hotel was warned by police to be careful of unsavoury patrons. He also alleges that the hotel failed to close its doors to the public at a reasonable hour. The issues of duty of care, causation, and contributory negligence will undoubtedly be canvassed at trial. I am unable to conclude that, on the evidence before me, the case is plainly devoid of merit.
[19] The motion is therefore dismissed.
Costs
[20] If the parties are unable to agree on costs, they may apply to the trial coordinator within thirty days for a date to argue same, failing which, costs shall be deemed to be settled.
Regional Senior Justice H.M. Pierce
Released: June 8, 2012
COURT FILE NO.: CV-08-0234-00
DATE: 2012-06-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sean Gamble
Plaintiff
- and –
Best Western Lakeside Inn and Conference Centre et al
Defendant
Reasons on Motion for Security for Costs
Pierce RSJ.
Released: June 8, 2012
/nf