COURT FILE NO.: C-570-04

DATE: 2012-01-19

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Estate of Joseph Straus by its Executor,
Angela Straus and Angela Straus, Plaintiffs

and

Roy Decaire, RCB Investors Choice Inc., IPC Investment Corporation,
Fundex Investments Inc., Pacific International Securities Inc., Orion
Securities Inc., Spectrum Meditech Inc., IRG Services Ltd., Cyclone
Investments Inc., Northgate Holdings Inc., Millenium Medical Supply Inc.,
Millenium Medical Supply Corp., Kelly Fielder, Richard Savage and
Nicola More, Defendants

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
R.F. Earnshaw, for Moving Party, IPC Investment Corporation
G.L. Petker, for Responding Parties/Plaintiffs

HEARD: January 16, 2012

ENDORSEMENT

[ 1 ] IPC Investment Corporation (“IPC”) seeks an order staying payment of the outstanding balance of a costs order.

Background

[ 2 ] The plaintiffs’ claim, commenced in 2004, sought recovery of losses incurred in respect of unsuitable investments. Roy Decaire was the plaintiffs’ investment advisor at the relevant time periods. He was employed or affiliated with IPC and, subsequently, Fundex Investments Inc. (“Fundex”).

[ 3 ] The trial took place in October and November 2010. On February 18, 2011, Crane J. released his reasons for decision. The plaintiffs were awarded judgment for $277,471, the full amount of their loss. Relevant to this motion, damages were apportioned as follows:

a) $177,471, payable by IPC; and

b) $100,000, payable by Fundex.

[ 4 ] As a result of the settlement with another defendant, IPC’s liability was reduced to $154,471; said to be approximately sixty per cent of the total award.

[ 5 ] On May 17, 2011, Crane J. released supplementary reasons on the issue of costs. The plaintiffs were awarded $236,000 for fees and $49,484.50 for disbursements, plus HST and post judgment interest, payable by the defendants jointly and severally with indemnity rights each against the other.

[ 6 ] In September 2011, IPC delivered $465,932 to the plaintiff. This amount represents the damage award and sixty per cent of the costs. The balance owing for costs is approximately $127,000. IPC declined to pay this amount, contrary to the joint and several direction, when demand was made by plaintiffs’ counsel, saying such is Fundex’s share.

[ 7 ] Fundex has appealed the trial decision and cost award to the Ontario Court of Appeal. IPC has not.

Issues

[ 8 ] Two issues were identified by counsel in their factums and submissions, namely:

i) has IPC met the test for a stay; and

ii) is IPC entitled to request a stay when it has not appealed the underlying decision.

Law

[ 9 ] The statutory authority for a stay of proceedings is section 106, Courts of Justice Act . The following are the relevant provisions in the Rules of Civil Procedure :

AUTOMATIC STAY ON DELIVERY OF NOTICE OF APPEAL

63.01 (1) Payment of money – 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.

STAY BY ORDER

63.02 (1) By trial court or appeal court – An interlocutory or final order may be stayed on such terms as are just,

(a) by an order of the court whose decision is to be appealed;

(b) by an order of a judge of the court to which a motion for leave to appeal has been made or to which an appeal has been taken.

[ 10 ] Counsel agree on the relevant test. The moving party must establish:

a) the application involves a serious issue;

b) the balance of convenience favours granting a stay; and

c) irreparable harm will result if the relief is not granted.

See: RJR-MacDonald v. Canada (Attorney General) , [1994] 1 S.C.R. 31 (S.C.C.), at para. 43 ; and M.J. Jones Inc. v. Kingsway General Insurance Co. (2004), 72 O.R. (3d) 68 (Ont. C.A.), at para. 15 .

[ 11 ] Further, these three requirements are not to be considered separate hurdles but as interrelated considerations. The overarching consideration is whether the interests of justice call for a stay. See Longley v. Canada (Attorney General) (2007), 223 O.A.C. 102, 2007 ONCA 149 (Ont.C.A.) , at para.15.

Analysis

[ 12 ] Rule 63.01 creates an automatic stay as to the payment of money. In my view, the rule was intended to apply only with respect to parties appealing the decision. IPC has accepted the decision of the trial judge. It has not appealed the cost award.

[ 13 ] If I am correct in this interpretation, IPC cannot meet the requisite test for a stay under Rule 63.02.

[ 14 ] Regardless, I am not persuaded IPC has met the test in any event.

[ 15 ] I accept there is a serious issue. Counsel made reference to the general rule of costs being assessed in the same proportion as damages. See Empire Life Insurance Company of Candaa v. Krystal Holdings Inc. et al , [2009] O.J. No. 1095 (Ont. S.C.J.) ; and Wright v. Walmart Canada Corp ., [2010] O.J. No. 2206, 2010 ONSC 2936 (Ont. S.C.J.) . While the ultimate determination by the Court of Appeal may impact IPC, it is only Fundex who seeks a remedy.

[ 16 ] The balance of convenience issue brings into play the substantial payment thus far by IPC but less than full recovery in that the plaintiffs have incurred substantial expense in this lawsuit.

[ 17 ] In any event, the moving party fails on the third requirement. Irreparable harm is said to result if Fundex succeeds on appeal as IPC could only then look to the plaintiffs for recovery. As to the evidence in support of counsel’s submission, the affidavit of Tracy Salmon, sworn October 20, 2011, at para. 9, simply says:

I am informed by Darrell Bartlett and do verily believe that IPC is concerned about its ability to recoup if IPC pays the balance of the costs award in the amount of $125,205.27 as demanded by Petker.

[ 18 ] A “concern” falls well short of establishing irreparable harm and invites speculation. Rulings may only be made on supporting evidence. Further, seeking recourse as described is no different than what the plaintiffs have been doing since 2004.

[ 19 ] The overarching considerations do not favour IPC, particularly when it seeks a benefit but chose to avoid further exposure on appeal.

Summary

[ 20 ] In result, IPC’s motion is dismissed. Counsel have agree the appropriate cost award for the motion is $3,000, inclusive of HST and disbursements in favour of the successful party. I so order.

D.J. Gordon J.

Released: January 19, 2012