COURT FILE AND PARTIES

COURT FILE NO.: CV-851-09; C-923-09
DATE: 2012-08-30
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Mario Milano, Plaintiff Court File No.: CV-851-09

AND:

Elite Capital Inc., Vito Caportoto, Vince Caportoto, Josh Alton, Roy A. Fisher Defendants

COUNSEL: Simon Adler, for the Plaintiff

Milton Davis and Kelli Preston, for the Defendant Roy Fisher

RE: Mario Milano Court File No.: C-923-09

AND:

Josh Alton, Charles Orenstein, Roy Fisher, Regal Fiance Limited, Elite Capital Inc., Vito Caportoto, Vince Caportoto, Defendants

COUNSEL: Simon Adler, for the Plaintiff

Glenn Solomon, for the Defendant Charles Orenstein

Milton Davis and Kelli Preston, for the Defendant Roy Fisher

BEFORE: The Honourable Madam Justice C. Lafreniere

HEARD: August 20, 2012

ENDORSEMENT

[ 1 ] There are three motions before the court each seeking security for costs against the plaintiff, Mario Milano (“Milano”) in two actions: Court File No. C-923-09 and Court File No. CV-851-09.

[ 2 ] The defendants Charles Orenstein (“Orenstein”) has brought two motions in C-923-09 and the defendant Roy Fisher (“Fisher”) has brought one motion in CV-851-09.

[ 3 ] Vito Caportoto and Vince Caportoto are defendants in both actions. They have been noted in default in both actions. Josh Alton is a defendant in both actions. He was noted in default but is now defending the action with the consent of the plaintiff. Mr. Alton has not participated in the motions before the court.

[ 4 ] Milano is ordinarily resident outside of Ontario and thus, falls within one of the enumerated grounds set out at Rule 56.01 (1) (a) of the Rules of Civil Procedure. Milano must prove he has sufficient assets in Ontario to meet a potential cost award or that he is impecunious and it would be unfair if he were not permitted to proceed.

Milano’s submissions

[ 5 ] Milano submits that he is impecunious and he will be driven out of the actions, if he is ordered to post security for costs.

[ 6 ] Orenstein seeks $96,012.00 as security for costs and Fisher seeks $72,137.72 as security for costs.

[ 7 ] Milano offers some security by way of property in Florida and shares in a company that owns property in Ontario. He owns all of the shares of a company that operates a retirement home in Alymer, Ontario and owns real estate. Milano, however, candidly submits neither of these properties is marketable. He cannot borrow any money against them. And, further the retirement home operation is losing money. His substantive position is that he is impecunious and it would be inequitable to order the security for costs sought because it will effectively force him out of the litigation.

Orenstein’s submissions

[ 8 ] Orenstein argues that the case law is clear with respect to a claim of impecuniousity. The impecunious person must put forward current information as to their financial circumstances.

[ 9 ] Here, Milano is relying on an affidavit sworn February 25, 2011 and the income and financial information set out in the affidavit is from 2009. In that affidavit, Milano states he had no income for 2009 and attached his United States Individual Income Tax Return. He states his 2010 return will state the same thing. Thus, before the court on August 20, 2012, the most recent financial documentation is a 2009 U.S. tax return.

[ 10 ] Orenstein relies on the case of Coastline Corp. v. Canaccord Capital Corp ., 2009 CarswellOnt 2312 . At paragraph 7 Master Glustein states at subparagraph (viii) and (ix):

The evidentiary threshold for impecuniosity is high, and “bald statements unsupported by detail” are not sufficient. The threshold can only be reached by “tendering complete and accurate disclosure of the plaintiff’s income, assets, expenses, liabilities and borrowing ability, with full supporting documentation for each category where available or explanation where not available.” ( Uribe v. Sanchez (2006), 33 C.P.C. (6 th ) 94 at para 12 ; Shuter v. Toronto Dominion Bank 2007 37475 (ON SC) , [2007] O.J. No. 3435 at paragraph 76 ;

To meet the onus to establish impecuniosity, “at the very least, this would require an individual plaintiff to submit his most recent tax return, complete banking records and records attesting to income and expenses” Shuter , at paragraph 76 ;

[ 11 ] Milano has not put his best foot forward or made frank and full financial disclosure and on that basis the motion should succeed, Orenstein submitted. The security offered by way of the Florida and shares is inadequate.

Fisher’s submissions

[ 12 ] Fisher adopted the submissions made by Orenstein. Fisher further submitted that despite Milano’s submission that the retirement home is losing money, the revenue from the operation is significant. The bottom line is that Milano has not established impecuniosity because he is relying on his bald statement in his affidavit rather than producing current documentation to establish his financial circumstances. He has failed to satisfy the onus.

Analysis and Discussion

[ 13 ] Milano has failed to meet the onus on him as a plaintiff not ordinarily resident in Ontario. He has not established he has sufficient assets in Ontario to satisfy a costs award. Nor has he established that he is impecunious because he has not provided current information. The most recent information, other than his own statements in his affidavit sworn nearly 18 months ago, is his 2009 Income Tax Return.

[ 14 ] I am satisfied that the sum requested by Orenstein is reasonable in all of the circumstances. The action is at an early stage, examinations for discovery have not yet been scheduled. There are complicated factual and legal issues. Examinations will take a number of days and the trial will likely proceed over several days. The same can be said with respect to the matter involving Fisher. I accept the sum requested by Fisher as reasonable in all of the circumstances.

[ 15 ] Therefore, I make the following orders:

In File No. C-923-09:

a) The Plaintiff is required to pay into court security for costs in this action in the amount of $96,012.40;

b) This action is stayed if the amount ordered for security for costs is not paid by September 30, 2012; and

c) Submissions with respect to costs of the motion may be made in writing within 30 days.

In File No. CV-851-09:

a) The Plaintiff is required to pay into court security for costs in this action in the amount of $72,137.72;

b) This action is stayed if the amount ordered for security for costs is not paid by September 30, 2012; and

c) Submissions with respect to costs of the motion may be made in writing within 30 days.

C. Lafreniere J.

Date: August 30, 2012