SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-01-FP271761-001
DATE: 2013/01/16

RE: Flame aka Donna Miovski v. Aleko Miovski

BEFORE: Herman J.

COUNSEL:
Amanda Taerk, for the Applicant and Ms. Melpomeni Davie

Elliot Birnboim, for the Respondent

HEARD: December 21, 2012

ENDORSEMENT

[1] The respondent, Mr. Miovski, seeks security for costs in the form of an order preventing the property at 26 White Cedar Drive, Markham, from being sold, transferred or encumbered.

[2] Ms. Davie, the mother of the applicant, Ms. Miovski, was given notice of the motion. She was represented by counsel at the motion and gave oral testimony.

[3] Mr. Miovski’s position is that Ms. Miovski has already failed to comply with one costs order and there is good reason to believe she will attempt to defeat any future costs order. The White Cedar property is Ms. Miovski’s only means to satisfy any costs order.

[4] Ms. Miovski’s and Ms. Davie’s position is that the non-payment of such a small costs order should not be the basis for granting security for costs. They note that Mr. Miovski also has no means to satisfy a costs order, should one be granted in Ms. Miovski’s favour. Furthermore, Ms. Davie’s position is that she is the true owner of the property and the court cannot prevent her from dealing with her own property.

[5] The trial of this action concluded on December 11, 2012. The decision has been reserved and has not yet been issued.

[6] The parties consented to a temporary order preventing the property from being sold, encumbered or transferred, pending the argument of this motion. The motion was argued on December 21, with further written submissions to be provided by January 14, 2013. The order continues, pending further court order. Mr. Miovski wants the order to continue. Ms. Miovski and Ms. Davie ask that the order be vacated.

[7] Mr. Miovski’s original motion for security of costs was dismissed. In her Endorsement, dated November 8, 2011, D.A. Wilson J. wrote:

With respect to the motion of the Resp [Respondent] for an Order that the App [Applicant] be required to post security for costs, I see no basis for this relief. To the contrary, the evidence before me is that the App has title to the property where she resides at 26 White Cedar Drive in Markham. In my view the Resp has failed to demonstrate that the factors set out in R. 24 (13) are applicable to the case at hand. The motion for security for costs is dismissed.

[8] Mr. Miovski submits that, in view of recent events, the court should now grant an order for security for costs. He points, in particular, to the non-payment of a costs order by Ms. Miovski and evidence that Ms. Miovski intends to transfer 26 White Cedar to her mother, Ms. Davie.

Non-payment of Costs

[9] On October 29, 2012, Penny J. awarded costs to Mr. Miovski of $750, as a result of his substantial success on a refusals motion. He did not specify any time for payment. As of the date of the hearing of this motion, these costs remain unpaid.

[10] In cross-examination at trial, Ms. Miovski was asked if she intended to pay the costs ordered by Penny J. She replied that she did not have any money to pay them.

26 White Cedar

[11] Ms. Miovski and her daughter currently live at 26 White Cedar in Markham.

[12] Ms. Miovski’s mother, Ms. Davie, purchased the property on March 31, 2008 for $430,000. According to Ms. Davie, she took title in her name because her daughter did not qualify for a mortgage.

[13] On December 22, 2008, Ms. Davie transferred the property to Ms. Miovski, without advising the bank that held the mortgage.

[14] When Ms. Davie was asked why she transferred the property to Ms. Miovski, she replied that she was sick, and that if something should happen to her, she wanted her daughter and granddaughter to have it.

[15] Title is currently in Ms. Miovski’s name. According to Ms. Miovski, her mother makes all the payments related to the property. She pays her mother $300 a month, when she can afford it.

[16] During the course of the trial, Ms. Davie went to the bank to obtain information. In her oral testimony at the hearing of this motion, Ms. Davie said that the bank then discovered she had transferred 26 White Cedar to her daughter without their knowledge. The bank also discovered that Ms. Davie had a line of credit on another property (Greenfield Ave.), which she had sold without paying off the line of credit.

[17] According to Ms. Davie, when the bank discovered what had occurred, they told her it had been a mistake to transfer the property to her daughter and the property had to be transferred back. Ms. Davie said the bank told her it was still her property.

[18] There was no evidence from the bank as to their position, nor any evidence that the bank has taken or intends to take any action with respect to the property.

[19] Ms. Davie testified that it is her intention to have her daughter transfer the White Cedar back to her. She intends to apply for a mortgage of $225,000. That mortgage would cover the mortgage currently on White Cedar, the line of credit on the Greenfield Ave. property, as well as some additional debts.

[20] Ms. Davie’s testimony as to what she would do with the property after it is transferred back to her was confusing. Ms. Davie first testified that she intends to fix up the house so that her granddaughter can finish school. When asked how she will get the money to fix up the house, Ms. Davie said she would rent out the property. When asked what would happen to her granddaughter and daughter, Ms. Davie replied that they could live in the basement. Ms. Davie also said she would fix up the property and sell it.

Analysis

[21] A few facts are clear. Ms. Miovski has not satisfied the $750 costs order.

[22] If Ms. Miovski is the owner of the White Cedar property, it is her only substantial asset. Ms. Miovski’s only income is the support she receives from Mr. Miovski and the assistance she receives from her mother.

[23] Ms. Davie intends to have the property transferred back to her. There is no reason to believe that Ms. Miovski would not cooperate. The evidence as to what Ms. Davie intends to do with the property after it is transferred back was confusing.

[24] There was no evidence from the bank with respect to its position and no evidence that the bank has or intends to take any action with respect to the property.

[25] I am unable to conclude that Ms. Davie is the owner of White Cedar on the basis of her testimony that the bank told her she is the owner. Ms. Miovski is the registered owner of the property and I will treat her as such, for the purpose of this motion.

[26] Rule 24(13) of the Family Law Rules provides that the court may make an order for security for costs “as is just”, based on one or more of a list of factors. The applicable factor here is set out in subparagraph 2: “A party has an order against the other party for costs that remains unpaid, in the same case or another case”.

[27] An order under this rule is discretionary. I decline to exercise my discretion to make the order for several reasons.

[28] Firstly, I have some question as to the appropriateness of a request for security for costs at this late stage in the proceedings, that is, at the conclusion of the trial. Mr. Miovski previously sought such an order and it was denied.

[29] Usually, motions for security for costs are made early on in a proceeding. In considering whether to grant an order, the court is generally concerned with balancing two factors: the possibility that an order could effectively deny an impecunious litigant from access to justice; and the concern that, absent such an order, the court could be encouraging a risk-free and dubious claim made by an individual against whom costs are unrecoverable. These considerations to not apply to this case because the trial has already taken place. While a security for costs order would not affect Ms. Miovski’s access to justice, it would also not serve to discourage a dubious claim.

[30] Secondly, no order for security for costs may be made unless one of the enumerated factors applies. Thus, the fact that Ms. Miovski may have difficulty satisfying a future costs order is not, in itself, a basis for ordering security of costs. Rather, the factor upon which this motion for security for costs rests is Ms. Miovski’s non-payment of $750 in costs. This, in my opinion, is a very small amount to justify an order for security for costs.

[31] In Mariani v. Mariani, [2010] O.J. No. 1351 (S.C.J.), Nelson J. considered a request for security for costs based on non-compliance with costs orders. In that case, the respondent had brought himself into substantial compliance with cost orders. However, there was $750 outstanding as well as outstanding interest on another costs award. He considered these to be de minimis matters in the circumstances and dismissed the motion for security for costs.

[32] Mr. Miovski points to the protracted litigation and Ms. Miovski’s non-compliance with disclosure orders and undertakings as reasons why I should exercise my discretion in favour of granting the order. While I agree that the court may consider other circumstances once it determines that one of the factors in the Rule applies, $750 is a very small amount to trigger such an inquiry.

[33] Finally, a security for costs order would affect the interests of a non-party, that is, Ms. Davie. While I am unable to conclude that Ms. Davie is the owner, at the very least, she has an interest in the property in so far as she is personally responsible for the mortgage registered on the property. She is also the person who makes all the ongoing payments related to the property.

Conclusion

[34] For these reasons, the motion for security for costs is dismissed. The order that was made on November 9, 2012, which prohibited the sale, transfer, encumbrance or dissipation of 26 White Cedar Drive, Markham, and the subsequent orders that extended that order (November 14, December 11, December 14 and December 21, 2012) are hereby vacated.

[35] The parties may provide cost submissions with respect to this motion at the same time they provide cost submissions with respect to the trial.

Herman J.

Date: January 16, 2013