ONTARIO

SUPERIOR COURT OF JUSTICE

2014 ONSC 4600

NEWMARKET COURT FILE NO.: CV 13-115613

DATE: 20140806

BETWEEN:

Tri-Lag Corporation Limited

Plaintiff

– and –

York Region District School Board, Ronald Biderman, The Corporation of the Town of Markham, Berczy Farm Corporation, Kennedy-Sixteenth Development LTD., Kennedy Mackenzie Consix Investments LTD., Larkin-Monarch Partnership, E. Mason Investments Limited, B. McGregor Developments Limited, Baystore Developments Inc., John Doe and Jane Doe, and other persons unknown who have conspired with the named defendants

Defendants

Gordon McGuire, for the Plaintiff

Robert Richler, for the Defendant York Region District School Board
Shaneka Taylor, for the Defendant The Corporation of the Town of Markham
David Fenig, for the Defendant Berczy Farm Corporation

HEARD: July 28, 2014

REASONS

EDWARDS J.:

[1] The plaintiff seeks leave to appeal a decision of Mullins J. dated March 14, 2014 in which Mullins J. allowed the various motions brought by the defendants for security of costs. In seeking leave to appeal the plaintiff relies on Rule 62.02(4)(b) of the Rules of Civil Procedure. The plaintiff did not rely upon that part of the test for granting leave to appeal set forth in Rule 62.02(4)(a). As such, in order for the plaintiff to succeed on this motion the plaintiff must show that there is “good reason to doubt the correctness of the order in question” and that the proposed appeal “involves matters of such importance that leave to appeal should be granted”.

[2] The plaintiff resisted the motions for security for costs before Mullins J. largely on the basis that the plaintiff was impecunious. It was further argued that if an order for security for costs was made the litigation would be at an end as the plaintiff could not pay any order requiring it to post security for costs. The plaintiff’s position based on its impecuniosity essentially amounts to an argument that the plaintiff would be denied access to justice if the order of Mullins J. was allowed to stand.

[3] The defendants resist the motion seeking leave to appeal on the basis that the order of Mullins J. was correctly made, in that Mullins J. had accurately determined that the plaintiff had failed to establish the onus imposed on it with respect to the plaintiff’s impecuniosity. In that regard Mullins J. stated:

“There is no evidence that accounts for the receipt and disposition of funds by the plaintiff for the land expropriated from it and the sale of the residential and commercial portions of the land it acquired, nor do its financial statements transparently demonstrate this.”

[4] In support of the plaintiff’s position before Mullins J., it is stressed that the plaintiff had put before the Court a substantial body of evidence which would establish the plaintiff’s impecuniosity. Specifically, various financial records were filed with the court that on its face would demonstrate the plaintiff’s impecuniosity. The difficulty with this argument, however, lies in the fact that the plaintiff had received in February 2002, as a result of an unsuccessful appeal to the Ontario Municipal Board, the sum of approximately $1,540,000 as compensation for 5.7 acres which had been expropriated for what is described in the materials as the “school site”. As well, on December 22, 2006 the plaintiff received $595,000 for a commercial block of the property which is the subject matter of these proceedings which had been sold to a third party.

[5] If the financial records which had been filed before Mullins J. had accounted for the aforesaid funds which totaled in excess of $2,000,000, it might be said that those financial records could then properly support a finding of impecuniosity. Those financial records however, do not provide any accounting for the aforesaid $2,000,000 received by the plaintiff. In the absence of credible and accurate financial records, it was entirely open to the motions judge to make a finding that the plaintiff had not met its evidentiary onus to resist an order for security for costs on grounds of impecuniosity. It was entirely open to the motions judge on the evidentiary record before her to make the following finding:

“There is no evidence that accounts for the receipt and disposition of funds by the plaintiff for the land expropriated from it and the sale of the residential and commercial portions of the land it acquired, nor do its financial statements transparently demonstrate this.”

[6] I am not satisfied that the plaintiff has met the first requirement of Rule 62.02(4)(b). Even if I had been satisfied that there was reason to doubt the correctness of the order of Mullins J., the plaintiff would have been required to convince this Court that this matter involved matters of importance that transcend the importance of the issues as between the parties. The Court of Appeal and the Divisional Court have in a number of reported cases given guidance to the profession with respect to security for costs motions and the issue of impecuniosity. I fail to see how this particular case would make this a case of general importance given what the Court of Appeal and Divisional Court have already said about this issue to date.

[7] The plaintiff’s motion seeking leave to appeal is therefore dismissed with costs. Counsel for the various parties provided me with their submissions on costs in the event that they were successful and/or unsuccessful as the case might be. Taking into account those submissions, I am ordering that the plaintiff pay to each of the defendants the sum of $5,000 for costs which amount is inclusive of HST and disbursements.

Justice M. Edwards

Released: August 6, 2014