ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 4932/12
DATE: 2014/12/05
B E T W E E N:
Wheatley Phelps
Margaret A. Hoy, for the Plaintiff
Plaintiff
- and -
Niagara Regional Police Service
Niagara Municipality of Niagara Police Services Board, Cst. Stephen Dever, Cst. Brian Knight, Cst. Michael Woodfine and Cst. Hermanus Deleeuw
Mickey Cruickshank, for the Defendants
Defendants
HEARD: December 5, 2014
The Honourable Justice J. R. Henderson
ENDORSEMENT
[1] This is a motion brought by the Defendants for an order pursuant to Rule 56.01(1)(a) that the Plaintiff pay security for costs as the Plaintiff is ordinarily resident outside of Ontario.
[2] It is acknowledged that the Plaintiff resides in Niagara Falls, New York, and that the Plaintiff does not have any assets in Ontario.
[3] The Plaintiff alleges that he was assaulted in Ontario by officers of the Niagara Regional Police Services (the Defendants) on August 26, 2010, and that as a result the Plaintiff has suffered injuries to his head, neck, back, and shoulders. The Plaintiff claims that his injuries are ongoing and that, as a consequence of the injuries, he has not been able to earn an income since the assault.
[4] The Statement of Claim was issued in May 2012. The examination for discovery of the Plaintiff was conducted in June 2014. Examinations for discovery of the Defendants were scheduled for June 2014, but were postponed and have not yet been held.
[5] The evidence of the financial circumstances of the Plaintiff can be summarized as follows:
− The Plaintiff deposes that he owns two real properties in New York State, valued at $53,100 and $25,700 respectively, and that neither property is the subject of a mortgage.
− The Plaintiff deposes that he is unemployed and cannot borrow money.
− The Plaintiff deposes that he has three bank accounts in New York State with total holdings of $430.
− The Plaintiff deposes that he has not earned any income since his assault in August 2010.
[6] The proper way to analyze a motion for security for costs is neatly summarized in the case of Coastline Corp. v. Canaccord Capital Corp., 2009 21758 (ON SC), [2009] O.J. No. 1790, at para. 7 as follows:
(i) The initial onus is on the defendant to satisfy the court that it “appears” there is good reason to believe that the matter comes within one of the circumstances enumerated in Rule 56.01 (Hallum v. Canadian Memorial Chiropractic College (1989), 1989 4354 (ON SC), 70 O.R. (2d) 119 (Ont. H.C.) at 123);
(ii) Once the first part of the test is satisfied, “the onus is on the plaintiff to establish that an order for security would be unjust” (Uribe v. Sanchez (2006), 33 C.P.C. (6th) 94 (Ont. Master) (“Uribe”) at para. 4);
(iii) The second stage of the test “is clearly permissive and requires the exercise of discretion which can take into account a multitude of factors”. The court exercises a broad discretion in making an order that is just (Chachula v. Baillie (2004), 2004 27934 (ON SC), 69 O.R. (3d) 175 (Ont. S.C.J.) at para. 12; Uribe, at para. 4);
(iv) The plaintiff can rebut the onus by either demonstrating that:
(a) the plaintiff has appropriate or sufficient assets in Ontario or in a reciprocating jurisdiction to satisfy any order of costs made in the litigation,
(b) the plaintiff is impecunious and that justice demands that the plaintiff be permitted to continue with the action, i.e. an impecunious plaintiff will generally avoid paying security for costs if the plaintiff can establish that the claim is not “plainly devoid of merit”, or
(c) if the plaintiff cannot establish that it is impecunious, but the plaintiff does not have sufficient assets to meet a costs order, the plaintiff must meet a high threshold to satisfy the court of its chances of success …
[7] In the present case the Defendants have established that the matter comes within Rule 56.01(1)(a), and therefore the onus shifts to the Plaintiff. The Plaintiff does not claim impecuniosity in this case; rather the Plaintiff claims that he has appropriate or sufficient assets in a reciprocating jurisdiction (i.e. New York State). Further, the Plaintiff relies upon the court’s broad discretion, and submits that in consideration of all of the circumstances an order for security for costs would not be just.
[8] Rule 56.01(1) confers on a motions judge the discretion to make an order for security for costs “as is just” provided that one of the subsections apply. Thus, it is clear that the motions judge has a broad discretion to consider all of the circumstances surrounding the court proceeding, the financial circumstances of the Plaintiff, the prohibitive effect that any order may have on the Plaintiff’s ability to proceed with the action, and the need to protect the Defendant’s ability to enforce any judgment for costs against the Plaintiff. This analysis therefore requires the motions judge to balance a wide variety of factors. In that respect see the case of Crudo Creative Inc. v. Marin, 2007 60834 (ON SCDC), 90 O.R. (3d) 213 (Div.Ct.) at para. 28.
[9] In the present case, the Plaintiff relies on several factors that Plaintiff’s counsel submits are supportive of the position that there should not be an order for security for costs.
[10] In particular, the Plaintiff submits that New York State has reciprocal enforcement of judgment legislation whereby any Ontario judgment against a Plaintiff for costs may be enforced in New York State. I accept that to be the case.
[11] However, the fact that reciprocal enforcement legislation exists is not dispositive of the matter. A court will generally not order security for costs if a Plaintiff has appropriate or sufficient assets in a reciprocating jurisdiction. But, I adopt a statement made by Nightingale J. in the case of Housser v. Niagara Regional Police Services, unreported, dated September 18, 2014, that the phrase “appropriate assets” means assets that are both sufficient to answer for the costs and are of the kind that can be conveniently realized.
[12] In the present case, I have only the Plaintiff’s bald statement that he owns two properties, that both properties have some value, and that both properties are unencumbered. The onus is on the Plaintiff to establish by way of robust evidence that these properties are appropriate and sufficient. The Plaintiff has not done so in this case. Specifically, I have no objective evidence of the value of the properties, the lack of encumbrances, the ease of liquidation of the properties, or how title is held.
[13] Similarly, the Plaintiff has made bald statements that he is unemployed and that he has had no income since 2010. The only objective income evidence before the court is a tax return summary showing that the Plaintiff earned approximately $81,000 in 2004, six years prior to the alleged assault. I have no objective evidence as to the Plaintiff’s earnings, or absence of earnings, for the past 10 years. This is not the type of robust evidence that a Plaintiff can hope to rely upon to defend against a motion for security for costs.
[14] Further, I have no objective evidence as to the Plaintiff’s bank accounts. Again, the evidence adduced in this case is insufficient.
[15] The Plaintiff further submits that it would be unjust to make a prohibitive order for security for costs when the cause of the Plaintiff’s financial hardship is the assault that is the subject of the court proceeding. There may be some value to that submission if the Plaintiff could prove a direct connection between the Plaintiff’s financial hardship and the assault. However, in this case the merits of the Plaintiff’s claim are still very much in dispute. At this point, the issue of whether an unlawful assault even occurred is still unresolved.
[16] Furthermore, the only medical evidence provided to this court is a copy of the hospital record from August 2010. Also, I repeat that I have no income information after 2004. The court cannot assume an injustice has occurred without an evidentiary foundation.
[17] Lastly, the Plaintiff relies upon s.4(2) of the Victims’ Bill of Rights, 1995, S.O. 1995, c.6, which states “a judge shall not make an order under the rules of court requiring a victim to provide security for costs unless the judge, having considered the spirit and purpose of this Act, considers that it is necessary to do so in the interests of justice”.
[18] In my view the Victims’ Bill of Rights does not apply at the present time as it has not yet been established that the Plaintiff falls within the definition of a “victim” as set out in s.1 of the Act.
[19] For all of these reasons, I find that the Plaintiff cannot meet its onus to prove that an order for security for costs would be unjust. Therefore, it is ordered that the Plaintiff shall pay into court as security for costs the sum of $10,000 on or before January 31, 2015. This amount represents security for costs up until the completion of all examinations for discovery, without prejudice to the Defendants bringing another motion for further security thereafter.
[20] Costs of this motion are fixed at $2,000 all inclusive, payable to the Defendants in the cause.
Henderson J.
Released: December 5, 2014
COURT FILE NO.: 4932/12
DATE: 2014/12/05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Wheatley Phelps
Plaintiff
- and –
Niagara Regional Police Service
Niagara Municipality of Niagara Police Services Board, Cst. Stephen Dever,
Cst. Brian Knight, Cst. Michael Woodfine and Cst. Hermanus Deleeuw
Defendants
ENDORSEMENT
Henderson J.
Released: December 5, 2014