CITATION: Silva v. Doe, 2015 ONSC 1917
COURT FILE NO.: CV-11-00437793
DATE HEARD: 20150210
ENDORSEMENT RELEASED: 20150413
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jarley Silva v. John Doe and the Superintendent of Financial Services
BEFORE: Master B. McAfee
COUNSEL: John Friendly for the Moving Party, the Defendant the Superintendent of Financial Services
Rebecca Nelson and A. Arruda, student, for the Responding Party, the Plaintiff Jarley Silva
REASONS FOR DECISION
[1] The defendant, the Superintendent of Financial Services brings this motion pursuant to Rule 56.01(1)(a) and (e) of the Rules of Civil Procedure for security for costs.
[2] The plaintiff opposes the motion.
[3] The applicable analysis on a motion for security for costs is set out in Hallum v. Canadian Memorial Chiropractic College, 1989 CanLII 4354 (ON SC), [1989] O.J. No. 1399 (H.C.J.). The court is required to engage in a two-step inquiry. First, the defendant must show that it appears that the plaintiff fits within one of the subrules of 56.01(1). If that is accomplished, the onus shifts to the plaintiff to establish that an order for security for costs would be unjust. As stated in Uribe v. Sanchez, [2006] O.J. No. 2370 (Master) at paragraph 4, there is a broad discretion in making such order as is just.
[4] The plaintiff concedes that he is ordinarily resident outside of Ontario. There is no issue that currently the plaintiff is ordinarily resident in Brazil. Accordingly, the defendant has satisfied its initial onus to show that it appears that the plaintiff is ordinarily resident outside of Ontario in accordance with Rule 56.01(1)(a).
[5] In the circumstances, before moving to the second step of the analysis, it is not necessary for me to also determine if it appears that there is good reason to believe that the action is frivolous and vexatious in accordance with Rule 56.01(1)(e). The plaintiff concedes that he has insufficient assets in Ontario to pay the costs of the defendant within the meaning of Rule 56.01(1)(e).
[6] In the second step of the analysis, the court examines all factors it considers relevant or important in determining whether it would be just to make the order, including the financial circumstances of the plaintiff, the merits of the claim and whether the proposed order will prevent a bona fide claim from proceeding (Pare v. Vahdat, 2002 CarswellOnt 3082 (S.C.J.) at paras 7, 8, 16, 18 and 19 and Pritchard v. Avante Solutions Inc., 2005 CarswellOnt 2756 (S.C.J.) at paras 3-6).
[7] The degree of scrutiny given to the merits of the claim depends on the circumstances of the case. Where the plaintiff is impecunious, the threshold is low, requiring only a demonstration that the claim is not plainly devoid of merit. In cases where impecuniosity has not been shown, a closer scrutiny of the merits is warranted, requiring a demonstration that the claim has a good chance of success or a real possibility of success (John Wink Ltd. v. Sico Inc., 1987 CarswellOnt 370 (H.C.J.) at paras 9-11, Pare at para 17, Zeitoun v. Economical Insurance Group, 2008 CanLII 20996 (ON SCDC), 2008 CarswellOnt 2576 (Div.Ct) at paras 44-50 and Pritchard at paras 3-5).
[8] The plaintiff’s position is that he is impecunious. The plaintiff has the onus of leading sufficient evidence to establish impecuniosity. The plaintiff has not satisfied this onus.
[9] The evidence before me does not satisfy me that the plaintiff is unable to raise funds (see Uribe at para 6). At paragraph 74 of the plaintiff’s affidavit sworn December 6, 2014, the plaintiff states, “I have no family or friends with sufficient financial means to lend me any significant amount of money. I would not even be able to borrow $1000 CDN. At this time I do not have any means to pay back any loans.” However, there is also evidence before me that the plaintiff has a brother who lives in Oakville, Ontario. In the plaintiff’s statement dated September 2, 2011, he states that the brother who lives in Oakville earns $500.00 a day. There is no evidence explaining any change in the financial circumstances of his brother or any evidence that the plaintiff tried to raise funds. The bald statement in the plaintiff’s affidavit is not sufficient to satisfy me that the plaintiff is unable to raise funds.
[10] In support of his position that he is impecunious, the plaintiff submits that he has not earned income since the accident. At paragraph 61 of the plaintiff’s affidavit he states, “I have not worked, or had any income, since the accident” (and see also paras 37 and 53 of the plaintiff’s affidavit). However, exhibit D to the affidavit of Antonio Azevedo includes a payroll summary that lists post-accident cheques payable to the plaintiff’s company. No explanation was provided for these post-accident cheques. The material before me does not satisfy me that the plaintiff has not earned income since the accident.
[11] I am not satisifed that the plaintiff is impecunious.
[12] I turn next to the merits. The action arises as a result of an accident that occurred on or about April 16, 2011. The plaintiff alleges that he was a pedestrian who was struck by an unidentified motor vehicle that failed to remain at the scene of the accident.
[13] Pursuant to section 12 of the Motor Vehicle Claims Act, R.S.O. 1990, c.M.41 (the MVAC Act), where personal injury is occasioned in Ontario by a motor vehicle but the identity of the motor vehicle and driver and owner thereof cannot be established, any person who would have a cause of action against the driver or owner may bring an action against the Superintendent of Financial Services.
[14] On October 21, 2011, the plaintiff commenced the within action by statement of claim naming John Doe and the Superintendent of Financial Services as defendants.
[15] The plaintiff concedes that at the time of the accident he was illegally residing in Canada. The plaintiff was deported for the first time in 1995. At the time the statement of claim was issued, the plaintiff was subject to a second deportation order dated October 12, 2011.
[16] One of the main issues in this action, and the focus of the submissions on the merits, is whether the claim of the plaintiff is barred by section 25(1) of the MVAC Act. Section 25(1) of the MVAC Act provides,
The Minister shall not pay out of the Fund any amount in favour of a person who ordinarily resides in a jurisdiction outside Ontario unless the jurisdiction provides persons who ordinarily reside in Ontario with recourse of a substantially similar character to that provided by this Act.
[17] No party takes the position that Brazil provides persons who ordinarily reside in Ontario with recourse of a substantially similar character to that provided by the MVAC Act.
[18] The issue is whether the plaintiff, a person illegally residing in Canada (Ontario) at the time of the accident, is a person who ordinarily resides in a jurisdiction outside Ontario within the meaning of section 25(1) of the MVAC Act.
[19] The Motor Vehicle Claims Fund (the Fund) is administered by the Minister of Finance pursuant to the MVAC Act. The Fund is the payor of last resort. The Fund is financed through driver’s licence renewals, the Consoldiated Revenue Fund and collection actions against uninsured drivers. Claims for payment out of the Fund are governed by procedures set out in the MVAC Act.
[20] The defendant argues that the action is barred by section 25(1) of the MVAC Act. The defendant argues that the plaintiff, a person unlawfully in Canada (Ontario), cannot be ordinarily resident in Canada (Ontario) (see Schevchuck v. Motor Vehicle Accident Claims Fund, [2009] O.F.S.C.D. No. 30, R. v. Jonas, 1981 CanLII 4950 (ON SC), [1981] O.J. No. 2442 (H.C.J.), Young v. Ontario (Minister of Finance), 2003 CanLII 23640 (ON CA), [2003] O.J. No. 4832 (C.A.), R. v. Oladipo, 2004 CanLII 46658 (ON SC), [2004] O.J. No. 5028 (S.C.J.) and TD Home & Auto Insurance Company v. Her Majesty the Queen, unreported decision of Abitrator B.R. Robinson dated April 15, 2011).
[21] The plaintiff argues that the action is not barred by section 25(1) of the MVAC Act. The plaintiff argues that the MVAC Act does not define ordinary residence and does not contain any provision specifying legal status as a requirement to establish residency. The plaintiff argues that this is in contrast to other Ontario legislation that extends benefits to residents and specifies that the applicant shall have legal status in Canada (see Health Insurance Act, R.S.O. 1990, c.H.6, ss. 11(1) and Regulation 552, R.R.O. 1990, s. 1.4, Ontario Disability Support Program Act, 1997, S.O. c. 25, ss. 5(1)(b) and O.Reg. 222/98, s. 8 and Ontario Works Act, S.O. 1997, c. 25, ss. 7(3) and O. Reg. 134/98, s. 6 and see R. v. Haig, 1993 CarswellNat 2353 (S.C.C.), Harris (Litigation Guardian of) v. Pilot Insurance Co., 1992 CarswellOnt 660 (Gen.Div.); appeal dismissed, 1997 CarswellOnt 3022 (C.A.), Lee v. Minister of National Revenue, 1989 CarswellNat 429 (T.C. Can.), Thompson v. Minister of National Revenue, 1946 CarswellNat 76 (S.C.C.), Mark v. Mark, [2005] 3 W.L.R. 111 (HL)).
[22] In considering the merits, I am not to determine the issue itself. A motion for security for costs should not be turned into a substitute for a motion for summary judgment and a motion for security for costs should not be used to accommplish the same result. This is particulary so when there is an actual motion for summary judgment for a determination of the very issue of whether the action is barred by section 25(1) of the MVAC Act scheduled to proceed in the near future.
[23] If the action is not found to be barred by section 25(1) of the MVAC Act, there is also an issue of whether the plaintiff meets the threshold forth at section 267.5(5) of the Insurance Act, R.S.O. 1990, c. I.8.
[24] As a result of the accident, the plaintiff sustained fractures to his left ankle and right knee.
[25] The plaintiff’s affidavit states that because of his injuries he is unable to perform physical labour and he is not qualified to do any other type of work. As noted above, there is an indication of post-accident earnings that was not explained.
[26] There is no up to date medical documentation. The most recent medical report referred to on the motion is an ambulatory care report of Dr. Roscoe, St. Joseph’s Health Centre dated June 26, 2012. The report indicates that the plaintiff’s left ankle was bothering him along the superior aspect of the plate, that he had good range of motion and that his knee was unstable on the other side. It was Dr. Roscoe’s opinion that the plate should probably be removed.
[27] Credibility will be an issue in determining whether the plaintiff’s injuries meet the threshold. On the basis of record before me, I unable to properly assess the chance of success of whether the plaintiff will meet the threshold.
[28] On the basis of the record before me and in the circumstances of this motion, the merits are a neutral factor.
[29] The defendant concedes that an order for security for costs would cause the plaintiff financial hardship. At paragraph 77 of the plaintiff’s affidavit he states that if an order for security for costs was made he would be forced to abandon his claim. Having not been satisfied that the plaintiff is impecunious and unable to raise funds, I am also not satisfied that any amount of security ordered would prevent the action from proceeding.
[30] For these reasons, I am not satisifed that an order for security for costs would be unjust.
[31] The defendant seeks security for costs in the all inclusive sum of $25,000.00 payable in its entirety before the summary judgment motion. The plaintiff did not take issue with the quantum sought other than submitting that any amount of security ordered would prevent the action from proceeding.
[32] Given the timing of this motion and the pending summary judgment motion, I am not prepared to order that security be posted prior to the summary judgment motion. I am ordering the sum of $25,000.00 to be paid into court as follows: $5,000.00 within 45 days of the release of the decision on the summary judgment motion; the further sum of $5,000.00 payable no later than 45 days prior to the pre-trial date; and, the further sum of $15,000.00 payable no later than 120 days prior to the trial date. The amounts may be paid by way of certified cheque, bank draft or by way of an irrevocable standby letter of credit from a Canadian charted bank in a form approved by the defendant.
[33] If the parties are unable to agree on costs of the motion, the parties may re-attend before me to speak to the issue of costs.
[34] Order to go as follows:
The motion is granted.
The plaintiff shall pay into court as security for costs of the action the all inclusive sum of $25,000.00 to be paid into court by way of certified cheque, bank draft or by way of an irrevocable standby letter of credit from a Canadian charted bank in a form approved by the defendant as follows:
(a) The sum of $5,000.00 within 45 days of the release of the decision on the summary judgment motion;
(b) The further sum of $5,000.00 no later than 45 days prior to the pre-trial date;
(c) The further sum of $15,000.00 no later than 120 days prior to the trial date.
Master B. McAfee
DATE: April 13, 2015