SUPERIOR COURT OF JUSTICE - ONTARIO

CITATION: Massih v. AMA Development, 2015 ONSC 539

COURT FILE NO.: 12-CV-458815

MOTION HEARD: May 29 and October 28, 2014

Re:

Amanuel R.A. Massih, Nadir Massih,

Kamal Abdel Moneim, Kamal Abdel Moneim

In his capacity as executor of the Estate of the Late Mahmoud A. Moneim

Plaintiffs

v.

AMA INTERNATIONAL DEVELOPMENT CORPORATION,

966527 ONTARIO LIMITED, ALBERT NOSSEIR,

TORONTO DESIGN AND CONSTRUCTION COMPANY,

WIDAD M. NOSSEIR, PETER NOSSEIR, JOACHIM NOSSEIR,

JOHN MARSHALL, BORDEN LADNER LLP, ATOOSA

MAHDAVIAN, AIRD AND BERLIS LLP, DONALD SHELDON,

CORPORATE SECURITIES AND TRANSFER AGENCY INC.

Defendants

BEFORE: Master Thomas Hawkins

Counsel

David Fogel for moving defendants AMA

International Development Corporation,

966527 Ontario Limited, Albert Nosseir,

and Peter Nossier

F (416) 221-8928

Sean Dewart for moving defendants John

Marshall and Borden Ladner Gervais LLP

F (416) 971-8001

Andrea J. Sanche for moving defendants Aird

and Berlis LLP and Atoosa Mahdavian

F (416) 364-1697

David Fogel for moving defendants AMA International

966527 Ontario Limited, Albert Nosseir, Toronto Design and Construction Company and Peter Nossier

F (416) 221-8928

Milton Verskin for responding plaintiffs

F (647) 343-3403

No one for defendants Corporate Securities and Transfer

Agency Inc., Donald Sheldon, Joachim Nosseir and

Widad Nossier

REASONS FOR DECISION

Nature of Motions

[1] I have before me three motions for security for costs. These motions are brought by nine of the 13 defendants in this action.

[2] Four of the defendants did not move for security for costs for the following reasons. The defendant Joachim Nossier was never served with the statement of claim. He has not defended this action. On January 11, 2013 Haberman M. dismissed this action as against the defendant Donald Sheldon. On January 27, 2014 Conway J. dismissed this action as against the defendant Widad M. Nossier. The defendant Corporate Securities and Transfer Inc. has defended this action. Its solicitors of record have been served with the materials in support of the three motions brought by the nine defendants who seek security for costs. Nevertheless Corporate Securities and Transfer Inc. has not brought any motion for security for costs. Absent unusual circumstances, all motions for security for costs in the same proceeding should be brought at the same time. A litigant from whom security for costs is sought should not be faced with several motions for security for costs serially brought by other parties to the same proceeding. That is why proper practice requires those seeking security for costs to serve all other parties who are actively participating in the proceeding with the materials supporting each motion for security for costs, as was done here.

[3] Peter Nossier is one of the nine defendants moving for security for costs. At the outset, I decline to order that the plaintiffs post any security for his costs of defending this action for the following reason. The order which Conway J. made on January 27, 2014 in part dismissed this action as against the defendant Peter Nosseir. He is not entitled to an order for security for costs because he will not be defending this action in the future.

Legal Test

[4] The three motions for security for costs are brought under one or more of the following clauses of subrule 56.01(1): (a), (c) and (d). They provide as follows.

56.01 (1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,

(a) the plaintiff or applicant is ordinarily resident outside Ontario;

(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part;

(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;

First Basis for Motions

[5] Insofar as all three motions are brought on the basis of clause 56.01 (1)(a) – namely that the plaintiffs are ordinarily resident outside Ontario – the moving defendants rely upon paragraph two of the statement of claim. There the plaintiffs allege that the plaintiffs Amanuel R.A. Massih and Nadir Massih reside in Khartoum, Republic of Sudan. The plaintiffs also allege that the plaintiff estate is the estate of the late Mahmoud A. Moneim who resided and died in Khartoum, Sudan. The moving defendants infer from this last allegation that the plaintiff estate is domiciled in Khartoum, Sudan and that its assets, if any, are located there.

[6] In the same paragraph of the statement of claim the plaintiffs allege that the plaintiff Kamal Abdel Moniem resides in Mississauga, Ontario.

[7] Neither side delivered any affidavit to the effect that any of the allegations of residence in paragraph two of the statement of claim are untrue or are no longer true. In the context of these motions these allegations as to residence are statements against interest. That being so, I will decide the motions for security for costs brought under clause 56.01 (1)(a) on the basis that the plaintiffs Amanuel R.A. Massih, and Nadir Massih and the plaintiff estate are ordinarily resident outside Ontario but the plaintiff Kamal Aldel Moneim is not ordinarily resident outside Ontario.

[8] I therefore decline to order the plaintiff Kamal Aldel Moneim to post security for costs on the basis of clause 56.01 (1)(a). The moving defendants have failed to prove that he is ordinarily resident outside Ontario.

[9] The situation before me is one in which three of the plaintiffs are ordinarily resident outside Ontario while the fourth plaintiff is not so resident.

[10] In Vogel v. Trinity Capital Corp., [2005] O.J. No. 815 Haberman M. had a similar situation before her on a motion for security for costs. She expressed herself as follows (at paragraphs 15 to 17).

15 Security for costs will not be ordered where there are multiple plaintiffs pursing a joint claim, as long as one of them ordinarily resides in Ontario. Conversely, where the claims are several, any plaintiff who is non-resident may be ordered to post security for costs (see Willowtree Invst v. Brown (1985), 48 C.P.C. 150; Bondarenko v. Kotov, [2004] O.J. No. 3752, (2004), 2004 CarswellOnt 3767). The rationale for this approach is straightforward – where a claim is joint, any one of the plaintiffs can be called upon to satisfy a cost order in its entirety. Where it is several, however, each plaintiff is only responsible for his share.

16 This issue then is whether or not the claims asserted here are joint or several. In distinguishing between the two, Master Peppiatt stated the following in Willowtree (supra):

In reviewing the authority cited to me which include cases decided in New Brunswick and in the United Kingdom, it seems to me that he law is clear that where claims are joint so that all plaintiffs must succeed or must fail, security will not be ordered from a non-resident plaintiff where there is a plaintiff within the jurisdiction; conversely where the claims are several so that one plaintiff may succeed while another fails a non-resident plaintiff may be ordered to post security.

17 Thus, to qualify as joint, it must be clear on the face of the pleading that all plaintiffs must succeed or must fail – their claims must necessarily stand or fall together.

[11] I have examined the various claims set out in the statement of claim. Some of the claims are made by all of the plaintiffs against one or more of the defendants. They are thus claims jointly made by the resident plaintiff Kamal Abdul Moneim and the non-resident plaintiffs. These joint claims must succeed or fail together. The plaintiffs cannot be ordered to post security under clause 56.01 (1)(a) for the cost of defending against these joint claims because one of the joint claimants (Kamal Abdul Moneim) is not ordinarily resident outside Ontario.

[12] Other claims are several claims made by one plaintiff other than Kamal Abdul Moneim. Still others are joint claims made by two or three of the plaintiffs other than Kamal Abdul Moneim. The plaintiff or plaintiffs advancing these claims can be ordered to post security under clause 56.01(1)(a) for the cost of defending against these claims because all those advancing these claims are ordinarily resident outside Ontario.

[13] Finally, there is a small number of claims which Kamal Abdul Moneim advances alone. He cannot be ordered to post security for the cost of defending against these claims on the basis that he is ordinarily resident outside Ontario.

[14] In summary, those plaintiffs who are ordinarily resident out of Ontario (that is, the plaintiffs other than Kamal Abdul Moneim) can be ordered to post security in respect of some but not all of the claims which they advance in this action.

Second Basis for Motions

[15] Next, I turn to the motion by the defendants AMA International Development Corporation, 966527 Ontario Limited, Albert Nosseir, Toronto Design and Construction Company and Peter Nosseir for security for costs on the basis of clause 56.01(1)(c), that is there is an unpaid order for costs outstanding. The order in question is the order of January 27, 2014 made by Conway J. He made an order awarding the costs of a motion fixed at $1,000 which costs were payable by all the plaintiffs to the defendants Wadid M. Nosseir and Peter Nosseir. The other defendants were not awarded costs.

[16] Because of the wording of clause 56.01(1)(c), the only defendant or respondent who may move for security for costs on the basis of this clause is a defendant or respondent who has been awarded costs which remain unpaid. That being so, the only defendants in this action who may move for security for costs on this basis are the defendants Widad M. Nosseir and Peter Nosseir. The other defendants may not move on this basis.

[17] However, the same order of Conway J. dismissed this action as against the defendants Widad M. Nosseir and Peter Nosseir. They are not entitled to an order for security for costs because they will not be defending this action.

[18] In these circumstance clause 56.01(1)(c) does not assist any of the remaining defendants.

Third Basis for Motions

[19] Finally, I turn to the third basis for two of the motions before me, that is clause 56.01(1)(d).

[20] There are several components to this clause. First there must be a corporate plaintiff or a nominal plaintiff. Here none of the plaintiffs is a corporation. The only nominal plaintiff is the plaintiff Kamal Abdel Moneim in his capacity as executor of the estate of the late Mahmoud A. Moneim. To the extent that Kamal Abdel Moneim sues in his personal capacity, he is not a nominal plaintiff.

[21] The second component of clause 56.01(1)(d) is that there must be good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent.

[22] As I have said, the defendants infer from the fact that Mamoud A. Moneim resided and died in Khartoum, Sudan, that the assets, if any, of his estate are also located in Khartoum. The plaintiffs have not delivered any affidavit to the effect that the plaintiff estate has any assets in Ontario. Certainly as between the moving defendants on the one hand and the plaintiff Kamal Abdel Moneim as executor on the other hand, Kamal Abdel Moneim has the better means of knowledge as to where the assets of the plaintiff estate are located. The inference which the moving defendants draw as to asset location would be easy to rebut if untrue. That inference has not been rebutted.

[23] In these circumstances, two groups of the moving defendants are entitled to an order that the plaintiff estate post security for costs.

Summary

[24] In summary, the plaintiff Kamal Abdel Moneim need not post any security for costs. The remaining three plaintiffs are required to post security for costs whether on the basis of clause 56.01(1)(a) or clause 56.01(1)(d). So ordered. The amount of security which these three plaintiffs must post has to reflect the fact that they need not post security in respect of those claims which they advance jointly with the plaintiff Kamal Abdel Moneim.

Security in Stages

[25] This is a situation where security should be posted in stages with the first stage being proceedings in this action through to the end of examinations for discovery including any discovery related motions. I say this primarily for two reasons. This action is just at the end of the pleadings stage. Most of the draft bills of costs consists of estimates of how much time will be spent in the future on various steps in this action. Secondly, the draft bills of costs do not reflect the fact that the plaintiffs who are required to post security for costs need not post security in respect of claims which they advance jointly with the plaintiff Kamal Abdel Moneim. For now I will assume that defending against the joint claims will consume 50 per cent of the time required to defend against all claims.

Amount of Security to be Posted

[26] I note the following in reviewing the draft bills of costs. The plaintiffs are seeking damages in the millions of dollars. The defendants have been generous in their time estimates. They have included time for some services which are proper solicitor and client fee items but not party and party costs items. I refer to such services as reporting to their clients. I have excluded the claims for such services. I have also applied a 50 percent reduction for the reason set out in paragraph [25] above.

[27] Having done so, I have reached the following conclusions. The plaintiffs other than Kamal Abdel Moneim in his personal capacity are to post the following amounts of security for costs within 90 days:

(a) for the costs for the defendants Atoosa Mahdavian and Aird & Berlis LLP the sum of $35,000;

(b) for the costs of the defendants Borden Ladner Gervais LLP and John Marshall the sum of $24,000; and

(c) for the costs of the defendants AMA International Development Corporation, 966527 Ontario Limited, Albert Nosseir, and Toronto Design and Construction Company the sum of $25,000.

[28] The moving defendants other than Peter Nosseir have been significantly successful on these motions although not completely so. They should receive the costs of these motions in an amount which reflects both the principle of indemnity and what the plaintiffs other than Kamal Abdel Moneim in his personal capacity could reasonably expect to pay. I fix the amounts of costs as follows:

(a) to the defendants AMA International Development Corporation, 966427 Ontario Limited and Albert Nosseir the sum of $4,000;

(b) to the defendants Atoosa Mahdavian and Aird & Berlis LLP the sum of $4,000; and

(c) to the defendants John Marshall and Borden Ladner Gervais LLP the sum of $4,000.

[29] The plaintiffs other than Kamal Abdel Moneium in his personal capacity are to pay such costs as fixed and ordered within 90 days.

(original signed)

Date: January 23, 2015 Master Thomas Hawkins