Zawadzki v. Gravelle, 2015 ONSC 7315

CITATION: Zawadzki v. Gravelle, 2015 ONSC 7315

COURT FILE NO.: 3554/14

DATE: 2015-12-02

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Nikki Irena Zawadzki Plaintiff

– and –

Paul Gravelle Defendant

COUNSEL: Matthew K. Dale, for the Plaintiff Gordon A. Marsden, for the Defendant

HEARD: October 5, 2015

Reasons for Judgment

Leitch J.

[1] The Defendant moves for an order compelling the Plaintiff to post security for costs.

[2] In this action, the Plaintiff alleges that the Defendant, who is her father, physically, emotionally and sexually abused her.

[3] The Defendant denies all allegations of abuse.

[4] The Plaintiff is ordinarily resident in Vancouver, British Columbia and thus is ordinarily resident outside of Ontario.

[5] Pursuant to r. 56.01, the court on motion by a Defendant may make an order for security for costs as is just where a Plaintiff is ordinarily resident outside of Ontario.

[6] It was acknowledged by the Plaintiff that as someone ordinarily resident outside of Ontario, she bore the onus on this motion to establish that an order for security for costs would be unjust by demonstrating that:

(i) she has sufficient assets in Ontario or a reciprocating jurisdiction to satisfy any order for costs made in the litigation;

(ii) that alternatively she is impecunious and justice demands that she be permitted to continue with her action, which is not plainly devoid of merit; or,

(iii) in the further alternative, that her action has a real possibility of success (see Willets v. Colalillo, [2007] O.J. No. 4623, 2007 Carswell, Ontario 7616 (Master) at paras. 46, 47 and 56).

The Evidence Filed by the Plaintiff on this Motion

[7] The Plaintiff made an assignment in bankruptcy in 2011-2012 and is now discharged from that bankruptcy. As she deposed in para. 16 of her affidavit sworn July 10, 2015 she has "struggled to financially rebuild since that time".

[8] She resides in rented accommodation with her long-time partner.

[9] She is employed fulltime and her partner is employed in a trade in which his income fluctuates from month to month.

[10] Her partner has been laid off and is currently not earning any income and has applied for employment insurance.

[11] The Plaintiff produced copies of the 2011, 2012 and 2013 income tax assessments for herself and her partner and has also provided a copy of their 2014 statement of remuneration.

[12] These productions indicate that the Plaintiff earned $61,194 in 2011, $56,088 in 2012, $55,604 in 2013 and gross income before tax of $48,493.94 in 2014.

[13] Her partner earned $9,157 in 2011, $2,001 in 2012, $22,957 in 2013 and he had gross income before tax of $36,710.44 in 2014.

[14] Therefore the combined net income of the Plaintiff and her partner in the period 2011 to 2013 did not exceed $78,561 and in 2014 their combined gross income was $74,278.

[15] As the Plaintiff deposed in para. 20 of her affidavit sworn July 10, 2015 neither she nor her partner have any savings and they "live pay cheque to pay cheque and do not own any land or significant assets".

[16] The Plaintiff has provided details of both her and her partner's bank accounts and provided copies of their account balances which are minimal. She owns a 2002 motor vehicle which has limited value and as she deposed in para. 25 of her affidavit sworn July 10, 2015 this is her "only notable asset". It is her information and belief that her partner "does not own any significant assets other than household items such as furniture".

[17] She has also provided details of their monthly budget which tracks her income and expenses as well as copies of the bills which represent their normal monthly expenses.

[18] She deposed in para. 32 of her affidavit that she and her partner "struggle to pay our bills on a month to month basis", and despite the fact that she has steady employment her salary is "insufficient to pay for our expenses on its own", her partner's income is "inherently unstable" and "even in the best of months", their income is insufficient to pay off their significant personal debts (most significantly her partner's Canada student loan) and insufficient to invest or save for the future.

[19] Finally she deposed in para. 33 of her affidavit, her belief that she was unable to post security for costs in the action and "any order to that effect will likely cause me to abandon this action, which I believe would be unjust and unfair given the severity of the Defendant's transgressions against me."

The Position of the Defendant

[20] With respect to the issue of impecuniosity, the Defendant argues a very strict interpretation requiring a finding that the Plaintiff is poor, penniless or has little or no money. The Defendant points to what he submits is a substantial level of income for the Plaintiff and her partner in 2014.

[21] The Defendant's position is that the Plaintiff has not satisfied her onus to establish impecuniosity and even if she is found to be impecunious she has not demonstrated that her action is not devoid of merit. Furthermore, if the Plaintiff is found not to be impecunious but does not have assets to satisfy a cost order, she has not met the higher threshold on the merits issue and cannot satisfy the court that her claim has a real possibility of success.

[22] With respect to the merits possibility of success issue, the Defendant's position is that the Plaintiff's case has, as the Defendant puts it, "certain evidentiary vulnerabilities". In particular two key witnesses, her mother and sister, are deceased and the Plaintiff has not produced any contemporary medical records supporting her allegations. Further, she reported to a treating psychiatrist in 2002 that she did not have a personal recollection of abuse.

[23] The Defendant submits that the medical records do not support the Plaintiff's claim of abuse and her assertion that she received treatment at a certain hospital for a sexually transmitted disease.

[24] The Defendant also notes that there is no evidence produced of the Plaintiff's partner's student loan and no production of her banking records other than a record for one day showing the outstanding balance.

The Position of the Plaintiff

[25] The Plaintiff's position is that this action arises from her personal claim and her partner's income ought not be a factor. The evidence she has produced clearly establishes that she is impecunious within the meaning of that term as interpreted by the courts. The Plaintiff asserts that her action involving a flagrant breach of trust and authority should not be foreclosed by a security for costs order. She points out that she has produced medical documentation wherein she reported the alleged abuse to a number of treating professionals.

Discussion and Analysis

[26] I am mindful that r. 56.01 requires the court to exercise its discretion and make such order "as is just" which mandates consideration of all of the circumstances of the case. In considering an appeal from a Master's decision in Chachula v. Baillie, 2004 CanLII 27934 (ON SC), 69 O.R. (3d) 175, [2004] O.J. No. 1 at para. 18, Himel J. commented that exercising discretion in making an order "as is just" under r. 56.01:

a. …involves a balancing of interests of the parties which necessitates a review of the financial circumstances of the Plaintiff, the possible effect of an order for security for costs in preventing a bona fide claim from proceeding and permitting frivolous matters to continue where there is no prospect of recovering costs of the litigation. There is broad discretion in the court to determine what is just in the circumstances.

[27] I agree with the statement of Perell J. in Talati v. Tarnoweckyj-Carr, 2011 ONSC 228, [2011] O.J. No. 97 at para. 8 that "impecuniosity means an inability to raise sufficient funds for the litigation, including the exposure to costs liability: Leonard v. Prior, [1994] OJ 1753 (Ont. Gen. Div.) at para. 3.

[28] I am satisfied that the Plaintiff has made full and frank disclosure of her financial circumstances and has met the high evidentiary burden of demonstrating impecuniosity which is required in response to a Defendant's r. 56.01 motion (for discussion, see Talati v. Tarnoweckyj-Carr, at para. 9). The Plaintiff, has virtually no assets, earns a modest income and, at the time her affidavit has sworn her partner was unemployed. Her net income is less than their monthly expenses. She has provided her tax returns, copies of nine of her monthly bills and details of her bank account. I do not find the fact that there has been no documentary evidence respecting her partner's student loan or more fulsome banking records renders her disclosure inadequate.

[29] Having reached this conclusion, it is necessary to consider whether the Plaintiff's claim is plainly devoid of merit. Although the Defendant contends that this is a documentary case, in essence it is a case that will rise and fall on the credibility of the parties. The fact that documentary support of her allegations has not been produced does not lead me to the conclusion that her case is completely devoid of merit.

[30] As observed by Pierce J. in Gamble v. Lakeside Inn., 2012 ONSC 3404, 217 A.C.W.S. (3d) 803 at para. 18 "except in the clearest of cases, the court should be reluctant to deprive a litigant of the chance to have his case tried on the merits."

[31] At this very early stage of the action, I am unable to conclude that the Plaintiff's case is clearly devoid of merit. As a result, I make no order requiring the Plaintiff to post security for costs.

[32] I emphasize that I have reached this conclusion based on the evidentiary record before me and in my view the Defendant is not foreclosed in pursuing a further motion under r. 56.01 as this matter proceeds.

[33] In accordance with the agreement of counsel at the hearing of this motion, costs are awarded to the successful party, the Plaintiff, in the all-inclusive amount of $5,000.

"Justice L. C. Leitch"

Justice L. C. Leitch

Released: December 2, 2015