SUPERIOR COURT OF JUSTICE
Court File No. 51022/09
Date: 2015/12/18
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B E T W E E N :
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MARK DEMARCO
Plaintiff
- and -
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JOSEPH NICOLETTI and JOHN LEIGH DABOLL
Defendants
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P R 0 C E E D I N G S 0 N M 0 T I 0 N
BEFORE THE HONOURABLE JUSTICE C . BRAID ,
on December 18, 2015 at ST. CATHAR INES , Ontario
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APPEARANCES:
30 M . Demarco Appeared in Person
Counsel for the Defendant John
Ms. K . Watters
Leigh Daboll
(i)
Table of Contents
SUPERIOR COURT OF JUSTICE
T A B L E O F
C O N T E N T S
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REASONS FOR DECISION 1
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Transcript Ordered : Transcript Completed:
Ordering Party Notified :
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June 6, 2017
June 6, 2017
June 6, 2017
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Reasons for Decision - Braid, J .
FRIDAY , DECEMBER 18, 2015
REASONS FOR DECISION
5 BRAID, J. (Orally):
This is a motion brought by the defendant John Leigh Daboll seeking to dismiss the plaintiff 's claim because he has failed to pay security for
10 costs.
In response to that motion, the plaintiff Mark Demarco has brought a responding motion seeking the following :
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1. An order decreasing the amount of security for costs that were previously ordered.
20 2 . An order staying the security for costs order pending the adjudication of two other court actions.
- An order delaying the security for costs
25 order until the plaintiff collects on two other court actions .
- In the alternative, an order permitting
the plaintiff to post security by way of a
30 Charge against his properties in lieu of
payment of monies.
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Reasons for Decision - Braid , J .
FACTS:
The following is a summary of the facts as they
are agreed , or as I find them on these motions .
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The statement of claim in this action was issued on February 25, 2009 . Although the title of proceedings lists two defendants , the action against Mr. Nicoletti was dismissed by Justice
10 Crane in 2010 . The remaining defendant , Mr .
Daboll, who I shall hereinafter refer to as the
defendant , has outstanding cost orders against
Mr . Demarco, who I shall hereinafter refer to as
the plaintiff , from a separate defamation action.
15 This includes $20,000 in costs which were ordered at trial; $2,500 costs order by the Divisional Court ; and a $1,000 cost order by the Court of Appeal , for a total of $23,500.
20 The defendant brought a motion for security for costs in this action. That request was primarily based on the fact that the plaintiff had not paid any of the outstanding cost orders in the defamation action .
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On February 20, 2014, Justice Ramsay found that the plaintiff was not claiming impecuniosity and ordered the plaintiff to post $50,000 for security for costs . Justice Ramsay also ordered
30 the plaintiff to pay $3,000 for the costs of that
motion .
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Reasons for Decision - Braid, J.
The plaintiff then sought leave to appeal the security for costs order. That application for leave to appeal to the Divisional Court was dismissed by Justice Gordon on July 2nct, 2014.
5 On November 26, 2014 , the matter was brought back before the court . The defendant consented to Justice Gordon 's order being set aside and the application for leave to appeal was argued. Justice Sloan dismissed the application for leave
10 to appeal the security for costs order and further ordered $8,000 costs against the plaintiff.
Almost two years have passed since the original
15 order for security for costs order was made, and more than one year has passed since the leave to appeal was dismissed. The plaintiff has
exhausted any appeal rights from the security for
costs order . The plaintiff has deposited no
20 money in court and has not complied with the order in any fashion . The current outstanding costs orders, which have been made against the plaintiff in favour of the defendant, can be summarized as follows:
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- $23,500 costs of the defamation action.
2. $3,000 costs ordered on the security for costs motion.
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3. $8,500 costs ordered on the motion for leave to appeal the security for costs
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Reasons for Decision - Braid, J.
order.
In total, the plaintiff now owes the defendant
$35,000 in costs, none of which has been paid.
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When the security for costs order remained
unpaid , the defendant brought a motion to dismiss the action based on default of payment of security. That motion was served in August of
10 2015, with a return date in September of 2015 .
The motion was then adjourned to October 28, 2015 in assignment court.
On October 21, 2015 , the plaintiff served his
15 cross motion and provided material in response to the motion to strike the claim . By his own admission , the plaintiff has significant assets . His sworn affidavits reveal that he has real and personal property valued at approximately
20 $1,179,000 . The plaintiff states that there are
mortgages on the properties totalling $175,000
and that he owes a CRA debt of approximately
$160,000 . Taking these debts into account , the
plaintiff still has assets with a value in excess
25 of $840,000 .
The plaintiff has not provided any evidence regarding any ongoing income, whether rental or otherwise from some of these properties, which
30 appear to be commercial properties. He has not provided evidence regarding his current
employment status or his own personal income. He
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Reasons for Decision - Braid, J.
has not provided any evidence of money in bank accounts or investments that might be available to satisfy the security for costs.
5 The plaintiff claims that he would suffer a "huge loss" on the sale of his properties if he were forced to sell the properties to pay security for costs. The plaintiff advised me during submissions that he has owned three of the
10 properties since the 1990s and that he purchased the 'last one during the last 10 to 15 years.
It is not clear what the purchase price of the properties might have been ; what income he has
15 earned from those properties over the years ; and ,
whether the fair market value of those properties has increased or decreased since they were purchased . The plaintiff stated during oral submissions that properties have been de-valued
20 in Niagara Falls , but it is not clear what the de-valuation is in comparison to. The plaintiff also stated orally that some of the properties
are listed for sale and that he has continued to reduce the sale price over a number of months.
25 None of this information is in evidence on these
motions.
The plaintiff stated in oral submissions that the properties have CRA attachments. If the
30 properties are sold , CRA would seize the money
that is owed from the proceeds of the sale. This
appears to be part of the "huge loss" from the
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Reasons for Decision - Braid, J .
sale of the properties that the plaintiff is
talking about in his affidavit material.
In the ·plaintiff's affidavit he stated:
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My continuous efforts to date [to obtain funds to post security for costs] have been unsuccessful.
10 This is a bald assertion. No evidence has been provided regarding inquiries at any financial or other lending institution. The plaintiff has not provided any documentation from third parties setting out any efforts he has made to obtain
15 funds.
Other than the bald assertion that he would suffer a "huge loss" if he sold the properties, the plaintiff has provided no evidence regarding
20 what loss, if any, would be suffered. The claim
that the plaintiff would suffer a loss is not supported by any documentation or valuation of the fair market value of the properties or any loss that might be incurred by their sale. It is
25 not even clear whether it is a loss of income
from the properties; or loss of value from when
he originally purchased the property; or, loss of future investment opportunity.
30 The plaintiff has offered to provide security on one of the properties in lieu of the security for costs order. This offer was considered and
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Reasons for Decision - Braid, J .
rejected by Justice Ramsay when he made the order for security for costs.
The plaintiff has requested that the security for
5 costs order be stayed or delayed pending the determination of two other actions against lawyers. One of those actions was commenced in October of 2013 and it is not clear the status of
that action as of today's date .
10 has not even been commenced.
The other action
On the evidence before me, the merit of those actions is entirely unclear. The plaintiff says that those two other cases are related to this
15 action as the conduct of the two law firms
contributed to cost awards relied on by the defendant for security for costs .
I reject this argument outright. The cost orders
20 that have been imposed against the plaintiff are as a result of the plaintiff's pursuance of litigation for which the court ordered costs when he was unsuccessful. The actions , or proposed actions against the other lawyers are not
25 related; and there is no authorities to suggest that this action before me should be delayed pending any possible outcome of other actions. I find that those actions are completely unrelated to this case against Mr. Daboll.
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ANALYSIS
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Reasons for Decision - Braid , J.
1. The plaintiff's motion regarding security for
costs order.
The first two paragraphs of the order for
5 security for costs state the following:
- This court orders that the plaintiff, Mark Demarco, shall post security for costs in the amount of $50,000 to be paid into
10 court within 30 days from the date of this
order .
- This court further orders that the plaintiff shall not take any further step in
15 this proceeding, except an appeal from this
order , until the security has been paid into court.
The order clearly states that the security for
20 costs was to be paid within 30 days and that no other step can be taken by the plaintiff in the proceeding until the security for costs are paid. This suggests , on its face, that the plaintiff should not be permitted to bring his motions.
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However , Rule 56 .07 does permit the court to consider a request to modify the terms of a security for costs order. The Rule states the following:
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56.07 The amount of security required by an order for security for costs may be
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Reasons for Decision - Braid, J.
increased or decreased at any time.
The plaintiff relies on Rule 56.07 in making his
motions for the relief that he is seeking.
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To determine whether this court should exercise its discretion and permit the relief sought , it is important to examine what the plaintiff is
seeking. Essentially , the plaintiff wants to re-
10 visit the security for costs order and/or to circumvent the order entirely after his appeal rights have been exhausted. He has not made any contribution whatsoever towards security for costs and he waited until he was served with the
15 defendant's motion to strike the action before moving for the relief that he now seeks.
I find that the circumstances have not changed
since the security for costs were ordered . If
20 anything , the plaintiff's position is made worse by the fact that he has accumulated additional cost orders that have not been pa id to the defendant.
25 With respect to the request to decrease the amount to be paid as security for costs , or to
change the security to a Charge instead of money, I am mindful that this court has jurisdiction to do so, but that it should not be done lightly.
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In the case of Novarode NV/SA v. Nova Coated
Products Ltd, [1987] O .J . No. 2327 , Master
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Reasons for Decision - Braid , J.
Peppiatt stated the following , which I adopt in
this case:
In my view , the jurisdiction to increase or
5 diminish the amount of security already ordered ought not be exercised lightly and ought not to be used to second guess the Court that made the original order , whether on consent or otherwise , unless the gap
10 between what was ordered and what later
appears to be necessary is significant .
The plaintiff has not paid any money into court as security for costs. He now owes the defendant
15 $35,000 in court costs that have been ordered and has made no payment on those orders. The plaintiff has not established a change in circumstances that might justify revisiting the security for costs order .
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With respect to the request to stay the security for costs order , or to delay the order pending two unrelated actions , I find that it would be
improper for the court to grant such relief . One
25 of the actions has not even been commenced yet; and both are wholly unrelated to this action. It would be inappropriate for the court to delay the payment of security for costs awaiting the
results of another unrelated action .
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Justice Ramsay found the plaintiff in this case
is not impecunious. His financial situation
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Reasons for Decision - Braid, J.
demonstrates that he is still not impecunious as of the date of this motion.
I have considered the materials filed by both
5 parties and the submissions made in court. I decline to exercise my discretion to grant any of the relief sought by the plaintiff.
The motions brought by the plaintiff are
10 therefore dismissed.
- Defendant's motion to strike the claim.
The defendant has brought a motion pursuant to
15 Rule 56.06 seeking to strike the claim because the plaintiff has not complied with the order to post security for costs. The defendant asks that
the court exercise its discretion and dismiss the
action as a result of a default.
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The relevant portions of Rule 56 .06 state as follows:
56.06 Where a plaintiff ... defaults in
25 giving the security required by an order, the court on motion may dismiss the proceeding against the defendant ....
In response to the defendant's motion, the
30 plaintiff argues that it would be unfair to grant the relief sought. He relies on similar
arguments made in support of his own motions,
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Reasons for Decision - Braid, J .
namely that he would be forced to sell properties at a "huge loss" to satisfy the order for security for costs and it would be unfair to force him to do so.
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It is clear that any relief granted under Rule 56 .06 is discretionary. The court is not to perform a review of the decision to order that security be paid into court, nor to review the
10 quantum or type of security that was ordered.
Instead, the court must confine its focus to the efforts made by the plaintiff to meet the obligations imposed in the order for security for costs.
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In the case of Leonard v . Prior, [1994] O.J. No . 2045, Justice Macdonald of the Ontario Court (General Division) held that the onus is on the plaintiff on a motion of this nature:
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It is incumbent upon the plaintiffs to bring forward persuasive evidence to move the court to relieve against a breach of the
order ... The plaintiffs must put "their
25 best foot forward" ...
The reasoning in the Leonard case is followed with approval ln the case of RNH Real Estate Developments Inc. v. Lodi, [2006] O.J. No. 1403.
30 In that case, Master Dash stated that the plaintiff had not provided details or corroboration (such as description of the land,
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Reasons for Decision - Braid , J .
valuations and specifics of sale attempts or potential buyers) which would aid the court in assessing the veracity of the plaintiff's position . The court confirmed that the onus is
5 on the plaintiff to produce evidence in support of his position on Rule 56 .06 motion.
In the case before me, the onus is on the plaintiff to put his best foot forward to
10 persuade the court that it should relieve against a breach of the order for security for costs.
The plaintiff has not provided evidence to satisfy me that he has made any real efforts to
15 satisfy the order for security for costs. On his
own evidence the plaintiff states that he has significant assets. Even taking into account his debts, the assets that he has listed have a total value of approximately $850,000 .
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The plaintiff states that he was advised by a lawyer that he would be unable to obtain mortgage funds while CRA has a lien on the properties . However , the plaintiff has not provided any proof
25 that he has inquired of, or made efforts to seek a loan, from any bank or lending authority to determine whether he could be approved for a mortgage.
30 In his own words, the plaintiff has “ample equity” in real property to provide security. However, he simply does not wish to sell the
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Reasons for Decision - Braid, J .
properties at this time . As I have noted previously , the plaintiff's claim that the sale of the properties could or would result in a huge loss is not clear in terms of what that loss
5 might be , and he has provided no supporting
documentation to substantiate any such loss .
The theme of the plaintiff's submissions is that the prior orders against him are unjust and that
10 it would be unjust to dismiss his action. He
argues that this is not the intended use of the security for costs rule. I reject this argument.
The plaintiff has known since November 26, 2014
15 that his appeals from the security for costs were exhausted. He knew that there was an order for security for costs and the action was stayed
until such time as he paid those costs into court. He has also known since August of 2015 ,
20 when he was served with the defendant's motion , that the Rules permitted the court to dismiss his action for failure to pay security for costs into court (if he did not know this before he received those motion materials) .
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If the plaintiff wanted this action to proceed , he should have paid the money into court and he has not done so . Instead , he has come before the court seeking to revisit the order of Justice
30 Ramsay. I find that, in fact, it would not be
unjust to dismiss the action in the circumstances of this case, in which the plaintiff has made no
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effort to pay security for costs and when his financial circumstances have not changed since the granting of the order. On the contrary, the plaintiff has failed to comply with costs orders
5 and security for costs orders previously imposed on him and has essentially asked this court that he be entitled to run this litigation on his own terms. In my view, it would be unfair to permit the action to proceed in these circumstances.
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CONCLUSION
In the result, the plaintiff's motions are
dismissed. With respect to the defendant's
15 motion seeking an order dismissing the claim ,
this action is hereby dismissed pursuant to Rule
56.06 of the Ru les of Civil Procedure.
Form 2
20 Certificate of Transcript
Evidence Act , Subsection 5(2)
I, Heather L . Marceau certify that this document is true and accurate transcript of the recording of DeMarco v. Daboll in the
25 Superior Court of Justice, held at 59 Church Street , St.
Catharines , Ontario, taken from Recording 2111_CRT9_20151218 094741 10 BRAIDC.dcr which has been certified in Form 1.
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(Date) Signature of Authorized Person