SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Manmohan Mohanti and Pratimarani Mohanti v. Liliana Mohanty and Rajendra Mohanty;
BEFORE: MASTER C. WIEBE
COUNSEL: Asma Desai for Liliana Mohanty and Rajendra Mohanty; Shanthi Devanand for Manmohan Mohanti and Pratimarani Mohanti.;
HEARD: February 17, 2016 at Toronto, Ontario.
REASONS FOR DECISION
I. INTRODUCTION
1The defendants, Liliana Mohanty and Rajendra Mohanty, bring a motion for an order requiring that the plaintiff, Manmohan Mohanti (“Manmohan”), post security for the defendants’ costs of this action in the amount of $15,000. The basis for the motion is that Manmohan is ordinarily resident in India.
2For the reasons stated herein, I grant the motion.
II. BACKGROUND
3Manmohan is the father of Rajendra Mohanty. The action concerns a motor vehicle accident that occurred on October 25, 2009. Mahmohan, 70 years old at the time, was a passenger in a car being driven by Rajendra Mohanty on Hwy 11 between Matheson and Kirkland Lake, Ontario. The car is owned by Liliana Mohanti. The car skid on black ice and landed in the ditch. Manmohan’s right foot was injured. He received treatment for his injuries in the Timmins Hospital. He and his wife returned to India in June, 2010.
4Manmohan made a claim against his son’s Accident Benefits insurer. The insurer scheduled medical examinations in Ontario on a date that was provided by Mahmohan, namely Septembe 27, 2010. Mahmohan did not attend these scheduled examinations because he was not given timely notice. He (accompanied by his wife) eventually did come to Ontario to be medically examined in September and October, 2013. The Accident Benefits carrier, TD Insurance, paid Manmohan $100,682.56 up to November 27, 2013. Shortly thereafter there was a settlement of the Accident Benefits claim whereby TD agreed to pay Manmohan an additional $56,000.
5Manmohan and his wife, Pratimarani Mohanti , started this action in Ontario on March 3, 2015, over five years after the accident. They plead that “the injuries sustained by the Plaintiff Manmohan were serious and required immediate medical attention.” They claim general damages of $500,000, special damages of $200,000 and punitive damages of $100,000.
6On June 11, 2015, the defendants delivered a Statement of Defence. Among the other defences, the defendants plead that the action is statute barred pursuant to the Limitations Act, 2002, S.O. 2002, c.24, that Mahmohan’s injuries are not a permanent and serious impairment of an important physical, mental or psychological function and that his claim for damages is therefore barred by the Insurance Act, R.S.O. 1990, c.I.8. At the same time, the defendants delivered a Jury Notice.
7Pratimarani Mohanti died in 2015. Ms. Devanand advised that Ms. Mohanti’s estate is not pursuing this claim, and that Ms. Mohanti will be removed from this action. Therefore, Manmohan is the only active plaintiff in this case.
8By letter dated May 13, 2015, Mr. Devanand confirmed to Mr. Desai in writing that Manmohan is not ordinarily resident in Ontario.
9At the outset of the argument of the motion there was an issue as to the admission of a supplementary affidavit sworn by Manmohan on February 10, 2016. It was served on the defendants by email on February 11, 2016. The defendants did not want me to accept this late submission. I heard argument. Neither side wanted to adjourn the motion, particularly as it had been adjourned twice in the past. I ruled that the supplementary Manmohan affidavit be admitted.
III. ISSUES
10Having reviewed the facta, authorities, the evidence and heard the arguments, I believe that the following are the issues to be determined:
a) Is Manmohan ordinarily resident outside of Ontario?
b) Is India a reciprocating jurisdiction?
c) Is Manmohan “impecunious” for the purpose of this motion?
d) Does Manmohan have a sufficiently meritorious case to avoid security for costs?
e) If security for costs is ordered, what is the amount and when should it be paid?
IV. ANALYSIS
(a) Is Manmohan ordinarily resident outside of Ontario
11Is it undisputed that Manmohan is not ordinarily resident in Ontario. Mr. Desai confirmed this in writing on May 13, 2015. Therefore, the motion falls squarely under the ground specified in Rule 56.01(1)(a) for granting security for costs, namely that the plaintiff is not ordinarily resident in Ontario.
(b) Is India a reciprocating jursidiction?
12A way for the plaintiff to possibly circumvent Rule 56.01(1)(a) is to provide evidence that the jurisdiction in which the plaintiff resides is a reciprocating jurisdiction under the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5. If such evidence is provided, the argument can be made that the enforcement of a costs award would not be significantly more expensive and inconvenient for the defendants, and that an order for security for costs should not be issued pursuant to Rule 56.01(1)(a). However, Ms. Devanand confirmed that India is not a reciprocating jurisdiction. I, therefore, conclude that the defendants in this case will have to try to enforce a costs order in a non-reciprocating jurisdiction.
13As a result, I must move to the next stage of the analysis, namely determining whether ordering security for costs would be “just” under Rule 56.01(1).
(c) Is Manmohan “impecunious” for the purpose of this motion?
14It was undisputed that, as the defendants have established the ground specified in Rule 56.01(1)(a), as noted above, the onus falls on Manmohan to prove under Rule 56.01(1) that it would be “unjust” for the court to order security for costs in this case. Manmohan seeks to do so by arguing that he is impecunious and that his case is not clearly devoid of merit, thereby making any order of security for costs in effect a deprivation of his potentially meritorious claim, something courts are loath to do.
15Proving his impecuniousness is, therefore, central to Manmohan’s defense to this motion. It is well settled law that proving impecuniousness is done at a high onus. The reason for this high onus is that the evidence of the plaintiff’s means usually rests solely with the plaintiff, and that the plaintiff is relying on this position to thwart an order for security for costs; see Pritchard v. Avante Solutions Inc. [2005] O.J. No. 2718 (Ont. Master) at paragraph 6.
16The level of disclosure required of a plaintiff who is relying on his alleged impecuniousness is described by various decisions is being “robust.” In Shuter v. Toronto Dominion Bank 2007 CanLII 37475 (ON SC), [2007] O.J. No. 3435 at paragraph 76 Master Haberman described the threshold as having been reached “by tendering complete and accurate disclosure of the plaintiff’s income, assets, expenses, liabilities and borrowing ability.” In Morton v. Canada (Attorney General) 2005 CanLII 6052 (ON SC), [2005] O.J. No. 948 (S.C.J.) at paragraph 32 Justice Quinn provided a useful description of what must be produced by the plaintiff in this circumstance: “Full financial disclosure is required and should include the following: the amount and source of all income; a description of all assets (including values); a list of all liabilities and other significant expenses; an indication of the extent of the ability of the plaintiffs to borrow funds; and details of any assets disposed of or encumbered since the cause of action arose.”
17I have reviewed the evidence proffered by Manmohan as to his alleged impecuniousness, and I find that it does not meet this exacting standard. In his initial affidavit sworn on December 2, 2015 (“the Initial Affidavit”), Manmohan discloses that his “primary source of income” is a pension of 46,000 Indian rupees ($935 CAN). He then makes the following bald and unsubstantiated statements about his financial means: “There are no prospects of my financial situation improving in the near future”; and “I do not have means to post security for costs in this action, nor I am in a position where I could borrow the necessary money, given my age, my limited income sources, simply my only source of income being my pension income, and my injuries at this age.” He then attaches two sets of bank statements from the State Bank of India for two savings accounts in Manmohan’s name for the period of 2013 to 2015. These statements show a pension income and various other debits and credits.
18In his supplementary affidavit sworn on February 10, 2016 (“the Supplementary Affidavit”), Manmohan provides tax documentation. He attaches a Form No. 16 for assessment year 2013-2014, which shows a gross pension income of 453,303 rupees. He attaches an Indian Income Tax Return Verification Form for assessment year 2014-15 which shows a gross income of 512,186 rupees. He attaches an Indian Income Tax Return Verification Form for assessment year 2015-16 which shows a gross income of 564,680 rupees. Manmohan states that these amounts convert to Canadian dollars at a ratio of 49/1, which was uncontested. This means that these documents confirm, according to Manmohan, that he made an income of $9,251 CAN in assessment year 2013-14, $10,452 CAN in assessment year 2014-15 and $11,524 CAN in assessment year 2015-16. He went to state that this confirms that he is indeed without the means to post security for costs.
19As pointed out by Ms. Desai, there is a question as to the veracity of these documents. I do not know whether the Form No. 16 is an Indian Government document. It may have been prepared by Manmohan’s accountant for all I know. If so, the weight to be given the document is diminished. As to the Verification Forms, they purport to be Indian Government documents, but I note that both are signed by Manmohan beside the stated date on both documents of January 31, 2016. This is just a few weeks before this motion. I was left wondering whether these documents were in fact prepared for the purpose of the motion. However, I am careful not to draw that conclusion.
20What I do conclude, though, is that all of this evidence is quite insufficient for me to conclude that Manmohan is impecunious. Nowhere does Manmohan disclose any other assets he may have, such as his place of residence, other real estate and securities. He does not even say that he does not have such other assets. He makes no disclosure of his liabilities. He makes no disclosure of his disposition of assets since October 25, 2009. The most that he says is that he is not in a position to borrow money given his age, limited income and injuries. This suggests that he may very well have such other assets and that he is simply incapable or unwilling to use them to post security for costs. In any event, he has not disclosed these other assets.
21Ms. Desai pointed out in argument that there is reason to doubt Manmohan’s assertions about impecuniousness. Manmohan retired as a geology professor in 1999. In his curriculum vitae that he attached to the Initial Affidavit Manmohan makes reference to various items of on-going work: research into the Odisha, India coast, speaking engagements in 2012 and 2014, and several publications. In the medical reports concerning Manmohan’s examinations in the fall of 2013 there is reference to Manmohan stating that he was writing a book on gold mining in Timmins, and was planning to resume teaching and establish his own geology department upon retirement. In the bank statements attached to the Initial Affidavit there are credits that are not stated to be pension related.
22Another issue was the status of Manmohan’s Accident Benefits settlement of $56,000 in 2013. The evidence indicates that Manmohan’s injuries had stabilized by 2013 when the settlement was made. None of the bank statements attached to the Initial Affidavit show the deposit of these funds into the indicated accounts. There is a real question as to what extent Manmohan has used these funds for his on-going medical care and where these funds are.
23Ms. Devanand referred me to credits in the bank statements which showed that Manmohan received large payments from the defendant, Rajendra Mohanty, on two occasions. She argued that this showed Manmohan’s dependence on his son. I do not accept that submission. There was nothing in the evidence to corroborate that argument.
24I, therefore, conclude that Manmohan has not met his onus of proving that he is impecunious.
(d) Does Manmohan have a sufficiently meritorious case to avoid security for costs?
25The case authority indicates that, where impecuniousness is not established, the plaintiff may still avoid an order for security for costs if he establishes that that he “has a good chance of success” or a “real possibility of success;” see Uribe v. Sanchez [2006] O.J. No. 2370 (Ont. Master) at paragraph 6. The rationale here is that a plaintiff should not be put to an inordinate expense (or hardship) to get a judgment on a highly meritorious case.
26However, the merits will play a much smaller role where the plaintiff has the ability to post security. Master Dash stated the following in Uribe op cit. at paragraph 6: “It would not be just to deny a defendant security for costs against a non-resident plaintiff who can afford to pay security just because he has a meritorious case. Departures from an award of security against a non-resident plaintiff should be exercised with caution and only when financial hardship is demonstrated.”
27Has Manmohan shown that his case “has a good chance of success”? The key issue here is the limitation defence raised by the defendants. Manmohan’s action was commenced over five years after the accident. The Limitations Act, 2002 specifies that a claim is statute barred if a proceeding in relation to that claim is commenced over two years after the claim is or should have been “discovered.”
28Mr. Devanand rightfully pointed out that the key issue in the case is whether Manmohan’s injuries are a permanent and serious impairment of an important physical, mental or psychological function under the Insurance Act. This threshold must be proven by Manmohan to give him an opportunity for recovery of the claimed damages from the defendants. Therefore, the two-year limitation period starts to run when Manmohan knew or ought to have known that his injuries met the “permanent and serious impairment” threshold. This proposition was not disputed by the defendants.
29The evidence that was presented to me, however, did not indicate that Manmohan has a “good chance of success” on this point. The key injury is to Manmohan’s right foot and leg. At one point, after the accident, and after he had returned to Indian, gangrene set in. However, the medical reports submitted indicate that Manmohan’s injuries had stabilized by the end of 2011.
30Most telling for me was a letter Manmohan wrote to the Accident Benefits insurer on February 10, 2012 wherein he stated the following: “Although the wound resulting from the injury has healed, I have developed a permanent disability to my right foot and leg, which has severely affected my mobility and I am not able to do my routine daily activities.” This letter indicates to me that as of February 10, 2012, Manmohan was aware that he had a “permanent and serious impairment” of the right foot and leg. Manmohan started this action on March 3, 2015, over three years after the February 10, 2012 letter. In my view, the defendants’ limitation defence is a serious one.
31Ms. Devanand made several arguments. She argued that Manmohan did not have legal advice until the fall of 2013. That may be true, but I was not made aware of any authority for the proposition that a plaintiff can escape a limitation defence because of the absence of legal advice.
32Ms. Devanand presented decisions in motions by defendants for summary judgment on the limitation defence concerning the threshold question; see Lees v. Willoughly et al, 2010 ONSC 2589 (S.C.J.) and Vanier v. Ray, (2004) CV-02-22153 (S.C.J.). In these decisions, the court denied the motions, finding that the commencement of the limitation period in those cases created issues warranting trial. I agree that had this been a motion for summary judgment by the defendants on the limitation defence, they might have had some difficulty given this authority and heavy onus on the moving party in such motions. But I am faced with a motion for security for costs and the question is whether the plaintiff has met his onus of proving that he has “a good chance of success” in the face of the limitation defence. Given the evidence, particularly Manmohan’s letter of February 10, 2012, I am not prepared to find that the plaintiff has met his onus in this regard.
33Ms. Devanand argued that Manmohan first became aware of how serious his injuries were when he had his medical examinations in the fall of 2013, which, if so, would undermine the limitation defence. Manmohan stated as much in paragraph 9 of his Supplementary Affidavit. This does not, in my view, assist the plaintiff, given Manmohan’s February 10, 2012 letter.
34Ms. Devanand relied heavily on the decision of Justice Himel in Chachula v. Baille et al 2004 CanLII 27934 (ON SC), [2004] O.J. No. 1(S.C.J.). In this case, Her Honour dismissed an appeal from a decision of a master on a defendants’ motion for security against a non-resident plaintiff. The master had found that, although the defendants had established that the plaintiff was non-resident and although the plaintiff was not asserting impecuniousness, there would be no security for costs because the plaintiff had a better chance of success than the defendants. This decision was criticized by Justice Ferguson in Nieh v. Sea Land Holding Corp. [2006] O.J. No. 4564 (S.C.J.) at paragraph 11. His Honour found that it was not a judicial exercise of discretion to refuse security for costs solely because the plaintiff had a better chance of success. I agree with Justice Ferguson and do not find the Chachula decision to be binding on me. In any event, I find that Manmohan does not have a better chance of success than the defendants for the reasons already stated.
35Ms. Devanand also relied on the decision of Justice Pitt in Zeitoun v. Economical Insurance Group [2007] O.J. No. 473 (S.C.J.) which dealt with an appeal from a decision of a master requiring security for costs from a non-resident plaintiff due to insufficient evidence of impecuniousness and the merits of the case. His Honour overturned the decision. I note that this decision was subsequently overturned on appeal; see Zeitoun v. Economical Insurance Group (2008) 2008 CanLII 20996 (ON SCDC), 91 O.R. (3d) 131 (Div. Ct.).
36I, therefore, do not find for the purpose of this motion that Mamohan’s case has a “good chance of success” in light of the limitation defence. Therefore, I do not have to, and I do not, examine whether an order for security for costs will cause hardship to Manmohan.
37As a result, I do not find that an award of security for costs is unjust in this case. I will order security for costs.
(e) If security for costs is ordered, what is the amount and when should it be paid?
38There was no serious debate over the quantum of the security for costs being sought by the defendants. The defendants presented a Bill of Costs for their anticipated costs of this action. It showed a total cost of $90,953.40. $60,800 of this total was for anticipated legal fees, and $30,153.40 was for anticipated disbursements. It was not clear whether these figures are tax included.
39I had some concerns about the accuracy of this Bill of Costs, such as the stated anticipated length of the trial. I am not sure that two weeks will be required. But these concerns were allayed when Ms. Desai made it clear that all that the defendants were seeking was security in the amount of $15,000. The defendants’ primary concern is being secured for the disbursement costs of having to bring Manmohan from Indian to Canada for discoveries, defence medical examinations and mediation. One such trip cost the Accident Benefits insurer about $5,000. Those three trips alone would justify the quantum of the security for costs. Ms. Devanand did not dispute the quantum of the requested security.
40I, therefore, find that $15,000 is the proper amount of security to be posted.
41Because this amount is for disbursements and because the amount is not relatively speaking great, I will also order that all of it be paid at this time. I will give Manmohan a little more time than usual to post this security, namely 60 days from the date of this order.
V. CONCLUSION
42I order that Manmohan post security of $15,000 for the defendants costs in this action on or before 60 days from the date of this order.
43As for the costs of this motion, both sides filed costs outlines at the close of argument. Ms. Desai’s costs outlines shows $2,582.60 for actual cost, $1,662.60 for substantial indemnity costs and $1,202.60 for partial indemnity costs. All of these figures are tax included. Ms. Devanand’s costs outline shows $11,422.55 for actual cost, $10,280.29 for substantial indemnity costs and $6,853.53 for partial indemnity costs.
44Usually I would order further written submissions on costs. I do not find it necessary to do so in this case. Furthermore, there is a need to bring this motion to an end.
45In assessing costs, I considered several factors. Clearly, the defendants were the successful party in this motion, and are entitled to the costs of the motion as a result. Also their claimed costs are well within what Manmohan would reasonably have expected to pay given his own costs outline. There is nothing in this motion that warrants a departure from the usual standard of costs awards, namely an order for partial indemnity costs. In any event, the amount of additional costs for a substantial indemnity award in favour of the defendants does not justify having a further discussion on that point. The quantum of what the defendants are claiming in costs is quite reasonable. For instance, Ms. Desai shows an hourly rate of $200, which is reasonable given her seven years of practice. I award what the defendants seek in partial indemnity costs.
46I, therefore, also order that Manmohan pay the defendants $1,202.60 in partial indemnity costs for this motion, to be paid on or before 60 days from the date of this order.
DATE: February 18, 2016 __________________________
MASTER C. WIEBE