Court File and Parties

COURT FILE NO.: 716/14 (Guelph) DATE: 2016 04 21

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

IBOLYA BARTHA Applicant – and – STEFAN BARTHA and ENIKO BARTHA Respondent(s)

Counsel: David Woollcott, counsel for the Applicant Richard J. Campbell, counsel for the Respondent (s)

HEARD: April 18, 2016

Justice Tzimas

Endorsement

The Issue

[1] The defendants, Stefan and Eniko Bartha have moved for an order requiring the plaintiff, Ibolya Bartha to pay into court security for costs up to and including the pre-trial, in the amount of $16,565.41. They ask for such relief on the basis that Mrs. Bartha is ordinarily resident outside of Ontario and she has insufficient assets within the meaning of Rule 56.01 of the Rules of Civil Procedure, within Ontario. They also contend that Mrs. Bartha is not impecunious and would not be prejudiced by having to pay security for costs.

[2] Mrs. Bartha does not dispute her residency. She resides in Romania in the small city of Satu Mare. She was visiting her son, Stefan Bartha in 2013 when she tripped and fell on the stairs at 70-74 Janefield Avenue, in Guelph, Ontario.

[3] She opposes the defendants’ motion on essentially two grounds. First, she has been deprived by the defendants of any access to the location where she fell to undertake her own investigations concerning the question of liability, despite eight separate requests made by her lawyer. This has placed her in a seriously disadvantaged position, as she has not been able to assess liability. Secondly, she alleges impecuniosity and says that she has no means of coming up with the requested security. She contends that an order for security would be unjust in her circumstances.

[4] In my review of this matter and my consideration of all the evidence before the court, I conclude that the defendants’ motion is at best premature and ought to be dismissed. Having regard for all of the circumstances of this case, I conclude that it would not be just to order Mrs. Bartha to post a security for costs. My analysis is outlined below.

Background

[5] The action arises out of a slip and fall that is alleged to have occurred on May 3, 2013 at the defendants’ home located at 70-74 Janefield Avenue, in Guelph, Ontario, when Mrs. Bartha fell down the stairs. Mrs. Bartha was visiting her son, Stefan and his wife, Eniko, from Romania. Mrs. Bartha has pleaded in her statement of claim that the stairs, or the landing above the stairs, were unsafe and that her injuries were caused by the defendants’ negligence.

[6] As a result of the alleged fall, Mrs. Bartha suffered a number of fractures to her face, her collarbone, her ribs, her upper spine and a brain injury. In her Declaration attached to the affidavit of her Power of Attorney, Mr. Barney Cserepka, she noted that she “ran from the kitchen to answer the phone which was near the basement door, I’ve stumbled, I’ve fallen and have tumbled for 6 meters, losing consciousness”, resulting in her hospitalization.

[7] Mrs. Bartha, through her counsel made repeated requests for access to the location of her fall to undertake an investigation and to view the specific location of the fall. Such access would have enabled Mrs. Bartha’s counsel to assess the parameters of liability. Eight requests for such inspections were refused and ultimately, the defendants’ insurer advised Mrs. Bartha’s counsel that their investigation led them to conclude that there was no liability on the part of the defendants. Counsel for the defendants, in his submissions advised the court that his clients would be contesting liability very vigorously.

[8] Mrs. Bartha returned to Romania after the accident.

[9] Mrs. Bartha is seventy-eight years old. She is a mother of three adult children. She was a “home mother and homemaker” and she was married to Stefan Bartha (Senior) who was a pastor in the Baptist Christian Church in Romania. Pastor Bartha died in January 8, 2004 and Mrs. Bartha has been a widow since then.

[10] Mrs. Bartha is a pensioner and she has various health issues. Her sole source of income is a pension from the Baptist Christian Church in Romania. Her pension is valued at approximately $360 per month. She provided a copy of a Certificate from the House of Pensions and Aids of the Baptist Christian Cult in Romania confirming the pension. The Certificate specifically noted that “the pension is paid at the domicile of the above-named (Mrs. Bartha Ibolya), through the mail service”. There is no indication if the payment of the pension is in cash or by some other financial instrument.

[11] In her Declaration, Mrs. Bartha stated that she did not have any other source of income. Both the Certificate and the Declaration were attached as exhibits to an affidavit filed by Mr. Barney Cserepka, who is Mrs. Bartha’s Power of Attorney. The said original documents were in Romanian but official translations into English were also attached.

[12] Mrs. Bartha advised her Power of Attorney that she does not have any savings or any bank accounts in any financial institutions. Nor does she have other sources of income. She resides in her family home, an apartment in Satu Mare which she described as a family dwelling and where she lives together with her daughter and her son-in-law. Mrs. Bartha states that she is dependent upon the support of her daughter and her son-in-law who are teachers and who earn between $600 and $1,000 per month. The family apartment is said to be worth less than $20,000.

[13] Mrs. Bartha says that she has no ability to borrow funds or to obtain funds to pay for security for costs. She does not file tax returns in Romania because none are required for individuals of her age that have her level of income. As a result, she does not have any tax returns to provide to the court.

Analysis

a. Legal Authorities

[14] Rule 56.01(1) of the Rules of Civil Procedure sets out that the court, on a motion by the defendant in a proceeding, may make such order for security for costs as is just where it appears that, among other things, the plaintiff is ordinarily resident outside of Ontario.

[15] Rule 56.04 sets out that the amount and form of security and the time for paying into court or otherwise giving the required security shall be determined by the court. Rule 56.07 sets out that the amount of security required by an order for security for costs may be increased or decreased at any time.

[16] In Yazdani v. Ezzati (August 5, 2015), Brampton, CV-14-3239 (Ont. S.C.), Mackenzie J. set out the test for security for costs:

There is no real dispute between the parties as to the test for security for costs. It may be simply stated as follows:

On a motion for an order for security for costs, the initial onus is on the party moving for security to show that the other party falls within one of the circumstances for which an order may be made: here the plaintiff ordinarily resides outside Ontario.

The party responding to a motion for security for costs may avoid an order issuing by showing that security is unnecessary because it has sufficient exigible assets in Ontario or that it should be permitted to proceed to trial despite its inability to pay costs.

On a motion for security for costs, the court has a broad discretion in deciding whether security for costs is just in the circumstances. The court will carefully scrutinize the quality and the sufficiency of the plaintiff’s assets and determine whether they are genuine assets.

The merits of the plaintiff’s case is a relevant factor in the exercise of the court’s discretion to make an order for security for costs. If the plaintiff shows a real possibility of success, then the court may conclude in the circumstances of the case, justice demands that he or she not be required to post security.

Impecuniosity in the context of a non-resident plaintiff responding to a motion for security for costs by a defendant includes the inability to raise sufficient funds for the purposes of the litigation. Where impecuniosity is shown the plaintiff to avoid having to post security for costs needs only to demonstrate that his or her claim is not plainly devoid of merit.

A litigant who relies on impecuniosity bears the onus of proof and must do more than adduce some evidence of impecuniosity and must satisfy the court that he or she is genuinely impecunious with full and frank disclosure of his or her financial circumstances. [Emphasis removed]

[17] On the relationship between a party’s impecuniosity and the merits of a case, the case law has treated these issues as concomitant considerations for the court. In Shibish v. Scher, 2015 ONSC 1844, at para. 36, Justice Brown noted:

Merits have a role in any application under Rule 56.01(1), albeit on a continuum. Merits are a relevant factor at the second stage of the Rule 56.01 analysis. It is an error of law to fail to consider the merits of the plaintiff’s claim in an application for security for costs brought by the defendant, whether or not the plaintiff raises impecuniosity in defence of the motion: Padnos v. Luminart Inc., [1996] O.J. No. 4549 (Ont. Gen. Div.). The issue is not whether the merits are considered but to what extent they are considered. The appropriateness of any investigation into the merits depends on the nature of the action; the complexity of the pleadings; and whether the defendant can satisfy one of the subrules (a) to (f).”: Horvat v. Feldman, [1986] O.J. No. 2560 (Ont. H.C.).

[18] In 720441 Ontario Inc. v. The Boiler et al. 2015 ONSC 3550, at paras. 6 – 12, Master Haberman elaborated on this subject by noting the following symbiotic relationship between a party’s impecuniosity and the merits of a claim:

Case law directs that we treat plaintiffs who have established impecuniosity differently from those who have not when determining the order that is just on a security for costs motion. When impecuniosity has not been alleged, or has been alleged but not established, the plaintiff has a higher burden as regards the merits of their claim when trying to avoid having to post security.

This is a sensible approach. As Ontario is a cost jurisdiction, the purpose of Rule 56.01 is to ensure that those who turn to our courts for assistance are generally able to fulfill the court’s expectations, which include paying costs if and when ordered to do so.

As the Rule directs the court to make the “order that is just”, the cases have carved out an exception for plaintiffs found to be “impecunious”, a term that has been defined by case law. This exception is based on the premise that it could be unjust to deprive a plaintiff of the ability to achieve a just result due to his inability to pay costs. In those situations, a plaintiff need only show that his claim is not devoid of merit.

Where impecuniosity has not been established, however, there is no legally recognized impediment, so the burden placed on a plaintiff for proceeding without posting costs is necessarily higher – something more is needed for the green light. This properly reflects the fact that Ontario is a cost jurisdiction.

As a result, where impecuniosity is not alleged or not proven, it is not enough for a plaintiff to show that their claim is not devoid of merit. In these instances, the onus is on the plaintiff to show that their action has a good chance of success in order to avoid the imposition of the order sought (see Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 2013 ONSC 686, 2013 CarswellOnt 1630 (Ont. S.C.J.), and on appeal, 2013 CarswellOnt 9210 (Ont. Div. Ct.); Stojanovic v. Bulut, 2011 ONSC 874 (Ont. Master); Cigar500.com Inc. v. Ashton Distributors Inc., [2009] O.J. No. 3680 (Ont. S.C.J.); Zeitoun v. Economical Insurance Group (2008), 91 O.R. (3d) 131 (Ont. Div. Ct.)). Where the plaintiff is able to demonstrate this, the order that is just could include that no security at all need be posted.

b. Residency

[19] There is no dispute that Mrs. Bartha is not ordinarily resident in Ontario. Mrs. Bartha was visiting her son in Guelph from Romania when she fell at his residence. She returned to Romania where she continues to live.

c. Impecuniosity and Merits

[20] My overriding difficulty in my ability to apply the principles that govern Rule 56 to arrive at an order that is just in the circumstances, rests with the defendants’ denial of any access to their premises for Mrs. Bartha’s inspection. This response by the defendants, whether by design or not, has effectively deprived Mrs. Bartha and her counsel from being able to assess Mrs. Bartha’s claim and to make any meaningful submissions on whether her claim has any merit or whether she has a good chance to succeed. In the result, the defendants hold all the cards on the issue of liability, including Mrs. Bartha’s ability to address the merits of her claim in the context of this motion.

[21] Given the symbiotic relationship between a party’s financial means and the merits of a claim, Mrs. Bartha’s inability to address the merits of her claim, through no fault of hers, is a fundamental flaw in the defendants’ motion and their request for the posting of security. It is not enough for the defendants to argue that Mrs. Bartha has the financial means to post security. Even if the court were to agree with the defendants, such a finding would not be dispositive of the defendants’ motion. At best, it would raise the standard of review on the merits of the claim from a question of whether the claim is devoid of merit, to a question of whether the claim stands a good chance of success.

[22] In these circumstances, it would be most unjust to order Mrs. Bartha to post any security. Mrs. Bartha and her counsel must be afforded the opportunity to undertake the necessary inspections of the premises where the accident occurred. It is possible that after the appropriate inspection and practically speaking, after discoveries are concluded, the defendants may renew their motion. At that time, it would be reasonable to expect that everyone will have had ample disclosure to be able to address the issue of defendants’ liability, and by extension, the merits. It is noted that the defendants do not contest the merits as they relate to damages.

[23] Insofar as Mrs. Bartha’s financial position is concerned, given the extensive submissions by both sides on the quality of Mrs. Bartha’s evidence as well as the prospects that the defendants might renew their motion at some later point in time, I find it necessary to make the following observations. While there is no question that “the litigant who relies on impecuniosity bears the onus of proof and must do more than adduce some evidence of impecuniosity and must satisfy the court that he or she is genuinely impecunious with full and frank disclosure of his or her financial circumstances”, see Yazdani, supra., at para. 20, such a requirement does not equate with the requirement that the evidentiary record be exhaustive, leaving no stone unturned. The evidence must be robust, it must not leave unanswered material questions, and it must be sufficient to establish impecuniosity, see Shibish, supra., at para. 32.

[24] In my review of Mrs. Bartha’s evidence, having regard for her age, her various disabilities and the quality of her evidence, I have little difficulty concluding that the evidence she produced is sufficient to conclude that she is impecunious. In her evidence, she produced the necessary documentation to confirm her monthly pension of $360. She made a solemn declaration in the Romanian language and she provided a Pension Certificate. She provided the court with the translation of both documents into English by a certified translator.

[25] The defendants argued that she should be producing additional confirmation that she does not have other sources of income, that she does not have any bank accounts, and that she cannot obtain a loan from any sources, be that from family members or financial institutions.

[26] Having regard for Mrs. Bartha’s age, her various health issues, including a “traumatic intracranial injury”, the fact that she has been a widow since 2004, that she was a homemaker all her life and married to a pastor, and that her total pension is about $360, I find the defendant’s submission that Mrs. Bartha be required to produce evidence that she was denied a loan from a financial institution, or some confirmation that she does not have a bank account or savings, to be disproportionate to her circumstances, and to the task at hand.

[27] I have reviewed the cases relied upon by the defendants in support of their submission that Mrs. Bartha’s evidence was insufficient, including Shibish, supra., Shah v. Loblaw Companies Limited, 2015 ONSC 5987, O’Neil v. Le Roux, 2011 ONSC 39 and Morton v. Canada (A.G.), [2005] O.J. No. 948. However, in each of these examples, the litigants’ overall evidence gave rise to suspicions over their actual financial positions. For example, in Shibish, the claimant had a part-time job, she claimed substantial monthly expenses, she was receiving a scholarship with a monthly income of $2,083 and there were questions concerning her share in the ownership of a farm. She left a number of unanswered questions concerning her financial situation. Similarly, in O’Neil, his monthly expenses and activities raised questions about the plaintiff’s true financial situation. In Shah, the plaintiff’s evidence did not align itself with his actual activities and travels to and from India.

[28] In Mrs. Bartha’s case, her evidence on her financial situation is consistent with her overall profile. Where she could produce financial documents, she did just that. She is already living with her daughter and son-in-law, suggesting dependency on her daughter. On a pension of $360, to suggest that she cannot obtain a loan is to state the obvious. Given her limited means, her age, and her medical conditions, to require her to go and obtain a letter from the financial institution(s) in Satu Mare would be excessive and prohibitive. In this regard, I am mindful of the expenses that might be involved for Mrs. Bartha to obtain documents, have them translated and then sent to her Power of Attorney. If there were indicators to suggest that her disclosure was less than frank or that she failed to explain certain expenses, I would be less concerned about such costs but of a pension of $360, such a requirement runs the risk of putting justice into disrepute.

[29] Similarly, if Mrs. Bartha does not have bank accounts, I am not certain how she would go about proving that negative On my read of Mr. Cserepka’s affidavit and Mrs. Bartha’s Declaration, as translated, there seems to be some discrepancy or conflation between “savings” and “bank accounts”. I am left to wonder if something has been lost in the translation.

[30] On further reflection I find that the suggested difference is without a material distinction. In other words, a bank account with a zero or a minimum balance is not that materially different from the non-existence of such an account. This observation is underscored by Mrs. Bartha’s pension of $360. I don’t see how Mrs. Bartha would have any savings on such a pension, even if the standard of living is low. On the evidence before the court everything points to a lack of savings and a dependency on Mrs. Bartha’s children for additional support. In that regard, I note that her children are far from affluent. Although the evidence of their financial means does not go beyond a bald statement, it is not a basis to conclude that Mrs. Bartha’s evidence in the totality, is insufficient to make a finding of impecuniosity.

[31] In the result, while it would not hurt Mrs. Bartha to supplement her evidence with any additional evidence that she may have regarding her financial position, I am satisfied that in her circumstances, Mrs. Bartha’s evidence is sufficient to support a finding that she is impecunious.

Concluding Remarks

[32] In light of my analysis and findings, the defendants’ motion is dismissed. The defendants may renew their motion following the examinations for discovery.

Costs

[33] The parties are strongly encouraged to reach agreement on costs. If the parties cannot reach agreement, the plaintiff shall have until May 9 to serve and file her submissions and the defendants shall respond by no later than May 24, 2016. Such submissions are to be limited to two pages, double-spaced, as well as a Bill of Costs and any offers to settle.

Tzimas J.

Date: April 21, 2016

[34] COURT FILE NO.: 716/14 (Guelph) DATE: 2016 04 21 ONTARIO: SUPERIOR COURT OF JUSTICE BETWEEN: IBOLYA BARTHA Applicant – and – STEFAN BARTHA and ENIKO BARTHA Respondent(s) ENDORSEMENT Tzimas J . DATE: April 21, 2016