Court File and Parties
CITATION: Son v. Khan, 2016 ONSC 7621 COURT FILE NO.: CV-14-4313-00 DATE: 2016-12-06
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Young-Hew Son and Young Son, Plaintiffs/Responding Party AND: Daud Ahmad Khan, Fawad Khan, Ishaq Ahmad Khan, Isam Munajjeed and Re/Max Realty Specialists Inc., Brokerage, Applicant/Moving Party
BEFORE: The Honourable Justice Price
COUNSEL: Sang Joon Bae, Sang Joon Bae Professional Corporation, for the Plaintiffs/Responding Parties Daud Ahmad Khan, Fawad Khan, Ishaq Ahmad Khan, Isam Munajjeed and Re/Max Realty Specialists Inc., Brokerage, Applicant/Moving Party
HEARD: In writing
ENDORSEMENT
NATURE OF THE MOTION
[1] The defendants seek leave to appeal from the order of the Honourable Justice Bloom dated September 15, 2016, in which the motion judge ordered the defendants to pay the plaintiffs’ costs of the motion in the amount of $5,000, and if leave is granted, an order staying the costs order until the appeal is heard.
[2] The costs award of Bloom J. was made with respect to an interlocutory motion to compel the defendant Daud Ahmad Khan to fulfil his undertakings from his examination for discovery on February 3, 2016, and to compel the defendants Fawad Khan and Daud Ahmad Khan to fulfil their undertakings from their cross-examinations on July 14, 2016.
[3] The plaintiffs move for an order dismissing the defendants’ motion and prohibiting the defendants from bringing further motions in the proceeding without leave. The plaintiffs submit:
a. The defendants have not filed a notice of motion for leave to appeal.
b. The defendants brought the same motion on October 20, 2016, at the Court of Appeal and were advised by Amicus Attorney that this type of motion is improper.
c. The defendants have failed to comply with Justice Bloom’s order.
d. The defendants have filed seven responding motion records for a motion brought by the plaintiffs.
e. The defendants still have not complied with multiple undertakings from the examination for discovery and cross-examination on the affidavits.
ISSUE
[4] The defendants seek leave to appeal on the issues of whether the motion judge erred by:
a. imposing a costs order that the defendants do not have the means to pay;
b. allegedly ignoring the fact that 32 out of 36 undertakings had been fulfilled by September 4, 2016, and that out of the remaining 4 undertakings, 3 had been fulfilled by October 13, 2016.
c. Allegedly ignoring that the last undertaking, regarding insurance, could not be fulfilled in spite of the defendants’ best efforts, as the defendants could not find the insurance company.
d. The costs submitted to the motion judge were allegedly deceitful and dishonest.
e. The undertakings were, according to the defendants, unnecessary and unjustified.
f. The costs claimed are excessive and beyond the reasonable expectations of the defendants.
ANALYSIS
Legislative framework
[5] Section 19 (1)(b) of the Courts of Justice Act provides that an appeal lies to the Divisional Court from an interlocutory order of a judge of the Superior Court of Justice, with leave.
[6] Section 133(b) of the Rules of Civil Procedure provides that leave is required where an appeal is only as to costs that are in the discretion of the court that made the order.
[7] Rule 62.02 (4) provides that leave to appeal shall not be granted unless:
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
Test for Leave to Appeal
[8] The test for granting leave to appeal under Rule 62.02(4) is well-settled. It is recognized that leave should not be easily granted and the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.
[9] Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere (but not a lower level court) and that it is, in the opinion of the judge hearing the motion, “desirable that leave to appeal be granted.” A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542 (Div. Ct.).
[10] Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to “very serious debate”.[^1] In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice.[^2]
Application of the test to the present case
[11] Justice Quinn noted, in Jessome v. Jessome, in 1998, that rule 62.02 (4) consists of two disjunctive branches and, in turn, each branch has two conjunctive requirements.[^3]
Rule 62.02(4)(a):
[12] To succeed under the first branch, it is necessary for the moving party to show that there is a conflicting decision in Ontario and it is desirable that leave to appeal be granted. A “conflicting decision” is one in which a different principle has been chosen by another court. A “conflicting decision” is not one where another court, in following the same principle, has exercised its discretion differently.[^4]
[13] The defendants’ motion for leave to appeal cannot succeed under this first branch. There have been no conflicting decisions presented to me.
Rule 62.02(4)(b)
[14] To succeed on the second branch of rule 62.02.(4), the defendants must establish that there is good reason to doubt the correctness of the order of Bloom J. and that the proposed appeal involves matters of such importance that leave to appeal should be granted.
[15] In determining if there is “good reason to doubt the correctness” of the decision, the question for the motions judge is not whether the decision is wrong or probably wrong, but whether the correctness of the decision is open to very serious debate.[^5]
[16] I am not satisfied that the defendants have established that there is good reason to doubt the correctness of the decision of Bloom J. The plaintiffs were successful on the issue of whether the defendants had failed to comply with four undertakings. There is a presumption that the successful party is entitled to the costs of a motion.
[17] Motions for answers to undertakings may attract costs on a substantial indemnity scale. However, they do not invariably do so. Master Beaudoin, for example, who awarded costs at the higher scale in OZ Optics Ltd. v. Timbercon Inc.,[^6] declined to do so in Lowrey v. Merrill Lynch Canada Inc., even though he awarded costs of $3,875 in the latter case, which involved only two refusals and a “handful of undertakings.”[^7]
[18] It is apparent that in the present case, Bloom J. took into consideration the fact that there were no orders to comply with undertakings breached, and that most of the undertakings were complied with before the hearing of the motion, both of which factors militate against costs on a higher scale, when he fixed costs on a partial indemnity scale, at $5,000.00, rather than on a substantial indemnity scale, in the amount of $7,136.08, as the plaintiffs had requested, or even the full amount of $5,416.79, the alternative amount that the plaintiffs requested, on a partial indemnity scale. The amount of costs awarded, namely $5,000 inclusive of HST and disbursements, is not excessive for a motion for non-compliance with undertakings.
[19] An award of costs is a matter within the discretion of the motions judge by virtue of s. 131(1) of the Courts of Justice Act, which provides:
Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
[20] Rule 57.01 allows the court to take into account “any other matter relevant to the question of costs.” Read in conjunction with s. 131 of the Courts of Justice Act, the court therefore has a wide discretion. The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness.[^8]
[21] Orkin, in The Law of Costs, 2nd ed., notes that different considerations apply to an application for leave to appeal an order as to costs than apply to an application for leave to appeal generally:
The British Columbia Court of Appeal has enunciated the following test on an application for leave to appeal limited to a question of costs:
(1) the applicant must identify a good arguable case having enough merit to warrant scrutiny by the court;
(2) the issues must be important, both to the parties and in general;
(3) the appeal must have practical utility;
(4) the court should consider the effect of the delay in proceedings caused by the appeal.[^9]
[22] I am not satisfied that Justice Bloom’s costs award warrants scrutiny by the Divisional Court.
[23] I am also not satisfied that Justice Bloom’s award of costs is a matter of general importance. An application for leave to appeal is not an appeal. The test of general public importance is an essential requirement before leave to appeal may be granted.
[24] In Greslik v. Ontario Legal Aid Plan, in 1988, the Divisional Court, in dealing with Rule 62.02(4)(b), stated:
The conditions for granting leave are conjunctive. A judge hearing such an application must have good reason to doubt the correctness of the decision. He must also be satisfied that the matters involved are of “such importance” that in his opinion leave should be granted. We wish to draw to the attention of the members of this court and the profession at large that those words refer to matters of general importance, not matters of particular importance relevant only to the litigants. General importance relates to matters of public importance and matters relevant to the development of the law and the administration of justice.[^10] [Emphasis added]
[25] Having regard to the criteria set out in Orkin, derived from the British Columbia Court of Appeal, I am of the view that the appeal of this cost award to the Divisional Court, where a relatively modest amount of costs is in dispute, is of limited practical utility.
[26] In Bellissimo Excavating Ltd. v. Ding, in 2004, Pitt J. stated the following with respect to leave to appeal an order for costs:
The governing principle in such motions is that leave to appeal an order for costs should be granted sparingly and only in obvious cases. The applicant must convince the judge from whom leave is required that there are strong grounds upon which the appellate court could find that the judge erred in exercising his or her jurisdiction. See Yakabuski Estate (1988), 36 C.P.C. (2d) 189 (Ont. Div. Ct.)[^11]
As early as Axelrod v. Beth Jacob, [1943] 2 D.L.R. 115 (Ont. H.C.) per Urquhart J. at p. 120:
… The trend of decisions is against the granting of leave. In the Horrocks case, supra, I expressed the opinion that leave to appeal on the question of costs alone ought to be sparingly granted and only in very obvious cases.
See Johnson v. Multinational Five Investments Ltd., [1999] O.J. No. 3442 (Ont. Div. Ct.), Court File No. 294/99, September 21, 1999 per O’Driscoll at para. 23.
- A court should set aside a costs award only if the trial judge has made an error in principle or if the costs award is plainly wrong. See Duong v. NN Life Insurance Co. of Canada (2001), 2001 ONCA 24151, 141 O.A.C., 307 (Ont. C.A.) applied in [Hamilton v. Open Window Bakery Ltd. (2003), 2004 SCC 9, [2004] 1 S.C.R. 303 (S.C.C.)].”
[27] In the case before me, the defendants have not established that Bloom J. erred in principle or that the costs award is plainly wrong.
Should the defendants be required to seek leave for future motions?
[28] Section 140 of the Courts of Justice Act provides:
140 (1) Where a judge of the Superior Court of Justice is satisfied, on application, that a person has persistently and without reasonable grounds,
(a) Instituted vexatious proceedings in any court; or
(b) Conducted a proceeding in any court in a vexatious manner, the judge may order that,
(c) No further proceeding be instituted by the person in any court; or
(d) A proceeding previously instituted by the person in any court not be continued,
Except by leave of a judge of the Superior Court of Justice.
(3) Where an application for leave is made under subsection (3),
(a) leave shall be granted only if the court is satisfied that the proceeding sought to be instituted or continued is not an abuse of process and that there are reasonable grounds for the proceeding;
(b) the person making the application for leave may seek the recision of the order made under subsection (1) but may not seek any other relief on the application;
(c) the court may rescind the order made under subsection (1);
(d) the Attorney General is entitled to be heard on the application; and
(e) no appeal lies from a refusal to grant relief to the applicant.
(5) Nothing in this section limits the authority of a court to stay or dismiss a proceeding as an abuse of process or on any other ground.
[29] The Court of Appeal has interpreted the words “Where a judge of the Superior Court of Justice is satisfied, on application,” as used in section 140(1), to mean that an order under that section requires an application, and cannot be granted on an interlocutory motion within a proceeding. Lang J.A., in dissenting reasons in Kallaba v. Bylykbashi, in 2006, concluded that because a vexatious litigant order is an extraordinary remedy that alters a person’s right to access the courts, it should be made only by way of application.[^12] Justice Lang found that an application provides the procedure best suited to the determination of whether a litigant is vexatious, because of the due process protections which that procedure accords to the person targeted, such as personal service, adjudication by a judge, a directed trial of an issue if necessary, and the right of appeal without the need for leave.
[30] The Court of Appeal adopted Justice Lang’s analysis in Lukezic v. Royal Bank of Canada, in 2012.[^13] Goudge J.A., speaking for the court, stated:
In summary, Lang J.A. emphasized that the Courts of Justice Act is designed to advance access to justice which is, as she says, a fundamental pillar of the rule of law. Section 140(1) runs contrary to that important goal by denying access to individuals with carefully specified characteristics. In that sense, it is an exception to the thrust of the legislation and therefore should be construed strictly.[^14]
[31] This conclusion does not, however, leave the court without the means to prevent abuse of its process. Rule 2.1.02 of the Rules of Civil Procedure, governing frivolous, vexatious, and abusive motions, provides, in part:
2.1.02(1) The court may, on its own initiative, stay or dismiss a motion if the motion appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court.
(2) Subrules 2.1.01(2) to (7) apply, with necessary modifications, to the making of an order under subrule (1) and, for the purpose,
(a) a reference to the proceeding shall be read as a reference to the motion; and
(b) a reference to the plaintiff or applicant shall be read as a reference to the moving party.
(3) On making an order under subrule (1), the court may also make an order under rule 37.16 prohibiting the moving party from making further motions in a proceeding without leave.[^15]
[32] Rule 2.1.02 is narrower in scope than s. 140 of the Courts of Justice Act. It restricts only motions, not any proceeding, including appeals. The Divisional Court, in Cudini v. 1704405 Ontario Inc., in 2012, distinguished the narrower scope of orders made based on an abuse of process from the wider scope of orders under s. 140(1) of the Courts of Justice Act. Justice van Rensburg stated:
Section 140(5) of the Courts of Justice Act preserves the authority of the court to “stay or dismiss a proceeding as an abuse of process or on any other ground”. Under rule 37.17 of the Rules of Civil Procedure, a judge or master may prohibit a party from making further motions in a proceeding without leave, and under rule 21.01(d) a defendant may move before a judge to have an action stayed or dismissed on the grounds that the action is an abuse of the process of the court.[^16] [Emphasis added]
[33] Justice van Rensburg, in Cudini, delineated a type of proceeding that would justify an order regulating abuse of process. She stated:
The proceedings were clearly an attempt to re-litigate the constituent issues or material facts already embraced in a decision that had already been determined. Such conduct is an abuse of process, and will justify an order dismissing a proceeding: Toronto (City) v. Canadian Union of Public Employees, [2003 SCC 63](https://www.canlii.org/en/ca/scc/doc/2003/2003scc63/2003scc63.html), [2003] 3 S.C.R. 77 at para. [37](https://www.canlii.org/en/ca/scc/doc/2003/2003scc63/2003scc63.html), per Arbour J.[^17] [Emphasis added]
[34] In the present case, the defendants seek to re-litigate the issue of costs that it litigated before the Court of Appeal previously, based on the same facts that the courts considered at that time. In their motion for leave to appeal to the Divisional Court, and to stay the order of Justice Bloom, the defendants do not advance new circumstances or evidence. They simply seek a different outcome of the costs issue, based on evidence of the same facts that the court had considered previously.
[35] Were the court to entertain an application to have the defendants declared a vexatious litigant, the evidence the court has heard in the present motion might well justify such an order being made. The Court of Appeal in Canada (Attorney General) v. Mennes, in 2014, approved the factors that the High Court enumerated in Re Lang Michener and Fabian, in 1987, when considering an application under s. 140(1) of the Courts of Justice Act.[^18] In Lang Michener and Fabian, Justice Henry reviewed the jurisprudence and summarized the principles relating to vexatious proceedings as follows:
(a) The bringing of one or more actions to determine an issue which has already been determined by a court of competent jurisdiction constitutes a vexatious proceeding;
(b) Where it is obvious that an action cannot succeed, or if the action would lead to no possible good, or if no reasonable person can reasonably expect to obtain relief, the action is vexatious;
(c) Vexatious actions include those brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights;
(d) It is a general characteristic of vexatious proceedings that grounds and issues tend to be rolled forward into subsequent actions and repeated and supplemented, often with actions brought against the lawyers who have acted for or against the litigant in earlier proceedings;
(e) In determining whether the proceedings are vexatious, the court must look at the whole history of the matter and not just whether there was originally a good cause;
(f) The failure of the person instituting the proceeding to pay the costs of unsuccessful proceedings is one factor to be considered in determining whether proceedings are vexatious;
(g) The respondent’s conduct in persistently taking unsuccessful appeals from judicial decisions can be considered vexatious conduct of legal proceedings.[^19]
[36] For the reasons stated above, it is ordered that:
The defendants’ motion for leave to appeal is dismissed.
The plaintiffs’ motion to require the defendants to seek leave before bringing future motions is allowed.
The defendants shall seek leave of the court before bringing any future motions. When seeking such leave, the defendants shall file proof that it has paid the costs ordered by Justice Bloom and the costs ordered on this motion.
The defendants shall pay the costs of this motion in the amount of $2,611.93, inclusive of fees, disbursements and HST.
Approval as to form and content is dispensed with.
Price J.
Date: December 6, 2016
[^1]: Nazari v. OTIP/RAEO Insurance Co., 2003 40868 (ON SC), [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen. Div.) [^2]: Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110 (Div. Ct.). [^3]: Jessome v. Jessome (1998), 43 R.F.L. (4th) 196 (Ont. Gen. Div.), at p. 198 [^4]: Comtrade Petroleum Inc. v. 440300 Ontario Ltd.(1992), 1992 7405 (ON SC), 7 O.R. (3d) 542 (Ont. Div. Ct.) [^5]: Ash v. Corp. of Lloyd’s (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Ont. Gen. Div.), at p. 284 [^6]: OZ Optics Ltd. v. Timbercon Inc., 2006 1674 (ON SC), per Master Beaudoin, as he then was, para. 7; See also: Donnelly v. Donnelly, 2004 9296 (ON SC), per Howden J. at para. 17 [^7]: Lowrey v. Merrill Lynch Canada Inc., 2003 22376 (ON SC). See also: Abdul-Ghani v. Zappia, 2011 ONSC 6325, and Gowdie v. Warby, 2011 ONSC 960, per Lauwers J., as he then was, at paras. 26 and 27; Grant v. Great Atlantic and Pacific Co. of Canada, 2004 28049 (ON SC), per Master Hawkins, at para. 27; Doobay v. Diamond, 2007 37465 (ON SC), per Master Sproat; Cannon v. Funds for Canada Foundation, 2014 ONSC 953, per Master Dash, at para. 20 [^8]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 2004 ONCA 14579, 71 O.R. (3d) 291 (C.A.), at paras. 37-38. [^9]: Orkin, The Law of Costs, 2nd ed. (Aurora: Canada Law Book, 2006) pp. 8-6 and 8-7 [^10]: Greslik v. Ontario Legal Aid Plan, 1988 4842 (ON SC), [1988] 65 O.R. (2d) 110 (Ont. Div. Ct.) [^11]: Bellissimo Excavating Ltd. v. Ding, [2004] CarswellOnt 5401 (S.C.J.), Pitt J., at paras. 4 - 6 [^12]: Kallaba v. Bylykbashi (2006), 2006 3953 (ON CA), 265 D.L.R. (4th) 320 (Ont. C.A.), per Lang J.A., paras. 95 to 169. [^13]: Lukezic v. Royal Bank of Canada (2012), 350 D.L.R. (4th) 111, 2012 ONCA 350, at para. 11 to 17. [^14]: Lukezic v. Royal Bank of Canada, above, at para. 13 [^15]: Rules of Civil Procedure, R.R.O. 1990, Reg 194 [^16]: Cudini v. 1704405 Ontario Inc., 2012 ONSC 6645, para. 42 [^17]: Cudini v. 1704405 Ontario Inc., para. 43 [^18]: Canada (Attorney General) v. Mennes (2014), 122 O.R. (3d) 434, 2014 ONCA 690 (C.A.) [^19]: Lang Michener and Fabian, (1987) 1987 172 (ON SC), 59 O.R. (2d) 353, at para. 19