Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CHARLES SAMMUT, Plaintiff
AND:
SUSANNE SAMMUT and JOSEPHINE SPITERI, Defendants
AND:
JOSEPHINE SPITERI, Plaintiff by Counterclaim
AND:
CHARLES SAMMUT and ROYAL BANK OF CANADA and MANJU GURJOT SEKHON and DENNIS RAY COOK and BY HIS ESTATE TRUSTEE, ROBERTA GLADYS MCLEAN, Defendants to counterclaim
BEFORE: Emery J.
COUNSEL: Emily J. Pinckard, for the Plaintiff
Chris Shorey and Domenico Magisano, for the Defendants
HEARD: November 8, 2016
ENDORSEMENT
1The plaintiff, Charles Sammut brings this motion for the following orders:
(a) To stay the motion of the defendant Susanne Sammut to set aside the judgment granted by Justice Woollcombe against her in the amount of $466,420.22 unless various costs orders totalling $10,975.35 are paid.
(b) To stay the motion of the defendant Susanne Sammut to set aside Justice Woollcombe’s order unless she posts security in the amount of $25,000; and
(c) An order that if the defendant Susanne Sammut fails to comply with those orders, her motion shall be automatically dismissed.
2Mr. Sammut was awarded costs on three previous occasions in his litigation with Ms. Sammut as follows:
(a) Justice Donohue made an order for costs dated July 22, 2014 in the amount of $750 on the first return date of Mr. Sammut’s application to determine methods to serve documents on the respondents, and to sanction Ms. Sammut’s conduct.
(b) On April 27, 2016, Justice Woollcombe granted judgment against Ms. Sammut in the amount of $466,420.22 inclusive of the $750 awarded by Justice Donohue, and ordered her to pay $5,000 in costs; and
(c) Three months later, Ms. Sammut made an assignment into bankruptcy. On August 18, 2015, Mr. Sammut brought a motion that was heard on March 15, 2016 to exclude the judgment granted by Justice Woollcombe from any discharge under section 178 of the Bankruptcy and Insolvency Act. At that motion, Master Mills, sitting as a registrar in bankruptcy, ordered that the judgment would survive bankruptcy and ordered Ms. Sammut to pay $5,000 in costs to Mr. Sammut, which would also survive her discharge from bankruptcy.
3Ms. Sammut served her motion to set aside the judgment granted by Justice Woollcombe on August 22, 2016. That motion has not yet been heard. Ms. Sammut brings the set aside motion in large part on the basis that she was not served with the statement of claim, affidavit of documents and notice of trial. She therefore asserts that the judgment was obtained without notice to her, and in her absence.
4It was not until Master Mills made the order that the judgment would survive any discharge from bankruptcy that Ms. Sammut brought the motion to set aside Justice Woollcombe’s order.
5Ms. Sammut candidly admits that she has not paid any of the costs she has been ordered to pay by Justice Donohue, Justice Woollcombe or Master Mills.
6In argument, counsel for Mr. Sammut made the following concessions:
(1) Under section 69 of the Bankruptcy and Insolvency Act, enforcement of the costs awarded by Justice Donohue and Justice Woollcombe prior to the date Ms. Sammut made her assignment into bankruptcy are stayed.
(2) A plaintiff does not have the right to seek security for costs against a defendant on the face of Rule 56.01. However, Mr. Sammut moves under Rule 56.09 as authority to seek an order that Ms. Sammut post security for costs as a term of any other order. As the other order requested is a stay of Ms. Sammut’s motion to set aside the default judgment, the discretion to order Ms. Sammut to post security for costs can only be ordered if that order is granted.
7These concessions were, in my view, properly made. Given these concessions, the only costs order that could remain payable by Ms. Sammut would be the costs of $5,000.00 awarded to Mr. Sammut by Master Mills sitting as a registrar in bankruptcy. The question then becomes whether that costs order is payable, or if it is stayed on some basis.
8It would therefore appear that the main issue on this motion is whether any costs award against Ms. Sammut is currently payable as a matter of law. The answer to this question will in turn inform the court on whether judicial discretion is available to stay her motion to set aside Justice Woollcombe’s order. The power given to the court under rule 56.09 to require Ms. Sammut to post security for costs as a term of an order is contingent upon the court answering those questions in Mr. Sammut’s favour.
9Ms. Sammut has filed evidence on the motion before this court that she brought a motion in Commercial List Court in Toronto under section 192(4) of the Bankruptcy and Insolvency Act to appeal the order made by Master Mills. On April 20, 2016, Justice Newbould endorsed the 9:30 hearing request form when the motion came before him in Commercial List Court in Toronto as follows:
April 20/16
This appeal is adjourned sine die to a date, if needed, to be scheduled at a 9:30 a.m. appointment taken out through the commercial list office.
10Mr. Sammut argues that an appeal under section 192(4) is not stayed by virtue of section 195, or by operation of Rule 63.01 because Ms. Sammut has served and filed a notice of motion seeking a review of Master Mills’ order instead of a notice of appeal. He therefore argues that Ms. Sammut has not brought an appeal, and that the order awarding costs made by Master Mills on March 15, 2016, is not stayed. Mr. Sammut argues that as the order requiring Ms. Sammut to pay $5,000 in costs remains outstanding, it is open for this court to stay Ms. Sammut’s motion to set aside Justice Woollcombe’s order until those costs are paid under Rules 53.07 and 60.12. It follows that the court may order that Ms. Sammut pay security for costs going forward as a term of that order.
11I find it helpful that the endorsement made by Justice Newbould on the 9:30 a.m. hearing request form refers to Ms. Sammut’s motion to set aside the order of Master Mills as an appeal, but that endorsement is not conclusive. In order to determine whether Ms. Sammut has employed the proper procedure to appeal the order of Master Mills, I refer to Rule 30 of the Federal Bankruptcy and Insolvency General Rules, CRC, c. 368.
12Rule 30 of the Bankruptcy and Insolvency General Rules provides as follows:
Appeals from Decisions of the Registrar
30 (1) An appeal from an order or decision of the registrar must be made by motion to a judge.
(2) A notice of motion or a motion, as the case may be, must be filed at the office of the registrar and served on the other party within 10 days after the day of the order or decision appealed from, or within such further time as the judge stipulates.
(3) The notice of motion or the motion must set out the grounds of the appeal.
13Under Rule 30 (1), and appeal from order on a registrar is made by serving and filing a motion to be heard by a judge within the prescribed time. There was no argument before me that Ms. Sammut proper motion out of time. I therefore conclude that Ms. Sammut has employed the proper procedure to bring an appeal from the order of Master Mills, sitting as a registrar in bankruptcy, by making a motion to the Commercial List Court.
14The Bankruptcy and Insolvency General Rules provide a bridge to the Rules of Civil Procedure for this court to apply. Rule 3 reads as follows:
- In cases not provided for in the Act or these rules, the courts shall apply, within the respective jurisdictions, their ordinary procedure to the extent that that procedure is not inconsistent with the Act or these rules.
15I take that rule as authority to find there is an automatic stay of an order under appeal from a registrar in Ontario for the payment of money by operation of Rule 63.01 of the Rules of Civil Procedure. Rule 63.01 is applicable if Ms. Sammut is found to have appealed the order of Master Mills, including the issue of costs.
16The parties made reference during argument to section 195 of the Bankruptcy and Insolvency Act that operates to stay all proceedings. However, that section only applies to an appeal of a judge’s order if brought to the Court of Appeal under section 193: Royal Bank of Canada v. LaHave Equipment Ltd., 2007 NSSC 329. In that case, Justice Davidson of the Nova Scotia Supreme Court found there was no automatic stay of the receiving order made by the registrar in bankruptcy under section 195 because the order in that case had been appealed to the Court of Appeal.
17I do not know if the Rules of Court in Nova Scotia when Royal Bank v. LaHave was decided in 2007 contained the equivalent of Rule 63.01 of the (Ontario) Rules of Civil Procedure that provides an automatic stay of any order for the payment of money under appeal. However, the court in RBC v. LaHave found there was no automatic stay because the appeal of a registrar lies to a judge of the Supreme Court, and no statutory provision was given to invoke an automatic stay of the order under appeal in those circumstances.
18The decisions in Lin v. Kuo (2009) CarswellOnt 2848, and 1530495 Ontario Inc. v. Bionda (2014 CarswellOnt 4495 are compelling authorities for imposing a stay on the motion of a party who has not paid one or more outstanding cost orders. However, these cases are distinguishable on the facts before this court as the costs Ms. Sammut has been ordered to pay are stayed at law. Neither of the defaulting parties in those cases had made an assignment in bankruptcy. In each case, the court found that the defendant had conducted him or herself in a “contumelious” manner to breach the subject order.
19In each of those cases, the defaulting party had also acted in some manner undeserving of any indulgence the court might grant. It is true that Mr. Sammut includes evidence in his materials of Ms. Sammut’s conduct in the course of the alleged fraud she is said to have perpetrated, and conduct of mischief if not malice he attributes to her over the course of the litigation. However, he seeks relief on this motion because of Ms. Sammut’s failure to comply with one or more court orders to pay costs. It is the nonpayment of costs at issue on this motion, not Ms. Sammut’s conduct. As Ms. Sammut’s legal obligation to pay those costs goes, so goes Mr. Sammut’s leverage to request a stay of her motion and an order that she post security for costs, at least pending appeal or further order the court.
20In view of my finding that Ms. Sammut has appealed the order made by Master Mills in the manner provided under the Bankruptcy Rules, I conclude that Rule 63.01(1) of the Rules of Civil Procedure applies. The notice of motion filed by Ms. Sammut to appeal the costs order made by Master Mills as a registrar in bankruptcy is the procedural equivalent to filing a notice of appeal of a registrar’s order. Accordingly, the filing of the notice of motion with the court stays any provision of the order for the payment of money by operation of law. Under Rule 63.01, the costs order made by Master Mills is therefore stayed until the disposition of the appeal.
21The court has no inherent jurisdiction to award security for costs. The power to order security for costs in this case must be drawn from the statutory power provided by Rule 56.01, or from Rule 56.09 as a term of another order: Khan v. Metroland Printing, Publishing & Distribution Inc. (2005), 2005 CanLII 14941 (ON CA), 75 O.R. (3d) 165 (Ont. C.A.).
22Accordingly, Mr. Sammut’s motion to stay the motion brought by Ms. Sammut to set aside Justice Woollcombe’s order is therefore dismissed. As there is no other order made, Mr. Sammut’s motion that Ms. Sammut post security for costs for her motion is also dismissed.
COSTS
23If either Ms. Sammut or her trustee seeks costs on this motion, they may file written submissions consisting of no more than three pages by December 14, 2016. Mr. Sammut shall then have until December 21, 2016 to file responding materials limited to the same extent. No reply submissions shall be permitted without leave. All written materials may be sent by fax to my judicial assistant, Ms. Priscilla Gutierrez, at 905-456-4834 in Brampton.
24If no written submissions are received by December 21, 2016, the parties shall be deemed to have resolved the issue of costs between them.
Justice Emery
Date: December 8, 2016
CITATION: Sammut v. Spiteri 2016 ONSC 7637
COURT FILE NO.: CV-14-2716-00
DATE: 2016 12 08
SUPERIOR COURT OF JUSTICE - ONTARIO
CHARLES SAMMUT, Plaintiff
AND:
SUSANNE SAMMUT and JOSEPHINE SPITERI, Defendants
AND:
JOSEPHINE SPITERI, Plaintiff by Counterclaim
AND:
CHARLES SAMMUT and ROYAL BANK OF CANADA and MANJU GURJOT SEKHON and DENNIS RAY COOK and BY HIS ESTATE TRUSTEE, ROBERTA GLADYS MCLEAN, Defendants to counterclaim
BEFORE: EMERY J.
COUNSEL: Emily J. Pinckard, for the Plaintiff
Chris Shorey and Domenico Magisano, for the Defendants
ENDORSEMENT
Emery J.
DATE: December 8, 2016