CITATION: Guilbeault v. Knutson, 2017 ONSC 4828
COURT FILE NO.: CV-10-00000601-00
DATE: 2017 08 10
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Marcel Guilbeault and Claudette Guilbeault
Plaintiffs
-and-
Martin Clifford Knutson, Karen McMaster, Christine McBean, John Rapski, Garry Richer, Kenneth Russell and Thomas Cook
Defendants
BEFORE: Bloom, J.
COUNSEL: Alan Butcher, counsel for the Plaintiffs
Chad Pilkington, counsel for the Defendants
HEARD: 2017/08/09
E N D O R S E M E N T
I. INTRODUCTION
[1] The Defendants move for security for costs in the amount of $207,704.70. The Plaintiffs at paragraph 2 of their factum state that they “do not dispute [the Defendants’ entitlement, nor do… [they] seek to be excused from the obligation to post security on the basis that they are impecunious.” In oral argument the Plaintiffs disputed the amount of security for costs sought by the Defendants as not reasonable and proportionate. Further, the Plaintiffs at paragraph 3 of their factum argued that the security ordered “should be staged and payable in instalments.”
II. PROCEDURAL BACKGROUND
[2] The action in respect of which the motion before me is brought arises out of longstanding disputes between the parties.
[3] There was, in fact, an action brought in Haileybury before Justice Boissonneault relating to at least some of the same matters subject of the action giving rise to the motion at bar. Justice Boissonneault released his decision in that proceeding on January 25, 2012. He awarded the Defendant Knutson $87,720.90 plus $13,367.36 in prejudgement interest payable by the Plaintiffs. $41,076.36 in costs were also ordered to be paid by the Plaintiffs to Knutson. The Plaintiffs have not paid those sums. The only amounts recovered by Knutson are the results of garnishment efforts.
[4] Additionally, Marcel Guilbeault was convicted criminally for conduct related to the disputes between the parties.
[5] The Statement of Claim in the action before me was issued on February 12, 2010. On October 20, 2014 an order was made for security for costs in the sum of $35,500. The Defendants were at liberty to seek additional security for costs. Moreover, on March 4, 2015 Justice Van Melle ordered that the Defendants “may move for further security for costs at any time.”
III. GOVERNING PRINCIPLES
[6] In Hayamoon v. Bordbar, [2010] O.J. No. 1505 (Ont. Sup. Ct.) at paras. 22 to 26 Justice Quinlan stated:
22 A court's discretion to refuse an order for security for costs should only be exercised in special circumstances and with caution and restraint.7
23 Where the court finds that a defendant is entitled to security for costs, it is an improper exercise of the court's discretion to fix only a token amount of security.8
24 If an order for security for costs is made, the court has the discretion as to the amount and means of payment of the order.9
25 In Morton, Quinn J. held:
Despite the generous discretion available, where the need for security for costs is made out, the court, absent exceptional circumstances, should order security in the amount of the actual anticipated costs and not become weak-kneed at that prospect. This is not to say, however, that the full anticipated costs of the entire action must be ordered.10
26 Pursuant to the Hawaiian Airlines case, 1985 CanLII 2155 (ON SC), [1985] O.J. No. 2515, unless other factors apply, security for costs must be determined on the basis of the estimated party-and-party costs which a defendant might reasonably expect to assess.11
[7] In SeeWind Design Corp. v. Accenture Business Services for Utilities Inc., 2013 ONSC at para. 72 Master P.E. Roger stated:
72 Where impecuniosity is shown, the plaintiff needs only to demonstrate that the claim is not plainly devoid of merit, as a factor for the court to consider when assessing whether it would be just to order security for costs. However, where impecuniosity has not been shown, the plaintiff should show that its claim has a good chance of success. The latter is a higher burden as there is no argument (or a much weaker argument as impecuniosity is not made out) that there is a danger that the plaintiff's poverty will cause an injustice by impeding pursuit of a claim that otherwise would have been permitted to be tried.10 As indicated, these are factors for the court to consider when assessing whether making a security for costs order would or not be a just result.
[8] In Shuter v. Toronto Dominion Bank, 2007 CanLII 37475 (ON SC), [2007] O.J. No. 3435 at paras. 100 and 101 Master J.M. Haberman stated:
100 The plaintiffs rely on a number of cases that stand for the proposition that an order for security for costs should be pursued at an early stage and, failing that, the delay to move earlier must be satisfactorily explained (see Kawkaban Corporation v. Delutis, 2005 CanLII 35683 (ON SCDC), 16 C.P.C. (6th) 178; 423322 Ontario Ltd. v. Bank of Montreal (1988) 1988 CanLII 4678 (ON SC), 66 O.R. (2d) 123).
101 What is clear from the cases is that delay, in and of itself, is not the determining factor. The delay must be found to have been unreasonable for it to have an impact on the end result. Thus, in some instances, failure to provide a satisfactory explanation for the delay has been fatal to the motion (see Cohen v. Power 1970 CanLII 228 (ON SC), [1971] 2 O.R. 742; Gosselin v. Wong 33 C.P.C. 262). In other cases, however, the court has looked for evidence from the plaintiff demonstrating that the delay in moving has somehow caused them prejudice - in other words, evidence showing that they might have acted differently had they been aware that such a motion would be brought down the road (see Stepps Investment Ltd. v. Security Capital Corp., 2 O.R. (2d) 648; 408466 Ontario Ltd. v. Fidelity Trust Co. 10 C.P.C. (2d) 278).
IV. ANALYSIS
[9] Since entitlement of the Defendants to an order for security for costs is admitted, I must consider the quantum and form of an appropriate order. In doing so I am mindful of the principles set out above.
[10] The Plaintiffs do not assert that they are impecunious. Moreover, there is no evidence of the current state of their assets or income other than the assertion by Marcel Guilbeault in his affidavit sworn July 9, 2014 that “it does take me some time to come up with large sums of money.”
[11] As to delay by the Defendants in asserting their claim for security for costs, I find that the Defendants explicitly preserved their rights to pursue this claim from October 20, 2014 onward when the earlier order was made. Justice Van Melle recognized this point in her order of March 4, 2015.
[12] Further, the Plaintiffs have shown by their non-payment of the sums due as a result of the action before Justice Boissonnault, that they do not readily satisfy court orders for the payment of monies made as a result of the disputes which have given rise to the action before me.
[13] I am also troubled by the possible weakness of the grounds for that action. Justice Boissonnault’s decision and the results of the related criminal proceeding raise that concern. As well I am concerned by the possibility of overlap of the action before me and that before Justice Boissonnault giving rise to res judicata or related defenses. The Plaintiffs have pointed to no evidence to allay my concerns about the weakness of their case.
[14] I am, at the end of the day, satisfied that a meaningful order for security for costs must be made at a partial indemnity rate. The Defendants have supplied an anticipated bill of costs. From it I eliminate $8775.00 for Mediation since it will not be consented to by the Plaintiffs. I also eliminate $105,510 for Trial Preparation and Trial, since these items are too uncertain at this time.
[15] I, therefore, make an order for security for costs in the amount of $93,419.70 as a result of deducting the sums for Mediation, Trial Preparation, and Trial from the amount sought by the Defendants.
[16] I order that that sum be paid into court in three instalments of $31,139.90 each; the instalments are to be paid 30, 90, and 120 days after the release of this endorsement.
V. COSTS
[17] If the parties cannot agree on costs, I will receive written submissions on that issue of no more than 3 pages in length, excluding a bill of costs. The Defendants are to serve and file their submissions within two weeks from the release of this endorsement. The Plaintiffs are to serve and file their submissions within two weeks after service of the Defendants’ submissions. There shall be no reply.
Bloom, J.
DATE: August 10, 2017
CITATION: Guilbeault v. Knutson, 2017 ONSC 4828
COURT FILE NO.: CV-10-00000601-00
DATE: 2017 08 10
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Marcel Guilbeault and Claudette Guilbeault
Plaintiffs
-and-
Martin Clifford Knutson, Karen McMaster, Christine McBean, John Rapski, Garry Richer, Kenneth Russell and Thomas Cook
Defendants
BEFORE: Bloom, J.
COUNSEL: Alan Butcher, counsel for the Plaintiffs
Chad Pilkington, counsel for the Defendants
ENDORSEMENT
Bloom, J.
DATE: August 10, 2017