Citation: Link & Associates v. Howard Paul Ivany, 2017 ONSC 4891

COURT FILE NO.: CV-17-11751-00CC

DATE: 2017-08-22

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Link & Associates Inc., Trustee in Bankruptcy, Bankruptcy of the Estate of Howard Paul Ivany

AND:

Howard Paul Ivany, Darlene Ivany, Mi Lee Inc., and Backcove Company

BEFORE: Regional Senior Justice G.B. Morawetz

COUNSEL: Brandon Jaffe, for Darlene Ivany, Mi Lee Inc. and Backcove Company Howard Reininger, for Link & Associates Inc., Trustee in Bankruptcy of Howard Paul Ivany

HEARD: August 14, 2017

ENDORSEMENT

[1] The defendants Darlene Ivany, Mi Lee Inc. and Backcove Company (together, the “Mi Lee Defendants”) request that this action be temporarily stayed while there is another proceeding pending in Florida, U.S.A. between the Plaintiff and the Mi Lee Defendants in respect of the same subject matter.

[2] For the most part, the facts are not in dispute. Further, the parties are in agreement with the general principles of law.

[3] On June 8, 2012, a creditor of Howard Paul Ivany issued an application for a bankruptcy order against him. On December 12, 2012, D. Brown, J. (as he then was) adjudged Mr. Ivany bankrupt (the “Bankruptcy Order”).

[4] Mr. Ivany appealed the Bankruptcy Order. On October 9, 2013, the Court of Appeal for Ontario dismissed his appeal. The trustee in bankruptcy is Link & Associates Inc. (the “Trustee”).

[5] On May 15, 2015, the Trustee commenced a proceeding in Florida, U.S.A. (the “Florida Action”) against the Mi Lee Defendants regarding alleged transfers of property by Mr. Ivany and the Mi Lee Defendants.

[6] On October 20, 2016, the Florida court dismissed the Florida Action on the basis of forum non conveniens (the “Dismissal Order”).

[7] The plaintiff sought reconsideration of the Dismissal Order and the Dismissal Order was amended on January 19, 2017, with the Judge stating:

“However, the court failed to address the statute of limitations issue: Defendants have not stipulated they will not waive any statute of limitation defences available to them. Accordingly, the court will amend the dismissal Order to indicate the following paragraph

(3) The entry of this Order is without prejudice to the plaintiff to reinstate this action in Canada within 120 days of the date of this Order and to seek reconsideration of this Order if the defendants refuse to waive any statute of limitations defence that may be available to them.”

[8] On January 30, 2017, the plaintiff appealed the Dismissal Order. The Appeal has not been heard or abandoned and is pending in Florida.

[9] On April 3, 2017, the plaintiff issued the within action on the regarding alleged transfers of property by Mr. Ivany and the Mi Lee Defendants.

[10] The Defendants then sought reconsideration of the amended Dismissal Order and on April 24, 2017, three weeks after the plaintiff instituted these proceedings, the Florida court further amended the Dismissal Order to add the words “of the date this Order becomes final and non-appealable” and also added “if Defendants refuse to waive any statute of limitations defence that becomes available after May 5, 2015”.

[11] This further amendment clarifies the statute of limitation defence issue for the period after May 5, 2015.

[12] Counsel to the plaintiff suggests that it is unknown if the Mi Lee Defendants brought to the attention of the judge in Florida on April 24, 2017, when they sought reconsideration, that the plaintiff had already issued this action in Canada. The issuance of the action in Canada clearly took place before the judge added the words “of the date this Order becomes final and non-appealable”.

[13] A defendant may move to have an action stayed on the grounds that another proceeding is pending in another jurisdiction between the same parties in respect of the same subject matter. The court has the authority to order a stay under section 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and under Rule 21.01(3)(c) of the Rules of Civil Procedure.

[14] Temporary stays pending resolution of a foreign proceeding are typically granted when the foreign proceeding will substantially reduce the issues to be determined, or if success in the foreign proceeding could render the local proceeding substantially moot or otherwise have a material impact on the outstanding issues in the case (see: Hollinger International Inc. v. Hollinger Inc., 2004 CarswellOnt 3442 (S.C.J.) (Commercial List) (“Hollinger”).

[15] Courts have considered the following issues in deciding whether to exercise their discretion to issue a temporary stay pending the resolution of another proceeding:

(a) whether there is substantial overlap of issues in the two proceedings;

(b) whether the two cases share the same factual background;

(c) whether issuing a temporary stay will prevent unnecessary and costly duplication of judicial and legal resources; and

(d) whether the temporary stay will result in an injustice to the party resisting the stay.

(see: Hollinger and Moneris Solutions Corp. v. Group Germain Inc., 2014 ONSC 6102).

[16] Counsel to the Mi Lee Defendants takes the position that this action and the Florida Action share the same issues and the same factual background. Counsel also points out that the plaintiff chose to commence the Florida Action in Florida and the plaintiff continues to prosecute the appeal in the Florida Action.

[17] In addition, counsel to the Mi Lee Defendants submits that if the court does not grant the request of stay of proceedings, the parties will expend legal resources to prepare pleadings, discover evidence, research and prepare for trial. Counsel submits that all of these steps will be an unnecessary costly duplication if the Plaintiff succeeds in the appeal and prosecutes the Florida Action. Further, there is no evidence that the Plaintiff will not abandon this action and continue the Florida Action if the Plaintiff is successful in the appeal, regardless of the judicial and legal resources that have been expended to move this action towards trial in Canada while the appeal is pending.

[18] Counsel to the plaintiff submits that if the Defendants did raise a limitations defence that arose before May 5, 2015, the plaintiff would then be able to ask the Florida court to again reconsider the express terms and conditions of the Dismissal Order as amended; such a reconsideration could yield a result such that the plaintiff would not have to proceed with the Appeal that is pending.

[19] Further, if the Mi Lee Defendants do not raise the limitation defence that arose before May 5, 2015, the Mi Lee Defendants could, at that time, seek a stay of these proceedings until the Florida Appeals are final.

[20] Counsel to the plaintiff also submits that the refusal of a stay at this time would not put the Mi Lee Defendants to the expense of further productions and discoveries and would assist the plaintiff in avoiding the time and expense of continuing the appeals in Florida since they can seek reinstatement of the Florida Action if the Mi Lee Defendants raise a limitation defence that would prevent the Canadian action from proceeding.

[21] In argument, it became apparent that the real issue is that it is not known whether the Mi Lee Defendants will be raising any statute of limitation defences for the period prior to May 5, 2015.

[22] It seems to me that if the issue surrounding the statute of limitations defence is clarified at this time through the delivery of a statement of defence in this action, it would provide clarity for the benefit of both parties.

[23] If the stay was imposed at this time, it would only lead to greater uncertainty and potential further delay in the resolution of the proceedings, whether they are in either Florida or Ontario.

[24] If the Mi Lee Defendants raise a limitation defence that arose before May 5, 2015, the Plaintiff could conceivably ask the Florida court to again reconsider the express terms and conditions of the Dismissal Order as amended and, as argued by the plaintiff, such a reconsideration could yield a result such that the plaintiff would not have to proceed with the appeal that is pending.

[25] Conversely, if the Mi Lee Defendants do not raise the limitation defence that arose before May 5, 2015, it would be open for the Defendants to seek a stay of these proceedings until the Florida appeals are final.

[26] In addition, because the fact scenario in both the Florida Action and this proceeding are the same, there should not be a significant expense incurred in the drafting of the statement of defence. The factual matrix is no longer evolving.

[27] Notwithstanding the overlap of issues and the common factual background in the two cases, I am of the view that the imposition of a stay at this time would be unjust to the Plaintiff. The resulting uncertainty of not knowing the intention of the Defendants with respect to the statute of limitations defence could result in further delay as the Florida appeal process would have to play out to its conclusion. The time and expense for the Mi Lee Defendants to produce a statement of defence is not, in my view, onerous and if the Mi Lee Defendants do not raise the limitations defence that arose before May 5, 2015, the Mi Lee Defendants would not be precluded from seeking a stay of these proceedings until the Florida appeal is concluded. It is time for the statute of limitation defence issue to be clarified.

[28] In the result, the motion for the stay of proceedings is dismissed without prejudice to the Mi Lee Defendants bringing a further motion to stay after delivery of a statement of defence.

[29] The plaintiff, having been successful on this motion is entitled to its costs in the agreed upon amount of $7,500.00 inclusive of disbursements and HST.

Regional Senior Justice G. B. Morawetz

Date: August 22, 2017