Superior Court of Justice – Ontario

CITATION: BLM Investments v. FCMI, 2017 ONSC 6819

COURT FILE NO.: C-1167-11

DATE: 2017-11-15

RE: BLM INVESTMENTS INC., Plaintiff

AND:

FCMI GLOBAL INC., HOWARD BRODSKY, ROZ BRODSKY, JONATHAN BRODSKY, JOHN GILLESPIE, BY DESIGN FINE JEWELLERY BY HOWARD BRODSKY, 1329552 ONTARIO INC., REMY SALES LTD. and CRITICAL PATH COURIERS LTD., Defendants

BEFORE: The Honourable Mr. Justice P.J. Flynn

COUNSEL: D. Phillips-Brown, Counsel for the Plaintiff/Responding Party J.P. Thomson, Counsel for the Defendant/Moving Party

HEARD: October 15, 2017

ENDORSEMENT

[1] This action has been alive since December 2011. But it was only in early June of this year that this motion was brought even though counsel for the moving parties told the court that he only “twigged” to bringing this motion for security for costs at the end of January this year.

[2] The Defendants have brought (another) motion for Summary Judgment, which is returnable at the beginning of December next.

[3] The Defendants argue that the Plaintiff’s claim has no chance of success. And, at least in the case of some of those Defendants, that may very likely be the case.

[4] But the principal Defendant, Howard Brodsky, seems to be fully in the centre of the Plaintiff’s cross-hairs.

[5] The Defendants argue that this lawsuit is but revenge harassment brought at the instance of the Plaintiff’s principal, James McConnell, for losses suffered in a quixotic but sham mining adventure in Equatorial Guinea into which the Defendant Howard Brodsky introduced his long-time friend, McConnell to cause the Plaintiff to invest.

[6] And the Plaintiff did invest- $1,000,000. But the Plaintiff says it never got the shares for which it subscribed and its investment was converted by the Defendants to their own use.

[7] If that proves to be true, you can understand why the Plaintiff`s principal would feel put out.

[8] On this motion, the Defendants seek to have the Plaintiff post security for costs (on a partial indemnity basis) in the amount of $134,090.91 prior to the hearing of the Summary Judgment motion, failing which the action is to be dismissed.

[9] The Plaintiff, as might be expected, says the Defendants needs a lesson in Rule 56.01 and asks for an outright dismissal of the motion but, if not, then argues that the quantum of costs ordered secured be limited to the costs incurred after the bringing of this motion, determined as the stages of the litigation all reached. For example, for the stage from this motion to the conclusion of the Summary Judgment motion, the Plaintiff says that amount would more nearly approximate $10,000.

[10] To succeed on their motion, the Defendants must show that the Plaintiff fits one of the enumerated categories set out in Rule 56.01(1). And if the Defendants show that, then the Plaintiff has the onus to demonstrate a good reason why the order ought not to be made.

[11] The pertinent sub-rule through which the Defendants seek passage, is 56.01(1)(d). Here the Defendant must show that there is good reason to believe that the Plaintiff has insufficient assets in Ontario to pay a costs award.

[12] The uncontested affidavit evidence of Henry Godinho shows that the Plaintiff owns a property in Lambton Shores, Ontario, with an approximate value of $270,000 and a property in Kitchener, Ontario valued at $421,000 upon which there is secured a $400,000 mortgage, leaving a worth of $21,000.

[13] The Plaintiff has provided the Defendants with necessary proof of ownership.

[14] The Defendants may doubt the value of these properties, but chose not to conduct any cross-examination in that regard.

[15] I am therefore satisfied that the Plaintiff has sufficient ($291,000) assets in Ontario to pay the Defendants costs of required.

[16] That is the end of the inquiry and the motion. Motion Dismissed.

COSTS

[17] The Plaintiff was completely successful on their motion and is therefore entitled to its costs.

[18] At the close of the hearing the parties delivered their Rule 57B Costs Outlines.

[19] The Plaintiff claims all inclusive partial indemnity costs of $2,294.97. In my view, considering that the Defendants would have claimed partial indemnity costs of $9,574.42 for bringing and arguing the motion, I would accept the Plaintiff’s claim as fair and reasonable within the reasonable expectation of the losing party.

[20] Therefore I fix the Plaintiff`s costs at $2,294.97 as sought.

P.J. Flynn J.

Date: November 15, 2017