Sorensen et al v. Ellis, 2018 ONSC 7155

Court File and Parties

COURT FILE NO.: CV-16-128704-00 DATE: 20181129 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Caroline Sorensen and Lucie Giguere Plaintiffs – and – Keith Ellis Defendant

COUNSEL: Ronald V. Zaldin, for the Plaintiffs David E. Mende, for the Defendant

HEARD: October 19, 2018

Reasons for Decision

DE SA J.:

Overview

1The Plaintiff, Caroline Sorenson, has brought this motion with a view to obtaining answers to various undertakings and refusals from the examination of the Defendant, Keith Ellis, on his affidavit. The examinations relate to an ongoing motion for security for costs. This motion was commenced in February 2017.

2Having reviewed the record, the motion appears largely directed at getting to the merits of the action. The Plaintiff wants to establish, by way of cross-examination on the Defendant’s affidavit, that the Defendant’s counterclaim is frivolous.

3The Defendant has asked that the matter be moved forward to discoveries and takes the position that the motion is unduly delaying the proceeding. In the alternative, if the motion is to continue, the Defendant is seeking to examine the Plaintiff and the Plaintiff’s mother, Lucie Giguere, on the motion to demonstrate the counterclaim has merit.

4Given the approach of the parties here, it would be far more efficient to address a potential motion for security for costs after the discoveries are complete. The current approach adds far too much complexity and unnecessary costs to the proceeding.

5Accordingly, the motion for security for costs will be adjourned sine die pending the completion of the discoveries. If the Plaintiff is still intent on bringing her motion for security for costs, she can seek do so with leave of the court, once the discoveries have been completed.

6The reasons for my decision and the other terms of my Order are outlined below.

Background

7The Plaintiff and the Defendant met in 2010. They became a couple and began living together in 2011, first at the Plaintiff’s sister’s home, and then at the Defendant’s mother’s home.

8According to the Defendant, in the summer of 2011, the parties decided to purchase the property located at 126 Longford Drive, Newmarket, Ontario (the “Property”). Given the Defendant’s credit situation, he was not able to obtain financing for the Property himself. Accordingly, the Plaintiff and her parents co-signed for the mortgage with a view to assisting the couple with the purchase.

9According to the Defendant, it was always understood that the Plaintiff and the Defendant would be joint owners of the Property.

10The Property was purchased on July 29, 2011 without any deposit or down payment. The Plaintiff purchased the Property in her name with a 98 percent share, with her parents each having a one percent joint tenant interest in the Property. In December 2012, a 99 percent interest in the Property was transferred to Caroline and her mother retained a one percent interest as a joint tenant.

11From August 2011 to February 2016, the Defendant made a number of payments that went towards the Property. According to the Defendant, the amount he contributed towards the household expenses, including the mortgage, was substantial, and was well in excess of $100,000. The basement of the Property was also being rented as a means to generate additional income.

12After living in the home together for almost five years, the parties began having problems in their relationship. In January 2016, Caroline moved back to her parents’ house. She left a letter for the Defendant stating that she was having second thoughts about their relationship. While they had a few more contacts after January 2016, the relationship gradually broke down.

13A few months later, Caroline and her parents told the Defendant that they wanted him out of the home. The Defendant advised that he would only move out of the house if they paid him his half of the value of the Property. With a view to protecting his interest in the Property, the Defendant remained in the Property.

14In November 2016, Caroline and her mother commenced an action against the Defendant requiring that he leave the Property and seeking a declaration that the Property belonged solely to the Plaintiff, Caroline Sorensen. The Defendant counterclaimed against Caroline and her mother seeking half of the value of the Property. While the Plaintiff’s mother, Lucie Giguere, was originally a party to the action, she has abandoned any interest in the claim, and discontinued her action.

15Accordingly, the action is now solely between the Plaintiff, Caroline Sorensen, and the Defendant.

Motion for Security for Costs and Delay

16As noted above, the action was commenced in November 2016. In July 2017, the Plaintiff brought a motion for security for costs. The parties filed affidavits in support of their motion, and the parties chose to cross-examine on their respective affidavits.

17The cross-examination of the Defendant commenced on December 12, 2017, but it was not completed. The Plaintiff takes the position that it was not possible to finish the cross-examination because of the Defendant’s failure to bring requested documentation to the examination.

18The Plaintiff has now brought this motion with a view to obtaining answers to various undertakings and refusals from the examination of the Defendant. While this motion was originally scheduled for a short motion in February 2018, it was adjourned to October 2018 given its anticipated length and complexity.

19I have reviewed the materials filed, including the transcript of the cross-examination of the Defendant. Much of the examination seemed to try and get to the merits of the action itself. The Plaintiff’s motion is largely based on the assertion that the Defendant’s counterclaim has no merit. And while I understand that the merits are relevant on a motion for security for costs, the threshold for merit on a motion of this sort is extremely low: see John Wink Ltd. v. Sico Inc. (1987), 57 O.R. (2d) 705 (Ont. H.C.), at p. 708. Even from a cursory glance, I can see there is potential merit to the Defendant’s position. The primary issue here is credibility. To delve so deeply into the merits of the action on a motion of this sort merely invites unnecessary costs and unwarranted delay.

20In Intellibox Concepts Inc. v. Intermec Technologies Canada Ltd., Nordheimer J. (as he then was), in dismissing a request to revisit a motion for security for costs, explained at paras. 6 – 7:

…while I am prepared to accept that the examinations for discovery may have elicited evidence that may pose some obstacles to the plaintiff's claims, the evidence falls well short of establishing that the plaintiff's claim is without merit. I do not intend to review the evidence to which I was referred in this regard because I do not consider it necessary or appropriate to do so. A motion for security for costs ought not to be turned into a substitute for a motion for summary judgment nor should it be used to indirectly accomplish the same result. [Emphasis added.]

21Another concern for the motion for security for costs here is that the counterclaim raises the exact same issues being advanced on the main action. This also militates against ordering security for costs against the Defendant on the counterclaim: see Toronto-Dominion Bank v. Szilagyi Farms Ltd. (1988), 65 O.R. (2d) 433 (C.A.). The matter will have to proceed regardless.

22The Defendant had brought a cross-motion seeking to amend its statement of claim, and an order scheduling the completion of the pleadings, the delivery of affidavits of documents, and examinations for discovery. The Defendant is also seeking that he be entitled to examine both the Plaintiff and her mother, Ms. Giguere, in relation to the issues raised on the motion.

23The Plaintiff resists even scheduling the cross-examination on her own affidavit on the motion for security for costs until she has completed her examination of the Defendant. The Plaintiff also takes the position that if the Defendant wants to cross-examine Ms. Giguere, he will have to bring a separate motion which will be resisted.

24This matter dates back to November 2016, and the parties have yet to exchange their affidavits of documents. The main action has been put on hold on the basis of an ongoing motion which appears to have a very slim chance of success. The costs incurred on the motion have been substantial, and the motion itself seems to lack any meaningful direction. Both parties seem to be trying to get discovery of the case through the examinations on a motion for security for costs. This is hardly an efficient way to proceed.

25The courts have been encouraged to assist with moving matters forward. ¹ Unnecessary procedures and inefficient practices run a serious risk of impeding litigants’ ability to have matters adjudicated on their merits. If interim motions are not kept within reasonable bounds, litigants can easily end up paying more on the motions than they can ever hope to gain in the litigation. Unnecessary procedural steps can also impose an unfair burden on other stakeholders in the system.

26The Supreme Court specifically addressed these concerns in the summary judgment context in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, where the Court stated, at paras. 24 – 25 and 32:

Undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes. The full trial has become largely illusory because, except where government funding is available, ordinary Canadians cannot afford to access the adjudication of civil disputes. The cost and delay associated with the traditional process means that, as counsel for the intervener the Advocates’ Society (in Bruno Appliance) stated at the hearing of this appeal, the trial process denies ordinary people the opportunity to have adjudication.

Prompt judicial resolution of legal disputes allows individuals to get on with their lives. But, when court costs and delays become too great, people look for alternatives or simply give up on justice. Sometimes, they choose to represent themselves, often creating further problems due to their lack of familiarity with the law.

This culture shift requires judges to actively manage the legal process in line with the principle of proportionality. While summary judgment motions can save time and resources, like most pre-trial procedures, they can also slow down the proceedings if used inappropriately. While judges can and should play a role in controlling such risks, counsel must, in accordance with the traditions of their profession, act in a way that facilitates rather than frustrates access to justice. Lawyers should consider their client’s limited means and the nature of their case and fashion proportionate means to achieve a fair and just result. [Emphasis added.]

27Similar statements have been made by the Supreme Court in the context of criminal proceedings in R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631. In the criminal context, litigants have been required to streamline, and get to the issues. The Court’s comments in this regard are equally applicable in the civil context. As the Court explained in Jordan, at para. 43:

Complexity is sometimes unavoidable in order to achieve fairness or ensure that the state lives up to its constitutional obligations. But the quality of justice does not always increase proportionally to the length and complexity of a trial. Unnecessary procedural steps and inefficient advocacy have the opposite effect, weighing down the entire system. A criminal proceeding does not take place in a vacuum. Each procedural step or motion that is improperly taken, or takes longer than it should, along with each charge that should not have been laid or pursued, deprives other worthy litigants of timely access to the courts. [Emphasis added.]

28The important role that judges play in ensuring matters remain focussed was also emphasized by the Supreme Court in R. v. Cody, 2017 SCC 31, [2017] 1 S.C.R. 65 in the criminal context. The Court explained, at paras. 38 – 39:

[T]rial judges should not hesitate to summarily dismiss “applications and requests the moment it becomes apparent they are frivolous” (Jordan, at para. 63). This screening function applies equally to Crown applications and requests. As a best practice, all counsel — Crown and defence — should take appropriate opportunities to ask trial judges to exercise such discretion.

Trial judges should also be active in suggesting ways to improve efficiency in the conduct of legitimate applications and motions, such as proceeding on a documentary record alone. This responsibility is shared with counsel. [Emphasis added.]

29These sentiments are echoed in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”). Rule 1.04(1) provides that the rules are to be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits (emphasis added).

30Similarly in Rule 1.04(1.1), in applying the Rules, the court is directed to make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved in the proceeding which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation (emphasis added). See also Szeto v. Dwyer, 2010 NLCA 36, 297 Nfld. & P.E.I.R. 311.

31The Rules also provide for early judicial involvement, through Rule 1.05, which allows a court to make directions, to manage the time and cost associated with anticipated or ongoing motions.

32The Supreme Court in Hryniak, at para. 72 recognized that an order to stay or dismiss an improper or premature motion may be appropriate in certain cases, such as,

to challenge lengthy, complex motions, particularly on the basis that they would not sufficiently advance the litigation, or serve the principles of proportionality, timeliness and affordability.

See also Stantec Consulting Ltd. v. Altus Group Limited, 2014 ONSC 6111.

33In my view, the circumstances of this case warrant such an order. Accordingly, the motion for security for costs will be adjourned sine die and will not be brought by the Plaintiff until the discoveries are completed. The parties will serve their affidavits of documents no later than January 15, 2019. Discoveries are to be scheduled on or before the end of April 2019.

34If the Plaintiff is still intent on bringing her motion for security for costs, the Plaintiff can do so, with leave of the court, once the discoveries have been completed. At least then, the costs associated with a detailed examination on the merits will not be borne by the litigants twice.

35This matter should be set down for trial by no later than September 2019.

36Should there be any issues with respect to complying with the terms of this timetable, the parties can arrange for a subsequent appearance before me. It may be that this matter would benefit from proceeding in the Family Division given the underlying basis of the Defendant’s counterclaim, and the availability of case management.

Outstanding Issues on the Motion

37The Plaintiff asks that I exercise my discretion and order that the costs of the Defendant’s cross-examination be paid by the Defendant given his attitude on the discovery and his failure to bring the necessary documentation to the examination. Having reviewed the transcript, I do not think this order would be appropriate.

38I have reviewed the undertakings and refusals. In my view, many of the questions were properly refused by counsel for the Defendant. They were not questions relevant to the issues on the motion. They were comments more in the nature of rhetoric, or statements directed at impugning the Defendant’s legal position. I hardly see these to be appropriate questions of a witness.

39Having reviewed the record, I am prepared to order the following should the Plaintiff choose to continue to pursue the motion for security for costs after the discoveries have been completed.

1. The Defendant will produce income tax returns for 2010, 2011, 2012, 2013, 2014, 2015, and 2016. If the Defendant does not have his tax returns for 2015 – 2016, a statement of his income for those years will suffice;
2. To date, the Defendant has provided a list of debts (CIBC – $8,039.85, Canadian Tire – $2,884, Capital One – $2,903, and CRA – $3,485.15). The Defendant is to produce official copies (from the banks) of his outstanding debts with each of these institutions;
3. List of any and all assets and liabilities/debts including any debt to the CRA;
4. Job history from July 29, 2011 to current date (résumé);

40These are to be produced by the Defendant within 60 days of this order.

41The Defendant also made a request to examine Ms. Giguere on the motion for security for costs. At the hearing of this matter, the Plaintiff’s counsel indicated that he would resist Ms. Giguere’s examination largely on the basis that she was no longer a party to the main action. The Defendant’s specific request is moot given my order. However, given the Plaintiff’s position on the motion, I do feel the need to comment on the issue.

42In my view, even if Ms. Giguere is no longer a “party” to the action (which appears to be in question), her examination would be warranted under Rule 31.10. She would clearly have information relevant to the material issues in the action and to require the matter proceed to trial without her examination would be unfair: see Manga Hotels (Toronto) Inc. v. GE Canada Equipment Financing G.P., 2014 ONSC 2699, at para. 13. I point this out with a view to expediting matters once the discoveries are commenced.

Costs

43I will entertain costs submissions on this motion. If the parties cannot agree on costs they may file submissions with the court within 30 days of this decision. The submissions are to be no more than two pages in length, excluding bill of costs, case law, and offers to settle. If there is any doubt from my reasons, I view the Defendant, Keith Ellis, to be the successful party on the motion.

Footnotes

1. 1The Ontario Rules and a superior court’s inherent jurisdiction permit a motion judge to be involved early in the life of a motion. See Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.