Court File and Parties

Court File No.: CV-18-603208 Motion Heard: 20190211 Superior Court of Justice - Ontario

Re: Mohamed Bhaloo, Plaintiff And: Tundra Technical Solutions Inc., Defendant

Before: Master Jolley

Counsel: Matthew Morden, Counsel for the Moving Party Defendant Gregory Sills, Counsel for the Responding Party Plaintiff

Heard: 11 February 2019

Reasons for Decision

[1] The defendant brings this motion for an order requiring the plaintiff to post security for costs on the basis that the plaintiff is ordinarily resident outside Ontario.

[2] The plaintiff does not deny that he lives a good part of the time in Mexico. He takes the position, nonetheless, that he is ordinarily resident in Ontario. He relies on Knowles v. Lindstrom, 2014 ONCA 116 for the proposition that an individual can be resident in more than one location.

[3] By September 2016, the plaintiff’s wife and son had relocated to Mexico. By at least March 2017, he too had moved to Mexico, from where he worked remotely for the defendant. He has a visa that allows him to remain in Mexico for 180 days at a stretch, meaning he could be in Ontario for one week a year and legally stay in Mexico for the balance of the year. Last year, the plaintiff spent 75 days in Ontario and the balance of almost ten months in Mexico. When the plaintiff is in Ontario he stays with his parents or brother.

[4] Unlike the facts in Knowles, supra, here there is little indicia of the plaintiff ordinarily residing in Ontario. There is no evidence that he belongs to any community groups or other organizations in Ontario, that he has a bank account in Ontario or has any of the other ties one associates with residency. The plaintiff travelled to Ontario to attend work meetings as required in 2017 and 2018 until his relationship with the defendant was terminated. Otherwise, he lives in Mexico and comes to Ontario to visit family from time to time.

[5] I am satisfied on the evidence before me that it appears that the plaintiff is ordinarily resident outside Ontario for the purposes of Rule 56.01(1)(a) of the Rules of Civil Procedure.

[6] Having determined that the plaintiff is ordinarily resident outside Ontario, the court may make such order for security for costs as is just. The onus shifts to the plaintiff to demonstrate that such an order would be unjust. He may demonstrate either that he has sufficient assets in Ontario to satisfy a costs award, that he is impecunious and his claim is not plainly devoid of merit or, where he has not established that he is impecunious, that his claim has a good chance of success on the merits.

[7] The plaintiff has led no evidence about his assets in Ontario but defends the motion on the basis that he has a good chance of success at trial. The threshold has been variously described as a real possibility of success, a good chance of success or an overwhelming case. Regardless of the language used, the threshold for the plaintiff is high (Coastline Corp. v. Canaccord Capital Corp., 2009 ONSC 2312 at paragraph 7).

[8] If an action is complex or turns on issues of credibility, an assessment of the merits is not appropriate. In such cases where it is not possible for the court to determine on the motion record before it whether the plaintiff’s case has a good chance of success, the merits would be a neutral factor (Coastline Corp, ibid. and Jones v. Jones, 2013 ONSC 1377, paragraph 32). This does not mean that scrutiny of the merits is not warranted. Indeed, the test to respond to such a motion demands such a consideration. At this same time, this is not to be turned into a summary judgment motion and it is not the role of the court to embark on that kind of analysis. The analysis is primarily on the pleadings with recourse to the evidence filed on the motion (Padnos v. Luminart Inc., paragraph 7, referenced in Coastline Capital).

[9] In his statement of claim, the plaintiff claims damages for lost compensation and for accrued vacation pay. He pleads that he worked for the defendant for 12 years as its executive recruiter. He pleads that while he worked under the label of “independent contractor”, he was an employee in fact or, alternatively, a dependent contractor and is entitled to reasonable notice.

[10] In his affidavit on this motion, the plaintiff deposes that the defendant prepared a services agreement between it and 1698491 Ontario Inc. (the “company”), a company he was instructed to incorporate. He notes that he worked a minimum of 40 hours a week, that his hours were directed by the defendant, that he received a base salary and four weeks’ vacation, among other indicia of employment or dependent contractor status.

[11] The defendant pleads that the plaintiff is a shareholder or officer or director of the company with which it had a services agreement. That agreement provided that the company was an independent contractor and that none of its directors or employees will be deemed to be employees of the defendant.

[12] On the record before me setting out the length of the relationship, the obligations of the plaintiff and the terms of the services agreement, I find that the plaintiff has a good chance of success on his claim for either wrongful dismissal damages or dependent contractor damages. The defendant may succeed at trial in proving both that the plaintiff did not have a relationship of employment with the defendant and that his relationship was solely with the services company he had incorporated. It may also prove that the plaintiff had other customers, which was contested on this motion. However, the trial judge may also consider that the services agreement provides that the plaintiff was defined as the Designated Individual and had the obligation to perform those tasks assigned to him by the defendant’s president. By virtue of his designation, the plaintiff was also required to devote substantially all of his time, attention and effort to the performance of his duties on behalf of the company for the defendant.

[13] As a final matter, before making an order for security for costs, the court is to step back and consider the justness of the order sought holistically. Security for costs should only be made where the justice of the case demands it (Yaiguaje v. Chevron Corporation, 2017 ONCA 827). Considering all the circumstances of the case, I find that the justice of this case does not require the plaintiff to post security for costs. The motion is dismissed.

[14] I encourage the parties to come to a resolution on costs. If they are unable to do so by 15 March 2019, they may each submit a costs outline and costs submissions of no more than three pages in length to my attention, c/o Christine Meditskos.

Master Jolley Date: 13 February 2019