COURT FILE NO.: CV-14-1168-00
DATE: 2019 02 04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BRIM IPCO INC.,
Joseph Nicholson, in person, and for the BRIM corporations.
Plaintiff
- and -
STEPHEN HORBATIUK, RICHARD MYERS, CORINNE MYERS (a.k.a. CORI PRATT), FACILITATOR XTREME CORP., JASON LAGADIN, ROCH BEAULIEU, BOBBI JO BEAULIEU, R. BEAULIEU ROOFING LTD., RVP ROOFING SYSTEMS INC.,
Defendants
C. Harold Rosenberg, for Janza, Zupanec, Nahanni Steel & RVP Roofing
Tibor Sarai, for Horbatiuk, Myers Facilitator Extreme, Lagadin, Roch & Bobbi Jo Beaulieu and R. Beaulieu Roofing
HEARD: December 3, 2018 at Brampton
REASONS FOR DECISION
Emery J.
[1] There are two motions before the court that seek an order to dismiss this action. In the alternative, the moving parties ask this court to stay the action under Rule 57.03(2) or Rule 60.12 because of the plaintiff’s failure to pay costs under various orders.
[2] The defendants Stephen Horbatiuk, Richard Myers, Jason Lagadin, Roch Beaulieu, R. Beaulieu Roofing Ltd., (The “Horbatiuk defendants”) ask this court to dismiss or to stay this action as against them for the failure of the plaintiff BRIM IPCO Inc. (“IPCO”) and those associated parties who were plaintiff’s before the statement of claim was amended, to pay $53,750 ordered as costs by this court on April 25, 2016, as well as $6,250 awarded on May 12, 2016.
[3] The defendant RVP Roofing Systems Inc. (RVP), also brings a motion for this court to dismiss or to stay this action as against it for the failure of the plaintiff and those parties who were plaintiffs prior to the amendment of the statement of claim, including Joseph Nicholson, to pay costs ordered by the court in the amount of $127,750 on April 25, 2016, as well as $6,250 awarded by the court on May 12, 2016.
[4] Paul Janza, Vlado Zupanec, Sebastijan Zupanec, Nahanni Steel Products Inc. (the Janza group), were removed as defendants from this action when the statement of claim was amended. The Janza group also seeks an order to dismiss the shareholder proceeding commenced by Mr. Nicholson as a counter-application in court file number CV-15-2151 as against them (the “Nicholson application”).
[5] The Janza group further seeks an order striking any affidavits filed by Mr. Nicholson or any BRIM Corporation in response to the application commenced by the Janza group in court file number CV-14-0103.
Basis for the relief requested
[6] Joseph Nicholson commenced this action and a second action under court file number CV-14-1169 along with other corporate plaintiffs, including the current plaintiff IPCO, against those parties constituting the Janza group, Horbatiuk defendant’s and RVP Roofing Systems Inc. The actions were brought by the plaintiffs alleging that the defendants had breached a trademark, and wrongfully passed off the plaintiffs’ products as their own by confusing consumers in the market place. The Plaintiffs claimed for substantial damages as well as injunctive relief in that action when it was commenced in 2014.
[7] Mr. Nicholson and those corporate plaintiffs were also named as respondents in an application commenced by the Janza group in 2014 under court file number CV-14-0103. The Janza group asked the court in that application for relief under the oppression remedy made available by section 248 of the (Ontario) Business Corporations Act as they characterized the issue as a shareholders dispute between the parties.
[8] Mr. Nicholson and the corporate plaintiffs changed counsel to the Toronto law firm of Lenczner Slaght LLP after their previous counsel had brought several motions, some of which had been heard and determined, and some that had floundered. With the experienced counsel of Mr. Lenczner and the able assistance of Mr. Morrison, the plaintiffs obtained the consent of all defendants at the time to amend the statement of claim in this action. By these amendments, the BRIM corporations initially named as plaintiffs were reduced to IPCO, and the field of defendants was narrowed to the Horbatiuk defendants and RVP Roofing Systems Inc.
[9] The plaintiffs in the action commenced under court file number CV-14-1169 filed a notice of discontinuance of that action. In the course of streamlining the litigation, the plaintiffs in both actions withdrew all motions that had been served but not yet heard in those actions.
[10] Around the same time, Mr. Nicholson commenced the Nicholson application against the Janza group to claim an oppression remedy and other relief.
[11] I heard submissions of counsel for the Janza group and for the Horbatiuk defendants on costs with respect to motions that had been heard and determined, for those motions that had been withdrawn, and for the discontinuance of the action in court file number CV-14-1169. In reasons released on April 5, 2016, as corrected on April 25, 2016, I made the following costs awards:
- To the Janza group, in the amount of $127,750 all inclusive;
- To the Horbatiuk defendants, in the amount of $53,750 all inclusive; and
- Mr. Nicholson and the BRIM group of companies that commenced this action were ordered to pay those costs by October 31, 2016.
[12] After receiving submissions in writing on costs related to the hearing in 2015 that resulted in the costs decision, I awarded further costs as follows:
- On the motion for leave to amend, costs were awarded to the plaintiffs in the amount of $7,711 plus applicable HST, payable by the Janza group and the Horbatiuk defendants equally.
- On the motion for costs, the Janza group and the Horbatiuk defendants were each awarded $6,250 all inclusive, payable by the plaintiffs.
- Those costs were payable by October 31, 2016.
[13] The Janza group also assert the non-payment of $5,500 for costs ordered by this court, and pursuant to a consent order made by the Court of Appeal in the amount of $5,000 on July 11, 2017 as grounds for this motion. They argue that the costs orders are piling up, with no discernable effort made by Mr. Nicholson or the BRIM group of companies to pay them.
[14] There is no dispute that Mr. Nicholson or the BRIM group of companies, including IPCO have not paid any of the costs ordered to date.
Position of the parties
[15] The Janza group and the Horbatiuk defendants ask this court to dismiss the action because neither Mr. Nicholson or the BRIM corporations have paid any costs ordered by this court, or nor have they provided any explanation for the failure to do so.
The Moving Parties
[16] The Janza group also relies on the fact that Mr. Nicholson and the BRIM corporations, including IPCO, have failed to pay the costs of $5,500 awarded to the Janza group on September 28, 2018. These costs arose when this court dismissed the plaintiff’s motion under Rule 15.01 for leave to continue this action without the representation of a lawyer.
[17] The Janza group also brings this motion under Rule 15 for the dismissal of the action as against RVP Roofing Systems Inc., dismissal of the Nicholson application because the BRIM group has not retained a lawyer to represent them in either proceeding.
[18] Both the Janza group and the Horbatiuk defendants rely upon Rule 57.03(2) as authority for the court to dismiss or to stay another party’s proceedings where that party fails to pay the costs of a motion. They also rely on Rule 60.12 that provides the court with authority to stay or to dismiss the proceeding of a party, or to make such order as is just where that party fails to comply with an interlocutory order.
The Responding Parties
[19] Mr. Nicholson appeared at the motion to make submissions on his own behalf and on behalf of the BRIM group, including IPCO. I permitted Mr. Nicholson to speak on behalf of the BRIM corporations despite the failure of those corporations to comply with my order on August 28, 2018, that they appoint a lawyer within 30 days for two reasons: first, because those corporations were represented by counsel when the costs order were made; and second, because the submissions Mr. Nicholson is entitled to make as a person who is representing himself were inextricably connected to the submissions he would make on behalf of those corporations.
[20] Mr. Nicholson submits that the relationship between himself and the Janza group as well as the Horbatiuk defendants was effectively a partnership. From this premise he argues that all of the parties that made up that partnership are obligated to pay the costs awarded. Mr. Nicholson states in the alternative that while he and the BRIM corporations have not paid any costs, nor have any of the partners.
[21] Mr. Nicholson also argues that neither the Janza group or the Horbatiuk defendants have paid the $7,711 plus HST that IPCO was awarded by this court on May 12, 2016. Mr. Nicholson submits that the Janza group and the Horbatiuk defendants are in no position now to require the payment of costs by himself and the BRIM group if they have not paid the costs they have been ordered to pay.
The Rules and their application
[22] For reference, I am setting out the provisions of Rules 57.03(2) and 60.12 that the Janza Group and the Horbatiuk defendants rely upon for the relief they are seeking. Rules 57.03(2) and 60.12 read as follows:
(2) Where a party fails to pay the costs of a motion as required under subrule (1), the court may dismiss or stay the party’s proceeding, strike out the party’s defence or make such other order as is just. R.R.O. 1990, Reg. 194, r. 57.03 (2).
Rule 60.12 reads as follows:
60.12 Where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by these rules,
(a) stay the party’s proceeding;
(b) dismiss the party’s proceeding or strike out the party’s defence; or
(c) make such other order as is just. R.R.O. 1990, Reg. 194, r. 60.12.
[23] In Rana v. Unifund Assurance Company, 2016 ONSC 2502, Justice Dunphy conducted a careful review of the authorities and set out a series of principles to guide this court on the exercise of the judicial discretion when deciding a motion under Rule 57.03(2) or Rule 60.12. The Rana principles have since been applied in Talluto v. Marcus, 2017 ONSC 1243 (SCJ) and Apollo Real Estate Ltd. v. Stream Bank Funding Inc., 2018 ONSC 392. Those principles from Rana, found at paragraph 50 of that decision, are as follows:
a. Where there has been non-compliance with an order of the court, the court should be alive to the possibility that its process is being abused; failing to act may deprive the moving party of justice according to law and risks rendering the court a paper tiger: Bottan v. Vroom, at para. 24-25;
b. The right of access to the courts must be accompanied by the responsibility to abide by the rules of civil procedure and to comply with orders of the court - to exempt impecunious parties from the enforcement of costs orders when made would amount to granting “carte blanche to continue to ignore the rules and orders of the court and take unsupportable steps in the action without fear of consequences” per Master Dash in Heu v. Forder Estate, 2011 16198 (ON LRB), 2011 16198 (ON SC) at para. 19-20;
c. The court ought not to sit in appeal of the prior costs awards – the respondent will have had the opportunity to make submissions about impecuniosity at the prior hearings that resulted in the costs orders and seeking to relieve against prior costs orders constitutes a collateral attack on orders previously made: Bottan v Vroom, at para. 23; Visic v. University of Windsor, 2013 ONSC 2063at para. 36 and 66; Trewin v. MacDonald, [2008] O.J. No. 2821 (ONSC) at para. 26;
d. The court may have regard to a pattern of unnecessary and unreasonable steps taken in the proceeding, including appealing numerous orders without chance of success or knowing the risk thereby imposing costs upon the other party: Visic v. University of Windsor at para. 68;
e. If the orders of the court are “cavalierly ignored” and if a litigant “continuously fails to comply with her obligations as a litigant and then fails to abide by the costs consequences attendant upon that behavior, the court is justified in bringing some finality to the action” (per Master Dash in Burrell v Peel (Regional Municipality) Police Services Board, 2007 46173 (ON SC), 2007 46173 (ONSC) at para 63; aff’d 2010 ONSC 1387;
f. Impecuniosity is not a shield for unreasonable conduct of litigation and a dismissal order may be made even if it resolves the matter on procedural rather than substantive grounds: Baradaran v. Tarion Corp., 2014 ONSC 6870;
g. Self-represented litigants, while entitled to some accommodation and assistance to ensure a fair hearing, are not entitled to abuse the system or the party opposite and failure to enforce orders once made against self-represented parties is unfair to the parties opposite and undermines respect for the court and the civil justice system: per Myers J. in Baradaran v. Tarion Corp., 2015 ONSC 7892; Bilich v. Toronto (City) Police Services Board, 2014 ONSC 6765;
h. “Courts usually talk in terms of prejudice that cannot be compensated for by costs. But, at some point, costs themselves become an inadequate form of compensation for prejudice, especially where the party on whom they are imposed refuses to pay them”: per D.M. Brown J.A. in Schwilgin v. Szivy, 2015 ONCA 816at para. 23.
[24] In Talluto, Justice Di Luca held that a matter should be heard on its merits as a matter of general principle. However, a “party’s conduct in the course of the litigation may disentitle it from seeking adjudication on the merits.”
[25] Justice Firestone also distilled further principles in Apollo Real Estate Ltd. and those principles guide me when exercising the discretion I am given under Rules 57.03(2) and Rule 60.12. Those further principles include the following:
- The enforcement of interlocutory orders is of overriding concern for the court to ensure the administration of justice, and to uphold the integrity of the justice system. Failure to ensure this compliance in the course of litigation is “corrosive of the entire justice system”: Rana v. Unifund Assurance Company.
- When determining if an action should be dismissed where there is non-compliance with a costs order, the court must balance the competing interests of all parties and consider all relevant factors: Garrett v. Oldfield, Greaves, D'Agostino, 2016 ONCA 424 (Ont. C.A.).
- The importance of self-represented litigants to understand the nature of proceedings and to have a fair opportunity to present their case was recognized in Baradaran v Tarion Corporation, 2015 ONSC 7892. However, “ignoring court orders is unjust and unfair to opponents and generally cannot be condoned by the courts.”
- “Impecuniosity is not a shield for unreasonable conduct of litigation”: Baradaran, at para. 7.
- Where impecuniosity is used as a shield against cost sanctions, it would mean “that a plaintiff could bring, resist, or appeal motions with no fear of consequences, and would emasculate the powers provided in Rules 57.03(2) and Rule 60.12: Baksh v. Sun Media (Toronto) Corp. (2003), 2003 64288 (SCJ); and
- It has been held by the Court of Appeal that “while standing alone, lack of funds cannot justify a failure to pay costs. That said, evidence of impecuniosity is a factor to take into consideration. As is always the case when there are competing interests, the goal is to strike a balance”: Tarion Warranty Corp. v. 1486448 Ontario Inc., 2012 ONCA 288.
[26] Mr. Nicholson stands before this court as a self-represented litigant. The courts have held once an order is made, the fact a party is self-represented does not excuse non-compliance with that order. For that reason, I include the following quote from Justice Myers in Baradaran that Justice Firestone found significant enough to set out in Apollo:
[16] Treating all litigants with respect and ensuring that all have an opportunity to have a fair hearing does not include excusing abusive conduct such as repeated breaches of court orders. To the contrary, ensuring a fair hearing and a fair process requires the even-handed application of the Rules and the enforcement of court orders for all parties. The Rules are broad enough that their interpretation and enforcement can and should take into account whether a party has legal representation where that issue is relevant to promote a fair hearing in the circumstances. However, once a determination under the Rules results in an order of the court, it is only fair for the orders to be seen as binding and to be enforced with an even hand regardless of parties’ representation. The self-represented party’s status would be taken into account in the hearing that led to the order being made if appropriate. I certainly took into account Mr. Baradaran’s self-represented status in ordering costs of only $750 against him last time. But once orders are made, a failure to enforce orders against self-represented parties is unfair to the parties opposite and undermines respect for the court and the civil justice system. With these principles in mind, I now turn to the merits of the two motions before the court.
[27] Court orders are court orders, and must be followed. Justice D.M. Brown, as he then was, put that direction in no uncertain terms when he said in Mercedes-Benz Financial (DCFS Canada Corp.) v. Kovacevic, 2009 9423 in the context of a contempt motion:
[5] A court exercises its contempt power to uphold the dignity and process of the court, thereby sustaining the rule of law and maintaining the orderly, fair, and impartial administration of justice: see the sources cited by Lax J. in Chiang (Trustee of) v. Chiang (2007), 2007 82789 (ON SC), 85 O.R. (3d) 425 (S.C.J.), paras. 16 to 19. When a person deliberately fails to obey a court order, he shows disregard for the obligations which he owes to others in his community, disrespect for his community’s system of justice which enforces those obligations, and disdain for the fundamental principle that all persons who live in our community do so subject to the rule of law. By disobeying a court order, a person seeks to place himself above and beyond the law of his community. His disobedience also creates conditions of gross inequality, rewarding those who turn their backs on the law, while placing burdens on those who follow the law. As Cumming J. so aptly put it in Sussex Group Ltd. v. 3933938 Canada Inc. (c.o.b. Global Export Consulting), [2003] O.J. No. 2906 (S.C.J.), at 48:
The thin veil of civilization that cloaks our community through the rule of law is fragile, in need of constant protection, and in need of being seen by all members of the community to be constantly protected.
The motion of the Horbatiuk defendants
[28] Mr. Nicholson did not raise the issue of an inability of himself or the BRIM group of companies including IPCO, to pays the outstanding costs. Submissions relating to the affordability of legal fees were made in previous motions, notably IPCO’s unsuccessful motion for leave to have Mr. Nicholson represent it although he is not a lawyer. Mr. Sarai addresses that issue as a subtext to Mr. Nicholson’s submissions by referring to paragraph 49 of Justice Dunphy’s decision in Rana for the principle that impecuniosity is not a factor on a motion of this nature.
[29] The issue of impecuniosity as the antidote to a costs order was addressed directly by Justice J.W. Quinn in Gordon v. Starr, 2007 35527. He held (at paragraph 19) that the inability of a party to pay costs is not relevant to the inquiry about the nonpayment of a costs order. Justice Quinn took a strict view of the mandatory obligation of a party to obey a court order, by stating that:
[23] Subrule 14(23) should not be taken lightly. It means what it says. It recognizes the offensiveness of allowing a party to obtain relief while in breach of a court order. Court orders are not made as a form of judicial exercise. An order is an order, not a suggestion. Non-compliance must have consequences. One of the reasons that many family proceedings degenerate into an expensive merry-go-round ride is the all-too-common casual approach to compliance with court orders. Mr. Sarai also relies upon the decision in Rana for the proposition that offset is permitted where there are competing costs awards. He argues that the nonpayment of a lesser amount of costs is no excuse for the nonpayment of the balance owing by the responsible party on a larger costs award. An order for the payment of costs net of the amount set off cannot be “cavalierly ignored”.
[30] I agree. Even though Gordon v. Starr was a family case, the nature of a court order and the requirement of a party to attend to the order of the court is the same as in any other context.
[31] In my view, the importance of requiring a party to comply with court orders, and to pay costs when due applies as much to the amount owing after setting off costs as it does to any costs order. Even if the Horbatiuk defendants were liable for the full amount of the costs awarded to IPCO in 2015 on the leave to amend motion in the amount of $7,711 plus HST of $1,002, Mr. Nicholson would still owe the Horbatiuk defendants $51,287 net of those costs. Alternatively, Mr. Nicholson and IPCO would owe the Horbatiuk defendants $55,644 if those costs are shared equally with the Janza group. It is not an answer to say a lesser amount between the same parties remains unpaid as an excuse to disregard an order for the payment of costs.
[32] Mr. Nicholson also made submissions that the Horbatiuk defendants were somehow partners in the BRIM venture. He asked the court to consider an agreement between Mr. Horbatiuk and Mr. Boulieu with BRIM Roofing Inc. dated February 13, 2013 as evidence of this partnership. He argues that BRIM Roofing Inc. essentially promised each of them shares in that corporation if they provided sales, marketing and installation services to the company up to certain performance levels.
[33] I do not consider this agreement as evidence that the parties to the agreement were partners for the very reason that it has been common ground throughout this litigation that BRIM Holding Corp holds all shares in the other BRIM companies. It was not a party to this agreement. BRIM Roofing Inc. had no shares in itself to offer to the other contracting parties. Mr. Horbatiuk and Mr. Boulieu were to incorporate a separate corporation to receive those shares in any event, and there is no evidence that the other corporation was ever incorporated. This agreement contemplated a corporate structure and a functionality that never transpired. As the parties never considered themselves partners under the agreement or carried on business with a view to making a profit, they were never partners.
[34] In an effort to deflect liability from himself for the costs he has been ordered to pay the Horbatiuk defendants, Mr. Nicholson has introduced a Unanimous Written Consent of the Shareholders and Directors of BRIM Holding Corp. and similar Consents of the other BRIM companies to indemnify, defend and hold him harmless. He argues that this indemnity covers him, even if he is negligent, from “any and all losses, claims, damages, liabilities, costs and expenses, including reasonable attorney’s fees and other expenses of investigation any claims and/or defending against or prosecuting any actions because of, or arising out of the activities of Paul Janza, Stephen Horbatiuk and others in relation to the roofing system described in the Canadian Patent Application No. 2,749,455 and manufactured and distributed under and by the BRIM group of companies.”
[35] I do not consider this Consent to indemnify or defend and save harmless an answer to the motion to dismiss these proceedings for three reasons.
[36] First, even if this Consent operates as an Indemnification Agreement instead of just a consent or authority for any BRIM corporation to give that indemnity, it has only been raised in the context of this motion. That is said assuming the Consent was truly given on December 23, 2013 as dated. Surely Mr. Nicholson would have made that Consent or Indemnity known to the other parties and to the court at the time those costs at issue were argued.
[37] Second, the fact that a corporation agrees to indemnify a person who is an officer and director does not excuse that person from paying costs. The indemnity operates to enable the person to seek payment from an insurance policy having the appropriate coverage, or to reimburse the person directly. In any event, the ability to indemnify Mr. Nicholson is limited by subsections 136 (1), (3), and (4.1) of the (Ontario) Business Corporations Act which read:
Indemnification
136 (1) A corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity. 2006, c. 34, Sched. B, s. 26.
Limitation
(3) A corporation shall not indemnify an individual under subsection (1) unless the individual acted honestly and in good faith with a view to the best interests of the corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the corporation’s request. 2006, c. 34, Sched. B, s. 26.
Derivative actions
(4.1) A corporation may, with the approval of a court, indemnify an individual referred to in subsection (1), or advance moneys under subsection (2), in respect of an action by or on behalf of the corporation or other entity to obtain a judgment in its favour, to which the individual is made a party because of the individual’s association with the corporation or other entity as described in subsection (1), against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfils the conditions set out in subsection (3). 2006, c. 34, Sched. B, s. 26.
[38] I am of the view that Mr. Nicholson falls short of acting in good faith by his failure to comply with court orders on behalf of the BRIM group of companies. Those corporations are therefore precluded from indemnifying Mr. Nicholson in any way under subsection 136(3), even if the right to indemnity was properly given to him.
[39] Third, the language of the Consent itself is not broad enough to protect Mr. Nicholson from his personal liability to pay the costs ordered. The Consent to indemnity provides whatever coverage permitted in the event of any loss, claim, damages or liability, including costs and expenses to which the Mr. Nicholson or the corporation may become subject. The purpose of the indemnity is to provide protection to Mr. Nicholson from litigation started by other parties, against himself or that BRIM Corporation as defendants. It is not to shield him from the consequences of litigation brought by him or the corporation as claimants.
[40] In the case before this court, IPCO is the plaintiff in the action, and in the counter-application where Mr. Nicholson and the BRIM corporations are the applicants. The language restricts the relevance of the indemnity where it defines the scope of the indemnity or defence to matters in relation to the BRIM roofing system itself. The current action confines itself to a claim for injunctive relief and to damages for another roofing system and brand name the defendants allegedly passed off as the BRIM system and brand. The application concerns a dispute between inherent or actual shareholders. There is no obligation on the part of the corporations to indemnify Mr. Nicholson in either proceeding as he is directly or indirectly the claimant on the facts as pleaded, or to indemnify him for any costs.
[41] In conclusion, there is no basis for the failure of Mr. Nicholson or any of the BRIM group of companies to pay the costs awarded to the Horbatiuk defendants. No amount of time in addition to the two years, eight months that have elapsed since the largest awards were made will likely make a difference to the willingness or ability of IPCO to pay those costs. This motion has been pending for almost one year, and it has not motivated IPCO to pay a penny or to retain a lawyer. With the evidence Mr. Nicholson has placed before this court, not even one more day will make a difference.
[42] The action of BRIM IPCO Inc. is therefore dismissed as against the Horbatiuk defendants.
The motion of the Janza group
[43] This action as against RVP Roofing Systems Inc. is also dismissed for the same reasons.
[44] The submissions made by Mr. Rosenberg on behalf of the Janza group as applicants in their application, and as respondents on the Nicholson application were similar to those made on behalf of the Horbatiuk defendants, although he placed emphasis of different points. To the extent the submissions made on arguments raised by Mr. Nicholson were based on the same legal principles or documents, I make the same rulings with respect to the Janza group.
[45] Mr. Nicholson made submissions that the Janza group were as much partners as they were shareholders. He did so to make the argument that members of the Janza group as partners were also liable for the costs awarded as partnership debts, and that as partners they have not paid those debts.
[46] This argument ignores the fact that Mr. Nicholson was a plaintiff in this action at the time the costs orders were made in April 2016, and that he has personally ignored a court order to pay those costs.
[47] This argument also ignores the fact that any evidence in affidavits related to past motions in this action or with respect to the applications have referred to an agreement between the parties to incorporate corporations to manufacture, market and install the BRIM Roofing system in the marketplace. The evidence is clear that the corporations making up the BRIM group of companies were formed soon thereafter. All parties in these proceedings have remarked on the observation I made in my decision in April 2016 that “rightly or wrongly, Mr. Nicholson became the sole director” of the BRIM corporations. This was the agreement that provided a corporate structure to the business the parties were to carry on.
[48] Since Mr. Nicholson effectively holds all shares in BRIM corporations, I order a stay of the Nicholson application until May 30, 2019. I am directing the registrar in Brampton to dismiss the Nicholson application upon the filing of an affidavit by counsel for any member of the Janza group that the costs that have been awarded to them under previous orders described in these reasons have not been paid in full by that date, including interest.
[49] The Janza group also seeks an order to strike the affidavits served by Mr. Nicholson in response to the application.
[50] I do not consider Rule 25.11 broad enough to empower the court to strike affidavits for the failure to pay costs. Although the court in Allianz Global Risks US Insurance Co. v. Canada (Attorney General), 2016 ONSC 29 (Ontario Master) interpreted the word “document” in Rule 25.11 to include an affidavit as a document under the rule, it is clear from the rule and the authorities that the ground for seeking to strike a document must be found under the rule as “frivolous, vexatious, or an abuse of process”.
[51] I see no basis provided under Rule 25.11 or elsewhere to strike an affidavit for failure to pay costs, or for non-compliance with an order such as the court ordered requirement to appoint counsel, or to serve a Notice of Intention to Act in Person pursuant to an order made under Rule 15.01(8). Rules 57.03(2) and 60.12 do not authorize the striking of an affidavit for the non-payment of costs, nor does the sanction for the failure of a corporate party to retain counsel. The power of the court to make such order as is just is not a power to use where there are rules that could specifically provide that power, but do not.
[52] The motion of the Janza group to strike affidavits filed in response to their application is therefore dismissed.
Costs
[53] Counsel for each the Janza group and the Horbatiuk defendants handed up their respective Costs Outlines at the motions. Mr. Nicholson shall have until February 14, 2019 to file responding submissions in writing to each claim for costs, limited to no more than 6 pages in total. Those submissions may be filed by emailing my judicial assistant, Ms. Melanie Powers, at melanie.powers@ontario.ca in Brampton.
Emery J.
Released: February 4, 2019
COURT FILE NO.: CV-14-1168-00
DATE: 2019 02 04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BRIM IPCO INC.,
Plaintiff
– and –
STEPHEN HORBATIUK, RICHARD MYERS, CORINNE MYERS (a.k.a. CORI PRATT), FACILITATOR XTREME CORP., JASON LAGADIN, ROCH BEAULIEU, BOBBI JO BEAULIEU, R. BEAULIEU ROOFING LTD., RVP ROOFING SYSTEMS INC.,
Defendants
REASONS FOR DECISION
Emery J.
Released: February 4, 2019