Court File and Parties

COURT FILE NO.: CV-18-607758 DATE: 2020-04-27 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tanya Rebello, Plaintiff AND: Paragon Security et al., Defendants

BEFORE: Master P. T. Sugunasiri

COUNSEL: E. Turkienicz, Counsel, for the Paragon Defendants/Moving Parties T. Rebello, in person, Plaintiff/Responding Party

HEARD: January 27, 2020, written submissions February 6, 13, 2020

Reasons for Decision

Overview

[1] Ms. Rebello is a tenant at 125 Village Green Square in Toronto. Paragon Security is the building’s security contractor and concierge. Ms. Rebello sues Paragon, two of its security guards, and other defendants for harassment, conspiracy, breach of fiduciary duty, breach of contract and intentional infliction of emotional distress. Specifically, Ms. Rebello alleges that the Defendants conspired with the Toronto Police Service to maliciously prosecute her by planting listening devices in and near her unit, planting fake tenants to harass and surveil her, and caused false fire alarms and improper inspections to gain access to her unit. She claims $50 million in damages. The action is at the pleadings stage. It is one of multiple actions that Ms. Rebello has initiated on the same subject matter.

[2] On February 14, 2019, Justice Matheson denied Paragon’s request to dismiss the action as frivolous, vexatious or an abuse of process. As per Rule 2.1.01 of the Rules of Civil Procedure, the court may dismiss an action if it is apparent on the face of the pleading (without any evidence) that it is frivolous, vexatious or an abuse of process. Matheson, J. concluded that although problematic, Ms. Rebello’s Claim was not sufficiently frivolous, vexatious or an abuse of process to summarily dismiss it under Rule 2.1.01. She did however leave the door open for the Defendants to seek other types of summary dismissals.

[3] The Paragon Defendants now seek security for costs from Ms. Rebello on the basis that there is good reason to believe that her action is frivolous, vexatious and that she has insufficient assets to pay adverse costs (Rule 56.01(1)(e)). Among other arguments, Ms. Rebello opposes the motion on the basis that Justice Matheson has already ruled that the action is neither frivolous nor vexatious for the purpose of Rule 2.1.01. This motion addresses the issue of whether a ruling in a Rule 2.1 motion binds the court in a security for costs motion under r. 56.01(1)(e).

[4] For the reasons that follow, I conclude that a ruling under Rule 2.1.01 does not bind the court in a subsequent motion for security for costs under Rule 56.01(1)(e) because the respective rulings are based on different tests and different considerations. In this case, I am satisfied that there is good reason to believe that the action is frivolous, vexatious and that Ms. Rebello has insufficient assets to meet an adverse costs award. It is just to order Ms. Rebello to pay $23,713.93 in security for costs up to the end of oral discovery.

Issues:

1. Does a ruling under Rule 2.1.01 that an action does not appear on its face to be frivolous or vexatious bind the court in a subsequent motion for security for costs under Rule 56.01(1)(e)? No. The two rules apply different tests and considerations.
2. Is there good reason to believe that this action is frivolous and vexatious? Yes. Based on the pleadings and evidence in the motion, there is good reason to believe that the action is frivolous and vexatious.
3. Is there good reason to believe that Ms. Rebello has insufficient assets to pay an adverse costs award? Yes. Ms. Rebello’s only known asset is a rural property that may or may not be fully encumbered and no evidence of any other assets.
4. Is it just to order Ms. Rebello to pay security for costs? Yes. In the circumstances of the case, it is appropriate for Ms. Rebello to pay $23,713.93 in costs up to the end of oral discovery.

Law and Analysis:

1. Does a ruling under Rule 2.1.01 that an action does not appear on its face to be frivolous or vexatious bind the court in a subsequent motion for security for costs under Rule 56.01(1)(e)?

[5] Rule 2.1.01(1) of the Rules of Civil Procedure states:

2.1.01 (1) The court may, on its own initiative, stay or dismiss a proceeding if the proceeding appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court.

[6] Rule 56.01(1)(e) states:

56.01 (1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,

(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant…

[7] The clear wording of Rule 2.1.01(1) requires a finding that the pleading is frivolous or vexatious on its face. The court cannot consider evidence or submissions of a requesting defendant. Indeed in this case, Justice Matheson expressly disregarded the Paragon Defendants’ submissions on why the action was frivolous or vexatious and only considered the Statement of Claim itself.

[8] In contrast, the court considers the pleadings and evidence when deciding if there is good reason to believe that the action is frivolous and vexatious under Rule 56.01(1)(e). Master Jolley recently affirmed this principle in Bokserman v MacDonald Associates PC, 2019 ONSC 5087 at para. 12. In the present case, both parties have tendered affidavit evidence to speak to the “frivolousness”, “vexatiousness” and the justness of a security for costs order. This is a far different than what was before Justice Matheson.

[9] Further, the effect of rule 2.1.01 is to end the action before it gets off the ground – a step that the court is loathed to take except in the clearest of cases (for example see Gao v Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6100 at para. 9). On the other hand, an order for security for costs allows the action to proceed but with some protection for defendants where such an order is just and unlikely to stop the plaintiff in her tracks at the pleadings stage. This is a very different outcome and therefore a very different lens of analysis.

[10] I conclude that Justice Matheson’s ruling that Ms. Rebello’s action is not frivolous or vexatious under Rule 2.1.01 does not bind me.

2. Is there good reason to believe that this action is frivolous and vexatious?

There is good reason to believe the action is frivolous

[11] There is good reason to believe that this action is frivolous and vexatious. The initial onus is on the Paragon Defendants to demonstrate that the action or the plaintiff falls into one of the categories enumerated in (a) to (f) of Rule 56.01(1) of the Rules (Brown v Hudson’s Bay Company, 2014 ONSC 1065 at para. 33). In meeting this burden, the Paragon Defendants must only demonstrate that there are sufficient hallmarks of “vexatiousness” and “frivolousness” to allow the court to conclude that there is good reason to believe that the action may be so. The rule does not require a conclusive finding that the action is frivolous and vexatious (Illitchev v Yevstigneev at para 17 and Froehlich-Fivey v Fivey, 2016 ONCA 833 at para. 11 applying the same principle in the context of security for costs in appeals).

[12] The Courts have defined “frivolousness” as an action that appears so highly unlikely to succeed that it is apparently devoid of practical merit (Illitchev at para 18) or one which on its face, is so unreal that no reasonable or sensible person could bring it (Queenscorp v Windcatcher, 2016 ONSC 871 at paras. 19-20). The court should give statements of claim the widest latitude and allow for drafting deficiencies, especially when the plaintiff is self-represented and has not had the benefit of legal training.

[13] Having carefully reviewed Ms. Rebello’s Claim and affidavit evidence from both sides, there is good reason to believe that the action is frivolous for the purpose of ordering security for costs. The Claim itself contains highly scandalous and incredible allegations suggesting that the Paragon Defendants worked with the Toronto Police (a non-party) to plant fake tenants on her floor to eves drop and monitor her, created fake reasons to enter her apartment and installed listening devices inside and around her rental unit. She also alleges false arrest (with no particulars), and an attempt to evict her from the unit for acts she did not commit. The Claim includes harassment (which is not a recognized tort as held in Merrifield v Canada (Attorney General), 2019 ONCA 205 at para 105), and stalking, mischief and voyeurism (also not torts known in Ontario). Even if there is a scintilla of an actionable claim within the pleading, I agree with Paragon that it is vastly overshadowed by allegations that are patently incredible and unbelievable.

[14] In addition, I prefer the uncontested evidence of Mr. Scolaro, Paragon Security’s Director of Client Services who oversees its operations at 125 Village Green Square. He attests that it was Ms. Rebello’s friend, Mr. Curtis, who primarily interacted with Paragon staff. He details each logged incident and calls into question the veracity of Ms. Rebello’s allegations. While I make no finding on the merits of the action, Mr. Scolaro’s evidence is relevant in assessing whether there is good reason to believe that this action is frivolous. Mr. Curtis’ affidavit is also relevant. I find it less persuasive because a) it continues the theme of the claim and alleges that Paragon has created false incident reports to support its motion; and b) because Mr. Curtis denies that he resides at 125 Village Green Square with Ms. Rebello yet attests to what did or did not happen to Ms. Rebello without indicating the source of his knowledge. This diminishes the quality of his evidence.

There is good reason to believe that the action is vexatious

[15] Similarly, based on the totality of the evidence and the Claim itself, there is good reason to believe that Ms. Rebello’s action is vexatious. The Paragon Defendants quite correctly state that “vexatiousness” considers the conduct and motives of the plaintiff in prosecuting her action. Re Lang Michener and Fabian remains the leading case setting out a non-exhaustive list of indicia of a vexatious litigant ((1987), , 59 OR (2d) 353 at para 20 as confirmed by Morgan, J. more recently in Yae v Park, 2013 ONSC 1331 at para 14). Other courts have added to the list including bringing multiple overlapping proceedings (Blue Heron Co-Operative Homes v O’Brien, 2019 ONSC 3853 at para. 35) and bringing simultaneous lawsuits and complaints against lawyers and judicial officers involved in the case (Yae at para. 17).

[16] Some of the most relevant indicia in this case are:

a. Multiple overlapping proceedings – Ms. Rebello has commenced at least three actions against relating to the alleged conspiracy, stalking, voyeurism and harassment against various defendants including the Premier of Ontario and the Toronto Chief of Police. All lawsuits seek damages of at least $20 million; b. Repeated formal and informal allegations of impropriety against Paragon’s counsel including reporting to the Law Society and to his superiors; c. Repeated threats to sue counsel for the Paragon Defendants and his firm at every turn while the Paragon Defendants attempted to schedule this motion; and d. Repeated attempts to adjourn the within motion even after this court granted an adjournment on terms.

[17] There is good reason to believe that this action is vexatious.

3. Is there good reason to believe that Ms. Rebello has insufficient assets to pay an adverse costs award?

[18] Having met its burden on the first two issues, the onus shift to Ms. Rebello to demonstrate that she has sufficient assets to satisfy an adverse costs award. This is because Ms. Rebello’s financial circumstances are uniquely within her knowledge (see for example Cohen v Power et al., [1971] 2 OR 742 at page 2, and Chemical Vapour Metal Refinishing v Terekhov, 2016 ONSC 7080 at para. 20). She has not persuaded me that she has sufficient assets to pay an adverse costs award.

[19] The Paragon Defendants have provided information publicly available which shows that Ms. Rebello owns a rural property in Trent Hills. It is encumbered over its purchase price but Mr. Curtis provides some information that suggests possible equity of $96,750. Ms. Rebello has otherwise provided no information about her assets. This is insufficient. The court expects a Plaintiff defending a motion for security for costs to demonstrate with particularity that she is able to satisfy an adverse costs award. Even if a hearsay claim about one asset is sufficient, equity on paper is nothing more than a number. There is no information about other creditors, marketability of the property, Ms. Rebello’s income, or her ability to carry the mortgage. The quality of an asset and its exigibility is just as important, if not more, as its existence (Chemical Vapour at paras. 26-32).

4. Is it just to order Ms. Rebello to pay security for costs?

[20] In determining if a security for costs order is appropriate, the court must not only consider the particular test applicable to the case but must sit back and look at the overall justice of such an order (Novak v. St. Demetrius (Ukrainian Catholic) Development Corp., 2018 ONCA 219 at para. 7).

[21] I conclude it is just to order Ms. Rebello to post security for costs. I adopt Master McLeod’s comment in Breatross Estate v Woolfson that “in its simplest terms, the rule provides for a form of risk analysis. The more likely it is that the defendant will be entitled to costs and unable to recover them, the stronger the case for security” (2013 ONSC 6819 at para. 11). In this case, the incredulity of the allegations coupled with Ms. Rebello’s conduct thus far puts the Paragon Defendants at serious risk of incurring unnecessary and heightened costs that will be unrecoverable. Ms. Rebello already has unpaid costs awards that Justice Myers recognized in Rebello v The Bank of Nova Scotia, 2018 ONSC 7127 as a pattern of non-payment. While in a different action not involving Paragon Security, that behaviour is relevant to the justness of a security for costs order in these proceedings.

[22] Ms. Rebello claims that an order for security for costs will stop the litigation in its tracks. However, she has not provided any evidence to corroborate this bald statement. Ms. Rebello also argues that the Paragon Defendants have delayed in bringing this motion and are therefore precluded from obtaining security.

[23] In 423322 Ontario Ltd. v Bank of Montreal, Master Peppiatt explains the rationale for denying late security for costs requests. In that case, the plaintiff commenced the action in 1980. The defendant sought security for costs in 1987 after the action had been set down for trial. In those circumstances, he noted that the plaintiff was lulled into believing that she could proceed without having to post security. As such, she did not factor this into her financial decisions to proceed or take various steps in the proceeding (at page 3).

[24] There is no such delay here nor deprivation of Ms. Rebello’s opportunity to factor the security for costs into her litigation decision. The action is still at the pleadings stage. Ms. Rebello had it issued on October 29, 2018. Paragon’s counsel wrote to Ms. Rebello on July 8, 2019 indicating his instructions to seek security for costs. At that point Ms. Rebello and Mr. Curtis’ commenced their threats to report counsel to the Law Society and sue the firm. In fact, Ms. Rebello’s objection to the motion was that it was being brought too soon.

[25] Finally, Ms. Rebello argues that ordering security for Paragon’s costs will set a precedent for the other defendants and lead to a cascade of similar requests by the other defendants. The possibility of other defendants seeking security for costs should not preclude these defendants from obtaining security. Ms. Rebello chose to name multiple defendants. This should not deprive each of the defendants of options that would have been available to them if they were the only defendant. Otherwise, any plaintiff could defeat a potential security for costs order by simply naming other defendants.

[26] I find it just to order Ms. Rebello to post security for costs. The final question is what the appropriate quantum is.

Quantum

[27] The Paragon Defendants seek $30,000 representing substantial indemnity security for costs. It includes time already spent and time anticipated for discoveries. I find no basis to apply a substantial indemnity scale to the security for costs figure. Instead I accept counsel’s proposed partial indemnity figure of $23,713.93 up to the end of oral discoveries but not including discovery related motions. Ms. Rebello has not provided any evidence that speaks to her financial means or ability to pay this amount. As discussed previously, I have no evidence to suggest that this quantum would stop the litigation in its tracks.

Disposition:

[28] I order the following:

1. The Plaintiff, Tanya Rebello shall post security for costs through to the end of oral examinations for discovery in the amount of $23,713.93 (not including motions to compel answers to undertakings and refusals);
2. Ms. Rebello shall post security within 60 days of today’s date;
3. Ms. Rebello may not take any step in the action other than an appeal of this order, until security for costs have been paid into court;
4. In the event that Ms. Rebello fails to post security as ordered, the Paragon Defendants may move for an order dismissing the claim as against them;
5. This order is effective as of today’s date and need not be formally issued and entered until the court resumes its normal operations; and
6. If the Paragon Defendants wish to have a signed order, they may send a word version of their draft to my assistant Christine.Meditskos@ontario.ca. They shall copy Ms. Rebello on the email but they are not required to have Ms. Rebello’s consent as to its form and content.

Costs:

[29] I reserved costs of the November appearance to adjourn this motion to the Master hearing it. As such, I require costs submissions from the parties for the November attendance as well as for this motion. Mr. Turkienicz may deliver his costs outline and no more than three-pages of submissions by May 7, 2020 via email to Ms. Meditskos and Ms. Rebello. Ms. Rebello shall email her responding cost submissions of no more than three-pages by May 21, 2020.

Master Sugunasiri Date: April 27, 2020