Court File and Parties

COURT FILE NO.: CV-13-490665 MOTION HEARD: 01202022 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Diana Hordo and Michael J Hordo, Plaintiffs AND: Arnold H. Zweig, Defendant

BEFORE: Associate Justice Jolley COUNSEL: Peter Smiley, counsel for the moving party defendant Diana Hordo and Michael Hordo, self-represented respondents HEARD: 20 January 2022

REASONS FOR DECISION

[1] The defendant seeks an order dismissing this action as a result of the plaintiffs’ failure to pay four outstanding costs orders against them.

[2] Justice Glustein’s order of 24 March 2021 required the plaintiffs to pay the defendant $12,000 in costs. Associate Chief Justice Fairburn’s order of 26 June 2021 required the plaintiffs to pay the defendant $6,350 in costs. Justice Zarnett’s order of 15 September 2021 required the plaintiffs to pay the defendant $1,000 in costs. The appeal panel order of Justices Lauwers, Paciocco and Thorburn of 15 December 2021 required the plaintiffs to pay the defendant $2,000 in costs.

[3] The plaintiffs concede that they have paid none of the $21,350 in ordered costs. They argue that the orders arose from a fraud and conspiracy among the Law Society of Ontario (“the LSO”), the Lawyers’ Professional Indemnity Company (“LawPro”) and defence counsel. Until that fraud argument is determined, these costs are not due.

Adjournment Request

[4] The plaintiffs sought an adjournment of this motion on two bases: first, that the delay in obtaining an endorsement from Glustein, J. which was necessary for this motion; second, the request to cross-examine R. Leigh Youd (“Youd”) on the affidavit he swore in support of this motion. In addition, they seek costs of $2,000 against Mr Smiley personally for his refusal to consent to the adjournment request and for abuse of process.

[5] On the first ground, Glustein, J., who is case managing this matter, conducted a telephone case conference at the plaintiffs’ request on Thursday 13 January 2022, dealing with this upcoming motion. His Honour directed the plaintiffs to raise the issue of Mr. Youd’s cross-examination when this motion was argued. His endorsement also dealt with the plaintiffs’ request for transcripts of the appeal hearing and of case conferences. The plaintiffs received the short endorsement on Tuesday 18 January 2022.

[6] The respondents argue that the delay in obtaining the endorsement caused them to be rushed for time to prepare their materials for this motion. They were required to obtain the moving party’s consent to late filing their materials. That consent was given and the materials were filed Friday and further materials filed after that deadline. Even though the plaintiffs may have been pressed for time, they were able to prepare and upload lengthy responding materials for this motion. They served and uploaded to Caselines a responding motion record containing the affidavit of Mr. Hordo sworn 14 January 2022 as well as a further supplementary responding motion record which contained an affidavit of Mr. Hordo sworn 18 January 2022 with numerous exhibits and a “Judicial Review and Compendium” for my aid.

[7] I do not agree that an adjournment is warranted on this ground. The endorsement is of marginal, if any, relevance on this motion. In any event, it was received in sufficient time to permit the plaintiffs to file a fulsome response. While not all the material was filed within the timelines, I granted leave to the plaintiffs to file both of their responding records and undertook to read all the material, which I have done.

[8] Turning to the second ground for the adjournment request, Mr. Youd’s affidavit was sworn 21 September 2021 and served on the plaintiffs by email on 20 October 2021. The defendant’s law firm filed an affidavit of service, confirming that its office sent a second copy of the materials by email on 21 December 2021 and served a hard copy of the materials on 23 December 2021, which the plaintiffs deny receiving. The plaintiffs did not open the email with the materials, fearing a virus. The plaintiffs had time to cross-examine Mr. Youd, had they wished, without interfering with the hearing date for this motion.

[9] In any event, Mr. Youd’s affidavit served to put into evidence the court decisions and costs orders as well as the fact of their non-payment. The plaintiffs indicate that they wish to cross-examine Mr. Youd on the timing of his firm’s retainer, all in aid of the conspiracy allegation which has twice been rejected. I find that any cross-examination would not have yielded evidence sufficiently relevant to warrant the adjournment of the motion.

Plaintiffs’ Response to the Motion

[10] The plaintiffs provide four reasons for their non-payment: (1) the costs orders are stayed pursuant to rule 63.01(1) by virtue of their pending constitutional challenge; (2) one of the orders is not effective as it has not been issued and entered and does not bear the court seal; (3) the defendant is improperly moving on his unpaid costs as well as the costs awarded to LawPro and the LSO,; and (4) a dismissal will prejudice any application to the Supreme Court of Canada where they intend to argue that this matter raises matters of national and public interest.

Finding on Ground 1 - The costs orders are not stayed

[11] Rule 63 provides that the delivery of a notice of appeal from an interlocutory or final order stays, until the disposition of the appeal, any provision of the order for the payment of money, except a provision that awards support or enforces a support order.

[12] In short, there is no appeal outstanding from any of the costs orders.

[13] The plaintiffs attempted to appeal the order of Glustein, J. directly to the Court of Appeal. Being an interim order, the court rejected the materials. The plaintiffs then brought a motion for directions to the Court of Appeal seeking leave to appeal the order of Glustein, J. They appended to their appeal materials a notice of constitutional question challenging the validity of the Law Society Act. This notice is not an appeal of the costs order. The motion for directions seeking leave to appeal was dismissed as was its subsequent appeal, both discussed further below.

[14] The plaintiffs then brought a motion to the Court of Appeal to vary the dismissal of their motion for directions, to stay the outstanding costs orders and to bring a notice of constitutional question. In its reasons of 15 December 2021, the Court of Appeal dismissed the plaintiffs’ motion and stated unequivocally “there is no reason to stay the costs orders below” (see 2021 ONCA 893 at paragraph 22).

[15] Leaving aside any appeal period issue, the plaintiffs have not sought leave to appeal to the Supreme Court of Canada, although they advised they still intended to do so.

Finding on Ground 2 - The order need not be stamped or entered to be enforceable

[16] The plaintiffs argue that the defendant failed to certify the costs order as required, by a court stamp. They argue that the order is not enforceable until the stamp is affixed.

[17] Pursuant to Rule 59.01 an order is effective from the date on which it is made. I have before me each endorsement confirming the quantum ordered and the date the order was made.

Finding on Ground 3 - The defendant is only moving on his separate costs orders

[18] Contrary to the plaintiffs’ assertions, the costs orders did not provide a lump sum for all parties. The costs order of Glustein, J. awarded costs to the LSO of $7,500, costs to LawPro of $9,000 and costs to Mr. Zweig of $12,000, each payable within 30 days. Fairburn, A.C.J.O and the Court of Appeal panel similarly awarded separate costs to Zweig, the LSO and LawPro. The defendant is moving only on costs awarded to him.

[19] There is nothing to prevent him from moving for relief on his own costs awards separately from LawPro and the LSO, which are not parties to this action in any event.

Finding on Ground 4 - The dismissal of this action will not prejudice the plaintiffs’ constitutional challenge concerning the LSO and LawPro

[20] The plaintiffs have been told repeatedly that their larger issues with the LSO and LawPro are irrelevant to this solicitor’s negligence action which has been ongoing since 2013. Since 2018, the action has been derailed by these conspiracy issues unrelated to the main action. I set out the litigation history briefly here.

[21] In November 2018, on the consent of the plaintiffs, their then lawyer removed himself as their counsel of record. The plaintiffs then alleged that there had been a conspiracy among defence counsel, LawPro and the LSO to remove their lawyer.

[22] They brought a motion to remove counsel acting for the defendant on the basis of this conspiracy allegation. Associate Justice (the Master) Muir dismissed the motion, finding no evidence that the plaintiffs’ former lawyer was directed or compelled by the defendant’s lawyer, by LawPro or by anyone else to remove himself as counsel. He found no evidence of improper conduct on the part of the defendant’s lawyer, the LSO or LawPro and stated that “the allegations are pure speculation based on inference and conjecture and nothing more.”

[23] The plaintiffs’ appeal of that order was heard by Justice Glustein. The theory of the appeal seemed to be that the defendant’s lawyer, LawPro and the LSO had all committed fraud against the court because LawPro did not disclose that it had retained counsel for the defendant, for LSO and for itself, a fact the plaintiffs did not discover until after the motion was argued before Associate Justice Muir. They argued that LawPro could only act as insurer for lawyers and not for the LSO and that the LSO had to be represented by the Ministry of the Attorney General. The alleged fraud was confirmed, in their mind, when all ordered costs of the motion before Muir, A.J. were ultimately requested to be paid to LawPro. This, the plaintiffs argued, demonstrated that LawPro was trying to represent indirectly those it could not represent directly, which was a fraud on the court and something that brought the administration of justice into disrepute. Based on this alleged fraud, they sought the appointment of a receiver for the LSO.

[24] His Honour made no finding on the jurisdiction of LawPro to insure the LSO because in his view, it was “not material to the Master’s Decision and, as such, cannot serve as the basis to set aside his order”.

[25] The plaintiffs argued before me that the decision of Glustein, J. dated 12 February 2021 confirmed their right to sue. It did not. What it stated in paragraph 174 on which they rely was a general proposition that an interim receiver may be appointed under section 101 of the Courts of Justice Act “in cases where the plaintiff can demonstrate a strong case that the defendant has engaged in fraud and that without the appointment of a receiver the plaintiff’s right to recovery would be in serious jeopardy.” In no manner did Glustein, J. suggest this was such a case. What he did say in the subsequent paragraph 175 was that, “for the reasons outlined above, the Hordos have not demonstrated any case, let alone a strong case, that the LSO engaged in fraud.”

[26] On a subsequent attendance, Glustein, J. again noted that the issues raised by the plaintiffs concerning whether or not LawPro could retain its own counsel or act for the LSO were irrelevant to the issues in this action or to the motion under appeal.

[27] The plaintiffs’ notice of constitutional question accuses the LSO of racketeering, LawPro and the LSO of creating a “cabal” that impedes access to justice and seeks an order placing the LSO and “its Cabal members” into receivership. Associate Chief Justice Fairburn dismissed the motion and noted that the relief sought “appears to be an attempt to continue to derail the ongoing proceedings in the Superior Court of Justice.”

[28] Lastly, the plaintiffs moved before the Court of Appeal for an extension of time and for an order setting aside the order of Zarnett, J.A. The extension was rejected, in light of the finding that there was no arguable merit to the appeal.

[29] When this proposed constitutional challenge was raised before Glustein, J., he “advised Mr. Hordo that this proposed new [constitutional] application would not delay any of the case management steps to ensure the present action proceeds promptly to trial, and, as such, I refused to schedule the application as a pre-condition to the other preliminary issues/motions raised by the Hordos”.

[30] Nonetheless, the plaintiffs have successfully used these issues to derail this action by raising them as defences to payment of costs.

[31] The plaintiffs’ argument of fraud on the part of the defendant, Mr. Youd, the LSO and LawPro has been rejected at every level where it was argued.

[32] If the plaintiffs still wish to resurrect their threatened constitutional application, they should do so without continuing to embroil this defendant in further years of litigation.

Conclusion - Dismissal is the appropriate remedy

[33] The plaintiffs’ have been sanctioned at every level of court before which they have appeared for levelling unfounded personal attacks against the defendant and others.

[34] Muir, A.J. found that the plaintiffs had made very serious allegations that included criminal behaviour, dishonesty and other reprehensible conduct by the defendant, his lawyers and the LSO, all of which they failed to prove. He ordered the plaintiffs to pay costs on a substantial indemnity basis.

[35] Glustein, J. also awarded costs on a substantial indemnity basis, finding the plaintiffs’ conduct to be “reprehensible, scandalous or outrageous”. His Honour noted “the Hordos repeatedly alleged that Youd (Zweig’s lawyer), the LSO, and LawPro engaged in false representations, concealment or misconduct”. He held there was no support for any of those allegations and that, “despite all of the above, including the Reasons which upheld the Master’s finding that the alleged conspiracy was baseless, the Hordos continue to impugn the integrity of Youd, the LSO and LawPro.”

[36] In their appeal before Glustein, J., the plaintiffs continued to accuse Youd, the LSO, and LawPro of fraud, conspiracy, criminal conduct, and swearing false evidence. The court found there was no support for any of those allegations.

[37] In rejecting the plaintiffs’ appeal of this interim order to the Court of Appeal and their related motion for directions, Associate Chief Justice Fairburn also awarded her costs on a substantial indemnity basis noting “the baseless nature of the materials filed in this court, including the impugning of the integrity of many”. Her Honour noted that the relief sought appeared to be for an improper purpose.

[38] The plaintiffs’ materials were silent on their intention to pay these costs orders. At the opening of argument, the defendant proposed as an alternative to a dismissal that the plaintiffs pay the funds owing, including costs of today’s attendance, within 30 days and agree peremptorily to set the matter down for trial within 30 days. They did not agree with that proposal. I asked whether they were prepared to pay the money into court. They advised that they were not, as it was not owing as LawPro, the party collecting the costs, had committed a fraud on the court.

[39] If anything brings the administration of justice into disrepute, it is a litigation participant’s refusal to obey court orders on the basis of their own rejected interpretation of a legitimate court order. The civil system is predicated on parties honouring court orders once made.

[40] The plaintiffs confirmed that they do not intend to obey these costs orders as, in their view, they are derived from fraud, an argument that has been rejected multiple times.

[41] To do justice to the defendant and to protect the administration of justice generally, I find it is appropriate that the action be dismissed.

[42] If the parties are unable to agree on costs of the motion and action, they may each file costs submissions, not to exceed five pages in length, and a costs outline, by email to my Assistant Trial Coordinator Ms. Meditskos to Christine.Meditskos@ontario.ca within 30 days of the release of this decision,

Associate Justice Jolley

Date: 26 January 2022