COURT FILE NO.: CV-19-00633355-0000
MOTION HEARD: 2023-09-26
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MAZDA AMIRYAR, plaintiff
AND:
DAVID YOUSIF and SAAD YOUSIF, defendants
BEFORE: ASSOCIATE JUSTICE R. FRANK
COUNSEL: A. Brown for the defendants / moving parties
D. Shellnutt for the plaintiff / responding party
HEARD: September 26, 2023
ENDORSEMENT
[1] This is a motion by the defendants for an order that the plaintiff pay security for costs of this action in the amount of $109,000.
[2] In the underlying action, the plaintiff alleges that the defendant, David Yousif, intentionally drove his car into the plaintiff, striking him while he was on his bicycle. The plaintiff claims that he has suffered physical and psychological damages as a result of the collision. The action is scheduled for trial in June 2024 and a pre-trial date has been scheduled for April 17, 2024.
[3] Rule 56.01 engages a two-step process to determine whether it is appropriate to make an order for security for costs. The defendant bears the initial onus of establishing that the circumstances fall within one of the enumerated grounds in Rule 56.01(1). Once the defendant satisfies this onus, the onus shifts to the plaintiff to establish that an order for security for costs would be unjustified. The plaintiff can meet this onus by demonstrating one of the following: (i) the plaintiff has sufficient assets in Ontario, or in a reciprocating jurisdiction, to satisfy an order for costs; (ii) the plaintiff is impecunious, and his or her claim is not plainly devoid of merit; or (iii) if the plaintiff cannot establish that he or she is impecunious, but does not have sufficient assets to meet a costs order, that the claim has a good chance of success on the merits.[^1]
[4] In assessing whether to make an order for security for costs, the court is required to consider the relevant circumstances to determine the justness of such an order. As the Court of Appeal has explained:
The Rules explicitly provide that an order for security for costs should only be made where the justness of the case demands it. Courts must be vigilant to ensure an order that is designed to be protective in nature is not used as a litigation tactic to prevent a case from being heard on its merits, even in circumstances where the other provisions of rr. 56 or 61 have been met.
…The correct approach is for the court to consider the justice of the order, holistically, examining all the circumstances of the case, and guided by the overriding interests of justice to determine whether it is just that the order be made.[^2]
[5] The following factors have been identified as considerations for determining the justness of a security for costs order: the merits of the claim; delay in bringing the motion; the impact of actionable conduct by the defendants on the available assets of the plaintiffs; access to justice concerns; and the public importance of the litigation. Each case must be considered on its own facts.[^3]
A. Have the defendants met the initial onus under Rule 56.01?
[6] On this motion, the defendants submit that the circumstances fall under Rule 56.01(1)(a) because the plaintiff is no longer ordinarily resident in Ontario. The plaintiff does not dispute that he is no longer resident in Ontario and is currently resident in Finland. As a result, the defendants have satisfied the initial onus under Rule 56.01.
B. Has the plaintiff established that an order for security for costs would be unjustified?
(i) Impecuniosity
[7] To demonstrate impecuniosity, a plaintiff must provide evidence that goes beyond bald or unsupported statements lacking sufficient detail of his or her financial status. A plaintiff must provide evidence of his or her financial circumstances with robust particularity that demonstrates fair disclosure of the plaintiff’s income, assets, expenses, liabilities, and borrowing ability, along with supporting documentation for each of these categories.[^4]
[8] The plaintiff’s evidence is that he has been unable to find work since moving to Finland, and that he is currently receiving social assistance in the form of government unemployment funding and rent subsidies. The defendants submit that the plaintiff has failed to meet the onus of demonstrating impecuniosity because the evidence about his financial means and capability is inadequate. With respect to the plaintiff’s evidence that he is receiving social assistance, the defendants submit that there is no evidence before the court of the grounds on which social assistance is available in Finland. Further, the defendants submit that there are insufficient particulars of the plaintiff’s assets, liabilities, or borrowing ability.
[9] In my view, the plaintiff’s evidence lacks the required robust particularity. In the result, the plaintiff has not satisfied his onus of demonstrating impecuniosity.
(ii) Good chance of success
[10] As an alternative argument to impecuniosity, the plaintiff submits that his claim has a good chance of success on the merits.
[11] The test for demonstrating a good chance of success on the merits requires a plaintiff to show a real possibility of success.[^5] The test is higher than the standard of “not devoid of merit” but not as high as the standard of proving the claim on a balance of probabilities or establishing that there is no triable issue on a summary judgment motion.[^6] Where a motion for costs is based on Rule 56.01(1)(a), the merits analysis of the case is at the low end whereas the merits will be at the high end for a motion that is based on Rule 56.01(1)(e).[^7] The plaintiff bears the onus of leading evidence to establish the merits of his or her case.[^8]
[12] The defendants submit that the plaintiff has not met the onus of demonstrating that his claim has a good chance of success on the merits. The defendants argue that the plaintiff’s expert evidence with respect damages is countered by the defendant’s contrary expert evidence, making the expert evidence a neutral factor. The defendants also assert that the plaintiff’s discovery evidence includes admissions that undermine his claims and demonstrate that he does not have a good chance of success on the merits.
[13] For purposes of this motion, I do not accept the defendants’ arguments regarding the merits of the plaintiff’s claim. With respect to the allegations of an intentional assault, the record includes video evidence of the circumstances prior to, during and following the collision underlying the claim, as well as a witness statement from a non-party witness (with no prior connection to the plaintiff or defendant) that the plaintiff relies on in support of these allegations.
[14] With respect to the plaintiff’s claim for damages, I do not accept the defendants’ submission that the expert reports are a neutral factor. The plaintiff has obtained and served an expert report in support of his damages claim. While there is disagreement between the plaintiff’s and the defendants’ respective experts, the competing expert reports should be assessed at trial rather on a security for costs motion. As noted by Associate Justice Jolley in Ali Zenaid Trading Company LLC v. Heys International Limited:
In order to meet the threshold good chance of success test, the plaintiff need not prove its claim on a balance of probabilities as at trial or establish that there is no triable issue as at a motion for summary judgment.[^9]
[15] With respect to other evidence relating to damages, including the plaintiff’s discovery evidence, it is necessary to consider such evidence fairly and in context. While the defendants submit that the plaintiff has made certain admission on discovery, considering that evidence in the fuller context of the medical records from the plaintiff’s treating health care providers as well as the plaintiff’s answers to other discovery questions, I find that the plaintiff has satisfied his onus of demonstrating he has a good chance of success. Issues that may ultimately turn on questions of credibility should not be determined on this motion. Again, “a motion for security for costs should not be turned into a motion for summary judgment”.[^10]
[16] In summary, I am satisfied on the evidence that the plaintiff has met the onus of demonstrating that his claim has a good chance of success on the merits.
(iii) Is adverse costs insurance available as a substitute for payment of security into court?
[17] In addition to the assertion that the claim has a good chance of success on the merits, the plaintiff submits that he has adverse costs insurance that would be available in the event of an adverse costs order. The defendants acknowledge that adverse costs insurance is a relevant factor and that the existence of such insurance may mitigate against an order for security for costs depending on the specific wording of the policy. However, the defendants assert that the court must pay particular attention as to whether the available policy covers the defendants’ costs up to the date of any potential suspension/cancellation permitted under the policy. Here, the defendants argue that if the available policy were to be suspended, it is not clear from the policy terms whether the insurer would be required to pay the defendants’ costs up to the date of suspension. Further, the defendants argue that the applicable policy outlines several circumstances in which the insurer is not required to indemnify the plaintiff, namely: (i) where the plaintiff’s action does not have a reasonable prospect of success; and (ii) if the plaintiff decides not to accept an offer to settle in certain circumstances. The defendants submit that the plaintiff’s policy is not an adequate substitute for payment of security into court because of the policy terms that permit the insurer to refuse to indemnify the plaintiff in certain circumstances.[^11]
[18] The plaintiff submits that the policy available to him in this case contains the same language as the court considered in two other actions: Frantz v. NB Thrilling Films 4 INC. et al. and Grotz v. 1392275 Ontario Inc. o/a Hilton Garden Inn Toronto/Markham et al.[^12] In both Frantz and Grotz, the court found that the applicable policy would be accepted as security for the defendants’ costs in lieu of payment into court.
[19] Having reviewed the decisions in Frantz and Grotz, I am unable to find that the conclusion reached about the applicable policies in each of those cases is binding in the circumstances of this case. Although the insurer in both Frantz and Grotz is the same insurer as in this action, the decisions in those proceedings do not provide details about the specific language the court relied on to conclude that the policies were sufficient in the circumstances. As a result, I am not able to conclude that the policy in this case is sufficient based solely on the decisions in Frantz and Grotz. Nevertheless, having reviewed the terms of the applicable policy in this case, I find that the policy would be an adequate substitute for payment of security into court. In this regard, the defendants did not point me to any specific termination rights in the policy that would be of concern. With respect to the concerns raised by the defendants regarding the potential suspension of the policy, the policy provides only that there is no coverage for the period in which the policy is suspended. This is distinguishable from the circumstances in Alary and consistent with the situation in each of Frantz and Grotz. Further, as in Frantz, the plaintiff and his counsel have undertaken to inform the defendants immediately if the policy is to become suspended.[^13] With respect to the concerns raised by the defendants about circumstances in which the insurer is not required to indemnify the insured, I am not satisfied that the impugned provisions in the insurance policy demonstrate that the policy is an inadequate substitute for payment of security into court.
[20] In the result, I find that the terms of the policy are distinguishable from the situation in Alary. As was the case with respect to the policies considered in Frantz and Grotz, I find that the available policy would be an adequate substitute for payment of security into court.
(iv) Justness of an order for security for costs
[21] As the Court of Appeal has explained, an order for security for costs should only be made where the justice of the case demands it and the court must consider the justness of the order sought holistically.[^14] As noted, I have concluded that the plaintiff has demonstrated that his claim has a good chance of success on the merits. Other relevant circumstances include that this is a claim in which the plaintiff alleges intentional assault with a motor vehicle as the cause of the alleged damages, the parties have already obtained and served expert evidence on damages, and the pre‑trial and trial of the action have already been scheduled. 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.
Conclusion, disposition, and costs
[22] As outlined above, although the defendants have met the initial onus under Rule 56.01, the plaintiff has satisfied the onus of demonstrating that his claim has a good chance of success on the merits such that an order for security for costs would be unjustified. I also find that the adverse costs insurance policy available to the plaintiff would be an adequate substitute for payment of security into court. Further, considering all of the circumstances and the justness of the order sought holistically, including the merits, the stage of the proceedings, and the nature of the claim, I find that the justice of this case does not require the plaintiff to post security for costs. For these reasons, I decline to exercise my discretion to make an order for security for costs, and the defendant’s motion is dismissed.
[23] With respect to costs, the parties exchanged costs outlines in which their respective partial indemnity costs were approximately $6,900 for the defendants and $6,600 for the plaintiff. Given that the plaintiff was successful in opposing the motion, I find that it would be in the reasonable of contemplation of the unsuccessful party and fair for the defendants to pay to the plaintiff costs fixed in the amount $6,600, inclusive of disbursements and taxes, within 30 days.
[24] I order as follows:
The motion is dismissed.
The defendants shall pay to the plaintiff costs in the amount $6,600, inclusive of disbursements and taxes, within 30 days.
R. Frank Associate J.
DATE: October 3, 2023
[^1]: Chahal v. Abdullah et al, 2022 ONSC 1727 ("Chahal") at paras 21-23 [^2]: Yaiguaje v. Chevron Corporation, 2017 ONCA 827 ("Yaiguaje") at paras 23 and 25 [^3]: Yaiguaje at paras 24 and 25 [^4]: 2311888 Ontario Inc. v. Ross, 2017 ONSC 1295 at paras 18-19 [^5]: Chahal at para 48 citing Perell J. in Chill Media Inc. v. Brewers Retail Inc., 2021 ONSC 1296 at para 14 [^6]: Stojanovic v. Bulut, 2011 ONSC 874 at para 62 [^7]: Chahal at para 24 [^8]: 1615574 Ontario Inc., et al v. Hodgson, et al., 2021 ONSC 8409 at para 27 [^9]: Ali Zenaid Trading Company LLC v. Heys International Limited, 2019 ONSC 674 ("Ali Zenaid") at para 2 [^10]: Ali Zenaid at para 4 [^11]: See Alary v. Brown, 2015 ONSC 3021 at paras 14-24 ("Alary"); Daigneault v. Canjet, 2016 ONSC 78 at paras 115 to 132 [^12]: Frantz v. NB Thrilling Films 4 INC. et al., 2017 ONSC 4637 ("Frantz") and Grotz v. 1392275 Ontario Inc.o/a Hilton Garden Inn Toronto/Markham et al, 2016 ONSC 2688 ("Grotz") [^13]: See Frantz at para 15 [^14]: Yaiguaje at paras 23-25