Levant v. Day, 2023 ONSC 768

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-16-554290 DATE: 2023 01 31

RE: EZRA LEVANT, Plaintiff - and - ROBERT P.J. DAY, Defendant

BEFORE: Associate Justice Todd Robinson

APPEARING: T. Markovic, counsel for the plaintiff R. Day, in person

HEARD: October 17, 2022

REASONS FOR DECISION (Motion to Strike Defence)

1The plaintiff, Ezra Levant, seeks an order striking Robert Day’s statement of defence in this defamation action for non-payment of costs awards. Mr. Day opposes the motion primarily on the basis that he has made attempts to pay the costs awards by installments, but despite Mr. Levant accepting an initial $5,000 payment, he thereafter refused to accept any further incremental payments and insisted on payment of the costs in full.

2I am dismissing the motion, but not without fixing a peremptory deadline by which Mr. Day must pay the outstanding costs awards, failing which Mr. Levant is at liberty to move again to strike the defence. In doing so, I am denying Mr. Day’s request to let him to make modest incremental payments of $1,000 until the costs are paid. I am not satisfied that Mr. Day has tendered sufficient evidence of his current financial circumstances to support varying the prior court orders to permit a payment plan, let alone such a protracted one. I am affording Mr. Day one final opportunity to pay the long overdue costs awards.

Background

3Costs awards totalling $48,000 have been made by Ontario courts against Mr. Day, all arising from two motions and subsequent appeals heard between May 2017 and February 2019. Mr. Day, who was represented by counsel at the time, brought an anti-SLAPP motion to dismiss this action under s. 137.1 of the Courts of Justice Act, RSO 1990, c C.43. A decision on the motion was reserved. While under reserve, Mr. Day brought a motion for leave to adduce fresh evidence. A decision on that motion was also reserved. Ultimately, both motions were dismissed and costs of $19,731.64 were awarded against Mr. Day.

4Mr. Day appealed the dismissal of both motions. Leave to appeal dismissal of the motion to adduce fresh evidence was denied by the Divisional Court. Costs of $5,000 were awarded against Mr. Day. Dismissal of the anti-SLAPP motion was appealed to the Court of Appeal. That appeal was also dismissed, but Mr. Day was successful in appealing the costs award of the motion judge, which was varied to $18,000. The Court of Appeal awarded $25,000 in costs of the appeal against Mr. Day.

5Mr. Day then sought leave to appeal to the Supreme Court of Canada. The leave motion was dismissed with costs. Mr. Levant thereafter filed a bill of costs for taxation by the Registrar of the Supreme Court of Canada in the amount of $1,379.05, including disbursements. No certificate of taxation is in evidence, but Mr. Day does not dispute that he also owes that amount. In total, his costs liability from motions and appeals, including seeking leave to the Supreme Court of Canada, was $49,379.05.

Analysis

6Mr. Levant moves to strike Mr. Day’s defence under subrule 57.03(2) and rule 60.12 of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”). Subrule 57.03(2) provides that when a party fails to pay a costs order arising from a motion, the court may dismiss or stay the party’s proceeding, strike out the party’s defence, or make such other order as is just. Rule 60.12 is to similar effect. It provides that when a party fails to comply with an interlocutory order, the court may stay the party’s proceeding, dismiss the party’s proceeding or strike out the party’s defence, or make such other order as is just.

7In support of his request that I strike Mr. Day’s defence, Mr. Levant relies on BRIM IPCO Inc. v. Horbatiuk, 2019 ONSC 878 and my own decision in Allen v. Kumar, 2022 ONSC 4223. Both are cases in which the court held that non-payment of costs awards had not been adequately explained and that, in the circumstances of each case, giving the litigant additional time to pay costs would make no difference. In BRIM IPCO, the plaintiff’s action against the moving defendants was dismissed. In Allen, the defendant’s statement of defence was struck.

8In Allen, at paras. 10-11, I reviewed the relevant principles on a motion to strike under subrule 57.03(2) and rule 60.12. Whether to strike a pleading is a discretionary decision. Since striking a pleading is a severe remedy, I must consider the balance between having claims and defences adjudicated on their merits and ensuring that the administration of justice is not undermined by litigants failing to comply with court orders. Exercise of my discretion is guided by various principles discussed In Rana v. Unifund Assurance Company, 2016 ONSC 2502, at para. 50, which I summarized as follows:

(a) The court must be alive to the possibility that non-compliance with court orders is indicative of its process being abused. Failing to act may deprive the moving party of justice according to law and risks rendering the court “a paper tiger”;

(b) A litigant’s right of access to the courts must be accompanied by the responsibility to abide by the Rules and comply with court orders. Exempting impecunious parties from enforcing costs orders may amount to granting “carte blanche” to continue to ignore rules and orders and take unsupportable steps in the action without fear of consequences;

(c) Where a party had the opportunity to make submissions about impecuniosity at the prior hearings leading to the costs order(s), subsequently seeking to relieve against payment of those costs constitutes a collateral attack on the prior orders;

(d) The court may consider a pattern of unnecessary and unreasonable steps taken in the proceeding, including appealing numerous orders without chance of success or knowing the risk of an adverse costs order;

(e) If court orders are cavalierly ignored and if a litigant continuously fails to comply with their obligations as a litigant and then fails to abide by the costs consequences of that behaviour, the court is justified in bringing some finality to the action;

(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;

(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. 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; and

(h) 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.

9There is no question that Mr. Day has failed to pay the costs awards in full. However, unlike the facts in both BRIM IPCO and Allen, Mr. Day acknowledges his obligation to pay the costs awards, has evinced an intention to pay them, and has attempted to make payments. Other than an initial $5,000 payment, Mr. Levant has refused to accept any other partial payments.

10In late November 2019, following dismissal of leave to appeal to the Supreme Court of Canada, Mr. Day’s counsel made a payment plan proposal to Mr. Levant’s counsel for Mr. Day to make an initial $5,000 payment with monthly payments of $1,000 thereafter. That proposal was rejected with a note that this motion would be brought.

11Despite the rejection, a few days later, Mr. Day forwarded a $5,000 cheque through his counsel. Mr. Day’s counsel advised that Mr. Day would continue to make monthly payments of $1,000 commencing on January 4, 2020 until the full amount of the costs awards had been paid. In response, plaintiff’s counsel sent an email acknowledging receipt of the letter and cheque, stating as follows:

We will deposit the cheque and apply it to the outstanding costs awards, but as I had earlier indicated, we do not agree to the payment plan suggested by your client and reiterated in your letter. We will be proceeding with a motion to strike as planned.

12Mr. Day’s counsel acknowledged that position, but confirmed that post-dated cheques would still be sent in the next few days. Mr. Levant’s counsel, in turn, responded, “Any further payments received before the date of the motion will be deposited without prejudice to our position.” Twelve post-dated cheques were thereafter provided under cover of letter from Mr. Day’s lawyer dated December 16, 2019. Notwithstanding the suggestion that further payments would be deposited without prejudice to Mr. Levant’s position, the cheques were returned by plaintiff’s counsel a few days later.

13Mr. Day appears to have continued sending payment cheques of $1,000, but plaintiff’s counsel continued to return them.

14I agree with Mr. Day’s submission that it does not make sense for Mr. Levant to have accepted the $5,000 cheque, but then to refuse further payments altogether. I am not convinced that Mr. Levant could not have accepted the further payments without prejudice to his position that payment in full was still required. Mr. Levant’s counsel had already put that position in writing. The various installment cheques could have been cashed while this motion was being pursed. If Mr. Levant had done so, and assuming the monthly cheques were honoured, a further $33,000 toward the $44,379.05 in outstanding costs would have been paid by the time of the hearing before me.

15Mr. Day also points out that plaintiff’s counsel could have asked him to pay more, but never did so. The record supports that submission.

16Nevertheless, it cuts both ways. When Mr. Day’s payment proposal was refused, he did not make another one. I do not accept Mr. Day’s submission that Mr. Levant ought to have made a counterproposal for a payment plan. Mr. Levant was under no obligation to do so and was entitled to rely on the court-ordered costs awards as they stood. None of them provide for an deferred payment of costs. Also, although the post-dated cheques were refused, Mr. Day’s opposition to this motion would have been much stronger had he continued to put aside the same $1,000 per month that he proposed to pay. By the time of the hearing, he would have banked the same $33,000 toward his outstanding costs liability.

17Mr. Day seems to have taken the plaintiff’s refusal to accept incremental payments as excusing him from any obligation to save money to pay the costs. During oral argument, he submitted that he had not saved the money because he needed it for other obligations. He submits that he cannot pay the costs as a lump sum because he does not currently have it and still has outstanding legal fees for his prior counsel. Mr. Day’s outstanding legal fees to his former lawyer are not properly considered in assessing any inability to pay. I fail to see why payment of his own legal fees incurred for the unsuccessful motions and appeals that he initiated should have any priority over payment of the costs awarded against Mr. Day for those steps.

18Regardless, the record does not support that Mr. Day cannot pay the costs. There has been insufficient financial disclosure. A party cannot merely claim a financial inability to pay costs without also showing that there are no assets from which a costs order could be paid: 10313033 Canada Inc. v. Kechichian, 2021 ONSC 7606 at para. 18.

19Mr. Day’s responding affidavit was sworn January 31, 2020. The financial information in that affidavit is evidently out of date. Notably, Mr. Day wrote a letter to plaintiff’s counsel on February 14, 2022 advising, “Also, as of January 10, 2022, I have a new job with a gross annual salary of $150,000, so you're free to update my financial information accordingly.” There is no updated evidence from Mr. Day on why, given his change in financial circumstances, he is still unable to satisfy the costs awards by payment in full.

20Cross-examination evidence from Mr. Day also does not support his position that he is unable to pay. Mr. Day refused production of his income tax returns or even to confirm his reported income between 2017 and 2021. Mr. Day’s cross-examination testimony further supports that, at the time of his examination in October 2021, he lived with his common law spouse in her condominium and paid only $500 per month for the condominium fees. He otherwise appears to have had only modest monthly expenses and modest debts other than for legal fees incurred in this litigation, most of which were incurred for the unsuccessful motions and appeals.

21Mr. Levant submits that Mr. Day has demonstrated a cavalier attitude toward the court and payment of the costs. I do not agree. Although Mr. Day has not proven a genuine inability to pay the costs (particularly since he would have had a sizeable lump sum available had he put aside the rejected monthly payments), I am not satisfied that his conduct is comparable to the circumstances found in BRIM IPCO and Allen.

22In Allen, at para. 60, I held that not all defendants who fail to comply with court orders should be given further chances. I remain of the same view, but this is not such a case. In my view, in the circumstances of this case, Mr. Day should be afforded a final opportunity to comply before his defence is struck.

23I am not convinced by Mr. Day’s submissions that he should be permitted to pay the outstanding costs by installments. Court orders are court orders. Mr. Day has now had over two years to pay the costs after exhausting his appeal rights. If he has failed to put aside the money earmarked for that payment and not accepted by Mr. Levan, that was done at his own risk. The outstanding costs awards must be paid, in full, within thirty (30) days.

Disposition

24For the above reasons, the plaintiff’s motion is dismissed, but on terms that Mr. Day shall pay the balance of the outstanding costs awards against him within thirty (30) days. If not paid, then the plaintiff shall be at liberty to move again, on notice, to strike Mr. Day’s defence. The thirty-day compliance deadline shall be peremptory against Mr. Day. Order accordingly.

25No draft order was included in the motion materials or submitted at the hearing. If Mr. Levant requires a formal order, then the parties should follow the process outlined in rules 59.03 and 59.04 of the Rules for preparing, approving, settling (if necessary), and issuing an order through the registrar.

Costs

26Costs outlines have been exchanged and submitted. Although I advised the parties that I would be providing directions on costs submissions with my decision, Mr. Day appears to have included written costs submissions with his costs outline, which I have not reviewed. In the circumstances, it is appropriate that Mr. Levant’s costs submissions include a response to those submissions. Mr. Levant’s costs submissions shall be served by February 15, 2023. Mr. Day may then serve a reply and response by March 3, 2023.

27Notwithstanding that Mr. Day resides in Ottawa, the hearing before me was booked as an in-person hearing in Toronto. There is an email in the record indicating that Mr. Day objected to an in-person hearing and requested a remote hearing. Rather than proceed remotely, plaintiff’s counsel appears to have done nothing more than ensure that the in-person attendance was booked on a date available to Mr. Day. Mr. Day was accordingly required to travel from Ottawa to Toronto for the hearing.

28It does not appear that Mr. Day’s objection to the in-person booking was addressed nor does it appear he was made aware that he was entitled to formally challenge it under subrule 1.08(4) of the Rules. I expect the parties’ costs submissions to address what impact, if any, the seeming unilaterally selected mode of hearing should have on costs.

29Costs submissions of each party shall not exceed three (3) pages, excluding any offers to settle, relevant communications, or case law. They shall be submitted by email directly to my Assistant Trial Coordinator. Unless costs submissions are exchanged and filed in accordance with these directions, the parties shall be deemed to have agreed on costs.