Byrd v. Murdoch et al., 2025 ONSC 1324

Byrd v. Murdoch et al., 2025 ONSC 1324

CITATION: Byrd v. Murdoch et al., 2025 ONSC 1324

COURT FILE NO.: CV-24-00033631-0000

DATE: 20250227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DARRYL BYRD

Plaintiff

– and –

DOUGLAS K. MURDOCH, as Trustee of the DOUGLAS K. MURDOCH REVOCABLE TRUST and SCOTT MURDOCH

Defendants

Acting in Person

Darwin Harasym, for the Defendants

HEARD: February 13, 2025

Motion to dismiss action

kalajdzic J.:

1The Defendants have brought a motion to dismiss, or alternatively to stay, the Plaintiff’s action on the basis of res judicata and unpaid costs orders. In the alternative, they seek to strike the Statement of Claim without leave to amend on the grounds that there is no reasonable cause of action and that the claim is an abuse of the process of the court.

2The end result of any of the arguments advanced by the Defendants is that the Plaintiff’s action will come to an end. Should I determine that the action can proceed, the Defendants seek an order requiring the Plaintiff to post security for costs.

3I agree that the Plaintiff’s action is, at its core, a re-litigation of issues previously decided by this court and, as such, is dismissed as an abuse of process. I also agree that the non-payment of six costs orders justifies a dismissal of the Plaintiff’s action. In the alternative, I would strike the claim without leave to amend as disclosing no reasonable cause of action. Finally, I also agree that security for costs would be appropriate in this case if the action were to proceed.

Background

a. Facts

4In January 2023, the Plaintiff, Darryl Byrd, owned a seasonal cottage located in Pleasure Beach, an Ontario Co-Operative in the Township of Essex, Ontario. Residents of Pleasure Beach own their cottages but do not have title to the property on which their cottages are situated; rather, they own shares in the Co-Operative.

5Douglas Murdoch (“Mr. Murdoch”) and his son, Scott Murdoch, are American citizens and residents. Mr. Byrd and the Murdochs were friends.

6It is uncontested that Mr. Byrd was experiencing financial difficulty in January 2023 and wished to sell his cottage because he “needed the money”. It is also not in dispute that the Board of the Co-Operative had voted to ‘evict’ him, to use Mr. Byrd’s own terminology.

7Mr. Byrd approached the Murdochs to buy his cottage. The Murdochs repeatedly resisted, stating that they did not want to insult Mr. Byrd regarding the price that they could afford and that Mr. Byrd might get a better deal from a Canadian buyer. Scott Murdoch also queried whether it was even possible for Mr. Byrd to sell the cottage to the Murdochs because “the balance of the Co-Op has to be Canadian ownership on the shares.”

8After many exchanges back and forth over text and Mr. Byrd’s repeated entreaties, all of which were in the motion record before me, Mr. Murdoch agreed to purchase the cottage for $90,000 USD.

9On January 25, 2023, Mr. Byrd and Mr. Murdoch signed an agreement of purchase and sale. The agreement contains the following provisions relevant to this proceeding:

a. It provided that Mr. Byrd was to make repairs to the siding of the cottage before closing.

b. It was contingent upon the approval and sale of the membership share in the Co-Operative and approval of the transfer to Mr. Murdoch.

c. Time of closing was within 7 days of the execution of the agreement “if title can be conveyed in the condition required hereunder”.

d. Lastly, the agreement stated that “time is of the essence with respect to the performance of the parties’ obligations under this Agreement.”

10On January 25, 2023, Mr. Murdoch paid Mr. Byrd a $15,000 USD deposit. On January 30, 2023, he paid another $70,000 USD to Mr. Byrd.

11On January 30, 2023, Mr. Byrd signed a Bill of Sale confirming receipt of the purchase price, that the cottage was free and clear of all liens and encumbrances, and that he had the authority to sell the cottage. The purchase price was listed as $90,000 USD, with $5000 USD “to be held pending surrender of possession of the property within 7-14 days.”

12On February 2, 2023, the President of the Co-Operative informed Mr. Byrd and Mr. Murdoch that the Board of the Co-Operative would not approve the sale absent some certainty as to the application of the Prohibition of the Purchase of Residential Property by Non-Canadians Act, S.C. 2022, c. 10, s. 235 (“Residential Property by Non-Canadians Act”).

13On February 15, 2023, Mr. Byrd advised the Defendants that he considered the agreement to be “dead” and that he had relisted the cottage for sale at a price of $179,900 CAD. He also advised that he had spent the $85,000 USD paid to him by Mr. Murdoch and suggested he would repay it out of the proceeds of a future sale of the cottage.

b. Litigation History

14As a result of both the Co-Operative’s concerns about the lawfulness of a transfer to non-Canadians and Mr. Byrd resiling from the sale, Mr. Murdoch commenced an application on March 6, 2023 to determine the question of law and to enforce the agreement. That application – court file no. CV-23-31918 (“Prior Proceeding”) – named both the Co-Operative and Mr. Byrd as respondents.

15The Notice of Application in the Prior Proceeding sought the following orders, among others:

a. An interim/interlocutory injunction restraining the Respondents from selling, disposing or encumbering the cottage;

b. A declaration that Mr. Murdoch is entitled to possession of the cottage;

c. An order that Mr. Byrd surrender possession of the cottage;

d. A declaration that Mr. Murdoch’s purchase of the cottage is not prohibited by s. 4 of the Residential Property by Non-Canadians Act;

e. An order for specific performance of the agreement of purchase and sale executed by Mr. Byrd on January 25, 2023.

16Mr. Byrd was initially represented by counsel, Antoine d’Ailly.

17Several court appearances were held in the Prior Proceeding, as summarized in the chart below:

Date

Judge

Order Made

Mar. 21, 2023

Dube J.

On consent, application adjourned one week. The order provides that Mr. Byrd and Pleasure Beach Co-Operative Inc. are restrained from selling, conveying or otherwise transferring the land leased by Mr. Byrd upon which the cottage is situated, and Mr. Byrd is restrained from selling, conveying or otherwise transferring or encumbering the cottage, until March 29, 2023 or further order of the court.

Mar. 28, 2023

R. Macfarlane J.

Contested adjournment granted for one week.

Costs in the amount of $750 ordered against Mr. Byrd.

Apr. 4, 2023

R. Macfarlane J.

Declaration made that the seasonal cottage at issue is not “residential property” within the scope of s. 2 of the Residential Property by Non-Canadians Act. Dube J.’s order extended to April 19, 2023. Balance of application seeking to enforce agreement adjourned.

Apr. 25, 2023

Bondy J.

Balance of application adjourned three weeks at Mr. Byrd’s request, peremptory on him.

Costs thrown away in the amount of $2,500 ordered against Mr. Byrd to be paid before the return of the application.

May 16, 2023

Hebner J.

Antoine d’Ailly removed as counsel of record for Mr. Byrd.

Declaration made that Mr. Murdoch is the owner of the cottage. Mr. Byrd ordered to vacate the cottage by May 18, 2023. Mr. Byrd permanently restrained from disposing, selling or otherwise transferring the cottage and its contents.

Balance of application adjourned to June 6, 2023 (to assess damages for the failure of Mr. Byrd to repair the cottage’s siding panels and to determine entitlement to the $5000 USD holdback held in trust and costs of the application).

June 20, 2023

Perfetto J.

On consent, orders made that issue of costs of the application be dealt with in writing and balance of application adjourned to July 11, 2023.

June 23, 2023

Roberts J.A.

Motion by Darryl Bird for stay of Hebner J.’s order denied. Roberts J.A. finds Mr. Murdoch is the innocent party and has performed his obligations under the agreement of purchase and sale. “That the Co-Operative’s approval of the share transfer was delayed does not affect the validity of the transaction between Mr. Byrd and Mr. Murdoch for the sale of the cottage and Mr. Byrd’s rights and interests in relation to it.” Roberts J.A. also finds that “Mr. Byrd’s appeal appears to have little merit.”

Costs awarded to Douglas Murdoch in the amount of $17,682.45.

July 25, 2023

Deputy Registrar Theroulde

Motion by Douglas Murdoch to settle the Order of Roberts J.A. Order settled.

Darryl Byrd ordered to pay costs of motion in the amount of $750.

Oct. 3, 2023

Miller J.A.

Motion by Darryl Bird for an order extending time to perfect his appeal from the decision of Hebner J. denied. Miller J.A. finds that there “is no merit to the appeal whatsoever”.

Darryl Byrd ordered to pay costs to Douglas Murdoch in the amount of $8025.26.

Nov. 27, 2023

Deputy Registrar Swaby

Motion by Douglas Murdoch to settle the Order of Miller J.A. Order is settled.

Darryl Byrd ordered to pay costs to Douglas Murdoch in the amount of $750.

Jan. 17, 2024

Hebner J.

Costs of the application decided by Hebner J. on May 16, 2023 awarded to Douglas Murdoch in the amount of $25,259.¹

Mar. 27, 2024

Trotter, Thorburn and Dawe JJ.A.

Motion by Darryl Byrd to review the order of Miller J.A. dated Oct. 3, 2023. Panel dismissed the motion and agreed with Miller J.A.’s observation that the appeal has no merit.

Darryl Byrd ordered to pay costs to Douglas Murdoch in the amount of $4000.

Sept. 26, 2024

Karakatsanis, J.S.C.C.

Application for leave to appeal to SCC dismissed with costs.

18By the time of the hearing of the motion before me, therefore, five judges of the Court of Appeal had rejected Mr. Byrd’s argument that Hebner J. erred in ruling that the agreement of purchase and sale was enforceable and in declaring that Douglas Murdoch was the owner of the cottage.

19Moreover, Mr. Byrd has not paid at least six costs orders totalling $56,466.71 exclusive of interest.²

(c) Possession of the Cottage

20As a result of Macfarlane J.’s ruling that the Residential Property by Non-Canadians Act did not preclude Mr. Murdoch’s purchase of the cottage, the Co-Operative removed its objection to the sale.

21Nevertheless, Mr. Byrd refused to deliver possession of the cottage. He continued to take the position that the agreement ended on the closing date and that he was entitled to relist and sell it, presumably for a higher price than the one paid by Mr. Murdoch.

22With the assistance of the Sheriff, Mr. Murdoch obtained possession of the cottage on June 27, 2023.

(d) The Current Action

23In his Statement of Claim issued on June 17, 2024, Mr. Byrd seeks the following relief:

a. General and special damages of $2 million based on breaches of the agreement of purchase and sale;

b. A declaration that the agreement was terminated and that Mr. Byrd is entitled to ownership of the cottage.

24The essence of the claim, and the argument repeated at the hearing of the motion before me, is that:

a. Hebner J. did not have all relevant evidence before her when she made her decision that the agreement was enforceable;

b. Hebner J. could not come to a proper decision on an application as a trial was needed;

c. Since the closing date was February 1, 2023 and the transfer of the cottage was not completed by that date, and because “time was of the essence”, the agreement was terminated and Mr. Byrd was entitled to relist and sell the cottage.

25Mr. Byrd argues that the principle of res judicata does not apply because he has not had a trial with all relevant evidence before the court.

26Mr. Byrd also refers to the concept of unjust enrichment, claiming that he has been deprived of the benefit of an increase in property values since January 2023.

(e) The Defendants’ Motion

27The Defendants’ main argument is that the Plaintiff’s action attempts to re-litigate the enforceability of the agreement of purchase and sale, a matter that was already decided by Hebner J. and affirmed indirectly by five judges of the Court of Appeal.

28The Defendants seek the following orders on this motion:

a. An order that the action be dismissed, or alternatively stayed, pursuant to r. 21.01(3) (d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as being frivolous, vexatious and/or otherwise an abuse of process;

b. An order striking out the Statement of Claim without leave to amend pursuant to r. 21.01(1)(b) for disclosing no reasonable cause of action as against the Defendants;

c. An order striking the Statement of Claim without leave to amend pursuant to r. 25.11(c) as being an abuse of process;

d. An order that the action be dismissed pursuant to r. 57.03(2) and r. 60.12 because the Plaintiff has six unpaid costs orders; and

e. If the action is permitted to continue, an order that the Plaintiff post security for costs.

Issues and Analysis

29The issues to be decided on this motion can be distilled to the following:

a. Should the action be dismissed, or struck without leave to amend, on the basis that it is an abuse of process?

b. Should the action be dismissed because of the unpaid costs awards?

c. Should the action be struck as against the Defendant Scott Murdoch on the basis that it discloses no reasonable cause of action against him?

d. Should an order for security for costs be made?

Issue (a): Is the action an abuse of process and should it be dismissed or struck on that basis?

30The authority to dismiss or stay an action that is an abuse of process derives from both r. 21.01(3)(d) and the inherent jurisdiction of the court.

31Rule 21.01(3)(d) provides that a “defendant may move before a judge to have an action stayed or dismissed on the ground that the action is frivolous or vexatious or is otherwise an abuse of the process of the court”. The analysis on a motion under this rule considers whether it is plain and obvious that the claim cannot succeed. Evidence is admissible on whether the claim is frivolous, vexatious or an abuse of process, but the court is not to weigh evidence going to the merits: Vacaru v. Legge, 2025 ONSC 218, at para. 31.

32The abuse of process doctrine “engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute”: SIF Solar Energy Income & Growth Fund v. Aird & Berlis LLP, 2024 ONCA 946, at para. 31.

33The law recognizes a number of doctrines to prevent abuse of the process of the court. One such doctrine is res judicata: Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141, 457 D.L.R. (4th) 530, at para. 30.

34The doctrine of res judicata is based on the principle that “[a]n issue, once decided, should not generally be re-litigated to the benefit of the losing party and the harassment of the winner”: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 18.

35There are two branches to res judicata: cause of action estoppel and issue estoppel.

(i) Cause of action estoppel

36Cause of action estoppel prohibits a litigant from bringing an action against another party when that same cause of action has been determined in earlier proceedings by a court of competent jurisdiction: Dosen, at para. 31.

37As articulated in Dosen, at para. 13, there are four elements to cause of action estoppel:

a. There is a final decision of a court of competent jurisdiction in a prior action;

b. The parties to the subsequent litigation were parties to, or in privy with, the parties to the prior action;

c. The cause of action in the prior action is not separate and distinct; and

d. The basis of the cause of the action and subsequent action was argued or could have been argued in the prior action, if the parties had exercised reasonable diligence. [Emphasis in original.]

38The only cause of action pleaded in the Statement of Claim is that the agreement of purchase and sale was terminated when the transaction did not close on the closing date. This contractual cause of action, however, was explicitly addressed in the Prior Proceedings – in Mr. Murdoch’s prayer for relief, in submissions to Hebner J., and in Her Honour’s reasons for decision. Mr. Byrd was a party to the Prior Proceedings and he challenged the enforceability of the agreement of purchase and sale.

39At the hearing before Hebner J., Mr. Byrd argued that the “deal is dead”. The following exchange took place:

Darryl Byrd: Okay, and again, by the contract of my rights, by the contract of my rights, the contract that they put down, time of the essence, time of the essence with disrespect [sic] to the performance of the parties’ obligations under this agreement. So, hindsight, the deal is dead.

The Court: So, tell me how the deal is dead?

Darryl Byrd: Because of Pleasure Beach sabotaging this situation. Pleasure Beach said yes, their lawyers said, their lawyers sent me a law, a law, a section bylaw. The only reason why they sent that because I, because the Murdoch’s are in my [indiscernible]. So, I believe that they were just trying to sabotage the relationship between the Murdoch’s and I, because the Murdoch’s have been there since 1940. They’re ex community board members. Why not let this deal go through? I have e-mails of the president calling me and asking me about potential buyers. What do you mean? You just, you just turned down my deal to the Murdoch’s. Why would you ask me if I have potential buyers? What’s going on here?

The Court: So, is your beef, is your beef with Pleasure Beach or is your beef with the Murdoch’s?

Darry Byrd: It’s with both, it’s with both …

40Later in the hearing, Hebner J. had Mr. Byrd take her to the agreement of purchase and sale. She confirmed that Mr. Murdoch had fulfilled his obligations under the agreement:

Darryl Byrd: I’m opposing. It says, “offer is accepted by the seller and if the title can become void in the condition required, the purchaser agrees to complete this sale within seven days.”

The Court: Okay, and did the purchaser – excuse me, Mr. Byrd, did the purchaser give you the $85,000 within the seven days?

Darryl Byrd: Yes.

The Court: Okay, so the purchaser did what the purchaser needed to do.

Darryl Byrd: Correct.

The Court: So, okay, what’s your point?

Darryl Byrd: Okay, okay, so, they, so, when Pleasure Beach sent the letter out saying that I could not sell this cottage to them, I told them that I would give them their money back by selling the cottage. They want to dispute that. […]

41Hebner J. rejected Mr. Byrd’s contractual argument. In her oral reasons, Her Honour stated:

The applicant seeks a declaration that he is the owner of the dwelling, among other things, The respondent, Mr. Byrd, asserts that the deal is dead as a result of the time is of the essence clause. He wishes to resell the cottage, pay the applicant back his money, and presumably keep any profit for himself. In Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, the Court of Appeal made it clear that a time is of the essence clause is for the benefit of the innocent party, in this case, the applicant. Mr. Byrd is not entitled to rely on the clause as he accepted the purchase monies and then spent the monies and is not in a position to return the full amount to the applicant. The respondent, Mr. Byrd, asserts that this matter ought to have been brought by way of a statement of claim as opposed to a notice of application. I disagree and find it [sic] that the application was properly brought under Rule 14.05(3)(h).

42Thus, the cause of action advanced by Mr. Byrd in his current action – the interpretation and enforceability of the agreement of purchase and sale – was decided by Hebner J. She also rejected his procedural argument that the question of enforceability could only be decided at trial. Accordingly, cause of action estoppel is made out.

(ii) Issue estoppel

43Issue estoppel is narrower than cause of action estoppel. It prevents a party from re-litigating an issue already decided in an earlier proceeding, even if the causes of action in the two proceedings differ: Minott v. O'Shanter Development Co. (1999), 1999 CanLII 3686 (ON CA), 42 O.R. (3d) 321 (C.A.), at para. 16.

44According to the Supreme Court of Canada in Danyluk, at para. 25, there are three pre-conditions to issue estoppel: (1) the same question has been decided; (2) the judicial decision which is said to create the estoppel was final; and, (3) the parties to the judicial decision or their privies were the same persons as to the parties to the proceedings in which the estoppel was raised.

45The court has the discretion to refuse to apply issue estoppel when to do so would cause unfairness or work an injustice, taking into account the entirety of the circumstances, but this discretion must be “very limited in application”. Drizen v. Capital One Bank (Canada Branch), 2024 ONSC 4274, at para. 17.

46I am satisfied that the question out of which the estoppel is said to arise was “fundamental to the decision arrived at” in the Prior Proceeding: see Danyluk, at para. 24. Mr. Byrd argues that the Defendants breached the agreement of purchase and sale. Hebner J. found that the “purchaser did what the purchaser needed to do” and declared Mr. Murdoch the owner of the cottage. Hebner J. thus determined that Mr. Murdoch did not breach the agreement.

47In the present case, the question – whether the agreement of purchase and sale is “dead” – was decided by Hebner J. Her decision was not successfully appealed. The parties to the Prior Proceeding and to the one before me are the same.

48I therefore find that the conditions for issue estoppel are satisfied.

(iii) Res judicata and abuse of process

49The overall goal of the doctrine of res judicata, and therefore of both cause of action estoppel and issue estoppel, is judicial finality. “The doctrine prevents an encore, and reflects the law’s refusal to tolerate needless litigation.”: Minott v. O’Shanter, at para. 17.

50At its core, Mr. Byrd’s claim is an attempt to re-litigate the contractual issue he argued and lost before Hebner J. Mr. Byrd is recycling arguments already considered and rejected. Because both cause of action estoppel and issue estoppel are made out on the facts of the case before me, his current action is an abuse of the process of the court: Midland Resources Holding Limited v. Shtaif, 2018 ONCA 743, 81 B.L.R. (5th) 191, at para. 4.

51I also find that the application of estoppel in this particular case does not result in an injustice. Mr. Byrd received and spent the full purchase price (less a $5000 holdback) for the cottage paid by Mr. Murdoch. When the Co-operative raised a legal issue, Mr. Murdoch promptly brought an application for an answer to the statutory question. Upon receipt of Macfarlane J.’s decision declaring that the Residential Property by Non-Canadians Act did not apply to the transaction, the Co-operative dropped its objection, but Mr. Byrd refused to give up vacant possession. As Roberts J.A. and Hebner J. both found, it is Mr. Murdoch – not Mr. Byrd – who is the innocent party. And, as Miller J.A. found, Mr. Murdoch is “an elderly man who has paid for the property, taken possession of it, and been living there for some months now. He has paid Mr. Byrd, has been caused considerable expense and anxiety for no good reason, and is entitled to be left to enjoy the property in peace.”

52I find that the justice of the case requires that Mr. Byrd be estopped from re-litigating it. Accordingly, the action is dismissed, pursuant to r. 21.01(3)(d).

53Rule 25.11(c) also provides that a Statement of Claim may be struck, without leave to amend, on the ground that the pleading is an abuse of process. As an alternative to an order dismissing the action, the Defendants are also entitled to an order striking out the Statement of Claim on the basis that it constitutes an abuse of process.

54Finally, the res judicata argument can also be applied to r. 21.01(1)(b), which states: “A party may move before a judge to strike out a pleading on the ground that it discloses no reasonable cause of action or defence and the judge may make an order or grant judgment accordingly.” A claim that is barred by the operation of res judicata is a claim that discloses no reasonable cause of action: Celik (Litigation guardian of) v. TD Canada Trust, 2020 ONSC 1714, at paras. 22, 49.

55Accordingly, I also strike the Statement of Claim, without leave to amend, on the basis that it discloses no reasonable cause of action.

(iv) Mr. Byrd’s Other Arguments

56Mr. Byrd made a number of arguments at the hearing that do not impact my decision on abuse of process. However, I will address them so that he understands that I heard and considered all of his submissions.

57Mr. Byrd spent considerable time at the hearing arguing that none of the previous courts had all of the relevant evidence before coming to their respective decisions. I am not persuaded that any relevant evidence was missing for two reasons. First, at his cross-examination, Mr. Byrd could not and did not say what evidence he would have liked Hebner J. to have before her that she did not have previously. Second, the additional evidence in question, comprised of text messages between Mr. Byrd, the Murdochs and the Co-operative, was in the record before me and I do not find it relevant to the issue of whether there was an enforceable contract between the parties. Instead, what those text messages prove is that Mr. Byrd repeatedly asked Mr. Murdoch to buy the cottage and then became angry when the Co-operative questioned the legality of the transfer to a non-Canadian. He resented being named in the application commenced by Mr. Murdoch and wanted to relist the property, sell for a higher price, and keep the profits. None of these facts, and therefore none of this evidence, is relevant to the legal question raised in his pleading and already decided by previous courts.

58Mr. Byrd also repeatedly stated that Mr. Murdoch breached the contract because the closing date was not met and he did not ask Mr. Byrd to amend the agreement of purchase and sale to provide for a new closing date. This argument is not legally tenable. As previously found, Mr. Murdoch did not breach the agreement. He did everything he was supposed to do as a purchaser. It was the Co-operative’s concern about Mr. Murdoch’s status as an American that resulted in the parties not being able to finalize the transfer of the cottage on the closing date. In any event, the legal effect of parties not closing on the date contemplated in the agreement does not mean the contract is at an end; when neither party can close on the closing date, the agreement remains in effect: Domicile Developments Inc. v. MacTavish (1999), 1999 CanLII 3738 (ON CA), 45 O.R. (3d) 302 (C.A.).

59Moreover, Mr. Byrd conceded at the hearing that if Mr. Murdoch had asked him to amend the agreement, he would have said “yes”.

60Mr. Byrd also placed great reliance on the “time is of the essence” provision in the agreement. He made the same argument before Hebner J. As she found, a time is of the essence provision protects the innocent party: Di Millo, at para. 31. Mr. Byrd received the purchase price by the closing date. He is not the innocent party.

Issue (b): Should the action be dismissed due to unpaid cost orders?

61To date, Mr. Byrd has failed to pay at least six costs orders to Mr. Murdoch totalling $56,466.71, exclusive of interest and any additional enforcement costs, all arising out of the Prior Proceeding and his unsuccessful appeals. Mr. Harasym advised at the hearing that with interest, the costs orders currently exceed $62,000.

62Rule 57.03(2) states: “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 order as is just.”

63Rule 60.12 also provides that a party’s proceeding may be dismissed where a party fails to comply with an interlocutory order, such as an order for costs.

64The general principle that a matter should be heard on its merits must sometimes give way to other interests. A party is not entitled to abuse the system or the parties opposite, nor ignore the rules and orders of the court: Lee v. McGhee, 2019 ONCA 99, at para. 3.

65Rules 57.03(2) and 60.12 are predicated on the fact that, in some circumstances, a party’s position ought to be foreclosed for failure to comply with court orders: 10313033 Canada Inc. v. Kechichian, 2021 ONSC 7606, at para. 12.

66While a court will normally be cautious in dismissing an action before it can be adjudicated on its merits, in the case at bar, the litigation involves, as I have already found, a legal question that has already been determined on its merits. There is no compelling interest favouring an exercise of discretion in favour of Mr. Byrd.

67Mr. Byrd has admitted to receiving and spending the purchase price of the cottage. He has neither paid Mr. Murdoch any of the cost awards owed to him nor offered any explanation for his failure to do so. The evidence in the record thus supports the conclusion that Mr. Byrd is choosing to ignore the costs orders. That he is self-represented does not obviate the operation of rr. 57.03(2) and 60.12: Lee v. McGhee, at para 3.

68Moreover, courts have the discretion to dismiss proceedings even when the unpaid costs orders were made in a different proceeding: Assaly v. Assaly, 2019 ONSC 1953, 46 E.T.R. (4th) 101, at paras. 36-37; Carbone v. DeGroote, 2018 ONSC 109, at para. 46. This principle has particular force in cases where, as here, the two proceedings relate to the same subject matter. Mr. Byrd cannot circumvent the operation of rr. 57.03(2) and 60.12 by simply commencing a new action.

69Consequently, I find that Mr. Byrd’s action should be dismissed due to his failure to pay the outstanding costs orders.

Issue (c): Should the claim be struck as against the Defendant Scott Murdoch on the basis that it discloses no reasonable cause of action against him?

70The Defendant, Scott Murdoch, seeks to dismiss the claim against him in any event on the basis that it discloses no reasonable cause of action against him.

71On a motion under r. 21.01(1)(b), the court must determine whether it is plain and obvious that the Plaintiff’s claim cannot succeed: Nevsun Resources Ltd. v. Araya, 2020 SCC 5, [2020] 1 S.C.R. 166, at para. 64.

72Although used with care, a motion to strike is a valuable housekeeping measure to weed out claims that have no chance of success: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 19-20.

73The Plaintiff is required to plead a cause of action and facts capable of supporting the elements of that cause of action. Mr. Byrd has not done so.

74The prayer for relief in the Statement of Claim states:

1. The Plaintiff claims:

2. General damages and special damages against the Defendant totaling $2,000,000.00 based on the Defendants [sic] breach of agreement;

3. A judgment and order declaring that the purchase and sale agreement of the parties was terminated, and that the Plaintiff therefore be entitled to ownership of the cottage and for all the damages as well.

75The only discernible cause of action pleaded in the Statement of Claim is an allegation of breach of contract. As Mr. Byrd himself pleads at para. 13 of the Claim, the contract was between him and Douglas Murdoch. Although Scott Murdoch communicated with Mr. Byrd and conveyed messages from Mr. Byrd to the elder Mr. Murdoch, he is not a party to the agreement.

76There are no specific allegations against Scott Murdoch in the Statement of Claim. Even read generously, there is no claim for a breach of contract or any other cause of action against him.

77Accordingly, the pleadings do not disclose a reasonable cause of action and the Statement of Claim is struck as against Scott Murdoch pursuant to r. 21.01(1)(b).

Issue (d): Should an order for security of costs be made?

78The Defendants have also asked for an order that Mr. Byrd pay security for costs in the event that the action is permitted to continue. Although I have already found that the action ought to be dismissed, I would nevertheless grant the relief sought because Mr. Byrd has not established that such an order would be unjust.

79Rule 56.01(c) provides that the court “may make such order for security for costs as is just” where “the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part.”

80On a motion for security for costs, the initial onus is on the defendant to satisfy the court that there is good reason to believe that the matter comes within one of the circumstances enumerated in r. 56.01. Once the first part of the test is satisfied, the onus shifts to the plaintiff to establish that an order for security for costs would be unjust: 2311888 Ontario Inc. v. Ross, 2017 ONSC 1295, 69 C.L.R. (4th) 40, at para. 17.

81As articulated in Ross, at para. 17, a plaintiff can meet the onus by demonstrating that:

(a) the plaintiff has appropriate or sufficient assets in Ontario or in a reciprocating jurisdiction to satisfy any order of costs made in the litigation;

(b) the plaintiff is impecunious and the plaintiff’s claim is not plainly devoid of merit (See Pitkeathly v. 1059288 Ontario Inc., [2004] O.J. No. 4125 at para. 10); or

(c) if the plaintiff cannot establish that it is impecunious, but the plaintiff does not have sufficient assets to meet a costs order, the plaintiff must satisfy the court that the plaintiff’s claim has a good chance of success on the merits. See Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, [2012] O.J. No. 3620 at paras. 41-46.

82It is incontrovertible that the Defendants have met the first part of the test. The unpaid costs orders bring this matter squarely within r. 56.01(c).

83Mr. Byrd has not met his onus to show an order for security for costs would be unjust. He has filed no evidence of his assets in Ontario or evidence of impecuniosity, and he has not satisfied me that his claim has a good chance of success on the merits. To the contrary, I have found his claim to be devoid of merit, as have five judges of the Court of Appeal. It is appropriate, therefore, that Mr. Byrd post security for costs.

84The Defendants have filed a bill of costs for determining the appropriate amount of security. The estimated fees from the pleadings stage, through discoveries, mediation, and trial, total almost $48,000 inclusive of HST and disbursements.

85The Defendants seek security for a full indemnity costs order and rely on para. 22 of the agreement of purchase and sale to this end. Hebner J. and the Court of Appeal awarded costs on a substantial indemnity basis (not full indemnity) in reliance on this provision in the agreement.

86I find that it is appropriate to order security for costs for the entire proceeding at this stage given the lack of merit to Mr. Byrd’s claim and his previous unpaid costs orders. On a substantial indemnity basis, the Defendants’ estimated fees are approximately $36,000 and disbursements are $2000. With HST, the total amount is $42,940.

87Should the action proceed as a result of a successful appeal, Mr. Byrd is ordered to pay the sum of $42,940 into court as security for costs.

Conclusion and Costs

88For the reasons stated, I grant the Defendants’ motion and dismiss the action on the basis of res judicata, abuse of process, and the Plaintiff’s unpaid costs orders. I also strike the Statement of Claim as against Scott Murdoch for disclosing no reasonable cause of action. In the alternative, I would strike the Statement of Claim without leave to amend as against both Defendants as an abuse of process. Finally, if the action were to proceed, I order that the Plaintiff pay security for costs in the amount of $42,940.

89As the successful parties, the Defendants are presumptively entitled to their costs of the motion. Mr. Harasym filed a bill of costs. Other than time spent to obtain an August 8, 2024 order that does not appear to be related to this motion, the remainder of the bill of costs appears reasonable.

90The Defendants seek full indemnity costs of $23,469.86 based on para. 22 of the purchase agreement, which states: “Each party shall pay their own attorney fees with respect to the transaction. If either party employs an attorney to enforce or defend its rights under this Agreement, the prevailing party shall be entitled to recover its costs and expense, including reasonable attorneys’ fees, from the other party.” It was on the basis of this provision that Hebner J. and the Court of Appeal ordered costs against Mr. Byrd on a substantial indemnity basis.

91I asked Mr. Byrd at the hearing if he had any submissions on costs. He indicated only that he should not have to pay any because he has done nothing wrong. I will nevertheless refrain from making a costs order at this time in case Mr. Byrd wishes to make more specific written submissions as a result of my reasons.

92I encourage the parties to compromise and resolve the issue of costs on their own. If they are unable to do so, the Defendants shall file submissions of no more than five double-spaced pages by March 14, 2025. The Plaintiff will file reply submissions of no more than five double-spaced pages by March 28, 2025.

Original Electronically Signed by “Justice J. Kalajdzic”

Jasminka Kalajdzic

Justice

Released: February 27, 2025

CITATION: Byrd v. Murdoch et al., 2025 ONSC 1324

Footnotes

1. 1Mr. Byrd was also ordered to pay costs to the Co-Operative.
2. 2Although counsel for the Defendants referred to six outstanding costs orders, according to my summary of orders made in the Prior Proceeding, eight costs orders were made totaling $59,716.71, exclusive of interest and not including the Supreme Court of Canada’s order of costs. Whether two of the eight costs orders were paid or two orders were mistakenly omitted from counsel’s factum is not relevant to my decision under issue (b), below.