



COURT OF APPEAL FOR ONTARIO

CITATION: Estates Associates Inc. v. 1645112 Ontario Ltd.,
    2020 ONCA 640

DATE: 20201009

DOCKET: M51428 (C67652)

Strathy C.J.O., Brown and Huscroft JJ.A.

BETWEEN

Estates Associates Inc.

Plaintiff (Appellant/Moving Party)

and

1645112 Ontario Ltd., 1793411 Ontario Ltd.,
    Ronald McCowan 
    and Bryon C. Cohen

Defendants (Respondents/Responding Parties)

Musharraf Iqbal, acting in person for the moving party

David N. Vaillancourt, for the responding party, Bryon
    C. Cohen

Amandeep S. Dhillon, for the responding parties, 1645112
    Ontario Ltd., 1793411 Ontario Ltd., and Ronald McCowan

Heard: October 5, 2020 by video conference

REASONS FOR DECISION

[1]

The moving party, Estates Associates Inc. (Estates), represented by
    its principal, Mr. Iqbal, seeks to set aside or vary the order of a judge of
    this court requiring that it post security for costs of the responding parties
    in the amount of $100,000 each.

[2]

The litigation is more than 10 years old and relates to events that
    occurred 11 to 12 years ago. Estates made claims for fraud, negligent
    misrepresentation, conspiracy, and breach of contract against the purchaser,
    Ronald McCowan and his companies (collectively, McCowan), in connection with
    the sale of a property. Estates also claims against the defendant, Bryon C. Cohen
    (Cohen), for allegedly negligent legal services.

[3]

The action was tried over the course of three weeks in 2019 and reasons
    were released in November 2019, dismissing the claim. The trial judge
    subsequently awarded costs of $150,000 to McCowan and $175,000 to Cohen.

[4]

Estates has appealed the trial judgment to this court.

[5]

Rule 61.06(1) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, permits this court to order security for the costs of an appeal on
    several grounds, including (a) where there is good reason to believe that the
    appeal is frivolous and vexatious and that the appellant has insufficient
    assets in Ontario to pay the costs of the appeal; (b) where an order for
    security for costs could be made under r. 56.01; or (c) where, for other good
    reason, security for costs should be ordered.

[6]

The motion judges order for security for costs rests on two
    foundations: first, a finding that the merits of the appeal are very much in
    doubt; and second, a finding that Estates failed to establish that, despite its
    apparent impecuniosity, it did not have access to funds.

[7]

The motion judges order is discretionary and is entitled to deference:
Yaiguaje
    v. Chevron Corporation
, 2017 ONCA 827, 138 O.R. (3d) 1, at para. 20. Estates
    has demonstrated neither an error of law nor an error in principle in the
    exercise of the motion judges discretion.

[8]

While the appeal may not be frivolous or vexatious, it appears to have a
    very low prospect of success. The trial judgment is fact-driven, and reflects
    the trial judges rejection of much of Mr. Iqbals evidence and her acceptance
    of the responding parties evidence.

[9]

While there was little doubt that Estates had no assets, the motion
    judge properly considered whether Estates had established that it did not have access
    to funds and would not be able to pay security for costs. There was evidence
    that Estates had funded its litigation at various times by retaining several
    different lawyers, retaining an expert witness, and paying for the costs of the
    trial transcripts. There was also evidence that Mr. Iqbal had received funds in
    2018 amounting to approximately $275,000. In the face of this evidence, Estates
    had an obligation to lead evidence that not only showed that it was without
    assets, but that it also had no access to funds. Estates failed to do so, and
    the motion judge properly considered this failure in concluding that security
    for costs could be awarded.

[10]

On
    this motion, Mr. Iqbal sought to adduce fresh evidence that while he received
    $275,000 in 2018 from another party in a separate litigation, those funds have
    since been disbursed. This evidence is not fresh because it was available at
    the time of the motion.

[11]

In
    any event, this evidence, when considered in light of Estates ability to
    finance this litigation over the years, does not demonstrate that the motion
    judge erred in law or in principle.

[12]

The
    motion is dismissed, with costs to McCowan and Cohen, in the amount of $2,500
    each, inclusive of disbursements and all applicable taxes.

G.R. Strathy C.J.O.

David Brown J.A.

Grant Huscroft J.A.


