


COURT OF APPEAL FOR ONTARIO

CITATION:
Szpakowsky v. Kramar, 2012
    ONCA 77

DATE: 20120206

DOCKET: C53827

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Lidia Yvonne Szpakowsky

Appellant (Plaintiff)

and

Robert Michael Kramar, Lee Edward Fingold, Evlar
    Investments Ltd., Jorum Gold, Grant Rayner Lawrence Ben Eliezer, George B.
    Callahan, Jerry Herzkopf

Respondents (Defendants)

Jeffrey Langevin, for the appellant

H.J. Doan, for the respondent

Heard: January 31, 2012

On appeal from the order of Justice Harrison.S. Arrell of the
    Superior Court of Justice, dated April 29, 2011.

ENDORSEMENT

Overview

[1]

Mr. Gold seeks an order requiring the appellant to post security for
    costs pending the disposition of her appeal from the order of Arrell J. dated
    April 29, 2011, dismissing her action as against him and the defendant Fingold,
    for delay.

[2]

How a motion for security for costs, in this battle infused with ill
    will in all corners, came to be dealt with by a full panel of the Court is a
    somewhat tortuous story.  Suffice it to say, that a motion for security for
    costs was granted by Juriansz J.A. on September 6, 2011, when no one attended
    on behalf of the appellant.  Why that was so, is hotly contested, but a panel
    of this Court set aside that order on November 22 on the basis that it had been
    granted on the misunderstanding that the motion was unopposed.  The panel said:

This misunderstanding arose because Mr. Langevin did not appear
    on the motion nor did anyone send any correspondence to the court.  He advises
    this was because he expect Mr. Doan to obtain an adjournment for him.  The
    approach of both counsel led to the need for this attendance today.

[3]

The order of Juriansz J.A. was set aside on terms that Ms. Szpakowsky
    pay costs thrown away before Juriansz J.A. and costs before the panel in the
    amount of $3,000, that materials be exchanged before certain dates, and that a
    companion motion to quash brought by Mr. Gold be argued with the appeal
    itself.  When the matter came on before this panel on January 31, 2012, it was
    not clear whether we were to deal with the motion for security for costs, the
    motion to quash or the appeal, or all of the foregoing.  As it turned out, the
    parties thought they were here to argue the motion for security for costs and
    expected that argument to take place before a single judge.  Because the matter
    was already before us, and because of the history of this proceeding as
    outlined above and below, we decided to deal with the motion for security for
    costs.

[4]

A brief outline of the entire history of these proceedings may be
    helpful at this point.

[5]

In the late 1980s, Ms. Szpakowsky held a number of investment
    properties in and around the City of Toronto.  The defendants  described by
    Arrell J. as a compilation of disbarred lawyers, lawyers still practicing and
    one estranged lover  were her financial and legal advisors in various
    capacities.  Mr. Gold, it should be said, is one of those disbarred lawyers
    (Mr. Fingold is not), although it does not appear from the record that his
    disbarment was in any way related to his dealings with Ms. Szpakowsky.  In
    summary, Ms. Szpakowsky alleges that because of the diverse misdeeds of the
    defendants, she lost her investments.

[6]

In August, 1988 she commenced an action claiming damages for these
    losses.  Mr. Gold was not a defendant in that action, although Ms. Szpakowsky
    acknowledges that she was aware of her allegations against him by at least that
    time.  That action was dismissed for delay in 1992.

[7]

In October, 1993, Ms. Szpakowsky commenced a second action raising
    essentially the same allegations and this time adding her first lawyer, Mr.
    Rayner, as a defendant, but again asserting no claim against Mr. Gold.  The
    second action was dismissed for delay in May, 1998.

[8]

Almost six years later, in March 2004, Ms. Szpakowsky issued her third
    statement of claim, again raising essentially the same allegations, but this
    time  at least 16 years after the events complained of  adding Mr. Gold as a
    defendant.  Even at that, although the proceedings moved along against the
    other defendants, Mr. Gold was not served with the new statement of claim for
    another 3 ½ years, in November 2007.  The explanation advanced for the delay in
    service is that Mr. Gold could not be found and was, in fact, incarcerated, for
    part of that time.  However, as Arrell J. pointed out, the record indicates
    that Mr. Gold has lived at the same address since 1994.

[9]

Earlier, in July, 2006, Milanetti J. had ordered that the claim be
    amended, issued and served by September 8, 2006, and that the trial record be
    passed by April 2007.  None of this was done, and Mr. Gold was not served in
    accordance with the order.

[10]

The
    allegations against Mr. Gold were based in negligence, fraud and breach of
    fiduciary duty.  He retained counsel and quickly moved to strike the claim as
    against him.  On January 4, 2008, Ms. Szpakowsky agreed to amend her claim
    forthwith and to delete all allegations against Mr. Gold except for breach of
    fiduciary duty.  She has never done so.

[11]

In late
    2010, Mr. Gold and Mr. Fingold moved for summary judgment to strike the claim
    against them.  Arrell J. granted that order.  He did so not only because of Ms.
    Szpakowskys failure to comply with certain court orders and the delay and the
    normal difficulties associated with such delay (the case was then 23 years
    old), but because he found that Mr. Gold has suffered significant and real
    prejudice because he had destroyed his files after 15 years and well before
    being advised of the lawsuit and because three potentially important witnesses
    had died in the interim.

Discussion

[12]

Mr. Gold
    seeks an order for security for costs in the total amount of $43,516.62,
    representing $25,000 in relation to the pending appeal together with an amount
    to secure the sum of $18,516.62 awarded by Arrell J. as costs of the motion to
    dismiss for delay.  He relies essentially on the provisions of rules 61.06 and
    56.01 that permit the Court to order security for costs where there is good
    reason to believe the appeal is frivolous and vexatious and the appellant has
    insufficient assets in Ontario to pay the costs of the appeal, and where there
    are outstanding orders of costs in favour of the moving party that have not
    been paid by the appellant.  He also requests an order lifting the stay pending
    appeal regarding the costs of the proceedings before Arrell J., if necessary,
    and directing that those costs be paid forthwith.

[13]

We would
    not grant the latter request, but we order that the appellant post security for
    costs of the appeal in the amount of $15,000.  We do so for the following
    reasons.

[14]

It is not
    necessary for these purposes that we be satisfied the appeal is in fact without
    merit and frivolous, vexatious or otherwise an abuse of the process.  It is
    sufficient if it appears to us that there is good reason to believe it has
    those characteristics.  As this Court noted in
Schmidt v. Toronto-Dominion
    Bank
(1995), 24 O.R. (3d) 1, at p. 5:

The words good reason to believe qualify the words frivolous
    and vexatious and indicate a finding short of an actual determination that the
    appeal is frivolous and vexatious.  A judge hearing a motion for security for
    costs may reach the tentative conclusion that an appeal appears to be so devoid
    of merit as to give good reason to believe that the appeal is frivolous and
    vexatious without being satisfied that the appeal is actually devoid of merit.

[15]

In our
    view, given the history and circumstances outlined above, Ms. Szpakowskys appeal
    is caught by these criteria.

[16]

As for the
    second part of the rule 61.06(1)(a)  good reason to believe that the appellant
    has insufficient assets in Ontario to pay for costs of an appeal  Ms. Szpakowsky
    asserts that she is an impecunious appellant and, therefore, there is no issue
    with respect to that aspect of the test.

[17]

We are
    aware of the jurisprudence that cautions courts  on access to justice grounds
     against depriving an impecunious litigant of his or her right to have a
    meritorious claim determined on the merits.  But, as noted above, we have grave
    reservations about the merits of the appeal, which appears to us to have little
    prospect of success.  Impecunious litigants are not entitled to proceed in such
    circumstances with impunity  causing their opponents to incur significant
    costs themselves  and without having to face the normal consequences of costs
    in they are unsuccessful.

[18]

In addition
    to the foregoing, Ms. Szpakowsky has a history of failing to comply with costs
    orders and with other court orders in the proceedings.  While we would not
    grant security for costs based on these factors alone, they serve to reinforce
    our conclusions respecting the apparent frivolous and vexatious nature of the
    appeal.

[19]

In the
    end, it is what is in the interests of justice that governs.  What is required
    is an appropriate balance between Mr. Golds entitlement, in the circumstances,
    to some protection in terms of costs and a disposition that will not have the
    effect of precluding Ms. Szpakowsky from proceeding for all practical
    purposes.  For that reason, we are not prepared to accept Mr. Golds request
    that we make an order for security for costs in the amount of more than
    $43,000.   We think that an order requiring the appellant to post the total sum
    of $15,000 as security for costs of the appeal and the motion before Arrell J.
    strikes the appropriate balance in all the circumstances.

Disposition

[20]


We therefore order that Ms.
    Szpakowsky pay the sum of $15,000 into court to the credit of this action as
    security for the costs of the appeal and the proceedings before Arrell J.  The
    appeal is stayed pending compliance with this order.

K.M. Weiler J.A.

Robert J. Sharpe J.A.

R.A. Blair J.A.


