



COURT OF APPEAL FOR ONTARIO

CITATION: Whitty v. Wells, 2019 ONCA 397

DATE: 20190516

DOCKET: C66054

Hoy A.C.J.O., Lauwers and Zarnett JJ.A.

BETWEEN

Patrick Whitty
, RPR
    Environmental Inc., 1049585 Ontario Inc., and 876947 Ontario Limited

Plaintiffs (
Appellant
)

and

Edward N. Wells
,
Edward G. Wells
,
Bradley May
,
    Renzo Benocci,
Mark Vanderlaan
, Manon Bombardier,
    Gordon Owen, and
Attorney General of Canada

Defendants (
Respondents
)

AND BETWEEN

Patrick Whitty
, RPR
    Environmental Inc., 1049585 Ontario Inc. o/a RPR Environmental Services, and
    876947 Ontario Limited

Plaintiffs (
Appellant
)

and

Edward Nicholas Wells
,
Edward Glenn Wells
, Diana Ball, Luke Cayley, Rob
    Fortin, Erin Gilmer, Jeffrey Green, Melanie Gregorich, Julie Horvath, Rebecca
    Huehn, Doug Laing,
Bradley May
, John Miller,
    Amrick Shergill,
Mark Vanderlaan
, Sandra Antoniani,
    and
Attorney General of Canada

Defendants (
Respondents
)

Vilko Zbogar and Ray Di Gregorio, for the appellant

Jacqueline Dais-Visca, for the respondents

Heard: May 7, 2019

On appeal from the orders of Justice Frederick L. Myers
    of the Superior Court of Justice, dated September 21, 2018, with reasons
    reported at 2018 ONSC 5572, and from the costs orders, dated October 10, 2018,
    with reasons reported at 2018 ONSC 6012.

REASONS FOR DECISION

[1]

The appellant, Patrick Whitty, is a plaintiff in two actions against the
    Attorney General of Canada and individuals employed by Environment Canada. He
    is also a director and officer of the corporate plaintiffs in those actions and
    two related actions. The four actions are being case managed together by the
    motion judge.

[2]

The appellant appeals from the dismissal of his personal claims by the motion
    judge. That dismissal arose in the following way.

[3]

In April 2016, the appellant and the corporate plaintiffs moved in all
    four actions for an extension of time to deliver their affidavits of documents
    and an expert report. The respondents sought, as a term of the extension, an
    order for security for costs. On April 4, 2016, the motion judge granted the
    extension but ordered the appellant and the corporate plaintiffs in the four
    actions to pay $230,000 in security for costs, on a joint and several basis, in
    two instalments. The first instalment of $100,000 was paid on May 30, 2016. The
    appellant personally funded $50,000 of that payment. The second instalment of
    $130,000 was to be paid on July 1, 2018.

[4]

Prior to the due date for the second instalment, the appellant and the
    corporate plaintiffs obtained leave from the motion judge to bring a motion to
    vary the security for costs order, which they did. The respondents moved to
    have all four actions dismissed on the basis of the failure to pay the second instalment
    and alleged breaches of other court orders. The motions were heard on September
    18, 2018.

[5]

The security for costs order was in default on September 18, 2018, as
    the second instalment had not been paid, but it was subject to the motion to vary.
    The motion judge did not find that the appellant had breached any other court
    orders.

[6]

The motion judge refused to vary the amount of security for costs. He
    was not prepared, however, to dismiss the action of the corporate plaintiffs
    and instead granted an extension of time, until October 31, 2018, for them to
    post the second instalment of $130,000 as security for costs. However, he
    granted no such extension to the appellant, and dismissed the appellants
    claims in the two actions in which the appellant was a plaintiff.

[7]

The motion judge articulated why he dismissed the appellant's claims in
    para. 22 of his reasons, which read as follows:

The security for costs orders
    impose joint and several liability on Mr. Whitty and the corporate plaintiffs.
    I have emphasized above the invitation in my endorsement for the plaintiffs to
    decline to post security if they do not wish to invest the funds and effort
    required to bring this significant matter to trial. In my view, Mr. Whitty has
    indicated that he is no longer interested in being a personal plaintiff by
    expressly declining to post further security despite his joint and several
    liability. This is consistent with the fact that Mr. Whitty has no damages
    independent of the companies except, possibly, general damages for defamation.
    Those damages would be trifling compared to the costs of proceeding. Mr. Whitty
    has made his personal position clear and I respect his choice. The two actions
    commenced by him are therefore dismissed.

[8]

As for the corporate plaintiffs, the motion judge, in deciding to grant
    them an extension, struck a balance between the principle that compliance with
    procedural orders is an important goal and the principle that the risk of
    unjustly depriving a plaintiff of a fair and just resolution of a claim on the
    merits, due to the effect of security for costs, is to be avoided. He
    concluded, in respect of the corporate plaintiffs, that it would be just to
    give them one last clear opportunity to determine their own fate by extending
    the time for the posting of the outstanding instalment of $130,000.

[9]

It is common ground that the sum of $130,000 was posted in accordance
    with that extension.

[10]

The order of the motion judge was a discretionary one. Rule 56.06
    of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194,
provides that an action
may
be
    dismissed for failure to post security for costs as ordered. Accordingly, the
    decision of the motion judge is to be afforded deference. Discretionary
    decisions will not be interfered with unless the court misdirected itself, came
    to a decision so clearly wrong that it amounts to an injustice, or gave
    insufficient weight to relevant considerations:
Penner v. Niagara (Regional
    Police Services Board)
, 2013 SCC 19, [2013
]
    2 S.C.R. 125, at para. 27. An exercise of discretion on a procedural matter
    will only be set aside if the court committed a palpable and overriding error
    of fact or based its decision on an erroneous legal  principle:

Margaret
    Grace Kerr v. CIBC World Markets et al.
,
    2013 ONSC 7685, 316 O.A.C. 192, at para. 39;
1196158 Ontario Inc. v.
    6274013 Canada Ltd.
, 2012 ONCA 544, 112
    O.R. (3d) 67, at para. 16.

[11]

In our view, in the
circumstances of this case,
    the motion judge's exercise of discretion to dismiss the appellants action was
    a reversible error. It was common ground before us that since the order for
    security for costs imposed an obligation on the appellant and the corporate
    plaintiffs that was joint and several, one consequence of that was that
    compliance with the order by any party would satisfy it for all. The motion
    judge gave insufficient weight to that fact, and erred in principle in reaching
    his conclusions.

[12]

The
    motion judge ought to have, but did not, engage in the balancing exercise in
    respect of the appellant that he did when he considered the corporate
    plaintiffs. The principles and factors he pointed to when he considered the
    corporate plaintiffs were equally applicable to the appellant, and there is no
    principled basis upon which the discretion ought to have been exercised in one
    way for the corporate plaintiffs and in a different direction for the
    appellant, especially given the joint and several nature of the obligation to
    which all were subject.

[13]

The
    motion judge inferred that the appellant was no longer interested in being a
    personal plaintiff because he was expressly declining to post further security,
    and because of the amount of his damages claim compared to the cost of pursuing
    it. With respect, that factual inference was not available to the motion judge
    on the record and in light of the nature of the security for costs obligation.

[14]

The
    motion judge relied on a statement in an affidavit made by a consultant to the
    plaintiffs quoting the appellants words that if it is necessary to pay
    further security for costs, that cash will need to be found in the business and
    will not be paid by [the appellant] personally. Read in context, that
    statement did not amount to an express declining to post further security. The
    motion judge accepted that the appellant was the owner of the corporate
    plaintiffs, so the desire to find funds in the business to pay security, where
    such a payment would satisfy the obligations of all parties including the
    appellant, is not an unequivocal refusal by the appellant to see the security
    for costs order to which he was subject satisfied. Additionally, although the
    motion judge made reference elsewhere in his reasons to a second affidavit from
    the same consultant, which set out a proposal whereby all of the plaintiffs would
    pay the second instalment of the security for costs ($130,000) on a revised
    timetable, he did not relate this evidence to the inference he drew about the
    appellants continued participation. This evidence is not consistent with a
    conclusion that the appellant would not comply with a security for costs order.
    In short, the evidence does not support an inference that the appellants
    approach to security for costs showed that he did not want to pursue his claim.

[15]

The
    motion judges statement concerning the amount of the appellants likely
    damages also could not lead to an inference that he had chosen not to pursue
    his claim. The appellant was one of the parties moving to vary the security for
    costs order so that the actions could proceed, and he was opposing the
    respondents request to dismiss the actions, including his personal claims. He
    had already funded $50,000 of the first instalment of security. He had given no
    indication that he was making the choice not to proceed with his actions because
    of the amount of his likely damages.

[16]

Accordingly,
    we allow the appeal and: (a) vary the two September 21, 2018 orders of the
    motion judge to include the appellant as one of the parties granted an
    extension of time, until 4:00 p.m. EST October 31, 2018, to post the
    outstanding instalment of security for costs of $130,000; (b) set aside those
    paragraphs of the orders that dismissed the appellants personal claims.

[17]

We
    would not interfere with the motion judges costs orders in the motions below. Those
    decisions reflected the fact that although the respondents had not succeeded in
    obtaining a complete dismissal of the actions, the corporate plaintiffs and the
    appellant were seeking an indulgence from the court because they had not
    complied with an existing security for costs order and, until it was extended,
    were in default of it. Even with the variation we have ordered, those same considerations
    entail the same costs result.

[18]

We
    award costs of the appeal to the appellant in the sum of $24,000 inclusive of
    disbursements and applicable taxes, as agreed by the parties.

Alexandra Hoy
    A.C.J.O.

P. Lauwers J.A.

B. Zarnett J.A.


