



COURT OF APPEAL FOR ONTARIO

CITATION: Wiseau Studio, LLC v. Harper, 2021
    ONCA 31

DATE: 20210115

DOCKET: M51953 (C68580)

Thorburn
    J.A. (Motions Judge)

BETWEEN

Wiseau
    Studio, LLC and Tommy Wiseau d.b.a. Wiseau-Films

Plaintiffs/ Defendants by
    Counterclaim

(Appellants/ Responding Parties)

and

Richard Harper, Fernando Forero Mcgrath, Martin

Racicot d.b.a. Rockhaven Pictures, Room Full of Spoons

Inc., Parktown
    Studios Inc. and Richard Stewart Towns

Defendants/ Plaintiffs by Counterclaim

(Respondents/ Moving Parties)

Matthew Diskin and Meredith Bacal, for
    the moving parties

Daniel Brinza, for the responding
    parties

Heard: January 7, 2021 by videoconference

REASONS
    FOR DECISION

RELIEF SOUGHT

[1]

This is a motion by the moving parties Ri
chard
    Harper, Fernando Forero McGrath, Martin Racicot d.b.a. Rockhaven Pictures, Room
    Full of Spoons Inc., Parktown Studios Inc. and Richard Stewart Towns (together
    Room Full of Spoons)
for security for the trial judgment, costs of the
    judgment and appeal and in the alternative, an order to lift the stay pending
    appeal.

[2]

The security amounts are as follows:

1.

Security for the trial judgment in the amount of
    $200,000 CDN and Canadian currency sufficient to purchase $575,488.36 at a bank
    in Ontario listed in Schedule I to the
Bank Act
(Canada) at the close
    of business on the first day on which the bank quotes a Canadian dollar rate
    for purchase of the foreign currency before the day payment of the obligation
    is received;

2.

Security for costs of trial judgment in the
    amount of $481,521.80 CDN; and

3.

Security for costs of the appeal in the amount
    of $30,000.

[3]

Room Full of Spoons claims that although
    security for judgment has not been awarded by an Ontario court, the unique
    circumstances of this case warrant security for the judgment awarded and has
    been awarded by courts in other Canadian jurisdictions. Room Full of Spoons
    also notes that the British Columbia and Alberta courts have granted security
    for judgment in similar circumstances.

BACKGROUND EVIDENCE

[4]

In 2003, Wiseau Studio LLC and Tommy Wiseau,
    doing business as Wiseau Films released a feature film called The Room. The
    Room and its creator, Tommy Wiseau, acquired cult-like status. Wiseau Studio
    and Tommy Wiseau are residents of California.

[5]

Richard Harper, Fernando Forero McGrath, Martin
    Racicot and Richard Stewart Towns are Ontario documentary filmmakers. In 2016,
    after years of work, they completed a documentary film called
Room Full of
    Spoons
about the cult phenomenon surrounding The Room and Mr. Wiseau (the
    Documentary). Room Full of Spoons only material asset is the Documentary.

[6]

Room Full of Spoons have not been able to
    exploit the Documentary since Wiseau Films brought a claim against them in
    2017.

[7]

On June 14, 2017, Wiseau Films obtained an
ex
    parte
injunction restraining the release of the Documentary while,
    unbeknownst to the court, it was in negotiations with Room Full of Spoons about
    the Documentarys release.

[8]

On November 1, 2017, the injunction was
    dissolved as the motion judge held that Wiseau Films had failed to make full
    and frank disclosure and engaged in litigation misconduct. Room Full of Spoons
    was awarded substantial indemnity costs of $97,034.68.

[9]

The cost award was not paid for 11 months and
    was paid only after the court advised that Wiseau Films claim would be
    dismissed if the cost award was not satisfied.

[10]

Thereafter, the case management judge found that
    Wiseau Films engaged in roadblocks to scheduling at almost every attendance
    and other improper acts. These include:

(a)     The injunction was issued at a
    commercially critical time when the parties were on the verge of finalizing a
    distribution deal which was prevented by the injunction such that the lawsuit
    had the effect of blocking the release of the documentary;

(b)     Wiseau stated falsehoods about the
    defendants on social media and made misrepresentation to third parties about
    the legality of screening the documentary;

(c)     Both sides agreed to file affidavits
    from their witnesses regarding their anticipated testimony in chief.
    Thereafter, Wiseau Films sought an order from the case management judge to
    direct the Crown to prosecute the defendants for perjury based on their
    affidavits, although he never identified what was allegedly false. The request
    was refused;

(d)     Seeking to adjourn the trial on the
    eve of trial on the grounds that Wiseau Films no longer had counsel. The case
    management judge held this was a situation entirely of their own making and
    one about which [he had] warned Mr. Wiseau on many occasions. Since February
    2019, the case management judge had dealt with three different motions by three
    sets of counsel for Wiseau Films asking to be removed from the record; and

(e)     On the eve of trial, sending the judge
    and opposing counsel a document entitled Total Withdraw purporting to
    discontinue his claims. In the document, Wiseau Films attacked the Ontario
    justice system and stated that a new action would be brought in another
    jurisdiction for the same relief. (The request was refused.)

[11]

Following an eight-day trial in January 2020,
    Wiseau Films claim was dismissed and judgment granted in favour of Room Full
    of Spoons on the counterclaim. The judgment was thorough and comprehensive.

[12]

Room Full of Spoons was awarded $200,000 in
    punitive damages (in large part for litigation misconduct), $550,000 USD in
    damages arising from the improper
ex parte

injunction,
    $25,488.36 USD in pre-judgment interest, and $481,521.80 CDN in costs.

[13]

Thereafter, Wiseau Films request to vary the
    judgment was dismissed with costs to Room Full of Spoons in the amount of
    $20,000 CDN. In his reasons, the trial judge refused to allow evidence from
    witnesses that testified at trial and that could and should have been adduced
    at trial. He also noted that,

Nothing presented on this motion suggests that
    my Reasons for Judgment were based on misleading evidence or that there is any
    other reason to reconsider my decision or reopen the trial. Rather, this motion
    raises the same concerns referred to by Koehnen J. prior to trial, that the
    plaintiffs seek to delay justice for the defendants at every turn.

Once again, Wiseau also complains of the
    Ontario justice system being unfair to him as an American citizen doing
    litigation in a foreign and unfamiliar jurisdiction. This claim, and other
    criticisms of the Ontario courts was made by Wiseau in advance of trial and
    also at the outset of the trial. However, Wiseau chose to bring this action in
    Ontario, and no doubt was quite content with our system of justice when he
    obtained his
ex parte
injunction. I am not aware of any way in which
    he has been treated differently than if he were a resident of Ontario or a
    citizen of Canada.

In my view, this motion has no merit and is
    yet another tactical attempt by Wiseau to delay and obstruct the release of
Room
    Full of Spoons
.

[14]

Thereafter, Mr. Wiseau failed to attend
    examinations in aid of execution, or court Orders compelling his attendance to
    provide information about his assets. Counsel for Wiseau Films advised that,

As for the location of the assets which could
    be used to satisfy any judgment  the bulk of my clients assets may be located
    outside Ontario, namely in the USA. As you are aware, should you wish to
    proceed with execution against any US-based assets, the proper procedure for
    your side would be to convince a US court of proper jurisdiction to endorse the
    judgments and orders issued by the Ontario courts.

[15]

Mr. Wiseau refused to say whether a sizeable
    real estate asset called the Pico Property, which was the only known address
    for Mr. Wiseau, was still his address and said it was laughable to ask. No
    information has been provided about any Wiseau Films assets or their
    whereabouts save for the bald assertion that Wiseau Films can satisfy any
    judgment award.

[16]

Wiseau Films has now brought a Notice of Appeal
    of the trial judgment. Wiseau Films counsel does not dispute that the Amended
    Amended Notice of Appeal, which grounds provide only that the court below erred
    in dismissing his various claims, is frivolous on its face. He suggested
    however that there was still time to further amend the Appeal.

THE POSITIONS OF THE PARTIES

[17]

Room Full of Spoons
claims costs of the judgment and security
    for costs of the trial and appeal on the grounds that there is no evidence that
    Wiseau Films or any of its assets is in the jurisdiction or that Wiseau Films
    would agree to pay any order of this court. Room Full of Spoons also submits
    that Wiseau Films improper behaviour in making numerous tactical attempts to
    obstruct and delay these proceedings, and its frivolous appeal, justify the
    relief sought.

[18]

Room Full of Spoons claims these actions are
    clear evidence that, having chosen to commence legal proceedings in Ontario,
    Wiseau Films does not intend to comply with an Ontario court order and that
    security for judgment and costs is therefore required.

[19]

Wiseau Films disputes the motion for security
    for judgment and/or costs as they claim justice does not demand that security
    be granted and the losing party should be entitled to avail itself of due
    process and any and all protections afforded to a judgment debtor.

[20]

Counsel for Wiseau Films conceded on this motion
    that the grounds of appeal set out in the Notice of Appeal are frivolous as
    they are entirely conclusory. He stated however, that they are not vexatious as
    there is no stated intention to refuse to pay any amounts deemed owing nor is
    there evidence Wiseau Films cannot satisfy a judgment and or costs award.

[21]

Lastly, Wiseau Films submits that to enable Room
    Full of Spoons to obtain information about its assets would constitute
    execution before final judgment. Such an order for security for judgment has
    never been granted in Ontario, which suggests it is not appropriate to do so
    absent exceptional circumstances which are not present in this case.

ANALYSIS

(1)

The First Issue: Security for Trial Judgment

[22]

Section 134(2) of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43 (CJA) provides that, On motion, a court to which a
    motion for leave to appeal is made or to which an appeal is taken may make any
    interim order that is considered just to prevent prejudice to a party pending
    the appeal.

[23]

Rule 1.05 of the
Rules of Civil Procedure
R.R.O. 1990, Reg. 194, provides that, When making an order under these rules
    the court may impose such terms and give such directions as are just.

[24]

Security for judgment is an extraordinary remedy
    that should only be granted in exceptional circumstances:
Vaillancourt v.
    Cater
,
2017 ABCA 282, at para. 20;
Aetna Financial Services
    Ltd. v. Feigelman
, [1985] 1 S.C.R. 2 at p. 10;
C.H. v. M.H.
, 1997
    ABCA 263, 53 Alta. L.R. (3d) 80 (
sub nom Hamza v. Hamza
), at para. 24.

[25]

Such an order requires an appellant to post
    security for judgment before continuing with the appeal. In this way, security
    for judgment functions much like a
Mareva

injunction and
    restrains the appellant from disposing of or dissipating assets in order that
    they be available to satisfy the judgment should it be upheld and if security
    for judgment is ordered and not posted, the appeal is dismissed:
Vaillancourt
,
    at. para. 20;
Vaccaro v. Twin Cities Power-Canada U.L.C.
, 2013 ABCA
    252, 97 Alta. L.R. (5th) 193, at para. 14.

[26]

Security for judgment has been granted in other
    jurisdictions in the following circumstances:

1.

Where there are no assets in the jurisdiction against which to
    enforce a judgment and the appeal has little merit (
Vaccaro

at
    para. 11;
Creative Salmon Company Ltd. v. Staniford
,
2007 BCCA
    285,

at paras. 12 and 14;
Richland Construction Inc. v. Manningwa
    Developments Inc.
, 1996 CanLII 3188 (B.C. C.A.) at paras. 12-13);

2.

To preserve assets that would otherwise be
    destroyed, disposed of, or dissipated prior to the resolution of the dispute:
Aetna
    Financial

at p. 12); and

3.

To encourage respect for the judicial process
    and avoid abuse of process (
C.H.
, at para. 23, citing
Mooney v.
    Orr

(1994), 100 BCLR (2d) 335 at p. 348 (B.C. S.C.);
Vaccaro

at paras. 12-14; and in respect of Mareva injunctions,
Aetna Financial

at pp. 13-14).

[27]

In
First Majestic Silver Corp. et al. v.
    Davila
,
2013 BCCA 312, the court invoked s. 10(2)(b) of the British
    Columbia
Court of Appeal Act
,
R.S.B.C. 1996, c. 77,

a
    provision with similar wording to that in s. 134 of the
CJA

which
    provides that In an appeal or other matter before the court, a justice may 
    (b) make an interim order to prevent prejudice to any person. The court
    ordered that appellants who resided out of the jurisdiction without assets in
    the jurisdiction post security for the trial judgment, failing which the
    respondents were granted leave to apply to have the appeal dismissed as
    abandoned. In so doing, the court set out the principles governing the exercise
    of discretion in ordering security for a trial judgment:

1.

The onus is on the applicant to show that it is in the interest of
    justice to order posting for security of a trial judgment and/or of trial costs.

2.

The applicant must show prejudice if the order
    is not made.

3.

In determining the interests of justice the
    chambers judge should consider the merits of the appeal and the effect of such
    an order on the ability of the appellant to continue the appeal. (See also
Vaillancourt
,
    at para. 24).

[28]

The interests of justice may include a
    consideration of the
ex juris

residence of an appellant and
    therefore the effective immunity of an appellant from enforcement of the
    judgment:
First Majestic Silver Corp. et al.
,

at para.
16;
Paz v. Hardouin
, 1995 CanLII 1808 (B.C. C.A.), at paras.
22. They may also include a consideration of the ability to enforce
    the judgment in the appellants
ex juris

jurisdiction
    and/or the absence of assets in the jurisdiction in which the judgment was
    rendered:
First Majestic Silver Corp. et al.
,

at para. 16;
Cadinha
    v. Chemar Corp. Inc.
, 1995 CanLII 1017 (B.C. C.A.), at paras. 5-7.

[29]

The interests of justice may not be relied upon
    by a successful plaintiff where the effect of requiring the posting of security
    for a trial judgment would be to preclude a party from pursuing the appeal:
Kedia
    v. Shandro Dixon Edgson
,
2007 BCCA 316, 243 B.C.A.C. 80, at para.
    39, relying on
Chan v. Vancouver Trade Mart Ltd.
, 1997 CanLII 4108
    (B.C. C.A.), at para. 10.

[30]

However, in
Creative Salmon
,
Lowry
    J.A. held at para. 12 that:

[A]dverse financial circumstances will
    generally not defeat an application for security where an appeal is virtually
    without any merit. A successful plaintiff should not be required to respond to
    an unmeritorious appeal when there is no real prospect of recovery.

[31]

A finding that an appeal has no reasonable
    prospect of success may be a factor: see
Richland Construction Inc.
, at
    para. 8.

[32]

For the reasons set out below, I find that this
    is one of those rare and exceptional circumstances where an order for security
    for judgment is warranted.

[33]

First, Wiseau Films is out of the jurisdiction.
    Wiseau Films refused to advise if it has any assets in the jurisdiction and the
    only reasonable inference therefore is that there is no evidence that Wiseau
    Films have any assets in the jurisdiction. Moreover, Wiseau Films concedes
    there is no issue that paying security for judgment and or costs would prevent
    Wiseau Films from pursuing its appeal. As such, the interest of justice onus is
    met.

[34]

Second, there is evidence that Room Full of
    Spoons will suffer prejudice if the order is not granted:

1.

On several occasions, both the case management and trial judges have
    noted that there were numerous tactical attempt(s) by Wiseau to delay and
    obstruct the release of Room Full of Spoons. Those actions are set out at
    paragraph 10 above;

2.

Room Full of Spoons spent years producing their
    documentary film and it has now been over four years since the completion of
    the film during which there has been a cloud on title such that they have been
    prevented from airing the documentary;

3.

A significant judgment award may never be
    recovered if the order is not granted.

[35]

Although Wiseau decided to commence legal
    proceedings in Ontario (and is therefore required to abide by the rules of the
    Ontario courts), Wiseau Films has demonstrated no intention to pay an award
    ordered by this court. Mr. Wiseau said it was laughable to ask if the
    sizeable Pico Property, which was the only known address for Mr. Wiseau, was
    still his address and suggests that if his appeal is not successful, Room Full
    of Spoons should commence proceedings in the United States to recover the
    judgment. It is also telling that, although Wiseau Films did pay the costs
    ordered against him for bringing an improper
ex parte
order, he did so
    only after the court ordered that if he failed to pay the award, his action
    would be dismissed.

[36]

Third, it is agreed that as presently drafted,
    the Amended Amended Notice of Appeal is frivolous and does not articulate what
    errors were made in the comprehensive reasons provided by the trial judge.

[37]

I am therefore satisfied that although this is a
    remedy that should be invoked sparingly, the interests of justice weigh in
    favour of granting the order for security for judgment.

[38]

Accordingly, the appellants are ordered to post
    security for the trial judgment within 90 days of this order, with liberty to
    apply for further directions on the form of the security, if necessary. If the
    appellants fail to comply with this order, Room Full of Spoons are granted
    leave to apply for an order dismissing the appeal as abandoned.

(2)

The Second Issue: Security for Costs

[39]

This court may order security for costs pursuant
    to Rule 56.01 of the
Rules of Civil Procedure

where,

(a)     the plaintiff or applicant is
    ordinarily resident outside Ontario;



(c)      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;

(d)     the plaintiff or applicant is a
    corporation or a nominal plaintiff or applicant, and there is good reason to
    believe that the plaintiff or applicant has insufficient assets in Ontario to
    pay the costs of the defendant or respondent; or

(e)     there is good reason to believe
    that the action or application is frivolous and vexatious and that the
    plaintiff or applicant has insufficient assets in Ontario to pay the costs of
    the defendant or respondent.

[40]

As noted above, the Wiseau Films parties are
    ordinarily resident outside of Ontario and there is good reason to believe
    Wiseau Films has insufficient assets in Ontario to satisfy the awards. Wiseau
    Films has refused to adduce evidence of any assets in Ontario or any evidence
    that, having elected to proceed in Ontario, it would pay any amounts ordered by
    Ontario courts unless and until ordered by a United States court. Moreover,
    there is evidence that the proceeding is vexatious given the circumstances
    surrounding the
ex parte
order, the conduct prior to trial set out
    above, and Wiseau Films concession that the appeal is frivolous.

[41]

Taken together, there are ample grounds to
    support an order for security for costs of the trial and appeal pursuant to
    section 56 of the
Rules of Civil Procedure
.

[42]

Given the above and extension of the delay for
    release of the Documentary, Wiseau Films should post funds into court:
Health
    Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine
,
    2019 ONCA 576 at paras. 8-11. This Court has the jurisdiction to do so pursuant
    to s. 134(2) of the
Courts of Justice Act
and Rule 1.05 of the
Rules
    of Civil Procedure
.

CONCLUSION

[43]

For the above reasons, the motion is granted.

[44]

In accordance with the agreement between the
    parties, costs are awarded to the moving parties Room Full of Spoons in the
    amount of $3,500.

J.A.
    Thorburn J.A.


