



COURT OF APPEAL FOR ONTARIO

CITATION: FoodInvest Limited v. Royal Bank
    of Canada, 2019 ONCA 728

DATE: 20190919

DOCKET: M50320 (C66522)

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

BETWEEN

FoodInvest
    Limited

Plaintiff (Appellant/Moving Party)

and

Royal Bank of Canada

Defendant (Respondent/Responding Party)

Glenroy Bastien, for the moving party

Catherine Francis, for the responding
    party

Heard: September 9, 2019

REASONS FOR DECISION

[1]

The corporate appellant brings two motions,
    identified as M50320 and M50386. The courts records and the appellants
    materials are difficult to follow, but we conclude that, in substance, the
    appellant asks this court to: (1)  review the March 28, 2019 order of Tulloch
    J.A. which, among other things, granted the respondent Bank security for costs;
    (2) review the May 9, 2019 order of Benotto J.A. dismissing the appellants
    motion for a further extension of time in which to perfect its appeal; and (3)
    set aside the Registrars order of May 23, 2019 dismissing this appeal for
    delay.

[2]

For the following reasons, we would set aside
    the order for security for costs and related order as to costs of Tulloch J.A.,
    the order of Benotto J.A., and the Registrars dismissal of the appeal, and
    grant the appellant a final extension of time to perfect the appeal.

[3]

We provide some brief background before turning
    to the orders at issue. In the underlying action, the appellant alleged, among
    other things, that the Bank was negligent because it failed to notify the
    appellant that it had been advised by the Polish bank to which it had wired
    funds, at the appellants request, that the Polish bank suspected fraud in
    relation to the wire transfers.

[4]

On December 27, 2018, Morgan J. granted summary
    judgment dismissing the appellants action against the Bank. He concluded that
    the Bank did not owe the appellant a duty of care to advise of the Polish
    banks suspicions about illegality being carried out by the counterparties.
    Further, he found that if the Bank owed the appellant a duty of care in respect
    of the information it received from the Polish bank, in the absence of expert
    evidence from the appellant as to the standard of care, the appellant could not
    prove negligence.

Order of Tulloch J.A.

[5]

In bringing its motion for security for costs,
    the Bank relied primarily on r. 61.06(1)(a) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194. That provision permits a judge of this court to, on
    motion, make such order for security for costs of the proceeding and of the
    appeal as is just where it appears that (1) there is good reason to believe
    that the appeal is frivolous and vexatious;
and
(2)
    that the appellant has insufficient assets in Ontario to pay the costs of the
    appeal.

[6]

In his endorsement, Tulloch J.A. indicated that
    he was ordering security for costs because he was satisfied that the appellant
    did not have sufficient funds in Ontario to pursue the appeal. But he did not
    find that there was good reason to believe that the appeal was frivolous and
    vexatious.

[7]

The appellant, which was not represented by
    counsel, did not spell out its grounds of appeal in its Notice of Appeal. The
    appellant retained Mr. Bastien to attend on this motion, which was of great
    assistance to the court. Mr. Bastien explains that the appellant argues that
    there is a genuine issue requiring a trial. The appellant says that Morgan J.
    erred in finding that a bank is not required to notify its customer when it is
    told by another bank that it suspects that the party with which the customer is
    doing business is engaging in a fraud and that expert evidence is not required
    in such circumstances. We reject the Banks argument that this is a frivolous
    and vexatious appeal. In our view, r. 61.06(1)(a) is not a basis for this court
    to award security for costs.

[8]

To the extent that the respondent Bank relies on
    rr. 61.06(1)(b) and (c) and r. 56.01(1)(d), the appellant is a corporation,
    and, based on the materials that the Bank filed before Tulloch J.A., we agree
    with him that there is good reason to believe that the appellant has
    insufficient assets in Ontario to pay the costs of the respondent. However, Tulloch
    J.A. did not consider the justness of the order sought in all the circumstances
    of the case, with the interests of justice at the forefront. Even where the
    other provisions of rr. 56 or 61 have been met, the failure to consider the
    justness of the order holistically, examining all the circumstances of the case
    and guided by the overarching interests of justice to determine whether it is
    just to make an order for security for costs constitutes an error in principle:
    see
Yaiguaje v. Chevron Corporation
, 2017 ONCA 827, 138 O.R. (3d) 1,
    at paras. 22, 25;
Pickard v. London Police Services Board
, 2010 ONCA
    643, 268 O.A.C. 153, at para. 17;
Ravenda Homes Ltd. v. 1372708
, 2017
    ONCA 556, at para. 4. Accordingly, it falls on this panel to consider the justness
    of the order for security for costs sought.

[9]

In all the circumstances, we consider that the
    justice of the case required the court to permit the appellant to perfect its
    appeal before considering if security for costs were warranted.

[10]

Tulloch J.A. ordered security for costs in the
    amount of $75,067.89, which was the sum of the costs order in the amount of
    $50,067.89 below plus estimated costs of the appeal of $25,000. While he made a
    very significant award for security for costs, he also granted the appellant an
    extension of time to perfect its appeal. Orders for security for costs are
    designed to be protective in nature:
Yaiguaje
, at para. 23. The
    respondent was not required to incur any expenses to respond to the appeal
    until after the appellant perfected its appeal. In other words, it is unclear
    that the respondent required protection at the time it brought its motion. The
    self-represented appellant had not filed any materials in response to the
    Banks motion for security for costs and, as indicated above, its Notice of
    Appeal did not specify its grounds of appeal. Having granted the self-represented
    appellant an extension, the interests of justice required that the respondents
    motion not be considered until the motion judge was able to consider such
    materials as the appellant might file and assess the merits of the appeal with
    the assistance of those materials.  This is particularly so given the
    significant amount of security for costs sought by the Bank and the seeming
    likelihood that such an order would effectively prevent the appellant from
    exercising its right of appeal.

[11]

Accordingly, we set aside the order of Tulloch
    J.A. for security for costs and his related costs award, without prejudice to
    the Bank renewing its motion for security for costs after the appellant has
    perfected its appeal. If the time permitted for the appellant to do so has
    expired and the appellant has not perfected its appeal, there will presumably
    be no need for the Bank to renew its motion.

The orders of Benotto J.A. and the Registrar

[12]

In denying the appellant a further extension of
    time to perfect its appeal beyond that ordered by Tulloch J.A., Benotto J.A.
    relied in part on the fact that the appellant had not complied with the order
    of Tulloch J.A. to pay security for costs. In our view, the appellants
    non-compliance with an order that we conclude must be set aside affected the
    outcome of the motion before Benotto J.A. and requires us to consider
de
    novo
the issue of whether a further extension of time should be granted.

[13]

The appellant served its Notice of Appeal on January
    28, 2019 and filed it on February 6, 2019, within the time frames required by rr.
    61.04(1)-(4). Rule 61.09(1) required it to perfect its appeal within at most 60
    days after filing its Notice of Appeal, depending on whether transcripts were
    required. Here, summary judgment was granted based on a written record, so
    transcripts are presumably not required. Accordingly, the delay in perfecting
    its appeal prior to Benotto J.A. denying the appellant a further extension of
    time was two months. Although the appellant offered little explanation for its
    delay in its materials, from the review of the record, we infer that the lack
    of counsel has been a significant cause of the delay. Mr. Bastien advised the
    court that he has a limited retainer in respect of these motions, but believes
    he will be retained on the appeal if these motions are granted.

[14]

We are not persuaded that any prejudice to the
    Bank has arisen from the appellants delay in perfecting its appeal. Further,
    having reviewed the reasons of Morgan J., and with the assistance of Mr.
    Bastien, we conclude that this is not a case where the appeal has so little
    merit that the court could reasonably deny the important right of appeal.

[15]

We conclude that the justice of the case
    requires a further, and final, extension of time to October 21, 2019 to perfect
    the appeal. Accordingly, we also set aside the order of Benotto J.A., including
    her order as to costs. Having set aside her order and granted a final
    extension, the Registrars order of May 23, 2019 is also set aside.

Costs

[16]

The appellant has filed deficient materials and
    sought indulgences from the court. In the circumstances, no costs are ordered
    on these motions.

Alexandra
    Hoy A.C.J.O.

P.
    Lauwers J.A.

M.
    Jamal J.A.


