



COURT OF APPEAL FOR ONTARIO

CITATION: Melrose Property Development Inc. v. Royal Bank of
    Canada, 2019 ONCA 164

DATE: 20190301

DOCKET: M50142 (C66435)

Lauwers J.A. (Motion
    Judge)

BETWEEN

Melrose Property
    Development Inc.

Appellant (Plaintiff)

Responding Party

and

Royal Bank of Canada,
    BDO Dunwoody Limited,

and Platinum Asset
    Services Inc.

Respondents
    (Defendants)

Moving Parties

J. Ross Macfarlane, for the moving parties

Marek Z. Tufman, for the responding party

Heard: February 26, 2019

REASONS FOR DECISION

[1]

The Respondents, the Defendants in the action, succeeded in a summary
    judgment motion before McEwen J. of the Superior Court of Justice, who
    dismissed the claim. They seek security for costs on the appeal launched by the
    responding party.

[2]

The claim arises out of the sale of certain coating equipment by the moving
    parties during a bankruptcy proceeding. The responding party asserted that it
    owned the disputed equipment, not the bankrupt, and claimed damages.

[3]

While the trial judge was unable to resolve the issue of possession of
    the disputed equipment on the evidence, he was able to determine its ownership,
    and on that basis granted summary judgment. He said:

Based on the evidentiary record before me, there is no credible
    and reliable evidence to support Melroses position that it owned the
    equipment. The only evidence in this regard of any significance is the bald
    affidavit evidence of Mr. Rosso, which is unsupported by the documentation, and
    undermined by the fact that he did not answer undertakings concerning
    ownership.

[4]

The notice of appeal sets out four grounds, all of which amount of
    challenges to the motion judges findings of credibility.

[5]

The basis of the motion for security of costs is, in particular, rr.
    61.06 (1) and 56.01(1)(d) and (e) of the
Rules of Civil Procedure
.
    Rule 61.06 gives this court authority to require a security for costs where an
    order can be made under r. 56.01. Rule 56.01(1)(d) provides that an order for
    security for costs may be made where 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. Further, the moving parties
    claim that the appeal is frivolous and vexatious under r. 56.01(1)(e).

[6]

Counsel for the moving parties cited
General Products Inc. v.
    Actiwin Company Limited
, 2015 ONSC 6923, where Lemon J. said at para.18:

The plaintiff corporation has a higher onus to demonstrate a
    sufficiency of assets by convincing evidence. This includes information and
    supporting documentation as to the current status of its assets and
    liabilities, particularly liabilities secured against those assets put forward
    as available to pay a judgment for costs.

[7]

Counsel points out that the affidavit of Mr. Rosso is thin and sparse.
    The financial statement attached lacks detail and, on its face, demonstrate a
    declining net position over several years.  The statement is dated January 31,
    2017. There is no evidence regarding 2018, and Mr. Rosso deposes only that no
    substantial changes have taken place with respect to such assets and
    liabilities during 2019. There is no detail at all about the corporations
    assets and where they are located.

[8]

As for the merits of the appeal, counsel for the moving parties point to
Szpakowsky v. Kramar
, 2012 ONCA 77, at para. 14 where this court said:

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.

See also
Schmidt v. Toronto-Dominion Bank
(1995),
    24 O.R. (3d) 1, at para. 5.

[9]

The appeal in this case is entirely factual.  Counsel for the responding
    party has put nothing before the court beyond the bald assertions of his client
    to show that there is any basis for the finding that the motion judge made a
    palpable and overriding error.

[10]

Counsel
    for the appellant seeks an order for costs in the amount of $54,000 comprised
    of $35,000 awarded by the judgment under appeal, and a projected $19,000 figure
    for the appeal before this court.

[11]

Given
    the manifest lack of merit in the appeal, I order the responding party to post
    security for costs in the amount of $54,000, $35,000 relating to the judgment
    under appeal and $19,000 relating to the appeal itself.  The costs are to be
    posted by March 29, 2019. Costs of this motion are fixed in the amount of
    $2,500 all-inclusive payable by the responding party to the moving parties
    forthwith.

P. Lauwers J.A.


