



COURT OF APPEAL FOR ONTARIO

CITATION: Richardson v. Arsenov, 2022 ONCA
    137

DATE: 20220211

DOCKET: M53086 & M53113 (C70048)

Tulloch J.A. (Motion Judge)

BETWEEN

Mary Richardson and Kristina
    Tracey

Applicants
    (Respondents/Moving Parties)

and

John Arsenov and Jan-Lee
    Hughes-Arsenov

Respondents
    (Appellants/Responding Parties)

Michael A. Jaeger, for the moving
    parties

Paul Riddles, appearing as
amicus
    curiae

Gerry Smits, for the responding parties

Heard: January 28, 2022 by video conference

REASONS
    FOR DECISION

[1]

The moving parties, Mary Richardson and Kristina
    Tracey, bring this motion seeking an extension of time to file a cross-appeal
    under r. 61.07 (a) and (b) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194. They also bring a second motion seeking security for costs under r.
    61.06(1) on the grounds that the responding parties appeal is frivolous and
    vexatious, and the responding parties do not have sufficient assets in Ontario
    to pay the costs of the appeal. They finally seek costs of the motion on a
    substantial indemnity basis plus HST.

[2]

The moving parties and the appellant John
    Arsenov are siblings. Their father, Rudy, is elderly and incapable of managing
    his affairs. The moving parties allege that the Arsenov appellants engaged in
    a pattern of serious emotional and financial abuse of Rudy before placing him
    in a nursing home. By order dated September 14, 2021, John was removed as
    Rudys power of attorney for property and personal care.

[3]

The primary order under appeal by the appellants
    is the October 25, 2021 judgment of Skarica J. in which the moving parties were
    successful in obtaining a judgment under r. 49.09 against the appellants. The
    responding parties have since appealed Skarica J.s decision.

Analysis

(1)

Extension of time

[4]

The first motion is for an extension of time to
    serve and file a notice of cross-appeal. The moving parties also seek an order
    abridging the time for service and filing.

[5]

The moving parties state their notice of appeal
    was not filed within the appropriate period because the moving parties did not
    know that, in the event the responding parties appeal is granted in whole or
    in part, if the moving parties wished to obtain relief other than what is
    specified in the order appealed from, they needed to also file a notice of
    appeal. The moving parties argued that they always intended to raise arguments
    regarding alternate relief at the appeal hearing, namely that even if the
    appeal were to be granted, the appellants should still be liable for partial
    summary judgment in the amount of $127,498.98. This is due to key admissions
    made by the responding parties as to the amount owing to Rudy. The moving
    parties further submit that the responding parties then-lawyer confirmed and
    provided documentation confirming that the above stated balance of $127,498.98
    was due and payable to Rudy.

[6]

While the moving parties delayed in filing their
    notice of cross-appeal, I am satisfied that they had every intention of arguing
    that the responding parties should still be liable for partial summary judgment
    in the amount of $127,498.98. I note that the length of the delay is not
    substantial in all the circumstances, as the subject order was dated October
    25, 2021. With respect to the issue of prejudice, I am satisfied that the
    responding parties will not suffer any prejudice if the extension of time is
    granted. Lastly, the moving parties have raised
bona fide
issues that
    were before the court when the order under appeal was made, and I agree with
    the moving parties that there is merit to this application.

[7]

I would therefore grant the motion for an
    extension of time and grant an order abridging the time for service and filing.

(2)

Security for Costs

[8]

The second motion seeks an order for security
    for costs. A court may make an order for security for costs pursuant to r.
    61.06(1) where certain circumstances are present:

61.06 (1) In an appeal where it appears that,

(a)  there is good reason to believe that
    the appeal is frivolous and vexatious and that the appellant has insufficient
    assets in Ontario to pay the costs of the appeal;

(b)  an order for security for costs could
    be made against the appellant under rule 56.01; or

(c)  for other good reason, security for
    costs should be ordered,

a judge of the appellate court, on motion by
    the respondent, may make such order for security for costs of the proceeding
    and of the appeal as is just.

[9]

In addition to the three factors enumerated in
    s. 61.06(1), a court must also consider whether it would be just to order
    security, having regard to the circumstances and the interests of justice:
Yaiguaje
    v. Chevron Corporation
, 2017 ONCA 827, 138 O.R. (3d) 1, at para.
    22.

[10]

The moving parties argue that an order for
    security for costs is justified under ss. 61.06(1)(a) and (c). I am satisfied
    that such an order should be made. I agree with the moving parties that there
    is good reason to believe the appeal is frivolous and vexatious. Having
    reviewed the responding parties amended notice of appeal and motion materials,
    in my view there is good reason to believe the appeal has little prospect of
    success. The responding parties argue they were not permitted to participate
    meaningfully in the motion, contrary to equity and fairness and that in the
    absence of such an opportunity, the case was not adjudicated on its merits.
    They also take issue with the findings of the motion judge that a valid
    settlement offer was tendered and accepted. They also appeal the costs awarded.

[11]

In my view, each of these grounds has little
    prospect of success. The responding parties were effectively the architects of
    their own demise: it is by their own actions in cycling through counsel and in
    failing to respond in a prompt fashion to the proceedings that the October 25,
    2021 order was made with minimal participation by their counsel. The responding
    parties materials and arguments give me good reason to believe that there is
    little chance of success on the issue of the impugned settlement offer, as well
    as with respect to the costs award, which is owed significant deference.

[12]

As to the vexatious nature of the appeal, I am
    mindful of the numerous changes to counsel and delays that have been suffered
    by the moving parties over the past two years. Counsel for the responding
    parties suggested that a nominal amount of the costs had been paid but no
    evidence of such payment was provided to the court. Indeed, I find that, as
    stated by the moving parties, the responding parties have failed to fulfill the
    terms of previous court orders issued.

[13]

As to the responding parties ability to satisfy
    potential costs of the appeal, the responding parties are currently subject to
    a power of sale proceeding against their residence, which is also their primary
    asset. I was advised by counsel at the hearing that the responding parties were
    on the precipice of losing their home. I note also a lack of evidence provided
    as to the responding parties financial state of affairs and any ability to
    satisfy costs of the appeal. While the responding parties claim they have funds
    available from John Arsenovs limousine business, they have not established
    that these funds constitute sufficient assets for the costs of the appeal. I am
    prepared to infer on the basis of counsels submissions, the appellants
    conduct, and the evidence before me, that there is good reason to believe the
    responding parties have insufficient assets in Ontario to pay the costs of the
    appeal.

[14]

I am also satisfied that it is in the interests
    of justice to order security. The moving parties have not delayed in bringing
    this motion, and the amount of the security sought is not prohibitive. While I
    am conscious of the responding parties current unfortunate situation regarding
    the power of sale proceedings and counsels submissions that the responding
    parties not be denied the opportunity to pursue their appeal, in my view they
    have not established impecuniosity or any other legitimate access to justice
    concerns:
Zeitoun v. Economical Insurance Group
(2008), 91 O.R. (3d)
    131 (Div. Ct.), at paras. 45-46, affd 2009 ONCA 415, 96 O.R. (3d) 639.

[15]

Given my finding that security for costs is
    justified under s. 61.06(1)(a), I need not consider s. 61.06(1)(c). I am
    mindful that resort to this latter section should be used sparingly:
Combined
    Air Mechanical Services Inc. v. Flesch
, 2010 ONCA 633, 268
    O.A.C. 172, at para. 8.

Disposition

[16]

The motion for security for costs is granted in
    the amount of $18,000, payable no later than February 28, 2022, failing which
    the moving parties may move to have the matter struck by the Registrar. The
    motion for an extension of time is also granted, and I make an order abridging
    the time for service and filing.

[17]

Costs are awarded to the moving parties in the
    amount of $5,000 all-inclusive, payable by March 11, 2022.

M.
    Tulloch J.A.


