Travaglione v. Wawanesa Mutual Insurance Company, 2010 ABQB 765

Court of Queen ’ s Bench of Alberta Citation: Travaglione v. Wawanesa Mutual Insurance Company, 2010 ABQB 765 Date: 20101203 Docket: 0803 17990 Registry: Edmonton Between: Bruno Travaglione Plaintiff - and - Wawanesa Mutual Insurance Company and James G. Burkinshaw Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] Mr. Travaglione appeals the Master’s orders requiring him to pay security for costs to each of the defendants. Pursuant to Rule 6.14, in effect at the time of the appeal hearing, an appeal from the Master is on the record. The record of the Master’s hearing includes the affidavits filed for that hearing by the defendants; although those affidavits set out only Mr. Travaglione’s residence address in Ontario, there was an oral representation by each of them to the Master that the address was actually a jail. [ 2 ] The appeal is allowed. [ 3 ] In the circumstances here, the standard of review of the Master’s decision is that of correctness since the appeal from the

Master’s decision is on a question of law. [ 4 ] The word “residence” in former R. 593(1)(

a) means “ordinary residence”. [ 5 ] The Master’s decision to grant security for costs was based on Mr. Travaglione residence outside Alberta.

Residence in jail is temporary, and does not constitute residence outside of Alberta: Denisov , Bouchard , Newman . [ 6 ] Procedurally, in the circumstances here, particularly the notices of motion and affidavits filed by the defendants before the Master, and the representation from lawyers representing the defendants that oral representations were made to the Master to the effect that the Ontario address was that of a jail, pursuant to the provisions of R. 6.14(4)(c), for the purposes of the appeal, the Court dispenses with a transcript of the hearing before the Master. [ 7 ] Mr.

Travaglione also asks for an order, pursuant to R. 6.39, to deliver him from the Ontario jail to the Courtroom in Alberta for the hearing of his appeal. [ 8 ] The second application is denied: the oral hearing with Mr. Travaglione present on the telephone demonstrated that presence by teleconference was perfectly adequate for this type of hearing where there is no presentation of evidence and no need to make credibility findings.. Cases and authority cited [ 9 ] By Mr. Burkinshaw: Crothers v. Simpson Sears Ltd. , (1988), 1988 ABCA 155 (CanLII) , 86 A.R. 268 (ABCA) ; Newman v.

Barlow (1983), 1983 CanLII 2372 (SK KB) , 27 Sask. R. 28 (Sask. Q.B.) . [ 10 ] By the Court: Stevenson v Canada 2008 TCC 76 , [2008] T.C.J. No. 43 ; Liu v Tangirala 2005 ABQB 246 , [2005] A.J. No. 348 ; Denisov v. Canada , [2010] T.C.J. No. 327 ; Bouchard v. Canada 2009 TCC 38 , [2009] T.C.J. No. 14 ; Spek and Lawson et al [1983] O.J. No. 323 (C.A.) . 1. Background

a) Factual [ 11 ] Mr. Travaglione has filed a statement of claim asserting that Wawanesa has improperly failed to honour his insurance coverage for residential property which suffered a break-in and that Mr. Burkinshaw has improperly failed to supervise the property. [ 12 ] Each of Wawanesa and Burkinshaw have defended the claim made against them. Each brought an application for security for costs. In each case, the defendant stated, in its Notice of Motion, that “the grounds upon which the within application is made are: 1. The Plaintiff, Bruno Travaglione, is not a resident of Alberta; and 2.

This Defendant has a good defence to the action on the merits”. The applications were duly served on Mr. Travaglione who was in jail in Ontario; Mr. Travaglione did not appear at the hearing before the Master. [ 13 ] Each of the affidavits filed in support of the defendants’ motion for security makes a statement about Mr. Travaglione address. A representative statement is found in Mr. Burkinshaw’s affidavit: I was served with the Statement of Claim on or about March 31, 2010 and was advised by the Defendant that his address for service was

in Ontario. Attached to and marked Exhibit “A” to this my Affidavit is a copy of the Plaintiff’s letter dated March 24, 2010. [ 14 ] Exhibit “A” includes the following paragraph: The Address for Service is: Bruce Trabaglione 2000 Beavercreek Drive P.O. Box 1240 Gravenhurst, Ontario, P1P 1W9 [ 15 ] All of the parties agree that, prior to the hearing before the Master, all parties understood that the above address is that of a federal custodial institution. [ 16 ] On July 21, 2010, the Master issued similar orders to the defendants. Mr.

Burkinshaw’s order, which is representative, stated, in part: Upon reviewing the affidavit of the Defendant Burkinshaw, filed . . . And upon hearing the submissions of counsel for the Defendant Burkinshaw, IT IS HEREBY ORDERED THAT: 1. The Plaintiff shall post security for costs in the sum of $23,000.00 with the Clerk of the Court of Queen’s Bench, on or before October 21, 2010. [ 17 ] No written reasons were issued on the decision to impose security. [ 18 ] This decision does not address the adequacy of the defence in the context of a request for security for costs. [ 19 ] Mr.

Trabaglione’s appeal hearing was heard in an Edmonton courtroom with the proceedings being recorded. Mr. Trabaglione was on the telephone from Gravenhurst and the lawyers for the defendants were present in person.

b) Procedural [ 20 ] When the defendants applied to the Master for security for costs, the Rules of Court contained the following provision: Security for Costs 593(1) Security for costs may be ordered: (

a) where the plaintiff resides out of Alberta;

(

b) where the plaintiff is ordinarily resident out of Alberta though he may be temporarily resident within Alberta; (

c) where the plaintiff has brought another action or proceeding for the same cause, which is pending in Alberta or in any other jurisdiction; (

d) where the plaintiff or any person through or under whom he claims has had judgment or order given against him in another action or proceeding for the same cause in Alberta or in any other jurisdiction with costs, and those costs have not been paid; (

e) where the plaintiff sues as an informer or seeks to recover any penalty given to an informer or person who sues for the penalty under a statute or law by which a penalty is given to any person who sues for it, either for his sole benefit, for the benefit of the Crown or partly for his benefit and partly for the benefit of the Crown, and the defendant swears that in his belief the plaintiff or informer is not possessed of property within the jurisdiction sufficient to answer the costs of the action if a judgment is rendered in favour of the defendant, and that he, the applicant, has a good defence to the action upon the merits, as he is advised and believes; (

f) where the action is brought by a nominal plaintiff; (

g) where upon the examination of the plaintiff it appears that there is good reason to believe that the action is frivolous and vexatious and that the plaintiff is not possessed of sufficient property to answer the costs of the actions; (

h) where an action is brought on behalf of a class and the plaintiff is not possessed of sufficient property within the jurisdiction to answer the costs of the action and it appears that the plaintiff is put forward or instigated to sue by others; (

i) where under any statute the defendant is entitled to security for costs.

(1.1) Notwithstanding subsection (1), the Court may order security for costs against any party where the Court, on its own motion or on the motion of any other party, finds that it is just and reasonable to do so in the circumstances.

(1.2) Where costs are ordered under subrule (1.1), Rules 594 and 595 apply with the necessary modifications. [ 21 ] The New Rules, which came into effect on November 1, 2010, state: Division 4 Security for Payment of Costs Award Considerations for security for costs order 4.22 The Court may order a party to provide security for payment of a costs award if the Court considers it just and reasonable to do so, taking into account all of the following: (

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta;

(

b) the ability of the respondent to the application to pay the costs award; (

c) the merits of the action in which the application is filed; (

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the action; (

e) any other matter the Court considers appropriate. [ 22 ] The Rules in effect at the time the application was made to the Master by the defendants for security stated that any appeal from the Master’s decision was to be by way of new hearing, or hearing de novo , whereas the Rules in effect at the time of the hearing of the appeal state that the hearing will be on the record. [ 23 ] In the absence of any reference to a transitional provision, the Court therefore takes the view that the appeal should be heard on the record. [ 24 ] Pursuant to Rule 6.14(4), the record consists of the application before the Master, the affidavits filed, the transcript, unless the Court dispenses with it, and the master’s order and any written reasons given for the decision. 2.

Dispensing with the transcript [ 25 ] In the circumstances here, I have considered it appropriate to dispense with the need for a record. [ 26 ] I acknowledge that, pursuant to the provisions of R. 593(1.1), it might have been possible for the Master to have imposed security for a reason other than the fact that Mr. Travaglione resided outside Alberta and that a transcript might have made that clear one way or the other. Nevertheless, given the way in which the Notices of Motion were worded and the fact that Mr.

Travaglione was not present at the hearing, I am of the view that it is unlikely that the Court would have proceeded on a basis other than the basis set out in the Notice of Motion.

Moreover, one of the lawyers who was present on the appeal was also present at the hearing before the Master and that lawyer did not suggest that the Master had proceeded on any basis other than that set out in the Notices of Motion. [ 27 ] Finally, I note that, at the time of the hearing before the Master, an appeal from that decision was by way of new hearing. [ 28 ] In the result, I am proceeding on the basis that the Master made orders for security for costs against Mr. Travaglione on the basis that, being in jail outside Alberta, Mr. Travaglione was not a resident of Alberta. 3.

Standard of review [ 29 ] The standard of review on the Master’s decision is, in the circumstances here, the standard of correctness. [ 30 ] The determination of whether Mr. Travaglione was, for the purposes of R. 593(1), a resident of Alberta is a question of mixed fact and law, but where the only facts before the Court were undisputed and where that Mr. Travaglione had a residence in Edmonton Alberta and was in a federal jail in Ontario, the remaining question - as to whether that made Mr. Travaglione a resident outside Alberta - is a question of law.

4. Concept of “residence outside Alberta” in the context of security for costs [ 31 ] Case law establishes that residence outside the jurisdiction is a common justification for imposing security for costs: Stevenson . Although the cases don’t always articulate the policy reasons why this is so, we can assume that it is because the litigant who lives outside the jurisdiction is more difficult to serve, more difficult to retain in the process and more difficult to execute upon, if necessary.

That is why, prima facie , a litigant is entitled to an order for security for costs against a litigant who resides outside the province. [ 32 ] Case law also establishes that, in the context of costs, the notion of residence outside the jurisdiction includes a notion of permanent, rather than transitory, residence outside the jurisdiction. In coming to this conclusion, I note that any other conclusion would potentially impose a very heavy litigation burden on any Albertan who was, for any number of reasons, temporarily outside the province.

The Charter implications of imposing security on non-residents was usefully reviewed by Lefsrud J. in Liu ; any wholesale attempt to impose security on residents would face Charter scrutiny. [ 33 ] The decision which Mr.

Burkinshaw cites, Newman , specifically addressed the issue of residence as a result of being a prisoner outside the province and concluded that security should not be awarded where the applicant’s only claim was that the respondent was in jail outside the province. [ 34 ] A representative analysis of the features which distinguish ordinary residence from deviatory residence is made by a tax court in Denisov : 29 The first question that needs to be answered is whether the appellant was a resident of Canada during the three taxation years at issue, namely the 2001, 2002 and 2003 taxation years.

It is important in this connection to look at some of the cases that have dealt with this issue, particularly the often-cited decision of the Supreme Court of Canada in Thomson v. Minister of National Revenue, 1946 CanLII 1 (SCC) , [1946] S.C.R. 209 , [1946] C.T.C 51 , in which Rand J. held as follows at pages 224 - 25 (S.C.C.), 63 - 64 (C.T.C.): The gradation of degrees of time, object, intention, continuity and other relevant circumstances, shows, I think, that in common parlance "residing" is not a term of invariable elements, all of which must be satisfied in each instance.

It is quite impossible to give it a precise and inclusive definition. It is highly flexible, and its many shades of meaning vary not only in the contexts of different matters, but also in different aspects of the same matter. In one case it is satisfied by certain elements, in another by others, some common, some new. The expression "ordinarily resident" carries a restricted signification, and although the first impression seems to be that of preponderance in time, the decisions on the English Act reject that view.

It is held to mean residence in the course of the customary mode of life of the person concerned, and it is contrasted with special or occasional or casual residence. The general mode of life is, therefore, relevant to a question of its application. For the purposes of income tax legislation, it must be assumed that every person has at all times a residence. It is not necessary to this that he should have a home or a particular place of abode or even a shelter. He may sleep in the open.

It is important only to ascertain the spatial bounds within which he spends his life or to which his ordered or customary living is related. Ordinary residence can best be appreciated by considering its antithesis, occasional or casual or deviatory residence. The latter would seem clearly to be not only temporary in time and exceptional in circumstance, but also accompanied by a sense of transitoriness and of return.

But in the different situations of so-called "permanent residence", "temporary residence", "ordinary residence", "principal residence" and the like, the adjectives do not affect the fact that there is in all cases residence; and that quality is chiefly a matter of the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living with its accessories in social relations, interests and conveniences at or in the place in question. It may be limited in time from the outset, or it may be indefinite, or so far as it is thought of, unlimited.

On the lower level, the expressions involving residence should be distinguished, as I think they are in ordinary speech, from the field of "stay" or "visit". [ 35 ] The application of the notion of ordinary residence to people in jail was considered in Bouchard where, for child benefit purposes, a father was held to be ordinarily resident with his daughter even though he was serving a term of imprisonment. [ 36 ] In the earlier case of Spek , the Ontario Court of Appeal specifically rejected the idea that the length of a sentence might make a difference to the notion of whether a prisoner was ordinarily resident in the jurisdiction where he was incarcerated.

They concluded that, whether they are serving a life sentence or not, prisoners are not in a position to make a choice about where they live; therefore,

prison is not their ordinary residence. [ 37 ] As Mr. Travaglione points out, Elections Canada also recognizes the difference between the location where a prisoner is being held while in custody and that prisoner’s ordinary residence. [ 38 ] In the result, with respect, the Master erred in law in concluding that Mr. Travaglione was resident outside Alberta. 5. Request to bring the applicant, a prisoner, to an Alberta courtroom [ 39 ] In the circumstances here, Mr.

Travaglione’s application for an order to bring him from his Ontario jail to an Edmonton courtroom for his appeal is denied. [ 40 ] As the hearing itself demonstrated, Mr. Travaglione was able to fully participate in the appeal even though he was only present by telephone. The circumstances which made his full participation possible include the fact that no new evidence could be presented and that no credibility findings were required. It may be that even when the last two features are anticipated at a hearing, an electronic presence might be sufficient; it is not necessary to decide that issue here. 6.

Costs [ 41 ] Mr. Travaglione was successful on this application and is therefore entitled to costs against the defendants. The Court sets those costs at $500.00 in respect of each of the respondent/defendants and orders that those costs will be paid or accounted for at the conclusion of the proceedings. Heard on the 2 nd day of December, 2010. Dated at the City of Edmonton, Alberta this 3 rd day of December, 2010. J.B. Veit J.C.Q.B.A. Appearances: Bruno Travaglione, on his own behalf Vaugh Cox, Chatwin LLP for Wawanesa Mutual Insurance Company

Mr. Kemper Handzic for Mr. Burkinshaw