Stepanik v Timmons, 2021 ABQB 287

Court of Queen’s Bench of Alberta Citation: Stepanik v Timmons, 2021 ABQB 287 Date: 20210414 Docket: FL13 01868 Registry: Ft. McMurray Between: Lisa Stepanik Applicant - and - Benjamin William Timmons Respondent _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice M.

David Gates _______________________________________________________ Introduction & Overview [ 1 ] Lisa Stepanik (“the Applicant”), seeks an order pursuant to Rule 4.22 and 4.23, requiring Benjamin Timmins (“the Respondent”), to post security for costs in the amount of $20,000, or such other amount to be determined by this Court, relative to the parties’ family law matters scheduled for a two-week trial commencing June 7, 2021.

The Respondent resists this application on the basis that he is not in a financial position to pay $20,000 in a lump sum in advance of this trial. [ 2 ] This application was heard by me on February 17, 2021. At the conclusion of the oral submissions of counsel, I reserved my decision. On April 6, 2021, I advised counsel for the parties of the disposition of this application, with written reasons to follow. These are my reasons for decision.

Facts [ 3 ] The Parties began cohabitation in approximately June 2016. While there is some dispute between the parties as to the date of separation, the Applicant maintains that it took place on August 20, 2019, the day before she sought a restraining order against the Respondent, as more fully described below. It also appears that the parties were separated between November 2018, and February 2019. [ 4 ] There is one child of the relationship, JT, born August 22, 2017, currently three years of age.

The Applicant has been the child’s primary care-giver since birth. [ 5 ] The Applicant obtained a restraining order against the Respondent on August 21, 2019. On the review date for the Restraining Order, September 18, 2019, the parties entered into a Mutual No Contact Order that expired one year later on September 18, 2020.

Following the separation and the granting of the Restraining Order, the Applicant took the child to stay with her family in Manitoba. [ 6 ] On August 28, 2019, the Respondent filed an application seeking shared parenting; an order preventing the Applicant from removing the child from Fort McMurray; an immediate return of the child to Fort McMurray from Manitoba; and an order for child support.

The Applicant responded to this application on September 3, 2019, seeking day-to-day parenting of JT, and supervised access by the Respondent. [ 7 ] On September 3, 2019, I granted the Respondent shared parenting on a week on/week off basis. It is not clear whether this order was ever implemented as Children and Family Services (“CFS”), applied for a supervision order on September 27, 2019.

This application was heard by Jacques PCJ on October 8, 2019, at which time he granted a one-month supervision order that required the Respondent to submit to a Risk Assessment for Violent Offenders and restricted the Respondent’s access to JT to supervised access until the Risk Assessment was completed. On November 7, 2019, the Respondent’s counsel was informed by counsel for the Director of CFS, that the Risk Assessment revealed that Mr.

Timmons did not pose a risk to the child during his parenting time, and confirmed that the existing Supervision Order would expire on November 12, 2019. [ 8 ] On September 30, 2019, the Applicant filed an application seeking primary parenting of the child and requiring supervised access by the Respondent. The Applicant also sought an order permitting her to relocate with the child to Manitoba. Further, she sought partner support, as well as a continuation of child support and continuing contribution to the child’s

section 7 extraordinary expenses. [ 9 ] Shortly after the conclusion of the CFS investigation, the Respondent was advised by the RCMP that he was under investigation for allegations made by the Applicant relating to assault and sexual assault. [ 10 ] The Respondent was charged with sexual assault, two counts of assault, uttering threats, breach of recognizance, and obstruction of justice, in an information sworn on November 12, 2019. He entered pleas of guilty to one count of assault, uttering threats and two breaches of recognizance on August 28, 2020.

He was sentenced to a six-month conditional sentence involving house arrest, followed by a period of 18 months probation during which he could have no direct contact with the Applicant. Pursuant to the terms of the conditional sentence order, the Respondent continued to be able to parent JT, the parties’ child, and to take him to daycare and to his extracurricular activities. [ 11 ] On February 3, 2020, prior to the resolution of the Respondent’s outstanding criminal charges, Inglis J. varied the September 3, 2019 parenting order.

The Respondent was granted daily access every other Saturday and Sunday until trial, as well as two-hour access visits every other Monday and Thursday evening and on Monday, Wednesday and Friday on the other week. This access arrangement was subsequently amended on consent in April 2020, as a result of the Respondent’s change of employment. The current access

schedule involves daytime access visits during the Respondent’s days-off and the days in which he works the night shift. At the present time, he has a total of 44 hours of access during a three-week cycle. Overnight visits are not permitted. [ 12 ] A Case Conference was heard by McCarthy J on October 8, 2019, at which point the Applicant’s mobility application, as well as the Respondent’s application for parenting, were set for a two-day trial on March 26 and 27, 2020.

However, due to Covid 19, the trial was then adjourned to June 18, 2020, and then adjourned sine die due to the health pandemic. [ 13 ] On November 14, 2019, the Respondent filed a further application seeking day-to-day parenting of the child. This application was heard by the Court on November 18, 2019, and adjourned sine die . [ 14 ] On March 9, 2020, at the request of the Respondent, and with the consent of the Applicant, the Court ordered a PN8 assessment. On August 30, 2020, Dr. Koreen Markfeld, Registered Psychologist, released her PN8 Bilateral Child Custody/Parenting Assessment. In her report, Dr.

Martfeld recommended that the Applicant be granted day-to-day parenting responsibility and the authority to make parenting decisions without the consent or agreement of the Respondent. She also recommended that the Applicant be permitted to relocate to Manitoba with JT. So long as the Applicant continued to reside in Fort McMurray, Dr. Martfeld recommended that the Respondent have parenting time every other weekend from Saturday at 10:00 a.m. until Sunday at 5:00 p.m., as well as from 12:00 p.m. to 8:00 p.m. every other Wednesday, plus one weekday evening for a period of three hours.

She also recommended that holiday time be divided equally between the parties. [ 15 ] If the Applicant were permitted by the Court to relocate to Manitoba, Dr. Martfeld recommended that the Respondent should be entitled to one week of parenting time every three months in Manitoba. Dr. Martfeld also recommended that the Respondent have graduated daily access with his son during the first few days of each week-long visit. She further recommended twice-weekly virtual contact between the Respondent and JT during the periods of separation. Finally, Dr.

Martfeld recommended that both the Applicant and the Respondent participate in individualized psychotherapy focused on trauma recovery [ 16 ] The Applicant’s claim for spousal support remains outstanding. No order, interim or otherwise, has ever been issued regarding the Applicant’s entitlement to spousal support.

[ 17 ] As previously indicated, the trial of this matter was originally scheduled for two days on March 26 and 27, 2020, but was adjourned on account of Covid-19. The duration of the trial was based on the number of witnesses each party intended to call. The trial has now been rescheduled for ten days commencing June 7, 2021. The increased trial time results from the Respondent’s recent disclosure of his intention to call 10-12 witnesses at trial.

Position of the Parties [ 18 ] The Applicant filed an affidavit sworn January 6, 2021, in support of her application for Security for Costs relating to the now 10-day trial. In her affidavit, the Applicant expresses great concern regarding the additional legal costs associated with a significantly longer trial than originally scheduled. Moreover, she raises concern that she will be unable to realize on any costs award that might be granted in her favour at the conclusion of the trial. [ 19 ] The Applicant points to the fact that the Respondent has failed to pay his share of the

section 7 expense relating to childcare since July 2020. In addition, she says that he initially agreed to pay her $1000 per month in partner support, but only made one payment in December 2019, and has failed to make any payments since that date. Further, the Applicant contends that the Respondent has failed to make full financial disclosure notwithstanding numerous requests for him to produce his information.

Notwithstanding an undertaking that the Respondent gave during questioning on March 10, 2020, to provide a sworn statement of Income, Assets, and Liability, he has failed to do so. [ 20 ] The Applicant deposes to her belief that the Respondent does not own real property in Alberta, and that the Respondent has never fully disclosed to her the extent of his assets, if any, in Alberta, or elsewhere.

Further, she deposes that she does not have the financial means to cover her own legal expenses for this now greatly expanded trial, as well as to secure legal assistance to enforce any cost award that may be awarded to her at the conclusion of the trial.

In short, the Applicant says that the anticipated cost of this trial will cause her lasting financial hardship and adversely impact her ability to financially provide for the care of the parties’ child. [ 21 ] Finally, the Applicant says that the Respondent’s acknowledgement that he does not possess assets in either Alberta or elsewhere, combined with the other circumstances described above, places her in a situation where she has little if any prospect of realizing on any cost award that may be made in her favour at the conclusion of the parties’ upcoming trial. [ 22 ] The Applicant maintains that the Respondent has the means to pay a security for costs award and, as such, there would be no prejudice to his ability to pursue this litigation if required to post such security.

Further, the Applicant says that the PN8 Assessment prepared by Dr. Martfield strongly supports her position relative to the mobility application. [ 23 ] In his affidavit sworn on January 22, 2021, the Respondent concedes that he has no real property in Alberta and that his Nova Scotia home is vacant and condemned. Further, he states that he is “swimming in debt” at least partly as a result of the legal costs to defend himself in the various family and criminal proceedings related to this matter.

Further, he acknowledges that the trial of this matter will be “ruinously expensive”. [ 24 ] The Respondent deposes that his 2020 income was $127,068.04, significantly less than he earned in 2019.

He states that his new employment involves a lower hourly rate, but allows him great flexibility in terms of his hours of work so as to increase the opportunities for him to have regular access to the parties’ child. [ 25 ] The Respondent takes the position that requiring him to post $20,000 in security for costs would be prejudicial in that it would require him to stop paying his lawyer and force him to represent himself at the upcoming trial. He maintains that his current budget, including his current debts, do not allow him any flexibility in terms of his available resources.

If forced to self-represent, the Respondent maintains that this would place him at a significant disadvantage at the upcoming trial. [ 26 ] The Respondent further deposes that he is aware that an acquaintance of the Applicant made a sworn statement to the RCMP during the course of the criminal investigation in which the individual alleges that the Applicant has stated that she would do anything to ruin the Respondent’s life so that she could relocate to Manitoba with the parties’ child.

As more fully described below, the Respondent also challenges some of the key conclusions and recommendations set forth in the PN8 report. [ 27 ] The Respondent filed a further affidavit sworn on January 12, 2021, in which he deposes that he is not currently in a financial position to pay $20,000 in a lump sum to the Applicant by way of security for costs. In his affidavit, he indicates that he currently has $116,233.50 in unsecured debt, together with a mortgage with an outstanding balance of $43,000 relative to a residence in Nova Scotia. He goes on to state that he is currently paying $1,612 per month in

section 3 child support, as well as $867 per month as his proportionate share of

section 7 extraordinary expenses, specifically child care expenses. His proportionate share of child care costs was reduced to $500 per month as of September, 2020. The Law [ 28 ] Rule 4.22 of the Alberta Rules of Court , Alta Reg 124/2010 (“ Alberta Rules of Court ”), provides that a court may order a party to provide security for payment of costs if the court considers it “just and reasonable” in the circumstances. The Rule specifies as follows: 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 judgement against assets in Alberta;

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

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

d) whether an action 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. 4.23

(1) An order to provide security for payment of a costs award must, unless the Court otherwise orders,

a) specify the nature of the security to be provided, which may include payment into Court,

b) require a party to whom the order is directed to provide the security no later than two months after the date of the order or any other date specified in the order,

c) stay some or all applications and other proceedings in the action until the security is provided, and

d) state that if the security is not provided in accordance with the order, as the case requires, (

i) all or part of an action is dismissed without further order, or (ii) a claim or defence is struck out. ...

(4) As circumstances require, the Court may (

a) increase or reduce the security required to be provided, and (

b) vary the nature of the security to be provided. [ 29 ] The proper

interpretation and application of Rule 4.22 must take into consideration the Foundational Rules contained in

Part 1 of the Alberta Rules of Court , specifically, Rule 1.2 : 1.2(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way.

(2) In particular, these rules are intended to be used (

a) to identify the real issue in dispute, (

b) to facilitate the quickest means of resolving a claim at the least expense, (

c) to encourage the parties to resolve the claim themselves, by agreement, with or without assistance, as early in the process as practicable, (

d) to oblige the parties to communicate honestly, openly and in a timely way, and (

e) to provide an effective, efficient and credible system of remedies and sanctions to enforce these rules and orders and judgements.

(3) To achieve the purpose and intention of these rules the parties must, jointly and individually, during an action, (

a) identify or make an application to identify the real issues in dispute and facilitate the quickest means of resolving the claim at the least expense, (

b) periodically evaluate dispute resolution process alternatives to a full trial, with or without assistance from the Court, (

c) refrain from filing applications or taking proceedings that do not further the purpose and intention of these rules, and (

d) when using public funded Court resources, use them effectively. Analysis [ 30 ] In Kaushal v Kaushal , 2020 ABCA 340 , Antonio JA, sitting as a single judge of the Court of Appeal, discussed Rule 4.22 in the following terms (at para 7-8): Other considerations which inform the test were succinctly summarized in Parker v Parker , 2019 ABCA 114 , at para 4 : A security for costs order is discretionary and balances the reasonable expectations of the parties with their rights in order to arrive at a just and reasonable outcome: Haymour v The Owners Condominium Plan No 802-2845 , 2016 ABCA 367 at para 8 .

The onus rests with the applicant to establish that the factors in rule 4.22 are met: Aski Construction Ltd v Markos , 2017 ABCA 341 at para 8 . A failure to pay costs awarded in previous trial court processes, along with a demonstrated inability to pay costs if an appeal is unsuccessful, will be sufficient to grant a security for costs order in most cases: DataNet Information Systems Inc v Belzil , 2011 ABCA 40 (Chambers) at para 4 . “Access to justice does not wait to access to civil processes without fear of costs consequences”: ibid .

Also, concerns regarding a party’s ability to pay costs coupled with modest prospects of an appeal’s success have been sufficient to

justify granting an application for security for costs: Aski Construction Ltd v Markos, 2017 ABCA 341 at para 8; Skolney v Nisha, 2018ABCA 78, at para 15. [31] This type of approach finds support in the decision of Wakeling J (as he then was) in Amex Electrical Ltd. v 726934 AlbertaLtd, 2014 ABQB 66. Following a comprehensive discussion of the history and underlying principles surrounding applications seekingsecurity for costs, Wakeling J noted that an applicant in this type of application “seeks relief to promote fair play values”: at para 42. Atparagraphs 40-42, he stated in part as follows: 40.

There are several reasons why a court may direct a party to furnish security for costs. There are equally compelling reasons whichmay cause a court to decline to do so. 41. A litigant whose lack of resources or their location immunize him from some of the factors which cause a person to behave as aresponsible litigant is a liability to the court system. 475878 Alberta Ltd. v Help-U-Sell Inc., 2001 ABQB 517 , 294 AR 151, 176(QB 2001) (“the use of costs is to serve the… aim of encouraging the phenomenon of legal proceedings which became the tool of therecreational litigant, or worse, the litigation terrorist”) & L.

Abrams & K. McGuiness, Canadian Civil Procedure Law 993 (2d ed.2010)... 42. An applicant seeks relief to promote fair play values. A litigant who has no resources to pay a costs award granted against her doesnot have the attributes the law can justifiably insist a party who initiates its procedures display. Keary Developments Ltd v TarmacConstruction Ltd., [1955] 3 All ER 534 (CA 1994). Poker players would not welcome to a high-stakes game a person who, at the outset,asks the others to lend him the money he needs to participate. They would not accept the risk that the borrower would be unable to repaythe lenders.

Why should they fund a venture which, if successful, costs them money and, if unsuccessful, cost them money? Crothers v Simpson Sears Ltd., 1988 ABCA 155 , 51 DLR (4th) 529, 543 (Alta CA 1998)... [32] Similarly, the Court of Appeal in Parker v Parker, 2019 ABCA 114, determined that an application for security for costsinvolves “balance[ing] expectations of the parties with their rights in order to arrive at a just and reasonable outcome”: at para 4. [33] Counsel have referred me to the decision of Yamauchi J in Toronto Dominion Bank v Suitel Canada Executive Suites Corp,2011 ABQB 519.

However, I have found this decision to be of very little assistance in this instance given that it was primarily concernedwith whether one of the named defendants was normally resident in Canada, and the shifting evidentiary burden of proof that may arisein such circumstances. [34] Counsel for the Respondent has also referred me to a series of Ontario decisions, one citing a decision from the UnitedKingdom Chancery Division, that seem to suggest that applications for security for costs in family law litigation involves specialconsiderations in light of the court’s primary focus on the best interests of the child.

The Respondent relies on three Ontario decisions,Bragg v Bruyere, 2007 ONCJ 515; Hodgins v Buddhu, 2013 ONCJ 137; and Marcocchio v Marcocchio, 1981 CarswellOnt 12. [35] In Bragg, a father sought an order for security for costs in circumstances in which the Respondent Mother had not only failedto pay court-ordered child support, but had also failed on two occasions to pay costs awarded to him. Prior to trial, the Father soughtsecurity for costs in the amount of $7,500 or, alternatively, an order striking out the Respondent’s answer and claim.

Justice McKay ofthe Ontario Court of Justice ultimately directed the Respondent to post $2,750 by way of security for costs, failing which her answer andclaim would be struck and the matter proceed to an uncontested trial. However, he noted, at para 5: Courts are justifiably cautious in ordering security for costs in family litigation where the best interests of the children are paramount.The court does not wish to see the merits of the case determined by a party’s inability to post security for costs.

However, in appropriatecircumstances, the court may make such an order. [36] O’Connell J of the Ontario Court of Justice addressed this same issue in Hodgins, where the Applicant Mother sought anorder for security for costs against the Respondent Father prior to trial. In that instance, the Respondent Father had not complied withprior orders requiring the provision of financial disclosure.

In dismissing the application for security for costs, the Court held (at para19): In cases involving custody and access, where the best interests of the child are the paramount consideration, it has been held by a numberof courts that security for costs should only be granted in exceptional circumstances.

As Justice Peter B Hambly states in Schumilas v Porter-Schumilas, , 76 RFL (6th), 2009 CarswellOnt 6166 (Ont SCJ) at paragraph 30 of that decision, while it is truethat a party’s position in a custody and access case may be unreasonable and lacking merit, “it can never be a waste of time or a nuisancefor a court to concern itself with the custody of a young child.” [37] Continuing at paras 21, 25, and 27, the Court went on to state: 21. First, Mr. Buddhu is not pursuing this litigation.

The purpose of an order for security for costs is to control and curtail people fromcommencing litigation and pursuing another party in the court system in a frivolous and wasteful manner. As Justice Katarynych aptlystates in McGraw v Samra, supra, an order for security for costs is “a control on a blithe pursuit of another person in the courts withoutattention to the merits of the pursuit and the legal costs likely to be incurred by the respondent to defend the case.” [paragraph 24]... 25. Further, it is in Jonathan’s best interests that the issue of access be determined on its merits. In my view, Mr.

Buddhu’s position withrespect to access is not unreasonable, nor a waste of time or a nuisance. If security for costs were ordered in the amount of $7500, then itis very unlikely that the court would have the opportunity to hear from Mr. Buddhu to make a proper determination of what access orderis in Jonathan’s best interests. The case law is clear that an order for security for costs in cases involving custody and access should bemade cautiously and in exceptional cases. 27... However, an order for security for costs is not the appropriate remedy in the circumstances of this case.

It is the trial judge’s role todetermine what inferences should be drawn from Mr. Buddhu’s failure to provide financial disclosure. I further leave it to the trial judge

to determine whether Mr. Buddhu should be entitled to participate in a hearing of the child support issue at trial if he has not complied with the cost order that was made against him or filed a response to the motion to change. [ 38 ] Finally, in Marcocchio , Master Cork of the Ontario High Court of Justice considered a situation where the Respondent Mother sought an order for the posting of security for costs against the Applicant Father who resided outside of Ontario in the State of Illinois.

While the decision turns on then Ontario Rule 373 dealing with plaintiffs who resided outside of Ontario, it contains some important discussion regarding this type of application in the context of a family law proceeding. [ 39 ] Referring to the decision of Pennycuick J in the Chancery Division in Re B (Infants) , [1965] 2 All ER 651, at p 652, the Court in Marcocchio adopted the following passage: Quite apart from that objection to the present motion, which is one of jurisdiction, it would, I think, be extremely unusual to order security for costs in an infant case against the party who was one of the parents of the infant.

The general principle on which the court acts in infant cases is, I think, that either parent of the infant is entitled to put before the court his or her view on the point of what is for the welfare of the infants, and only in the most exceptional circumstances would the court prevent a parent from putting his views before the court by means of an order for security for costs.

Counsel has mentioned certain special circumstances in this case, but it seems to me that, even assuming that I have jurisdiction to make an order at all – and I do not think I have got jurisdiction to make an order – still, in the exercise of my discretion I ought not to make the order. I must therefore dismiss the motion. [ 40 ] In Marcocchio , the Court went on to deny the request for security for costs stating, at para 20: It is apparent to me that on review of this paragraph, that the primary point in England, that of the welfare of the child, is identical to the real point at issue in this jurisdiction.

I must therefore respectfully agree with that decision that only in the most exceptional circumstances should I prevent a parent from putting his views before the Court (in this jurisdiction) by means of an order for security for costs.… I believe the law is clear that the welfare of the child or children in issue should be paramount to all other considerations.

Security of costs in favour of the wife, I think, should be well subservient to the interests of the child. [ 41 ] In Schumilas , one of the decisions referred to in Hodgins , I note that the judge made an order that required the Applicant Father to post $10,000 as security for costs if he wished to pursue his claim for joint custody.

However, the judge determined that the Applicant Father had a strong case for expanded access and, as such, no security for costs would be required to be posted to maintain that claim only. [ 42 ] I accept the general proposition advanced in these Ontario decisions that family law litigation requires a somewhat more nuanced approach to an application for security for costs than might otherwise be the case in a typical civil dispute.

Family law litigation typically involves continuing relationships between parents, at least as long as the children remain children of the marriage, and, more important, on-going relationships between parents and children. I also accept the notion that courts dealing with legal matters pertaining to children generally require the input of both parents in addressing any issue that triggers a “best interests” determination.

If, hypothetically, an advance costs award was to have the effect of silencing a parent in a particular proceeding that engaged the “best interests” doctrine, it seems reasonable to predict that the silenced parent would likely seek future opportunities to pursue the dispute in other fora. Potentially prolonging the dispute – and the litigation – would obviously not be in the best interests of the child or children and, indeed, the parties. [ 43 ] As the Ontario cases suggest, security for costs awards should be approached with some caution when dealing with family law litigation involving children.

While I agree with O’Connell J. in Hodgins that hearing from both parents “is not unreasonable, nor a waste of time or a nuisance”, I do not believe that a parent thereby acquires a license to adduce whatever evidence that parent believes may be somehow relevant to the proceeding. Awarding security for costs in appropriate circumstances is one of many tools available to family law litigants and to courts to try and avoid unduly lengthy and cost-prohibitive proceedings. As Rule 1.2 directs, parties have a shared responsibility to effectively use publicly-funded court resources.

Accordingly, while I share the view that courts should approach the awarding of security for costs in family law matters involving children with caution, I would respectfully disagree with the suggestion that this tool should be reserved for exceptional cases only.

Is it likely the Applicant will be able to enforce an order or judgement against assets in Alberta? [ 44 ] On the evidence before me, including the Respondent’s candid statements regarding his current state of indebtedness, it seems highly unlikely that the Applicant will be able to enforce an order or judgement against assets held by the Respondent in Alberta. The Respondent does not suggest otherwise.

Is the Respondent able to pay a costs award? [ 45 ] The Applicant urges the Court to consider the Respondent’s history in terms of the provision of financial disclosure in assessing his ability to pay a costs award and, indeed, the unlikelihood that he will volunteer to pay costs after trial. According to the Applicant, the Respondent continues to provide deficient materials relating to his financial disclosure materials. In particular, the Applicant points to missing bank account numbers, as well as missing account balances, combined with failures to respond to requests to provide updated information.

The Applicant also refers to the fact that the Respondent did report funds in two different bank accounts with East Coast Credit Union, but that the last bank statement provided is dated July 2019. [ 46 ] I am satisfied that there is considerable merit to the Applicant’s position in this regard. Indeed, the Respondent does not challenge the contention that he will be unable to pay a costs award.

Indeed, he goes so far as to say that he is not only not in a position to take on more debt, but that he would have to discharge is counsel and continue the litigation as a self-represented litigant if required to post security for costs.

What are the merits of the action? [ 47 ] The Applicant relies on the decision of Michalyshyn J in PM & C Specialist Contractors Inc v Horton CBI Limited , 2017 ABQB 400 , in relation to this factor. The decision contains a valuable

summary of the various Alberta decisions that have considered Rule 4.22 , including Attila Dogan Construction & Installation Co v AMEC Americas Ltd , 2011 ABQB 175 ; Autoweld Systems Limited v CRC-Evans Pipeline International Inc , 2011 ABQB 265 ; Arhum & Huzaifa Enterprises Ltd v 123-1993 Alberta Ltd , 2013 ABQB 333 ; 125-1165 Alberta Ltd v Wells Fargo Equipment Co , 2013 ABQB 533 ; and Parkland Industries Ltd v 897728 Alberta Ltd , 2015 ABQB 10 .

While I note that most, if not all, of these decisions involved applications for security for costs initiated by defendants against plaintiffs, I am of the view that the articulated principles are nonetheless relevant to the within situation. Rule 4.22 refers to a “party” and, as such, draws no distinction between whether an applicant seeking security for costs is a plaintiff or a defendant. [ 48 ] In my view, the decision of Master Hanebury in Parkland Industries, provides a succinct

summary of the element of Rule 4.22 that requires the court to consider the merits of the case. At para. 35-36, Master Hanebury held: The rule requires the Court to examine the action as a whole, both claim and defence: Arhum & Huzaifa Enterprises Ltd v 123-1993 Alberta Ltd , 2013 ABQB 333 , at para 25 . This is, as is often the case, difficult to assess at an early stage in the action, and in this case, also on the evidence filed: 590863 Alberta Ltd v Deloitte Touche Inc , 2012 ABQB 98 , at para 21 .

The greater the likelihood of success for the plaintiff, insofar as that can be reasonably assessed, the more the court should take into account the unfairness of an order that would stop a meritorious claim from proceeding: 125-1165 Alberta Ltd v Wells Fargo Equipment Co , 2013 ABQB 533 , at para 43 . [ 49 ] In PM & C Specialist Contractors Inc , Michalyshyn J noted, at para 24: I do not doubt that Attila Dogan can be read consistently with the cases mentioned above.

It can be in the sense that a conclusion as to a reasonably meritorious defence can rarely be made without some broader consideration of the merits of the claim – if the likelihood the plaintiff will receive judgment is high, it can hardly be said the defendant has a reasonably meritorious defence; if the plaintiff’s claim is weak, it may take relatively little to raise a reasonably meritorious defence. In any event it is hard to conceive of having little or no regard for the strength, or the merits, of both parties’ positions.

And the extent of that regard may depend on the stage of the litigation and on the availability of relevant and material evidence. [ 50 ] In this instance, the Applicant says that the prospects for success on her mobility application are high, given Dr. Martfeld’s recommendation that she be permitted to relocate to Manitoba, as well as her long-standing role as JT’s primary parent. As such, she relies on Dr. Martfeld’s conclusion that there would be “limited benefit and substantive potential risk in preventing Ms.

Stepanik from moving to Manitoba...”. [ 51 ] The Respondent, on the other hand, deposes in his affidavit sworn January 22, 2021, that he disagrees with Dr. Martfeld’s conclusion that the Applicant should be allowed to move to Manitoba with the parties’ child. He suggests that there are some “serious flaws” in the report, namely that Dr. Martfeld over emphasized certain benefits flowing to the child if permitted to relocate to Manitoba, while underemphasizing the benefits flowing to the child from his continued exposure to the Respondent and his extended family in Alberta. Further, the Respondent suggests that Dr.

Martfeld did not have access to the entire child welfare file or the RCMP file related to this matter. He maintains that the Trial Judge will have the benefit of access to all of this additional material and that this will reveal “a concerted effort on the part of the Applicant to systematically exclude me from JT’s life.” [ 52 ] In my view, Dr. Martfeld’s report and recommendations will be important evidence at the upcoming trial. Her detailed report reveals an exhaustive review of the background to this matter, as well as extensive exposure to, and interactions with, both parents.

While it will, of course, be for the trial judge to determine the weight to be placed on this evidence, the Respondent has not persuaded me that there are serious flaws in the report in terms of the parenting expert’s emphasis on certain matters over other matters. [ 53 ] I accept the Respondent’s suggestion that information not available to Dr. Martfield, specifically the full child welfare file and the police file relating to the November 2019 criminal allegations, could potentially reveal information that is favourable to his position.

However, the Respondent does not provide any details or specifics in his assertions in this regard. As such, I am left with little more than the expression of a hope or a desire that this additional information, assuming that it is even available to the trial judge, may support the Respondent’s contention that the Applicant has systematically sought to exclude him from his son’s life. [ 54 ] I am satisfied that it is possible at this stage of the proceedings to assess the relative merit of both the Applicant’s and the Respondent’s positions on the mobility application now scheduled for trial in June 2021.

A great deal of evidence is already before the Court in the form of the various affidavits filed by both of the parties since their separation in mid-2019. As noted above, the important evidence to be provided at trial by Dr. Martfeld is already available through her PN8 assessment report. While additional new evidence will doubtless be forthcoming at trial, this is not a situation, as described by Master Hanebury in Parkland Industries , where it is difficult to assess the merits of the case at an early stage in the action.

As such, I accept the Applicant’s contention that her prospects for success are high in this instance. At the same time, I am also satisfied that the Respondent’s prospected for success are quite low. Would granting security for payment of a costs unduly prejudice the Respondent’s ability to continue the action? [ 55 ] As regards the question of whether an advance costs award will prejudice the Respondent in his defence of this action, I note that he has adduced little evidence on this point beyond his mere assertions to this effect.

Nowhere in his materials does the Respondent fully disclose his current assets or negate the possibility of borrowing the necessary funds to satisfy this requirement. While he claims that he is not in a position to take on additional debt and that he is currently “swimming in debt”, he offers no particulars or details to support these conclusions. Similarly, he claims that he will have to discharge his counsel if required to post security for costs, yet offers no evidence to support this contention.

[ 56 ] Likewise, he has made no offer to try and reduce the time requirements for trial so as to reduce both the Applicant’s financial exposure and his own. Indeed, when invited by the Court to consider reducing the number of witnesses required to testify at trial on his behalf by having potential witnesses file affidavit evidence, the Respondent responded that only two of his proposed ten witnesses could provide their evidence in this fashion.

In short, the Respondent displayed a lack of flexibility in terms of attempting to find a way to resolve this issue. [ 57 ] In PM & C Specialist Contractors Inc , the Court referred to the decision in Stacey v Foy , 2014 ABCA 420 , in which Berger JA was prepared to draw an adverse inference against a security for costs respondent as a result of “a failure… to adduce meaningful evidence of his financial status and of the corporate entities”.

In PM & C Specialist Contractors Inc , the Court was also prepared to draw a similar adverse interest on the basis that a security for costs respondent “cannot rely on its own alleged impecuniosity to suggest that it will be unduly prejudiced, or that it would be unfair, if security for costs is ordered”: at para 52. [ 58 ] Côté JA also considered this issue in Calmont Leasing Ltd v 32262 BC Ltd , 2002 ABCA 290 , at para 5-6 regarding the now repealed equivalent rule: … It does not follow that the lack of income or assets of [the defendant] means that if security is ordered that will prevent the appeal from being prosecuted… The gap in this logic is this.

A number of the reported cases say that it is not sufficient for the appellant (or in another case plaintiff) is say that it has no income or assets. It must also go on to depose that it has no way of raising any money or other property which could be put up as security. [ 59 ] In all of the circumstances, I am not satisfied that the Respondent’s ability to continue this action would be unduly prejudiced if I were to make an award for security for costs in favour of the Applicant in this instance.

Are there any other matters the Court considers appropriate in these circumstances? [ 60 ] Other than the fact that this is family law litigation, as previously discussed, counsel have not identified any other factors that the Court should take into consideration in this situation. Conclusion [ 61 ] I am satisfied that the Applicant has established that this is an appropriate case for the Court to make an order awarding security for costs in accordance with Rule 4.22 and 4.23. I would set the amount to be paid into court or transferred to the trust account of the Applicant’s counsel at $20,000.

The Respondent has until April 30, 2021, to post this amount. [ 62 ] I now turn to consider the issue of what consequences should flow if the Respondent fails to post the security for costs as directed.

Consequences For Failing to Post the Required Security for Costs [ 63 ] Subsequent to the hearing of this application, the Court wrote to counsel on February 21, 2021, seeking additional submissions regarding the crafting of an appropriate remedy in the event the Court decided in the Applicant’s favour on the need for the Respondent to post security for costs. [ 64 ] In addition, the Court asked counsel to provide a list of witnesses for the forthcoming trial, together with a general overview of the type of evidence anticipated from each of these witnesses.

Further, counsel were invited to consider the extent to which the current time estimate for the trial could be reduced through a procedural order that required some or all prospective witnesses to file affidavits in advance of trial outlining their essential evidence. With such affidavits in hand, time limits could be imposed relative to each witness, both in relation to evidence-in-chief and cross-examination, with a view to attempting to reduce the total amount of trial time required for this matter. [ 65 ] Counsel for the Applicant subsequently advised that he anticipated calling a total of three witnesses.

The first witness, Lisa Stepanik, was estimated to require a full day to complete her trial evidence. Her counsel recommended that this evidence be provided viva voce and opposed the suggestion that her evidence be provided in whole or in part through an affidavit. The second witness, Sandra Stepanik, the Applicant’s Mother, was estimated to require a half day to complete her trial evidence. Counsel took the position that her evidence should be given viva voce by videoconference from Manitoba.

Finally, counsel for the Applicant indicated that a third potential witness would be the Applicant’s brother, Andrew Stepanik. Counsel suggested that Mr. Stepanik’s evidence could be adduced at least in part through an affidavit and pretrial cross-examination, if requested. Counsel estimated that Mr. Stepanik’s evidence if given viva voce would require approximately one hour. [ 66 ] In total, the Applicant estimates that she will require approximately two days of trial time to complete her evidence. I note that the Applicant’s witness list does not include Dr. Martfeld. In my view, Dr.

Martfeld is properly viewed as the Court’s witness and, as such, I do not factor her evidence into this exploration of the parties’ time requirements for trial. [ 67 ] Counsel for the Respondent also provided a list of the anticipated Defence witnesses. The proposed witnesses are as follows:

a) Benjamin Timmons – This evidence will require one full day. This evidence could not be provided by way of affidavit or be time- limited in terms of examination-in- chief or cross-examination;

b) Doug Timmins – This evidence from the Respondent’s brother requires one half day. This evidence would be best provided in person and without time limitations;

c) Brittany Timmins – This evidence from the Respondent’s adult stepdaughter requires one half day. Counsel suggests that this evidence could be given by way of affidavit with appropriate out-of-court cross-examination and with a transcript filed with the court;

d) Penny Lockyer – The evidence from the Respondent’s former counselor requires one half day. Counsel take the position that this evidence could not be provided by way of affidavit or be time limited in terms of either examination-in-chief or cross-examination;

e) Christian Mazerolle – This evidence requires two hours. Counsel take the position that this evidence could not be provided by way of affidavit or be time limited in terms of examination-in-chief or cross-examination. This witness is anticipated to give evidence regarding several conversations he had with the Applicant regarding her intention to ruin the Respondent’s life by having him arrested and put in jail;

f) Children’s Services – The Respondent seeks to elicit information from the CFS file from an as yet unidentified witness. He estimates that this evidence will require one half day to one full day to complete. Counsel take the position that this evidence could not easily be provided by way of affidavit or be time limited in either examination-in-chief or cross-examination;

g) RCMP – The Respondent has filed an application seeking disclosure of the Applicant’s RCMP file. This contested application is scheduled to be heard sometime during the week of April 19, 2021. The Respondent maintains that this material will contain relevant information regarding the Applicant’s attempts to have the Respondent imprisoned on spurious criminal charges. The Respondent estimates that this evidence from an as yet unidentified witness will require one half day. Counsel take the position that this evidence could not easily be provided by way of affidavit or be time limited in either examination-in-chief or cross-examination;

h) Dr. Edmund Ledi – The evidence from the Respondent’s current counselor is anticipated to take one half day. Counsel for the Respondent anticipates Dr. Ledi’s expert report being available by May 15, 2021. Counsel takes the view that this evidence could not be provided by way of affidavit or be time limited in terms of examination-in-chief or cross-examination;

i) Dr. Lloyd Flaro – Dr. Flaro was engaged by CFS in 2019, to determine if the Respondent posed a danger to JT. Dr. Flaro conducted in-depth interviews and testing relating to the Respondent. An expert report from Dr. Flaro is expected to be completed on or before May 15, 2021. This evidence is expected to take one half day and is not suited to presentation by way of affidavit or to be time limited in either examination–in-chief or cross-examination;

j) Dr. Martfield – The Respondent takes the position that this evidence will require one full day and cannot be provided by way of affidavit or be time limited in terms of cross-examination of this Court Expert by either of the parties. [ 68 ] The Respondent takes the position that Rules 4.23(

d) allows a court to either dismiss all or part of an action, or to strike out a claim or defence, in the event that a respondent party fails to comply with in order to post security for costs.

According to the Respondent, dismissing his action or striking out his claim or defence does not relieve the Applicant of the requirement to demonstrate that moving JT to Manitoba would be in the best interests of the child, as per section 18(1) of the Family Law Act , SA 2003, c 4 .5. [ 69 ] The Respondent concedes that it may well be appropriate to dismiss or strike-out his application for shared parenting and day- to-day parenting if he is unable to meet a security for costs payment requirement that may be directed by the Court.

However, the Respondent says that it would be contrary to s. 18(1) of the Family Law Act for the court to make an order that allowed the Applicant to relocate to Manitoba with JT without a full hearing to determine whether such a move would be in JT’s best interests. According to the Respondent, a full court hearing is required to make such a determination. Furthermore, the Respondent contends that his inability to pay a security for costs award has no relevance to his ability to parent, or to the “best interests” focus of the mobility application.

In short, the Respondent maintains that the Applicant should, effectively, be denied a remedy that she is otherwise entitled to receive on the basis that this is family law litigation in which he must be permitted to fully advance his challenge to the request to relocate JT to Manitoba. [ 70 ] In my view, the Applicant has accurately captured the essence of what has transpired in this instance. She maintains that the Respondent has fundamentally changed the process previously agreed upon by the parties as a result of a change in the Respondent’s trial strategy.

What was formerly a two-day trial is now proposed to last ten days; a change that lies entirely at the feet of the Respondent. In these circumstances, the Applicant seeks trial fairness through a mechanism that mitigates her risk of unrecoverable increased costs as a result of the Respondent’s claimed inability to pay costs.

In my view, such an approach reflects a balanced response focused on a leveling of the playing field fundamentally altered as a result of the actions of one party only. [ 71 ] Earlier in these reasons, referring to a series of Ontario decisions that considered applications for security for costs in the context of family law litigation involving children, I concluded that courts should approach such applications with some caution given the nature of the proceedings.

At the same time, I suggested that parents do not have a license to adduce whatever evidence they believe may be relevant to a proceeding without regard to the cost consequences to the other party or the time implications on over-burdened courts. [ 72 ] Family law litigants should, in my view, be required to follow the same general rules that apply to all litigants, including the requirement to post security for costs in appropriate circumstances.

Parents as litigants are not somehow immunized against following the same “fair play” requirements that lie at the heart of the Rules of Court that empower courts to make an order of this nature in proper circumstances. [ 73 ] In all of the circumstances, I am not prepared to accede to the Respondent’s suggestion that I direct the payment of an appropriate level of security for costs in this instance but then decline to direct any meaningful consequences in the event the Respondent fails to make the required payment.

As counsel for the Applicant suggests, this would amount to a meaningless or “toothless” remedy to the Applicant and, as such would fail to properly account for the foundational goal of promoting fair play. To adopt the approach advanced by the Respondent would, in my view, deny the Applicant of any form of remedy notwithstanding that she has satisfied the general requirements of Rule 4.22.

In my view, courts should look to creative remedies that balance the “best interests” foundation that lies at the heart of all family law litigation dealing with children with the need to ensure that family law litigants are held accountable for their litigation conduct.

[ 74 ] In his supplementary written brief, counsel for the Applicant proposes a series of alternative remedies that I would summarize as follows:

i) Require the Respondent to post security for costs in the amount of $20,000, or such other amount as may be deemed appropriate, within two months of the date of this decision. Failing payment, the Respondent’s application and response materials would be struck, and the Applicant granted leave to apply for an order in default with costs; ii) Require the respondent to post security for costs in the amount of $20,000, or such other amount as may be deemed appropriate, within two months of the date of this decision. Failing payment, the trial date would be vacated and the action stayed.

At the same time, an Interim Order would be granted allowing the Applicant to relocate to Manitoba with JT, as per the recommendations of Dr. Martfeld. The Respondent would be given an additional six months from the date of the Interim Order to post the required security. If the required security was posted within the six-month window, a new trial date would be set and the matter would proceed to trial.

If the required security was not posted within the six-month window, the Applicant would be granted leave to apply for a permanent Order permitting her to relocate to Manitoba with JT; iii) Permit the Respondent to reconsider the change in his trial strategy increasing the length of time required for trial from two days to ten days. As such, the Respondent would be required to post security for costs in the amount of $20,000, or such other amount as may be deemed appropriate, no later than 30 days before the scheduled start date of the trial of this matter (on or before May 7, 2021).

Failing payment, the Respondent would be required to submit an updated witness list not exceeding four witnesses, the same number of witnesses proposed to be called by the Applicant, and limiting the Respondent to three full days of trial time to present his case in full. [ 75 ] The Applicant’s third proposal is based on a decision Mesbur J of the Ontario Superior Court in Kaiser v Wein , 2014 ONSC 752 .

The facts in Kaiser are somewhat similar to those in the within matter, though I note that there was a finding of blameworthy conduct on the part of the father in that instance that involved his “persistent and unrepentant” failure to pay past cost awards or child support over a period of five years: at para 26. In that instance, the Respondent Father advised of his intention to call 23 witnesses at a custody trial. Faced with significantly increased legal costs, the Applicant Mother brought an application for security for costs.

The Court in Kaiser offered the Respondent Father the choice of either limiting his proposed list of witnesses and the trial time to match the Applicant Mother’s anticipated witness list and trial time, or pay security for costs as sought. In this regard, Justice Mesbur, relied on Rule 2(2) of the Family Law Rules, promulgated under the Courts of Justice Act , RSO 1990, c.

C-43 , which states: “the primary objective of these rules is to enable the court to deal with cases justly”. [ 76 ] I agree with the Applicant’s submission that the essence of this Ontario rule more or less conforms to Alberta foundational Rule 1.2(1), set out in full earlier in these reasons. I also agree with Mesbur J that this creative approach represents a novel but effective way of balancing the interests of the parties. [ 77 ] I would dispose of the Applicant’s application for security for costs as follows:

i) Ms. Stepanik’s application for Security for Costs is granted; ii) Mr. Timmons has until April 30, 2021, to deposit $20,000 with the Court as Security for Costs relative to the upcoming ten- day trial scheduled for this matter; iii) If Mr. Timmons fails to post the $20,000 by April 30, 2021, the trial of this matter will be reduced from ten days to five days. These five days will be allocated as follows:

a) One Day – Dr. Martfeld (the Court’s witness) – both parties will be allocated a maximum of 2.5 hours each for cross-examination of Dr. Martfeld;

b) Two Days – The Applicant will be permitted to call a total of three witnesses. The total time allotted for the examination-in-chief, cross-examination, and re-examination (if any) is two days;

c) Two Days - The Respondent will be permitted to call a total of three witnesses. The total time allotted for the examination-in-chief, cross-examination and re-examination (if any) is two days. iv) The Applicant and Respondent will be required to produce to the Court and counsel for the opposing party their final, revised witness list by May 14, 2021;

v) With leave of the Court, additional evidence may be adduced by either party at trial through the filing of expert reports or affidavits of no more than five pages in length. vi) If the Respondent call more witnesses, or their evidence-in-chief is longer than in his amended witness list, the trial judge will determine whether to limit the Respondent’s further participation in the trial, or require him to post security for costs at that time. Costs [ 78 ] The Applicant is entitled to her costs of this application. If the parties are unable to agree on the issue of costs, they may speak to the matter within 14 days of the release of these reasons. Heard on the 17 th day of February, 2021.

Dated at the City of Ft. McMurray, Alberta this 14 th day of April, 2021. M. David Gates J.C.Q.B.A. Appearances: J.M. Hackett for the Applicant M. Jones for the Respondent