2021 NUCJ 42, 2021 NUCJ 42

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Caine v. D1, D2, D3, D4, and D5 2021 NUCJ 42 Date: 20211029 Docket: 08-15-133-CVC Registry: Iqaluit Plaintiff/Defendant Mark Anthony Caine on Counterclaim : -and- Defendant(s)/Plaintiff D1, D2, D3, D4, and D5 on Counterclaim: __________________________________________________________________ Before: Madam Justice Charlesworth Counsel (Plaintiff): J. Bogle Counsel (Defendant): A.

Regel Location Heard: Iqaluit, Nunavut Date Heard: October 18, 2021 Matters: Decision on motions requesting security for costs, more information, an order setting aside a noting of default, and appointment of a guardian ad litem REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

DISCLAIMER PAGE Anonymized Judgment Disclaimer : This judgment has been anonymized to comply with legislative requirements or at the discretion of the authoring Justice to protect vulnerable parties. Letters have been assigned at random. I. BACKGROUND [ 1 ] The plaintiff was charged in 2013 with committing criminal offences against five young people. The plaintiff was employed as a teacher at the time he was charged and was consequently terminated from his employment.

The Public Prosecution Service stayed the prosecution of the offences approximately four months after the plaintiff was charged meaning the plaintiff was not put on trial or convicted of the serious allegations that had been made against him. [ 2 ] In March 2015 the plaintiff filed a civil claim in the Nunavut Court of Justice against the five young people who are named in the pleadings as D1, D2, D3, D4 and D5.

Four of the defendants did not file a defence and those four defendants have been noted in default. [ 3 ] D2 filed a defence to the original claim as well as a counterclaim on August 17, 2020 alleging the plaintiff perpetrated the acts that formed the subject of the criminal charges. D2 seeks damages for these bad acts. The plaintiff, now also a defendant by counterclaim, did not file a defence to the counterclaim within the time prescribed by Rule 93(1) and was noted in default in accordance with Rules 160 and 173 .

The noting in default of the plaintiff prevents him from taking any action on the counterclaim without leave of the court. [ 4 ] The plaintiff and D2 brought competing motions relating to procedural aspects of their respective claims. The motions were argued before me on October 18, 2021 and raised the following four issues: 1. D2, in their capacity as defendant to the original claim, seeks an order granting security for costs in the amount of $100,000 against the plaintiff on the plaintiff’s action against D2 in accordance with Rule 635 of the Rules. 2.

D2 also brings an application seeking an application for more information from the plaintiff in accordance with Rule 226. 3. The plaintiff seeks to set aside the noting in default on the counterclaim. 4. The plaintiff also seeks the appointment of a guardian ad litem for D2.

II. ANALYSIS [5] I will deal with the issues in the order listed above. A. Security for Costs [6] An order for security for costs ensures that a defendant will be able to recuperate, from the plaintiff, legal costs spent insuccessfully defending a claim. In Nunavut a party successful on a motion or after trial is presumptively entitled to their costs ofprosecuting or defending the litigation. Such cost awards help guard against frivolous claims. Costs also provide an incentive to litigantsto resolve matters outside of formal court proceedings. Litigation is very expensive.

It becomes much more expensive for a losing partywho must pay the costs of the opponent’s legal expenses after trial. Security for Costs is governed by

Part 49 of Nunavut’s Rules ofCourt starting at Rule 630. [7] D2 rests the claim for security for costs on several factors that call into question the likelihood of the plaintiff satisfying a costsaward should one be ordered against the plaintiff after trial.

D2 says that the plaintiff has a history of not paying debts; did not complywith a previous costs award from last summer until this application was brought; has outstanding costs ordered in the Ontario Teachers’College (OTC) action; is not a resident of Nunavut; does not work in Nunavut; does not have assets in Nunavut; has not taken steps toadvance this action; and was found to have been unreasonable and uncooperative in the OTC regulatory matter (particularly thesentencing phase), which led to additional delay and expense being incurred by litigants adverse in interest to the plaintiff. [8] In response to this application, the plaintiff says that he fully paid the August 2020 costs award once he retained new counsel; thatan appeal of the OTC decision has been filed and as a result those costs are currently in abeyance; and he has a connection to Nunavutthrough his residency and common law partner.

The plaintiff also maintains he has a business in Nunavut. [9] Rule 633 of Nunavut’s Rules of Court states: 633.

(1) The Court, on the application of a defendant in a proceeding, may make such order for security for costs as it considers justwhere it appears that (

a) the plaintiff is ordinarily resident outside the Territories; (

b) the plaintiff has another proceeding for the same relief pending; (

c) the plaintiff has failed to pay costs as ordered in the same or another proceeding; (

d) the plaintiff brings the proceeding on behalf of a class or an association, or is a nominal plaintiff, and there is good reason to believethat the plaintiff has insufficient assets in the Territories to pay costs; (

e) there is good reason to believe that the proceeding is frivolous or vexatious and that the plaintiff has insufficient assets in theTerritories to pay costs; or (

f) a statute entitles the defendant to security for costs [10] In 2012 Johnson J. of this Court had the occasion to twice consider Rule 633 in the cases of Kucera v. Qulliq, 2012 NUCJ 14 and Hynes v. Quilliq, 2012 NUCJ 15 . In Hynes Johnson J. adopted his reasoning in Kucera. [11] In Kucera, the defendant applied for security for costs against the plaintiff in a wrongful dismissal suit as the plaintiff was nolonger a resident of Nunavut and had no assets in the Territory. Qulliq argued that Ms. Kucera’s extra-jurisdictional residency statusmeant Qulliq had satisfied Rule 633(1)(

a) and that an order for security for costs should issue. [12] Justice Johnson found that merely demonstrating that criteria listed in Rule 633 had been satisfied does not end the analysis of the

court as an order for security for costs is discretionary. Justice Johnson stated at para. 35: “a court must also be satisfied the order would be just. In this phase of the inquiry, the onus shifts to the respondent to demonstrate whyan order would not be just and requires a court to inquire into all factors that have a bearing on the ‘justice of the case’ including themerits of the claim … the financial circumstances of the plaintiff and the possible effect of an order for security preventing a bona fideclaim from proceeding.

Another factor is whether the plaintiff’s residence is in a reciprocating jurisdiction for purposes of enforcingjudgments.” (Emphasis Added) [13] Johnson J.’s finding is consistent with jurisprudence from other Canadian jurisdictions on security for costs. In I.J. v. J.A.M., 2013BCSC 270 the British Columbia Supreme Court found that when both the plaintiff and defendant are individuals, “the postingof security of costs should be exercised with restraint. The BC Court found that an order should not be made without good reason” (para.11; citing para. 14 of Beasse v.

Holness, 2006 BCSC 1265 ). [14] Regarding reciprocating jurisdictions, Johnson J. stated at para. 41, “Ontario is a reciprocating jurisdiction for the enforcement of Nunavut judgments. This is a significant factor for this Court to consider asnoted in Mortimer, McLennan and Pharand.

I adopt the following words of Vertes J. in McLennan at para 19: There are a line of cases from this jurisdiction that have held that the fact of non residence, and the absence (as here) of exigible assets inthe jurisdiction, are insufficient, in and of themselves, to warrant security for costs where the plaintiff resides in a reciprocatingjurisdiction: see, for example, Frank v. Commissioner of the Northwest Territories (NWT SC), [1985] N.W.T.R. 149(S.C.); and Mortimer v. Inuvialuit Regional Corporation (NWT SC), [1987] N.W.T.R. 228 (S.C.).

These authoritieswere criticized by the Alberta Court of Appeal in Crothers v. Simpson Sears Ltd., 1988 ABCA 155 , [1988] 4 W.W.R. 673, onthe basis that reciprocal enforcement legislation still threw up significant barriers to recovery. In my view, however, the reasoning in thecases from this jurisdiction has only gained greater strength from the liberalization of reciprocal enforcement procedures promulgated bythe Supreme Court of Canada in Morguard Investments Ltd. v.

De Savoye, (SCC), [1990] 3 S.C.R. 1077.” [15] Every province or territory in Canada, except Quebec and New Brunswick, are designated as reciprocating jurisdictions withNunavut pursuant to the Reciprocal Enforcement of Judgments Act, (Nu) 1988, c R-1. This means that an order or judgement awarded bythe NCJ will be enforced by reciprocating jurisdictions as though the order came out of a court of that jurisdiction. [16] The plaintiff’s submissions on the motion were that he resides in Nunavut and has additional connections to the Territory through acommon law partner.

However, the plaintiff also submitted that he had not been physically present in Nunavut since 2015. I am notsatisfied that the plaintiff is a resident of Nunavut and find that he ordinarily resides in a reciprocating province in Canada. As such thisfinding does not adversely impact the respondent’s defence against the security for costs motion. [17] The Court goes on in paragraph 14 of I.J. v. J.A.M. to list “factors that have been considered in determining whether it isappropriate to make an order for security costs against an individual claimant”.

These factors are consistent with factors Johnson J.referred to as having a “bearing on the ‘justice of the case’” in Kucera. The I.J factors are:

a) The merits of the plaintiff’s claim

b) The inability of defendants to recover costs from a plaintiff such as where the plaintiff is bankrupt or insolvent

c) Whether the plaintiff has demonstrated an intention not to comply with previous orders relating to costs payable

d) If there is a risk that the plaintiff is not “findable”

e) Where there was evidence suggesting that a false description of residence or a false name had been given to the court or usedgenerally. [18] It is for a judge at trial to ultimately determine the strength of a plaintiff’s claim. At this interlocutory stage, where the merits ofthis claim must be examined to determine the suitability of a security for costs order, it is sufficient for me to examine the pleadings asfiled by the plaintiff to make a determination of the merits.

[ 19 ] The plaintiff has claimed that he lost employment on account of a tortious wrong perpetrated by the defendants. The plaintiff claims his income, career, and reputation have all been damaged because of the defendants’ wrongful actions. The pleadings reflect a meritorious claim. [ 20 ] Looking to the other factors bearing on the justice of the case I find that the plaintiff is not bankrupt or insolvent. The plaintiff is not accused of using an alias or other name. The plaintiff advised that he is employed and has retained counsel to assist him in prosecuting this claim.

There is no evidence the defendants would be unable to recover costs. Although the plaintiff was slow in paying back the (rather minimal) costs of last summer’s motion, once he retained counsel the full amount was paid. It is usual for costs to be deferred until after an appeal of a decision, especially a decision regarding costs, so the fact that the OTC cost order has not been paid is not relevant. I do note that the plaintiff seems to believe that those costs have been satisfied in some way, but his counsel has advised the court and the plaintiff otherwise.

The plaintiff has been findable for many years and that is unlikely to change, especially as he wishes this matter to proceed. [ 21 ] Considering all the above factors, I find that it would not be just to burden the plaintiff with a security for costs order as such an order is not required to protect the defendant’s ability to recover a potential cost award against the plaintiff. The imposition of such an order would serve only to economically disadvantage the plaintiff in his pursuit of this claim. There will be no order for security for costs.

I note that the plaintiff’s counsel has done much to move this claim along in the short time he has been retained. B. Application for more information [ 22 ] The Defendant also seeks better production of documents from the plaintiff in accordance with Rule 226(

b) which states: The Court may, on the application of a party seeking production from another party, order that the other party (

b) file a further or better statement as to documents, where the other party filed or served a statement as to documents that is incomplete or defective. [ 23 ] Civil litigants have a positive obligation to disclose every document that is not subject to privilege that relates to any matter in issue in an action that is or has been in the possession, control or power of a party to the action.

Part 15 of the Rules of Civil Procedure in Nunavut deals with the requirement to disclose documents. [ 24 ] Wide disclosure obligations are imparted on litigants to ensure parties are armed with all material information relating to a civil suit. Disclosure allows for the element of surprise to be removed from the trial process and facilitates settlement discussions as parties know what information or evidence is in the possession of the opposing side. [ 25 ] The obligations to disclose are both wide and speedy.

Rule 221 (1) requires parties to file a statement regarding the documents that are or have been in the party’s possession, control, or power and that relate to any matter in issue in the action within 30 days after the close of pleadings. [ 26 ] D2 takes issue with the sufficiency of the statement as filed by the plaintiff and requests the production of the further information. Below I list the information that has been requested and my finding in relation to the request: 1. Request: Records provided to the plaintiff by the prosecution in the criminal case.

The plaintiff says he hired a lawyer to represent him in the criminal prosecution and that lawyer should have the documents. Finding: These documents relate to a matter in issue in the action. Through former counsel the documents are in the control and power of the plaintiff. The records are to be produced forthwith.

2. Request: Complete records generated in relation to the investigations conducted by the Department of Education, in Nunavut. Finding: These documents relate to a matter in issue in the action. Any records provided to the plaintiff or his lawyers should beproduced. I note that many have been already. 3. Request: Disclosure relating to the Ontario Teachers’ College (OTC) Discipline Proceedings, including transcripts of the hearings. Finding: The OTC proceedings were a result of the allegations in Iqaluit. The OTC heard evidence from D2 and another student namedin the claim.

The Notice of Appeal to the Divisional Court filed by the plaintiff regarding the decision of the OTC is at Tab 17 of theplaintiff’s Statement as to Documents. This Notice references transcripts of the hearing before the OTC, which therefore must be, orhave been, in the plaintiff’s control. The documents relate to a matter in issue in the action. These records should be produced. 4. Request: Records relating to any counselling or treatment the plaintiff received for an addiction to drugs and sex.

Finding: The possible existence of such records appears to be based on a statement amounting to double hearsay and speculation at thepre-discovery stage of this action. The defendant can find out more during examinations for discovery and can renew the request ifrelevance is established. These records are not required to be produced at this time. 5. Tax returns 6. Employment/Canadian Pension Plan records 7. Government of Nunavut Employment file Findings: Requests 5 through 7 are records clearly within the plaintiff’s control and may be relevant to the issue of damages.

Therecords for the relevant years should be produced. 8. Request: Transcripts or copies of the interviews conducted by a private investigator working on the plaintiff’s behalf which wouldordinarily be privileged. D2 argues that because a conclusion of the investigator was referred to in a document that was produced by the plaintiff, the normalprivilege has been waived and the interviews that lead to the conclusion should be produced. Findings: Because the conclusion has been relied on by the plaintiff, the interviews should be produced. C.

Request to set aside default judgement on the counterclaim [27] The plaintiff was noted in default by D2 in accordance with Rules 160 and 173 for failing to file a defence to the counterclaimwithin the timeframe prescribed by Rule 93(1). The plaintiff moves to set that default aside. [28] The Rules of Court are silent in relation to the procedure or test governing the setting aside of a noting in default.

The Court enjoysthe inherent jurisdiction to control its own process and such jurisdiction is looked to arrive at the appropriate procedure. [29] There is a three-part test recognized by courts in Canada that must be met in order to set aside a noting in default or defaultjudgement. Generally, default proceedings will be set aside if the defaulting party is able to demonstrate:

a) a reasonable explanation forthe default:

b) that a reasonable defence exists; and

c) that the setting aside of the default was sought as soon as practicable in all of thecircumstances: Dodge v. Dodge, (ON SC), [2007] O.J. No. 3888, 44 R.F.L; also see Rule 12.6 of the Small ClaimsCourt Rules of Nunavut (meritorious defence, reasonable explanation for the default, and motion to set aside noting of default filed as

soon as practicable in all the circumstances). [ 30 ] This is a matter that obviously has been going on for many years. Because of various ongoing issues, including some agreements between counsel, D2 did not file a defence until almost 5 1/2 years after the claim was started. D2 was not noted in default by the plaintiff despite the protracted period taken to deliver a defence. [ 31 ] When the statement of defence was finally filed the plaintiff was unrepresented. The plaintiff should have known that the defence also contained a claim, and that the counterclaim had to be responded to quickly.

However, I accept that the plaintiff likely believed that he could take the time to retain new counsel to help him with that process as the time afforded to D2 to file a defence was much longer than the Rules provided. The plaintiff has now retained counsel. Having found earlier that the plaintiff’s claim illustrates sufficient merit I similarly find there are merits to the defence to the counterclaim. I find the absence of counsel and history of this file to be reasonable explanations for the delayed filing of the defence to the counterclaim.

I also find counsel’s request to address this motion before me on the security for costs motion was prompt in all of the circumstances. I set aside the Noting in Default on the Counterclaim and grant the plaintiff 30 days from today to file his defence. D. The appointment of a guardian ad litem [ 32 ] D2 is now an adult and no longer requires a litigation guardian. The request to have one appointed should have been made many years ago and is not appropriate now. It is denied. [ 33 ] Because there is mixed success in this motion, costs of it will be in the cause.

Dated at the City of Iqaluit this 29th day of October, 2021 ___________________ Justice S. Charlesworth Nunavut Court of Justice