10931926 Canada Inc. , O/A CANADIAN SMART HOME Plaintiff And: Melissa Hayes Defendant v. Docket:, 2021 NLSC 96

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : 10931926 Canada Inc. v. Melissa Hayes, 2021 NLSC 96 Date : June 29, 2021 Docket : 201901G7051 Between: 10931926 Canada Inc. , O/A CANADIAN SMART HOME Plaintiff And: Melissa Hayes Defendant -AND- Docket: 201901G7052 Between: Raymond Kalonga Plaintiff And: Melissa Hayes Defendant Before: Justice Sandra R. Chaytor Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 2, 2021

Date of Judgment: June 29, 2021

Summary: The Defendant applied for security for costs in two defamation actions. The applications were supported by affidavits of defencecounsel. The Defendant did not provide her own affidavit nor did she cross-examine the Plaintiffs on their affidavits filed in response.The Court determined that the Defendant had not established the applicability of any of the Rule 21.01 categories. Nor was the evidenceadduced by the Defendant sufficient to cause the Court to conclude it would otherwise be just to exercise its discretion and grant an orderfor security for costs.

Held: The applications were dismissed with costs to the Plaintiffs on a Column 3 basis. Appearances: Anna Wadden Appearing on behalf of the Applicant/Defendant in both actions Giles W. Ayers Appearing on behalf of the Respondents/ Plaintiffs in both actions Authorities Cited: CASES CONSIDERED Petten v. E.Y.E Marine Consultants (1995), (NL SC), 130 Nfld. & P.E.I.R. 205, 405A.P.R. 205 (Nfld. S.C. (T.D.)); Fields of Athenry Resort Corporation v. Grey, 2018 NLSC 215; Wall v. Horn Abbot Ltd., 1999 NSCA67; Crosbie-OSA Ltd. v. Bank of Montreal (1998), (NL SC), 163 Nfld. & P.E.I.R. 181, 503 A.P.R. 181 (Nfld.

S.C.(T.D.)); De Beers Consolidated Mines Ltd. v. Howe (Surveyor of Taxes), [1906] A.C. 455, [1904-07] All ER Rep Ext 1256; Grant v.Torstar Corp., 2009 SCC 61; Grant v. Cormier-Grant, (ON CA), [2001] 150 O.A.C. 305, 56 O.R. (3d) 215 (C.A.);Petten v. E.Y.E. Marine Consultants (1994), 120 Nfld. &. P.E.I.R. 313, (NL SC), 373 A.P.R. 313 (Nfld. S.C. (T.D.));U.F.C.W., Local 1252 v. Cashin (1988), (NL CA), 70 Nfld. & P.E.I.R. 139, 215 A.P.R. 139 (Nfld. C.A.); ColesFisheries Ltd. v. Sussman, 2006 NLTD 145 STATUTES CONSIDERED: Evidence Act, R.S.N.L. 1990, c.

E-16; Ontario Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched.A;

Canada Business Corporations Act R.S.C., 1985, c. C-44 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D TEXTS CONSIDERED: Allen M. Linden & Bruce Feldthusen, Canadian Tort Law, 10th ed. Toronto: LexisNexis, 2015, at page 802 REASONS FOR JUDGMENT Chaytor, J.: INTRODUCTION

[ 1 ] Melissa Hayes is the Defendant in two related defamation actions. The first is brought by 10931926 Canada Inc. o/a Canada Smart Home (“CSH”); the second by Raymond Kalonga. Ms. Hayes has applied for security for costs in both actions pursuant to Rule 21.01 of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D . [ 2 ] Each action was commenced by way of Statement of Claim issued on November 1, 2019. Although the actions have not been consolidated or ordered to be heard together, they are related in that they arise out of a common set of allegations against Ms. Hayes.

Both of the Statements of Claim allege that on September 6, 2019, Ms. Hayes published a post on her Instagram account, in part, as follows: Friends & family particularly in newfoundland [sic] please be aware of this scam artist. He recently scammed a mutual friend of mine who lives in Ottawa for $135,000. He also took out 2 vehicles under his information and credit… Ray drove these cars around acting like they were his. They caught him in the S63 which he had to return but unfortunately the GT was found in Halifax which [sic] was missing the engine & rims.

He currently has 42 charges that are available to view online and an active warrant in Toronto. He robs from hard working naïve people to afford his fake rich life. He recently started a business in newfoundland as well called @canadiansmarthome I would advise against doing any type of business with him or anyone close associated with him. This man has absolutely no remorse for the people he robs. He has no real money or credit so he scams hard working real business men. He runs and hides from province to province to avoid being caught.

Please Beware. [ 3 ] The Statements of Claim also allege that the publication included Mr. Kalonga’s name and photo, as well as a photo of his Instagram profile and a link to it. [ 4 ] In addition to the commonality of the allegations on which the actions are based, there is overlap in the evidence upon which the two applications for security for costs is founded. As such, pursuant to Rule 18.01, the Court ordered that the applications be heard at same time with evidence in one being evidence in the other. [ 5 ] In response to the applications, counsel for Mr. Kalonga and CSH raised evidentiary issues.

The applications were grounded in affidavits by one of Ms. Hayes’ counsel. No affidavit of Ms. Hayes was filed. The solicitor’s affidavits attached as exhibits the results of various searches of the internet, social media, the Registry of Deeds and Companies, the Provincial Court of Newfoundland and Labrador, the Judgment Enforcement Registry, and various news media sources. The Respondents objected to the admissibility of this evidence as being put before the Court by way of solicitor’s affidavits and on the basis of hearsay and failure to comply with sections 23 and 29 of the Evidence Act, R.S.N.L. 1990, c.

E-16 . [ 6 ] At the commencement of the hearing, the Court heard submissions on the evidentiary issues raised and gave an oral decision as to the admissibility of the impugned evidence.

References to specific aspects of that ruling are made in this decision. [ 7 ] The issue to be decided is whether security for costs should be ordered against CSH or Raymond Kalonga and if so, on what terms? [ 8 ] For the reasons that follow, both applications are dismissed with costs to the Respondents. analysis The Test for ordering Security for Costs [ 9 ] In determining whether to exercise its discretion in an application pursuant to Rule 21, the Court must balance one party’s right of access to the Court against the other party’s right to be protected against unnecessary or potentially unrecoverable costs. [ 10 ] Rule 21.01 codifies the common law jurisdiction of the Court to order security for costs when it is just to do so and sets out a number of circumstances that the Court may take into consideration in determining whether it would be just to grant the order. [ 11 ] With respect to both these applications, Ms.

Hayes contends that the circumstances set out in Rule 21.01 (

b) and (

d) apply: 21.01. The Court may order security for costs to be given in a proceeding whenever it deems it just, and without limiting the generality of the foregoing, it may order security to be given where … (

b) a plaintiff is ordinarily resident out of the jurisdiction, although the plaintiff is temporarily within the jurisdiction; … (

d) a plaintiff, or any person, through or under whom the plaintiff claims, has an order against the plaintiff for costs that have not

been paid; … [12] The factors set out in Rule 21.01 are not exhaustive. Furthermore, the Court has the discretion to order security for costswhenever it deems it just whether or not any one of the circumstances listed are established. However, if Ms. Hayes, can bring the casewithin one of the categories of Rule 21.01 then she will prima facie be entitled to an order for security for costs. In that event, Mr.Kalonga or CSH (as the case may be) will have the evidentiary burden to show why the justice of the case nevertheless requires thatsecurity not be posted (Petten v.

E.Y.E Marine Consultants (1995), (NL SC), 130 Nfld. & P.E.I.R. 205, 405 A.P.R.205 (Nfld. S.C. (T.D.) at para. 17). [13] Therefore the following questions must be addressed on each of these applications: (

a) Has Ms. Hayes established on a balance of probabilities that the case against Mr. Kalonga or CSH fits within the Rule21.01(

b) or (

d) categories? (

b) If so, has Mr. Kalonga or CSH (as the case may be) met the evidentiary burden of establishing why it would not be just toorder security be posted? (

c) If Ms. Hayes has not shown that the cases fit within one of the Rule 21.01 categories, is it nonetheless just for the Court toexercise its discretion to order security for costs in one or both of the actions? The Application for Security for Costs against Raymond Kalonga Rule 21.01(b): Ordinarily Residing Out of the Jurisdiction [14] Pursuant to Rule 21.01(b), the Court may order security of costs if a plaintiff is ordinarily residing out of the jurisdiction,although temporarily within the jurisdiction. [15] Ms. Hayes submits that Mr.

Kalonga did not state a residential address in the Statement of Claim initiating this action. She alsoadduced a copy of Mr. Kalonga’s Facebook page which lists Toronto, Ontario as his address. I give little weight to this however, asthere is no evidence before the Court as to when the Facebook page was last updated for address. [16] Mr. Kalonga filed an affidavit dated September 14, 2020 in which he attests that he is a resident of this province and that heresides with his fiancée and three children in Portugal Cove - St. Phillips.

This is consistent with the affidavit filed by StephanieRaymond in the other application before the Court in which she attests that Raymond Kalonga is her fiancé and that he resides with herand their children at the same address. [17] Ms. Hayes submits that Mr. Kalonga has not submitted any documentation to establish permanent residence in this provincesuch as a Medical Care Plan card or a driver’s licence. Ms. Hayes did not challenge the assertion of residency set out in the affidavitsthrough cross-examination of either of the Respondents. It was Ms.

Hayes’ burden to prove that this case fits within Rule 21.01(b). Iaccept the uncontroverted affidavit evidence of Mr. Kalonga and Ms. Raymond that Mr. Kalonga is a resident of this province. [18] I am not satisfied that the Applicant has proven on the balance of probabilities that Raymond Kalonga ordinarily is not aresident of this jurisdiction, although temporarily within the jurisdiction. As such, Hayes has not brought this application within thecircumstances of Rule 21.01(

b) so as to give rise to a prima facie entitlement to security for costs. Rule 21.01(d): The Small Claims Court Judgment [19] Ms. Hayes asserts that Raymond Kalonga has an outstanding judgment against him in this province which includes a costsaward. [20] In the solicitor’s affidavits filed in support of the applications, the solicitor attests to having obtained and reviewed a copy of afile from the Provincial Court of Newfoundland and Labrador, Small Claims Court Registry.

The solicitor further attests that on July 20,2020, she caused a search of the Judgment Enforcement Registry which disclosed an unpaid judgment in the approximate amount of$17,000 registered against Canadian Smart Home Network Inc., operating as Canada Smart Home. The representative of Canadian SmartHome Network Inc. is listed as Raymond Kalonga. These records are attached to the solicitor’s affidavits. [1] [21] The Statement of Claim in the small claims action was filed August 19, 2019. The plaintiff in that action was Centsible Limitedo/a Censtible Car & Truck Rentals.

The defendant was Canadian Smart Home Network Inc. o/a Canadian Smart Home. Its address isstated to be 681 Topsail Road, St. John’s. The Certificate of Status for the defendant company gives an Ontario incorporation numberand shows that it was incorporated under the laws of the Province of Ontario. Allegations in that Statement of Claim include: The Company Canadian Smart Home Inc. is involved in the business of selling home monitoring systems and appears to be a dealer forBell Aliant.

The Company and Raymond Kalonga have contracted to rent a number of vehicles from Censtible Limited to conductbusiness and have failed to pay for the vehicles in a timely manner as agreed. The Company has had several checks returned by ourbank… We are currently trying to get paid for invoices from May 2019 through August 2019 and are unsuccessful in our attempts tocharge the amount due, to a credit card provide by Mr. Kalonga. On Friday August 16 we demanded the return of our vehicles and onewas voluntarily returned and a second vehicle was repossessed from the defendants [sic] location at 681 Topsail Road St.

John’s onAugust 19, 2019. There are still several vehicles that have not been returned as demanded. As of August 19, 2019 the defendant owes atotal in excess of 17,000 and has been uncooperative when contacted and repeated attempts have gone unanswered. We have lostconfidence in this individual Raymond Kalonga and Canadian Smart Home. [22] No defence was filed to the small claims action and a default judgment was entered accordingly against the defendant company

for the amount of $17,177.15 which included a $100.00 court filing fee. I am satisfied that this fee may be considered court costs for thepurposes of Rule 21.01(d). The records from the Judgment Enforcement Registry indicate a judgment outstanding in the amount of thedefault judgment plus registration fees and interest. [23] I am further satisfied that Raymond Kalonga is associated with the company against whom this default judgment was obtained.The allegations in the Statement of Claim in that action refer to Raymond Kalonga having been the person who arranged the rental of thevehicles.

According to the Certificate of Service, the Statement of Claim was served on the corporate defendant by leaving a copy of itwith Raymond Kalonga at the company’s place of business. Furthermore, the Judgment Enforcement Registry lists Raymond Kalonga asthe representative of the judgment debtor company. I am not satisfied, however, for the reasons that follow that Ms.

Hayes has met theburden of establishing that this evidence is sufficient to invoke Rule 21.01(d). [24] Although the judgment from the Provincial Court includes reference in the Statement of Claim to Raymond Kalonga havingbeen the person who arranged the rental of the vehicles, he was not named as a defendant in the action and the judgment is not againsthim personally. It is only against the company. Although I am satisfied that Mr. Kalonga is associated with that company, it is aseparate legal entity. In addition, no evidence was adduced as to the nature of Mr.

Kalonga’s relationship to the judgment debtorcompany. In any event, even if Mr. Kalonga could be said to be the judgment debtor, the evidence put before the Court as to whether thejudgment remains outstanding was obtained by way of a search of the Judgment Enforcement Registry that the solicitor caused to be inconducted in July 2020, almost a year prior to the hearing of this application.

There was no evidence adduced as to the current status ofthat judgment and whether it remained outstanding. [25] Raymond Kalonga did not address the Provincial Court judgment in in his affidavit filed in response to this application. Theburden, however, remained with Ms. Hayes on this application to establish that Mr. Kalonga has an outstanding cost award against him.She has not met that burden, so as to bring this case within Rule 21.01(d). Is it nonetheless just to order security for costs? [26] Although I have found that there is no prima facie entitlement to security for costs in that Ms.

Hayes did not establish theoperation of one of the Rule 21.01 factors, I must consider whether in all of the circumstances it is nonetheless just to grant the orderagainst Mr. Kalonga. [27] Ms. Hayes’ submission on this basis is that Mr. Kalonga’s defamation case is weak, while her defence is strong, and that she isat risk of having to expend considerable funds to defend this weak case and may not be able to recover any cost award against Mr.Kalonga at the end of the day. [28] With respect to the risk of not being able to recover costs from Mr. Kalonga, Ms.

Hayes relies upon the solicitor’s affidavitwhich attests to various searches having been carried out to ascertain assets held by Raymond Kalonga in this jurisdiction. No assetswere found in his name. [29] With respect to the weakness of Mr. Kalonga’s defamation action, Ms. Hayes alleges that Raymond Kalonga’s name appearson the Ontario Consumer Beware List and that there are a list of charges against him under the Ontario Consumer Protection Act, 2002,S.O. 2002, c. 30, Sched. A. between August 2018 and July 2019. Ms.

Hayes also filed a number of decisions by the Ontario LabourRelations Board involving another company called Canadian Standard Home Services Inc. and a director of that company, John Kalonga.It is not contested that John Kalonga is the father of Raymond Kalonga nor does Raymond Kalonga contest that he too is a director ofCanadian Standard Home Services Inc. [30] Mr. Kalonga admits in his affidavit that there are a number of charges under the Consumer Protection Act in Ontario againstCanadian Standard Home Services Inc.

He also attests that: a number of charges arose from the conduct of the company’s independentcontractors; some of the charges have been resolved; the company is currently working to resolve the remaining charges through counselretained in Ontario; and neither the company nor any of its directors, including himself, have been convicted of any of these charges. [31] Ms.

Hayes also filed as exhibits to a supplemental affidavit of the solicitor, a number of media and online articles dating from2011, 2016 and 2017 which reference Raymond Kalonga being the subject of investigative journalism, and other court proceedings. Inthese articles, negative statements are made about Mr. Kalonga including reference to him having been convicted of criminal offences. Inthe preliminary ruling I allowed these articles to be adduced into evidence on the limited basis as proof that the statements were made ina public forum but not for the truth of the contents of the statements. Ms.

Hayes contends that these articles demonstrate that Mr.Kalonga has a poor reputation and had a poor reputation prior to the alleged Instagram posting in 2019 which is the subject matter ofRaymond Kalonga’s defamation action. Ms. Hayes’ submission goes to the strength of her defence as she contends evidence of this is apartial defence to a defamation action. It also goes to the weakness of Mr. Kalonga’s case. She contends the totality of this evidencedemonstrates that Mr. Kalonga’s claim against her is therefore weak, grossly exaggerated, frivolous and vexatious. [32] Although Ms.

Hayes’ submission in this regard is not based on the Rule 21.01(

f) factor[2], the case law addressing what mayconstitute frivolous and vexatious in that context is of assistance in analyzing Ms. Hayes’ submission. In Petten v. E.Y.E. MarineConsultants (1994), 120 Nfld. &. P.E.I.R. 313, (NL SC), 373 A.P.R. 313 (Nfld.

S.C. (T.D.), Green J. (as he thenwas), at paragraph 71, noted that the Court must, in both the exercise of its general discretion, or in applying sub-rule (f), try to balance adesire to protect persons from apparently frivolous litigation and the financial consequences that may flow from that, with a desire toensure that a person with a prima facie meritorious case, not be deprived of his or her day in court simply because of impecuniosity. [33] In Fields of Athenry Resort Corporation v. Grey, 2018 NLSC 215, Orsborn J. noted in the context of Rule 21.01(

f) that whendealing with a pre-trial application for security for costs, it is not appropriate to enter into an evidence-based examination of the merits ofthe plaintiff’s case. Unless the weakness of the case is apparent from the pleadings or unless undisputed facts are put before the Court,an assessment of the merits of the case should await trial. However, if other evidence not directly related to the substantive casesuggests that the proceeding is otherwise “frivolous and vexatious”, such evidence is properly considered (Wall v. Horn Abbot Ltd., 1999

NSCA 67). [34] In Fields of Athenry, the Court did not find that the plaintiffs’ claims were so weak as to be frivolous and vexatious but havingconsidered all the circumstances determined that it was just nonetheless to order security for costs. In that case there was undisputedevidence that the plaintiffs had outstanding judgments against them for a number of years which included costs awards.

The Courtdetermined that this demonstrated a risk to the defendants, if they were successful in the litigation, of not being able to recover any awardof costs because there was a pattern by the plaintiffs of refusing to pay judgments. [35] In Wall v. Horn Abbot Ltd., at paragraph 83, the court stated that if the case is complex or turns on credibility, it is generallynot appropriate to make an assessment of the merits at the interlocutory stage.

The assessment of the merits should be decisive onlywhere (1) the merits may be properly assessed on an interlocutory application; and (2) success or failure appears obvious. [36] In Grant v. Torstar Corp., 2009 SCC 61at para. 28, Maclaughlin, C.J.C., set out the following framework to be established onthe balance of probabilities by a plaintiff in a defamation action: (1) the impugned words were defamatory; (ii) the words referred to theplaintiff; and (iii) the words were published.

Where these steps are met, falsity of the words and damages are presumed and then theonus shifts to the defendant to advance an applicable defence. [37] Although the merits of Raymond Kalonga’s case are a relevant consideration as to whether I should exercise my discretion togrant security for costs, the assessment of the merits at this stage of the proceedings must be done cautiously and without entering into anevidence-based examination. Having conducted the limited review of the merits of Mr. Kalonga’s case which is appropriate at this stageof the proceeding, and considering the Grant v.

Torstar Corp. framework for defamation actions, I am unable to conclude that the actionis so weak as to be characterized as frivolous and vexatious or that its success or failure is obvious. Firstly, the statements allegedly madeby Ms. Hayes are serious and negative. Secondly, it is alleged that not only is Mr. Kalonga identified by name in the publication but alsoby photograph and through his own Instagram account.

Thirdly, it is alleged that the publication was posted to a social media site withpotentially a large audience based on the number of the Plaintiff’s followers. [38] I make no finding, of course, as to the truth of the statements allegedly contained in the Instagram post. However, simplybecause there were prior derogatory or negative statements made about Mr. Kalonga some years ago in the public domain, does not meanthat he cannot be defamed. Ms. Hayes contends however that the fact of these prior publications affects the damages that could beclaimed by Mr.

Kalonga and any potential damages would be highly disproportionate to what she will incur in legal costs to defend theclaim. The Court is not in a position at this early stage of the proceedings and on the basis of the evidence adduced to draw such aconclusion. [39] Overall, I am not convinced that the circumstances of this case are such that it would be just for me to exercise my discretionand make an order for security for costs. The evidence put before the Court was not sufficient. In this sense, the application appeared tobe premature in that Ms.

Hayes had not gathered and presented direct evidence on which to base the applications. As such the Court wasbeing asked to draw inferences which were not supported on the evidence adduced. Ms. Hayes seems to have taken a ‘where there issmoke, there is fire’ approach to the evidence on this application asking the Court to look at an accumulation of past allegations againstMr. Kalonga in various forums and conclude that this demonstrates that he has a weak case and that if his action is not successful there issufficient risk that he will not pay costs.

More is required particularly in terms of direct evidence before the Court will exercise itsdiscretion to order security for costs against a plaintiff. Therefore the application is dismissed. The Application for Security for Costs against CSH [40] The application against CSH is also based on the Rule 21.01(

b) and (

d) factors. Specifically, Ms. Hayes contends that:

(1) CSH’s registered office is in Ottawa, Ontario; and (2) there is an unpaid judgment within this jurisdiction against a company operating as Canadian Smart Home and that adirector/officer with that company has no assets in this jurisdiction. Rule 21.01(b): Ordinarily Residing Out of the Jurisdiction [41] As noted above, pursuant to Rule 21.01(b), the Court may order security of costs if a plaintiff is ordinarily residing out of thejurisdiction, although temporarily within the jurisdiction. Ms. Hayes contends that CSH is not ordinarily resident in this province. [42] Crosbie-OSA Ltd. v.

Bank of Montreal (1998), (NL SC), 163 Nfld. & P.E.I.R., 181, 503 A.P.R. 181 (Nfld.S.C. (T.D.)) is instructive in analyzing the issue of residence of a corporation. At paragraph 16, the Court referenced De BeersConsolidated Mines Ltd. v. Howe (Surveyor of Taxes), [1906] A.C. 455, [1904-07] All ER Rep Ext 1256 as authority for the propositionthat in determining residency in a security for costs application the Court should look beyond formal registration to the substance of thecorporate enterprise.

De Beers held that a corporation’s real business is carried on where the central management and control actuallyabides. At page 458, the Court stated: In applying the conception of residence to a company, we ought, I think to proceed as nearly as we can upon the analogy of theindividual. A company cannot eat or sleep but it can keep house and do business. We ought therefore to see where it really keeps houseand does business. [43] In asserting Rule 21.01(

b) as the basis for the application against CHS, Ms. Hayes points to the fact that the Statement of Claimissued by CSH states that its registered office is located in Ottawa, Ontario. [44] Stephanie Raymond filed an affidavit in response to this application in which she attests that: 1. she is the sole director and shareholder of CSH and that she resides in this province with her fiancé Raymond Kalonga (thePlaintiff in the other action) and her three children;

2. CSH was incorporated under the

Canada Business Corporations Act but that it is registered in this province. She included as an exhibit to her affidavit a copy of the Companies and Deeds online search which verifies that CHS is an interprovincial company with its registered office in St. John’s, NL. 1 Church Hill, Suite 201/107 St. John’s NL; 3. to the best of her knowledge, CSH has never carried on business in Ontario and has exclusively carried on business in Newfoundland and Labrador; and 4. for the year end 2019, CSH’s revenue in Newfoundland and Labrador was approximately $227,000. [ 45 ] Ms.

Raymond attests that she is the sole director and shareholder of CSH and that CSH was incorporated under the Canada Business Corporations Act R.S.C., 1985, c. C-44 but that it is registered in this province and has a registered office here. She included as an exhibit to her affidavit a copy of the Companies and Deeds online search verifying the registered office of CHS in St. John’s, NL. 1 Church Hill, Suite 201/107. St. John’s NL. Ms.

Raymond was not cross-examined on her affidavit. [ 46 ] The uncontroverted evidence of CSH as attested by its sole director, Stephanie Raymond, is that it is registered in this province as an extra-provincial company and she is its sole director. She attests she is a resident of this province and that to the best of her knowledge CSH has never carried on business in Ontario and has exclusively carried on business in Newfoundland and Labrador. In her affidavit Ms.

Raymond provided information as to the amount of revenue that was generated by CHS in this province in 2019. [ 47 ] Based upon the uncontroverted evidence before the Court, I am satisfied that CSH is under the control of a resident of this province, that CSH “keeps house” and does business in this province as an interprovincial company with a registered office in this province. Therefore, Ms. Hayes has not established that Rule 21.01(

b) is applicable. [ 48 ] Ms. Hayes filed a supplemental solicitor’s affidavit in which the solicitor attested that she had “caused” an internet search of the premises at 1 Church Hill, St. John’s and concluded based on information obtained from a website that the premises “is temporary office space available for rent through Business Portals without a lease.” A copy of the documentation from the website was attached to the affidavit. As part of the preliminary evidentiary ruling, I did not allow this evidence to be adduced. Ms.

Hayes did not file any direct evidence from the office rental company or author of the website as to the particular premises or leasing circumstances of CSH nor did Ms. Hayes choose to cross-examine Ms. Raymond on her affidavit. I would hasten to add that had I accepted the evidence of the website information, the evidence adduced in this manner would not be sufficient to counter the direct affidavit evidence of Ms. Raymond and as such Ms. Hayes still would not have met the burden of proof required to bring the application within Rule 21.01(b).

Rule 21.01(d): The Small Claims Court Judgment [ 49 ] I have already determined that Ms. Hayes has failed to establish whether the small claims judgment (with a cost award) is currently outstanding. On this basis alone, Rule 21.01(

d) has not been made out. I will nonetheless deal with Ms. Hayes’ specific submission on this issue with respect to CSH. [ 50 ] Ms. Hayes submits that the outstanding Provincial Court judgment is against a company with a similar name as CSH; both companies are operating as “Canadian Smart Home”; both are in the business of providing home security systems; and both have a connection to Raymond Kalonga.

The Court is being asked to infer that these companies are one and the same or that they are sufficiently related such that the debt outstanding is in fact that of CSH. [ 51 ] Although I have found that the judgment debtor company in the small claims action is associated with Raymond Kalonga, the uncontroverted affidavit evidence of Ms. Raymond and Mr. Kalonga is that he is not a director or shareholder of CSH. Furthermore, although the judgment debtor company, Canadian Smart Home Network Inc., is a company with a similar name to that of CSH and also operated as “Canadian Smart Home”, Ms.

Hayes has not established that it is the same company as CSH or that CSH is somehow otherwise liable for the outstanding judgment. On the other hand, Ms. Raymond attests in her affidavit that the company subject to the default judgment is not related to CSH. Again, she was not cross-examined on this. I accept her uncontroverted evidence. [ 52 ] Therefore, Ms. Hayes has not established that CSH has an outstanding cost award against it and has fallen short of meeting the burden of establishing that the circumstances of this case fall within Rule 21.01(d).

Is it nonetheless just to order security for costs? [ 53 ] Although Ms. Hayes has not established that the case fits within one of the Rule 21.01 categories, I must ask whether the circumstances are such that an order for security for costs would be just and therefore the court should exercise its discretion and grant the order. [ 54 ] Ms. Hayes’ submission on this basis is that CSH’s defamation case is weak, and that she is at risk of having to expend considerable funds to defend this weak case.

Further, she will likely not be able to recover any cost award against CSH at the end of the day as Stephanie Raymond has deposed to the precarious financial situation of CSH. [ 55 ] As noted above, only a limited review of the merits of the case is appropriate at this stage of the proceeding. [ 56 ] The basis of Ms. Hayes’ assertion that CSH’s case is weak is that the second component of the defamation test as articulated in Grant v. Torstar Corp. , cannot be met as the alleged defamatory statements are against Raymond Kalonga, not CSH, and CSH has disassociated itself with Mr.

Kalonga. [ 57 ] As noted in the text, Allen M. Linden & Bruce Feldthusen, Canadian Tort Law , 10th ed. Toronto: LexisNexis, 2015, at page 802, it must be pleaded and proved that the defamatory statement was spoken of and concerning the plaintiff. Where the plaintiff is not specifically identified, the plaintiff must show that the reference would reasonably be understood to have been made of the plaintiff.

Where the plaintiff’s name does not appear in the defamatory statement it must be shown that the words used, or the circumstances attending the statement, are such as would lead reasonable persons to understand that it was the plaintiff to whom the defendant referred

(Grant v. Cormier-Grant, (ON CA), [2001] 150 O.A.C. 305, 56 O.R. (3d) 215(C.A.)). [58] In submitting that the merits of CSH’s case are weak, Ms. Hayes contends that Stephanie Raymond attested that RaymondKalonga is not connected to CSH. Insofar as it is Raymond Kalonga who was the subject of the alleged defamatory Instagram post, if heis not connected to CSH, the company has no action. [59] The Statement of Claim, at paragraph 8, states: Mr. Kalonga is not a shareholder of CSH. However, regardless of the actual relationship between Mr.

Kalonga and CSH, the plain andordinary meaning of the Defamatory Publication, or, in the alternative, the implied meaning of the Defamatory Publication by innuendo,is that Raymond Kalonga is the director, officer and shareholder of CSH and either controls or is synonymous with CSH. [60] Furthermore, contrary to Ms. Hayes’ submission, Stephanie Raymond did not attest that CSH has no connection to RaymondKalonga. Rather her affidavit evidence is that: (1) he is not a director or shareholder of CSH; (2) he is her fiancé and; (3) that she is thesole director and shareholder of CSH.

The statements which are alleged to be defamatory as set out in the Statement of Claim, refer to@canadiansmarthomes and advise against doing any type of business with Mr. Kalonga and “anyone close associated with him.” [61] I cannot conclude at this stage of the proceeding based on the limited review to be undertaken, that CSH would not be able tomeet the second prong of the test articulated in Grant v.

Torstar Corp. and that therefore its case is weak. [62] On the other hand, in determining whether it is just to give an order for security for costs, the discretionary nature of theauthority conferred by Rule 21 requires that the Court consider whether such an order would halt the litigation. I am again reminded ofthe balancing act that the Court is to carry out as referenced in Petten v. E.Y.E. Marine Consultants (1994), 120 Nfld. &. P.E.I.R. 313, (NL SC), 373 A.P.R. 313 (Nfld. S.C. (T.D.)) and that there generally ought not to be a financial prerequisite toaccess to the courts.

This is especially so where it is alleged that the parties seeking costs are in part responsible for the plaintiffs’financial position (U.F.C.W., Local 1252 v. Cashin (1988), (NL CA), 70 Nfld. & P.E.I.R. 139, 215 A.P.R. 139 (Nfld.C.A.); at p. 143). [63] In Coles Fisheries Ltd. v. David Sussman, 2006 NLTD 145, Orsborn, J. noted, at paragraph 17, that the condition andcircumstances of the plaintiff corporation may be relevant considerations for the Court in determining whether it is just to exercise itsdiscretion to award security for costs. In that case, the Court found it was just to make the order.

The evidence established that therewere several outstanding judgments registered against the plaintiff company. Furthermore, the evidence did not support any finding thatan order to post security would have the effect of denying the plaintiff access to the court. The plaintiff’s evidence was contradictory ason the one hand it asserted impecuniosity and on the other it claimed it had assets. [64] In the case before me, unlike that of Coles Fisheries Ltd., it has not been established that there are outstanding judgmentsagainst CSH.

Furthermore, the Statement of Claim, pleads that prior to the Instagram posting, CSH had a thriving business in thisprovince which has been negatively impacted because of the statements made. Furthermore, Ms. Raymond attests in the affidavit filed inresponse to the application that because of Ms. Hayes’ conduct, CSH became unable to meet its obligations under its dealer agreementand the agreement has since terminated. Ms. Raymond further attests to the financial difficulties of CSH. She deposes that if CSH isrequired to post security for costs, the company would be unable to continue the action. Although Ms.

Hayes did not provide financialdocumentation in support of these assertions (which would have been preferable), she was not cross-examined on her affidavit andtherefore this evidence remained unchallenged. [65] Considering the totality of the evidence presented, I cannot find that the circumstances are such that it would be just for me toexercise my discretion in this case. Ms. Hayes has not met the burden of proof required on an application for security for costs and thisapplication is dismissed.

Costs [66] Raymond Kalonga and CSH sought costs on a Column 5 basis because of the evidentiary issues arising from the manner inwhich the applications were brought including that the applications were not supported by an affidavit from Ms. Hayes. In making thisrequest, the Respondents also reference that Ms. Hayes has not filed a List of Documents and therefore they did not have the benefit ofMs. Hayes’ documents in responding to these applications. [67] Although Ms.

Hayes should have complied with producing her List of Documents in a timely fashion, the Respondents couldhave brought an application pursuant to Rule 32 to compel production had they believed the documents to be important to mounting theirresponses. I do not accept this as a factor in my decision on costs. Further, although the applications were not supported by the type ofevidence that usually is expected on these applications, I do not find that Ms. Hayes’ conduct in bringing the applications to be of suchnature to depart from the usual award of Column 3 costs.

Therefore each Respondent shall have costs of responding to the application intheir respective action as against Ms. Hayes on a Column 3 basis.

summary and conclusion [68] I am unable to find that Ms. Hayes has established the applicability of any of the categories of Rule 21.01. Furthermore, I amunable to conclude that it would otherwise be just to exercise my discretion and order security for costs in either action. [69] Accordingly, it is ordered: 1. The applications are dismissed; and 2. The Respondents shall have their costs on Column 3 basis.

_____________________________ Sandra R. Chaytor Justice