2013 QCCA 830, 2013 QCCA 830

Pothitos c. Demers 2013 QCCA 830 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-022750-129 (500-17-067716-111) MINUTES OF THE HEARING DATE: May 7, 2013 THE HONOURABLE MARIE-FRANCE BICH, J.A. APPELLANTS COUNSEL BASIL N. POTHITOS & VASIRE HOLDINGS INC. / GESTION VASIRE INC. Mtre Vassilios Giannis BOUCHER HARPER RESPONDENT COUNSEL DENIS DEMERS Mtre Martin P. Jutras KAUFMAN LARAMÉE S.E.N.C.R.L. THIRD PARTY COUNSEL LE CHÂTEAU, 1321 SHERBROOKE OUEST INC. Mtre Amélie Aubut NORTON ROSE CANADA S.E.N.C.R.L., S.R.L.

MOTION TO DISMISS THE APPEAL (ART. 497 C.C.P.) Clerk: Asma Berrak Court Room: RC.18 HEARING 11 h 48 : Commencement of the hearing. Identification of counsel. 11 h 48 : Submission by Mtre Martin P. Jutras. 11 h 50 : Submission by Mtre Vassilios Giannis. 11 h 56 : Mtre Amélie Aubut has no representation to make. 11 h 56 : Reply by Mtre Jutras. 12 h 07 : Reply by Mtre Giannis. 12 h 10 : By the judge: Judgment will be rendered at 4 pm. 12 h 11 : Suspension of the hearing. 16 h 03 : Resumption of the hearing. 16 h 04 : Judgment - see page 3. 16 h 07 : Conclusion of the hearing. Asma Berrak Clerk JUDGMENT [ 1 ] On March 19, 2013, the respondent filed a motion for security in appeal, pursuant to

article 497 C.C.P. , requesting that: POUR CES MOTIFS, PLAISE À LA COUR : ACCUEILLIR la présente requête; ORDONNER aux Appelants de fournir un cautionnement de 100 000,00 $ dans les 15 jours du jugement à intervenir; Le tout avec dépens. [ 2 ] The motion was argued before my colleague St-Pierre, J.A. on April 8, 2013 and judgment was rendered the following day, ordering that: [19] ORDONNE aux appelants de fournir un cautionnement de 100 000 $ dans les quinze (15) jours du présent jugement, pour garantir le paiement des frais d'appel et garantir en

partie le paiement de la condamnation en Cour supérieure, au cas où le jugement de

première instance serait confirmé; [ 3 ] According to the rules set out in

article 8 C.C.P., the security should have been furnished on April 24, 2013 at the latest. It was not. Consequently, the respondent, on May 3, 2013, served and filed a motion to dismiss the appeal, pursuant to the last paragraph of

article 497 C.C.P. [ 4 ] This morning, when the motion was heard, the appellants' lawyer indicated that his clients, who allegedly are “assets rich but cash poor” (to use counsel's own words), are unable to comply with St-Pierre, J.A.'s order.

Instead, they offer a hypothecary guarantee on the immoveable at stake, in the amount of $100,000. [ 5 ] The respondent is unwilling to accept this offer for the following reasons: 1° By making this offer, the appellants are simply trying to circumvent S-Pierre, J.A.'s order; this is an appeal or a revocation in disguise; 2° The appellants are in fact offering a fourth-rank hypothec on an immoveable which is already encumbered by three prior hypothecs (the third of which in favour of the respondent) covering the whole value of the property. A fourth-rank hypothec, in these circumstances, is not a valid guarantee.

Were the appellants really “ assets rich”, they would have been able to comply with St-Pierre, J.A.'s order by refinancing their debts or offering a hypothecary guarantee on another, unencumbered asset. They did not. [ 6 ] Considering

article 531 C.C.P. , even if the appellants were entitled to offer a hypothecary guarantee in lieu of a deposit in cash, [1] they should have acted within the time limit set out by my colleague St-Pierre, which they did not. [2] But, more importantly, they have not established that the guarantee that they are offering today is sufficient. The debts guaranteed by the three existing hypothecs on the property have only increased since April 9, 2013, and will go on increasing, substantially, during the appeal since the appellants are unable to pay what they owe to their creditors.

No evidence was filed establishing that the value of the property is such that it would cover a fourth-rank hypothecary guarantee in the amount of $100,000, while the respondent has shown that, most likely, it would not. [ 7 ] Unfortunately, it appears that the appellants' offer is a last minute, undocumented and unsupported attempt to circumvent my colleague St-Pierre's judgment. FOR THESE REASONS, I: [ 8 ] GRANT the motion (“requête de l'intimé pour rejet d'appel faute de fournir un cautionnement”), with costs; [ 9 ] DISMISS the appeal, with costs. MARIE-FRANCE BICH,J.A.