2024 MBKB 22, 2024 MBKB 22

Date: 20240130 Docket: FD18-01-20145 (Winnipeg Centre) Indexed as: Garrett v. Garrett Cited as: 2024 MBKB 22 COURT OF KING’S BENCH OF MANITOBA (FAMILY DIVISION) B E T W E E N: JOAN ESTER GARRETT, ) ) petitioner, ) C. KULYK ) for the petitioner - and - ) ) jASON lEONARD gARRETT, ) I. HISTED respondent. ) for the respondent ) ) ) JUDGMENT DELIVERED: ) January 30, 2024 MIRWALDT J. [ 1 ] The Petitioner seeks an order for the Respondent to pay security for costs in the amount of $25,000.00.

At the hearing on January 25, 2024, the Respondent opposed the motion, citing a lack of the Court’s jurisdiction to impose such an order against a responding party, his own impecuniosity and that the order would, in effect, act as a bar to his defence of the claims against him and to bar him from seeking the relief he has pleaded. [ 2 ] For the reasons that follow, the Petitioner’s motion is granted in part. The Respondent shall post security for costs in the sum of $1,000 with respect to his pending claims in the trial of this matter. The Respondent shall pay this amount by 3:00 p.m. on February 15, 2024.

If the Respondent does not pay the ordered amount on or before that date, the trial scheduled February 20 to 23, 2024, shall be cancelled and his pleadings will be struck, allowing the Petitioner to seek default judgment against the Respondent. OVERVIEW [ 3 ] The parties separated on June 1, 2018. The Petitioner (the “wife”) had obtained a Protection Order under the The Domestic Violence and Stalking Act , C.C.S.M. c.

D93 , which restricted the Respondent (the “husband”) from attending at the family home, then occupied by the wife. [ 4 ] At the time of the separation, the parties’ son and daughter were living with the wife in the family home.

The daughter was under the age of 18 years and the son was an adult. [ 5 ] The wife initiated divorce proceedings in February 2021 seeking a divorce, retroactive child support for the daughter, spousal support both retroactive and ongoing, protective relief, equal division of family property, partition or sale of the family home, financial disclosure and costs. [ 6 ] The husband filed an Answer and Petition for Divorce, which he later amended, opposing the relief sought by the wife and asking the Court for a divorce, financial disclosure, return of personal property, equal division of family property, a negative accounting, occupation rent and costs. [ 7 ] The litigation path in this matter has been impeded at almost every stage by the husband.

In his initial pleading, the husband disputed the date of separation, alleging the separation had occurred in 2010. Under the Case Management rules for family proceedings, any disputes over date of separation in cases involving family property division must be determined by a reference to the Master prior to the case advancing to the triage stage.

The husband withdrew his claim at the first appearance on the reference as there was evidence that he had requested leniency from the Court in 2017 in his impaired driving sentencing on the basis that he and the wife were married and that she was dependent upon him due to ill health. The Master ordered the husband to pay $1,500 in costs to the wife. To date, those costs have not been paid by the husband.

[8] A prioritized hearing concerning the wife’s claim for interim spousal support occurred post-triage in June 2022. An interimorder was issued in September 2022, requiring the husband to pay spousal support to the wife. The husband was also ordered to pay her$3,750 in costs within six months. To date, those costs have not been paid by the husband. [9] Throughout the case conference process, the husband made agreements and undertakings and then resiled from them, resultingin extra case conference and motion dates being booked.

This required the wife to instruct her counsel to prepare materials andarguments and to attend at each date. The wife was forced to seek orders to compel the husband to comply with the order to sell thefamily home. The home was sold in August 2023 and the net sale proceeds are being held in trust by the wife’s counsel pending theoutcome of the trial. [10] As recounted in detail in my Endorsement in this matter (Document 151), once the husband’s first counsel withdrew in March2023, all efforts by the Court to cajole and then corral the husband into complying with the Court’s directions and orders wereunsuccessful.

Contempt proceedings ensued and as a result, the husband was found to be in contempt. He was fined $3,500 in June2023. To date, the husband has not paid this fine. Costs of $2,500 and $5,000 awarded to the wife during these proceedings have notbeen paid. [11] The husband has made only one spousal support payment under the interim order. In December 2023, the husband obtained anorder of suspension of enforcement of the interim support order and an administrative reduction of the support amount to less than one-half of the court-ordered support.

The husband has not made the reduced support payment. [12] Trial dates of February 20 to 23, 2024, are fast approaching. The wife argued that if she is successful and court costs areawarded to her, that the husband will not pay them. She also argued that his share of remaining family assets is not sufficient to pay theoutstanding child support, the arrears of spousal support, any award of retroactive spousal support, the unpaid court costs and any costsshe may be awarded at trial. [13] The husband argued that he cannot afford to pay any amount for security for costs.

Further, he took the position that the netproceeds of the family home represent the only funds available to him from which to pay any potential award of costs. RELEVANT STATUTORY AND LEGAL PRINCIPLES [14] The husband argued that the Court has no jurisdiction in this case as it is the wife who occupies the role of plaintiff in pursuingrelief against him.

The facts are that the husband also stands in the position of plaintiff by virtue of his own pleadings under which heseeks an order of occupation rent, a negative accounting and return of personal property, all of which are new claims in theseproceedings. [15] Steel J. (as she then was) examined a similar argument in MacIver v. MacIver, (MB KB), 1997CanLII 22763(MB KB) at paragraphs 5 through 14.

She ruled that an order for security for costs can be made against a respondent in a divorce casewhere the respondent seeks relief different than that plead in the applicant’s petition: 14 Although not in the exact form prescribed in the rules, the answer filed by the respondent contains a request for relief that isnot contained in the petition for divorce. To determine the issue with respect to this head of relief will occupy the majority of the twoweek trial that has been set. The rules direct this court to look to substance rather than form.

Although this answer may not be acounterclaim drafted in the prescribed form, it is a counterclaim in substance, and therefore, this court does have the jurisdiction toorder security for costs. [emphasis added] [16] The Court has jurisdiction to make the order requested by the wife. [17] King’s Bench Rule 56.01 defines the circumstances under which the Court can grant an order for security for costs: 56.01 The court, on motion in a proceeding may make such order for security for costs as in the particular circumstances of the case isjust, including where the plaintiff or applicant, (

a) is ordinarily resident outside Manitoba; (

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

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

d) is a corporation or a nominal plaintiff, and there is good reason to believe that insufficient assets will be available in Manitoba to paycosts, if ordered to do so; or (

e) a statute requires security for costs. [18] The wife’s motion is based on the fact that the husband has failed to pay costs as ordered in these proceedings. This fact alonewill not result in an order for security for costs. The Court must consider whether in the particular circumstances of this case that such

an order would be just. [19] Helpful factors in assisting the Court in its considering whether to exercise its discretion to order security for costs are found inDeBono v. Smith, (MB KB) at p. 88: Factors, in addition to those set out in R. 56.01, which the court may take into consideration in exercising its discretion include:

a) the apparent merits of the plaintiff's case;

b) the amount of costs the defendants have already incurred in defending the action;

c) the amount of the costs that might be assessed against the plaintiff, if the plaintiff is unsuccessful;

d) whether there is reason to believe the plaintiff has insufficient assets to satisfy a judgment for costs;

e) whether the plaintiff has any assets in Manitoba that would be available to satisfy a judgment for costs;

f) whether the plaintiff resides or carries on business in a reciprocating state under the Reciprocal Enforcement of Judgments Act, R.S.M.1987, c. J20;

g) whether the plaintiff has any assets in a reciprocating state that would be available to satisfy a judgment for costs;

h) whether there is reason to believe the plaintiff might attempt to avoid paying a judgment for costs;

i) whether there is reason to believe an order for security for costs might have the effect of preventing a plaintiff from proceeding with ameritorious claim;

j) the manner in which the proceedings have been conducted by the parties. [20] These factors are not an exhaustive list, and each case must be determined on its own merits in considering whether the order isjust in the circumstances of the case (see Gray et al. v. Webster et al, (MB CA); and Chaput v. Graham, 2012 MBQB233 CanLII). ANALYSIS [21] My analysis of applying DeBono to the facts of this case now follow. APPARENT MERITS OF THE CASE [22] In considering the wife’s case, she has a strong case for entitlement to both retroactive and ongoing spousal support on both acompensatory and non-compensatory basis.

The husband’s case for occupation rent is not strong as he failed to pay the mortgage,resulting in the wife’s eviction and an increase in the parties’ debt owed to the mortgage holder. Even if the husband is successful in hisclaim for occupation rent, that will only serve to affect the quantum of support and not entitlement or duration. The wife’s claim for$16,060 in child support is also a strong claim and one that the husband conceded early in the proceedings. [23] The husband has a strong case for reduction of the quantum of spousal support on an ongoing basis.

The Interim Order providedthat the spousal support amount was reviewable after the division of husband’s pension. COSTS INCURRED IN DEFENDING THE ACTION [24] The husband did not bring any evidence concerning the costs that he has already expended in defending the wife’s claim; thus, Icannot consider the second DeBono factor. [25] The wife has incurred heavy legal costs, but the particulars of the amount was not provided to the Court.

THE AMOUNT OF COSTS THAT MAY BE ASSESSED AGAINST THE PLAINTIFF IF THE PLAINTIFF ISUNSUCCESSFUL [26] The triable issues - spousal support (retroactive and ongoing), the review of the Interim Order of spousal support, family propertydivision and negative accounting, occupation rent, division of the net proceeds of sale of the jointly-owned home and child support;make this a Class 2 action with Tariff costs of up to $10,000.

WHETHER THERE IS REASON TO BELIEVE THE PLAINTIFF HAS INSUFFCIENT ASSETS TO SATISFY AJUDGMENT FOR COSTS [27] If the wife is successful, and there is a judgment of $10,000 against the husband, the wife argued that an accounting of the familyassets and debts will result in a negative accounting. Further, she argued that the husband’s share of the net sale proceeds will beinsufficient to pay what he already owes in child support, spousal support arrears and outstanding court costs.

WHETHER THE PLAINTIFF HAS ANY ASSETS IN MANITOBA THAT WOULD BE AVAILABLE TO SATISFY AJUDGMENT FOR COSTS [28] The husband’s financial statement revealed that he owns a hunting camp in Fisher, Manitoba, and guiding business that he valuesat $24,000. This is a family asset and thus its value will be subject to the accounting. Notionally, his share is $12,000. Depending onthe outcome of the accounting, this asset may be available to satisfy any judgment for costs.

[ 29 ] The DeBono factors six and seven do not apply here as there is no evidence that either party resides or carries on business or has assets in a reciprocating state. WHETHER THERE IS REASON TO BELIEVE THE PLAINTIFF MIGHT ATTEMPT TO AVOID PAYING A JUDGMENT FOR COSTS [ 30 ] There is ample evidence to support the wife’s argument that the husband would attempt to avoid paying a judgment as he has not complied with any of the Court’s orders and directions in this matter. The husband has made no efforts at all to pay the current outstanding orders of courts costs amounting to $12,750.

WHETHER THERE IS REASON TO BELIEVE AN ORDER FOR SECURITY FOR COSTS MIGHT HAVE THE EFFECT OF PREVENTING THE PLAINTIFF FROM PROCEEDING WITH A MERITORIUS CLAIM [ 31 ] The husband argued that he is impecunious. His financial statement reveals that his pension income is $58,000 per annum and that his monthly expenses leave him with an approximate $900 per month surplus. He is not impecunious. [ 32 ] The wife sought an order that the husband post $25,000, but during the hearing conceded that the proper amount would be $10,000.

The husband argued that such an order would have the effect of preventing him from proceeding with his meritorious claims. [ 33 ] In assessing the husband’s current financial circumstances, I find that an order of $10,000 would require him to borrow money from family or a financial institution to pay the costs in that amount. There is less than a month to the start of this trial and it is doubtful that the husband will be able to raise the necessary funds.

An order of $10,000 would prevent him from pursuing his claim for a review of the interim spousal support order and participating in the accounting of the family assets. [ 34 ] I have considered our Court of Appeal’s advice in Winkler v. Winkler ,

(1990) CanLII 7698 (MB CA), that extreme caution must be exercised in using my discretion in ordering a party to post security for future costs and possibly striking a party’s pleadings and allowing the other party to obtain a default order. I find this to be an exceptional case. The husband’s continued and deliberate defiance of court orders and directions cannot be ignored. [ 35 ] While I find the husband cannot afford to post $10,000, the evidence supports a finding that he can afford to post $1,000.

THE MANNER IN WHICH THE PROCEEDINGS HAVE BEEN CONDUCTED BY THE PARTIES [ 36 ] There is overwhelming evidence that the husband’s conduct has been obstructive and egregious throughout the proceedings. He has not been deterred by any admonishments of the Court nor by any of the orders of court costs made against him. The wife, by contrast, has acted properly and has followed all court orders and directions.

CONCLUSION [ 37 ] After considering all the factors required by KBR 56.01 and the case law, I find that an order that the husband post security for costs of $1,000 will not prevent him from participating in the trial. The order will ensure the wife, who has always acted properly, if successful at trial, will have an amount, albeit small, guaranteed to her to offset her costs of the trial. The order is just in the circumstances of this case. [ 38 ] I make the following order: a. The Respondent shall post security for costs in the sum of $1,000 with respect to his pending claims at the trial of the matter; b.

The Respondent shall pay this amount to the Court by 3:00 p.m. on February 15, 2024; c. If the Respondent does not pay the ordered amount on or before that date, the trial scheduled February 20 to 23, 2024, shall be cancelled and his pleadings will be struck, allowing the Petitioner to seek default judgment against the Respondent. d. The Petitioner is entitled to costs and she may submit a Bill of Costs for this motion in accordance with the Tariff. Mirwaldt J.