Peter Austin Plaintiff / Defendant by counterclaim And: Darlene Dunne Defendant / plaintiff by counterclaim, 2022 NLSC 175

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Austin v. Dunne , 2022 NLSC 175 Date : December 14, 2022 Docket : 201901G5152 Between: Peter Austin Plaintiff / Defendant by counterclaim And: Darlene Dunne Defendant / plaintiff by counterclaim Before: Justice Vikas Khaladkar Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: November 28, 2022

Summary: The Applicant requested security for costs on account of the Respondent having failed to make any effort toward the payment of costs incurred in prior proceedings in this matter. It was evident from the evidence adduced that the Respondent is impecunious and is expected to remain in that state for the foreseeable future. The Respondent’s claim against the Applicant is not frivolous or vexatious. Therefore, I have declined the invitation to exercise my discretion to order security for costs in this matter. Appearances: Jonathan Martin Appearing on behalf of the Plaintiff /

Defendant by Counterclaim Johnathan E. Earle Appearing on behalf of the Defendant / Plaintiff by Counterclaim Authorities Cited: CASE CONSIDERED: Petten v. E.Y.E. Marine Consultants, (1994) (NL SC), 120 Nfld. & P.E.I.R. 313, 373A.P.R. 313 (Nfld. S.C. (TD)) RULE CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Khaladkar J.: INTRODUCTION [1] The Applicant, Darlene Dunne, relies upon Rule 21.01 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D toestablish her entitlement to an order of security for costs against the Respondent, Peter Austin.

Rule 21.01 allows the Court, in itsdiscretion, to grant an order for security for costs whenever it deems it just to do so, where there is good reason to believe that theproceeding is frivolous and vexatious and where the plaintiff is not possessed of sufficient property within the jurisdiction to pay costs. [2] The law is not in dispute. Green J., as he then was, discussed Rule 21.01 in Petten v. E.Y.E. Marine Consultants, (1994) (NL SC), 120 Nfld. & P.E.I.R. 313, 373 A.P.R. 313 (Nfld. S.C. (TD)) as follows: 70. This notion is reflected in Rule 21.01(

f) which allows the court to order security where: (

f) upon examination of a plaintiff it appears that there is good reason to believe that the proceeding is frivolous and vexatious, andthat the plaintiff is not possessed of sufficient property within the jurisdiction to pay costs. It is not impecuniosity itself which tips the scales, but impecuniosity and a very weak case bordering on the frivolous and vexatious.Clearly, the case does not have to be so frivolous and vexatious so as to justify an order striking out the claim under Rule 14.24(1)(b). Insuch a case there would be no need for security.

Nevertheless, even though a court is prepared to allow a case to go to trial, the moretenuous the claim, the greater will be the likelihood that a perceived inability to recover costs at the end of the day will justify an orderfor security. 71. The court must, both in the exercise of its general discretion or in applying sub rule (f), try to balance a desire to protect personsfrom apparently frivolous litigation and the financial consequences that may flow from that, with a desire to ensure that a person with aprima facie meritorious case not be deprived of his or her day in court simply because of impecuniosity.

There generally ought not to be afinancial prerequisite to access to the courts. This is especially so where it is alleged that the parties seeking costs are in part responsiblefor the plaintiffs’ financial position. United Food & Commercial Workers Union, Local 1252, Fisheries Union et al v.

Cashin et al,supra, per Goodridge C.J.N. at p. 143. [3] The Applicant argues that the Respondent’s case is weak and that the record indicates a number of occasions when costs havebeen awarded against the Respondent, which the Respondent has failed to pay. [4] The Respondent argues that his inability to pay the costs awarded against him are a direct result of the Applicant’s treatment of

him outlined in his lawsuit against her. [ 5 ] Furthermore, he has submitted evidence to the Court outlining his means by way of income, assets and liabilities. In addition, he was cross-examined during the course of the hearing in this matter and he was able to amplify, and explain, the documentary evidence that he submitted. [ 6 ] He testified that he did not have recent income tax returns to file with the Court because he has not filed any in some time.

The reason he gave for not filing the income tax returns, which I accept, is that his personal income tax returns are associated with the income tax returns of a company that he used to operate, and he has not had the funds to pay an accountant to prepare the returns for him and his company. He indicated, however, that there is nothing owing on account of taxes – either for himself or his company. [ 7 ] In

summary, the Respondent earns a little over $1,000 per month working for a retail hardware outlet. He is in receipt of Canada pension payments. He rents a room from his girlfriend for $400/month. After paying the costs to operate, license and buy fuel for his 15-year old automobile (which he requires in order to get to and from work), and his other monthly expenses for food, medicines and the like he has nothing left over. [ 8 ] The Respondent has no other assets other than the tools of his trade – which he valued at $3,000.

He has no savings, no pension. [ 9 ] I had the benefit of hearing the Respondent provide viva voce evidence. His manner in giving evidence was direct. He did not embellish. He was, perhaps understandably, reluctant at first to provide any details concerning his girlfriend. But he did so when I advised him that he was obligated to answer Counsel’s question. I found him to be a credible witness, and I find that he is impecunious.

He has no present ability to pay any amount towards security for costs and, if I were to order that he do so, I am certain that his claim against the Applicant would be at an end. [ 10 ] The evidence that the Respondent has provided, by way of affidavit and in person, satisfies me that his action is not frivolous and vexatious. The matter has already been set down for a

summary trial and, in order to do justice between the parties, it is necessary that each of them be given an opportunity to be heard. [ 11 ] Counsel on both sides asked that I make an Order for costs on this Application. I am not inclined to do so. Costs should be borne by the party who eventually loses the action. [ 12 ] The Application for security for costs is dismissed. Costs shall be in the cause. _____________________________ Vikas Khaladkar Justice