Zimmerman v. Buss, 2015 MBCA 40

Citation: Zimmerman v. Buss, 2015 MBCA 40 Date: 20150423 Docket: AF15-30-08351 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : HEATHER LEE ZIMMERMAN ) M. U. Kramer ) for the Appellant ) (Petitioner) Respondent ) J. G. E. Young ) for the Respondent - and - ) ) Chambers motion heard: DOUGLAS GORDON BUSS ) April 16, 2015 ) ) Decision pronounced: (Respondent) Appellant ) April 23, 2015 BEARD J.A. I. THE ISSUE [ 1 ] This is a motion by the respondent in this appeal, Heather Lee Zimmerman, under s. 31 of The Court of Appeal Act , C.C.S.M., c.

C240, for security for costs from the appellant, Douglas Gordon Buss, on the basis that he has been unwilling to pay the judgment and costs ordered in the decision that is now under appeal. Mr. Buss’s position is that, in the circumstances of this case, it would not be just to make any order for security for costs. II. THE FACTS [ 2 ] The parties were married on October 17, 1987, and had three children. They separated on August 18, 2008. They entered into a comprehensive separation agreement dated August 4, 2009, and were divorced by Divorce Judgment dated December 21, 2009.

Ms Zimmerman filed an application in January 2011 regarding child support, spousal support and for financial disclosure. They were able to resolve those issues by way of a consent final order dated December 4, 2012, and a second agreement dated June 29, 2012, which incorporated the same terms as the final order. There was a subsequent variation order dated February 4, 2013. [ 3 ] On October 3, 2012, Ms Zimmerman filed a statement of claim alleging that Mr.

Buss had breached the terms of the separation agreement regarding the property division by not complying with his obligations regarding the payment of the certain debts, and requesting an order enforcing the agreement. Mr. Buss filed a defence denying the claim and alleging that Ms Zimmerman had breached the terms of the separation agreement. He filed a counterclaim alleging that Ms Zimmerman had increased a joint line of credit contrary to their separation agreement and asking that she be ordered to repay the amount at issue.

Ms Zimmerman then filed a defence to the counterclaim in which she sets out her justification for the additional debt. [ 4 ] These proceedings led to a judgment being granted on December 4, 2014, in favour of Ms Zimmerman against Mr. Buss in the amount of $145,128 and, in addition, Mr. Buss was ordered to pay solicitor-client costs of $11,000 for a total of $156,128. It is that judgment, filed on February 4, 2015, that is the subject of the underlying appeal. [ 5 ] Ms Zimmerman then filed this motion for security for costs on the appeal, alleging that Mr. Buss has been unwilling to pay the judgment and the costs.

III. THE PARTIES’ POSITIONS The Respondent’s Position [ 6 ] Ms Zimmerman alleges that:

- although Mr. Buss has made some payments on the judgment, approximately $75,000 remains outstanding and, further, that he hasrefused to pay any amount on the costs that were ordered; - while Mr. Buss has applied the proceeds from the liquidation of RRSPs to the debt, the amount that he has applied does notcorrespond to the value that he has attributed to the RRSPs on other occasions; - in correspondence to her lawyer dated February 26, 2015, Mr. Buss stated that “I have nothing left”; - Mr. Buss does not own any real property in Manitoba or elsewhere; - while Mr. Buss is still working in Manitoba, he has provided no plan to make any further payments on the outstanding amount. [7] In

summary, Ms Zimmerman alleges that Mr. Buss is continuing to willfully avoid the obligations that he entered intoin the separation agreement and those under the judgment notwithstanding an ability to pay those amounts. She is requesting an orderfor security for costs in the sum of $10,000. The Appellant’s Position [8] Mr. Buss’s position is that the circumstances of this case militate against an order that he pay security for costs. [9] Mr. Buss alleges that the motion judge erred, among other things, in: her

interpretation and application of Queen’sBench Rule 49 (Man. Reg. 553/88); in her failure to order a trial of the issues, given the conflicting evidence and the facts in dispute; andin her calculation of the amount owing to Ms Zimmerman. He further argues that he must appeal because Ms Zimmerman is,incorrectly, taking the position that his payments on the debt are not, or not necessarily, payments on the judgment.

He takes theposition that his grounds of appeal are strong and that, if successful on appeal, the costs order will be set aside. [10] He further states that, since the date of the judgment, he has paid a further $83,471.92 on the line of credit, which wasone of the debts that he was to pay under the separation agreement – this in addition to paying all of the support payments for MsZimmerman and the one child who is still a dependent. [11] Mr. Buss’s position is that, taking all of these circumstances into account, there is no basis upon which an order forsecurity for costs should be granted. IV. THE LAW [12]

Section 31 of The Court of Appeal Act states as follows: Security for costs 31 A judge of the court in chambers may, under special circumstances, make an order or orders for security for costs of any appeal. [13] Hamilton J.A., in Amneet Holdings Ltd. v. 79548 Manitoba Ltd. et al., 2003 MBCA 108, 177 Man.R. (2d) 231, had this tosay about the application of s. 31 (at para. 7): The governing principle in an application for security for costs under s. 31 is that such an order must be “just” in the “particularcircumstances of the case”.

See Moss (Bankrupt), Re (2001), 2001 MBCA 166 , 160 Man.R. (2d) 80; 262 W.A.C. 80; 2001MBCA 166 (C.A.), and Harvard Investments Ltd. v. Canadian National Railway Co. (2002), 2002 MBCA 127 , 170Man.R. (2d) 10; 285 W.A.C. 10; 2002 MBCA 127 (C.A.). As noted by Scott, C.J.M., in Franck Estate v. Webster et al. (1998), (MB CA), 129 Man.R. (2d) 87; 180 W.A.C. 87 (C.A.) (at para. 32): “An order for security for costs should only be grantedwhere it is essential to do so, in the interests of justice, to provide defendants with some protection for their potential costs”.

Scott,C.J.M., was speaking about security for costs for trial but the words are equally applicable to such an application on an appeal. (See also Danylchuk et al. v. Wolinsky et al., 2007 MBCA 106 at paras. 12-16, 220 Man.R. (2d) 83; and Ataliotis v. Assiniboine CreditUnion Ltd., 2014 MBCA 16 at para. 14, 303 Man.R. (2d) 142.) V.

ANALYSIS [14] While most applications for security for costs relate either to a plaintiff/appellant who is impecunious, does not reside inthe jurisdiction, has no assets in the jurisdiction, or whose case has no merit and is attempting to stall an inevitable outcome, I do not findthose to be the circumstances in this case. [15] Mr. Buss is not taking the position that he is impecunious and will be unable to pursue his appeal if an order is made forsecurity for costs.

His position is that it would not be just to require him to do so. [16] Ms Zimmerman argues that he has not lived up to his agreement to repay the debt set out in the separation agreement orto pay the judgment and costs and, as a result, should not be permitted to continue the appeal until he posts security for costs. [17] I will first address the issue of Mr. Buss’s failure to pay the monthly payments in the separation agreement, being $1,000per month.

[ 18 ] Mr. Buss’s position is that he has paid more on the debt than the cumulative total of the monthly payments that he was obligated to pay under the separation agreement. While Mr. Buss may have liquidated most of his assets since the date of the separation agreement, his evidence (which has not been challenged) is that he applied the proceeds to reduce the debt for which he is responsible.

His evidence, again unchallenged, is that he has reduced the debt from the $199,008.50 that he owed as set out in paras. 15.1-15.6 of the first separation agreement (being $142,649.50 to Manulife and $56,359 on three credit accounts) to $50,114.08, a reduction of $148,894.42. This far exceeds the $69,000 in monthly payments under para. 15.1. In addition, he deposes that he has never missed paying his spousal and child support payments. [ 19 ] It appears from the documents that have been filed that Mr. Buss, who is a financial planner, has suffered a significant reduction in his income since the separation.

There is evidence that the stock market crashed at around or shortly after the date of the separation agreement, and that this affected both his income as a financial planner and the value of his investments and RRSPs. In the first separation agreement dated August 4, 2009, his income was stated to be $150,000 per year, while his income in the variation order dated February 4, 2013 was determined to be $89,175. If he has been late in making some payments, this may explain that lateness. [ 20 ] On the question of collecting any amounts owing to Ms Zimmerman, her counsel acknowledged that Mr.

Buss is employed and not impecunious. This means that she would be able to enforce any order, including one for costs, that is made against him. [ 21 ] On the question of the Manitoba courts having continued jurisdiction over Mr. Buss, there is no suggestion that he is contemplating leaving the province. He has resided here for many years, he is employed here and his children live here.

He clearly has strong ties to Manitoba. [ 22 ] Ms Zimmerman, through counsel, has acknowledged that the appeal is not without merit, so I will assume that there is at least an arguable issue or issues raised and that the appeal is not merely a stalling tactic. In fact, the reduction in Mr. Buss’s debt since the judgment indicates that he is taking serious steps to carry out his obligations, rather than avoiding them. [ 23 ] It is arguable that the current proceedings have motivated Mr.

Buss to liquidate his assets and pay the debts more quickly than he might otherwise have done, but that is not a reason to make an order for security for costs. In the circumstances of this case, where Mr. Buss has made significant inroads to paying the amounts owing under the separation agreement, particularly since the date of the judgment, and has resources to pay any costs ordered on appeal, I find that it would not be just to order that he pay security for costs. VI.

DECISION [ 24 ] For the reasons set out herein, I would dismiss Ms Zimmerman’s motion for security for costs with costs on this motion payable to Mr. Buss. J.A.