Indcondo Building Corp. v. Sloan et al., (2012) 293 O.A.C. 392 (CA)

• Judge: Goudge, Sharpe and Juriansz, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: July 18, 2012
• Jurisdiction: Ontario
• Citations: (2012), 293 O.A.C. 392 (CA);2012 ONCA 502

Indcondo Building Corp. v. Sloan (2012), 293 O.A.C. 392 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. JL.048

Indcondo Building Corporation (plaintiff/appellant) v. Valerie Francis Sloan, David Robin Sloan and Cave Hill Properties Ltd. (defendants/respondents)

(C54391; 2012 ONCA 502)

Indexed As: Indcondo Building Corp. v. Sloan et al.

Ontario Court of Appeal

Goudge, Sharpe and Juriansz, JJ.A.

July 18, 2012.

Summary:

The plaintiff obtained judgment against Sloan. Sloan had transferred the matrimonial home to his wife shortly after being served with the statement of claim. In 2002, the plaintiff sued the defendants to set aside the transfer as a fraudulent conveyance. In 2004, Sloan declared bankruptcy. The plaintiff proved its claim in bankruptcy. The action was stayed. The trustee declined to pursue the action, advising that it would have to be undertaken by the creditors under s. 38 of the Bankruptcy and Insolvency Act because the estate was impecunious. In 2005, Sloan was discharged from bankruptcy. The plaintiff's action was dismissed under s. 176(2). In 2006, the plaintiff obtained an order from the Registrar that the trustee assign its right of action against the defendants to the plaintiff. The action was dismissed as being barred by the two year limitation period. On appeal (272 O.A.C. 275), the action was held not to be statute barred and the action was reinstated. The trial judge then dismissed the action on the grounds of abuse of process, res judicata and issue estoppel. The plaintiff appealed. A motion for the plaintiff's counsel to personally post security for costs was dismissed by a single appellate judge. The appeal on the merits and a motion to review the security for costs decision were heard together.

The Ontario Court of Appeal dismissed the motion to review the security for costs decision and allowed the plaintiff's appeal. The action did not constitute an abuse of process and was not precluded by res judicata or issue estoppel.

Bankruptcy and Insolvency - Topic 6448

Administration of estate - Actions by trustee - Assignment of - The plaintiff obtained judgment against Sloan - Sloan had transferred the matrimonial home to his wife shortly after the action was commenced - In 2002, the plaintiff sued the defendants to set aside the transfer as a fraudulent conveyance - In 2004, Sloan declared bankruptcy - The plaintiff proved its claim in bankruptcy - The action was stayed - The trustee declined to pursue the action, advising that it would have to be undertaken by the creditors under s. 38 of the Bankruptcy and Insolvency Act - In 2005, Sloan was discharged from bankruptcy - The plaintiff's action was dismissed under s. 176(2) - In 2006, the plaintiff obtained an order from the Registrar assigning the trustee's right of action against the defendants to the plaintiff - The trial judge dismissed the action on the grounds of abuse of process, res judicata and issue estoppel - The Ontario Court of Appeal allowed the plaintiff's appeal and reinstated the action - The judge's decision was based on the faulty premise that the 2008 action advanced the same claims as the 2002 action - The 2002 action was brought on the plaintiff's own behalf - The 2008 action under s. 38(1) was the trustee's claim, not the plaintiff's - The 2008 action was not an action by the plaintiff on its unsatisfied judgment - It was not contested that the trustee could bring such an action - There was no abuse of process (collateral attack on the discharge order or the order dismissing the 2002 action) and res judicata and issue estoppel did not preclude the action, as there had been no adjudication of the action on the merits and the trustee (whose cause of action was being advanced) was not a party to the 2002 action.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process (incl. abuse of process by relitigation) - [See Bankruptcy and Insolvency - Topic 6448 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See Bankruptcy and Insolvency - Topic 6448 ].

Practice - Topic 5361

Dismissal of action - Grounds - General and want of prosecution - Abuse of process - [See Bankruptcy and Insolvency - Topic 6448 ].

Practice - Topic 8102

Costs - Security for costs - General principles - Persons against whom security may be ordered (incl. counsel) - The plaintiff appealed the dismissal of his action - The defendant sought security for costs on the ground that the plaintiff was impecunious and the appeal was frivolous - The defendant requested the plaintiff's counsel personally post security, because counsel was acting under a contingency agreement and had a stake in the litigation - A single appellate judge declined to order security - The Ontario Court of Appeal dismissed a motion to review that decision - The court agreed that ordering counsel acting on a contingency to post security for costs "would chill the very access to justice that is a main objective of the contingency fee regime" - Further, the appeal was not frivolous, particularly where the court went on to allow the appeal on its merits - See paragraphs 5 to 8.

Practice - Topic 8208

Costs - Security for costs - Security for costs of an appeal - Grounds for - General - [See Practice - Topic 8102 ].

Cases Noticed:

Shaw Estate v. Nicol Island Development Inc. et al. (2009), 248 O.A.C. 35; 51 C.B.R.(5th) 12; 2009 ONCA 276, refd to. [para. 23].

International Warranty Co. (Bankrupt), Re (1993), 155 A.R. 241; 73 W.A.C. 241; 27 C.B.R.(3d) 1 (C.A.), leave to appeal refused (1994), 185 N.R. 80; 178 A.R. 215; 110 W.A.C. 215 (S.C.C.), refd to. [para. 23].

Toyota Canada Inc. v. Imperial Richmond Holdings Ltd. - see International Warranty Co. (Bankrupt), Re.

Morganti et al. v. Strong et al. (1999), 126 O.A.C. 166; 14 C.B.R.(4th) 127 (C.A.), dist. [para. 33].

Counsel:

P. James Zibarras and Trung Nguyen, for the appellant;

Philip P. Healey and Miranda Spence, for the respondents.

This motion and appeal were heard on March 14, 2012, before Goudge, Sharpe and Juriansz, JJ.A., of the Ontario Court of Appeal.

The judgment of the Court was delivered by Goudge, J.A., and released on July 18, 2012.