Stecyk v. Smysniuk et al., (2013) 423 Sask.R. 259 (CA)

• Judge: Caldwell, J.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: September 23, 2013
• Jurisdiction: Saskatchewan
• Citations: (2013), 423 Sask.R. 259 (CA);2013 SKCA 106

Stecyk v. Smysniuk (2013), 423 Sask.R. 259 (CA);

    588 W.A.C. 259

MLB headnote and full text

Temp. Cite: [2013] Sask.R. TBEd. OC.050

Stanley Roy Smysniuk and John Ivanechko, also known as John Ivanochko (respondents/appellants/defendants) v. Alan Stecyk (applicant/respondent/plaintiff) and Roy Smysniuk, Alroy Oilfield Construction Incorporated, and All-Roy Oilfield Contractors Corporation (respondents/respondents/defendants)

(CACV2432; 2013 SKCA 106)

Indexed As: Stecyk v. Smysniuk et al.

Saskatchewan Court of Appeal

Caldwell, J.A.

October 17, 2013.

Summary:

The plaintiff and the defendant formed a partnership in 1994, which was incorporated in 1996. The defendant managed the corporation. In 2000, wanting to leave the corporation, the plaintiff asked the defendant to buy out his share. They could not agree on a value. The plaintiff left. The defendant immediately formed a new corporation and, with the assistance of two others who were co-defendants, transferred all of the old corporation's assets, both directly and indirectly, to the new corporation. The plaintiff sued.

The Saskatchewan Court of Queen's Bench, in a decision reported at (2013), 422 Sask.R. 175, having determined that the transfers by the defendant in late 2000 and 2001 were fraudulent and the result of a conspiracy between the defendant and the two other co-defendants to deprive the plaintiff of his rightful share of the original corporation, awarded the plaintiff damages as follow: (1) against the defendant and the old and new corporations: $796,796, representing the plaintiff's share of the original corporation as of April 2000 ($360,000), a promissory note and damages in lieu of interest ($350,000); (2) against the first co-conspirator: $275,000, representing the value of the assets that he assisted in fraudulently conveying ($153,545) plus damages in lieu of interest ($121,455); and (3) against the second co-conspirator: $150,000, representing the value of the assets that he assisted in fraudulently conveying ($87,100) plus damages in lieu of interest ($62,900). The plaintiff was awarded solicitor and client costs including all disbursements. The court declared that each of the claims fell within ss. 178(1)(c) and 178(1)(e) of the Bankruptcy and Insolvency Act and were not to be released by any subsequent order of discharge from bankruptcy. The defendants appealed. Execution of the judgment was automatically stayed under rule 15(1) of the Court of Appeal Rules. The plaintiff applied to lift the stay and for orders (i) requiring the defendants to pay into court the amounts awarded by the trial judge; (ii) requiring the Registrar of Titles to remove a lock placed on the title to certain land owned by one of the defendant corporations; (iii) requiring the defendants to post security for the judgment amount and for costs of the appeal; and (iv) designating the appeal an "expedited appeal" under rule 43.

The Saskatchewan Court of Appeal, per Caldwell, J.A., allowed the application in part. The stay of execution was lifted, subject to a number of conditions. The remainder of the application was dismissed.

Practice - Topic 8207.2

Costs - Security for costs - Security for costs of an appeal - Indigent appellant - [See Practice - Topic 8209 ].

Practice - Topic 8209

Costs - Security for costs - Security for costs of an appeal - Grounds for - Special circumstances or other good reasons - The trial judge awarded damages against the defendants for losses caused by breaches of fiduciary duties, fraudulent conveyances and conspiracy - The defendants appealed - The plaintiff applied, inter alia, for orders for security for the judgment amount and for security for costs - The Saskatchewan Court of Appeal, per Caldwell, J.A., dismissed the application - The defendants appeared to have assets in Saskatchewan, many of which were already subject to charges in favour of the plaintiff - There was no indication that they were not diligently pursuing the appeal - The plaintiff had demonstrated no special circumstances that would justify an order for security for costs and had provided no authority for the proposition that a judge in chambers could order "security for the judgment amount" - See paragraph 11.

Practice - Topic 8953

Appeals - Stay of proceedings pending appeal - Circumstances when stay may be lifted - The trial judge awarded damages against the defendants for losses caused by breaches of fiduciary duties, fraudulent conveyances and conspiracy - The defendants appealed - Execution of the judgment was automatically stayed under rule 15(1) of the Court of Appeal Rules - The plaintiff applied, inter alia, to lift the stay - The Saskatchewan Court of Appeal, per Caldwell, J.A., allowed the application - The plaintiff was concerned that the inherent duration of the appeal process would afford the defendants time to dissipate assets - There was a strong factual basis for this concern - The plaintiff held enforcement charges against much of the defendants' real and personal property, but there was no guarantee that the defendants would maintain the assets' value - The defendants' assertion that they would be financially unable to proceed with the appeal if the stay was lifted weighed against lifting the stay - However, the defendants' only evidence supporting their allegations of impecuniosity were statements to that effect and personal property and land titles registry entries disclosing charges against their properties - The court gave little weight to the prejudice that might befall the defendants if the stay was lifted - There was insufficient weight to counterbalance the plaintiff's real concern regarding dissipation - The stay was lifted with a number of conditions - See paragraphs 1 to 10.

Practice - Topic 9134

Appeals - Hearing of appeal - Expediting - The trial judge awarded damages against the defendants for losses caused by breaches of fiduciary duties, fraudulent conveyances and conspiracy - The defendants appealed - Execution of the judgment was automatically stayed under rule 15(1) of the Court of Appeal Rules - The plaintiff applied, inter alia, to lift the stay and to have the appeal designated an "expedited appeal" - The Saskatchewan Court of Appeal, per Caldwell, J.A., having lifted the stay on conditions, dismissed the application for an expedited appeal - There was no indication that the appeal was not proceeding at an adequate speed - The stay of execution had been lifted - The plaintiff had provided no other basis on which to conclude that he might be prejudiced if the appeal were to proceed in the usual manner - See paragraph 11.

Cases Noticed:

Ochapowace First Nation v. Araya and Shepherd (1994), 123 Sask.R. 311; 74 W.A.C. 311 (C.A.), refd to. [para. 5].

Tekarra Properties Ltd. v. Saskatoon Drug and Stationery Co. (1985), 37 Sask.R. 286; 17 D.L.R.(4th) 155 (C.A.), refd to. [para. 5].

Horseshoe Creek Farms Ltd. v. Sterling Structures Co., Ferguson and Swertz (1982), 15 Sask.R. 54 (C.A.), refd to. [para. 5].

Bank of Nova Scotia v. Omni Construction Ltd., Telfer Investments Ltd., Schwartz, Bauer and Tuffs (1981), 14 Sask.R. 81 (C.A.), refd to. [para. 6].

Vagi et al. v. Peters (1989), 74 Sask.R. 46 (C.A.), refd to. [para. 6].

Rieger et al. v. Burgess et al., [1987] 2 W.W.R. 137; 53 Sask.R. 199 (C.A.), refd to. [para. 6].

MacKay Construction Ltd. v. Potts Construction Co. (1983), 25 Sask.R. 81 (C.A.), refd to. [para. 6].

Middlemiss Holdings Ltd. v. Brothers' Grocery Ltd. et al. (1987), 56 Sask.R. 273 (C.A.), refd to. [para. 6].

Bank of Nova Scotia v. Simonot et al. (1992), 100 Sask.R. 257; 18 W.A.C. 257 (C.A.), refd to. [para. 6].

Counsel:

Jessie Buydens, for the respondents, appellants;

Robert J. Gibbings, Q.C., for the respondents, respondents;

Ivan Holloway, for the applicant, respondent.

This application was heard in Chambers on September 23, 2013, by Caldwell, J.A., of the Saskatchewan Court of Appeal, who delivered the following written reasons for judgment on October 17, 2013.