Power to Strike or Dismiss For Failure to Pay Interlocutory Costs Constitutional

Rule 57.03(2) allows a court, albeit in extreme cases (Rasekhi-Nejad v. General Accident Assurance Co. of Canada, [2004] O.J. No. 4225 (Ont. S.C.J.) ), to strike a defence or stay or dismiss a claim for failure to pay interlocutory costs.

The recent Prince Edward Island appeal decision in Ross v. City of Charlottetown 2008 PESCAD 06 considers whether the Rule offends the Charter as being discriminatory against the poor (PEI’s Rules are identical to Ontario’s).

The Court, after careful review, decided not concluding:

[34] I conclude Rule 57.03(2) of the Rules of Civil Procedure does not violate the Charter, specifically ss. 15 and 7. Poverty is not one of the enumerated grounds in s. 15(1), nor is it analogous to any of these grounds. (Polewsky v. Home Hardware Stores Ltd. 1999, Can LII 14906 (Ont. S.C.)) As to s. 7, that section protects bodily integrity, not economic integrity. Finally, even if Rule 57.03(2), as applied to impecunious litigants, violated some section of the Charter, the discretion given by the Rule to dismiss the actions of litigants who fail to pay costs on interlocutory matters is a reasonable limitation on the rights and freedoms guaranteed by the Charter, and can be demonstrably justified in a free and democratic society. Specifically, no litigant rich or poor should be entitled to bring unsuccessful interlocutory motions and appeals, and then be immune to the consequences of failing to pay costs awarded against that litigant. Exposing some litigants to endless expense and litigation so that other litigants may enjoy unlimited access to the courts does not right a wrong, it creates an unfettered right to abuse the rights of others.