Section 133(b) of Ontario's Courts of Justice Act
states that leave to appeal is required "where the appeal is
only as to costs that are in the discretion of the court that made
the order for costs." The Ontario Court of Appeal's
September 25, 2014 decision in KDS v. Aamazing Technologies Inc.
confirms that leave is not required to appeal if the order
appealed from also affects substantive rights of a party. In doing
so, the Court also gave helpful guidance regarding when appeals
should be heard together, and when security for costs should be
ordered on an appeal.
The case emerged from complicated litigation, a different aspect
of which has previously been discussed on this blog, and which has spanned across Taiwan,
Hong Kong, California and Ontario.
Christina Chiang, one of the defendants in the underlying
Ontario actions and one of the respondents in this appeal, had
become indebted to KDS, one of the plaintiffs in the actions and
one of the appellants on this appeal, after the Ontario Superior
Court ordered the enforcement of a California judgment against her.
In another action in Ontario where KDS was unsuccessful, KDS was
ordered to pay Christina Chiang's costs. The trial judge
refused to order that the costs award be set off against the amount
that Christina Chiang owed KDS. The Court then analyzed how KDS,
which had also filed a notice of appeal from the trial
judgment dismissing its claim but had not perfected the appeal,
could appeal the costs order:
Is leave required to appeal the costs
 Christina Chiang and the
Trustee argue that leave is required for all appeals as to costs,
pursuant to s. 133(b) of the Courts of Justice Act.
 KDS argues that the order
goes beyond the usual "quantum and entitlement"
determination with respect to costs; the order alters legal rights
not related to the costs of the fraudulent conveyance action.
 The costs order
Christina Chiang is entitled to her costs fixed in the amount
to the extent that the costs are paid by the Estate, the
Trustee is entitled to seek recovery from KDS;
counsel for Christina Chiang is entitled to a solicitor's
lien on the costs, which shall have priority over the claims of the
Estate's unsecured creditors;
all of KDS's reasonable costs arising from KDS's
efforts to sell the Chiang's house at 10 Cortina Court, and an
outstanding costs order for $15,000 made against Christina Chiang,
have been satisfied from surplus funds realized from the sale of
outstanding costs orders made against Jay and Christina Chiang
are to be satisfied out of funds received by the Trustee from
Winner International Group Ltd. after the trial decision.
Is the order more than a costs order?
 Here, the trial judge's
decision not to allow set-off has a substantive effect on the legal
rights of KDS. The decision effectively eliminates the
ability of KDS to set-off this debt against the much larger
judgment debt owed to it by Christina Chiang. [emphasis
 In our view, the order is not
a straightforward determination of who should pay the costs and how
much those costs should be. The order determines rights that extend
beyond the entitlement to and quantum of the costs. As such, the
appeal is not "only as to costs". Thus, leave is not
required under s. 133(b) of the Courts of Justice Act. However, if
leave were required, we would have granted leave.
Should the costs appeal be separated from the main
 The complexity of the issues
involved and the commonality of the history make it necessary to
have the costs appeal heard with the enforcement appeal. In
addition, the claim for set-off can only be fully evaluated in the
context of the past judgments and costs orders issued against Jay
and Christina Chiang. The appeals will be heard together.
 KDS will have 45 days to
perfect the appeals.
Security for Costs
 Christina Chiang asks that
KDS be required to pay the costs order, as well as security for
costs of the appeal, into this court. She contends that KDS has no
assets in Canada.
 The appeal is not frivolous
or devoid of merit. In addition, it is Ms. Chiang who has been
found in contempt of court and who has failed to pay costs ordered
against her. This would not be an appropriate case for security for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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