“Counsel for Manny argues that the decision of the trial judge is clearly wrong as it relates to the award of costs against him as a non-party in the following four ways:
1) It is argued that the court’s discretion under s. 131(1) of the Courts of Justice Act to award costs against a non-party is limited to cases where the non-party is the real litigator who, in order to avoid liability for costs, puts forward a “man of straw” to prosecute the litigation. Having found that there was no evidence that Marcos was named plaintiff solely for the purpose of insulating Manny from liability for costs, and no evidence that Marcos was a shell company without exigible assets, it is argued that the trial judge erred in finding Manny liable. He was the true and only proper litigant and not a man of straw.
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While Marcos and Manny both urged the trial judge not to make an award of costs against the non-party unless that non-party was a “person of straw”, in this case the trial judge, having concluded that Manny was not a person of straw, nonetheless, in our view, quite properly interpreted and applied her inherent jurisdiction to order costs against a non-party who had committed an abuse of process. Specifically, the trial judge referenced the decision of the Court of Appeal in 1318847 Ontario Limited v. Laval Tool & Mold Ltd., 2017 ONCA 184, where the court confirmed that Superior Courts of record have inherent jurisdiction to control their own processes and to protect them from abuse. The Court of Appeal makes clear that the Superior Court of Justice has an inherent jurisdiction which must be exercised “sparingly and with caution”. Of particular concern as it relates to the facts of this case and the egregious conduct of Manny, the Court of Appeal in Laval Tool makes clear at para. 66:
In particular, apart from statutory jurisdiction, Superior Courts have inherent jurisdiction to order non-party costs, on a discretionary basis, in situations where the non-party has initiated or conducted litigation in such a manner as to amount to an abuse of process.”