A. Mahdavian

The moving parties sought an order requiring the responding party, a franchisee corporation, to post security for costs in relation to a counterclaim and third party proceedings arising from a franchise dispute.

The court considered Rule 56.01 of the Rules of Civil Procedure and whether the circumstances justified ordering security for costs against the counterclaim plaintiff.

The court held that the third parties were not entitled to security for costs because none of the recognized exceptions permitting recovery of third party costs from a plaintiff applied.

However, the defendant by counterclaim established that the responding party had previously pursued substantially identical relief in earlier proceedings and had failed to satisfy outstanding costs orders exceeding $40,000.

The court exercised its discretion to order security for costs in favour of the defendant by counterclaim.

Following the dismissal of the plaintiff's action, the successful defendants sought costs on a substantial indemnity basis.

The court found that the plaintiff's conduct was not reprehensible and awarded costs on a partial indemnity basis.

The court reviewed the defendants' bills of costs, making reductions for excessive trial preparation time and for the defendants' failure to properly produce relevant documents before trial, which had necessitated a two-day adjournment.

Total costs of $784,276.99 were awarded to the defendants.