Baichoo

The defendant brought a motion seeking security for costs under Rule 56.01(1)(d) of the Rules of Civil Procedure, arguing there was good reason to believe the plaintiff lacked sufficient assets in Ontario to satisfy a potential costs award.

The court reviewed evidence including alleged asset transfers, a bonding company's security enforcement, delayed corporate filings, lien claims, and non-payment of previous costs orders.

The court held that the moving party failed to meet the required evidentiary threshold showing indicia of insolvency or corporate instability.

Much of the evidence was speculative, hearsay, or insufficient to establish asset insufficiency.

The motion for security for costs was dismissed.

The defendant moved for security for costs against a corporate plaintiff under Rule 56.01(1)(d), alleging there was good reason to believe the plaintiff lacked sufficient assets in Ontario to satisfy a potential costs award.

Although the court found evidence suggesting financial instability and concluded the moving party met the initial threshold and obtained leave under the Construction Lien Act, the motion ultimately failed.

The court held that the plaintiff had not met the high evidentiary burden to prove impecuniosity that would defeat the motion.

However, the defendant’s unexplained delay in bringing the motion, breach of case management directions, and the existence of substantial counterclaims arising from the same facts rendered an award of security for costs unjust.

The motion was therefore dismissed.