The Ontario Securities Commission (OSC) brought a motion for security for costs against the appellants, who were appealing a merits and sanctions decision that found they orchestrated a massive fraud at Sino-Forest Corporation.
The OSC sought $100,000 in security, arguing the appeal was frivolous and vexatious and the appellants lacked assets in Ontario.
The Divisional Court found that while the appeal did not appear vexatious, the grounds of appeal appeared frivolous.
Furthermore, the court found 'other good reason' to order security under Rule 61.06(1)(c) due to the strong findings of fraud and evidence that the appellants had put assets out of reach.
Applying a holistic approach, the court concluded it was just to order the appellants to post $100,000 as security for costs.
