The plaintiffs moved for an order requiring the defendant to post $40,000 as security for costs in relation to a counterclaim arising from mortgage enforcement and seizure of business assets.
The motion relied primarily on Rule 56.01(1)(c) of the Rules of Civil Procedure because previous costs orders against the defendant remained unpaid.
The court held that although the plaintiffs met the initial threshold for seeking security for costs, the defendant’s counterclaim substantially overlapped with his defence to the main action.
Requiring security would effectively condition the defendant’s ability to defend the claim.
The court also found that the defendant’s case was not frivolous and had a reasonable prospect of success.
The motion for security for costs was dismissed.
