The defendants appealed an interlocutory order requiring them to post $100,000 in security for costs or have their Statement of Defence and Counterclaim struck.
The primary issue was whether Rule 56.01(1)(c) conflicts with section 12 of the Libel and Slander Act.
The Divisional Court found no conflict, as the rule and the statute rely on different criteria.
However, the court varied the order, holding that a party should not be required to post security merely to defend itself.
The order was amended so that only the defendants' counterclaim would be struck if security was not posted.