The defendants moved for an order requiring the plaintiff to post additional security for costs under Rule 56.01 of the Rules of Civil Procedure.
Although the plaintiff resided outside Ontario and the court found that the defendants had satisfied the threshold for ordering security, the plaintiff argued that the proceeding was fundamentally an oppression action under the Nova Scotia Companies Act.
The court held that the true nature of the claim was oppression based on the plaintiff’s status as a beneficial shareholder and allegations that corporate managers stripped profits to the detriment of that shareholder.
Section 7(3) of the Third Schedule to the Nova Scotia Companies Act prohibits requiring security for costs from a complainant bringing such an action.
As a result, despite finding that security would otherwise have been justified, the court dismissed the motion.
