The defendants moved for security for costs against the plaintiff, Hockeyfest Incorporated, under Rule 56.01 of the Rules of Civil Procedure.
The court applied a two-stage test: first, whether the plaintiff was a corporation with insufficient assets (which was conceded), and second, whether justice demanded the case proceed without security, considering impecuniosity and the merits.
The court found Hockeyfest failed to provide adequate financial disclosure to prove impecuniosity and that its claims against all defendants had very little chance of success due to its own non-compliance with contractual terms and misrepresentations.
Consequently, the court ordered Hockeyfest to post significant security for costs to each defendant, prohibiting further steps until paid, and allowing for dismissal if not posted within 30 days.
