The defendant, Hydro One, brought a motion for security for costs against the corporate plaintiff, which was in receivership.
The court applied the three-step test under Rule 56(1)(d) of the Rules of Civil Procedure.
The court found that the plaintiff had insufficient assets in Ontario but successfully established that it was impecunious and unable to raise funds to post security.
Furthermore, the court determined that the plaintiff's claim for damages arising from the defendant's alleged failure to process energy conservation program applications was not devoid of merit.
Concluding that an order for security for costs would unjustly end the litigation, the court dismissed the motion.