Court File and Parties
DIVISIONAL COURT FILE NO.: 879/25
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: 2524991 ONTARIO CORPORATION AND QINGXIN SHAO, Appellants/Responding to Motion
AND:
SvN ARCHITECTS + PLANNERS INC., Respondent/Moving Party
BEFORE: Matheson J.
COUNSEL: Rachel Allen, for the Appellants
Asad Khan, for the Respondent
HEARD: July 30, 2026, by video-conference
Endorsement
1The respondent SvN Architects + Planners Inc. moves for security for costs for this appeal. SvN relies on r. 61.06(1)(a) of the Rules of Civil Procedure, submitting that there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. SvN further submits that there is other good reason to order security for costs under r. 61.06(1)(c). The respondent estimates its costs at $17,500.
2In the underlying appeal, the appellants challenge the decision of Deputy Judge E. Prattas dated September 29, 2025 (the Decision), made after a three-day trial. SvN successfully sued the appellants for unpaid invoices for professional architectural services in the amount of $29,094.98, plus interest and costs.
3With respect to the appellants’ assets in Ontario, SvN undertook available public searches, without finding assets, and asked the appellants about their assets. The appellants declined to provide any information.
4There is no issue about the test for security for costs of this appeal, which is summarized in Heidari v. Naghshbandi, 2020 ONCA 757, at paras. 5-10, and need not be repeated here.
5To establish the prerequisites to an order for security for costs under r. 61.06(1)(a), the moving party must show that there is good reason to believe that the appeal is frivolous and vexatious and that the appellants have insufficient assets to pay the costs of the appeal. All three criteria must be met.
6The "good reason to believe" standard requires the motion judge to reach only a tentative and not a definitive conclusion on the absence of merit or assets: Heidari, at para. 9.
7On the merits, there is good reason to believe that the appeal is frivolous. The appellants intend to raise issues about the contracting parties that conflict with the evidence and findings based on that evidence. The trial judge’s refusal to permit amendments to the statement of defence in final argument arose after a three-day trial, with shifting defences, where there does not appear to be good reason to believe that the proposed amendments would have changed the outcome. Further, certain of the proposed amendments directly conflict with the position advanced on this motion.
8Further, the trial judge addressed the issue of personal liability of Shao for the contract claim, as well as the liability of 2524991, and addressed the alternative basis for liability under unjust enrichment. The proposed appeal of the unjust enrichment finding does not have an arguable foundation and the judgment could therefore stand even if the breach of contract issues had more merit. Further, the trial judge’s credibility findings support the conclusion that this is a frivolous appeal. And the trial judge’s reasons are not sparse as alleged by the appellants. They appear to be more than adequate for this Small Claims Court decision.
9I have considered the many grounds for appeal set out in the notice of appeal, and those that the appellants focused on in this motion and find the first requirement for security is met.
10However, I do not conclude that this appeal is vexatious, taken to annoy or embarrass the respondent, or being conducted in a vexatious manner. I find that the second requirement for security under r. 61.06(1)(a) is not met.
11Since commencing this appeal, it has been conducted in an appropriate manner. There is a right of appeal. The appeal was commenced in a timely manner, and no issues have been raised about the ensuing process. The moving party focuses on the numerous grounds in the notice of appeal and a remedy sought in the appeal.
12On the many grounds in the notice of appeal, this may not be a sign of strength, but it is also not necessarily vexatious. The issues often become more focused in the factum. On the remedy sought in this appeal, the moving party focuses on the request to amend the defence and have a new trial. However, a remedial request is not necessarily vexatious. It is for the appeal court to decide on remedy and, even if the appeal were granted and an amendment permitted, I am not persuaded that there would necessarily be a new trial ordered. While I understand why, given the history of this case, having a new trial would be burdensome on the moving party, the remedy is for the appeal court to decide. Many of the grounds do not suggest to me that there would need to be a new trial.
13Having concluded that the second requirement is not met, I need not address the third requirement under r. 61.06(1)(a).
14Although I understand why the moving party is concerned about recovery of the costs of this appeal, given the history of this matter, I do not find that the criteria for an order under r. 61.06(1)(a) are met.
15I am also not persuaded to proceed under r. 61.06(1)(c). The moving party submits that this provision may be available because there is a low prospect of success and it would be nearly impossible to collect costs. But the moving party has not shown that very high threshold – nearly impossible – is met in this case.
16This motion is therefore dismissed, with costs to the appellants in the agreed upon total sum of $4,500, all inclusive.
Matheson J.
Date: July 31, 2026