Icon Wheelchairs Inc. v. Gee Jay Group International Inc., 2025 ONSC 2638
COURT FILE NO.: CV-16-550600
DATE: 2025-04-30
COURT: Superior Court of Justice - Ontario
RE: Icon Wheelchairs Inc. and Icon Wheelchairs Canada, Plaintiffs
- and -
Gee Jay Group International Inc. and Nitin Jain, Defendants
BEFORE: Todd Robinson
COUNSEL:
M. Bradley and J. Lake, for the defendants (moving parties)
K. Adams, for the plaintiffs
HEARD: 2024-11-28
Reasons for Decision (Motion for Security for Costs)
Introduction
[1] The defendants initially brought this motion seeking security for costs from each of the plaintiffs, Icon Wheelchairs Inc. (“Icon USA”) and Icon Wheelchairs Canada (“Icon Canada”). Prior to the motion being argued, Icon USA discontinued its claims against the defendants, with the defendants electing to continue their counterclaim against both plaintiffs. The motion accordingly proceeded only with respect to relief against Icon Canada and with respect to whether Icon USA is liable for any costs of this action to the date of discontinuance.
[2] I am dismissing the motion. I am not satisfied that an order for security for costs is just in all the circumstances, particularly given the defendant’s delay in bringing this motion and there being a sufficiently meritorious claim by Icon Canada, which includes credibility issues more properly decided at trial. With respect to costs of the discontinued action by Icon USA, I am fixing costs payable to the defendants, but staying payment of those costs until the defendants’ counterclaim has been decided, including costs.
Analysis
Relevant Legal Framework
[3] The defendants seek security for costs under subrules 56.01(1)(d) and (e) of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”), which provide as follows:
56.01 (1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,
(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;
(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;
[4] There is no dispute on the applicable test for security for costs. Granting security for costs is a discretionary decision. The initial onus is on the moving party to demonstrate that the responding party fits within one or more of the provisions of subrule 56.01(1) of the Rules. Doing so “triggers the enquiry” into security for costs, which involves considering a number of factors and making the order that is just in the circumstances of the particular case: Yaiguaje v. Chevron Corporation, 2017 ONCA 741 at para. 25.
[5] Determining the justness of a security for costs order requires a holistic approach, in which all circumstances of the case are examined, as guided by the overriding interests of justice. Although various factors have been outlined by courts to be considered, such as merits of the claim, delay in bringing the motion, the impact of a defendant’s conduct on the available assets of the plaintiff, access to justice concerns, and the public importance of the litigation, those factors are not static. Each case must be considered and decided on its own facts: Yaiguaje v. Chevron Corporation, 2017 ONCA 827 at paras. 22-25.
Is There Good Reason to Believe That Icon Canada Lacks Sufficient Assets in Ontario?
[6] Icon Canada is a corporation. If there is good reason to believe that it lacks sufficient assets in Ontario to satisfy a costs award, then that is sufficient for the defendants to satisfy their threshold onus under subrule 56.01(1)(d) of the Rules. The same sufficient assets requirement applies for the defendants to meet their threshold onus under subrule 56.01(1)(e).
[7] In my view, the defendants have demonstrated good reason to believe that Icon Canada lacks sufficient assets in Ontario to satisfy a costs award.
[8] In response to this motion, Icon Canada has disclosed various financial records, including bank account statements, GST returns, income tax assessments, and a vehicle purchase agreement. Icon Canada takes the position that it is a going concern and does, in fact, have sufficient assets to satisfy any reasonable costs award that may be made against it in this action. Although the threshold evidentiary onus lies on the defendants, in my view, it is appropriate for me to consider the entire evidentiary record before me, including the financial documents produced by Icon Canada, in deciding whether that threshold onus has been met.
[9] I am satisfied that the record supports good reason to believe that Icon Canada lacks sufficient assets in Ontario to satisfy a costs award in this action. I say this for three main reasons.
[10] First, the evidence put forward in the affidavit of Jeffrey Adams, the president of Icon Canada, is that Icon Canada’s bank account balances as of July 3, 2024 totalled $42,814. Based on the defendants’ bill of costs and the parties’ respective costs outlines for this motion, that amount is at best equivalent to a reasonable low-end partial indemnity costs award at the end of trial. The banking information provided is limited to a 100-day period. The records disclose that, prior to early May 2024, one account had a notably lower balance.
[11] Second, I have been directed to examination for discovery evidence supporting that Icon Canada’s only exigible asset is funds in its bank accounts. During his examination for discovery in December 2017, Jeffrey Adams was directly asked what assets of Icon Canada exist in Ontario. In response, Mr. Adams identified Icon Canada’s bank account and confirmed that there was nothing else.
[12] In response to this motion, Mr. Adams has given additional evidence regarding intellectual property owned by Icon Canada and that Icon Canada continues to develop products and acts as a reseller of adaptive sports equipment. This evidence does not assist Icon Canada’s position. It has not tendered any valuation of the intellectual property, which in any event is not a readily exigible asset. There is also no specific evidence on the extent and regularity of revenue generated from the reselling business.
[13] There is some evidence of a BMW vehicle owned by Icon Canada, but two-thirds of the purchase price was financed with a loan. That loan is secured with a registration under the Personal Property Security Act, RSO 1990, c P.10. A $25,096 down payment appears to have been paid (including deposit), but vehicles are depreciating assets. From the record before me, the exigible value of the vehicle is uncertain at best.
[14] Third, although Icon Canada’s financial disclosure does tend to support that it is a going concern, it raises more questions about Icon Canada’s exigible assets than it answers. Jeffrey Adams’ evidence on Icon Canada’s operations is general and non-specific. It does not assist Icon Canada in responding to this motion. The supporting documents are not explained and are tendered for the truth of their contents without substantiation. Put simply, the documents constitute hearsay. There are several examples:
- (a) Income tax assessments for 2022-2024 have been tendered, which disclose approx. $40,000 to $50,000 in annual revenue for Icon Canada year over year. However, no evidence has been tendered on the source of that revenue. Icon Canada’s operating expenses are also equal to the revenue, with either net losses or no more than a modest profit in any given year. That suggests Icon Canada operates close to the line of insolvency.
- (b) There is no evidence that the bank account balances represent any kind of bank “float” that will remain in the accounts throughout and after this litigation. The evidence before me does not correlate the bank account and Icon Canada’s annual net income as set out in the income tax assessments. That leaves questions about whether the bank balance will be depleted by the operating expenses, which appear commonly to exceed annual revenue.
- (c) Jeffrey Adams’ affidavit says that Icon Canada has income from his speaking engagements, in support of which he provides a list of invoices. The invoices themselves not in evidence and there is no evidence on the invoice amounts, and whether they were paid. Importantly, there is no evidence on whether the invoices are properly receivables of Icon Canada or Jeffrey Adams personally. There is simply insufficient evidence to assess to what extent income from these speaking engagements is an exigible asset of Icon Canada (as opposed to Jeffrey Adams personally) against which a costs award may reasonably be enforced.
- (d) Icon Canada points to evidence that it was able to pay the $23,096 balance owing on delivery of the BMW vehicle. However, there is no evidence on the source of those funds. The purchase was in October 2024, which is after the date of the bank account information before me. I am asked to infer that the BMW vehicle is an asset in addition to Icon Canada’s bank accounts, rather than that the $23,096 was paid from the $42,814 in Icon Canada’s bank accounts. I am not prepared to draw that inference. Icon Canada could have tendered direct evidence on the source of funds for the BMW vehicle purchase, but did not.
[15] For these reasons, I am satisfied that the defendants have met their threshold onus under subrule 56.01(1)(d). In my view, given that determination, I need not decide whether the claims are frivolous and vexatious. The defendants need only satisfy one of the provisions of subrule 56.01(1) to trigger the inquiry into security for costs.
Would an Order for Security for Costs Be Unjust?
[16] At the second stage of the analysis, the onus shifts to Icon Canada to demonstrate that an order for security for costs would be unjust. Icon Canada argues that security for costs would be unjust for several reasons, namely:
- (a) Icon Canada has sufficient assets to satisfy any costs awards;
- (b) The defendants have substantially delayed in bringing this motion; and
- (c) Icon Canada has a meritorious claim with a good chance of success.
[17] With respect to sufficiency of assets, Icon Canada has not demonstrated that it does, in fact, have sufficient assets to satisfy an adverse costs award. My comments above on the threshold onus apply equally here. Icon Canada’s evidence on assets has numerous gaps and raises many unanswered questions. On the record before me, I am unable to agree with Icon Canada’s submissions that it will clearly be able to satisfy a costs order.
[18] With respect to delay, there is no dispute that there has been delay in bringing this motion. The action was commenced in 2016. All discovery steps and mediation have now been completed. The action has also been set down for trial, albeit after this motion was scheduled at a case conference before me. This iteration of the defendants’ motion for security for costs was not brought until shortly after the plaintiffs had passed the trial record in May 2024.
[19] Relevant principles in assessing delay have been summarized by my colleagues in Wilson Young & Associates Inc. v. Carleton University, 2020 ONSC 4542 at para. 59 and Mountainwide Auto Parts Ltd. v. UAP Inc., 2022 ONSC 5462 at paras. 12-13. Those principles are as follows:
- (a) A motion for security for costs must be brought promptly by the defendant upon discovering that it has a reasonable basis for bringing the motion. A plaintiff ought not be placed in the position of having to post security for costs after having incurred significant expense in advancing the lawsuit.
- (b) The moving party should not be entitled to security for costs if there is evidence that the delay in bringing the motion caused prejudice to the plaintiff.
- (c) Even in the absence of prejudice to the plaintiff, a failure by the moving party to provide an explanation for the delay is fatal to the motion.
[20] The defendants argue that the delay in bringing this motion is fully explained on the record before me and is excusable in the circumstances of this case. They further submit that there is no prejudice to Icon Canada from any delay. Icon Canada disagrees, except for delay since 2021, which Icon Canada concedes has been explained. I find that the defendants have significantly delayed in bringing a motion for security for costs prior to 2021 and have failed to adequately explain that delay. The extent of the unexplained delay is significant when considering the justness of security for costs in this case.
[21] I have considered the history of this action in three periods: a period from commencement of the action until February 2018, when the plaintiffs provided a post-discovery letter with their position on security for costs; a period between February 2018 and May 2021, when a prior motion for security for costs was brought; and the period since bringing that motion in May 2021. As already noted, Icon Canada concedes that delay in the third period is explained. However, I am not satisfied that the defendants have sufficiently explained delay in the first two periods.
[22] The first period is problematic. The defendants initially questioned whether the plaintiffs were extra-provincial corporations and raised security for costs in July 2016. Plaintiffs’ counsel confirmed that Icon Canada was resident in Ontario, but no immediate position was provided on assets. In December 2016, defendants’ counsel challenged Icon USA’s extra-provincial status and requested a position on security for costs. Plaintiffs’ counsel responded by letter in February 2017, asserting that Icon USA had sufficient assets and that Icon Canada was a going concern.
[23] The defendants argue that the letter from plaintiffs’ counsel in February 2017 provided an answer, and that they had no reasonable basis to bring a motion until examinations for discovery ten months later in December 2017. During those examinations, Jeffrey Adams did give direct evidence on the plaintiffs’ assets. That is argued to have led to the defendants’ demand for proof of sufficiency of assets shortly after discoveries.
[24] I have difficulty with the defendants’ argument. The response given by plaintiffs’ counsel in February 2017 was self-serving. It stated, in part, that Icon USA had “demonstrated that [it] currently has sufficient funds to satisfy a reasonable cost order” and that Icon Canada “remains an active corporation with incoming receivables from its EU partners.” These statements were not substantiated by any further particulars or documents. There is no evidence from the defendants explaining how these bald statements answered their concerns.
[25] Regardless, the defendants’ position has always been that the plaintiffs were insolvent with insufficient assets to satisfy a costs award. That is expressly pleaded at para. 21 of the statement of defence and counterclaim. In fact, Icon USA had been dissolved as a corporation in July 2015, prior to this action being commenced. Despite the defendants’ pleaded position, there is no evidence before me of investigating the assets of the plaintiffs or supporting a finding that the defendants accepted the positions set out in the February 2017 letter. I am not prepared to infer from the materials before me that the defendants were, in fact, satisfied by the response in February 2017. The defendants could have tendered direct evidence on the point from the Nitin Jain or others, including from prior defendants’ counsel, but did not.
[26] The evidence before me does not support a finding that the December 2017 discoveries changed the defendants’ views on the financial wherewithal of either plaintiff. Even if that were true, in my view, a defendant who has concerns about the solvency of a plaintiff cannot sit idly by while litigation costs are incurred without investigating those concerns and, if seemingly founded, bringing a motion for security for costs. It is unfair and prejudicial to a plaintiff for a defendant to permit discovery costs to mount and wait for examinations for discovery to explore the matter before bringing a motion. The purpose of examinations for discovery is to ask questions about the parties’ positions and seek evidence on substantive issues in dispute in the action as well as to test the opposite party’s case. It is not intended to be a tool to test financially solvency of a plaintiff or perform a judgment debtor examination before having judgment.
[27] This is not a case where the defendants had no basis to believe that Icon USA and Icon Canada lacked sufficient assets prior to discoveries. On the record before me, the defendants’ concerns raised in July and December 2016 were not addressed by the plaintiffs, other than by a self-serving denial in February 2017. I find no change in circumstances between February 2017 and December 2017. No efforts appear to have been made by the defendants to investigate their concerns at all prior to discoveries.
[28] The second period is similarly problematic. In my view, the defendants’ explanation for not bringing a security for costs motion delay is weak. The defendants argue essentially that they ought to be excused from failing to bring the motion until May 2021 because the plaintiffs themselves had taken no steps to advance the case. They agree that a defendant should not let a plaintiff incur costs and then “pop out” to seek security, but argue that is not what they are doing here. They submit that the plaintiffs did nothing between 2018 and 2021. The plaintiffs thereby incurred no costs and there was no prejudice from any delay in bringing this motion through that period.
[29] I agree with the defendants that the record supports complete silence from the plaintiffs after February 2018. However, given the stage of proceedings, it was not reasonable for the defendants to similarly do nothing to advance their repeatedly threatened motion. All discovery steps had been completed. Despite readiness for mediation and set down, and pre-existing security for costs concerns, the defendants did nothing for over three years. They did not obtain new information in 2021 that was unavailable to them in 2018. To the contrary, the defendants were aware of the same facts that they relied upon in moving for security for costs in 2021 throughout the preceding three-year period.
[30] I do not dispute that a plaintiff has the primary burden of advancing litigation, but a defendant is not without any obligation itself. In this case, the defendants also have a counterclaim that, despite discontinuance by Icon USA, they have elected to pursue against both plaintiffs. There is no evidence of any efforts by the defendants to advance this motion or the action, or to query the reasons for silence from the plaintiffs. If they were genuinely concerned about security for costs, then continuing to delay in bringing a motion in a nearly trial-ready action and meeting silence and inactivity with equal silence and inactivity was done at the defendants’ own risk.
[31] In the third period, as already noted, Icon Canada concedes that the delay has been explained. In May 2021, the defendants served their motion record for a prior motion for security for costs, which was returnable in November 2021. Responding affidavits were served shortly before the motion return date. In response, defendants’ former counsel confirmed his intention to cross-examine and indicated that the motion should be adjourned pending the examinations. There appears to have been miscommunication between opposing counsel and the court, and the motion was ultimately dismissed when defendants’ counsel failed to appear at the hearing. That resulted in LawPRO becoming involved and a motion being brought to set aside the motion dismissal order, which was ultimately granted on consent in March 2024. This iteration of the security for costs motion was thereafter brought.
[32] Although the third period of delay has been conceded, in my view, the delay accrued in the first two periods prior to May 2021 was already significant. The first security for costs motion was brought over five years after the action had been commenced and nearly five years after the defendants first raised security for costs. Icon USA’s status as a dissolved extra-provincial corporation was unchanged throughout the five-year period. By no later than December 2017, the defendants had sworn evidence on the available assets of the plaintiffs, yet took no steps to advance a security for costs motion for another three and a half years. There was no change in the defendants’ knowledge or information on the plaintiffs’ assets during that period. In my view, the delay in seeking security for costs is inadequately explained.
[33] Even if I am wrong in the foregoing, then I am of the view that Icon Canada has a sufficiently meritorious claim that it would be unjust to require security for costs at this late stage. Case law cited by the parties supports that Icon Canada must demonstrate a “good chance of success” or “real possibility of success”: 2311888 Ontario Inc. v. Ross, 2017 ONSC 1295 at para. 17; Montrose Hammond & Co. v. CIBC World Markets Inc., 2012 ONSC 4869 at para. 38.
[34] Given the Court of Appeal’s guidance in Yaiguaje v. Chevron Corporation, and the extent of discretion now afforded to the court in deciding a security for costs motion, I question whether a “good chance of success” threshold must be met. In my view, there is no longer any need to engage in a technical assessment of whether a plaintiff’s chances of success at trial are “reasonable”, “good”, “high”, or at any other threshold. It is enough for the court to find a sufficiently meritorious claim such that the justness of the case does not support a security for costs award.
[35] With respect to the merits, Icon Canada is advancing three primary claims: a claim in contract, a claim in negligence, and a claim in professional negligence. This is not a motion for summary judgment. It is beyond the scope of this motion to make findings of fact, weigh evidence, draw inferences, and assess credibility when considering the merits of Icon Canada’s claims. That is the function of the trial judge. Nevertheless, in my view and on the record before me, Icon Canada has demonstrated sufficient merit to its claims to satisfy its onus.
[36] With respect to the contract claim, there is limited evidence from both sides on contract formation. There is, though, direct evidence from Jeffrey Adams on both his initial dealings with Nitin Jain and subsequent dealings between Mr. Jain and Icon Canada employees. No reply evidence was tendered from Mr. Jain to challenge Mr. Adams’ account of events. In my view, resolving the dispute over whether any oral contract was formed with Icon Canada will turn to a great extent on the dealings between and credibility of Nitin Jain and Jeffrey Adams. That is not something properly assessed or decided on this motion. It also cannot be decided in the absence of any direct evidence from Mr. Jain, which I do not have. In my view, the record supports an arguable case for an oral contract being entered with both Icon USA and Icon Canada.
[37] I also find there to be an arguable case for Icon Canada’s position that it is entitled to rely on a contract with Icon USA as an intended third-party beneficiary of the contract. Icon Canada points to case law supporting that third party beneficiaries under a contract may rely on those clauses made for their benefit despite not being direct parties to the contract: London Drugs Ltd. v. Kuehne & Nagel International Ltd.; Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd.; Brown v. Belleville (City), 2013 ONCA 148. I am not convinced that any failure by Icon Canada to specifically plead that position will preclude it from succeeding in the argument at trial. Those are issues for the trial judge.
[38] The defendants have put forward a good argument on the “logic gap” between liability for breach of contract and Icon Canada’s claim for damages for cancellation of the plaintiffs’ medical device establishment license. However, I am convinced by Icon Canada’s arguments that there are triable issues and a reasonable prospect of establishing causation at trial.
[39] With respect to negligence, in my view, Icon Canada has an arguable claim on the merits. The defendants have advanced a good argument that the damages claimed are a form of pure economic loss, which case law supports is not recoverable in a claim for negligence absent real and substantial danger to the plaintiffs’ rights in person or property, as opposed to those of end-user consumers: 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35 at paras. 45-46 and 57; Winnipeg Condominium Corporation No. 36 v. Bird Construction Co..
[40] However, those arguments have been directly addressed by Icon Canada, which denies its claim is clearly for pure economic loss. Icon Canada points out that part of its damages claim is for costs incurred for parts that were supplied, which it submits is not a pure economic loss at all. Icon Canada also argues that a claim for pure economic loss is tenable at law, since recovery in this case would fall squarely within two of the categories for recovery recognized by the Supreme Court of Canada, namely negligent misrepresentation or performance of a service, and negligent supply of shoddy goods: 1688782 Ontario Inc. v. Maple Leaf Foods Inc., supra at para. 21.
[41] Specifically, Icon Canada argues that the defendants undertook to provide manufactured parts in accordance with technical drawings and ensuring proper manufacturing processes, in respect of which the plaintiffs reasonably relied on the defendants’ expertise and commitments. Icon Canada further argues that the defendants negligently supplied defective parts that failed to meet agreed specifications and failed to provide required certification documents on manufacturing processes, which caused the claimed losses. Mr. Adams’ affidavit provides facts that could well be held to support these arguments at trial.
[42] I cannot resolve the parties’ legal dispute on the record before me, nor would it be appropriate for me to do. There are disputed factual and legal issues that are, in my view, most properly left to the trial judge to weigh and assess. For the purposes of this motion, it is sufficient that I am convinced by Icon Canada’s arguments that it has a reasonable prospect of succeeding in its negligence claim.
[43] With respect to the professional negligence claim against Nitin Jain, I agree with the defendants that it appears more tenuous. However, given my views on the merits of the contract and negligence claims, I need not address that issue. The defendants are being commonly defended. It would be artificial to uncouple them solely for the purposes of this motion. No argument has been advanced that their costs of defending the action should be treated or viewed separately.
[44] The Court of Appeal has directed that courts be vigilant in ensuring that security for costs, which is designed to be protective in nature, is not used as a litigation tactic to prevent a case from being heard on its merits, even in circumstances where the other provisions of rule 56 have been met: Yaiguaje v. Chevron Corporation, supra at para. 23. Given the history of threatening security for costs motions and the delay in ultimately bringing one, it is difficult to view this motion as anything other than tactical.
[45] Regardless, even if not tactical, in my view, the significant delay in the defendants bringing a security for costs motion at a point when the action was nearly trial ready is itself sufficient to dismiss the motion. The failure to provide a reasonable explanation for moving sooner is fatal, irrespective of whether Icon Canada has suffered any actual prejudice. Moreover, given the arguable merits of Icon Canada’s contract and negligence claims, I am reinforced in finding that an order for security for costs would be unjust at this late stage in the proceeding.
[46] For the foregoing reasons, I dismiss the defendants’ motion.
Costs
[47] The parties agreed that I would deal with costs of the discontinued action by Icon USA at the same time as dealing with costs of the motion. Specifically, subrule 23.05(1) of the Rules provides that if all or part of an action is discontinued, then any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of the action. Rather than the defendants bringing a separate motion, the parties discussed and agreed to speak to costs of the discontinued action by Icon USA at this motion. I agreed that those costs could be addressed concurrently with submissions on costs of the motion. They are, however, separate issues.
[48] With respect to costs of the motion, Icon Canada has been entirely successful in opposing the motion and is entitled to its costs. It seeks $22,103.72, including HST and disbursements, on a partial indemnity basis. That includes costs of the first security for costs motion. The terms of the parties’ consent set-aside of the prior dismissal permitted the prior motion costs to be claimed on this motion. The defendants concede that the costs claim is reasonable. That concession was reasonable and appropriate. Icon Canada’s costs claim, which includes the prior motion, is lower than what the defendants would have sought themselves for only this motion. I am accordingly awarding Icon Canada the costs as claimed.
[49] With respect to costs of the discontinuance, the defendants seek one-half of their partial indemnity costs of the action to date of $13,514.68 in fees, plus one-half of the disbursements. The fees claimed are for litigation steps taken prior to the two motions for security for costs. In total, the defendants claim $8,082.08 in fees and disbursements as against Icon USA, rounded to $8,000.
[50] The plaintiffs argue that there should be no costs, since the costs would have been incurred in any event defending the claim by Icon Canada and there is no evidence that costs were in any way escalated by Icon USA’s involvement, particularly since the defendants knew from an early stage that Icon USA had been dissolved. Alternatively, the plaintiffs argue that costs should be addressed at trial, with costs against Icon USA reserved in the cause since the counterclaim against it is being continued.
[51] I reject the argument that Icon USA should not be liable for any costs because the costs would have been incurred in any event. Regardless of the same claim being advanced by both plaintiffs, there were still two plaintiffs. One of them has withdrawn its claim. I fail to see how it is just that Icon USA be insulated from an adverse costs award for a claim that it advanced, litigated, and then discontinued, irrespective of whether the claim is being continued by Icon Canada. The defendants are entitled to their costs of the action to the point of discontinuance as against Icon USA.
[52] While I understand the plaintiffs’ argument for deferring costs against Icon USA to trial, costs are now before me by agreement of the parties and I have no intention of hoisting the task on the trial judge. I am fixing the costs now. In my view, the one-half allocation is fair and proportionate. The sole issue is the timing of when those costs should be fixed and payable.
[53] I have decided that payment must be deferred because of the continuing counterclaim and the potential for costs set-off if the defendants are unsuccessful against Icon USA. There is no unfairness to the defendants from doing so. They have elected to continue their counterclaim against Icon USA. Albeit that the counterclaim is much smaller than the claim by the plaintiffs, I cannot ignore that there is a counterclaim. If the defendants are successful in the counterclaim, then they will be entitled to costs as against Icon USA and the issue will become moot. If unsuccessful, though, it will remain an open issue as to what, if any, costs should be awarded in favour of Icon USA for the counterclaim and whether those costs should be set off against costs awarded in favour of the defendants for Icon USA’s discontinued claim. That is an issue more properly decided by the trial judge.
[54] I accordingly fix costs of the action to the date of discontinuance, payable by Icon USA to the defendants, in the amount of $8,000.00, including HST and disbursements. Subject to further court order, payment of those costs shall be stayed pending final disposition of the counterclaim, including costs.
Disposition
[55] For the foregoing reasons, I order as follows:
(a) The defendants’ motion for security for costs is hereby dismissed.
(b) The defendants shall pay to Icon Canada its costs of this and the prior security for costs motion fixed in the amount of $22,103.72, including HST and disbursements, payable within thirty (30) days.
(c) Icon USA shall pay to the defendants their costs of the action to the date of discontinuance fixed in the amount of $8,000.00, including HST and disbursements. Subject to further court order, payment of those costs shall be stayed pending final determination of the counterclaim, including costs.
(d) This order is effective without further formality.
Todd Robinson
Date: April 30, 2025