Court File and Parties
COURT FILE NO.: 13-CV-473652 MOTION HEARD: 2016-09-29 REASONS RELEASED: 2017-03-03 SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
Dynacorp Canada Inc. Plaintiff
and
LEVINE, SHERKIN, BOUSSIDAN and LARRY LEVINE Defendants
BEFORE: MASTER D. E. SHORT
COUNSEL: Demetrios Yiokaris, for the moving Defendants Evan Tingley, for the responding Plaintiff
REASONS RELEASED: March 3, 2017
Reasons for Decision
I. Overview
[1] This is a motion seeking an order for security for costs against the plaintiff, an Ontario Corporation.
[2] The moving party’s factum asserts:
“This is a $20 million lawyer's negligence claim brought by the Plaintiff, against the Defendants, regarding their handling of another lawyer's negligence lawsuit from 2010. This action is a second generation lawyer's negligence action based on an underlying 2004 action.”
[3] In a May 3, 2010 decision, Dynacorp Canada Inc. v. Curic ("Curic"), Master Muir ordered the current Plaintiff to post security for the costs of that action. Master Muir found there was good reason to believe that the Plaintiff had insufficient assets in Ontario to pay the Defendants' costs and that the Plaintiff failed to establish that its' sole shareholder, Mr. Sebe, was impecunious. Master Muir noted that Sebe only revealed the existence of his Innisfil properties when he was questioned on cross-examination.
[4] In August of 2015, the Defendants' lawyer requested in writing that the Plaintiff agree to post security for costs or otherwise provide evidence to refute Master Muir's previous findings in Curic. Despite five follow-up letters over the next half year, the Plaintiff failed to provide a substantive response. As a result, the within motion was brought, cross examinations were held and the motion argued.
II. Applicable Rule
[5] Rule 56.01(1) of the Rules of Civil Procedure has many significant components which I have emphasized in the following extract:
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.
[6] For the reasons that follow and applying proportionality, I am satisfied that it does appear to me that there is good reason for me to believe there is a present justification for requiring the posting of security for costs in this case.
[7] I come to this conclusion having considered the 2010 reasons of my colleague with respect to the same plaintiff responding to the earlier motion for security for costs, brought by the defendant in that matter, which can be found at Dynacorp Canada Inc. v. Curic; 2010 ONSC 2603; 96 C.P.C. (6th) 238; 2010 CarswellOnt 2791; 188 A.C.W.S. (3d) 895.
III. Appropriate Approach
[8] In that case Master Muir noted that the analysis the court is to employ when determining a motion for security for costs was the subject of a thorough review by Justice Code in Cigar500.com Inc. v. Ashton Distributors Inc., [2009] O.J. No. 3680 (S.C.J.). In that decision Justice Code states the following:
The application of Rule 56.01 involves some procedural complexity as there is a shifting onus between the two parties and the standard of proof also changes as the onus shifts.
Doherty J., as he then was, explained this point in Hallum v. Canadian Memorial Chiropractic College (1989), 70 O.R. (2d) 119 (H.C.J.):
Rule 56.01 which empowers a court to order security for costs establishes a two-step inquiry. First, the defendant must show that it "appears" that one of the six factors set out in cls. (a) Through (f) of rule 56.01 exists. Secondly, if the defendant can clear the first hurdle, the court may make any order as to security for costs "as is just". I take this second stage to require an inquiry into all factors which may assist in determining the justice of the case.
[9] In Cigar 500 his Honour was dealing with a situation where the plaintiff was relying on impecuniosity as a justification for not posting security. He described the correct approach in such cases:
A litigant who falls within one of the categories created by rule 56.01(a) to (f), and who relies on his impecuniosity to avoid an order requiring that he post security, must do more than adduce some evidence of impecuniosity. The onus rests on him to satisfy the court that he is impecunious: City Paving Co. Ltd. v. Corporation of Port Colborne (City) (1985), 3 C.P.C. (2d) 316 (Ont. Master's Ch.). The onus rests on the party relying on impecuniosity, not by virtue of the language of rule 56.01, but because his financial capabilities are within his knowledge and are not known to his opponent; and because he asserts his impecuniosity as a shield against an order as to security for costs: Sopinka and Lederman, The Law of Evidence in Civil Cases (1974), at p. 395.[my emphasis]
[10] However, in the case before me the plaintiff does not rely upon impecuniosity. Instead it asserts that it has ample assets and that there is thus no good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant. In my view, in such circumstances the onus of demonstrating the validity of that assertion in this case rests on the party relying alleged creditworthiness, not by virtue of the language of rule 56.01, but because his company’s financial capabilities are within his knowledge and are not known to his opponent.
[11] Similarly, in order to establish impecuniosity, a corporate plaintiff must not only show that it does not have sufficient assets to post security but also that it cannot raise the security for costs from its shareholders and associates. See Cigar500 at paragraph 69.
[12] Where impecuniosity is shown, the plaintiff needs only to demonstrate that the claim is not plainly devoid of merit. Where impecuniosity has not been shown, a legitimate factor in deciding whether or not it would be just to require security for costs is whether the claim has a good chance of success. See Zeitoun v. Economical Insurance Group, [2008] O.J. No. 1771 (Div. Ct.) at paragraphs 49 and 50; affirmed, [2009] ONCA 415 (C.A.).
IV. Nature of Present Action
[13] An action was commenced in 2004 by the Plaintiff against Petro-Canada (the "First Action"). In the First Action, the Plaintiff sought damages relating to an arrangement for the Plaintiff to distribute Petro-Canada lubricants in Hungary. Petro-Canada denied any such breach and, inter alia, asserted that the contracts were properly terminated.
[14] The Defendants’ affidavit in support of this motion reads in part:
“7. After five years of litigation, around early February 2009, Dynacorp settled the First Action with Petro for $160,000.00. Prior to agreeing to Settlement, there is good reason to believe that the Plaintiff received Independent Legal Advice from John Middlebrook (the "ILA"). It appears that the ILA was not limited to advice regarding the Settlement, but also a lawyer's negligence claim for the failure to plead a cause of action for tortious contractual interference in the First Action. …
- As a term of Settlement, the parties agreed to exchange mutual releases. On March 5, 2009, Sebe on behalf of Dynacorp executed a mutual release in favour of Petro-Canada (the "Mutual Release"), which, inter alia, provides:
IN CONSIDERATION of the payment by Petro-Canada to Dynacorp of the sum of One Hundred and Sixty Thousand ($160,000.00) Dollars and in consideration of this Mutual Release, together with the Consent to dismissal of the Action without costs, and for other good and valuable consideration the receipt and sufficiency of which is acknowledged, the undersigned parties hereby remise, release and forever discharge one another and each of their subsidiaries and related and affiliated corporations and each of their respective insurers, successors, assigns, directors, officers and employees from any and all actions, causes of action, claims, complaints, demands, suits, debts, costs, expenses, dues, accounts, bonds, covenants, liabilities, contributions, indemnities, statutory rights and obligations and contracts whatsoever, whether presently known or unknown, and whether arising by legislation, law, equity or in any manner whatsoever, as against each other that they ever had, now have or hereinafter may have arising in any way from any fact, cause, matter, or thing existing up to the present time, including, without limitation, and all actions, causes of action, claims and demands for damages, loss or injury howsoever arising which heretofore may have been or may hereafter be sustained by each of them in consequence of the matters referred to or that could have been reasonably referred to in the Action, including any claim for interest or legal costs and including all damage, loss, and injury not now known or anticipated but which may arise in the future and all effects and consequences thereof. [emphasis added in factum]”
[15] Clearly it was not only the contract claim which was being addresses in that document. There is no doubt in my mind that the problems set out below were clearly known by the plaintiff and its various counsel.
[16] The Statement of Claim in the present action sets out these assertions regarding the relevant background matters:
The First Action
The plaintiff's lawyers of record in the First Action were Robins, Appleby & Taub LLP ("Robins") from 2004 until August 2008, and Ritchie, Ketcheson, Hart & Biggart ("RKHB") from and after August 2008.
Following its assumption of carriage of the First Action on behalf of the plaintiff in 2008, RKHB negligently advised the plaintiff that the plaintiff was unlikely to succeed at trial because the statement of claim did not seek damages for tortious contractual interference, and that it was too late to amend the statement of claim to seek such damages, as such a claim would be statute barred by reason of the expiry of the applicable limitation period. [my emphasis]
In fact, the limitation period for advancing a claim for tortious contractual interference had not expired because the material facts in support of such a claim had already been pleaded by Robins in the statement of claim in the First Action. That claim could therefore have been advanced by RKHB and would have been successful. RKHB gave the incorrect advice referred to above and negligently failed to pursue this tort claim.
[17] Given the limited materials before me, I am not in a position to comment on the foregoing analysis at this stage. With that caveat, I continue the extracts from the moving defendants’ affidavit with my underlining added:
After the First Action settled, the Plaintiff sued the lawyers that represented it in the First Action …. In particular, on July 28, 2010, Dynacorp issued an action against the law firm, Robins, Appleby & Taub LLP ("Robins") … (the "Second Action"). Moreover, on or about June 20, 2011, the Second Action was amended to add the law firm Ritchie, Ketcheson Hart Biggart LLP ("RKHB") as a second defendant. …
The Second Action was dismissed as against Robins by way of Summary Judgment motion heard and disposed of on March 23, 2012. Around June 15, 2012, RKHB served a motion record for summary judgment to have the Second Action dismissed against it. According to Dynacorp, it accepted an offer to settle on July 13, 2012 from RKHB to settle the Second Action on the basis that it be dismissed without costs. …”.
[18] The Statement of Claim picks up the history in these terms:
In or about July, 2010, the plaintiff retained Levine and LSB to commence an action against Robins for negligence in its prosecution of the First Action. The plaintiff delivered its entire file to Levine and LSB at that time.
On July 28, 2010, the plaintiff commenced an action against Robins (the "Second Action") alleging that Robins was negligent in its prosecution of the First Action. In particular, the plaintiff alleged that Robins had negligently failed to pursue a claim for tortious contractual interference, and that such a claim was now statute barred by reason of the expiry of the applicable limitation period.
The statement of claim in the Second Action was drafted by Levine and LSB on the plaintiffs behalf, but they were not listed as the plaintiffs lawyers of record. Rather, the plaintiff represented itself in the First Action until early to mid-2011, when Levine and LSB delivered a notice of appointment of lawyer.
On March 1, 2011, Robins delivered its statement of defence in the First Action. Robins' statement of defence pleaded that at the time the plaintiff retained RKHB, the limitation period for advancing a claim for tortious contractual interference had not expired because the material facts in support of such a claim had already been pleaded by Robins in the statement of claim in the First Action.
[19] The pleading then asserts that upon being served with Robins' Statement of Defence in the Second Action, Levine and LSB knew or ought to have known that:
(a) the plaintiff had a claim against RKHB for negligence and breach of contract, and
(b) the limitation period to pursue the plaintiff's claim against RKHB would expire within two years of the termination of RKHB's retainer in April of 2009.
[20] The key issue is then set out:
Levine and LSB therefore ought to have promptly added RKHB as a defendant to the Second Action or commenced a fresh action against RKHB well before April of 2011. They did neither.
On or about June 7, 2011, Levine and LSB served a motion record for a motion amending the statement of claim in the Second Action to add RKHB as a defendant. That motion was heard and granted on June 20, 2011. The statement of claim in the Second Action was amended on June 21, 2011 to add RKHB as a defendant.
On or about August 25, 2011, RKHB delivered a statement of defence in the Second Action pleading that the plaintiff's claim as against it was statute barred.
Levine and LSB then brought a motion to be removed as the plaintiffs lawyers of record, which motion was granted by order dated September 12, 2011.
[21] The Second Action was dismissed as against Robins on a motion for summary judgment on March 23, 2012. In June of 2012 RKHB served a motion record for summary judgment to have the Second Action dismissed on the basis that, inter alia, it was statute barred. The plaintiff forwarded copies of RKHB's motion record and offer to settle to counsel for Levine and LSB. Levine and LSB took no steps to participate in RKHB's motion.
[22] The plaintiff summarizes its claim:
“24. Given that proceedings against RKHB were clearly statute barred, the plaintiff accepted RKHB's offer to settle on July 13, 2012.
Levine's acts and omissions as set out above (for which LSB is vicariously liable) fell short of the professional standard of care owed by the defendants to the plaintiff as its solicitors, as a result of which the plaintiff has sustained damages. …. Levine ought to have added RKHB to the Second Action, or commenced a fresh action against RKHB, prior to the expiry of the limitation period.
The plaintiff has suffered damages arising out of Levine's negligence and breach of contract, including, but not limited to, the fees and disbursements paid to the defendants, and the loss of the plaintiff's claim against RKHB.
As a result of the negligence and breaches of contract described herein, the plaintiff has suffered damages in the amount of $20 million for which the defendants are liable.”
[23] What the damages that might have been proven at trial in the First Action will undoubtedly present difficulties if this matter proceeds to trial. This may well be an appropriate case to separate liability and damages as the limitation issues appear to me to be relatively clear.
V. Security for Costs is Again Appropriate
[24] In Curic, the previous case involving this plaintiff, Master Muir held:
- Having applied the analysis set out above, I have come to the conclusion that security for costs should be ordered pursuant to Rule 56.01(1)(d). At the first stage of the analysis under Rule 56.01, the onus is on the defendants to show that there is good reason to believe that the corporate plaintiff has insufficient assets in Ontario to pay the costs of the defendants. In my view the defendants have more than met this onus. By its own admission, the plaintiff's only asset is a 10 year old uncollectible receivable from a bankrupt corporation. Clearly the plaintiff is unable to pay any costs orders that may be made against it in this proceeding.
[25] Now over 6 years later, while not quite a res judicata situation, I am not persuaded that my conclusion in this regard should be any different.
[26] I find of some assistance the findings of my colleague which he found undermined any possible impecuniosity argument. In particular I note his reference to the Petro-Canada matter which apparently gave rise to the present litigation against the counsel involved in that litigation on the Plaintiff’s behalf:
- As a result of this finding, the analysis now moves to the second stage, an assessment what order is just in the circumstances of this case. The plaintiff seeks to avoid posting security for costs on the basis of its impecuniosity. Sebe's evidence in his affidavit sworn March 17, 2010 is that he is the plaintiff's only shareholder, that he has been unemployed for over a year and has no money to advance to the plaintiff to allow it to post security for costs. The evidence on his cross examination, however, indicates that Sebe does have assets he could look to in order to fund a security for costs order. He acknowledges that he owns a one third interest in a property located …in the town of Innisfil, Ontario. Sebe states that this property is worth approximately $1,000,000.00 and is mortgaged for $800,000.00. His equity would appear to be worth approximately $67,000.00. He also admits to having a one third interest in a corporation which owns [another] property at …[in] Innisfil, Ontario but he has no idea of its value. Finally, the plaintiff was recently involved in a lawsuit with Petro-Canada. It settled that lawsuit in April 2009 and received $140,000.00 from Petro-Canada as a result. None of those funds were retained by the plaintiff. Sebe's evidence is that the settlement funds were used, in part, to pay various expenses but that a portion was paid to him but he does not know how much or what happened to it.
46 I am not satisfied that the plaintiff has met the onus of establishing impecuniosity. It is clear that Sebe is possessed of assets that could be used to raise the funds necessary to post security for costs. It is noteworthy that Sebe only revealed the existence of his Innisfil properties when he was questioned on cross examination. The plaintiff has not established impecuniosity. In addition, I do not believe, for the reasons set out above in the portion of these reasons dealing with the motion to discharge the CPL, and based on the evidence before me on this motion, that the plaintiff's claim has a good chance of success. In my view, it is just, in all of the circumstances, that an order be made requiring the plaintiff to post security for the costs of the defendants.
[27] Based on the checkered history of this matter I am not able to conclude that the plaintiff has “a good chance” of success. I interpret “good” odds as being at the very least better than the 50-50. Here the numerous factual and legal issues still in play do not convince me that there is a probability that the plaintiff will be successful. This is clearly a long way from a “slam dunk”.
[28] In coming to this conclusion I accepted and adopt the observations of the defendants’ factum:
“5. On August 24, 2015, the Defendants' lawyer requested in writing that the Plaintiff post Security for Costs; otherwise, provide evidence to refute Master Muir's findings in Curic. Despite five follow up letters over the next half year, the Plaintiff failed to provide a substantive response….
- A month later, Sebe injected assets into Dynacorp. He then filed an affidavit alleging that Security for Costs is not appropriate as Dynacorp now has $125,978 (the "Cash") in its bank account, and $112,500 equity in three related Innisfil properties (the "3 Properties") (collectively the "Assets"). The Assets are insufficient for any number of reasons, including that they can easily be removed, are not bona fide, are not net assets, and are not readily exigible. Notably:
(a) Timing Concerns - The Assets only came into existence a month after the within motion record was served- i.e. on June 29, 2016 (3 Properties) and July 5, 2015 (Cash);
(b) Dynacorp is a Shell Corporation - At cross-examinations, Sebe admitted that Dynacorp has not operated or carried on business in the past five years (other than purchasing the 3 Properties "In Trust" and being a beneficiary of the Trust Declaration). Sebe also conceded that for the past five years or so Dynacorp has not prepared financial statements or income tax returns, and has had little to no activity in its bank accounts;"
(c) Sebe Unilaterally Decides Dynacorp's Net Assets - Sebe made numerous admissions at cross-examination, which confirm that he unilaterally decides what debts, liabilities and assets Dynacorp will have at any given time amongst his group of companies …;
(d) Unable to Pay Debts when Due - A writ search reveals that Dynacorp still has an unpaid judgment of $17,500 from March 23, 2012.10 At cross-examination, Sebe was asked when Dynacorp intends to pay this debt and responded "whatever it can pay" and "if we come to the point that we have [funds], yes". When Defendants' counsel pointed out Dynacorp could use its $125,978 Cash, Sebe refused to answer any further questions regarding paying off this debt…. Later on, when asked what Dynacorp would do with the $125,978, Sebe did not indicate that the funds
(e) The Cash is not a Net Asset - At cross-examination, Sebe advised that the Cash was a return of the deposit money from the purchase of the 3 Properties. Sebe confirmed that this deposit money was loaned to Dynacorp by himself or a related company. Sebe used the words "borrowed" and "loan" to describe how Dynacorp obtained the $125,000. Sebe then stated that this $125,000 debt was not forgiven - "there's no forgiveness in a business!' Sebe seemed to suggest that this debt will be paid off in the future, when Dynacorp obtains some sort of potential profit sharing from the land development. Sebe could not recall any specifics, or if there was any paperwork around these transactions. He analogized the situation to moving money from one of his pockets to the other;
(f) The 3 Properties will be Assigned - Dynacorp will lose its beneficial interest in the 3 Properties. Sebe has confirmed that the 3 Properties will be assigned to Abandel (another corporation in which Sebe is a part owner), at which point the beneficiaries will lose their interest in the 3 Properties;
(l) Unable to Pay Debts When Due (NSF and Legal Fees) - Dynacorp's July 2016 bank statement reveals that on July 5, 2016, Dynacorp's accounts only had $978.18 and a "Cheque Returned NSF" of $3,500 that same day.23 Also, Dynacorp was unable to pay legal fees owing to its previous lawyers, which led to Dynacorp obtaining new counsel.”
[29] At this point I turn to an analysis of the impact of banking information provided and the extent of the obligation of if any of an Ontario Corporation to expose its financial dealings to a defendant when they are not otherwise relevant to the matters in issue in the action. It is not my belief that an affidavit of documents of every corporation is required to produce their financial records. However, it is necessary for me to consider the relevance of apparently liquid funds available in bank accounts at any point in time.
[30] My colleague Master Wiebe had occasion to consider these issues in a construction lien case, Unimac-United Management Corp. v. Canadian National Railway Co., [2015] O.J. No. 1927; 2015 ONSC 2372; 2015 CarswellOnt 5349; 253 A.C.W.S. (3d) 525; 48 C.L.R. (4th) 76.
[31] There the plaintiff's central claims against the defendant in two actions were for damages for breach of contract and negligence and for restitution. The factual underpinning of the actions was the same. There was "good reason to believe" that the plaintiff had insufficient assets in Ontario to pay costs. He found that plaintiff failed to make appropriate corporate filings for the past six years, transferred almost $2,000,000 from its bank accounts to related entities and was being pursued by a bonding company in relation to alleged bonding losses.
[32] In particular, he held that evidence of monthly bank balances meant little without information behind the redactions and the money could be transferred to an area where it could not be executed against. In particular he observed:
“38. …. The existence of the monthly bank balances per se does not satisfy me that this is an asset that would be readily available to pay costs. The quality of an asset is a valid consideration on a motion for security; see Dion v. CIBC World Markets Inc. 2002 CarswellOnt 5878 (Ont. S.C.J.). The quality of a bank account was expressly called into question in the Dion case as the Master held in that case that $305,000 in a brokerage account was not of the quality that met the test of sufficient assets in Ontario. On appeal Justice Somers agreed with this aspect of the decision as follows in paragraph 3: "In my view, the quality of assets for the purposes of determining whether or not security for costs should be ordered is dependent upon a number of factors, one of which would be the ease with which that asset could be transferred outside the jurisdiction to an area where it could not be executed against." ….”
[33] In my view, to the extent the plaintiff asserts funds and assets are available it is reasonable to conclude there should be no problem in obtaining a letter of credit (or other surrogate for cash) to secure the costs in lieu of paying monies into court.
VI. Quantum
[34] Justice P. Lauwers of the Trial division (as he then was) addressed this area in 855191 Ontario Ltd. v. Turner, [2011] O.J. No. 668; 2011 ONSC 918; 2011 CarswellOnt 862; 198 A.C.W.S. (3d) 242. There the court allowed a reduced amount for security where the plaintiff's registered office was a vacant lot and there was no real property registered in the plaintiff's name. The plaintiff did not carry on any active business and had no assets. Such circumstances constitute what I would regard as good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant and thus it was appropriate to order security for costs.
[35] Justice Lauwers observed:
3 Under the rule a defendant is required only to establish that it has good reason to believe that the plaintiff does not have sufficient assets in Ontario to pay the costs of the defendant. A defendant is not required to prove that such is the case: Warren Industrial Feldspar Co. Ltd. v. Union Carbide Canada Ltd, et al. (1986), 54 O.R. (2d) 213 (H.C.J.) at para. 23. Once a defendant has shown that there is good reason to so believe, an order for security for costs should prima facie be granted: Warren Industrial Feldspar Co. Ltd., supra, at para. 24; RCVM Enterprises Ltd. v. International Harvester Canada Ltd., et al. (1985), 50 O.R. (2d) 508 (S.C. Master). The onus then shifts to the plaintiff to establish either that it has sufficient assets in Ontario to pay the costs, or that it is impecunious and justice demands that it be allowed to proceed with the action nonetheless: Warren Industrial Feldspar Co. Ltd., supra, at para. 25.
5 Based on this evidence, I find for the purposes of this motion that the plaintiff does not carry on any active business and has no assets. In the absence of countervailing arguments, I would not hesitate to make an order for security for costs in this case.
[36] The plaintiff has chosen to sue for twenty Million Dollars. Applying proportionality it is reasonable to expect the defendants to mount a complete and potentially costly defence. Their compilation of potential defence costs contains the following items and estimates:
| Task | Amount |
|---|---|
| Pleadings | $6,000.00 |
| - review Statement of Claim | |
| - review several boxes of documents regarding the First Action and Second Action; | |
| - draft the Fresh as Amended Statement of Defence | |
| Affidavit of Documents | $5,000.00 |
| - the Defendants Affidavit of Documents is 298 tabs (several boxes) | |
| Discoveries (1 week) | $40,000.00 |
| - 2.5 days for Sebe, and 1 day for Levine | |
| - 2 days for potential exams of non-parties (e.g. Petro-Canada, Middlebrook who provided ILA and Hart of RKHB) | |
| Motion (Examination of Non-Parties) | $10,000.00 |
| Mediation (full day) | $5,000.00 |
| Mediator's Fee (split share) | $3,000.00 |
| Expert Report #1 (Financial) | $20,000.00 |
| - a financial expert/forensic accountant to assess/scrutinize damages | |
| Expert Report #2 (Lawyer) | $5,000.00 |
| - an expert or two may be required regarding the standard of care | |
| Trial (two to three weeks) | $130,000.00 |
| - prepare for and attend trial; and expert fees to attend trial | |
| TOTAL | $224,000.00 |
[37] These calculations are made on a substantial indemnity basis. On the motion the Defendants’ counsel proposed a total security quantum, through trial, of $150,000. I regard this amount as proportional and reasonable. As a consequence I am directing that roughly that total be posted by three installments being two thirds of the gross amount claimed for the various items should be posted on the plaintiff’s behalf.
[38] However I also continue to believe the fairest approach to such orders is to stage the payments required.
VII. Disposition
[39] In the result, the defendants’ motion for security for costs is granted.
[40] I am of the view that it would be just, in the circumstances of this case, to order, at this time, that security for costs be posted through the pleadings, production and discovery stages to cover the first three components being two thirds of $51,000, which I calculate at $34,000.
[41] Within 60 days of the completion of the examinations for discovery security for the next five items totaling $43,000 shall be provided. I calculate and round the relevant two thirds portion to $28,500.
[42] The remaining portion of the $130,000 component shall be posted within 60 days of the trial record being filed. I calculate portion of that item at $86,500.
[43] Thus the total ultimately to be secured is $149,000.
[44] The security shall be posted in cash or by way of an irrevocable stand-by letter of credit from a Canadian chartered bank in a form approved by the defendants or the court.
[45] An Order will issue providing that until the appropriate Security for Costs is posted or provided for the Plaintiff may not take any steps in the proceeding, except to appeal such Order, in accordance with the Courts of Justice Act and the Rules of Civil Procedure.
VIII. Costs of Motion
[46] In the circumstances, I see no reason not to award the defendants their costs of this motion on a partial indemnity basis. If the parties are unable to agree on an appropriate quantum, I may be contacted with respect to establishing a process for submission of materials with respect to that matter.
[47] I am obliged to all counsel for their helpful submissions and advocacy.
Released: March 3, 2017,
Master D. E. Short
DS/ R.176