2018 ONSC 4641
Court File and Parties
COURT FILE NO.: CV-12-00470904 MOTION HEARD: 20180523, 20180725 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Welhelm Ventures Corporation and John Gregory Aulin, Plaintiffs AND: Rasoee Restaurant Systems Inc., David Simpson and Colin Bosa, Defendants
BEFORE: Master B. McAfee
COUNSEL: M. Miller (Day 1) and D. Augruso (Day 2) for the Moving Party, the Defendant Colin Bosa B. Clancy for the Responding Parties, the Plaintiffs
HEARD: May 23, 2018 and July 25, 2018
REASONS FOR DECISION
[1] This is a motion brought by the defendant Colin Bosa (Bosa) for an order requiring the plaintiffs Welhelm Ventures Corporation (Welhelm) and John Gregory Aulin (Aulin) (collectively the plaintiffs) to post security for costs on a full indemnity basis in the amount of $100,000.00.
[2] The plaintiffs oppose the motion.
[3] The applicable Rule of Civil Procedure is 56.01(1):
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,
(a) the plaintiff or applicant is ordinarily resident outside Ontario;
(b) the plaintiff or applicant has another proceeding for the same relief pending in Ontario or elsewhere;
(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part;
(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; or
(f) a statute entitles the defendant or respondent to security for costs.
[4] The plaintiffs agree that Bosa has satisfied his initial onus to demonstrate that it appears that there is good reason to believe that the matter comes within Rule 56.01(1) of the Rules of Civil Procedure.
[5] The onus now shifts to the plaintiffs to satisfy the court that an order for security for costs would be unjust.
[6] In Yaiguaje v. Chevron Corporation, 2017 ONCA 827 at paragraphs 23-25, the Court of Appeal states as follows with respect to consideration of the justness of the order:
[23] The Rules explicitly provide that an order for security for costs should only be made where the justness of the case demands it. Courts must be vigilant to ensure an order that 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 rr. 56 or 61 have been met.
[24] Courts in Ontario have attempted to articulate the factors to be considered in determining the justness of security for costs orders. They have identified such factors as the merits of the claim, delay in bringing the motion, the impact of actionable conduct by the defendants on the available assets of the plaintiffs, access to justice concerns, and the public importance of the litigation. See: Hallum v. Canadian Memorial Chiropractic College (1989), 70 O.R. (2d) 119 (H.C.); Morton v. Canada (Attorney General) (2005), 75 O.R. (3d) 63 (S.C.); Cigar500.com Inc. v. Ashton Distributors Inc. (2009), 99 O.R. (3d) 55 (S.C.); Wang v. Li, 2011 ONSC 4477 (S.C.); and Brown v. Hudson’s Bay Co., 2014 ONSC 1065, 318 O.A.C. 12 (Div.Ct.).
[25] While this case law is of some assistance, each case must be considered on its own facts. It is neither helpful nor just to compose a static list of factors to be used in all cases in determining the justness of a security for costs order. There is no utility in imposing rigid criteria on top of the criteria already provided for in the Rules. The correct approach is for the court to consider the justness of the order holistically, examining all of the circumstances of the case and guided by the overriding interests of justice to determine whether it is just that the order be made.
[7] In my view, the interests of justice require that no order for security for costs be made in the circumstances of this case.
[8] This motion proceeds after the action has been set down for trial and four and a half years after Bosa served a statement of defence. Bosa seeks security for costs already incurred on a full indemnity basis in the all-inclusive sum of $100,000.00. No security is sought based on an estimated amount for future costs. There is no evidence explaining the reason for the delay in bringing this motion.
[9] Although I was not referred to evidence of prejudice as a result of the delay, in the circumstances of this case the timing of the motion is fatal. In my view it would be unjust to grant an order for security for costs at this stage in the action for all costs incurred to date.
[10] If security for costs had been ordered, the record before me does not satisfy me that the quantum and scale of costs sought are reasonable. The evidence with respect to the quantum sought is set out at paragraph 9 of the affidavit of L. Salerno, a law clerk. At paragraph 9 Ms. Salerno states that “…Bosa has incurred and will continue to incur substantial legal costs as a result of the within action and Motion to seek an Order requiring the Plaintiffs to post security for costs. To date, he has incurred legal fees and disbursements close to $100,000.00 in his efforts to respond to the Plaintiff’s Claim.” There is no evidence with respect to any amount incurred for any particular step. There is no bill of costs. I was not referred to evidence or case law in support of the scale of costs sought.
[11] The motion is dismissed.
[12] With respect to costs of the motion, I decline to award costs of the motion to any party. Although the plaintiffs were successful in opposing the motion, the plaintiffs’ estimate of time to argue the motion was not accurate, resulting in a further attendance to complete submissions. There shall be no costs of the motion.
[13] Order to go as follows:
- The motion is dismissed.
- There shall be no costs of the motion.