The defendants moved for security for costs against the plaintiff, Forvest Financial Services Corporation, an assignee of a claim from a Swiss corporation.
The motion was brought under Rule 56.01(1)(d), alleging Forvest had insufficient assets in Ontario to pay costs.
The court applied the two-stage test from Hallum and Yaiguaje, considering all evidence, including the plaintiff's own financial disclosures.
The Master found that Forvest's assets, primarily "advances to related parties," were sheltered from execution and insufficient.
While the plaintiff demonstrated a good case on the merits regarding misappropriation of funds, a critical credibility issue concerning a limitation period argument prevented a finding of "good chance of success." No unreasonable delay was found on the defendants' part.
The court ordered Forvest to post security for costs, reducing the quantum to exclude mediation costs due to the defendants' bad faith participation and costs related to their counterclaim.