Jenkins v. Fletcher’s Fields Limited, 2025 ONSC 1502

Court File No.: CV-23-00004422
Motion Heard: 2025-03-05
Superior Court of Justice – Ontario

Between:
Robert Llewellyn Jenkins, in his capacity as Trustee for the Estate of Samuel Harrison Ball, and the Estate of Samuel Harrison Ball, plaintiffs

And:
Fletcher’s Fields Limited, defendant

Before: Associate Justice Jolley

Counsel:
Luke Sabourin, counsel for the moving party defendant
Sarah O’Connor, counsel for the responding party plaintiffs

Heard: 5 March 2025

Reasons for Decision

Overview

[1] The defendant seeks an order requiring the plaintiffs to post security for costs in the amount of $25,000. The plaintiffs do not contest that the defendant has met its onus to establish that rule 56.01(1)(c) applies, as the plaintiff has a costs order against the plaintiffs in another proceeding which remains unpaid. The onus then shifts to the plaintiffs to establish either that (a) they have sufficient assets in Ontario to satisfy any costs order made in the litigation, (b) they are impecunious and the action is not plainly devoid of merit, or (c) they do not have sufficient assets to meet a costs order, but their claim has a good chance of success on the merits.

[2] It is also uncontested that the plaintiffs do not have sufficient assets in Ontario to satisfy a costs award. The estate was wound up in 1994, more than 30 years ago, after the death of Samuel Ball in 1991. Instead, the plaintiffs argue either that they are impecunious and their action is not devoid of merit or that they do not have sufficient assets in Ontario to meet a costs award but their action has a good chance of success.

[3] As was made clear in 2311888 Ontario Inc. v. Ross, 2017 ONSC 1295, there is a difference between demonstrating impecuniosity and demonstrating insufficient assets in Ontario. If a plaintiff is relying on impecuniosity to avoid the payment of costs, it must “provide robust financial disclosure such that there are no unanswered questions with respect to the plaintiffs' financial circumstances, including the ability of the plaintiffs to raise money or borrow money. This requires the plaintiffs to produce complete and accurate disclosure of the plaintiffs' income, assets, expenses, liabilities, and borrowing abilities.”

[4] In their responding materials, the plaintiffs have addressed the insufficiency of their assets, but not impecuniosity. Mr. Jenkins has not passed the accounts for the estate and has advised he will not do so without a court order. There is no evidence that he has sought to borrow funds on behalf of the estate. Nor is there any evidence of his own ability as trustee to post security, particularly as he was the party who exercised his discretion as trustee after the death of Mr. Ball to provide the estate funds to the defendant. As noted in Gray Estate v. Winkfield, 1992 CarswellOnt 4060, a trustee may be required to post security for costs if he has not ensured that sufficient estate funds were held back from distribution to cover the costs of the litigation. The court noted:

“Where an action is brought by an estate executor, the defendant in such action should satisfy himself that the estate is able to pay or satisfy the costs of litigation if unsuccessful. This perhaps may be handled by seeking security for costs to be paid into court or direction by the court that security be retained by the executor. In the alternative, directions might be given by the court that there should be no distribution of the estate assets until completion of the trial and disposition of the cost issues. If all else fails the executor may be required to post security from the estate or personally and/or satisfy himself of the guarantees of the interested parties in the litigation as it relates to costs in the event of unsuccessful litigation. These are considerations that should be entertained before the final disposition of the issues before the court.

One of the principal duties of an executor is the payment of debts and the protection of the creditors to the estate. If the executor is obliged in his position to bring court action on behalf of the estate, then he should be certain to retain sufficient monies to cover the costs of such litigation in the event the estate is unsuccessful or he may be held personally responsible in the event of failure.”

[5] Mr. Jenkins states both that he, as trustee, intended to pay the $15,000 costs award from 2018 through the estate, but also that the estate was closed “years ago and all assets were cashed.” It is unclear how he could have paid or intended to pay the outstanding costs award in 2018 when the estate had been fully distributed by 1994. Leaving aside the potential assets of the trustee, I am satisfied that the estate does not have sufficient assets in Ontario to meet a costs award. As such, to avoid an order for security for costs, the plaintiffs must demonstrate that their claim has a good chance of success on the merits.

[6] I am not satisfied that the plaintiffs have met that onus. The plaintiffs have variously suggested that the money in question was a loan, a gift with conditions, or subject to a trust. None of these theories or causes of action is clearly set out in the pleading. There is no pleading of unjust enrichment. There is also nothing in the pleading addressing a perpetuities issue, when it appears the plaintiffs are proposing to revoke an alleged trust or continue its conditions some 25 years after the funds transfer. The statement of claim does not articulate a legal theory that would support an order unwinding the gift/loan or continuing conditions of a gift more than 30 years after the funds were given, and based on a sale of land that took place more than 25 years after the gift. Based on the present pleading, I find that the plaintiffs have not demonstrated that the claim has a good chance of success on the merits.

[7] Considering the action holistically, as required by Yaiguaje v. Chevron Corporation, 2017 ONCA 827, I find an order for security for costs to be fair in the circumstances. To do otherwise would allow this plaintiff “a free ride” with respect to the costs of this current action, to quote Associate Justice Graham in Parravano v. St. Paul Fire and Marine Insurance, 2023 ONSC 2380 at paragraph 46, when it has failed to pay the costs of the previous action. Absent an order for security for costs, the defendant is faced with plaintiffs who started the action while without assets, who have had no funds for over 30 years and who already have one unpaid costs order against them.

[8] The plaintiffs argue that an order for security for costs of $25,000 would be disproportionate, given the action is only for $100,000. While the claim is for $100,000, the steps required to defend it still take time. Further, the rules provide that a successful party may recover costs in a simplified rules action of up to $50,000. The time proposed for the litigation steps appears reasonable. The defendant has allocated four hours in total for documentary discovery, twelve hours for examinations for discovery and twenty hours for the pretrial preparation and attendance. These amounts total $16,146. It also seeks its incurred costs to prepare the statement of defence of $12,051.60. I am prepared to reduce those totals somewhat to reflect a partial indemnity rate more in line with the court’s hourly rate guidelines.

[9] The plaintiff shall post security in the amount of $20,000 to cover the steps incurred to date and up to and including the pretrial within 60 days of this order.

[10] The defendant was successful on its motion and is entitled to costs. It seeks partial indemnity costs in the all-inclusive amount of $14,929.56. The plaintiffs’ partial indemnity costs totalled $5,733.71. The legal issues were not straightforward and the defendant’s cases on the estates issues were helpful. I find the sum of $10,000 to be a fair and reasonable sum for the plaintiffs to pay the defendant. Those costs are payable within 60 days of this order as well. The plaintiffs shall take no further step in this action until this order for security for costs and costs is satisfied.

Date: 6 March 2025
Associate Justice Jolley