BZAM Ltd. and Cortland Credit Lending Corporation brought a motion for security for costs against Final Bell Holdings International Ltd. within an ongoing CCAA proceeding.
Final Bell had initiated a claim alleging fraudulent misrepresentation against BZAM and seeking damages and equitable relief, including a constructive trust.
The court determined that Rule 56.01 of the Rules of Civil Procedure, concerning security for costs, applies to claims within CCAA proceedings, and that Cortland, as a directly affected stakeholder, was entitled to seek such security.
Finding that Final Bell was ordinarily resident outside Ontario and had insufficient assets to satisfy a costs award, the court ordered Final Bell to post security for costs in favour of BZAM ($350,000) and Cortland ($147,000).
Additionally, Final Bell was ordered to pay the costs of the motion to BZAM ($20,000) and Cortland ($8,500).
