Simon's Megalomaniacal Legal Resources

Civil Litigation - Security for Costs (3)

. Karatzoglou v. Commisso

In Karatzoglou v. Commisso (Ont CA, 2023) the Court of Appeal considered a motion for security for costs, here in a family appeal context:

[5] The test to be applied in considering a motion for security for costs is well known. Subrule 61.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides:

In an appeal where it appears that,

(a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal;

(b) an order for security for costs could be made against the appellant under rule 56.01; or

(c) for other good reason, security for costs should be ordered,

a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just.

[6] Subrule 38(26) of the Family Law Rules, O. Reg. 114/99 similarly provides:

On a motion by the respondent for security for costs, the court may make an order for security for costs that is just, if it is satisfied that,

(a) there is good reason to believe that the appeal is a waste of time, a nuisance, or an abuse of the court process and that the appellant has insufficient assets in Ontario to pay the costs of the appeal;

(b) an order for security for costs could be made against the appellant under subrule 24 (13); or

(c) for other good reason, security for costs should be ordered.

[7] As the court observed in Yaiguaje v. Chevron Corporation, 2017 ONCA 827, 138 O.R. (3d) 1, at para. 22, “[i]n deciding motions for security for costs judges are obliged to first consider the specific provisions of the Rules governing those motions and then effectively to take a step back and consider the justness of the order sought in all the circumstances of the case, with the interests of justice at the forefront.” Accordingly, even if the test set out under r. 61.06(1) has been met, the motion judge must “consider the justness of the order holistically, examining all the circumstances of the case and guided by the overarching interests of justice to determine whether it is just to make an order for security for costs”: FoodInvest Limited v. Royal Bank of Canada, 2019 ONCA 728, at para. 8.

[8] The moving party relies on r. 61.06(1)(a) of the Rules of Civil Procedure. To succeed, she must satisfy the court, on a balance of probabilities, that there is good reason to believe that (1) the appellant is impecunious, and (2) the appeal is frivolous and vexatious. Subrule 38(26) of the Family Law Rules provides helpful guidance with respect to the second condition in the context of family proceedings by framing “frivolous” and “vexatious” appeals as a “waste of time”, “nuisance”, or “abuse of the court process”.

....

[23] It is important to underline the fact that the assessment of the merits (or lack thereof) for a security for costs motion does not require the court to make an affirmative finding or actually determine that the appeal is frivolous or vexatious and that the appellant lacks sufficient Ontario assets to pay the appeal costs. Rather, “good reason to believe” suggests a tentative conclusion of absence of merit and assets: Pickard v. London Police Services Board, 2010 ONCA 643, at para. 18; Schmidt v. Toronto-Dominion Bank (1995), 1995 CanLII 3502 (ON CA), 24 O.R. (3d) 1 (C.A.), at p. 5; and McKee v. Di Battista, Gambin Developments Ltd. (1995), 1995 CanLII 728 (ON CA), 22 O.R. (3d) 700 (C.A.), at pp. 702-3. As I have indicated, I see no errors of law. The appeal appears to turn only on findings made on the evidence that are subject to a high level of deference and with respect to which I see no reversible error on the part of the summary motion judge.

. Hordo v. Zweig

In Hordo v. Zweig (Div Court, 2022) the Divisional Court considers a security for costs motion:

[10] The principles governing a motion for security for costs on appeal are summarized in Yaiguaje v Chevron Corp., 2017 ONCA 827, at paras. 19, 24 and 25:

[19] In determining whether an order should be made for security for costs, the overarching principle to be applied to all the circumstances is the justness of the order sought.

...

[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.

[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 the circumstances of the case and guided by the overriding interests of justice to determine whether it is just that the order be made.

. Richardson v. Arsenov

In Richardson v. Arsenov (Ont CA, 2022) the Court of Appeal considered a security for costs issue in an appeal:

(2) Security for Costs

[8] The second motion seeks an order for security for costs. A court may make an order for security for costs pursuant to r. 61.06(1) where certain circumstances are present:

61.06 (1) In an appeal where it appears that,

(a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal;

(b) an order for security for costs could be made against the appellant under rule 56.01; or

(c) for other good reason, security for costs should be ordered,

a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just.

[9] In addition to the three factors enumerated in s. 61.06(1), a court must also consider whether it would be just to order security, having regard to the circumstances and the interests of justice: Yaiguaje v. Chevron Corporation, 2017 ONCA 827, 138 O.R. (3d) 1, at para. 22.

....

[14] I am also satisfied that it is in the interests of justice to order security. The moving parties have not delayed in bringing this motion, and the amount of the security sought is not prohibitive. While I am conscious of the responding parties’ current unfortunate situation regarding the power of sale proceedings and counsel’s submissions that the responding parties not be denied the opportunity to pursue their appeal, in my view they have not established impecuniosity or any other legitimate access to justice concerns: Zeitoun v. Economical Insurance Group (2008), 2008 CanLII 20996 (ON SCDC), 91 O.R. (3d) 131 (Div. Ct.), at paras. 45-46, aff’d 2009 ONCA 415, 96 O.R. (3d) 639.

[15] Given my finding that security for costs is justified under s. 61.06(1)(a), I need not consider s. 61.06(1)(c). I am mindful that resort to this latter section should be used sparingly: Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 633, 268 O.A.C. 172, at para. 8.