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Family - Appeal - Security for Costs. O.K. v. M.H.
In O.K. v. M.H. (Ont CA, 2025) the Ontario Court of Appeal considered security for costs on appeal, here in a family law context:(b) Security for the moving party’s appeal costs
[8] I turn next to the request for security for costs. Rule 61.06(1) of the Rules of Civil Procedure sets out the criteria for making such an order on an appeal:R. 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] The determination of whether security for costs should be ordered is a two-step process. First, the court must assess whether the statutory criteria under r. 61.06(1) have been met. Second, the order is discretionary and will not be made unless the court is persuaded that it is just: Thrive Capital Management Ltd. v. Noble 1324 Queen Inc., 2021 ONCA 474, 156 O.R. (3d) 551, at para. 31; Yaiguaje v. Chevron Corporation, 138 O.R. (3d) 1, 2017 ONCA 827, at paras. 18, 25.
[10] The moving party relies on all three prongs of r. 61.06(1), including under r. 56.01(1)(a) that the appellant is ordinarily resident outside Ontario.
[11] I am not persuaded that security for costs should be awarded under r. 61.06(1)(a). The criteria are conjunctive: the moving party must show that there is good reason to believe that the appeal is both frivolous and vexatious and that the responding party has insufficient assets in Ontario: York University v. Markicevic, 2017 ONCA 651, O.J. No 4147 (QL), at para. 33. Generally, a frivolous appeal is one devoid of merit and with little prospect of success; a vexatious appeal is one that is brought to annoy or harass, is conducted in a vexatious or “less than diligent” manner or is pursued in bad faith or for an oblique purpose: Lavallee v. Isak, 2022 ONCA 290, at paras. 19, 25. While the responding party no longer has any assets in Ontario, I cannot say that he has brought the appeal to harass the moving party. He has a right to appeal and his appeal raises arguable, albeit weak, grounds.
[12] However, the motion succeeds under r. 61.06(1)(b) and (c).
[13] With respect to r. 61.06(1)(b), there is no dispute that the responding party no longer lives in Ontario. He left Ontario in May 2021 and never returned. He travelled for six months and then settled in New Zealand. He is registered as a medical practitioner and listed as a doctor in a medical clinic in Quatar. The moving party having established that the responding party is no longer resident in Ontario, the onus shifts to the responding party to demonstrate that he has assets available to satisfy the moving party’s costs if the appeal is unsuccessful or that his appeal has merit and posting security for costs would prevent him from continuing with it: Yaiguaje, at para. 25; Unique Labeling Inc. v. GCAN Insurance Company, 2009 ONCA 591, 98 O.R. (3d) 233, at paras. 16, 20.
[14] The responding party has not satisfied his onus. It is common ground that he has no assets in Ontario. He says that he has about $116,000 in a bank account in New Zealand. There was no evidence as to whether his bank account would be exempt under any reciprocal enforcement legislation. Moreover, there is unchallenged evidence before the court that he is registered as working in Qatar, a country not subject to reciprocal enforcement legislation.
[15] Given his historical and ongoing failure to honour his support obligations and the possibility that he may have relocated to Qatar, I have no confidence that the monies in his New Zealand bank account will remain available to satisfy a costs order nor that he will voluntarily satisfy a costs order if he loses his appeal. I also am of the view that as the moving party is a person of limited means, exacerbated by the responding party’s failure to pay support, it would be unfair to require her to bring proceedings to recover payment of a costs order if the responding party’s appeal is unsuccessful. That is not the case with the responding party: he has substantial funds in a bank account and is gainfully employed as a physician earning a six-figure salary; there is no suggestion that he cannot afford to proceed with his appeal if security for costs is ordered. As I earlier noted, the responding party’s appeal is weak – he essentially challenges the trial judge’s careful findings of fact and credibility that were open to her on the record.
[16] Further, I conclude that the moving party is entitled to security for costs under r. 61.06(1)(c). As Zarnett J.A. noted in Thrive Capital Management Inc., at para. 19: “The list of what might qualify as an "other good reason" is not closed. But the reason must be (i) compelling, and (ii) related to the purpose of ordering security, which is to provide a respondent with a measure of protection for costs (citations omitted)”. What may qualify as an “other good reason” includes those circumstances to which I have already alluded: the responding party’s historical and ongoing failure to pay his support obligations, the weakness of his appeal, and the unlikelihood that the moving party would be able to collect costs if the appeal is unsuccessful: Perron v. Perron, 2011 ONCA 776, 345 D.L.R. (4th) 513, at paras. 21, 22; Henderson v. Wright, 2016 ONCA 89, O.J. No 533 (QL), at para. 27; Heidari v. Naghshbandi, 2020 ONCA 757, 153 O.R. (3d) 756, at para. 24; Rathod v. Chijindu, 2024 ONCA 317, at paras. 10-11.
[17] As for the amount of the security to be ordered, the moving party has suggested a range of $35,000 to $50,000. This is based on the estimate provided by the family law lawyer who assisted the moving party to prepare her motion materials and who will likely be retained to respond to the appeal. I conclude that the amount of $35,000 is a fair estimate for the moving party’s appeal costs.
[18] The responding party shall pay the amount of $35,000 into court as security for the moving party’s costs of the appeal. His appeal is adjourned and stayed until payment is made and notice of payment is provided to the moving party/her counsel and this court’s Registrar. If payment is not made by June 6, 2025, the appeal shall be administratively dismissed without further notice. . Hevey v. Hevey
In Hevey v. Hevey (Div Court, 2023) the Divisional Court considered a security for costs motion in a complex family court appeal [FCR R38], which adopts RCP R61.06 security for costs on appeal rules - which further adopts R56 of the RCP (trial security for costs). This messy configuration was further complicated by the involvement of a corporate derivative proceedings between the parties and unpaid past cost orders.
These quotes address which security for costs regime should apply:Applicable law
[10] A preliminary issue is whether the Family Law Rules or the Rules of Civil Procedure apply to this motion.
[11] Rule 38(1) of the Family Law Rules, O Reg 114/99, dealing with appeals to the Divisional Court and Court of Appeal, provides that Rules 61, 62 and 63 of the Rules of Civil Procedure, RRO 1990, Reg 194, apply to appeals to the Divisional Court. This includes Rule 61.06(1) governing security for costs, which states:(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. [12] Rule 56.01(1) of the Rules of Civil Procedure provides:(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. [13] However, Rule 38(26) of the Family Law Rules provides for security for costs as well, stating:(26) 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. [14] Rule 24(13) of the Family Law Rules provides:(13) A judge may, on motion, make an order for security for costs that is just, based on one or more of the following factors:1. A party habitually resides outside Ontario.
2. A party has an order against the other party for costs that remains unpaid, in the same case or another case.
3. A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.
4. There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs.
5. A statute entitles the party to security for costs. [15] Counsel in this case both submitted that I should follow the Family Law Rules, despite the general direction in Rule 38(1) of the Family Law Rules to use the Rules of Civil Procedure, as Rule 38(26) specifically deals with security for costs. I am not convinced. Rule 38(4) provides that subrules (5) to (45) “apply to an appeal from an order of the Ontario Court of Justice to the Superior Court of Justice” under certain statutory provisions listed. This proceeding is not an appeal from the Ontario Court of Justice, and those subrules appear to deal with different procedures than are before this Court.
[16] Although, at the end of the day, both schemes set out similar tests, and provide the Court with discretion to make an order that is just in the circumstances, in my view the appropriate rules to follow in this case are those found in the Rules of Civil Procedure.
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