Simon's Megalomaniacal Legal Resources

Family - Security for Costs

. Unoh v. Agboola

In Unoh v. Agboola (Div Court, 2023) the Divisional Court considered the family law rules of security for costs, here in a Canada-US parenting case:

Guiding Principles – Security for Costs

[31] Rule 24(13) of the Family Law Rules, O. Reg. 114/99 (the “Rules”), provides the authority for requiring security for costs and reads:

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.

[32] Rule 23(14) provides that a judge shall determine the amount of the security, its form, and the method of giving it.

[33] Rule 23(15) provides that if security is ordered, until such time as it has been given, the party against whom the order is made is not able to take any further step in the case (except to appeal) unless a judge orders otherwise.

[34] Rule 23(16) permits the court to dismiss a party’s case or strike that party’s pleading if the security is not provided, presumably as a result of the other party bringing a motion requesting the same.

[35] The mother is arguing points 1, 2, and 4 of rule 24(13) in this motion.

[36] In Izyuk v. Bilousov, 2015 ONSC 3684, 62 R.F.L. (7th) 131, at paragraph 40, Pazaratz J. set out the following steps for courts to follow when determining whether security should be ordered:

[40] The court must apply the following analysis:

a. The initial onus is on the party seeking security for costs to show that the other party falls within one of the enumerated grounds.

b. If the onus is met, the court has discretion to grant or refuse an order for security.

c. If the court orders security, it has wide discretion as to the quantum and means of payment of the order. Clark v Clark 2014 ONCA 175

d. The order must be “just” and be based on one or more of the factors listed in subrule 24(13). Hodgins v Buddhu [2013] O.J. No. 1261 (OCJ).

[37] Justice Pazaratz commented further at paragraphs 41 and 42:

[41] A common theme in the case law suggests security for costs in custody and access cases should only be ordered in exceptional circumstances. Kaiser v. Wein 2014 ONSC 752; Daviau v. Husid 2014 ONSC 3188; Parham v. Jiang 2014 ONSC 3293. The traditional rationale:

a. The best interests of children are always paramount.

b. Courts should not allow the outcome in children’s lives to be determined by a party’s financial resources, or inability to post security for costs.

c. Despite any deficiency or non-compliance by a parent, courts are better able to address sensitive children’s issues if both parties participate in the process and provide valuable information. Kovachis v Kovachis 2013 ONCA 663; Purcaru v Purcaru 2010 ONCA 92.

d. These concerns may be particularly applicable where custody or access are being determined in the first instance (as opposed to a motion to change, where the issues may be narrower, and where the moving party has the threshold onus to establish a material change in circumstances).

[42] But high conflict parenting disputes are often the most time consuming, financially draining, and emotionally damaging cases we deal with in family court. Quite often the best gift we can give children is a break from the family siege mentality and perpetual stoking of conflict which accompanies endless litigation.

The court resolves this security for costs issue at paras 57-76, citing additional case law.

. 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”.

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[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.