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Security for Costs

Bolton Mechanical v. EBC Inc. 2020 Ont SCJ (MC)

Master held that the defendant general established that there was good reason to believe that the plaintiff lien claimant had insufficient assets in Ontario to pay costs of the action. Coming to that conclusion, she (a) held that the plaintiff was allowed to refuse to provide evidence of its assets because it was the defendant’s initial onus to show good reason (b) gave a little weight to the fact that the plaintiff did not own real property in the Ottawa area (c) gave a full weight to the admission that the plaintiff would no longer be doing any more mechanical work. She held that if a case is complex or turns on credibility, it is generally not appropriate to make an assessment on the merits of the action at the interlocutory stage; success or failure must appear to be obvious. In this case, it was not obvious. She held that the existence of a counterclaim does not preclude the court from making an order for security for costs, but may be a factor in the quantum ordered. She ordered $50,000 security, which was the exact amount that the defendant had allocated towards costs in the lien bond.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.