Legal Blog

Security for Costs on Appeal

Thrive Capital Management Ltd. v. Noble 1324 Queen Inc. 2021 Ont CA

Plaintiff sued for fraud and breach of fiduciary duty. It obtained a Mareva injunction. The defendant breached the injunction and dealt with its assets. The defendants acknowledged its contempt and, on the sentencing hearing, the motion judge held, as a sanction, that the defendants were to pay the $8.7 million claimed amount to the plaintiff and directed the defendants to attend a judgment debtor exam, even if the defendants appealed the sentencing decision. The defendants appealed and the plaintiff moved for security for costs, both for the appeal and the motion itself. The Court held that, under Rule 61.06(1), there was “good reason” to order the costs. The Court also noted that, normally, after an appeal no JD exam may be conducted. However, in this case the examination being sought was not to support a monetary judgment being appealed, but rather under the terms of the motion judge’s order. This is not akin to an appellant being forced to drop its financial skirts when it may be ultimately exonerated on appeal; it is an examination that the defendants had to undergo because of the Mareva injunction issued against it.

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