Master refuses security for costs to the defendants
Released October 5, 2015 | Full Decision [Document Bank]
The defendants brought a motion seeking security for costs from the plaintiffs in the motor vehicle accident action. The accident took place on April 7, 2006. The defendant rear-ended the plaintiff’s vehicle. The plaintiff suffered injuries. The plaintiff’s husband and two daughters were added to the action under s. 61 of the Family Law Act, R.S.O. 1990, c. F.3.
The plaintiffs made a permanent move to the U.K. The defendants brought a motion seeking $264,457.12 plus applicable taxes to be posted in security. The plaintiffs opposed the motion.
Master Pope, who heard the motion, struck out the defendants’ references to settlement communications and offers to settle finding them improper and in breach of rule 49.06. She also struck out the defendants’ references to the pre-trial communications finding them improper and in breach of rule 50.09.
Master Pope affirmed that the application of rule 56.01, which deals with security for costs, requires a two-step inquiry. At the first stage the onus is on the defendants to show that one of the factors set out in clauses (a) through (f) in rule 56.01 exists. If the defendants succeed at the first stage, the onus shifts to the plaintiffs to show why an order the security for costs would be unjust in the circumstances.
The plaintiffs did not dispute that they were ordinarily resident outside Ontario. The plaintiffs resisted the motion arguing that a) an order for security for costs would cause them financial hardship, b) the action had a good chance of success, c) the defendants’ conduct, which was the subject matter of this litigation, caused the plaintiffs’ assets to become insufficient, and d) the costs sought by the defendants were excessive.
The plaintiffs had the means to post the security for costs. Master Pope reviewed the evidence led by the plaintiffs regarding their financial situation, finding it insufficient to conclude that the security for costs would result in the financial hardship for the plaintiffs.
Master Pope affirmed a good chance of success test as a legitimate factor even where impecuniosity is not shown. She stated that in order to succeed, the plaintiffs needed to show that they had a good chance of success in obtaining judgment against the defendants, which would require them to prove that a) the defendants were liable for the accident; b) the accident caused injuries to the plaintiff; and c) the injuries satisfied the statutory threshold.
Master Pope found that the merits of the plaintiffs’ action were strong, and that the plaintiffs had a good chance of success. Liability evidence strongly favoured the plaintiffs. On the issues of causation and statutory threshold, Master Pope also sided with the plaintiffs preferring the opinion of the plaintiffs’ expert orthopaedic surgeon to that of the defendants’.
The defendants were not allowed to rely on any offers to settle in arguing the good chance of success issue.
Master Pope accepted as relevant the plaintiffs’ argument that the plaintiffs’ deficiency in assets had been caused by the defendants’ conduct. Because of the accident the plaintiffs had to make significant life changes, including their move to the U.K.
Notwithstanding the plaintiffs’ ability to post the security for costs, the motion was dismissed. The plaintiffs’ good chance of success in the action was the predominant factor in Master Pope’s decision.
The decision is under appeal.
Plaintiffs’ counsel: Alex Kluchuk, Obradovich Law, Toronto, Ont.