Security for Costs
“This rule authorizes a court on defendant’s motion to make an order requiring plaintiff to put up security for the anticipated costs of the proceeding. The most common situation in which this rule is invoked is where plaintiff is a shell corporation, or a non-resident or an impecunious individual. The rationale behind the rule is that defendant would be hard pressed to collect a favourable costs award if the action is ultimately dismissed. At the same time, courts have been loath to make an order which would prevent a worthy claim from being pursued by an “impecunious” plaintiff. Note that once an order for security for costs has been made, the amount of security required may be varied at any time, presumably on a motion by either party.
Plaintiff’s counsel must respond forthwith to defendant’s demand in writing for a declaration as to whether plaintiff is ordinarily resident in Ontario, otherwise, the proceeding may be stayed or dismissed. A motion for security for costs can only be brought by defendant after the statement of defence has been delivered. On complying with an order for security for costs, plaintiff must give a notice of compliance forthwith to the party obtaining the order.”
Excerpt From: Todd L. Archibald. “Ontario Superior Court Practice 2019.”
This motion can be quite procedurally complex as the burden of proof shifts between the parties which in turn can impact the standard of proof. As such, granting this motion can be heavily influenced by the facts presented by both sides. This highly technical motion requires a 2 stage analysis. Bringing this motion properly can significantly shorten the length of a proceeding and/or at the very least deal with a lot preliminary issues in a legal dispute. Every case is different and these motions can be drafted according to the context of the dispute. The lawyers at Alemi Law Group are experienced trial lawyers who are familiar with utilizing this tool to gain strategic advantage for clients.
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