A security for costs motion in Ontario asks the court to require a plaintiff to provide security before the litigation continues. Whether it arises and how a plaintiff responds depends on the pleadings, residence, assets, evidence and applicable rules. This guide explains the motion in practical terms.
Key takeaways: Review the motion materials, identify the factual basis, gather evidence about the claim and consider ATE or other costs-risk questions.
What is security for costs?
In Ontario, a party who loses a lawsuit may be ordered to pay part of the winning party’s legal costs. Security for costs is intended to protect a defendant who may have difficulty collecting those costs from the plaintiff if the defendant wins. If an order is made, the plaintiff must post the security, often by paying money into court or providing another acceptable form of security, within a set time.
The rule: Rule 56
Security for costs is governed by Rule 56 of the Rules of Civil Procedure. The court may order security in circumstances set out in the rule, and the result depends on the evidence and the court’s discretion. The current rule should be reviewed for the particular motion.
Even where a ground is established, the court has discretion. The overriding question is whether an order is just in the circumstances.
How much and what happens if you do not pay
Security for costs orders can be substantial, particularly in cases that are expected to go to trial. Courts sometimes order security in stages, for example an amount to cover the steps up to discovery, with further amounts later. If the plaintiff does not post security as ordered, the court may dismiss or stay the claim. The consequences of non-compliance make it important to respond carefully.
Plaintiffs who live outside Ontario
A plaintiff’s residence outside Ontario does not by itself determine the outcome of a security-for-costs motion. The court may consider the plaintiff’s assets, the merits and the circumstances of the case. The applicable facts and current rule should be reviewed for the particular motion.
Possible responses to a motion
Depending on the facts, a plaintiff may respond in one or more of the following ways:
• Assets: filing evidence, often an affidavit, showing that the plaintiff has sufficient assets in Ontario or in a reciprocating jurisdiction to satisfy a costs award.
• Impecuniosity: showing that the plaintiff genuinely cannot afford to post security and that the claim is not plainly devoid of merit. Courts are reluctant to prevent a genuine claim from proceeding solely because of lack of means, but the evidence of impecuniosity must be full and frank.
• Merits: showing that the claim has a good chance of success, which may weigh against an order.
• Nature of the claim: arguing that the plaintiff’s financial difficulties were caused by the defendant’s conduct, for example by the very injury that is the subject of the claim.
• Delay: pointing out that the defendant waited an unreasonably long time to bring the motion.
• Amount and timing: if an order is likely, proposing a reduced amount or staged security, supported by a realistic costs outline.
Practical considerations
• Responding to a security for costs motion often requires detailed financial disclosure. Plaintiffs should be prepared to provide accurate, complete information.
• The evidence filed may be tested through cross-examination.
• The plaintiff may be ordered to pay costs of the motion if it is unsuccessful.
• Timing matters: a motion brought late in the case may be treated differently from one brought early.
How a security for costs motion unfolds
A defendant usually begins by serving a notice of motion and supporting affidavit, explaining the ground relied on, often the plaintiff’s residence outside Ontario, and the costs the defendant expects to incur. The plaintiff then has an opportunity to respond with its own evidence, such as an affidavit about assets or impecuniosity. Each side may cross-examine on the other’s affidavits. The motion is then argued before a judge or associate judge, who decides whether to order security, how much, in what form and by when.
Security in the context of personal injury claims
In personal injury cases, a plaintiff’s financial position may have been affected by the injury itself, for example through lost income. Courts may consider this when assessing whether an order would be just, particularly where the defendant’s alleged wrongdoing contributed to the plaintiff’s financial circumstances.
Conclusion
A security for costs motion in Ontario requires a focused review of the rule, evidence and plaintiff’s circumstances. Contact Booni Law at admin@boonilaw.com or +1 (226) 271-1751 to discuss the materials. No outcome is promised.
Frequently Asked Questions
Why would I have to pay security for costs?
The defendant may be concerned it cannot recover costs from you if it wins, for example because you live outside Ontario. The court decides whether an order is just.
I live in another province. Will I have to post security?
Not automatically. If you have assets in a reciprocating jurisdiction, the court may decide security is not needed. Each case depends on its facts.
What if I cannot afford to post security?
You may be able to show impecuniosity and that your claim has merit. Full financial evidence is usually required.
What happens if I do not post the security ordered?
The court may stay or dismiss your claim. Get advice promptly if an order is made.
Facing a security for costs motion?
If a defendant has brought, or is threatening, a security for costs motion in your case, Booni Law can review the motion and explain the responses that may be available. Email Booni Law at admin@boonilaw.com or call +1 (226) 271-1751. The outcome depends on the evidence and the court’s discretion.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Reading this article does not create a solicitor-client relationship between you and Booni Law. The information in this article may not reflect the most current legal developments and should not be relied upon as a substitute for professional legal advice tailored to your specific circumstances. If you require legal advice, please contact Booni Law.
