29 Sep 2023
1059233 Ontario Ltd. v. Vandeputte
In the case of 1059233 Ontario Ltd. v. Vandeputte, dated September 25, 2023, the defendant, Vandeputte, had requested an order that the plaintiff, 1059233 Ontario Inc. ("105"), post security for costs totaling $69,073.97 on a partial indemnity scale. The background of the case involved 105's sale of a property to Recchia Developments Inc. in 2012, where the purchase price included a Vendor Take Back Mortgage. Disputes had arisen over the Claw Back Clause in the Agreement of Purchase and Sale (APS) related to the property's development application, leading to legal proceedings.
In 2014, Recchia initiated an Application to determine the enforceability of the Claw Back Clause, with the Defendant acting as counsel for 105. Ultimately, the court upheld the Claw Back Clause's enforceability. Subsequently, 105 commenced an action against the Defendant, claiming negligence in failing to obtain critical evidence during the Application, seeking damages of $800,000.
Ultimately, the court ordered 105 to post security for costs of $25,000 on a partial indemnity scale within 90 days, allowing the case to proceed to trial while providing some protection for the Defendant.
This decision took into account the complexity of the litigation, the narrowed scope of the negligence claim, and the timing of the security for costs motion. Additionally, the court emphasized that security should not be so onerous as to hinder a party's access to the legal process. The parties were given the option to file written submissions regarding costs if they couldn't reach an agreement.