Background:
PreveCeutical Medical Inc. (PMI), Stephen Van Deventer, and Asterion Cannabis Inc. (ACI) filed a lawsuit against Jonathan Lotz and Lotz Law Corporation, alleging professional negligence. The plaintiffs claimed the defendants, acting as legal counsel, failed to ensure a corporate News Release met securities law requirements. This alleged failure resulted in regulatory proceedings and financial harm. PMI is a bio-pharmaceutical company, and ACI operates in the medicinal cannabis industry.

Legal Issues:
The defendants sought an order for the plaintiffs to post security for costs, arguing the claims were unmeritorious and the plaintiffs were impecunious. The plaintiffs contended their financial difficulties stemmed from the defendants’ negligence, which caused reputational and financial harm.

Court’s Findings:
The court ordered PMI and ACI to post $20,000 in total as security for costs, with $10,000 payable within 90 days and the remainder before discovery. It held that while the corporate plaintiffs were impecunious, their claims were not obviously without merit. The claim included unresolved issues such as whether the defendants owed a duty of care to ACI.

Outcome:
The application for security for costs against Stephen Van Deventer personally was denied due to his precarious financial state and the absence of egregious circumstances. Costs of the application were made payable in the cause.

Award:
No damages were awarded, but security for costs totaling $20,000 was imposed on the corporate plaintiffs.