Case Overview:

• Dispute: Arises from a lease agreement (2016–2019) for a retail unit. The landlord claims unpaid rent and operating costs; the Solace Is Comfort Inc. ("SIC") counters with claims of damages due to alleged breaches, including issues with HVAC and termination of the lease.

Key Legal Issues:

• Motion for Security for Costs:
  • 2455993 Ontario Inc. ("245") sought $45,000 from SIC, arguing that SIC lacked sufficient assets in Ontario to cover a potential costs award.
  • Under Rule 56.01(1)(d) of the Rules of Civil Procedure, the court may order security for costs if the plaintiff appears to lack sufficient assets.

Court Analysis:

1. SIC's Financial Status:

   • SIC has not operated since 2019, and its financial records show insufficient assets. SIC did not provide updated financial evidence to rebut this claim.
   • SIC failed to demonstrate that it is genuinely impecunious or unable to raise funds for the litigation.

2. Counterclaim Merits:

   • The court found significant disputed facts and credibility issues that require trial determination. SIC's claims include allegations of fraud and negligence by 245, which are not "plainly devoid of merit."

3. Timing of the Motion:

   • Although 245 delayed bringing the motion, the delay was not deemed strategic or materially prejudicial to SIC. The court reflected the delay by reducing the security amount.

4. Holistic Approach:

   • Balancing access to justice for SIC and protecting 245 from an unenforceable costs award, the court decided to require a reduced security amount.

Order:

• SIC to post $25,000 in two installments:
  • $15,000 within 60 days of the case being set for trial.
  • $10,000 within 60 days after the Pre-Trial Conference.
• The case remains under the Simplified Procedure Rules.