Key Issues:

1. Security for Costs Order:

   • In a prior ruling (Dec 23, 2024), the court required the Plaintiffs, 2722959 Ontario Inc., Frank D’Angelo, and Gemma Runaghan,  to post $75,000 as security for costs.
   • The security was due by January 14, 2025, but the Plaintiffs failed to meet this deadline.
   • Plaintiffs proposed to secure the amount by granting a third-ranking charge on real property, which the Defendants, Canadian Western Bank (CWB) and John Butler, opposed.

2. Plaintiffs' Financial Position:

   • The property in question is in Collingwood, Ontario, owned by Gemma Runaghan.
   • The Plaintiffs argue they have over $500,000 in equity but cannot obtain a bank loan due to employment circumstances.
   • The property has two existing mortgages:
     • TD mortgage: Outstanding amount $329,448.96.
     • Gar mortgage: Renewal amount $915,793, with high interest rates (15.75%-18%).

3. Court’s Analysis & Decision:

   • Lack of Proper Evidence: Plaintiffs provided no sworn affidavits or verified financial records to support their claim of sufficient equity.
   • Inadequate Security: The court emphasized that security for costs should be readily accessible to the Defendants if they win.
   • Precedents Considered: The court cited cases (e.g., Clark v. Clark, 2014 ONCA 175) to explain why a third-ranking mortgage is unreliable security.
   • New Deadline for Security: Plaintiffs must post cash or a letter of credit by January 27, 2025.

Conclusion:

• The third-ranking mortgage was rejected as a valid security.
• Plaintiffs must post security in an acceptable form (cash or letter of credit) by the new deadline.
• The case continues, with judicial mediation scheduled for February 2025.
• No final determination on liability or damages has been made yet.