Background

• The case concerns the failed sale of 3200 Danforth Avenue, Toronto.
• 688103 Ontario Inc. ("688") sued 5000917 Ontario Inc. ("500") for breaching an Agreement of Purchase and Sale (APS), seeking at least $150,000 in damages and release of a $100,000 deposit.
• 500 counterclaimed for $200,000 in damages, relief from forfeiture, and return of the deposit, alleging 688 and Samuel Chang (director of 688 and Century 21 Harvest Realty Ltd.) misrepresented rent rolls, mould, and billboard revenue.

Motion for Security for Costs

• Century 21 and Chang (the “Chang Parties”) sought security for costs from 500, arguing 500 lacked assets in Ontario.
• Under Rule 56.01(1), security for costs may be ordered if a plaintiff has insufficient assets to cover costs. 500’s director admitted in discovery that 500 had no assets in Ontario.

Court’s Findings

• The motion was brought promptly and was not strategic.
• 500 did not claim impecuniosity and failed to prove its claims had a good chance of success at trial.
• The court found 500’s counterclaim had independent elements beyond its defense.

Decision

• The court ordered 500 to post $30,000 in security for costs:
  • $15,000 due 60 days after the pre-trial conference
  • $15,000 due 90 days before trial
• Costs were reserved for the trial judge?.