PRACTICE |
Costs |
Early Recovered Resources Inc. v. Gulf Log Salvage Co-Operative Assn.
T-588-00
2001 FCT 524, Hargrave P.
24/5/01
19 pp.
Motion for order requiring plaintiff to provide security for costs--Defendant estimating trial will last five days, taxable costs will be $28,219.65--Federal Court Rules, 1998, r. 416(1)(b) permitting Court to order security for costs where reason to believe plaintiff corporation would have insufficient assets in Canada available to pay defendant's costs--Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 56.01(1), permitting order for security for costs where good reason to believe plaintiff corporation having insufficient assets in Canada to pay defendant's costs, similar to r. 416--Orkin on Costs, 2nd ed., Canada Law Book Inc.: Aurora, Ont., 2000, dealing with Ontario rule, indicating onus initially on defendant to establish good reason to believe corporate plaintiff having insufficient assets, at which point onus passing to plaintiff to establish either sufficiency of assets or that it be permitted to proceed to trial despite lack of assets, all of this being discretionary--Once defendant showing prima facie case plaintiff unable to pay costs, plaintiff required to show exigible assets of sufficient value to satisfy award of costs: Ruko of Canada Ltd. v. CIBC (1991), 49 C.P.C. (2d) 105 (B.C.S.C.)--No weight given to defendant's submission plaintiff private company, maintaining no employees, operating out of family home as not relevant in establishing prima facie case of lack of exigible assets that plaintiff operating out of residence of principal--Defendant establishing plaintiff owning 1997 Ford pickup, 1999 Ford Taurus car, 22.2-foot aluminum work boat, two small licensed vessels--Plaintiff refusing to produce financial statements, evidence as to age, mileage, condition or independently assess market value--Prima facie case plaintiff lacking exigible assets by which might satisfy possible award of costs, should plaintiff lose case--Plaintiff disputing any shift of burden or onus to it--Defendant having neither obligation nor burden through counsel to put in plaintiff's case by way of extended cross-examination of plaintiff--Plaintiff expected to put into evidence financial status by way of affidavit evidence in opposition to motion--Plaintiff relying on affidavit of "co-owner" of plaintiff listing five assets, relying upon dealer's figures for value of vehicles, and own estimates for values of vessels, although not trained appraiser--Basing value of vessels on consultation with husband, and on 20 years' experience--Assets valued at $90,000 in affidavit, which ignores possibility of claims of lien, including maritime liens, against vessels, which would not appear in any register--Also some confusion as to documentation of vessels--According to Ruko, plaintiff must provide some sort of evidence to show nature of assets, extent to which might be encumbered, whether assets exigible--Plaintiff's refusal to provide evidence of financial position, inability to provide reliable evidence of age, condition, saleability of vehicles, vessels, any evidence of vehicle mileage, any disinterested professional valuation, or material to help establish absence of creditors interested in assets fatal to plaintiff's attempt to rebut defendant's prima facie case--R. 417 providing impecuniosity, meritorious case grounds for refusing security for costs--Plaintiff probably not impecunious given withdrawal of plea of impecuniosity, establishment of ownership of some assets--No evidence as to whether or not plaintiff might have credit to borrow funds--That federal Department of Justice declined to intervene indicating Government of Canada viewing constitutional issues raised herein as of little merit--Ontario test for allowing impecunious corporate plaintiff to proceed without posting security for costs that claim almost certain not to fail--Without deciding appropriate test, plaintiff falling short of satisfying plain wording of r. 417 as not establishing case deserving or worthy of consideration on basis of substance, elements or grounds of cause of action entitling plaintiff to have matter considered by Court--Federal Court Rules, 1998, SOR/98-106, rr. 416, 417--Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 56.01(1).