Toronto Injury Lawyer Blog
Accidents which take place in Ontario, ought to be commenced in Ontario.
But, it’s not always the case that the Plaintiff resides in Ontario. The Plaintiff can be a visitor to Ontario; or, could have moved from Ontario out of province, or outside of Canada.
When this happens, a Defendant wants some peace of mind knowing that if they win the case at trial, and are then awarded costs; that their costs award can be satisfied. When a Plaintiff lives in Ontario, the Defendant isn’t as concerned with this sort of thing. But, when a Plaintiff resides outside of Ontario, a Defendant has some concerns (rightly or wrongly).
There is a mechanism contained under the Rules of Civil Procedure which call for a Plaintiff to pay money into Court in order to provide security for a potential cost award ordered against them. This is called “Security For Costs” and it’s provided for under Rule 56 of Ontario’s Rules of Civil Procedure. The Defendant will seek permission from the Court in the form of a motion to ask for money to be paid into Court by the Plaintiff to form part of that security. The Judge makes a determination of how much money needs to get paid if an Order for Security for Costs is warranted.
These Security for Costs orders can be in the thousands, or tens of thousands of dollars. This is not easy for any Plaintiff to pay. If a Plaintiff cannot make the payment, then their case can get dismissed by the Judge, even completely legitimate cases. It’s an example of the civil justice system working in favour of deep pocketed litigants as oppose to people of lesser means. It’s a classic example of the system favouring wealthy parties.
How would a Plaintiff defend such a motion? What can be done?
Don’t fret. Not all is lost. Sometimes the system appears to work against a Plaintiff, but there ar checks and balances to make sure that the little guy doesn’t get steam rolled by a big, bad, deep pocketed Defendant who uses litigation as a business model.
When a defendant requests security for costs because a plaintiff lives outside of Ontario (such as in a different Canadian province), out-of-province residency alone does not automatically justify the order.
All provinces in Canada except Quebec have reciprocating jurisdiction for civil Judgments with Ontario. This means that Ontario court decisions can be enforced in every Canadian province except Quebec. As long as the plaintiff has reachable assets in their home province (outside of Ontario), being an out-of-province resident is not a standalone reason to force them to post security.
To build a defence strategy against a motion for security for costs, consider the following key approaches:
1. Show Sufficient Assets in a Reciprocating Jurisdiction
If the plaintiff has reachable assets in a province outside of Ontario, prepare an affidavit listing those assets, such as real estate equity, bank accounts, or investments. The evidence should clearly show that these assets are unencumbered and easily attachable to satisfy any future costs order.
2. Argue Impecuniosity and the Merits of the Case
If the plaintiff lacks the financial means to post security, they can rely on the impecuniosity exception. Courts will not use security for costs to deny a person access to justice. This requires proving two things:
• Impecuniosity: Provide clear financial evidence, such as tax returns, debts, monthly income, expenses, and bank statements, showing an inability to pay.
• Merit of the Case: Demonstrate that the claim has merit. In an intentional tort case like assault, highlight key evidence such as police reports, medical files documenting damages, or witness statements to meet this threshold.
3. Highlight the Nature of the Claim
Courts apply a holistic analysis to ensure fairness. If the defendant’s alleged wrongful conduct caused or worsened the plaintiff’s financial hardship—for instance, if the assault resulted in injuries that prevented employment—courts are reluctant to impose financial hurdles. It is also helpful to emphasize that the case was brought in Ontario out of necessity because the incident occurred there.
4. Review for Procedural Delay
Check the litigation timeline. Unexplained delays by the defendant in bringing the motion can be grounds for dismissal. If the defendant allowed major steps to occur, such as discoveries or mandatory mediation, before requesting security, it can be argued that they waived their right or did not genuinely fear an unrecoverable costs order.
Key Evidence to Compile
• An affidavit from the client detailing their financial status and listing any assets outside of Ontario (or inside of Ontario as well)
• Supporting evidence showing liability and damages, including excerpts from the Statement of Claim, police reports, and medical records.
• A draft costs outline to challenge any inflated future cost estimates provided by the defendant.
If the plaintiff is not impecunious but lacks liquid funds, an alternative solution is to propose posting security in stages, such as a smaller initial amount up to discoveries and additional amounts only if the matter proceeds to trial.
Sometimes, having security, or litigation financing protection coverage is a hinderance to settlement. The security or after the event insurance presents gold at the end of the rainbow for the Defendant to draw upon at trial if they are successful. A Defendant might have a greater appetite for risk at trial knowing that if they win at trial, there is a guaranteed pay day to recover their legal expenses from the security for costs posted into Court, or from an after the event insurance policy. It’s a completely different exercise if the Plaintiff is on welfare, and living in public housing. The Plaintiff is clearly impecunious, without any tangible assets. Should the Defendant win at trial, there is no reasonable prospect to recover any sort of cost award given the financial circumstances of the Plaintiff. There is no real property in the Plaintiff’s name to lien. Nor can the Defendant garnish their Ontario Works or ODSP payments. This can present a real hurdle for the Defendant and change the way that they think about the litigation, or proceeding to trial knowing that they can’t get blood from a stone should they win a costs award.
