Security for costs in the context of a construction lien matter.

Date: March 2023

A recent motions decision with respect to security for costs in the context of a construction lien matter discusses the evidentiary burden on a plaintiff who alleges “impecuniosity”.

Simply put, while a plaintiff is entitled to take the position that it is “impecunious” in order to avoid posting security for costs, it must provide sufficient financial disclosure in order for the court to accept that a security for costs order will prevent it from pursuing litigation.

In this case, Associate Justice Robinson found that although the plaintiff admitted to having no exigible assets, the plaintiff did not establish impecuniosity (or that the defendant was the cause of its insolvency) in part because it failed to make sufficient financial disclosure of its ability to secure funding from directors, officers, shareholders, and affiliates and did not provide evidence of efforts to obtain third party litigation funding.

Considering this, Associate Justice Robinson found that there would be no injustice in requiring security for costs in the amount of $215,000.

Click here for a link to the decision.

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