Security for Costs in Frivolous and Vexatious Actions
In Rebello v. Paragon Security et al, 2020 ONSC 2303, the court considered the test for ordering a plaintiff to pay security for costs when an action may be frivolous and vexatious.
The Test
Rule 56.01(1)(e) states that, on a motion by a defendant or a respondent in a proceeding, the court may make an order for security for costs as is just where it appears that there is good reason to believe that the action or application is frivolous or vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant.
The court considers the pleadings and evidence when deciding if there is good reason to believe that the action is frivolous and vexatious.
The rule does not require a conclusive finding that the action is frivolous and vexatious. The defendant must only demonstrate that there are sufficient hallmarks of “vexatiousness” and “frivolousness”.
The court then examines whether the plaintiff has insufficient assets to pay an adverse costs award.
Lastly, the court takes an overall look at whether ordering security for costs is just.
Frivolous
A frivolous action is one that appears so highly unlikely to succeed that it is apparently devoid of practical merit or one which on its face is so unreal that no reasonable or sensible person could bring it. The court should give statements of claim the widest latitude and allow for drafting deficiencies, especially when the plaintiff is self-represented and has not had the benefit of legal training.
Vexatious
In examining whether an action is vexatious, the court considers the conduct and motives of the plaintiff in prosecuting the action.
Examples of vexatious conduct are bringing multiple overlapping proceedings and bringing simultaneous lawsuits and complaints against lawyers and judicial officers involved in the case.
Findings
Master Sugunasiri held that there is good reason to believe that the action is frivolous. The statement of claim contained highly scandalous and incredible allegations suggesting that the defendants worked with the police to plant fake tenants on her floor to eavesdrop and monitor her.
The plaintiff also alleged that the defendants created fake reasons to enter her apartment and installed listening devices. She further alleged false arrest with no particulars. She also claimed for harassment (which is not a recognized tort), as well as stalking, mischief, and voyeurism (which are also not known torts in Ontario).
Master Sugunasiri stated that, even if there is a scintilla of an actionable claim within the pleading, it is vastly overshadowed by allegations that are patently incredible and unbelievable.
It was held there is good reason to believe that the action is vexatious. The plaintiff commenced multiple overlapping proceedings. She made repeated allegations of impropriety against defence counsel, including reporting defence counsel to the Law Society and to his superiors. She threatened to sue defence counsel.
The court then examined the next stage of the analysis, in particular, whether there is good reason to believe that the plaintiff has insufficient assets to pay an adverse costs award. A plaintiff bears the onus of proof on this issue. The court was not satisfied that the plaintiff has sufficient assets.
Master Sugunasiri noted that, in determining if a security for costs award is appropriate, the court must not only consider the particular test applicable to the case, but must sit back and look at the overall justice of such an order.
The court held that requiring the plaintiff to post security for costs is just. The incredulity of the plaintiff’s allegations put the defendants at serious risk of incurring unnecessary and heightened costs that will be unrecoverable.
The plaintiff did not provide any evidence to corroborate her bald statement that an order for security for costs would stop the litigation in its tracks.
Outcome
The plaintiff was ordered to post security for costs through the end of examinations for discovery in the amount of $23,713 within 60 days. If the order is not satisfied, the defendants may move for an order dismissing the claim as against them.