Recently, a foreign resident brought a frivolous lawsuit against one of my clients. Even if my client won the case and successfully defended the claim, there was no guarantee he would be able to recover any of his legal expenses. In order to avoid that outcome, I scheduled a hearing and brought a Motion for Security for Costs under Rule 56.01.
On a motion for security for costs, the Court is required to engage in a two-step inquiry.
1) First, the defendant must show that it appears that the plaintiff fits within one of the subrules of 56.01(1).
2) Once the Defendant has done that, the onus then shifts to the Plaintiff to establish that an order for security for costs would be unjust. In determining that, the Court will look at the financial circumstances of the Plaintiff, the merits of the claim and whether the proposed Order would prevent a bona fide claim from proceeding.
At hearing, the Court found that the plaintiff was in fact a non-resident, and that he had not shown that an Order for Security for Costs would be unjust. As such, the Court ordered the defendant to pay money into Court as the case progressed, in tranches. The Court further awarded my client costs of the motion.
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