While free solo climbers and volcano researchers may thrive on adventure, in my experience, the majority of people strive for a sense of stability and security in their lives. As a result, it should come as no surprise that defendants and respondents also seek security: security for costs.

Security for Costs

In litigation, the general rule is that the successful party will recover a portion of her costs from the unsuccessful party. However, costs are only awarded at the end of the litigation or a step in the litigation. Security for costs is designed to ensure that a defendant to an action or a respondent to an application does not have to incur the expense of a fulsome defence without the possibility of recovering a portion of her costs against the plaintiff/applicant if successful. Where an order for security for costs is made, the plaintiff/applicant is prohibited from taking any further step in the proceeding until the security has been given.

Security for costs is not awarded as of right: the defendant/respondent must meet a high bar. Rule 56.01(1) sets out the factors the motion judge will consider when determining whether it is appropriate to make an order for security for costs.

Security for costs is also available on appeal under rule 61.06. Where the appellant fails to comply with an order for security for costs on an appeal, a judge of the appellate court may dismiss the appeal.

Estates law and security for costs intersected in the Court of Appeal of Ontario’s decision in Ducharme Estate v Thibodeau, 2022 ONCA 661.

Background

As the Court of Appeal later held, Ms. Thibodeau had the hallmarks of a vexatious litigant. After Brian’s death, Ms. Thibodeau filed a notice of objection to his will, preventing it from being probated. The estate trustee was required to start a court application seeking a declaration that Brian’s will was valid such that it could be submitted for probate.

Ms. Thibodeau did not file any evidence in support of her will challenge. Then, on the eve of the hearing, Ms. Thibodeau withdrew her notice of objection. Ms. Thibodeau failed to instruct her lawyers to attend the hearing to determine costs of the application. The result was that Brian’s will was declared valid, it was submitted for probate, and the judge awarded $47,147.90 in costs against Ms. Thibodeau.

Ms. Thibodeau appealed the decision of the application judge to uphold the validity of the will and the costs decision. The estate trustee brought a motion seeking security for costs of the appeal.

Order for Security for Costs

At the outset of the decision, the appellate judge hearing the motion pointed out that, had Ms. Thibodeau sought to appeal the cost award alone, she would have required leave of the court (which is rarely granted). By combining the cost appeal with an appeal of the decision that the will was valid (despite the fact that Ms. Thibodeau herself withdrew her notice of objection to probate), leave to appeal was not required.

Turning to the factors set out in rule 61.06(1)(a),[1] the motion judge held that it was appropriate in the circumstances to order security for costs. The motion judge found:

First, there is ““good reason” to believe that the appeal appears to be devoid of merit” … Ms. Thibodeau is appealing the very order that she conceded below, and she is doing so without any evidentiary record having been placed before the application judge to support a challenge to the validity of the will. …

Secondly, “there is something that supports the conclusion that the appeal is “vexatious”” ... The substantive appeal appears to be so bereft of merit that there is reason to believe that the decision to bring it may have been a vexatious strategy to advance a costs appeal without having to seek leave to appeal costs, which is rarely granted.

Moreover, Ms. Thibodeau is conducting related litigation against the solicitor who Brian allegedly instructed to amend his will. She has already made widescale unsupported allegations of invalidity in the Notice of Objection which delayed probate of a will that, if fulfilled, would distribute property she believes should be hers. Now she is bringing an apparently frivolous appeal that she believes, based on the submissions in her factum, will delay the distribution of the estate assets even without a stay. There is therefore reason to believe that she has advanced this appeal to delay distribution while she conducts related litigation against Brian’s solicitor.

Finally, the motion judge held that the estate trustee “should not have to run the very real risk of ultimately having to bear his own costs. Since Ms. Thibodeau initiated the appeal and appears to have the means if he wins to indemnify him for the costs she has caused, an order for security for costs is just, and should be made.”

The motion judge ordered that Ms. Thibodeau pay security for costs in the amount of $20,000.00, which was to be deposited by a certain date. If Ms. Thibodeau failed to do so, the estate trustee could bring a motion to dismiss the appeal.

The estate trustee was also awarded an all-inclusive payment of $5,100.00 for his costs of the motion.

[1] The court also cited Health Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine, 2019 ONCA 576.