PRACTICE |
Costs |
Pepper King Ltd. v. Sunfresh Ltd.
T-2351-93
Lemieux J.
29/5/00
7 pp.
On eve of trial defendants moving for order requiring plaintiff to give $20,000 as security for costs pursuant to Federal Court Rules, 1998, r. 416(1)(b) without having submitted bill of costs--Plaintiff, very small Canadian corporation, engaged in sale of homemade hot pepper sauces under trade-mark "Volcano" to limited market in southwest Ontario--Defendants all related companies--Loblaw Companies Limited Canada's largest food distributor--Selling salsa with labels which include term "volcano"--Plaintiff commencing action in 1993--During 1998 status review, plaintiff's counsel indicating belief good cause of action, and plaintiff unable to pay further fees--Action allowed to continue under case management--In April 2000 McKeown J. ordering plaintiff deemed to have admitted facts set out in notice to admit because not setting out grounds for denial--Plaintiff conceding corporation with insufficient assets in Canada to pay defendants' costs if ordered to do so; invoked r. 417--R. 417 permitting court to refuse order for security for costs if plaintiff demonstrating impecuniosity, case having merits--Plaintiff not leading any evidence on impecuniosity; whether case having merits better left for determination after trial--Defendants knew in September 1998 that plaintiff may not have assets in Canada to satisfy costs if so ordered, yet delayed until mid-May 2000 to make motion--Stating until deemed admitted facts order, plaintiff likely able to show case had merit--Thus, defendants' motion designed to insulate itself from successful r. 417 motion had they moved sooner--Last-minute motion for security for costs not conducive to proper resolution of issue raised, including whether r. 417 applicable--Laches factor taken into account in exercise of judicial discretion--Access to courts underlying principle against which motion for security for costs should be gauged--Court unable to conclude plaintiff not having case to put forward--Federal Court Rules, 1998, SOR/98-106, rr. 416(1)(b), 417.