While the Superior Court of Justice has suspended most hearings in response to the COVID-19 pandemic, recently released decisions show how the COVID-19 pandemic is already affecting civil litigation matters in the Province of Ontario.
One such decision is Lancaster Group Inc. v. Kenaidan Contracting Ltd. (2020 ONSC 1653), which was a decision on a motion for security for costs on a construction lien matter. While the motion was heard on November 18, 2019, the decision was released on March 20, 2020, after COVID-19 had been declared a pandemic by the World Health Organization.
While much of the motion is a standard motion for security for costs, of relevance is the Court’s consideration of COVID-19, more specifically the economic impact of COVID-19, in its determination of what constitutes a just order in the circumstances.
While considering the appropriate quantum for security for costs, in addition to considering the existence of other actions, the Court considered what it described as the unknown impact of COVID-19 on the plaintiff, and ultimately ordered that the plaintiff did not have to pay the entire security for costs upfront, instead finding that a “pay-as-you-go” plan was appropriate.
It is interesting that the Court in this decision applied COVID-19 as a mitigating factor to the need for the plaintiff to post security for costs, instead of a factor making it necessary, given the economic instability that COVID-19 has created. However, as Judges possess significant discretion on motions for security for costs and the orders made under these motions, this decision is not conclusive that COVID-19 could not be considered and applied differently in a different matter.
Given that the motion was heard in November, the parties would not have advanced any argument relating to COVID-19. As such, it remains to be seen whether the existence of COVID-19, and its economic impact, could be found by a Court as a factor that may hinder a party’s ability to satisfy a costs award, and therefore strengthening a moving party’s motion for security for costs.