CITATION: Providence Grace Inc. v. Yardistry Ltd., 2022 ONSC 3983  
COURT FILE NO.: CV-20-637294-0000  
DATE: 20220705  
SUPERIOR COURT OF JUSTICE - ONTARIO  
RE:  
PROVIDENCE GRACE INC., Plaintiff/Respondent  
AND:  
YARDISTRY LTD., Defendant/Appellant  
VERMETTE J.  
BEFORE:  
COUNSEL: Myron Shulgan, for the Plaintiff/Respondent  
Stewart Thom, for the Defendant/Appellant  
HEARD:  
December 14, 2021  
ENDORSEMENT  
[1]  
The Defendant, Yardistry Ltd. (“Yardistry”), appeals from the Order of Master Brott (now  
Associate Justice Brott) dated June 1, 2021 dismissing Yardistry’s motion for security for costs.  
[2]  
A.  
The appeal is dismissed.  
FACTUAL BACKGROUND AND ALLEGATIONS IN THE ACTION  
The Plaintiff, Providence Grace Inc. (“PGI”), is a corporation incorporated in October  
[3]  
2017 pursuant to the laws of the State of Washington in the United States of America, with its  
principal office in Washington State. Mary Jackson is the president, director and sole shareholder  
of PGI. She is a resident of Washington State.  
[4]  
Yardistry is an Ontario corporation that carries on business as a designer, manufacturer and  
vendor of ready-to-assemble outdoor living products for use by residential customers. Yardistry’s  
customers are principally large chain retailers.  
[5]  
Prior to establishing PGI, Ms. Jackson was a part owner-operator of Frontier Northwest  
Inc. (“Frontier”). Frontier provided representation services to Yardistry in its dealings with  
Costco Wholesale Corporation (“Costco”). Frontier was paid for its services by Yardistry at a  
commission rate of 1.2% of the net sales receipts from Costco. The terms of the agreement  
between Frontier and Yardistry were not reduced to writing.  
[6]  
On December 22, 2017, Ms. Jackson entered into a redemption and resignation agreement  
with Frontier. PGI alleges that Frontier assigned to Ms. Jackson and PGI existing company  
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accounts that Ms. Jackson had been servicing at Frontier, including Yardistry’s account.  
According to PGI, Frontier’s contract with Yardistry was thereby assigned to PGI along with any  
commission payments to which Frontier would have otherwise been entitled. PGI pleads that  
Yardistry agreed to continue the contract with PGI and, in doing so, acquiesced in the same course  
of dealings that governed its relationship with Frontier.  
[7]  
However, PGI acknowledges in its Statement of Claim that on December 20, 2017, Ms.  
Jackson met with representatives of Yardistry who informed her of Yardistry’s intention to reduce  
PGI’s commissions to 0.4% on all shipments beginning January 1, 2018. PGI states that Yardistry  
would only pay to PGI commissions calculated at the rate of 0.4% on orders filled and invoiced  
after January 1, 2018, even where such orders were secured prior to January 1, 2018.  
[8]  
PGI pleads that it objected to and consistently disputed Yardistry’s unilateral decision to  
reduce PGI’s earned commissions, without providing reasonable notice. PGI’s position is that  
Yardistry was obligated to pay to PGI a 1.2% commission on all sales arising from purchase orders  
secured prior to December 20, 2017 and on all sales arising from purchase orders secured during  
a reasonable notice period thereafter.  
[9]  
PGI provided services to Yardistry from December 22, 2017 to September 14, 2018, when  
Yardistry sent a termination letter to PGI. PGI alleges that it secured Costco orders worth over  
USD $114 million for Yardistry’s benefit during that period. Prior to its termination, PGI received  
five commission payments from Yardistry totaling USD $226,847.  
[10] PGI pleads that beginning September 14, 2018, Yardistry refused to make any commission  
payments whatsoever on sales enjoyed under purchase orders secured by PGI prior to its  
termination.  
[11] Yardistry denies that its relationship or agreements with Frontier were assignable or for  
any fixed term. It states that upon Frontier’s announcement that it would no longer be servicing  
Yardistry, all contractual and business relations with Frontier or any of its personnel were  
terminated or otherwise ceased to exist.  
[12] Yardistry alleges that PGI was willing and agreed to proceed on the new terms proposed  
by Yardistry in December 2017, which also included a reduction of the scope of services. It further  
alleges that PGI did not object or complain about its compensation.  
[13] Yardistry states that it was an express or implied term of the agreement between PGI and  
Yardistry that commissions were payable only on net sales receipts received by Yardistry from  
Costco during the period in which representation services continued to be provided by PGI.  
Yardistry denies that PGI has any legal entitlement to compensation in respect of payments  
received by Yardistry after termination of the agreement with PGI and cessation of services.  
[14] PGI commenced this action on March 2, 2020. PGI claims the following relief:  
a. an accounting of all sales made by Yardistry pursuant to purchase orders procured  
by PGI on Yardistry’s behalf;  
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b. a judgment for the amount of commissions found due and owing to PGI and a  
declaration in respect of any future commissions owed to PGI;  
c. damages for breach of contract in the amount of $1,500,000;  
d. alternatively to (c), damages on a quantum meruit basis for unjust enrichment; and  
e. aggravated damages, in the amount of $1,000,000.  
B.  
MOTION FOR SECURITY FOR COSTS  
[15] Yardistry brought this motion for security for costs by Notice of Motion dated September  
18, 2020, a few months after the close of pleadings.  
[16] In support of its motion, Yardistry filed a short affidavit of a legal assistant attaching the  
pleadings, the corporation profile report of PGI and some correspondence between counsel  
regarding Yardistry’s proposed motion for security for costs. The affidavit also included an  
estimate of the costs associated with the remaining steps in the action and the following paragraph:  
PGI has no known assets in the Province of Ontario, or Canada. Yardistry  
furthermore has no knowledge of any assets owned by PGI in the United States  
which could be realized upon in satisfaction of any potential adverse costs award  
against PGI, should PGI fail to prove its claims and Yardistry become entitled to  
such an award.  
[17] I note that the affidavit filed by Yardistry does not comply with Rules 4.06(2) and 39.01(4)  
of the Rules of Civil Procedure as it contains evidence that is not within the personal knowledge  
of the deponent and the sources of her information (e.g., specific employees of Yardistry regarding  
Yardistry’s knowlegde, counsel regarding the costs/legal fees estimates, etc.) are not specified.  
[18] In response to the motion, PGI filed a short affidavit of Ms. Jackson. In her affidavit, Ms.  
Jackson outlines the facts giving rise to PGI’s claim. She also gives the following evidence:  
Assets in Ontario  
22.  
The Plaintiff has assets in Ontario. Its assets consist of money on  
deposit at the branch with which it deals at TD Canada Trust. It has a present  
account receivable from the Defendant. It will generate additional receivables from  
commissions to which it will be entitled in 2021 for services it provides to an  
Ontario manufacturer.  
The Defendant’s Acknowledgement of Present Indebtedness to the Plaintiff  
23.  
The Defendant has acknowledged to me that it is presently indebted  
to the Plaintiff for unpaid commissions but only for amounts totalling $13,102.82  
(USD) for services the Plaintiff performed on the Defendant’s behalf. The  
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Defendant has refused to remit payment of that amount to the Plaintiff unless the  
Plaintiff agrees to sign a release absolving the Defendant from any further payment  
obligations for services performed on its behalf by the Plaintiff. I have refused to  
comply with the Defendant’s request.  
Ability to Fulfill the Cost Order/Covid Pandemic  
24.  
The loss of the Defendant’s business had a dramatic impact on the  
Plaintiff’s business. The Defendant was the Plaintiff’s largest client.  
25.  
Since the loss of the Defendant’s business, the Plaintiff has secured  
a replacement manufacturer in the U.S. from whom the Plaintiff expects to replace  
the commissions formerly generated from the Defendant. However, the volumes  
of business the Plaintiff’s replacement client is generating had been limited by the  
effects of the Covid pandemic.  
26.  
The Plaintiff, since mid-March, 2020, has had no opportunity to  
perform services in Ontario as a result of restrictions imposed in consequence of  
the Covid pandemic. The restrictions imposed by the Canadian government on  
foreign travellers into Canada and by the U.S. Government on American travellers  
returning to the USA from out of the country make it almost impossible for the  
Plaintiff to secure representation of Canadian manufacturers at the present time or  
to generate significant commissions from its Canadian clients.  
27.  
It will be very difficult, if not impossible, for the Plaintiff to post  
security for costs in excess of an amount equal to the sum in which the Defendant  
is presently indebted to the Plaintiff because of the impact the Covid pandemic has  
had on the North American economy. The Plaintiff’s ability to generate revenues  
has been significantly impaired.  
Undertaking  
28.  
I have $110,000.00 in a personal investment account I maintain. A  
copy of the balances in that account are attached hereto as Exhibit “F”. I agree that  
in the event that the Defendant [sic] becomes liable for the costs of this proceeding  
I undertake to this Honourable Court to permit the Defendant to enforce any cost  
award it enjoys in this proceeding from that fund.  
Prejudice  
29.  
The prejudice the Plaintiff will suffer, if it is not permitted to  
continue to pursue this claim unless it posts security for costs, is far greater than the  
prejudice the Defendant will suffer if the Defendant’s motion is dismissed. The  
Defendant continues to enjoy sales revenues generated from the services provided  
for its benefit by the Plaintiff.  
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[19] Yardistry filed two affidavits in reply: an affidavit of an articling student who describes  
efforts that were made to verify the existence of PGI’s Ontario office, and an affidavit of Mat  
Wolf, Vice-President Finance of Yardistry. Mr. Wolf’s affidavit mainly contains hearsay evidence  
regarding the involvement (or lack thereof) of Jeff Bennett in PGI. Mr. Bennett’s name is not  
mentioned in Ms. Jackson’s affidavit, but Ms. Jackson refers to an employee of PGI in Ontario  
and Mr. Bennett is PGI’s alleged employee. The only paragraph of Mr. Wolf’s affidavit that does  
not deal with Mr. Bennett and addresses the facts of the case states as follows:  
Yardistry has furthermore reviewed the Affidavit of Ms. Jackson and disputes, for  
the record, Ms. Jackson’s characterizations of the work performed for Yardistry,  
the agreements with either Frontier or PGI, as well [sic] the amounts Ms. Jackson  
claims she is entitled to. The nature of Yardistry’s disputes on these issue [sic] is  
set out in the Statement of Defence of Yardistry and need not be recounted fully for  
the purposes of this motion. Yardistry views PGI’s claims as being without merit.  
[20] During his cross-examination, Mr. Wolf stated that he never had direct involvement or  
personal dealings with Frontier or PGI/Ms. Jackson. The question of whether approximately  
$13,000 in commissions earned by PGI remained unpaid (see paragraph 23 of Ms. Jackson’s  
affidavit reproduced above) was refused.  
C.  
THE ASSOCIATE JUDGE’S DECISION  
[21] The Associate Judge heard the motion on April 22, 2021 and released her decision on June  
1, 2021. Her endorsement reads, in part:  
[3]  
The defendant now brings this motion seeking leave to compel the plaintiff  
to post $135,000 as security for costs. On these motions, the courts have established  
a two-step process. The initial onus is on the moving party to satisfy the court that  
it appears there is good reason to believe that the matter comes within one of the  
enumerated areas in Rule 56.01(1). Yardistry moves pursuant to Rule 56.01(1)(a)  
and/or 56.01(1)(d).  
[…]  
[9]  
While is it [sic] arguable whether or not the defendant has met the onus  
under 56.01(1)(a) in light of Providence’s evidence, it does seem clear that the  
defendant has met the light onus under Rule 56.01(1)(d).  
[10] Once the first step is satisfied, the onus shifts to the responding party to  
establish that an order for security for costs would be unjust. Providence can meet  
that onus by demonstrating one of the following:  
1.  
It has appropriate or sufficient assets in Ontario or in a reciprocating  
jurisdiction to satisfy any order of costs made in the litigation;  
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2.  
3.  
It is impecunious and that its claim “is not plainly devoid of merit”;  
or  
If Providence cannot establish that it is impecunious, but it does not  
have sufficient assets to meet a costs order, that its claim has a  
“good chance of success” on the merits. […]  
[11] The plaintiff does not allege impecuniosity. The plaintiff’s evidence is that  
it does not presently have funds available to it to post security for costs. It alleges  
that its inability to do so results as a direct consequence of the defendant’s alleged  
wrongful refusal to pay to Providence the commissions to which the plaintiff claims  
entitlement. Further, there is uncontradicted evidence that the defendant is  
presently indebted to the plaintiff in the amount of $13,000 for outstanding  
commissions.  
[12] Providence has failed to provide much evidence of its assets in Ontario.  
Caselaw is clear that the plaintiff faces a high onus to demonstrate with “robust  
particularity” the state of its finances. As stated by Master Dash in Marion Custom  
Metals Inc. v Arlat Metals Inc. [2003] O.T.C. 1046 (Sup. Ct.) at para 24:  
It is incumbent on the corporation to provide information and supporting  
documentation as to the current status of its assets and liabilities secured  
against those assets put forward as available to pay a judgment for costs.  
[13] An order for security for costs is highly discretionary. The Court may make  
such order “as is just”. There is caselaw in support of the defendant’s position  
which notes that even where a plaintiff resides in a foreign jurisdiction with  
reciprocating enforcement of judgments legislation, the existence of the legislation  
is only a factor to be considered in the exercise of judicial discretion (Smallwood v  
Sparling (1983) 34 C.P.C. 24 (Ont. S.C.).  
[14] Significantly Mary has undertaken to make funds in excess of $100,000.00  
standing to her personal credit in an investment account that she maintains,  
available to Yardistry to satisfy any costs awards granted to the defendant, should  
the plaintiff’s action be unsuccessful. The defendant submits that even though the  
US is a reciprocating jurisdiction, the plaintiff must establish that the assets can be  
conveniently realized upon and it has failed to do so. The plaintiff on the other  
hand asserts that she can freely access her IRA. There is no conclusive evidence  
from either party about the exigibility of the account.  
[15] On the merits of the claim Yardistry relies on privity of contract and asserts  
that neither Mary nor Providence as assignee, has privity of contract with the  
defendant. However, the defendant has acknowledged that it owes to the plaintiff  
the sum of $13000 and further acknowledges the past relationship between  
Yardistry and Mary’s predecessor, Frontier. Although there is no written  
agreement between Mary and Yardistry, the standard of practice speaks for itself  
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and it will be up to the trial judge to make a final determination as to whether the  
defendant had to provide formal notice to the plaintiff of its intentions to alter the  
agreement.  
[16] Security for costs motions are intended to protect defendants from  
unmeritorious claims. The motion is not meant to unjustly deny a foreign plaintiff  
from pursuing its legitimate claims in Ontario.  
[17] In balancing the defendant’s interest in being protected from the risk of not  
being able to collect an order for costs if one is made and the plaintiff’s interest in  
pursuing the action, I accept and rely on the plaintiffs’ [sic] undertaking that she  
will make her personal account available to the defendant if necessary. The  
plaintiff should not be prevented from advancing this action. There is no evidence  
that the defendant will in any way be prevented from defending this action. I  
accordingly find that to make an order for security for costs at this time would be  
unjust. This motion is therefore dismissed.  
[22] The formal Order provides that the motion is dismissed “without prejudice to renew the  
request for security for costs after discoveries are completed.” The preamble of the Order contains  
the following paragraph which refers to Ms. Jackson’s undertaking:  
ON READING the material filed and on hearing the submissions of the  
lawyer(s) for the parties and in receipt of the undertaking of Mary Jackson to permit  
the Defendant to satisfy any cost award it may receive on the completion of this  
proceeding from her personal assets.  
D.  
POSITIONS OF THE PARTIES  
1. Position of Yardistry  
[23] Yardistry submits that while the Associate Judge correctly concluded that Yardistry had  
satisfied its onus to engage Rule 56.01 and correctly stated the onus upon the Plaintiff in response,  
she failed to apply the very legal principles that she referenced as those applicable, and she  
exercised her discretion based upon wrong principles that are inconsistent with the jurisprudence.  
[24] In its Notice of Appeal, Yardistry alleges fifteen errors or law, twelve palpable and  
overriding errors and six errors of principle in the Associate Judge’s exercise of discretion.  
[25] At the hearing of the appeal, Yardistry condensed its grounds of appeal and submitted that  
the Associate Judge had made four major errors:  
a. While the Associate Judge concluded that it would be unjust to order security for  
costs, she did not make any finding as to whether PGI had met its onus to prove  
one of the three elements at the second step of the test, as set out in paragraph 10  
of her endorsement, and she did not raise any other factor supporting a finding that  
ordering security for costs would be unjust.  
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b. She erred in relying on Ms. Jackson’s undertaking regarding her personal  
investment account.  
c. She erred by shifting the burden of proof onto Yardistry at the second stage of the  
analysis.  
d. She made a palpable and overriding error of fact in finding that PGI would be  
prevented from advancing this action if it was ordered to pay security for costs as  
there was no evidence that could support such a finding.  
[26] Yardistry submits that while the Associate Judge based her decision on financial hardship  
that would be suffered by PGI if an order for security for costs was made, she made no finding that  
such hardship would in fact result nor did she consider whether financial hardship had been proven  
by PGI to the applicable standard set out in the case law, i.e. with robust particularity. Yardistry  
further submits that the Associate Judge undertook no analysis as to whether PGI’s claim had “a  
good chance of success”. Yardistry states that the Associate Judge erred in law when she stated  
that “[s]ecurity for costs motions are intended to protect defendants from unmeritorious claims” in  
the context of a case where impecuniosity was not alleged.  
[27] Yardistry argues that the Associate Judge erred in law in her reliance and acceptance of  
Ms. Jackson’s undertaking. It states that the manner in which the Associate Judge dealt with the  
undertaking is not consistent with the decision of Justice Corbett in Printing Circles Inc. v.  
Compass Group Canada Ltd., 2007 57095 at paras. 41-43 (Ont. S.C.J.) (“Printing  
Circles”). Yardistry also submits that the Associate Judge did not consider whether PGI had  
demonstrated both the sufficiency and the adequacy of the asset relied upon, i.e. Ms. Jackson’s  
investment account. Yardistry points out that PGI did not challenge Yardistry’s submission that  
Ms. Jackson’s account was exempt from seizure or enforcement under Washington State law and  
incapable of being realized upon. In Yardistry’s view, the undertaking is essentially meaningless.  
[28] Yardistry further argues that the Associate Judge ignored Ms. Jackson’s evidence that since  
she could withdraw all the funds in her account now, she had the ability to pay security for costs  
if required, but it was simply Ms. Jackson’s preference to provide an undertaking and release funds  
at a later date, if necessary.  
[29] Yardistry submits that the Associate Judge exercised her discretion on the wrong principles  
when she stated in her conclusion that “[t]here is no evidence that the defendant will in any way  
be prevented from defending this action.” According to Yardistry, there is no requirement that a  
defendant adduce evidence that its ability to defend the action would be prejudiced if security for  
costs were not ordered, nor is such a consideration rationally connected to the underlying  
objectives of security for costs. Yardistry also submits that the Associate Judge exercised her  
discretion on the wrong principles when she failed to follow the second prong of the test for  
security for costs set out in paragraph 10 of her endorsement, which is the conventional way in  
which injustice is established. Yardistry expresses the view that the Associate Judge did not rely  
on any other or different factors or circumstances to ground her conclusion that it would be unjust  
to order security for costs in this case.  
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[30] Finally, Yardistry argues that the Associate Judge made a palpable and overriding error of  
fact when she stated that “the defendant has acknowledged that it owes to the plaintiff the sum of  
$13000”. Yardistry argues that the Associate Judge disregarded, misapprehended or failed to  
appreciate relevant evidence, made a finding not reasonably supported by the evidence and drew  
an unreasonable, unsupported and directly contradicted inference on this point. Yardistry points  
out that PGI has adduced no evidence in support of this alleged acknowledged liability and  
Yardistry has denied PGI’s claims.  
2.  
Position of PGI  
[31] PGI submits that the Associate Judge applied the right test. It further submits that the two-  
step legal inquiry under Rule 56.01 does not require a strict interpretation of that Rule, but, rather,  
an examination of all the evidence to determine if an order for security for costs would be just.  
While this analysis includes consideration of the merits of the claim, PGI states that the merits of  
the claim are only supposed to be considered as one factor on a continuum based on all the  
circumstances and, consequently, the court should not embark upon an analysis of the merits as if  
dealing with a motion for summary judgment.  
[32] PGI notes that, while the Associate Judge concluded that Yardistry had satisfied the first  
prong of the analysis, she exercised her discretion at the second stage and found that an award of  
security for costs would be unjust based on all the relevant factors before her. PGI refers to the  
discussion in paragraph 15 of the Associate Judge’s endorsement and argues that when exercising  
her discretion, the Associate Judge gave the merits of the claim proper consideration. According  
to PGI, the weight afforded to the merits of the issues was appropriately balanced as one factor  
alongside the relevant circumstances in this proceeding. PGI submits that the relevant  
circumstances in this case, which were considered by the Associate Judge before exercising her  
discretion, included the following:  
a. PGI’s insufficient assets in Ontario and funds available to pay costs to Yardistry;  
b. PGI’s alleged inability to pay security for costs because of Yardistry’s wrongful  
refusal to pay the commissions to which PGI claims entitlement;  
c. the indebtedness of Yardistry to PGI in the amount of $13,000;  
d. Ms. Jackson’s undertaking to make personal funds in excess of $100,000 available;  
e. the merits of the claim;  
f. the purpose of security for cost; and  
g. Yardistry’s ability to renew its motion for security for costs after the completion of  
the examination for discovery of PGI.  
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[33] PGI argues that all of the Associate Judge’s factual conclusions were supported by the  
evidence before her, and that none of the findings of fact can be described as being obviously or  
noticeably erroneous such that a palpable and overriding error occurred.  
[34] PGI’s position is that the Associate Judge correctly applied both prongs of the Rule 56.01  
enquiry in her analysis, and that she applied the correct legal principles and took a holistic approach  
when exercising her discretion. Therefore, her decision should not be interfered with.  
E.  
DISCUSSION  
1. Standard of appellate review  
[35] The standards of appellate review that apply to judges’ decisions also apply to associate  
judges’ decisions: see Zeitoun v. The Economical Insurance Group, 2019 ONCA 415 at para. 1.  
Thus, as set out in Housen v. Nikolaisen, 2002 SCC 33, the standard of correctness applies to  
questions of law and the standard of palpable and overriding error applies to questions of fact and  
questions of mixed fact and law, unless an error of law can be extricated from the mixed question  
of fact and law, in which case the standard of correctness applies.  
[36] The standard of palpable and overriding error was described as follows by the Court of  
Appeal in Farsi v. Da Rocha, 2020 ONCA 92 at para. 35:  
A palpable and overriding error is one that is clearly wrong, unreasonable, or not  
reasonably supported on the evidence: H.L. v. Canada (Attorney General), 2005  
SCC 25, [2005] 1 S.C.R. 401, at para. 110. The Supreme Court recently explained  
in Salomon v. Matte-Thompson, 2019 SCC 14, 432 D.L.R. (4th) 1, at para. 33,  
“[w]here the deferential standard of palpable and overriding error applies, an  
appellate court can intervene only if there is an obvious error in the trial decision  
that is determinative of the outcome of the case.”  
[37] The fact that an alternative factual finding could be reached based on a different ascription  
of weight does not mean that a palpable and overriding error has been made: see Nelson  
(City) v. Mowatt, 2017 SCC 8 at para. 38 and Salomon v. Matte-Thompson, 2019 SCC 14 at  
para. 33.  
[38] Thus, an appeal from an associate judge’s decision is not a rehearing. On questions of fact  
and mixed fact and law, deference applies, and the role of the reviewing court is limited. An  
appellate court cannot substitute its interpretation of the facts or reweigh the evidence simply  
because it takes a different view of the evidence from that of the associate judge. See Prescott v.  
Barbon, 2018 ONCA 504 at para. 11.  
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2.  
Applicable test on a motion for security for costs  
[39] Rule 56.01(1) of the Rules of Civil Procedure reads, in part:  
WHERE AVAILABLE  
56.01 (1) The court, on motion by the defendant or respondent in a  
proceeding, may make such order for security for costs as is just where it  
appears that,  
(a) the plaintiff or applicant is ordinarily resident outside Ontario;  
[…]  
(d) the plaintiff or applicant is a corporation or a nominal plaintiff  
or applicant, and there is good reason to believe that the plaintiff  
or applicant has insufficient assets in Ontario to pay the costs of  
the defendant or respondent;  
[…]  
[40] While the case law dealing with motions for security for costs discusses various factors  
(see, e.g., paragraph 10 of the endorsement of the Associate Judge in this case), the test for ordering  
security for costs requires a judicial officer, after analysing the specific factors set out in the rules,  
to consider the overall justness of the order: see Novak v. St. Demetrius (Ukrainian Catholic)  
Development Corporation, 2018 ONCA 219 at para. 7. The justness of the order sought is the  
overarching principle to be applied to all the circumstances: Yaiguaje v. Chevron Corporation,  
2017 ONCA 827 at para. 19 (“Yaiguaje”).  
[41] The Court of Appeal discussed the principles applicable to a motion for security for costs  
in its 2017 decision in Yaiguaje. In that case, the motion judge ordered the appellants to post  
security for costs. The motion judge found that the appellants had not established that they were  
impecunious or that third party litigation funding was unavailable. Because the motion judge  
concluded that impecuniosity had not been established, she ruled that the appellants had to  
demonstrate that their claim had a good chance of success. On a review of the merits of the claim,  
she found that the appellants had not met that onus.1 See Yaiguaje at paras. 14-15.  
1 While Yaiguaje deals with security for costs at the appeal level under Rule 61.06 of the Rules of Civil  
Procedure, the Respondents in that case were relying on Rule 61.06(b), i.e. that “an order for security for  
costs could be made against the appellant under Rule 56.01”: see Yaiguaje at para. 17. Therefore, the  
discussion in Yaiguaje applies to a case decided under Rule 56.01.  
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[42] The Court of Appeal subsequently set aside the motion judge’s order requiring the  
appellants to post security for costs. The Court stated the following (at paras. 22-25):  
[22] In deciding motions for security for costs, judges are obliged to first  
consider the specific provisions of the Rules governing those motions and then  
effectively to take a step back and consider the justness of the order sought in all  
the circumstances of the case, with the interests of justice at the forefront. While  
the motion judge concluded that an order for security for costs would be just, with  
respect, she failed to undertake the second part of that analysis. The failure to  
consider all the circumstances of the case and conduct a holistic analysis of the  
critical overarching principle on the motion before her constitutes an error in  
principle. It therefore falls to this panel to conduct the necessary analysis of the  
justness of the order sought.  
(ii)  
Justness of the order  
[23] The Rules explicitly provide that an order for security for costs should only  
be made where the justness of the case demands it. Courts must be vigilant to  
ensure an order that is designed to be protective in nature is not used as a litigation  
tactic to prevent a case from being heard on its merits, even in circumstances where  
the other provisions of Rules 56 or 61 have been met.  
[24] Courts in Ontario have attempted to articulate the factors to be considered  
in determining the justness of security for costs orders. They have identified such  
factors as the merits of the claim, delay in bringing the motion, the impact of  
actionable conduct by the defendants on the available assets of the plaintiffs, access  
to justice concerns and the public importance of the litigation. […]  
[25] While this case law is of some assistance, each case must be considered on  
its own facts. It is neither helpful nor just to compose a static list of factors to be  
used in all cases in determining the justness of a security for costs order. There is  
no utility in imposing rigid criteria on top of the criteria already provided for in the  
Rules. The correct approach is for the court to consider the justness of the order  
holistically, examining all the circumstances of the case and guided by the  
overriding interests of justice to determine whether it is just that the order be made.  
See also Fulop v. Corrigan, 2020 ONSC 1648 at para. 90.  
3.  
Application to this case  
a. The Associate Judge applied the correct test and did not err in law  
[43] In light of the decision of the Court of Appeal in Yaiguaje, I find that the Associate Judge  
applied the correct test for security for costs.  
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[44] It is agreed by all parties that the Associate Judge did not err at the first stage of the test.  
Yardistry’s position is that she erred at the second stage of the test.  
[45] As set out in Yaiguaje, the second stage of the test is to consider the justness of the order  
sought in all the circumstances of the case. The Associate Judge did that. While it is true that she  
did not make specific findings with respect to the factors set out in paragraph 10 of her  
endorsement, this was not strictly required. The Court of Appeal stated in Yaiguaje that there was  
no utility in imposing rigid criteria to be used in all cases in determining the justness of a security  
for costs order. The correct approach is for the court to consider the justness of the order  
holistically, examining all the circumstances of the case and guided by the overriding interests of  
justice to determine whether it is just that the order sought be made. The Associate Judge adopted  
such an approach in this case.  
[46] One of Yardistry’s main complaints with respect to the application of the test is that the  
Associate Judge did not make any finding as to whether PGI’s claim had “a good chance of  
success”. This complaint cannot be given any weight in light of Yaiguaje. In that case, the motion  
judge followed the test that Yardistry argues the Associate Judge should have followed in this case.  
The motion judge made an order for security for costs as she found that (a) impecuniosity had not  
been established, and (b) the appellants had not met their onus to show that their claim had a good  
chance of success. Nevertheless, her order was set aside by a full panel of the Court of Appeal  
because she was found not to have considered all the circumstances of the case and not to have  
conducted a holistic analysis. Thus, a finding as to whether a claim has a good chance of success  
is not determinative and, consequently, the failure to make such a finding does not constitute in  
itself an error.  
[47] In this case, the Associate Judge discussed the issue of the merits of the claim and  
considered that factor. The extent to which she could perform an analysis of the merits was rather  
limited: while Ms. Jackson gave evidence in her affidavit regarding her claims and allegations,  
albeit briefly, Yardistry, in contrast, refused to engage on this issue and only included a short denial  
in its evidence by an affiant who had practically no involvement in the relevant events. In the  
circumstances, it would not have been appropriate for the Associate Judge to make a decisive  
assessment of the merits: see AAD Investments Inc. v Casboro Industries Limited, 2017 ONSC  
3041 at para. 7.  
[48] I also find that, contrary to Yardistry’s allegation, the Associate Judge did not shift the  
burden of proof onto Yardistry at the second stage of the test. The Associate Judge clearly states  
in paragraph 10 of her endorsement that once the first step of the test is satisfied, the onus shifts to  
PGI to establish that an order for security for costs would be unjust. Yardistry complains about  
the statement of the Associate Judge in paragraph 16 of her endorsement to the effect that  
“[s]ecurity for costs are intended to protect defendants from unmeritorious claim”. Yardistry  
submits that this is an incorrect statement of the purpose of security for costs. While that may be  
the case, this statement in itself does not indicate that the Associate Judge shifted the burden of  
proof onto Yardistry. I also note that in the following paragraph of her endorsement (paragraph  
17), the Associate Judge correctly refers to the interests engaged on a motion for security for costs,  
including the defendant’s interest in being protected from the risk of not being able to collect an  
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order for costs if one is made. In my view, the impugned statement in paragraph 16 had no impact  
on the analysis or the outcome of the case.  
[49] When arguing that the Associate Judge improperly shifted the burden of proof onto  
Yardistry, Yardistry also relies on the Associate Judge’s statement in paragraph 17 of her  
endorsement that “[t]here is no evidence that the defendant will in any way be prevented from  
defending this action.” I agree that this statement raises some concerns, as it could be interpreted  
as requiring the defendant to adduce evidence that it would be prejudiced if an order for security  
for costs was not made. However, when looking at the Associate Judge’s endorsement as a whole,  
I am satisfied that she did not shift the burden of proof onto Yardistry, and that her statement in  
paragraph 17 only reflects one factor that she considered. Such a factor could legitimately be  
considered, as shown by the Court of Appeal’s decision in Yaiguaje where the Court considered  
the following factor when assessing the justness of an order for security for costs (at paragraph  
26(c)):  
In contrast to the position of the appellants, Chevron Corporation and Chevron  
Canada have annual gross revenues in the billions of dollars. It is difficult to believe  
that either of these two corporations, which form part of a global conglomerate with  
approximately 1,500 subsidiaries, require protection for cost awards that amount or  
could amount to a miniscule fraction of their annual revenues.  
[50] Thus, the impact of not making an order for security for costs on the defendant can be a  
legitimate factor to consider at the second stage of the test for security for costs when considering  
the overall justness of the order sought.  
[51] I therefore conclude that the Associate Judge did not make an error of law as she correctly  
articulated the applicable legal test and she applied that test.  
b.  
The Associate Judge did not make any reviewable error with respect to  
Ms. Jackson’s undertaking  
[52] Yardistry complains about the sufficiency and adequacy of Ms. Jackson’s undertaking.  
However, it is not the role of this Court as an appellate court to revisit the Associate Judge’s  
findings regarding the sufficiency of Ms. Jackson’s undertaking: see 250 Front Street West Inc. v.  
DCT5 Inc., 2018 ONSC 1159 at para. 12 (“250 Front”). Such a question is a question of fact or  
mixed fact and law. The Associate Judge was aware of Yardistry’s arguments with respect to the  
undertaking and referred to them in her endorsement, but, ultimately, she decided to accept and  
rely on Ms. Jackson’s undertaking. Her conclusion in this respect is entitled to deference.  
[53] I note that the issue of whether Ms. Jackson’s investment account is exempt from seizure  
or enforcement under Washington State law was raised for the first time by Yardistry during its  
cross-examination of Ms. Jackson. Thus, Ms. Jackson did not have the opportunity to file reply  
evidence on this point. I also note that proof of foreign law requires expert evidence, which neither  
party adduced.  
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[54] Yardistry raises additional issues regarding the Associate Judge’s acceptance of Ms.  
Jackson’s undertaking based on the case Printing Circles. These arguments were also raised in  
250 Front and were ultimately rejected: see paras. 13-16. I adopt the reasoning of Justice Copeland  
(as she then was) in that case.  
c.  
The Associate Judge did not make a palpable and overriding error  
[55] Yardistry argues that the Associate Judge made a palpable and overriding error of fact in  
paragraph 17 of her endorsement where she states that “[t]he plaintiff should not be prevented  
from advancing this action.” According to Yardistry, there was no evidence before the Associate  
Judge that could support a finding that PGI would be prevented from advancing this action if it  
was ordered to pay security for costs.  
[56] I find that there was evidence in the affidavit of Ms. Jackson that could support the finding  
of the Associate Judge. What Yardistry is really arguing is that this evidence was insufficient.  
However, on appeal, I cannot substitute my interpretation of the evidence/facts or reweigh the  
evidence simply because I may take a different view of the evidence from that of the Associate  
Judge. Thus, I conclude that the Associate Judge did not make a palpable and overriding error on  
this point.  
[57] I agree with Yardistry that the Associate Judge may have erred in fact when she stated that  
“the defendant has acknowledged that it owes to the plaintiff the sum of $13000”. There is no  
such acknowledgement on the part of Yardistry in the evidence. In her affidavit, Ms. Jackson  
states that Yardistry has acknowledged to her that it is presently indebted to PGI for unpaid  
commissions in the amount of USD $13,102.82. However, this is disputed by Yardistry. In his  
affidavit, Mr. Wolf states that Yardistry disputes the amounts that PGI and Ms. Jackson claim they  
are entitled to.  
[58] I say that the Associate Judge may have erred in fact because she refers earlier in her  
endorsement to the “uncontradicted evidence that the defendant is presently indebted to the  
plaintiff in the amount of $13,000 for outstanding commissions.” Given the short and blanket  
denial contained in Mr. Wolf’s affidavit, this could be a defensible characterization of the evidence  
on this point, and the Associate Judge’s later statement about the acknowledgement may be her  
conclusion on the evidence. However, given that the Associate Judge does not address Yardistry’s  
denial and does not explain why she accepts Ms. Jackson’s evidence over Mr. Wolf’s, she may  
have missed the fact that the alleged acknowledgement in Ms. Jackson’s affidavit was disputed by  
Yardistry.  
[59] In my view, however, if there was an error of fact, this error does not constitute a palpable  
and overriding error as it is not determinative of the outcome of the case. Further, it would have  
been open to the Associate Judge to accept Ms. Jackson’s evidence on this issue and to draw an  
adverse inference against Yardistry given that Yardistry failed to respond to the specific evidence  
on the alleged acknowledgement in Ms. Jackson’s affidavit; it refused a question on this issue  
during Mr. Wolf’s cross-examination; and it put forward only one affiant from Yardistry and that  
affiant had never had dealings with Frontier, PGI and Ms. Jackson and had almost no relevant  
- Page 16 -  
information regarding the merits of the case. As stated above, this may be what the Associate  
Judge did.  
F.  
CONCLUSION  
[60] Accordingly, Yardistry’s appeal is dismissed.  
[61] Counsel advised me at the end of the hearing that they had reached an agreement with  
respect to the costs of the appeal, i.e. the successful party would be entitled to costs in the amount  
of $7,500.00. In my view, this amount is fair and reasonable. Therefore, I order that Yardistry  
pay to PGI its costs of the appeal in the all-inclusive amount of $7,500.00 within 30 days. Given  
the result of the appeal, the Associate Judge’s costs award remains undisturbed.  
Vermette J.  
Date: July 5, 2022  


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