25 Feb Car Manufacturer Seeks Security for Costs From Plaintiff Prior to Trial

The Defendants in the case of Ballantyne v. General Motors LLC, 2018 BCSC 1886, brought an application for an order that the Plaintiff post security for costs. The underlying action was for personal injury damages allegedly suffered by the Plaintiff when his vehicle crossed the center line of the roadway and collided head-on with a bus.

The Plaintiff alleged that the GM Defendants negligently manufactured the vehicle and failed to warn the Plaintiff of a defect in the vehicle. The Plaintiff alleged that Dueck provided him with a vehicle which was not fit for its purpose and that Dueck was negligent in servicing the vehicle.

The power to order security for costs in British Columbia flows from the inherent jurisdiction of the court. It is a discretionary power that is to be exercised cautiously, sparingly and under special circumstances.

The threshold question was whether the Defendants had proven that the Plaintiff would be unable to satisfy a costs award if he was not successful in this action. Based on the Defendants’ evidence regarding the Plaintiff’s finances and his current status as an undischarged bankrupt, the Defendants had done so.

The Court was then required to consider whether there were special circumstances that justified an order requiring the Plaintiff to post security for costs. The Defendants relied on three factors that they thought constituted special circumstances justifying such an order, including:

a) The Plaintiff’s claim was weak: The merit of the Plaintiff’s claim was a relevant factor for the Court to consider. The Court acknowledged that the Plaintiff would ultimately need to prove that his vehicle had the defect referred to in the recall report and that the defect caused the collision. The evidence did establish that there was a possibility the Plaintiff’s vehicle had the defect and the evidence did tend to rule out many of the other possible causes of the crash. In addition, the Defendants had not attempted to put forward an alternative theory for how the collision occurred.

The Court rejected the Defendants’ submission that the Plaintiff’s case was not legitimate or was so weak that security for costs should be awarded.  The Court found that there was an arguable case;

b) The Plaintiff’s conduct in the bankruptcy proceedings: The Court found that the conduct of the Plaintiff in the bankruptcy proceedings was not a special circumstance justifying an order of security for costs; and

c) The Plaintiff’s claim was being handled on a contingency fee basis: The Defendants submitted that, because there was a contingency fee arrangement between the Plaintiff and his lawyers, the Plaintiff’s ability to prosecute this claim would not be compromised by an order for security for costs. The Court considered the Defendants’ argument in this regard to be entirely without merit and based upon pure speculation. In the Court’s opinion, the existence of a contingency fee agreement was not, and should not be, a relevant factor when considering whether to order security for costs.

The Court held that there were no special circumstances justifying the exercise of its discretion to order that the Plaintiff post security for the costs of the Defendants. Accordingly, the Defendants’ application was dismissed and the Plaintiff was awarded costs in the event of cause.