Credit Union Atlantic Ltd. v. Hebron Hospitality Group Inc.

Credit Union Atlantic Ltd. v. Hebron Hospitality Group Inc.

The court found the moving party met the requirements of CR 45: Hebron failed to maintain an address for delivery (CR 45.02(3)(d)), had indicators of insufficient assets (revoked status at the Registry of Joint Stock and past judgments supporting CR 45.02(3)(c)), and on balance it was unfair to permit the substantial but vague $750,000 counterclaim to proceed without security; accordingly the court ordered security for costs of $20,000 to be paid into court in two $10,000 installments and stayed the counterclaim until security was provided, alternatively relying on s.152 Companies Act.

Citation
2021 NSSC 40
Parties
Plaintiff/applicant: Credit Union Atlantic Limited; Defendant/respondent (counterclaimant): Hebron Hospitality Group Inc. (formerly 3295522 Nova Scotia Ltd., operating as Smiling Goat Organic Espresso Bar); Defendant/respondent (guarantor): 3294118 Nova Scotia Limited
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
5 February 2021
Procedural Posture
Civil Debt Action and Counterclaim With Motion for Security for Costs / Interim Motion Heard (security for Costs) — Decision on Motion
Outcome
Motion for security for costs granted against Hebron Hospitality Group Inc.; counterclaim stayed until security provided; security fixed at $20,000 to be paid into court in two installments; costs of motion awarded to plaintiff.
Legal Topics
Security for Costs, Companies Act S.152, Service of Process, Counterclaim, Registry Status/revocation
Source Language
English
Civil Procedure Corporate Law Debt Recovery Security for Costs Companies Act S.152 Service of Process Counterclaim Registry Status/revocation

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Parties

Credit Union Atlantic Limited

Plaintiff/applicant

Hebron Hospitality Group Inc. (formerly 3295522 Nova Scotia Ltd., operating as Smiling Goat Organic Espresso Bar)

Defendant/respondent (counterclaimant)

3294118 Nova Scotia Limited

Defendant/respondent (guarantor)

Procedural Posture

Civil Debt Action and Counterclaim With Motion for Security for Costs / Interim Motion Heard (security for Costs) — Decision on Motion

Legal Issues

  1. 1 Whether security for costs should be ordered under Civil Procedure Rule 45
  2. 2 Whether the defendant Hebron Hospitality Group Inc. will have undue difficulty realizing on a costs judgment
  3. 3 Whether any difficulty arises only from the defendant’s lack of means

Ratio Decidendi

The court found the moving party met the requirements of CR 45: Hebron failed to maintain an address for delivery (CR 45.02(3)(d)), had indicators of insufficient assets (revoked status at the Registry of Joint Stock and past judgments supporting CR 45.02(3)(c)), and on balance it was unfair to permit the substantial but vague $750,000 counterclaim to proceed without security; accordingly the court ordered security for costs of $20,000 to be paid into court in two $10,000 installments and stayed the counterclaim until security was provided, alternatively relying on s.152 Companies Act.

Court Disposition

Motion for security for costs granted against Hebron Hospitality Group Inc.; counterclaim stayed until security provided; security fixed at $20,000 to be paid into court in two installments; costs of motion awarded to plaintiff.

Orders

  • Hebron Hospitality Group Inc. shall pay security for costs totalling CAD 20000 into court in two installments of CAD 10000 each
  • First installment of CAD 10000 to be paid by April 30, 2021