4.22: Considerations for security for costs order
10.51: Order to appear

Case Summary

The Defendant, Wong, incorporated the two Defendant corporations – Material Processing Canada Inc. (“MPCI”) and Camrose Mining (Alberta) Ltd. (“Camrose”) – to purchase lands, the funds for which were advanced by the Plaintiffs. The Plaintiff, Louis Bilhete (“Louis”), had instructed Wong to make his son, Clinton Bilhete (“Clinton”), the sole shareholder of both corporations. However, Wong failed to make Clinton the sole shareholder for MPCI.

The Defendants brought an Application to have the Plaintiffs found in contempt for failure to answer Undertakings, for dismissal of the Action for delay, or alternatively for the Plaintiffs to provide Security for Costs. The Application to strike for delay was subsequently abandoned at the Hearing. The Application for a finding of contempt alleged that Louis failed to answer Undertakings which were ordered by the Court on two occasions. The Plaintiffs asserted that all Undertakings had been answered to the best of Louis’ ability.

On the issue of contempt, Read J. determined that an Order made by Master Wacowich was unambiguous and required actual responses, not just best efforts. The answers provided to the Undertakings were held to be unresponsive and incomplete. Pursuant to Rule 10.51, Read J. directed Louis to be served with Form 47 and to appear before the Court to show cause why he should not be declared in civil contempt for failing to answer the Undertakings he was ordered to answer.

The Order for Security for Costs was granted. Read J. held that the Plaintiffs’ case was weak: Louis’ evidence was confusing and often contradictory, and the Defendants had a strong Statute of Frauds defence regarding the absence of written documentation. Further, the Plaintiffs provided no evidence to show their ability to pay or that Security was not necessary.

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