Want Your Day In Court? Mortgage Your Property First!

In a very rare display of the BC Supreme Court’s powers pursuant to its inherent jurisdiction, and a strong reminder of the potentially high financial consequences of BC’s loser pays legal system, Mr. Justice Burnyeat released reasons for judgement ordering a Plaintiff to mortgage her properties to the amount of $100,000 as security for costs prior to allowing her claim to proceed to trial.
In today’s decision (IJ v. JAM) the Plaintiff sued the Defendants alleging sexual harassment   The Plaintiff had other costs orders made against her and the Court found she had “a pattern of ignoring orders for costs that have been made“:  The current Defendants applied for an order requiring $100,000 to be paid into court as security for costs.  Mr. Justice Burnyeat agreed security was appropriate and provided the following reasons:
[18]         I am satisfied that “very special circumstances” are present so that an order for security for costs should be made.
[19]         First, the Plaintiff has a pattern of ignoring orders for costs that have been made:  in the Petition for judicial review of the British Columbia Human Rights Tribunal decision where costs were awarded in favour of J.A.M. and, in these proceedings where an order for costs was made against the Plaintiff arising out of the dismissal of the civil claim against the G.S. and J.S.
[20]         Second, I take into account the merits of the claim of the Plaintiff.  As I will be the trial judge for the lengthy trial that is scheduled for June 2013, I do not express any final opinion about the merits of the claim other than to observe that, as presently drafted, the claim against J.A.M. and J.M. is expressed in an often confusing, emotional and vitriolic manner, with many allegations not relating directly to the very serious claim that the Plaintiff makes against J.A.M.  and J.M.  It is not appropriate at this stage to make a fine assessment of the relative merits of the claim of the Plaintiff but only to observe that the claims are not so weak that they are bound to fail.  However, regarding the claim, I take into account the agreement that was executed by the Plaintiff releasing the Company and officers, including J.A.M. for previous acts which occurred.  It is a fair assessment at this point that the case of the Plaintiff has many problems…
[25]         The Defendants request the payment into Court of the sum of $100,000.  It is clearly the case that such a sum is not available and that to require that sum to be paid would effectively deny the Plaintiff access to the Court.  However, the affidavit of the Plaintiff is that the two Whistler properties have a value of approximately $729,000 and have charges against them of approximately $550,000 so that her equity is in the neighbourhood of $279,000.  The Plaintiff also states that her property in Ontario has an approximate value of $560,000 with a mortgage of approximately $164,000 against it so that the approximate equity is $396,000.
[26]         Taking into account all of the circumstances surrounding the claim of the Plaintiff, I am satisfied that there is good reason and very special circumstances why an order for security for costs should be made.  Accordingly, a mortgage in the amount of $100,000 without interest will be granted by the Plaintiff against her two properties in Whistler with the mortgagee being the Registrar of the Supreme Court of British Columbia.  The mortgage is not to be discharged or enforced without the further order of the Court.
[27]         The Plaintiff will be required to sign that mortgage within ten days of it being tendered on her for her signature.