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Appeals - Security for Costs (6). 2524991 Ontario Corporation and Qingxin Shao v. SvN Architects + Planners Inc.
In 2524991 Ontario Corporation and Qingxin Shao v. SvN Architects + Planners Inc. (Div Ct, 2026) the Divisional Court dismissed a motion for security for costs on an appeal [under R61.06(1)(a)]:[1] The respondent SvN Architects + Planners Inc. moves for security for costs for this appeal. SvN relies on r. 61.06(1)(a) of the Rules of Civil Procedure, submitting that there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. SvN further submits that there is other good reason to order security for costs under r. 61.06(1)(c). The respondent estimates its costs at $17,500.
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[4] There is no issue about the test for security for costs of this appeal, which is summarized in Heidari v. Naghshbandi, 2020 ONCA 757, at paras. 5-10, and need not be repeated here.
[5] To establish the prerequisites to an order for security for costs under r. 61.06(1)(a), the moving party must show that there is good reason to believe that the appeal is frivolous and vexatious and that the appellants have insufficient assets to pay the costs of the appeal. All three criteria must be met.
[6] The "good reason to believe" standard requires the motion judge to reach only a tentative and not a definitive conclusion on the absence of merit or assets: Heidari, at para. 9.
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[9] I have considered the many grounds for appeal set out in the notice of appeal, and those that the appellants focused on in this motion and find the first requirement for security is met.
[10] However, I do not conclude that this appeal is vexatious, taken to annoy or embarrass the respondent, or being conducted in a vexatious manner. I find that the second requirement for security under r. 61.06(1)(a) is not met.
[11] Since commencing this appeal, it has been conducted in an appropriate manner. There is a right of appeal. The appeal was commenced in a timely manner, and no issues have been raised about the ensuing process. The moving party focuses on the numerous grounds in the notice of appeal and a remedy sought in the appeal.
[12] On the many grounds in the notice of appeal, this may not be a sign of strength, but it is also not necessarily vexatious. The issues often become more focused in the factum. On the remedy sought in this appeal, the moving party focuses on the request to amend the defence and have a new trial. However, a remedial request is not necessarily vexatious. It is for the appeal court to decide on remedy and, even if the appeal were granted and an amendment permitted, I am not persuaded that there would necessarily be a new trial ordered. While I understand why, given the history of this case, having a new trial would be burdensome on the moving party, the remedy is for the appeal court to decide. Many of the grounds do not suggest to me that there would need to be a new trial.
[13] Having concluded that the second requirement is not met, I need not address the third requirement under r. 61.06(1)(a).
[14] Although I understand why the moving party is concerned about recovery of the costs of this appeal, given the history of this matter, I do not find that the criteria for an order under r. 61.06(1)(a) are met.
[15] I am also not persuaded to proceed under r. 61.06(1)(c). The moving party submits that this provision may be available because there is a low prospect of success and it would be nearly impossible to collect costs. But the moving party has not shown that very high threshold – nearly impossible – is met in this case. . Yenovkian v. Shirtliff-Hinds Professional Corporation
In Yenovkian v. Shirtliff-Hinds Professional Corporation (Ont CA, 2026) the Ontario Court of Appeal granted an appellate motion for security for costs [under R61.06(1)(a) 'Security for Costs of Appeal']:[18] The issue on this motion is whether (a) the appeal is frivolous and vexatious; and (b) whether Mr. Yenovkian lacks sufficient assets in Ontario. I may exercise my discretion to order security for costs if both prerequisites of r. 61.06(1)(a) are met.
Analysis
[19] Rule 61.06(1) provides that:In an appeal where it appears that,(a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal;
(b) an order for security for costs could be made against the appellant under rule 56.01; or
(c) for other good reason, security for costs should be ordered,
a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just. A. Whether the proposed appeal is frivolous and vexatious
[20] The first part of the test is to determine if there is good reason to believe that the appeal is frivolous and vexatious.
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B. Whether there are assets in Ontario
[28] Under rule 61.06(1)(a), the moving party must also demonstrate that the responding party is not resident in Ontario. The onus then shifts to the responding party to demonstrate that he has assets in Ontario: O.K. v. M.H., 2025 ONCA 352, at para. 13.
[29] There is no dispute that Mr. Yenovkian lives in Nevada and has previously claimed to have no income. Moreover, despite repeated requests from SHPC, he has failed to meet his onus to demonstrate that he has assets in the province of Ontario.
[30] Moreover, if SHPC is awarded costs, it will be extremely difficult to collect those costs as not only does Mr. Yenovkian reside in Nevada but he has been known to use several aliases. Enforcement in Nevada will likely be very difficult if not impractical given Mr. Yenovkian’s documented use of aliases in court proceedings.
[31] As such, I am satisfied that Mr. Yenovkian does not reside in Ontario and has not demonstrated that he has assets in Ontario to satisfy the moving party’s costs if the appeal is unsuccessful.
Conclusion
[32] For the above reasons, I find that there is good reason to believe the appeal is frivolous and vexatious. In addition, Mr. Yenovkian has no known connection to Ontario and has refused to provide any evidence that he has assets in the jurisdiction. I am satisfied that there is a real risk that the moving party will be unable to recover both the costs of the appeal and the costs of the underlying settlement enforcement decision.
[33] I therefore order that Mr. Yenovkian post $26,375.32 in costs, which includes costs ordered by the case conference judge in the amount of $5,760.73 and anticipated costs of this appeal in the amount of $20,614.59, inclusive of HST and disbursements. Mr. Yenovkian’s appeal is stayed pending his compliance with this order and if he does not post the security as ordered, SHPC may move to dismiss the appeal without notice.
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