Courts are increasingly willing to order security for costs
against environmental groups that challenge land developments
through judicial review. InPointes Protection Association v Sault Ste. Marie
Region Conservation Authority (Pointes), the Court ordered an
environmental group to post $20,000 in security for costs. This
emerging trend to impose additional financial risk on environmental
groups raises important strategic issues for these groups when
contemplating litigation.1It also effectively bars
them from pursuing judicial review.
In Pointes, a local residents' group opposed the
development of a residential subdivision around the Point Louise
wetland. The Pointes Protection Association (PPA) argued that the
Conservation Authority that approved the subdivision did not have
legal authority under its statute to approve a development that
would destroy 46 hectares of wetlands. The PPA then brought a
judicial review application.
1704604 Ontario Ltd. (the Developer) applied to the Court for
and was granted party status on consent. The Developer then applied
for security for costs. The Developer submitted that the PPA's
financial state was uncertain. The Developer sought $60,000
security for costs based on full indemnity.
The Developer argued that none of the individual residents
sustained any risk in bringing an application for judicial review
because the PPA was a corporation. The PPA countered that it had
limited financial resources as a public interest litigant. The PPA
noted that a security for costs order would effectively terminate
The Costs Order
The Court considered when it may order security for costs. Rule
56.01(1)(d) of the Rules of Civil Procedure provides that
a Court may order security for costs where
The plaintiff or applicant is a corporation or nominal plaintiff
or applicant, and there is good reason to believe that the
plaintiff or applicant has insufficient assets in Ontario to pay
the costs of the defendant or respondent.
The Court concluded that the PPA was not a true public interest
litigant and therefore the Court could not shield the PPA from
costs. The Court observed that the PPA represented the interests of
only a minority of the residents in the area. The Court found that
litigation did not affect the interests of the corporation, only
the residents. Finally, the Court reasoned that, since the project
would impact a localized area, the opposition appeared to stem from
a "not-in-my-backyard" attitude.
Justice Del Frate wrote at paragraph 26:
I agree that the developer appears to have a greater capacity to
bear the cost of this litigation. However, this does not mean that
in every situation where one of the parties is in a better
financial position, that party should not be entitled to costs. If
that were the case, our courts would be even more congested than
they are currently. There must be some deterrent in any type of
litigation. Parties should seriously consider the consequences of
engaging in any litigation especially one that can be as
complicated, protracted, and expensive as this one.
Although the PPA managed to raise the money to pay the security
for costs order,2not all nonprofit corporations
will be able to do so. As a result, the availability of judicial
review may suffer. As with many legal issues, courts must balance
the interests of groups that feel aggrieved with those of the
respondents who have approvals to proceed with their projects.
1. Other cases where Courts have made a costs order under
Rule 56.01(1)(d) of the Rules of Civil Procedure are Evolution de
Future of Carnival Inc v Toronto Mas Band Association and Festival
Management Committee, 2012 ONSC 1628 (order made against a
non-share capital corporation formed just for the purpose of
litigation); Durham Citizens Lobby for Environmental Awareness
& Responsibility Inc v Durham (Regional Municipality), 2011
ONSC 7143 (order made against an environmental public interest
litigant because the organization otherwise would have no risk in
bringing the litigation).
2. Although they withdrew their application for judicial
review and will proceed before the Ontario Municipal
This article is based on a similar article by Marc McAree
and Nicole Petersenoriginally published in
Environews, a publication of the Ontario BarAssociation.
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