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CIVIL PROCEDURE - Costs - Security for costs - Where plaintiff resident out of jurisdiction - Appeal costs

Wednesday, November 15, 2017 @ 8:20 AM  


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Motion by the appellants to vary a security for costs order. The appellants were comprised of approximately 30,000 indigenous villagers from Ecuador's Oriente region. They obtained a $9.5 billion judgment in Ecuador against Chevron Corporation. The judgment was in respect of oil extraction activities in the Oriente region that allegedly caused extensive environmental damage. Chevron had no assets in Ecuador and refused to acknowledge the Ecuadorian judgment. The appellants sought to enforce the judgment in Ontario against Chevron and an indirect subsidiary, Chevron Canada. A motion judge dismissed the claims against Chevron Canada and refused to grant a declaration that Chevron Canada's assets were exigible to satisfy Chevron Corporation's judgment debt. The appellants appealed. The Chevron respondents brought a motion seeking security for the costs of the appeal. Chevron Canada was awarded security for costs in the amount of $591,335 and Chevron Corporation was awarded security for costs in the amount of $451,616. The appellate chambers judge ruled the appellants were not impecunious and failed to show evidence of available funding. The grounds for appeal were not strong, as the appellants were unlikely to establish the motion judge erred in refusing to pierce the corporate veil between Chevron and Chevron Canada. The appellants moved to set aside the order.

HELD: Motion allowed. The motion judge erred in principle in determining the justness of the order for security for costs. The failure to consider all the circumstances of the case and conduct a holistic analysis of the critical overarching principle on the motion constituted an error in principle. The interests of justice required that no order for security for costs be made. To conclude otherwise would be unjust given the public interest aspect of the litigation, the impracticality of obtaining evidence of impecuniosity, and the fact that the environmental devastation to the appellants' lands impacted their ability to earn a livelihood. In contrast to the appellants, the Chevron respondents were multi-billion dollar global companies. This was not a case wholly devoid of merit. The order requiring the appellants to post security for costs was set aside.

Yaiguaje v. Chevron Corp., [2017] O.J. No. 5614, Ontario Court of Appeal, A. Hoy A.C.J.O., E.A. Cronk and C.W. Hourigan JJ.A., October 31, 2017. Digest No. TLD-November132017005