Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff sought $8 million in unpaid commissions allegedly earned through pandemic-related PPE sales.

• Defendants moved for security for costs under Rule 56.01, citing plaintiff's U.S. residence and lack of financial disclosure.

• Court assessed whether it was just to order security, balancing access to justice against risks of cost non-payment.

• Motion was denied due to late timing, lack of evidence of impecuniosity, and absence of a strong defence.

• Dispute raised credibility issues and conflicting narratives around contractual obligations and partnership roles.

• The case illustrates caution in using procedural motions to pre-emptively shield defendants in high-stakes commercial litigation.

Plaintiff sought $8 million in unpaid commissions allegedly earned through pandemic-related PPE sales

The plaintiff, Brad Davis, brought an action against three companies and two individuals, alleging he was owed approximately $8 million in commissions for helping secure the sale of medical gloves and masks during the COVID-19 pandemic. Davis claimed that in 2020 he was invited by his childhood friend, Brent Goosens, to assist in sourcing suppliers for personal protective equipment (PPE) through companies operated by Goosens and his associates. Davis alleged that he was promised a share of the profits from these transactions but was ultimately excluded from the proceeds once the deals were completed.

The defendants denied the existence of any binding contract with Davis and contended that he played a minimal or informal role in the business. They characterized his involvement as an attempt to profit opportunistically from a volatile and high-demand market during the pandemic. The core factual issues involve the nature of Davis’s participation in the transactions, the legitimacy of any profit-sharing agreement, and the conduct of the parties during and after the sales.

Defendants moved for security for costs citing U.S. residency and limited financial disclosure

During the litigation, the defendants brought a motion for security for costs under Rule 56.01 of the Ontario Rules of Civil Procedure. They argued that Davis, a resident of Texas, had not provided meaningful financial disclosure and that there was a real risk they would be unable to recover costs if they were successful at trial. They asserted that Davis’s lack of assets in Ontario and his evasive responses to questions about his financial capacity warranted an order requiring him to post security as a condition of continuing the action.

In response, Davis argued that he had disclosed assets in the United States, including equity in a residence, and that the motion was a tactical attempt to obstruct his access to justice. He also noted the timing of the motion—several years into litigation and only shortly before trial—as a factor weighing against the exercise of discretion to grant the order.

Court considered the fairness and timing of ordering security for costs

Justice Morgan reviewed the applicable legal framework under Rule 56.01, which permits the court to order security where a plaintiff resides outside Ontario and there is reason to believe they may not be able to pay the costs of the defendant if unsuccessful. The court acknowledged that Davis had not provided full and detailed financial records but found that the evidentiary record did not establish impecuniosity. Additionally, there was no evidence that the action was frivolous or vexatious, or that the plaintiff lacked a good faith basis for bringing the claim.

The judge was particularly persuaded by the timing of the motion. The defendants waited nearly three years after the start of the litigation, and only six months before a scheduled trial, to bring the motion. The court found this delay to be unfairly prejudicial to the plaintiff and indicative of a tactical use of the rule rather than a genuine concern about costs recovery.

No security ordered due to delay and weak justification

Justice Morgan dismissed the motion for security for costs. He held that while the plaintiff’s out-of-province residence triggered the court’s jurisdiction to consider such relief, the equities did not support it. The absence of a clear showing of financial incapacity, the lateness of the motion, and the fact that the defendants had not moved earlier when disclosure deficiencies first arose all weighed heavily against granting the order.

The court also noted that the case involved conflicting accounts that would depend heavily on credibility assessments at trial. As a result, it would be inappropriate to prejudge the strength of either side’s case at the motion stage. The judge emphasized that security for costs is a discretionary tool, not a mechanism to limit legitimate access to the courts, particularly in commercial disputes where factual and legal complexities merit a full hearing.

Outcome preserves plaintiff’s right to proceed to trial

By denying the motion, the court allowed Davis’s $8 million claim to proceed to trial without requiring him to post security. The ruling underscores judicial caution in imposing financial hurdles late in litigation, especially in cases involving allegations of informal contracts or joint ventures where credibility and documentation are central. It reinforces that security for costs should not be wielded as a late-stage strategic measure to impede the prosecution of potentially valid commercial claims.