Background:

• Franchise Agreement: Dated October 6, 2016
• Termination: October 20, 2018, by DECI citing misconduct by the Plaintiff
• Plaintiff’s Allegations: Failure to provide a compliant franchise disclosure document and conspiracy to terminate the Agreement unfairly

Claims:

• Breach of Contract: $5,000,000
• Breach of Duty of Fair Dealing: $500,000
• Conspiracy: $3,000,000
• Punitive Damages: $250,000
• Other Damages: Market value of converted assets, unjust enrichment, personal liabilities of individual defendants

Motion:

• Security for Costs: Defendants sought $389,542.78 (substantial indemnity) or $300,864.78 (partial indemnity)

Court’s Decision:

• Initial Onus: Defendants showed Plaintiff had insufficient assets to cover potential costs
• Plaintiff’s Impecuniosity: Plaintiff failed to prove genuine impecuniosity; Heaphys' personal assets and incomplete financial disclosure were critical
• Claim Merits: Court did not assess merits due to complex, disputed facts
• Motion Timing: Delay noted but did not significantly prejudice Plaintiff

Security for Costs Ordered:

• Total: $45,000
  • Pre-trial: $15,000 within 60 days after setting the action down for trial
  • Pre-trial Conference: $5,000 within 30 days after the pre-trial
  • Trial: $25,000 no later than 60 days prior to trial

The court balanced allowing the Plaintiff's claim to proceed with protecting Defendants from unenforceable costs if the Plaintiff’s claim fails.