THE ADVOCATE 31
VOL. 80 PART 1 JANUARY 2022
ADDITIONAL COUNTER-MEASURES BY DEFENDANTS SEEKING
CANCELLATION
In addition to the possibility of obtaining an order cancelling a CPL, a defendant
may be in a position to legitimately exert pressure on the CPL filer,
which can potentially accomplish the same objective.
In an application under s. 256 of the Act, if the court declines to cancel
the CPL but there is sufficient evidence of potential losses by the defendant,
the court may impose conditions on the plaintiff to maintain its CPL that
are sufficiently onerous that the plaintiff may elect instead to allow the CPL
to be discharged. The key is to ensure all relevant evidence is before the
court on the application; this is something that, in my experience, is almost
always overlooked in the rush to apply for discharge. That said, a lawyer
must be cautious in what evidence is put before the court, as affidavits filed
in support of or in opposition to an application to cancel a CPL at the outset
of a proceeding could be used later on at trial for the purpose of impeaching
a party’s credibility. At the stage of a s. 256 application, which usually predates
document discovery and examinations for discovery, a lawyer is not
intimately familiar with all of the relevant facts at issue.
Next, defendants should consider applying for security for costs as a condition
of the plaintiff continuing with its claim. Frequently, the use of shell
companies in these transactions will mean that the requisite criteria for
security for costs will be present (corporate plaintiff without substantial
unencumbered assets, non-resident plaintiff where “special circumstances”
are present, or both11).
Again, in my experience, the possibility of seeking security for costs is
almost always overlooked. Frequently, plaintiffs who are only too happy to
rush to file a CPL will not be prepared to post security for costs, so the CPL
may come off “through the back door”. It is extremely common that plaintiffs
make their claims through numbered or other impecunious companies
whose main or only assets may be the alleged interest giving rise to the
CPL. In such cases, the availability of an order for security for costs under
the governing principles set out by the British Columbia Court of Appeal12
may be a virtual certainty.
Finally, defendants should consider the possibility of filing a counterclaim
for abuse of process for the wrongful filing of a CPL. Again, the idea
is, where the facts allow, to make the plaintiff think twice about the wisdom
of maintaining its CPL in the face of potential liability should the litigation
continue. I will consider this tort further below.
PERCEIVED MOTIVATION OF THE CPL FILER
In my experience, judges and masters hearing applications to cancel CPLs