The Supreme Court of Nova Scotia has ordered a former fitness-business operator and his company to provide $20,000 in security for costs across two lawsuits, substantially reducing the $87,167 sought by the defendants and allowing payment in instalments.
In Thompson v. Tower One Combat Sports Ltd., 2026 NSSC 309, decided October 5, 2026, Justice Michelle M. Kelly found that Alexander Thompson and AussieFit Inc. had not established that requiring security would prevent them from pursuing their claims. But the judge also concluded that the full amount requested would be unfair in their circumstances.
The ruling concerns money set aside to help cover a possible future costs award. It does not decide whether the defendants are liable on the underlying claims, or award them the $20,000 as damages.
Two disputes following a gym lease
AussieFit leased commercial space from Yellowstone Commercial Holdings Ltd. in March 2021 to operate a fitness facility. In October 2025, Thompson and the company sued Yellowstone, alleging negligence, bad-faith dealings, collusion and conversion.
They also brought a separate action against Tower One Combat Sports Ltd. and Gavin Tucker. That lawsuit included allegations concerning access to space and equipment, quiet enjoyment and interference with the plaintiffs’ business. Those remain allegations, rather than findings made on these motions.
The defendants argued that collecting a costs award would be difficult if they successfully defended the claims: Thompson lived in Arizona, and AussieFit had stopped operating and lacked meaningful assets. The plaintiffs said they could not provide security and that the amounts requested would bring the litigation to an end.
Limited means did not settle the question
The court applied Civil Procedure Rule 45.02. It requires more than showing that a plaintiff has little money. After filing a defence, a defendant must establish undue difficulty recovering a potential costs award, that the difficulty does not arise only from the plaintiff’s lack of means, and that allowing the claim to continue without security would be unfair.
The rule creates rebuttable presumptions in specified circumstances, including where a claimant ordinarily lives outside Nova Scotia or a corporate claimant appears to lack sufficient assets to satisfy a costs judgment. Kelly found those circumstances established here.
The plaintiffs then had to support their position that they could not raise security with sufficiently detailed financial evidence. The judge acknowledged their forthright disclosure, but found important gaps concerning borrowing capacity, liabilities and other possible sources of funding. The evidence did not establish that any security order would end the actions.
That finding did not justify the defendants’ full requests. Yellowstone sought $37,167, while Tower One and Tucker sought $50,000. Kelly concluded that requiring the combined amount from a full-time student supporting himself through work and business activities would be unfair.
The court instead fixed security at $10,000 per lawsuit, balancing some protection for the defendants with allowing the plaintiffs to continue. It also noted that earlier procedural costs awards had been paid. If a later costs award went unpaid, the defendants could return to seek increased security.
Instalments and a conditional stay
For each action, $2,500 must be posted by November 30, 2026, with the remaining $7,500 due by March 31, 2027. Payment of the first $2,500 in each matter lifts the stay affecting that proceeding.
If the full $10,000 in either matter is not posted by March 31, that proceeding is stayed and the defendants may apply for dismissal. The order does not make dismissal automatic.
Separate from the security, the plaintiffs must pay $250 in motion costs to Yellowstone and $250 to Tower One and Tucker. The decision illustrates a case-specific balancing exercise: neither residence abroad nor limited finances alone determines the amount of security a court will order.
