An Ontario court has upheld an earlier ruling, which found that the plaintiffs in a suit against a brokerage firm don’t have to post security for costs — allowing the suit to go ahead.

Earlier this year, the defendants in the case, CIBC World Markets Inc. and Belzberg Technologies Inc., brought a motion seeking an order that the plaintiffs in the case — a failed hedge fund known as The Raillery Fund LP and the firm, Montrose Hammond & Co., which managed the fund — post security for costs in their suit that seeks more than $4 million in damages.

They are suing CIBC, which provided brokerage services to the fund, and Belzberg, which provided trading software, alleging that they are responsible for a technical glitch that caused a trading loss of more than $1 million by the fund back in 2009, which ultimately led to the firms ceasing operations.

The allegations have not been proven, and the defendants were seeking security of nearly $372,000 for costs in the case. But the court denied the motion, indicating that the plaintiffs don’t have the assets to put up, and they shouldn’t have to, unless it’s clear that they have no chance of winning.

CIBC and Belzberg appealed that decision, arguing that the court erred in finding that the plaintiffs don’t have the assets to post as security, and that it erred in law. In particular, one of the plaintiffs owns a home worth $700,000, which could be used as a source of collateral to post security, the decision notes.

However, the court has rejected that argument, saying, “Notwithstanding the arguments of CIBC World and Belzberg Technologies, in my opinion, the master made no factual or legal error… he properly concluded that the plaintiffs were impecunious and that their case was not devoid of merit; therefore, this was a case where it would be just to relieve the plaintiffs from having to post security for costs.”

It notes that while one of the plaintiffs owns a house that doesn’t carry a mortgage, it is secured against a line of credit, a possible tax liability, and their own lawyers’ costs. They already “have real skin in the game”, it notes. As a result, the appeals are dismissed.