The Defendants brought an Application for Security for Costs. The Court, referring to Autoweld Systems Limited v CRC-Evans Pipeline International Inc, 2011 ABCA 243, Attila Dogan Construction and Installation Co v AMEC Americas Limited, 2011 ABQB 175, and Xpress Lube & Car Wash Ltd v Gill, 2011 ABQB 457, noted that the starting point of the analysis (when the Respondent is a company) is Section 254 of the Alberta Business Corporations Act, RSA 2000, c B-9. Rule 4.22 then comes into play.

In reference to Rule 4.22 generally and factor 4.22(e) in particular, the Court referred to Crothers v Simpson Sears Ltd, [1988] A.J. No. 408 CA for the proposition that the “justice” of the case governs the exercise of discretion and provides a framework for the application of Rule 4.22(e).

Because of the unusual circumstances of the case, the Court, rather than granting Security for Costs, ordered the shareholders of the Plaintiff to provide a personal undertaking, jointly and severally, to respond to any eventual Costs award against the Plaintiff.