Schutz JA

4.22: Considerations for security for costs order
14.67: Security for costs

Case Summary

The self-represented Appellants were successful in restoring their Appeal, and the Respondents, ASKI Construction Ltd. (“ASKI”) subsequently sought, among other things, Security for Costs for the Appeal.

Schutz J.A. noted that an Order for Security for Costs is discretionary, and such an Order must balance “the reasonable expectations and rights of the parties to come to a just and reasonable conclusion”. Justice Schutz noted that, pursuant to Rules 14.67(1) and 4.22, a single Appeal Judge may order Security for Costs. Schutz J.A. reviewed the Court’s considerations in awarding Security for Costs as listed in Rule 4.22(a) to (e):

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta;

b) the ability of the respondent to the application to pay the costs award;

c) the merits of the action in which the application is filed;

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent's ability to continue the action; and

e) any other matter the Court considers appropriate.

Schutz J.A. noted that the Applicant bears the burden of proving that the factors listed in Rule 4.22 weigh in favour of ordering Security for Costs. If the Appellant has only a modest prospect of success, and the Court is concerned about its ability to pay costs, that may be enough to grant Security for Costs. On the other end of the spectrum, Courts have not awarded Security for Costs where there is a risk of prejudice, and where the Application for Security for Costs “has not been made promptly”, especially if the delay is unexplained.

Justice Schutz observed that the Appellants had previously been “granted indulgences” by allowing them to take further steps to restore and “regularize” their Appeal. A significant sum of damages and costs remained outstanding to ASKI following Trial, and the Appellants had not clearly set out the errors that they argued were committed by the Court below in their materials. Her Ladyship referred to prior leading authority and noted that “[a]ccess to justice does not equate to access to civil processes without fear of cost consequences”.

Schutz J.A. held that questions of merit and financial considerations favoured granting Security for Costs, but ASKI’s delay in applying for Security for Costs was “significant, essentially unexplained, and likely prejudicial” to the Appellants, which would likely result in delay given that the Appeal was to be heard in less than two months. Additionally, Security for Costs is generally ordered in relation to future Costs and is not generally used to secure payment of Costs already incurred. Schutz J.A. observed that many steps leading to the Appeal had already occurred; as such, ASKI’s Application for Security for Costs was dismissed.

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