Master Robertson

4.22: Considerations for security for costs order
10.48: Recovery of goods and services tax

Case Summary

The Plaintiffs, diplomats from Chad who resided in South Africa, commenced an Action in defamation, oppression and claims relating to the Plaintiffs’ tarnished reputation. Three of the five Defendants applied for Security for Costs (the “Applicants”), arguing that the Plaintiffs owned very few assets in Alberta; and that the Claim would require approximately 30 days of Questioning, as well as the potential production of thousands of documents and interlocutory Applications relating to the issue of privilege. The Applicants sought Security for Costs in the amount of $492,187.50.

Master Robertson reviewed the factors that the Court may consider when determining whether Security for Costs should be posted, as listed in Rule 4.22:

(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;

(e) any other matter the Court considers appropriate.

The Plaintiffs owned a condominium in Edmonton which they admitted they would be selling soon, and for which they owed condominium fees and property taxes. The Court could not assess the Plaintiffs’ ability to pay the Cost award, or whether such payment would unduly prejudice them, because the Plaintiffs refused to disclose details of any their assets outside of Alberta. Master Robertson held that it would be difficult to enforce an Order against assets in Alberta.

Master Robertson held that the factor in Rule 4.22(e), which provides the Court with discretion to consider other matters, was important. Master Robertson noted that the Plaintiffs had already “expended significant funds trying to protect their claims”, and one of the Defendants was a large corporation which appeared to have taken steps to make international service more difficult and costly for the Plaintiffs. Master Robertson also noted that oppression actions are “entitled to protection from the requirement to post security for costs”.

Master Robertson also noted that the amount sought by the Defendants for Security for Costs was based on a forecasted 30 days of questioning, using the amounts set out in Schedule “C” multiplied by three. However, the figure included $23,437.50 in GST. Master Robertson held that, pursuant to Rule 10.48(2), the Applicants should not have included GST.

Master Robertson concluded that Security for Costs should be awarded, but that the Court should use its discretion to reduce the amount by 35%. Master Robertson directed that the Action be stayed until Costs were posted, and a previous unpaid Costs award was to be included in the amount set for Security for Costs.

View CanLII Details