BECHIR v GOWLING LAFLEUR HENDERSON LLP, 2017 ABQB 214
4.22: Considerations for security for costs order
6.7: Questioning on affidavit in support, response and reply to application
The Plaintiffs commenced a Claim against the Defendants alleging, among other things a breach of international law, negligent investigation, fraudulent withholding of shares in a corporation, abuse of process, and breaches of contract and trust. The Defendants applied for Security for Costs, with supporting Affidavits. In cross-examination on the Affidavits, the affiants refused to answer some questions and produce further records. The Plaintiffs applied unsuccessfully before a Master to compel the Defendants to provide the information, and subsequently appealed the Master’s Decision.
Justice Jeffrey noted that Rule 6.7 entitles the Plaintiffs to cross-examine the Defendants’ affiants, but the scope of the examination is restricted to what is relevant and material to the underlying Application.
The Plaintiffs argued that they were entitled to the requested information on the basis of either: (i) Rule 4.22(c), the “merits of the Action”; or (ii) Rule 4.22(e), “any other matter the Court considers appropriate”. An assessment of the merits under Rule 4.22(c) varies depending on how far the litigation has progressed at the time of the Application for Security for Costs is brought. This factor does not determine which case is stronger; if both parties establish a reasonably meritorious case based on the pleadings and available evidence, it is a neutral consideration. The Defendants conceded that the Plaintiffs’ Claim met the threshold for the purposes of the Security for Costs Application. Therefore, the requested information did not need to be provided in order for the Plaintiffs to satisfy Rule 4.22(c). Further, at this preliminary stage, Justice Jeffrey held that the defences met the requisite threshold of having a genuine air of reality. The requested information would not undermine the degree of merit of the defences raised and was therefore not material to Rule 4.22(c).
In respect of Rule 4.22(e), the Plaintiffs argued that public policy considerations were engaged by the information sought, namely, the interplay between investigations of private firms and international law. The Plaintiffs alleged that the Defendants breached international law through the governmental means used to investigate the firm; therefore, His Lordship held that this was not an “other matter” warranting separate consideration.
The Plaintiffs also argued that the requested information was connected to the Plaintiffs’ financial position and the Defendants’ conduct, and that this should be a consideration under Rule 4.22(e). Justice Jeffrey noted that any connection between the Plaintiffs’ financial situation and the Defendants’ conduct was relevant, particularly if the Defendants’ wrongful conduct was alleged to be the cause of the Plaintiffs’ impecuniosity. However, the requested information would not further inform any connection between the Plaintiffs’ means and the impugned conduct of the Defendants. The Plaintiffs could prove their financial means without the information sought from the Defendants. The Appeal was dismissed.View CanLII Details