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

Case Summary

The Respondent/Applicant applied for Security for Judgment and Security for Costs of the Appeal brought by the Appellant/Respondent. The Respondent had obtained Judgment against the Appellant, who appealed without applying for a stay pending the Appeal. The Appellant was a Delaware Corporation with head offices in Colorado, which did not appear to have any assets in Alberta. The Appellant did not make any payments towards the Judgment and contested enforcement proceedings brought in Colorado alleging improper procedures followed in the Alberta Courts, and asserting forum non conveniens arguments. The Respondent applied for an Order requiring the Appellant to post Security for Judgment (in the amount of $11.7 million) and Security for Costs of the Appeal (in the amount of $150,000).

Strekaf J.A. noted that Security for Judgment pending Appeal is an extraordinary remedy which will only be granted in exceptional circumstances, such as where there is evidence that an Appellant will improperly attempt to shield their assets. Strekaf J.A. noted that there was no evidence that this was the case, and accordingly declined to grant an Order for Security for Judgment.

Justice Strekaf noted that Security for Costs pending Appeal may be ordered pursuant to Rules 4.22 and 14.67(1). The test for granting an Order for Security for Costs pending Appeal is whether the Court considers it just and reasonable to do so, taking into account (i) whether it is likely that the Applicant for Security for Costs would be able to enforce an Order or Judgment against assets in Alberta; (ii) the ability of the Respondent to the Application to pay the Costs award: (iii) the merits of the Appeal; (iv) whether an Order to give security would unduly prejudice the Appellant’s ability to continue the Appeal; and (v) any other matter the Court considers appropriate.

Strekaf J.A. found that the Respondent would not likely be able to enforce any Costs award against assets in Alberta, and that the Appellant was a large commercial entity that would be able to pay the Costs award, and which would not be unduly prejudiced by the requirement to post Security for Costs. Justice Strekaf found that the Appeal itself was not frivolous. The amount of Costs sought by the Appellant was not challenged. Considering the totality of the circumstances, Justice Strekaf found that Security for Costs was appropriate and granted the Order requiring the Appellant to post Security for Costs within 30 days, failing which the Appeal would be struck.

The Application was allowed in part.

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