The Plaintiff, Biocomposites Group Inc. (“BCG”) sued the Defendant, 0975138 BC Ltd (“DH Manufacturing”) in part, for the ownership of certain electrical panels and a dust collector installed in an industrial building in Drayton Valley (the “Assets”). BCG applied for Summary Judgment under Rule 7.3 and a declaration that BCG was the owner of the Assets. In the alternative, BCG argued that DH Manufacturing should be required to post Security for Costs under Rule 4.22. DH Manufacturing brought a Cross-Application requesting it be granted leave to amend its Statement of Defence in accordance with Rule 3.62.

Khullar J. found that there was, at the heart of the litigation, a dispute about BCG's conduct and the intentions of the affiant, Daniel Madlung, while he had been a director and shareholder of both DH Manufacturing and BCG. Her Ladyship found that, with respect to the balance of the litigation, the same issues regarding Mr. Madlung’s credibility would likely also arise at Trial. Justice Khullar determined that severing the issues dealing with the ownership of the Assets prior to the determination of Mr. Madlung’s credibility would be inappropriate.

While declining to grant Summary Judgment, Justice Khullar acknowledged that it was a “close call” and that in the circumstances it was appropriate to order DH Manufacturing pay Security for Costs under Rule 4.22. Justice Khullar concluded that once DH Manufacturing paid its Security for Costs it was granted leave to amend its Statement of Defence in the form noted in their Application.