4.22: Considerations for security for costs order

Case Summary

The Defendants, including a corporate Defendant, applied for Security for Costs under Rule 4.22. Master Prowse remarked that the circumstances of the Plaintiff, who had been bankrupt twice, resided out of province, had no assets in Alberta, and had two outstanding unpaid Judgments in British Columbia, would typically result in a Security for Costs Order.

In resisting the Application, the Plaintiff relied on section 243(3) of the Alberta Business Corporations Act, RSA 2000, c B-9 (the “ABCA”) which states that “[a] complainant is not required to give security for costs in any application made or action brought or intervened in under this Part”. Master Prowse noted that the definition of “complainant” under the ABCA includes a “beneficial owner” and the Plaintiff indeed alleged that he was a beneficial owner of the corporate Defendant.

Master Prowse noted that there should be a threshold test to qualify as a complainant, and articulated the test as requiring that a plaintiff “produce evidence that supports an arguable case that they are a ‘complainant’.” Based on this test, Master Prowse reviewed the evidence and found that the Plaintiff had an “arguable case” of being a beneficial owner, and therefore of being a complainant as defined in the ABCA. Accordingly, Master Prowse dismissed the Defendants’ Application for Security for Costs.

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