The Plaintiff commenced an Action in relation to a failed business venture which supplied building materials in BC and Alberta. The Defendants counterclaimed and applied for an Order directing that Commercial Construction Supply Ltd. (“CCS”) provide Security for Costs.

The Court considered s.254 of the Business Corporations Act, RSA 2000, c B-9 (“BCA”), Rule 4.22, and the leading authorities, and stated that the BCA is applicable in this case because CCS is a corporation. Regardless of whether an Application for Security for Costs is brought under the BCA or Rule 4.22, the onus of proof does not change. The Applicant bears the initial onus to establish that the Respondent would be unable to pay Costs if the Applicant is successful in its defence, and, if the Applicant successfully meets this initial onus, the burden shifts to the Respondent to show why the Court should not exercise its discretion to make an Order for Security for Costs against it.

The Court stated that it was appropriate to consider cases decided under Rule 4.22 in this case, but only to determine whether the Applicants had met their onus under the BCA rather than whether it is “just and reasonable” to require the Respondent to provide Security for Costs as provided under Rule 4.22. The Court considered the factors for and against a Security for Costs order in the context of this case, and directed CCS to furnish Security for Costs in favour of the Applicants.