The Plaintiff commenced an Action against the Defendants for breach of fiduciary duty. The Defendants filed a Counterclaim against the Plaintiff and its officers for negligent statements, oppressive conduct, breach of duty, conspiracy and defamation. The Defendants by Counterclaim applied for an Order for Security for Costs, pursuant to Rule 4.22, with respect to the Counterclaim.

Justice McCarthy noted that Rule 4.22 and section254 of the Business Corporations Act, RSA 2000, c B-9 provided the framework for the analysis in this case. Rule 4.22 is applicable to individuals. His Lordship stated that Rule 4.22 requires that the Court analyse the appropriateness of Security for Costs in two steps, and must consider: all the factors outlined in Rule 4.22; and whether ordering Security for Costs is just and reasonable. No one factor in Rule 4.22 is determinative. Justice McCarthy held that, based on the outcomes of each of the enumerated factors, and the overall reasonableness of an Order for Security for Costs in the circumstances, the Defendants’ Security for Costs Application should be granted in the amount of $40,000.