4.22: Considerations for security for costs order

Case Summary

The Plaintiff, a self-represented litigant, commenced an Action against many parties following a workplace disciplinary action and subsequent termination and grievance. The Plaintiff alleged that the Defendants had been part of a broad conspiracy to remove her from her employment. The Plaintiff named the law firm and individual lawyer who had acted as counsel for one of the Defendants (“Defendant Counsel”). The Defendant Counsel applied for Security for Costs against the Plaintiff.

Master Farrington considered the leading Alberta authorities relating to Security for Costs, and the factors enumerated in Rule 4.22, noting that the factors play a “critical role” in determining what is “just and reasonable” in the circumstances.

Master Farrington considered each of the factors, including the merits of the Plaintiff’s Claim. Master Farrington noted that the Defendant Counsel had met their onus of showing they had an arguable defence, and that this factor weighed in favour of granting the Application. Master Farrington also stated that in some cases, Security for Costs should not be ordered when the Claim has arguable merit. On the other hand, if the Claim has little merit, the case for posting Security for Costs is strengthened. Master Farrington noted that the allegations made against the Defendant Counsel were very serious, and when a Plaintiff cannot prove allegations of this nature, they may be subject to an aggravated Costs award.

Master Farrington considered whether the granting of the Application would unduly prejudice the Plaintiff’s ability to continue the Action. The Plaintiff argued that “justice” favoured not granting the Application as it could have a serious impact on her ability to continue the litigation. Master Farrington held that “justice” was required to be applied in a way that was fair to all parties. Master Farrington considered the factors that influenced whether Costs were appropriate, including whether the Plaintiff had assets in Alberta and whether the Plaintiff likely had the ability to pay a Costs award, both factors which weighed in favour of granting the Security for Costs Application. Master Farrington also noted that there was a prior outstanding Costs award against the Plaintiff, and that the litigation had been very contentious.

Master Farrington granted the Application for Security for Costs, but not in the full amount sought by Defendant Counsel. Master Farrington observed that the Court may order a phased posting of Security for Costs when appropriate. Master Farrington held that the Action was stayed as against the Defendant Counsel pending the posting of the Security for Costs by the Plaintiff; and, if the Plaintiff did not post the Security for Costs within the Court’s deadlines, then the Action was to be dismissed.

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