Yamauchi J

4.22: Considerations for security for costs order
10.33: Court considerations in making costs award

Case Summary

Following a previous Decision of the Court, Yamauchi J. invited the parties to make further submissions as to whether the Defendants met the test to allow the Court to award Security for Costs, and if so, for what amount. The Defendants, as Applicants for Security for Costs, bear the initial onus of proof. If the evidentiary burden shifts, then the Respondent Plaintiffs would need to establish why the Court should not exercise its discretion to make and Order for Security for Costs. The Court then reiterated a list of non-exhaustive factors established in Amex Electrical Ltd. v 726934 Alberta Ltd. 2014 ABQB 66 (CanLII) (“Amex”) that a Court will consider when determining whether it will require a respondent to post Security for Costs. If one or more of the factors exist, then the likelihood that a Court will award Security for Costs increases. The Court also noted that there are similarities between the Rule 4.22 factors and the factors provided in Amex.

In applying the factors to the present case, the Defendants argued that because the Plaintiff corporations did not hold assets in Alberta and the Plaintiffs only had offices in the United States, it would be difficult to enforce an Alberta Judgment against them. Consequently, the onus shifted to the Plaintiffs to show that they had assets in Alberta. The Plaintiffs failed to meet this evidentiary burden.

The Plaintiffs then argued that the Defendants did not meet their burden to show that the Plaintiffs would not be able to pay Costs if they were unsuccessful. The Court held that since the onus had shifted, it was now in fact the Plaintiffs’ burden to show that they would be able to pay Costs. Yamauchi J. also found, without commenting on the relative strength of the parties’ respective positions, that the Defendants had raised meritorious defences to each cause of action that the Plaintiffs raised.

With respect to the last factor under Rule 4.22, the Plaintiffs did not provide any evidence that they could not fund the lawsuit. Therefore, the Court refused to find that the Security for Costs would be prejudicial to the Plaintiffs.

Yamauchi J. noted that the Court had discretion to order that the Plaintiffs post security for past as well as future Costs, and elected to do so in this case. Additionally, Yamauchi J. ordered that the award for Security for Costs would be made in stages. The first stage would include steps up to the end of a Summary Judgment Application. Since the Defendants had retained two separate sets of counsel, they would incur two sets of Costs. As such, they were also entitled to two separate sets of Security for Costs. The fact that the Defendants had chosen to retain two sets of counsel was not determinative of their entitlement to Security for Costs.

With respect to Costs for the Application, Yamauchi J. relied on Rule 10.33 in determining whether a Costs multiplier should be used. Yamauchi J. elected to award triple Costs under Column 5 of Schedule C, since the Plaintiffs had claimed $150 million, which far exceeded the $1.5 million threshold for Column 5. Additionally, the allegations made against the Defendant were complex.

View CanLII Details