4.22: Considerations for security for costs order

Case Summary

The Plaintiffs appealed an Order for Security for Costs granted by Master Robertson. Justice Devlin found no error in Master Robertson’s analysis but lowered the amount of security award because the Plaintiffs abandoned a large portion of their claim, which would have accounted for most of the costs going forward.

Rule 4.22 governs applications for Security for Costs. When making these discretionary decisions, the Court must consider (a) whether the Applicant can enforce a judgment against the Respondent’s assets in Alberta, (b) the Respondent’s ability to pay the cost award, (c) the merits of the Action, (d) whether a Security for Costs award would unduly prejudice the Respondent’s ability to continue the Action, and (e) any other matter the Court considers appropriate.

Justice Devlin, in making his decision noted that it appeared that the Order for Security for Costs prompted the Plaintiffs to abandon parts of their claim and focus only on its most justifiable aspect. As a result, the litigation costs going forward were drastically reduced.

After finding that the Defendants did not cause the Plaintiffs’ impecuniosity, and that the Defendants moved quickly to apply for security for costs, Devlin J. exercised His Lordship’s discretion to significantly reduce the Award of Security for Costs.

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