4.22: Considerations for security for costs order
14.67: Security for costs

Case Summary

The Respondents appealed an Order that recognized Court Orders from the Cayman Islands declaring one of the Respondents bankrupt and freezing the assets of the other Respondent. The Applicants, as agents of the trustee in bankruptcy, applied for Security for Costs of the Appeal and to set aside a Stay Application for permission to intervene. In granting Security for Costs, Her Ladyship cited Rule 14.67(1) as allowing a single Appeal Judge to order a party to provide Security for payment of a Costs Award.

Her Ladyship also cited Rule 4.22, which allows a Court to order a party to provide Security for payment of a Costs Award if the Court considers it just and reasonable to do so, taking into account: (1) whether it is likely the Applicant will be able to enforce an Order or Judgment against assets in Alberta; (2) the ability of the Respondents to pay the Costs Award; (3) the merits of the Appeal; (4) whether an Order to give Security for Costs would unduly prejudice the Respondents’ ability to continue the Appeal; and (5) any other matter the Court considers appropriate.

In finding it just and reasonable to award Security for Costs in the circumstances, Justice Veldhuis cited several considerations, including the merits of the Appeal, the existence of prejudice to the Applicants, the Respondents’ history of funding legal counsel to unsuccessfully oppose Applications and Appeal Decisions despite being bankrupt, and how Costs of litigation are treated in insolvencies.

Justice Veldhuis directed the Respondents to post Security for Costs in the amount of $28,000 failing which the Respondents’ Appeal would be struck without further Order.

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