1.2: Purpose and intention of these rules
4.22: Considerations for security for costs order

Case Summary

In a wrongful dismissal action against a Corporate Defendant, the Plaintiff attempted to force the other shareholders and directors to buy his shares. One of the individual Defendants applied for intervener status in order to defend the Action on behalf of the Corporate Defendant and to pursue the Corporate Defendant’s Counterclaim against the Plaintiff. The stated purpose of the Application for intervener status was to avoid the expense of having two counsel defend the Action and pursue the Counterclaim. The Plaintiff argued that, if the individual Defendant was allowed to intervene, he should post Security for Costs because the corporation was without significant assets.

Graesser J. referred generally to the Foundational Rules, stating that they favoured efficiency and economy in the pursuit of litigation. However, while economy is encouraged, it does not trump conflicts of interest. His Lordship observed that the Action was neither efficient nor economical since there had been significant delay in moving the Action forward, but a conflict would loom if leave were given to allow intervener status. It would inferentially allow the same counsel to defend both the individual Defendant and the Corporation as well as pursue a corporate counterclaim. In the result, Graesser J. held that the appointment of an intervener was not necessary and was premature since there was no indication that the corporation was unable to defend the Action and pursue the Counterclaim. Graesser J. noted that the requirement under the former Rules, that a Defendant who was seeking Security for Costs was required to swear that he had a defence to the Action, was no longer part of the Rules. The merit of the Parties’ positions was a factor to be considered, but there were no longer any “magic words” necessary in an Affidavit in support of such an Application.

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