The Respondent on Appeal brought an Application for Security for Costs. The Appellant was the unsuccessful Defendant in the underlying Action. Following conclusion of the underlying Action, the Respondent took steps to enforce Judgment, including by seeking an Order requiring the Appellant to provide a sworn financial report. The Order was granted; however, the Appellant failed to provide a proper sworn financial report and was ultimately found to be in Contempt of Court. The Appellant appealed the Contempt Order and the Respondent sought Security for Costs, pursuant to Rule 14.67 (and by implication, Rule 4.22).

The Appellant opposed the Application for Security for Costs on its merits, and additionally, challenged the constitutional validity of the Rules under which it was brought. The Court disagreed with both of the Appellant’s positions and granted the Application.

As a preliminary, procedural point, the Court confirmed that it was appropriate for a single Appeal Judge to hear the Application, notwithstanding its constitutional element. In so concluding, the Court noted that the Appellant’s response to the Application carried consequence only in respect of the Application, which issues are specifically permitted to be adjudicated by a single Appeal Judge, pursuant to Rule 14.37, whether or not they involve a constitutional element. A challenge of the Rules’ constitutional validity, generally, would require a different method of pleading.

Having decided this preliminary point, the Court went on to conclude that the Security for Costs Rules are constitutional. While the Court accepted that access to justice is a significant constitutional objective and that it is not open to the provinces to seek to limit such access, it concluded that the Security for Costs Rules at issue did not have that objective or effect. Rather, it held that Rules 4.22 and 14.67, which confer discretion to award Security for Costs in light of the parties’ capacity to pay a Costs Award and strength of legal position, strike an appropriate balance between access to justice, fairness between the parties and maintenance of judicial resources. In respect of Rule 14.67 specifically, the Court also noted that Appellate Courts are not necessarily subject to the same access to justice concerns as their Trial Court counterparts, and that the limitations on access to Appeal imposed by a properly ordered Security for Costs Award are neither unconstitutional, nor inappropriate.

Finally, the Court held that it would be appropriate to award Security for Costs in this Application in light of the Appeal’s very low likelihood of success and the likelihood that the Respondent would be unable to enforce a Costs Award that might be granted in its favour.