4.22: Considerations for security for costs order

Case Summary

The Applicants, numerous related American companies, sought a Stay of a Court of Queen’s Bench Judgment that ordered, inter alia, that security be posted in the amount of $1,376,726. The Respondent previously obtained Judgment for $1,376,726 against a Canadian company related to the Applicants. After that Judgment was granted the Canadian company ceased operations and transferred its funds to the American companies.

The Court cited Canadian Natural Resources Limited v Arcelormittal Tubular Products Roman SA, 2013 ABCA 357, for the test for a stay pending appeal: (a) there is an arguable issue to be determined on appeal; (b) the applicant will suffer irreparable harm; and (c) the balance of convenience favours granting the stay.

The Court held that there was an arguable issue on appeal, noting that it was somewhat novel to provide Security for Costs in the amount of the entire earlier Judgment when alternative options for pre-judgment relief were available. In relation to Rule 4.22, the Court held that “there is an arguable issue about the scope of the new rule which, unlike the old rule, does not specifically apply merely to security for costs”. However, the Court held there was no irreparable harm as the Appellants had adequate funds to continue operations. The Application was dismissed.

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