XPRESS LUBE & CAR WASH LTD v GILL, 2011 ABQB 457
HALL J
4.22: Considerations for security for costs order
Case Summary
The Defendants applied for Security for Costs against the Plaintiff corporation (which had assets in Alberta and carried on business there). The Court determined that different considerations apply to a Security for Costs Application when the Plaintiff is a corporation as opposed to an individual. In cases involving a corporate Plaintiff, the requirements of Rule 4.22 are less stringent than those of Section 254 of the Alberta Business Corporations Act, RSA 2000, c B-9, which envisions a situation where a corporation “will be” unable to pay costs. Rule 4.22, on the other hand, permits such an Order when it is “unlikely” that a Plaintiff can pay costs. Hall J. chose to apply Rule 4.22 because it was less onerous on the Applicant, and remarked that in considering such an Application, the Court should be mindful that a limited corporation can be a “one-way valve”, against which there may be no recourse for a Defendant should a Costs award be made against a Plaintiff. The Court granted the Application. Hall J. was persuaded in the circumstances that it was not likely that the Plaintiff had sufficient exigible assets or the ability to pay a Costs Order.
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