Security For Costs of Trial and Appeal

Security For Costs of Trial and Appeal

Arbutus Bay Estates Ltd v Canada ( A-G) 2017 BCCA 133 dealt with the law for security for costs for both an appeal as well as  trial that lasted 18 days and was appealed.

Security for costs was awarded in the amount of $50,000 for the trial and an additional $5000 for the appeal, and the appeal was ordered stayed until the funds were posted as security.

The Test for Security for Costs of an Appeal

[16]         The applicable principles for security for costs of appeal differ from those for security for costs of trial. The former is more readily ordered as the onus is on the appellant to demonstrate why it should not be granted. The latter is less frequently ordered as the onus is on the respondent to demonstrate why it should be granted. See Thompson v. Soundy, 2003 BCCA 82 at para. 11; and Siekham v. Hiebert, 2008 BCCA 299 at para. 13. The distinction between the two orders is relevant only to Canada’s motion.

Security for Costs of the Appeal

[17]         The appellant against whom security is sought bears the onus of showing why security should not be required: Creative Salmon Company Ltd. v. Staniford, 2007 BCCA 285 at para. 9. The ultimate question is whether the order would be in the interests of justice: Lu v. Mao, 2006 BCCA 560 at para. 6. The following relevant considerations were set out in Lu at para. 6:

(a) the appellant’s financial means;

(b) the merits of the appeal;

(c) the timeliness of the application; and

(d) whether the costs will be readily recoverable.

[18]         The appellant’s financial position is the principal basis on which an order for some, all, or none of the security for appeal costs is made. See Zen v. M.R.S. Trust Company (1997), 88 B.C.A.C. 198 at para. 18. It is a discretionary order. Courts have also distinguished between corporate and individual plaintiffs, generally treating corporate plaintiffs with less flexibility.

Security for Trial Costs

[19]         The principles governing the exercise of discretion in awarding security for trial costs are set out in Fat Mel’s Restaurant Ltd. v. Canadian Northern Shield Insurance Company (1993), 76 B.C.L.R. (2d) 231 (C.A.); and Kropp v. Swanaset Bay Golf Course Ltd. (1997), 29 B.C.L.R. (3d) 252 (C.A). They include:

(a)      The onus is on the applicant to show that it is in the interest of justice to order posting for security of trial costs;

(b)      The applicant must show prejudice if the order is not made; and

(c)      In determining the interests of justice the chambers judge should consider the merits of the appeal and the effect of such an order on the ability of the appellant to continue the appeal. See Bronson v. Hewitt, 2012 BCCA 268 at para. 13.

[20]         In general, an applicant requesting an order for security for trial costs should have its draft bill of costs assessed as “judicial economy militates against a two-step process”: International Hi-Tech Industries Inc. v. FANUC Robotics Canada Ltd., 2007 BCCA 272 at para. 4. However, this practice can be waived if it is in the interests of justice to do so: Leung v. Yung, 2016 BCCA 64 at paras. 36 and 38.

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