April 1, 2009

Security for Costs More Restricted Under New Rules

Filed under: 1 — ruleswatch @ 6:59 am

Goodfellow J , in Flewelling v. Scotia Island Property Ltd., 2009 NSSC 94, has confronted a set of thorny issues in a battle surrounding a residential tenancies dispute and its litigation aftermath (occupier’s liability etc.).

The case gives the first insight into the possible operation of the new, 2009, Security for Costs Rule, Rule 45.02. The judge compared the operation of the rule with its predecessor and found, strikingly, that the new rules on the availability of security for costs are stricter than the rules they have superseded.

The judge said:

[19] This Rule represents a considerable change from the 1972 Rule, CPR 42.01.
Under CPR 42.01 a number of examples are set out; however, they are not exhaustive
or determinative and security could, in the justice’s discretion, be ordered whenever
it was just to do so even, as I say, where the facts did not fall within one of the
examples set out in the Rule.

In Silver v. Cooperators General Insurance (1997),
159 N.S.R. (2d) 218, the Court stated at paragraph 41:
Civil Procedure Rule 42.01 recognises, “without limiting the
generality of the foregoing”, the discretion the Court has with respect
to costs. CPR 42.01 does provide considerable guidance but such
guidance is not exhaustive. The defendants rely substantially on
42.01 (d) and (f).

Rule 42.01 sub (a) through (i) provides examples of where the Court may exercise
its discretion in respect of ordering security for costs, but the examples do not limit
the ability of the court to exercise that discretion wherever the Court “deems it just”.
The new Rule appears to me to put limitations on the exercise of judicial discretion
because it sets out the requirement “if all of the following are established.”

Flewelling is one of those authorities you might want to set aside in a special file.


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