Alberta Court Of Queen's Bench Offers Clarification On Security For Costs And Security For Judgment

In 1400467 Alberta Ltd v Adderley, 2014 ABQB 439, Madam Justice Veit explained the circumstances in which a defendant will be ordered to pay security for costs and security for judgment. An order for security for costs requires the ordered party to pay money to the court or a trust account in an amount representing part or all of the opposing party's legal costs; security for judgment requires money to be paid in the requested amount of judgment. These orders effectively ensure that the party who successfully applies for the order can collect money owed to them by the opposing party when a judgment or a costs order has been rendered.

Originally, the action commenced when the defendants allegedly breached a non-compete contract entered into with the plaintiff. The defendants then counterclaimed that the plaintiff had breached the purchase and sale agreement featuring the transfer of a multi-million-dollar business. The plaintiff, 1400467 Alberta Ltd., asked the court