Security for Costs Definition:
Payment or deposit of money or some form of security in lieu thereof, into court, by a litigant to secure the payment of such costs if such person does not prevail.
Also presented as security for payment of costs or, in the case of an appeal, an appeal bond.
Not a creature of the common law but, rather, an creation of statute1 and therefore susceptible to variation from jurisdiction to jurisdiction.
In the matter of Electric Ltd. v Comstock which came before the Federal Court of Canada in 1989, Justice Strayer adopted these words to define security for costs:
"Payment into court by a plaintiff to secure the payment of such costs if such person does not prevail."
While the tests may differ between jurisdictions, the following is a typical statement of the law:
"To succeed, his affidavit must show the nature of the action and of the defence, that the plaintiff is not possessed of property sufficient to answer the costs, and either that the defendant has a good defence on the merits or that the grounds of action are trivial or frivolous."2
What may be acceptable in terms of security for costs rests within the realm of judicial discretion. Cash or money, of course, is the most basic form3 but bonds or even a promissory note might suffice.4
- Austin v Goerz, 2007 BCCA 151 and Dowler v State, 66 P. 2d 1081 (1937) [NOTE 3]
- Charron v. MacDonald,  4 D.L.R. 768. Cited with approval in numerous cases including Brunswick Printing Ltd. v. Centennial Office Equipment, 1 C.P.C. (2d) 66 (1984, New Brunswick Court of Queen's Bench, NOTE 2)
- Electric Ltd. v. Comstock Canada, 24 C.P.R. (3d) 137
- Hauer v Appalachian Gas Corporation, 167 A. 838 [NOTE 1]
- Kinney v O'Bannon, 6 Bush 692 [NOTE 4]
Categories & Topics: