Your client is sued by a corporation. Your client’s defence succeeds. The Court orders the corporation to pay your client’s legal fees. 

But – heartbreak! – the corporation has no money. Your client is left with its pyrrhic victory and its legal bills. To manage this the Court has the power to order security for the costs of a person in your client’s position. Today: a corporation commenced proceedings and incurred the costs of preparing all its evidence. Save for an expert report, the defendant had done the same: [6]. 

Mediation had been tried, and had failed. All parties agreed the corporation was impecunious. The defendant sought security for its costs. The corporation served evidence showing that its directors were not in strong financial positions and argued security for cost would stifle the proceedings. The Court worked through the evidence and was not satisfied an order for security would stifle the proceedings: [21]. As such, it ordered that security be set in the amount of $40K: [29]. 

In fixing that amount, the Court noted the financial difficulties of the plaintiff’s directors and so elected to fix security at 2/3 of the amount sought. This was, despite the finding at [21] in order to further manage any risk of potentially stifling the proceedings: [30].