Geophysical Services Inc. v. Sable Mary Seismic Inc. et al., 2011 NSCA 40

• Judge: Beveridge, J.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: April 28, 2011
• Jurisdiction: Nova Scotia
• Citations: 2011 NSCA 40;(2011), 304 N.S.R.(2d) 178 (CA)

Geophysical v. Sable Mary Seismic (2011), 304 N.S.R.(2d) 178 (CA);

    960 A.P.R. 178

MLB headnote and full text

Temp. Cite: [2011] N.S.R.(2d) TBEd. MY.019

Sable Mary Seismic Incorporated and Matthew Kimball (appellants) v. Geophysical Services Incorporated (respondent)

(CA 325703; 2011 NSCA 40)

Indexed As: Geophysical Services Inc. v. Sable Mary Seismic Inc. et al.

Nova Scotia Court of Appeal

Beveridge, J.A.

May 10, 2011.

Summary:

The respondent brought a motion under Civil Procedure Rule 90.42 to require the appellants to post security for costs.

The Nova Scotia Court of Appeal, per Beveridge, J.A., allowed the motion.

Editor's Note: The trial decisions on the merits and costs in this matter are reported at 287 N.S.R.(2d) 50; 912 A.P.R. 50 and 299 N.S.R.(2d) 42; 947 A.P.R. 42.

Practice - Topic 8206.2

Costs - Security for costs - Security for costs of an appeal - Application - Considerations - The respondent brought a motion under Civil Procedure Rule 90.42 to require the appellants to post security for costs - The Nova Scotia Court of Appeal, per Beveridge, J.A., allowed the motion - The court was not satisfied that if an order was made for security for costs it would prevent the prosecution of the appeal - The respondent did not suggest that the appellants' appeal was frivolous or vexatious - It conceded that it was an arguable appeal - At this stage, and in these circumstances, it was not the court's function to go further - The contended for strength of the appeal was not relevant since the court had already concluded that an order for security for costs would not deny the appellants their appeal - Further, there was no inordinate or inexcusable delay, nor prejudice to the appellants - See paragraphs 11 to 31.

Practice - Topic 8206.2

Costs - Security for costs - Security for costs of an appeal - Application - Considerations - [See Practice - Topic 8209 and first Practice - Topic 8214 ].

Practice - Topic 8209

Costs - Security for costs - Security for costs of an appeal - Grounds for - Special circumstances or other good reasons - The Nova Scotia Court of Appeal, per Beveridge, J.A., held that special circumstances had to be established before security for costs of an appeal would be ordered under Civil Procedure Rule 90.42 - There were a variety of scenarios that could constitute "special circumstances" - All bore on the issue of the degree of risk that, if the appellant was unsuccessful, the respondent would be unable to collect his costs on the appeal - The court held that the demonstration of special circumstances did not equate to an automatic order of security for costs - The court maintained a discretion not to make such an order, if the order would prevent a good faith appellant who was truly without resources from being able to prosecute an arguable appeal - See paragraphs 1 to 10.

Practice - Topic 8214

Costs - Security for costs - Security for costs of an appeal - Determination of amount of - The Nova Scotia Court of Appeal, per Beveridge, J.A., stated that "It is obvious that in deciding if security for costs is going to be required, and the quantum, is an exercise of judicial discretion. It must be set in light of the likely award of costs on the appeal if the appellants are unsuccessful. It only seems logical that a cautionary and conservative approach has been traditionally adopted out of concern in creating an unwarranted impediment to accessing the court." - See paragraph 38.

Practice - Topic 8214

Costs - Security for costs - Security for costs of an appeal - Determination of amount of - The plaintiff sued the corporate defendant (SMSI) and its principal (Kimball) - After a 13 day trial, the plaintiff obtained judgment for $1,764,251.70 - After adding the awards for prejudgment interest and costs, the defendants now owed the plaintiff approximately $2.7 million - Execution orders were issued, but after more than a year the sheriff had been able to collect and remit only $518.91 to the plaintiff - SMSI was no longer active - It held no real property in Nova Scotia, but substantial amounts were said to be due to it from associated companies - Kimball no longer had any real property registered in his name in Nova Scotia - Attempts to examine him in aid of execution had been unsuccessful as he resided in Thailand - The defendants appealed - The plaintiff brought a motion to require the defendants to post security for costs - Trial costs, exclusive of disbursements, were $275,000 - The plaintiff sought $100,000, which was under the 40% of trial costs which he argued was the general rule for security for costs - The defendants argued that no security for costs should be awarded, but submitted a review of cases which demonstrated the typical range at $1,000 to $10,000 - They argued that in the cases where the security had been over $10,000, the circumstances were unique and distinguishable - The Nova Scotia Court of Appeal, per Beveridge, J.A., ordered $35,000 security for costs - Party and party costs at trial, or on appeal, were not meant to be a complete indemnity to the successful party - The eventual amount of costs on appeal would be up to the panel hearing it - However, based on the information available, the court doubted that the 40% rule would be applied - It would likely result in a more than substantial contribution to the plaintiff's party and party costs if successful on the appeal - See paragraphs 32 to 41.

Cases Noticed:

Frost v. Herman (1976), 18 N.S.R.(2d) 167; 20 A.P.R. 167 (C.A.), folld. [para. 2].

Powell (L.E.) and Co. v. Canadian National Railway Co. and Nova Scotia Building Supplies Ltd. (1975), 11 N.S.R.(2d) 532; 5 A.P.R. 532 (C.A.), refd to. [para. 3].

Williams Lake Conservation Co. v. Chebucto Community Council of Halifax (Regional Municipality) et al. (2005), 231 N.S.R.(2d) 320; 733 A.P.R. 320; 2005 NSCA 44, refd to. [para. 6].

J. and P. Reid Developments Ltd. v. Branch Tree Nursery and Landscaping Ltd. (2006), 250 N.S.R.(2d) 35; 796 A.P.R. 35; 2006 NSCA 131, refd to. [para. 6].

2301072 Nova Scotia Ltd. v. Lienaux et al. (2007), 252 N.S.R.(2d) 193; 804 A.P.R. 193; 2007 NSCA 28, refd to. [para. 7].

Smith v. Michelin North America (Canada) Inc. (2008), 265 N.S.R.(2d) 358; 848 A.P.R. 358; 2008 NSCA 52, folld. [para. 7].

Burris v. Disabled Consumer Society of Colchester et al. (2009), 278 N.S.R.(2d) 50; 886 A.P.R. 50; 2009 NSCA 21, refd to. [para. 8].

Royal Bank of Canada v. Woloszyn (1999), 175 N.S.R.(2d) 352; 534 A.P.R. 352 (C.A.), refd to. [para. 35].

Pettigrew v. Pettigrew (2005), 238 N.S.R.(2d) 329; 757 A.P.R. 329; 2005 NSCA 154, refd to. [para. 36].

Smith v. MacGillivary et al. (2003), 217 N.S.R.(2d) 77; 683 A.P.R. 77; 2003 NSCA 88, refd to. [para. 36].

Smith v. Heron - see Smith v. MacGillivary et al.

Crouse v. Crouse (2002), 201 N.S.R.(2d) 43; 629 A.P.R. 43; 2002 NSCA 15 (C.A.), refd to. [para. 36].

Counsel:

Derrick J. Kimball and Sharon Cochrane, for the appellant, Sable Mary Seismic Inc.;

Nash T. Brogan, for the appellant, Matthew Kimball;

Colin D. Piercey and Jessica White, for the respondent.

This motion was heard in Halifax, N.S., on April 28, 2011, by Beveridge, J.A., of the Nova Scotia Court of Appeal, who delivered the following decision on May 10, 2011.