In what circumstances has security for costs been awarded against nominal plaintiffs?

British Columbia, Canada


The following excerpt is from Han v. Cho, 2008 BCSC 1229 (CanLII):

Another exception was concerned with practical unenforceability of recovery of costs. Nominal plaintiffs who were bankrupt or insolvent or who had assigned a debt and were suing on behalf of the assignee were required to give security for costs (Perkins v. Adcock (1845), 14 M. & W. 808, Goatley v. Emmott (1854), 15 C.B. 291). The spirit underpinning these early cases, in which security for costs was awarded against nominal plaintiffs or those who took actions to shield themselves against potential orders for costs, was encapsulated in the legislative provisions requiring limited companies to post security for costs if the assets of the company were insufficient to pay costs. Limited companies created a potential mechanism to bring actions without being personally liable for costs. Legislative provisions such as our current section 236 of the Business Corporations Act, S.B.C. 2002, c. 57 are intended to discourage the practice of bringing actions in the name of another, impecunious person by requiring security for costs.

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