The defendants sought leave to appeal an order requiring the corporate defendant to pay interim legal fees and disbursements of the plaintiffs in an oppression remedy action under s. 249(4) of the Ontario Business Corporations Act.
The motion judge had ordered payment of all past and future legal fees to create a level playing field between minority shareholders and the corporation that had funded the defence.
The court held that the motion judge properly applied the governing test from Alles v. Maurice regarding merit of the claim and the complainants’ financial inability to pursue the action without assistance.
However, the court found a serious question regarding the correctness of awarding 100% reimbursement of past fees and unlimited future costs, noting that prior authorities typically limit interim cost awards to specific stages or purposes.
Because conflicting approaches existed and the issue was of broader importance for oppression remedy litigation, leave to appeal was granted and the underlying order was stayed pending appeal.