J. Papazian

The appellant was successful on an appeal from a judgment of the Small Claims Court and sought partial indemnity costs of $19,323.46.

The respondent argued for costs of $5,000 based on proportionality, noting the underlying claim was for $25,000.

The court considered the factors under Rule 57.01 and the principle of proportionality, finding the appellant's claimed costs were higher than what an unsuccessful party might reasonably expect to pay.

The court fixed costs payable to the appellant at $8,000 inclusive of disbursements and HST.

The appellant appealed a Small Claims Court decision striking his claim against the respondent, his equal shareholder in a closely held corporation.

The appellant had sought damages under the oppression remedy (s. 248 of the Business Corporations Act) for the respondent's alleged misappropriation of corporate funds, which resulted in the appellant being held personally liable on a joint guarantee.

The Deputy Judge struck the claim, relying on the rule in Foss v. Harbottle, finding the wrongs were done to the corporation.

The Divisional Court allowed the appeal, holding that an oppression action and a derivative action are not mutually exclusive, especially in closely held corporations, and that the appellant had disclosed a reasonable cause of action.