Justin H. Nasseri

The appellant, counsel for the plaintiff in an underlying action, appealed a motion judge's order requiring him to personally pay $84,000 in costs on a joint and several basis with his client under Rule 57.07.

The underlying action had been dismissed as an abuse of process and a collateral attack on prior rulings.

The Court of Appeal dismissed the appeal, finding that the appellant had adequate notice of the grounds for the costs order and that the motion judge properly exercised her discretion.

The motion judge correctly concluded that the appellant caused costs to be incurred without reasonable cause by commencing an abusive action and taking unreasonable procedural steps, such as insisting on a jurisdiction motion proceeding alongside a motion to strike.

The respondent, a silent investor in a private company, brought an oppression action against the managing directors for awarding themselves excessive compensation and failing to provide financial disclosure.

The trial judge found the directors liable for oppression and awarded damages and substantial indemnity costs.

On appeal, the Court of Appeal upheld the findings of oppression and the scale of costs, but found the trial judge erred by not calculating the excess compensation on a net basis over the entire 22-year period, which would have credited the directors for under-compensation in the company's early years.

The Court reduced the damages award from $250,000 to $187,453.51 and remitted the quantum of costs to the trial judge for reconsideration in light of a Rule 49 offer to settle.