L. Munro

The applicants brought a motion in an oppression proceeding under the Ontario Business Corporations Act seeking interim costs and related relief.

The court reviewed the legal test under OBCA s. 249(4), requiring a complainant to demonstrate a case of sufficient merit and financial circumstances that would preclude pursuit of the claim without funding.

The court found that the individual complainant established an arguable oppression claim involving alleged expulsion from corporate management, cessation of compensation, and disputes under a shareholders’ agreement.

However, the trust applicant failed to disclose relevant financial information.

The court concluded that the individual complainant met the financial hardship requirement but reduced the interim costs award to reflect the trust’s failure to disclose its financial circumstances.

Following reasons on a motion concerning the removal of counsel for corporate and individual respondents, the court determined the appropriate costs award.

Success on the underlying motion was divided: counsel was removed for the corporate respondents but permitted to continue acting for the individual respondents.

Applying the principles under Rule 57 of the Rules of Civil Procedure, including proportionality and the guidance from appellate authority on fixing fair and reasonable costs, the court concluded neither side achieved complete success.

The applicants’ prior settlement offer was not considered because it addressed issues beyond the motion.

Partial indemnity costs of $4,000 were fixed, payable in the cause of the application.

The applicants brought a motion to remove the respondents’ solicitor of record on the basis of alleged conflicts of interest and the possibility that the lawyer might be called as a witness.

The court applied the conflict of interest principles from MacDonald Estate v. Martin and Canadian National Railway Co. v. McKercher LLP.

It held that the lawyer had not previously acted for the individual applicant or his trust in a manner giving rise to confidential information relevant to the litigation, and that the earlier retainer for a corporate applicant in unrelated litigation was not sufficiently related to the present oppression dispute.

However, the court found that a conflict arose because the lawyer sought to represent both the respondent corporations and the individual shareholder respondents in oppression litigation where their interests could diverge.

The lawyer was therefore removed as counsel for the corporate respondents but permitted to continue acting for the individual respondents.