Meagen J. Swan

The court considered costs submissions following a trial concerning a failed business venture.

Despite the plaintiffs' offers to settle and claims of the defendants' inappropriate conduct, and the defendants' counter-arguments, the court found that success was divided, or more accurately, a "divided failure." Given that litigation expenses approached $200,000 for each party while the amounts recovered were significantly less (within Small Claims Court jurisdiction for the plaintiffs), the court emphasized proportionality.

Ultimately, no costs were awarded to either party, as the litigation was not conducted in a reasonable manner and the conduct did not meet the threshold for elevated costs.

This case involved a dispute between two married couples, who were also siblings and their spouses, over the apportionment of substantial losses from a failed M&M Meat Shops franchise business.

The court was tasked with interpreting a "Letter of Understanding" (LOU) signed during mediation and its relationship to an earlier unanimous shareholders agreement.

The court found a material common or mutual mistake regarding the total corporate debt amount stated in the LOU, rendering the debt distribution terms of the LOU ineffective.

However, the LOU's provision for a $30,000 "sweat equity" payment to the defendants was upheld.

The remaining funds were ordered to be distributed based on the initial shareholders agreement's proportionate contribution terms, after correcting for disproportionate contributions and rejecting a minor claim for frozen food.