Hurst et al. v. Société Nationale de L'Amiante et al.

[Indexed as: Hurst v. Société Nationale de L'Amiante]

93 O.R. (3d) 338

Court of Appeal for Ontario,

K.N. Feldman, Cronk and Blair JJ.A.

August 1, 2008*

• This judgment was recently brought to the attention of the editors.

Actions -- Bars -- Abuse of process -- Plaintiffs commencing action in Ontario for oppression remedy and other relief in 1987 but not pursuing it until 2003 after five other proceedings in respect of same matter were dismissed or stayed -- Combination of inexcusable delay and facts that Ontario was not forum conveniens and that same issues had already been litigated in other proceedings leading to conclusion that action was abuse of process. [page339]

Civil procedure -- Delay -- Plaintiffs commencing action in Ontario for oppression remedy and other relief in 1987 but not pursuing it until 2003 after five other proceedings in respect of same matter were dismissed or stayed -- Motion judge not erring in dismissing action for delay.

Conflict of laws -- Forum conveniens -- Province of Quebec gaining control of Quebec asbestos producer but not purchasing shares held by minority shareholders -- Minority shareholders bringing action in Ontario for oppression remedy under Canadian Business Corporations Act and other relief -- Ontario having jurisdiction simpliciter but not being forum conveniens.

The appellants were minority shareholders of ACL. The Province of Quebec gained control of ACL in 1982, after it purchased the majority interest held by an American corporation. Quebec did not purchase the shares held by minority shareholders. The value of those shares subsequently declined. The appellants commenced six proceedings before courts or tribunals in an attempt to obtain compensation, including an action in Ontario for an oppression remedy under s. 234 of the Canada Business Corporations Act, S.C. 1974-75, c. 33 ("CBCA") and for other relief. All of the proceedings other than the Ontario action were dismissed or stayed. While the Ontario action was commenced in 1987, it was not pursued until 2003, after the other five proceedings had been exhausted. The respondents in the Ontario action moved to dismiss the action. The motion judge dismissed the action for delay. She also dismissed the action on the basis that all of the claims made in it had been determined in one or more of the prior proceedings in a manner that bound the parties and were accordingly governed by the doctrine of issue estoppel. In the alternative, she struck out the claims for an oppression remedy under s. 234(2) of the former CBCA and for breach of fiduciary duty on the basis that those claims did not disclose a reasonable cause of action. While she found that Ontario had jurisdiction simpliciter based on the connection between the appellants and Ontario, she found that Quebec was the most convenient forum for the hearing of the issues. Finally, she stayed the action as an abuse of the court's process. The appellants appealed.

Held, the appeal should be dismissed.

The motion judge did not err in dismissing the action for delay. The onus was on the appellants to establish the existence of an agreement among counsel to hold the Ontario action in abeyance pending the completion of the administrative proceedings in Ontario and Quebec, and they failed to do so. The motion judge's finding that the appellants decided not to pursue this action until they had exhausted their claims in the other forums was supported by the evidence. The motion judge correctly rejected the appellants' suggestion that there was an onus on the respondents to move the case forward. She correctly relied on the jurisdiction of the court to stay an action pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

The motion judge did not err in finding that Ontario was forum non conveniens. She gave serious and detained consideration to the loss of juridical advantage and the fact that the action would now be statute-barred in Quebec. It was only because of the appellants' choice not to begin an oppression action in Quebec within the limitation period that loss of juridical advantage became a factor in the forum conveniens analysis. As a result, it did not carry much weight.

Whether or not the claims were barred by issue estoppel, the same issues regarding the actions of the respondents and the reasonable expectations of the minority shareholders had been litigated in several proceedings. The motion judge made it clear that her decision that the action was an abuse of process was not dependant [page340] on her finding that the conditions for issue estoppel were met. Rather, it was the combination of the inexcusable delay and the inappropriate forum, together with the attempt to repackage the same set of facts and circumstances that had been considered by two securities commissions and by the highest courts in Ontario and Quebec, as well as the Supreme Court of Canada, which led her to conclude that the action was an abuse of process. She made no error in her analysis or conclusion.

It was neither necessary nor appropriate to come to a final decision on whether the requirements for issue estoppel were met or on the availability of a cause of action for oppression.

APPEAL from the order of Spies J., 2006 33682 (ON SC), [2006] O.J. 3998, 23 B.L.R. (4th) 214 (S.C.J.) dismissing an action.

Cases referred to

Amchem Products Inc. v. British Columbia (Workers' Compensation Board), 1993 124 (SCC), [1993] 1 S.C.R. 897, [1993] S.C.J. No. 34, 102 D.L.R. (4th) 96, 150 N.R. 321, [1993] 3 W.W.R. 441, J.E. 93-674, 23 B.C.A.C. 1, 77 B.C.LR. (2d) 62, 14 C.P.C. (3d) 1, 39 A.C.W.S. (3d) 600; Comité pour un traitement égale des actionnaires minoritaires de la Société Asbestos Ltée c. Société Asbestos Ltée, [1996] J.Q. No. 591 (Sup. Ct.); Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission), [2001] 2 S.C.R. 132, [2001] S.C.J. No. 38, 2001 SCC 37, 199 D.L.R. (4th) 577, 269 N.R. 311, J.E. 2001-1203, 146 O.A.C. 201, 29 Admin. L.R. (3d) 1, 14 B.L.R. (3d) 1, 105 A.C.W.S. (3d) 972, affg (1999), 1999 7316 (ON CA), 43 O.R. (3d) 257, [1999] O.J. No. 388, 169 D.L.R. (4th) 612, 117 O.A.C. 224, 86 A.C.W.S. (3d) 229 (C.A.), revg (1997), 1997 12433 (ON SC), 33 O.R. (3d) 651, [1997] O.J. No. 1872, 146 D.L.R. (4th) 721, 100 O.A.C. 46, 46 Admin. L.R. (2d) 128, 34 B.L.R. (2d) 103, 13 C.C.L.S. 50, 70 A.C.W.S. (3d) 1109 (Div. Ct.), revg (1994), 4 C.C.L.S. 233 (O.S.C.); Committee for the Equal Treatment of Asbestos Minority Shareholders v. Québec (Procureur Général), 2005 19389 (QC CQ), [2005] Q.J. No. 7170, [2005] R.J.Q. 1828 (C.Q.), affg (June 13, 2003), Montreal 2003-C-0211 (C.V.M.Q.); F. Warren Hurst and Carmand Normand v. General Dynamics Corp., 583 A.2d 1334 (Del. Ct. Ch. 1990); Fradet v. Société Asbestos Ltée, 1990 3345 (QC CA), [1990] Q.J. No. 228, J.E. 90-423, 28 Q.A.C. 302, [1990] R.D.J. 180 (C.A.), affg (March 12, 1986), Quebec 200-06-000003-866 (Sup. Ct.) [Leave to appeal to S.C.C. refused [1990] S.C.C.A. No. 157]; Kerr v. Danier Leather Inc., [2007] 3 S.C.R. 331, [2007] S.C.J. No. 44, 2007 SCC 44, 286 D.L.R. (4th) 601, 368 N.R. 204, 231 O.A.C. 348, 36 B.L.R. (4th) 95, 48 C.P.C. (6th) 205, 160 A.C.W.S. (3d) 910, J.E. 2007-1969, EYB 2007-124711; Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 87 O.R. (3d) 660, [2007] O.J. No. 3872, 2007 ONCA 695, 286 D.L.R. (4th) 487, 47 C.P.C. (6th) 233; Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20, [2002] O.J. No. 2128, 213 D.L.R. (4th) 577, 160 O.A.C. 1, 13 C.C.L.T. (3d) 161, 26 C.P.C. (5th) 206, 114 A.C.W.S. (3d) 634 (C.A.); Shaw v. BCE Inc., 2004 12080 (ON SC), [2003] O.J. No. 5481, [2004] O.T.C. 28, 42 B.L.R. (3d) 107, 128 A.C.W.S. (3d) 76 (S.C.J.); Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77, [2003] S.C.J. No. 64, 2003 SCC 63, 232 D.L.R. (4th) 385, 311 N.R. 201, J.E. 2003-2108, 179 O.A.C. 291, [2003] CLLC Â220-071, 17 C.R. (6th) 276, REJB 2003-49439, 59 W.C.B. (2d) 334, 120 L.A.C. (4th) 225

Statutes referred to

Canada Business Corporations Act, S.C. 1974-75, c. 33, s. 234 Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 241 Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 31 Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106 Securities Act, R.S.O. 1990, c. S.5, ss. 88(1), 91(1), 127(1) [as am.] Securities Act, R.S.Q. c. V-11 [page341]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21, 21.01(1)(b)

Peter R. Jervis, George S. Glezos and Meredith Jones, for appellants. Katherine L. Kay and Alexander D. Rose, for respondent General Dynamics Corporation. James C. Tory and Andrew Gray, for respondents Société Nationale de L'Amiante, Mines S.N.A. Inc. and Sa Majesté du Chef du Québec.

The judgment of the court was delivered by

[1] K.N. FELDMAN J.A.: -- The appellants are minority shareholders of Asbestos Corporation Limited. The Province of Quebec gained control of the corporation in 1982, after it purchased the majority interest held by General Dynamics Corporation. However, Quebec did not purchase the shares held by minority shareholders, and the value of those shares subsequently declined. This action is one of six proceedings brought before courts or tribunals by or on behalf of minority shareholders in an attempt to obtain compensation.

[2] This action was commenced in December 1987, but was not pursued by the appellants until 2003, after the other five proceedings had been wholly exhausted. The respondents moved before Spies J. to dismiss the action on a number of grounds, including issue estoppel, no cause of action for oppression, forum non conveniens, delay and abuse of process. The appellants appeal the decision of Spies J. to dismiss the action.

[3] For the reasons that follow, I would dismiss the appeal.

Facts

(a) History of the transaction

[4] In the fall of 1977, the Government of Quebec announced a policy of creating an asbestos manufacturing industry in Quebec to complement the asbestos mining industry. It also announced, pursuant to this policy, that it intended to take control of Asbestos Corporation Limited ("ACL"). At that time, ACL was the second largest asbestos producer in Quebec. It was controlled by General Dynamics Corporation ("GD US") through its wholly owned subsidiary, General Dynamics Corporation (Canada) Limited [page342] ("GD Canada"), which owned a majority of shares in ACL. Quebec stated at the time that its intention was to acquire 100 per cent of ACL and that minority shareholders would be offered the same price per share as GD US.

[5] In the fall of 1979, a Quebec crown corporation, Société Nationale de L'Amiante ("SNA"), made a formal offer to GD US to purchase all the ACL common shares held by GD Canada for a price of $42 per share. SNA stated at the time that it would "take the necessary steps to offer to purchase the common shares owned by the other shareholders of Asbestos [ACL] at the same price per share as the one paid to General Dynamics [GD US] by SNA". At its annual meeting in 1979, the chairman of GD US stated that GD US would do everything it could to obtain a fair price for itself and for minority shareholders of ACL. Some internal GD US memos written in 1978 and 1979 also alluded to a fiduciary duty or other responsibility owed by GD US to minority shareholders of ACL. However, GD US rejected the offer without consulting with minority shareholders.

[6] After GD US rejected the 1979 offer, it entered into negotiations with Quebec, but the parties were unable to agree on a price. In the meantime, Quebec enacted legislation that gave it the power to expropriate the assets of ACL. ACL commenced a court action, directed by GD US, challenging the legality of the expropriation legislation. However, this action was ultimately unsuccessful, with leave to appeal to the Supreme Court of Canada denied in March 1981.

[7] Following completion of the court challenge, Quebec and GD US resumed negotiations in April 1981. In its 1981 first quarter report, GD US disclosed the resumed negotiations and the threat of expropriation and stated: "It is impossible at this time to tell just what will happen, but we are determined to do whatever we can that is best for the employees and the shareholders of ACL as well as for our own shareholders." For tax reasons, GD US wanted to structure the transaction in such a way that SNA would not purchase the shares in ACL directly from GD Canada, but rather would purchase GD US's shares of GD Canada, which controlled ACL.

[8] The parties reached an agreement on that basis and Quebec announced on November 11, 1981 that SNA would acquire the majority of voting shares in GD Canada, with provision for the subsequent acquisition of all the shares of GD Canada. As a result, Quebec would acquire voting control of ACL through its voting control of GD Canada. The press release that announced the agreement also stated that Quebec did not intend to make an [page343] offer to minority shareholders of ACL. Following the announcement, the share price fell to a four-year low of $21 per share.

[9] The share purchase agreement was completed on February 12, 1982. SNA acquired voting control of GD Canada, later renamed Mines SNA. As part of the agreement, GD US received a "put" option that gave it the right to require SNA to purchase its remaining shares in GD Canada over the next five years, ensuring that it would obtain the most favourable tax treatment. GD US exercised that put option on November 24, 1986. SNA never made an offer to purchase the minority shareholdings. On December 3, 1986, the share trade price for ACL was $5.88 per share.

(b) History of proceedings by or on behalf of minority shareholders

[10] The following is a summary of the judicial and regulatory proceedings that have been undertaken by or on behalf of ACL minority shareholders, including the proceeding at issue in this appeal:

(i) Oppression Action #1 (Fradet action)

Date commenced: Summer 1985

Forum: Quebec Superior Court

Plaintiff: Bertrand Fradet on behalf of ACL minority shareholders

Defendants: Quebec, SNA, Mines SNA, GD US, ACL

Claim for: leave to bring a class action for an order directing a follow-up offer to minority shareholders at the same price paid to GD US as an oppression remedy under s. 234 of the Canada Business Corporations Act, S.C. 1974-75, c. 33 ("former CBCA") (now s. 241 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 ("CBCA")) and for breach of fiduciary duty

Disposition: application denied: Fradet v. Société Asbestos Ltée (March 12, 1986), Quebec 200-06-000003-866 (Sup. Ct.), affd 1990 3345 (QC CA), [1990] Q.J. No. 228, J.E. 90-423 (C.A.), leave to appeal to SCC refused [1990] S.C.C.A. No. 157 [page344]

(ii) Oppression Action #2 (Ontario action)

Date commenced: December 4, 1987

Forum: Ontario Superior Court of Justice

Plaintiffs: Warren Hurst and Carmand Normand, on their own behalf and on behalf of ACL minority shareholders

Defendants: Quebec, SNA, Mines SNA, GD US, ACL and others

Claim for: an order directing a follow-up offer as an oppression remedy under s. 234 of the former CBCA, and damages for misrepresentation and and breach of fiduciary duty

Disposition: the subject of this appeal

(iii) Delaware Action

Date commenced: March 1988

Forum: Delaware Court of Chancery

Plaintiffs: Warren Hurst and Carmand Normand, on their own behalf and on behalf of ACL minority shareholders

Defendants: GD US

Claim for: damages for breach of fiduciary duty and misrepresentation based on GD US's actions and statements regarding minority shareholders of ACL

Disposition: action stayed on the basis of forum non conveniens, subject to later reinstatement depending on Ontario's position on its own jurisdiction: F. Warren Hurst and Carmand Normand v. General Dynamics Corp., 583 A.2d 1334 (Del. Ct. Ch. 1990)

(iv) Ontario Securities Commission ("OSC") Proceeding

Date commenced: April 13, 1988

Forum: OSC [page345]

Applicants: OSC Staff and The Committee for the Equal Treatment of Asbestos Minority Shareholders, co-chaired by Warren Hurst and Carmand Normand

Respondents: Quebec, SNA

Claim for: an order for a follow-up offer to minority shareholders for breach of the take-over bid requirements of the Ontario Securitie Act, R.S.O. 1990, c. S.5 ("OSA"), or an order removing the exemptions under the OSA that enable Quebec to participate in Ontario's capital markets because of its failure to accord equal treatment to minority shareholders and for making misleading statements to the public that misled minority shareholders into believing a follow-up offer would be made

Disposition: application dismissed: Asbestos Corp. (Re) (1994), 4 C.C.L.S. 223 (O.S.C.); appeal allowed: Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission) (1997), 1997 12433 (ON SC), 33 O.R. (3d) 651, [1997] O.R. No. 1872 (Div. Ct.), revd (1999), 43 O.R. (3d) 257, 1999 7316 (ON CA), [1999] O.J. No. 388 (C.A.), affd 2001 SCC 37, [2001] 2 S.C.R. 132, [2001] S.C.J. No. 38

(v) Commission des valeurs mobilières du Québec ("CVMQ") Proceeding

Date commenced: April 22, 1988

Forum: CVMQ

Applicant: The Committee for the Equal Treatment of Asbestos Minority Shareholders, co-chaired by Warren Hurst and Carmand Normand

Respondents: Quebec, SNA

Claim for: a remedy for the inequities suffered by minority shareholders, including a follow-up offer to minority shareholders based [page346] on statements made by Quebec and on a breach of the takeover bid provisions of the Quebec Securities Act, R.S.Q. c. V-1.1; a civil remedy for misrepresentations in connection with the 1979 offer and for mismanagement of ACL following the take-over to the detriment of minority shareholders

Disposition: application dismissed: Committee for the Equal treatment of Asbestos Minority Shareholders v. Québec (Procureur Général) (June 13, 2003), Montreal 2003-C-0211 (C.V.M.Q.), affd 2005 19389 (QC CQ), [2005] Q.J. No. 7170, [2005] R.J.Q. 1828 (C.Q.)

(vi) Oppression Action #3 (Mazarin action)

Date commenced: June 9, 1995

Forum: Quebec Superior Court

Plaintiffs: Warren Hurst and Carmand Normand, on their own behalf and on behalf of ACL minority shareholders

Defendants: SNA, Mines SNA, ACL, Société d'Exploration Minière Mazarin Inc. and others, but not Quebec or GD US

Claim for: an oppression remedy under the CBCA for events after 1987

Disposition: the oppression claim was struck for prescription while the remaining claims were stayed pending the outcome of the OSC and CVMQ proceedings: Comité pour un traitement égal des actionnaires minoritaires de la Société Asbestos Ltée c. Société Asbestos Ltée, [1996] J.Q. No. 591 (Sup. Ct.)

[11] The Fradet action was dismissed by the Quebec Superior Court on the basis that there is no legal obligation on a majority shareholder to force a purchaser to purchase minority shareholdings, nor is there an obligation on a third-party bidder to purchase minority shareholdings. The court also noted that the [page347] inaction of the representative minority shareholder plaintiff between 1982 and 1985 in commencing an action induced the court to "think that it is complaining less about an attack on its rights than on its disappointment as a speculator". Finally, the court held that the action was out of time as the limitation period for bringing an oppression action was two years.

[12] In each of the two regulatory proceedings before the OSC and the CVMQ, a full hearing was held on the merits and appeals from the proceedings were ultimately dismissed by the courts. The issues that were determined in those proceedings are set out below.

[13] In the OSC proceeding, to which the appellants and the respondents Quebec and SNA were parties, the Commission made the following findings: (1) the transactions did not constitute a takover bid under s. 88(1)(k) of the OSA and therefore no follow-up offer was required to be made to minority shareholders under s. 91(1) of the OSA; (2) the public statements made by Quebec were equivocal and did not amount to misrepresentations; (3) it was not reasonable for investors to have relied on the statements made by Quebec as a promise that a follow-up offer would be made to minority shareholders of ACL; (4) the actions of Quebec and of GD US in leaving minority shareholders of ACL with no compensation failed to comply with the spirit underlying the takeover bid rules of the OSA, were abusive of the minority shareholders and were manifestly unfair to them; (5) however, the actions of Quebec and of GD US were not abusive of the integrity of the Ontario capital markets because there was no sufficient connection between the transaction and Ontario to warrant a remedy under s. 127(1)3 of the OSA. As a result, the OSC did not grant a remedy and dismissed the application.

[14] In the CVMQ proceeding, to which the appellants and the respondents Quebec and SNA were also parties, the Commission made the following findings: (1) Quebec was released from its obligations in connection with the 1979 offer, which was rejected by GD US and thereby became null and void; (2) Quebec's representations in 1977 and in connection with the rejected 1979 offer did not create a legitimate expectation that a subsequent offer would be made to minority shareholders of ACL with the same benefits as previously contemplated; (3) no new representations were made that would give rise to legitimate expectations by minority shareholders that an offer would be made to them; (4) any such expectations by minority shareholders were based on their own wishes rather than on the conduct of Quebec or SNA; (5) there was no violation of the province's takeover bid rules and therefore no obligation on Quebec to make a follow-up [page348] offer to minority shareholders; (6) the evidence did not support allegations of civil fraud or misrepresentation; (7) the applicants did not prove that Quebec or SNA engaged in abusive conduct as the majority shareholder operating ACL after the purchase from GD US, nor that the collapse in share value was attributable to the conduct of the majority shareholder rather than to the difficulties faced by the asbestos industry as a whole since the 1980s. Therefore, the CVMQ declined to exercise its discretion to pursue a civil remedy for the minority shareholders.

(c) Findings made by the motion judge in the action under appeal

[15] This action was commenced in December 1987, but the appellants did not proceed with it until after all the other claims, including appeals to the Courts of Appeal of Ontario and Quebec, and to the Supreme Court of Canada, had been completed. The action was revived by the delivery of an amended statement of claim in November 2003. Eventually, three further amended statements of claim were delivered, and the respondents moved to dismiss or stay the action in 2005.

[16] There were several bases for the respondents' motion, including delay, issue estoppel, no cause of action for oppression, and abuse of process. The motion judge made findings on the appellants' delay, as well as on each sub-issue of issue estoppel as against each respondent, on the elements of the oppression action as against each respondent and on abuse of process as against each respondent.

(i) Delay

[17] The motion judge dismissed the action for delay. The appellants alleged that there was an agreement among counsel for the parties to hold this action in abeyance pending the resolution of the other proceedings. However, the motion judge found that there was no such agreement that extended beyond the release of the decisions of the OSC and the CVMQ and that the appellants' delay in pursuing this action was unreasonable.

(ii) Issue estoppel

[18] The motion judge also dismissed the action on the basis that all the claims made in it had been determined in one or more of the prior proceedings in a manner that bound the parties and were accordingly governed by the doctrine of issue estoppel. She noted that in the Fradet action, the Quebec court had already dismissed the claim for an oppression remedy under the CBCA and [page349] for breach of fiduciary duty on the basis that a majority shareholder owes no duty to require a third-party purchaser to offer to purchase the shares of minority shareholders. The motion judge held that although the appellants were not named parties in that action, their interests were indistinguishable from the interests of the minority shareholder plaintiffs in the action and they were therefore privies for the purpose of issue estoppel. The appellants were therefore precluded from relitigating these issues.

[19] The motion judge held that the appellants were similarly precluded from relitigating the findings determined by the OSC and CVMQ proceedings, both of which were final and confirmed by the courts. She concluded that the following issues had been finally determined by those proceedings:

-- With respect to the 1979 offer, the finding of the CVMQ that the representations made in connection with the 1979 offer could not give rise to a legitimate expectation that a subsequent offer would include a follow-up offer to minority shareholders; that there were no misrepresentations made in connection with the 1979 offer; and that the allegations of civil fraud and misrepresentation were not supported by the evidence.

-- With respect to the 1982 agreement, the finding of the OSC that that agreement and the performance of that agreement was not a takeover bid within the meaning of s. 88(1)(k) of the OSA and there was therefore no legal obligation to make a follow-up offer to minority shareholders pursuant to s. 91(1) of the OSA; and that the transactions were not deliberately structured to attempt to turn a transaction with an Ontario connection into one purporting to have no such connection.

-- With respect to the statements made by Quebec in connection with the 1982 agreement, the finding by the OSC that the statements relied on by the appellants were at best equivocal, that they did not mislead anyone and that it would have been unreasonable to rely on them.

-- With respect to the alleged mismanagement of ACL, the finding of the CVMQ that the appellants did not present any evidence that the collapse in the value of ACL shares was attributable to the conduct of Quebec or SNA.

[20] The motion judge noted that the appellants had fully participated in the OSC proceeding and were parties to the CVMQ [page350] proceeding. She concluded that although GD US was not a party to either proceeding, it had been involved in the hearings by providing documents and testimony and the appellants would not be prejudiced by its reliance on issue estoppel given its level of participation.

(iii) Oppression

[21] In the alternative, the motion judge struck out the claims for an oppression remedy under s. 234(2) of the former CBCA and for breach of fiduciary duty on the basis that those claims, as pleaded, did not disclose a reasonable cause of action. The specific claims are set out below.

A. The 1979 offer

[22] The motion judge concluded that there could be no oppression by Quebec based on the 1979 offer that was rejected by GD US because neither Quebec nor SNA were affiliates of ACL at that time. Furthermore, any issue regarding the reasonable expectations of minority shareholders had already been determined by the CVMQ. Quebec owed no fiduciary duty to minority shareholders of ACL in 1979, nor could minority shareholders have had a reasonable expectation that Quebec would act in their interests to the detriment of the interests of others. The misrepresentation claim against Quebec in relation to the 1979 offer could not be sustained in law, and was barred by issue estoppel.

[23] The motion judge also held that there could be no claim for oppression against GD US as majority shareholder for rejecting the 1979 offer without consulting with the minority shareholders or for causing ACL to sue Quebec over the expropriation legislation in order to gain a tax advantage for itself. The motion judge found there is no duty on a majority shareholder to consult with minority shareholders on an offer for its shares, nor did GD US have the legal ability to compel Quebec to make a similar offer to minority shareholders. GD US also did not owe a fiduciary duty as majority shareholder to minority shareholders of ACL. With respect to the expropriation litigation claim, the appellants' complaint properly lay with the board of ACL, but that action was discontinued.

B. The 1982 agreement

[24] As before, Quebec was not an affiliate of ACL but a third-party bidder, and therefore the motion judge held that the oppression remedy was not applicable. She noted that there is not an oppression remedy available for a breach of the "spirit" of [page351] the OSA. Therefore, despite the findings of the OSC that Quebec and SNA failed to comply with the spirit of the takeover bid rules and that their conduct was abusive of the minority and manifestly unfair to them, and despite a similar concern expressed by L'Heureux-Dubé J. during argument at the Supreme Court of Canada, there was no legal remedy for this conduct. The motion judge also found that although SNA was an affiliate of ACL in 1986 when GD US exercised its put option, there was no oppression at that time because the rights of the parties had crystallized in 1982, which was therefore the relevant date for assessing the oppression claim. There was also no fiduciary duty owed by Quebec to minority shareholders of ACL as indirect purchaser of ACL shares through its purchase of GD Canada shares.

[25] Similarly, the motion judge concluded that there was no cause of action for oppression against GD US as indirect majority shareholder of ACL through GD Canada in respect of the 1982 transaction for failing to compel Quebec to make a follow- up offer to minority shareholders or for breaching the spirit of the OSA. GD US complied with the law, and minority shareholders could have no reasonable expectation that it would do more. She also held that there was no fiduciary duty on GD US in law. As a result, the claims for inducing breach of fiduciary duty were struck, as there were no underlying fiduciary duties to breach. The claims for conspiracy to injure were also struck as the main purpose of the 1982 transaction was not to injure the appellants, but to benefit the participants.

[26] The appellants' claims for oppression, breach of fiduciary duty and misrepresentation based on Quebec's public statements regarding the possibility of a follow-up offer to the 1982 agreement were struck as unsustainable and on the basis of issue estoppel. The appellants also claimed oppression and breach of fiduciary duty against GD US for the public statements it made before the 1982 transaction. The motion judge found that there could be no fiduciary duty owed by GD US to minority shareholders of ACL in these circumstances, but that an oppression claim was possible on that basis. As the oppression claim had not been adjudicated, it could not be struck out as disclosing no reasonable cause of action.

[27] Finally, the motion judge also struck out the appellants' claim against Quebec and SNA for mismanagement of the business following the takeover to the detriment of the minority on the basis of issue estoppel, as this claim was rejected by the CVMQ.

[28] The motion judge concluded [at para. 194] on this issue that although there had been findings of unfairness to minority shareholders by the conduct of the respondents, and they had [page352] suffered losses, "it cannot be said as a matter of law that their rights were prejudiced or their interests disregarded unfairly".

(iv) Forum non conveniens

[29] The fourth ground raised by the respondents on the motion to dismiss or stay was whether Ontario was the proper forum to adjudicate this claim. The motion judge found that there was a real and substantial connection between the subject matter of the action and Ontario sufficient for Ontario to assume jurisdiction based on the connection between the appellants and Ontario. She then turned to the issue of forum non conveniens, and after considering the relevant factors, found that Quebec was the most convenient forum for the hearing of the issues, not Ontario. She also noted that the oppression claim against GD US based on public statements, which was the only claim she did not strike, could still be pursued in the Delaware action which had been stayed subject to revival if this action were stayed on jurisdictional grounds.

(v) Abuse of process

[30] As a fifth basis for disallowing the action, the motion judge stayed it as an abuse of the court's process based on the excessive delay in proceeding while the appellants first tried to obtain a remedy in other jurisdictions and tribunals, and the attempt to relitigate issues already decided against the appellants in those proceedings.

(vi) Costs

[31] The motion judge was asked to order no costs but declined to do so. She ordered costs against the appellants on the partial indemnity scale in the amount of $60,000 to Quebec, $60,000 to GD US and $40,000 to SNA/Mines SNA.

Issues

[32] The appellants claim that the motion judge erred in the following ways:

(1) The action should not have been dismissed for delay because: (a) there was an agreement to hold the action in abeyance and therefore any delay was reasonable; (b) the delay did not cause substantial prejudice to the respondents; and [page353] (c) the remedy of dismissal was not available when the respondents were in default of delivering their statements of defence.

(2) The motion judge erred in law in finding issue estoppel by: (a) holding that the appellants were estopped from asserting claims against GD US and GD Canada; (b) finding that the appellants were privies to the Fradet action; and (c) misapprehending the documentary evidence before her that was not available to the Quebec court.

(3) The motion judge erred in staying the action on the basis that Ontario is not the most convenient forum.

(4) The motion judge erred in striking the oppression claims by: (a) misapplying the test under rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194; (b) failing to read the statement of claim in a broad manner; and (c) failing to consider the reasonable expectations of the appellants that GD US and Quebec would not self-deal in assets to the detriment of ACL or to cause ACL to avoid maximizing profit and that they would adhere to the spirit of the law.

(5) The motion judge erred in finding abuse of process on the basis of unreasonable delay and issue estoppel.

(6) The motion judge erred in awarding costs against the appellants.

Analysis

[33] The motion judge dismissed the entire action based on delay and, in the alternative, stayed the action based on forum non conveniens and abuse of process. Any one of these grounds was sufficient to dispose of the motion without addressing the potential merit of the individual claims or whether they were barred from relitigation by the doctrine of issue estoppel. However, the motion judge addressed each of these grounds, and her ruling on each is now challenged by the appellants on appeal. [page354]

Issue 1: Dismissal for delay

[34] The appellants essentially challenge the finding of fact made by the motion judge on the record before her that there was no agreement among counsel to hold the Ontario action in abeyance pending the completion of the administrative proceedings in both Ontario and Quebec, including all appeals. They also submit that to the extent the evidence from both sides was inconsistent, the motion judge was not entitled to make a finding of fact, but rather a trial of the issue was required.

[35] There is no merit in these submissions. The motion judge reviewed the record in detail, including not only the affidavits of Mr. Bresner, the appellants' former solicitor, and Mr. Franch, U.S. counsel for GD US, but the entire correspondence between counsel for all parties, as well as records of the steps and positions taken by counsel for all sides during that time and before various courts and tribunals regarding the fact that this action remained outstanding.

[36] The events that gave rise to this litigation occurred between 1977 and 1982. The Ontario action was commenced in late 1987. It was during 1988 that counsel for the parties corresponded about the status of this action. Counsel for several of the respondents made it clear from the beginning that they intended to challenge Ontario's jurisdiction, which explains why they did not deliver their statements of defence before moving against the statement of claim. Mr. Bresner swore in his affidavit that no one objected to this action being held in abeyance during the OSC and CVMQ proceedings until those proceedings were finally determined, and that to the best of his knowledge, the respondents were aware that this action would remain dormant until such time as the administrative proceedings were resolved. No Canadian counsel filed affidavits in response to Mr. Bresner's affidavit. Instead, they relied on the correspondence that had been exchanged and the history of the proceedings.

[37] The motion judge held that the onus was on the appellants to establish the existence of such an abeyance agreement on a balance of probabilities, which they failed to do. She found that the correspondence did not contain an agreement to hold the action in abeyance pending the final resolution of the administrative proceedings and that Mr. Bresner provided no details of the terms of any such agreement. The motion judge concluded that at most there was an agreement to hold the action in abeyance until the fall of 1988, and then a common understanding, following the passage of that date, that the action would remain dormant until the OSC completed its hearing.

[38] Counsel for Quebec acknowledged to the Supreme Court of Canada on appeal of the OSC decision that the Ontario action [page355] was on hold until that decision was final, but there was no evidence that GD US counsel had the same understanding. Further, there was no evidence that any defence counsel understood that this hold applied to the CVMQ proceeding, nor did the correspondence contain any reference at all to the CVMQ proceeding.

[39] Former counsel for GD US told the Delaware court in 1989 that this action was pending while the OSC proceeding was ongoing, which Mr. Franch reiterated to that court in 1990. However, the motion judge did not find that these statements supported the appellants' assertion that there was an agreement to hold the Ontario action in abeyance pending the completion of both of the administrative proceedings, including all appeals. Furthermore, she noted that the appellants took no action following the Supreme Court ruling on the OSC decision in 2001 until two years later, when they delivered an amended statement of claim.

[40] The motion judge concluded, based on the record, that at some point the appellants decided not to pursue this action until they had exhausted their claims in the other forums. It was only after they failed elsewhere that they decided to resurrect this action. There is no basis to interfere with this finding by the motion judge. It is supported by the record and contains no palpable and overriding error. Furthermore, the motion judge was correct in making a finding. The parties put a full record before her on the issue of delay. Had there been a serious issue of credibility, especially among counsel as to what had been agreed, a trial of that issue may have been appropriate. However, there was no such issue in this case and the motion judge was entitled to make the findings she did based on the record before her.

[41] The motion judge also correctly rejected the appellants' suggestion that there was an onus on the respondents to move the case forward, or that they had waived their right to object to delay by not doing so. Without an agreement to hold the action in abeyance and to shift the responsibility to move it forward to the respondents, the risk of the consequences of delay remained with the appellants.

[42] The motion judge also addressed the submission that the respondents could not move for dismissal for delay when they were in default of delivering their statements of defence. She found that the respondents were not in default because, after the appellants had granted the respondents a brief indulgence, the appellants never demanded the statements of defence. She also relied on the jurisdiction of the court to stay an action pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[43] The motion judge was correct on these issues. This court has recently discussed the importance of proceeding with litigation in a timely manner and its inherent jurisdiction to control [page356] its own process and to dismiss actions for delay. In Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660, [2007] O.J. No. 3872 (C.A.), at paras. 24 and 25, Sharpe J.A. stated:

Rule 24.01 allows a party to move to dismiss an action for delay where the plaintiff has failed to prosecute the action in a timely fashion in accordance with the rules. Moreover, courts may dismiss actions for delay even when the relevant rules do not mandate it. A court has inherent jurisdiction to control its own process, which "includes the discretionary power to dismiss an action for delay." Housser v. Savin Canada Inc. (2005), 2005 35779 (ON SC), 77 O.R. (3d) 251 at para. 9 (S.C.J.). As the Manitoba Court of Appeal wrote, "The power of a superior court to strike a matter for want of prosecution does not hinge on the niceties of the wording of the rules, but rather flows from the inherent power of the court to prevent an abuse of its own process." Kuhr v. Pearlman (1991), 1991 11776 (MB CA), 76 Man. R. (2d) 67 at para. 16. In at least two cases, this court has characterized lengthy, unexplained delays as "an abuse of the court's process." In Susin v. Baker & Baker, [2004] O.J. No. 723 at para. 7 (C.A), the court wrote that "even if the action could not be dismissed under r. 24.01(1), given all of the circumstances, it could properly be dismissed as an abuse of the court's process." See also Convay v. Marsulex Inc., [2002] O.J. No. 4655 (C.A.).

These rules and cases rest upon an important principle: there is a strong public interest in promoting the timely resolution of disputes. "The notion that justice delayed is justice denied reaches back to the mists of time. . . . For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it": Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307 at para. 146. The interest of litigants involved in the civil justice system in timely justice is obvious. Litigants are entitled to have their disputes resolved quickly so that they can get on with their lives. Delay multiplies costs and breeds frustration and unfairness.

[44] Finally, the motion judge made specific findings of presumptive prejudice to the respondents because of the passage of time, as well as actual prejudice because of the advanced age, poor health and death of critical defence witnesses. The fact that there is considerable documentary evidence as well as some transcripts of viva voce evidence given in prior proceedings was found not to be a complete answer, particularly because some issues, such as statements made by officers of GD US at the time of the 1979 offer and the 1981 agreement, were not previously canvassed. These findings by the motion judge were well-based in the record and are not susceptible to challenge on appeal.

[45] I would dismiss this ground of appeal.

Issue 2: Forum non conveniens

[46] After considering the factors for jurisdiction in Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20, [2002] O.J. No. 2128 (C.A.), the motion judge found that Ontario had jurisdiction simpliciter over [page357] the matters raised in the action. This finding was based on the fact that the appellant minority shareholders had a connection to Ontario. The parties have not appealed from that conclusion. The motion judge then went on to consider whether Ontario was the most convenient forum in which to try the claims. After applying the Muscutt factors for the second aspect of the jurisdictional question, she concluded that Quebec was the most convenient and appropriate forum to try the case and, in the exercise of her discretion, stayed the action on the basis that Ontario was not the forum conveniens.

[47] The appellants challenge the motion judge's exercise of her discretion on the second issue, essentially asking this court to reapply the factors and come to a different conclusion than the one reached by the motion judge. As her decision was a discretionary one, as long as the motion judge considered and applied the correct test and did not misapprehend the evidence, this court will accord it considerable deference.

[48] The appellants argue that Ontario is the most appropriate forum to try this action. They point out that 58.6 per cent of the minority shares in ACL were held by Ontario residents at the time of the transaction; the bulk of the evidence is documentary and is in Ontario; the majority of the parties are in Ontario; the appellants have a juridical advantage in Ontario because the action is now statute-barred in Quebec; and the action would obviate the need to proceed in Delaware.

[49] However, the motion judge considered and rejected each of these arguments. She noted that neither the appellants nor a significant number of current minority shareholders of ACL are residents of Ontario. Although ACL was a public company whose shares were listed on the Toronto and Montreal stock exchanges, it was based in Quebec and the majority of its shareholders were not Ontario residents. All the relevant events occurred in Quebec, or in St. Louis, Missouri, where GD US was located. The respondents' surviving witnesses were all located in Quebec or in the United States. Although copies of relevant documents were available in Ontario, the originals were outside Ontario. The motion judge also considered the opinion of the OSC that the transaction was not connected to Ontario, which was why it declined to impose any discretionary remedy or sanction to protect Ontario capital markets.

[50] The motion judge gave serious and detailed consideration to the issue of loss of juridical advantage and the fact that the action would now be statute-barred in Quebec. She referred to the decision of the Supreme Court of Canada in Amchem Products Inc. v. British Columbia (Workers' Compensation Board), 1993 124 (SCC), [1993] 1 S.C.R. 897, [1993] S.C.J. No. 34, [page358] in which the court held that loss of juridical advantage is a factor to be weighed when identifying the appropriate forum and that a party has a legitimate claim to a juridical advantage in a forum that has a real and substantial connection, but that forum shopping for a juridical advantage is to be discouraged if the forum is otherwise inappropriate.

[51] Addressing the issue of the claimed juridical disadvantage, which was the tolling of the limitation period in Quebec, the motion judge found that there was no reason for the appellants not to have commenced this action in Quebec at the time it was brought in Ontario. They had Quebec counsel representing them in the CVMQ proceeding and they also commenced the Mazarin action in Quebec. She concluded that given these facts, it was not open to the appellants to rely on the tolling of the limitation period in Quebec as a legitimate juridical disadvantage. On the contrary, she noted that it could be said that the respondents would suffer a juridical disadvantage by being deprived of a limitation defence if the action was allowed to proceed in Ontario when it was otherwise not the appropriate forum.

[52] Of equal importance, in my view, is the fact that a number of the respondents clearly advised the appellants back in 1988 that they intended to challenge the choice of forum. Consistent with their overall delay in proceeding with this action, the appellants allowed the jurisdiction issue to lay dormant until 2005, knowing that they were losing their opportunity to litigate the oppression case in Quebec. It is only because of the appellants' choice not to begin an oppression action in Quebec within the limitation period that loss of juridical advantage became a factor in the forum conveniens analysis. As a result, it is not a factor that should carry much weight.

[53] On the issue of avoiding a multiplicity of proceedings, the motion judge also noted that the one claim she did not strike out was an oppression claim against GD US. As a result, it could still proceed in Delaware as that action had been stayed pending the determination of the jurisdiction issue in Ontario.

[54] The motion judge concluded her analysis with some comments about the overall fairness of a finding that Ontario was not the appropriate forum. Weighing all the above factors along with the tenuous connection of the claims to Ontario, the respondents had established that Quebec was the most convenient and appropriate forum. There was also evidence given by the appellants in the Delaware proceeding that they only commenced this Ontario action as a precautionary measure in case they were unsuccessful in their preferred proceedings before the OSC and in Delaware. [page359]

[55] The motion judge fully and carefully considered the jurisdiction issue. There is no basis for this court to interfere with her conclusion that the action should be stayed based on forum non conveniens or her exercise of discretion.

Issue 3: Abuse of process

[56] At the conclusion of her analysis of all the other issues, including delay, forum non conveniens, issue estoppel and whether there was a viable cause of action for oppression, the motion judge found that [at para. 268]:

In this case, the plaintiffs' Ontario action constitutes an abuse of process not only because they attempt to revisit settled issues, but for a number of other reasons that evidence a violation of the fundamental principles of justice underlying the community's sense of fair play and decency.

[57] There were a number of reasons given by the motion judge for this conclusion. First, there was inexcusable delay on the part of the appellants. The appellants were aware of the transaction in 1981, but waited until 1987 to commence this action, then delayed in prosecuting it thereafter until 2003. Second, they appeared to recognize that Ontario was not the appropriate forum because they initially sued and proceeded in Quebec and in Delaware and only issued this claim as a precautionary measure. Third, the major issues in the claim had already been fully investigated and litigated in the other regulatory and judicial proceedings, all of which found that no remedy was available. Finally, subjecting the respondents to another lawsuit in respect of the same series of events that occurred between 1977 and 1982 should not be permitted in the interests of judicial economy in order for the court system to remain accessible to litigants in other cases.

[58] Earlier in her reasons, the motion judge had found that the doctrine of issue estoppel applied to prevent the relitigation of most of the issues in this action by these appellants. However, in addressing the abuse of process argument, the motion judge relied on the principle, enunciated by the Supreme Court of Canada in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, [2003] S.C.J. No. 64, at para. 52, that even where issue estoppel is not available because one of the three preconditions has not been met, the doctrine of abuse of process can still apply to prevent relitigation of the same issues where proceeding would undermine the integrity of the adjudicative process.

[59] In this case, whether or not the claims are barred by issue estoppel, the same issues regarding the actions of the respondents and the reasonable expectations of the minority shareholders have been litigated in several proceedings, as outlined above. The [page360] motion judge made it clear that her decision that the appellants' action was an abuse of process was not dependant on her finding that the conditions for issue estoppel were met in this case. Rather, it was the combination of the inexcusable delay and the inappropriate forum, together with the attempt to repackage the same set of facts and circumstances that have been considered by two securities commissions and by the highest courts in this province and Quebec, as well as the Supreme Court of Canada, which led her to conclude that this action was an abuse of process.

[60] In my view, the motion judge made no error in her analysis or in her conclusion that this action be stayed as an abuse of process. Accordingly, I would dismiss this ground of appeal.

Issue 4: Issue estoppel and availability of a cause of action for oppression

[61] Because I have concluded that this action should be dismissed for delay or, in the alternative, stayed on the basis of forum non conveniens and abuse of process, it is unnecessary for me to decide whether the appellants are precluded from alleging that certain actions of the respondents amount to oppression, either because of issue estoppel or because they must be struck out as disclosing no cause of action. The motion judge addressed these issues, which was appropriate in the event that any of her conclusions were reversed on appeal.

[62] The appellants' position is that they should not be prevented from pursuing a claim for oppression as this claim has not been tried on the merits in any of the prior proceedings. The motion judge effectively precluded the oppression claim by finding that the factual issues that underlie it have already been determined against the appellants and are therefore issue-estopped, combined with findings on the law that parties in the position of the respondents as third- party bidders and majority shareholders owed no statutory obligation or other duty to minority shareholders.

[63] The appellants' position on the appeal of the motion judge's decision on issue estoppel is that of the three requirements for issue estoppel, two are missing in analyzing the concurrence of the various previous proceedings, namely, identity of issues and mutuality of parties. Accordingly, they argue that the motion judge erred in law in finding that the issues were sufficiently similar and that the appellants were bound by the previous decisions.

[64] First, the appellants submit that neither of the regulatory proceedings involved the oppression remedy, meaning that any findings made in those proceedings are irrelevant. Furthermore, they point out that GD US and GD Canada were not parties to [page361] the OSC proceeding and the subsequent appeals, nor did they play a role in the CVMQ proceeding beyond intervening in the final judicial review. Second, the appellants submit that the motion judge erred in fact and law by finding that they were privies to the plaintiff in the Fradet action. They argue that there was no evidence that they had notice of that action, and as a result it could not be concluded that they stood by and allowed it to be fought by someone else. They say that the case of Shaw v. BCE Inc., 2004 12080 (ON SC), [2003] O.J. No. 5481, 42 B.L.R. (3d) 107 (S.C.J.), relied on by the motion judge is distinguishable on the facts. Third, the appellants argue that even if the three conditions for issue estoppel were met in this case, the court should have exercised its discretion not to apply the doctrine because many documents were produced by GD US after the Fradet action, both in the Delaware action in 1989 and at the OSC in 1994. These documents are relevant to the oppression claim and have never been considered in that context.

[65] In conjunction with their position on issue estoppel, the appellants submit that their claim for an oppression remedy should not have been struck out as disclosing no cause of action. The appellants submit that this is a unique situation where a government actor acquired control of a public company by purchasing shares from the majority shareholder under threat of expropriation, and where the two parties acted in concert to the detriment of the minority. They argue that because Quebec had the power to expropriate the shares of ACL, Quebec, through SNA, and GD US together had de facto control of ACL and were therefore de facto affiliates for the purpose of acting in concert in an oppressive manner as defined by the CBCA:

2(2) For the purposes of this Act, (a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and (b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

2(3) For the purposes of this Act, a body corporate is controlled by a person or by two or more bodies corporate if (a) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate; and (b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate. [page362] . . . . .

2(5) A body corporate is a subsidiary of another body corporate if (a) it is controlled by (i) that other body corporate, (ii) that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or (iii) two or more bodies corporate each of which is controlled by that other body corporate; or (b) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate. . . . . .

241(2) If, on an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates (a) any act or omission of the corporation or any of its affiliates effects a result, (b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or (c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.

[66] They submit that the motion judge only considered the claim for oppression in the context of one of the remedies sought, namely, a follow-up offer, but did not consider the oppression claim in a more general or global context. They also submit that the motion judge erred by failing to recognize the reasonable expectation of minority shareholders for fair treatment beyond the requirements imposed on corporate actors by statute.

[67] The appellants have framed their oppression claim in a creative manner in order to overcome both legal impediments and factual findings made in prior proceedings. The motion judge determined that in this case, in the context of the findings in the prior proceedings, the claim should be struck out. The pleadings in this case were struck out in part because of legal barriers to the claim, but also because certain underlying facts for the claim had already been determined and the motion judge found that they were therefore issue-estopped. In other words, this was not the more typical Rule 21 motion in which the pleading is accepted as true and the cause of action is assessed in that context. [page363]

[68] I have concluded that it is neither necessary nor appropriate in the circumstances of this case for this court to come to a final decision on whether the requirements for issue estoppel are met in this case, or on the availability of a cause of action for oppression. On this appeal, the appellants had to challenge the motion judge's findings on issue estoppel because those findings formed a key component of her conclusion that the oppression claim must be struck out. It is the viability of that claim that they wish to preserve. As I stated above, the oppression claim is framed in a creative manner in an effort to address the recognized unfairness that has been perpetrated here, but at the same time to try to overcome the legal impediments to relief because of the identity of the respondents as a third-party bidder and majority shareholder respectively.

[69] In my view, the question of the availability of a claim such as the one made in this case or a similar claim should be left to be decided in a case that has the potential to proceed and be determined. This is not that case. The claim has been struck for delay and alternatively stayed for abuse of process. Furthermore, having concluded that the action should also be stayed as Ontario is not the forum conveniens, it would be unusual for the court to make findings on the legal issues raised in the case.

[70] Whether or not there is full issue estoppel on every relevant issue, and whether or not the oppression claim as framed must be struck as disclosing no cause of action, this action remains an abuse of process. I say this not only because of the delay, but because the issues raised and the underlying factual findings needed to support the legal claims have already been litigated in more than one other proceeding in Canada and decided against the appellants or the position of the appellants.

Issue 5: Costs

[71] The appellants asked the motion judge to order no costs against them because this case is similar to a class action. Applying s. 31 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, by analogy, the appellants argue that this case raised novel questions of law, was a test case and involved a matter of public interest. They also argue that the previous findings of the OSC and the Supreme Court that the appellants have been treated unfairly as minority shareholders, though not illegally, should warrant an award of no costs against them. Finally, the appellants argue that the motion judge should have exercised her discretion to award no costs in order to promote access to justice.

[72] It is well-established that a trial or motion judge's exercise of discretion in awarding costs is one of the issues on which [page364] considerable deference is accorded on appeal. In this case, the arguments the appellants make to this court were made to the motion judge who thoroughly considered and gave full reasons for rejecting them.

[73] The motion judge found that the issues raised were difficult but not novel, and that the interests at stake were no broader than those of the minority shareholders who sought the relief. She decided to take into account the finding of unfair treatment, not by awarding no costs, but by refusing to award substantial indemnity costs in favour of GD US, which had requested costs on the higher scale because of forum shopping and the fact that the allegations had been litigated elsewhere.

[74] The Supreme Court of Canada's decision on costs in Kerr v. Danier Leather Inc., 2007 SCC 44, [2007] 3 S.C.R. 331, [2007] S.C.J. No. 44 supports the approach taken by the motion judge. In that case, similar arguments were made about the importance to the public of issues involving shareholder rights. However, the court viewed the parties as sophisticated commercial actors who knew and could afford the consequences of complex litigation involving the potential for a very substantial award if successful. The court viewed the representative plaintiff in that case as a person who was aware of his potential exposure for costs if he was unsuccessful. The court also dismissed the access to justice argument in the context of this type of shareholder litigation where the stakes are potentially very high and both sides are therefore sufficiently well-funded to engage in a protracted and expensive legal battle.

[75] In the end, the motion judge awarded amounts on the partial indemnity scale substantially lower than those requested by the respondents, observing that the amounts requested by counsel for the respondents were well beyond the reasonable expectations of the appellants.

[76] There is no basis to interfere with the decision of the motion judge to make the normal award that costs follow the result. In the circumstances, the amount awarded was very fair to the appellants.

Conclusion

[77] I would dismiss the appeal with costs. If the parties are unable to agree on the quantum, they may make written submissions within 30 days of the release of these reasons.

Appeal dismissed. [page365]