Superior Court of Justice – Ontario (Commercial List)
Court File No.: CV-20-00639997-00CL Date: 2022-05-16
IN THE MATTER OF VIVIAN GROUP INC. AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 248 OF THE ONTARIO BUSINESS CORPORATIONS ACT, R.S.O. 1990, c. B.16
RE: DAVID ANDREW VIVIAN and THE 2017 VIVIAN FAMILY TRUST
AND:
YOUSIF AL-ALI, SUPER-PUFFT SNACKS CORP., VIVIAN GROUP INC., SUPER-PUFFT FOODS LTD. and 1610830 ALBERTA LTD.
BEFORE: Kimmel J.
COUNSEL: David Hager, for the Plaintiffs Email address: david@hagerlaw.ca
Ronald Moldaver, for the Defendants Yousif Al-Ali and Super-Pufft Snacks Corp. Email address: qcmoldaver@rogers.com
Danny Nunes, for Ernst and Young, the Trustee in Bankruptcy of Vivian Group Inc., Super-Pufft Foods Ltd. and 1610830 Alberta Ltd. Email address: danny.nunes@dlapiper.com
HEARD: March 25 and April 1, 2022
Endorsement
[1] The plaintiffs have brought two motions.
The Motion to Extricate Certain Bankrupt Defendants
[2] By their first motion, the plaintiffs seek to discontinue the action against certain of the corporate defendants that have filed for bankruptcy, namely Vivian Group Inc. (“Vivian Group”), Solis Foods Corporation Inc. (formerly Super-Pufft Foods Ltd., “Solis”), and 1610830 Alberta Ltd. (together the “bankrupt companies”) against whom the action is stayed.
[3] The parties have co-operated to facilitate a process for the sale of the assets and/or the restructuring of the bankrupt companies. This process was overseen by the trustee in bankruptcy for those companies, Ernst & Young Inc. (the “trustee”). When the Approval and Vesting Order in respect of the sale of the assets and business of the bankrupt companies was signed on November 17, 2021, the court’s endorsement expressly provided that nothing in that order “shall affect the rights, and remedies, if any, of the parties to the Cooperation Agreement in respect of facts, matters, allegations and relief asserted by them … [or] the ability of any parties to the Cooperation Agreement to assert new relief in the litigation”.
[4] No order to continue has been sought by either the plaintiffs (in respect of their claims) or by the trustee (in respect of the counterclaim). The bankrupt companies have been determined to have no assets after distributions to secured creditors.
[5] The plaintiffs and the trustee consent, and the other defendants take no position, to the bankrupt companies being extricated from this action, to the corresponding amendments to the statement of claim, and to the dismissal of the counterclaim by Vivian Group. The trustee does not wish to pursue the counterclaim. The only issue upon which the court’s direction was sought was with respect to the proper mechanic for achieving this extrication of the bankrupt companies, whether it be a discontinuance “without costs” under r. 23 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, or a with prejudice and without costs dismissal.
[6] The court determined that the desired consistency and finality would be best achieved through a with prejudice and without costs dismissal of the action as against the bankrupt companies and of the Vivian Group’s counterclaim against the plaintiffs, with the corresponding paragraphs of the statement of claim, being paragraphs 4, 5, 6, and 52 – 61, to be struck. The court so orders. This issue was determined on the first day. Counsel for the trustee was then excused, and he did not participate in the balance of the hearing.
The Motion to Amend the Statement of Claim as Against the Remaining Defendants
The Original Statement of Claim and Status of the Action
[7] The plaintiffs, David Vivian and the 2017 Vivian Family Trust, and the remaining defendants, Yousif Al-Ali and Super-Pufft Snacks Corp., are the beneficial owners of the business formerly operated by the bankrupt companies. Vivian and Yousif Al-Ali (“Al-Ali”) were both directors and/or officers and direct and/or indirect shareholders of various of the bankrupt companies. The plaintiffs are also unsecured creditors of the bankrupt companies.
[8] The original statement of claim issued on April 23, 2020 (the “original statement of claim”) claimed damages for various alleged causes of action including breach of contract, bad faith in contractual performance, inducing breach of contract, libel, and punitive damages as against the remaining defendants. The pleaded contracts at issue include a share purchase agreement dated April 4, 2019; a shareholders agreement dated April 4, 2019; an employment agreement between Vivian and Solis dated April 3, 2019; guarantees of up to $5 million that were subsequently provided in favour of HSBC Canada to support loans made to the now bankrupt companies; and a pledge agreement signed by the plaintiffs in or about December 2019.
[9] The original statement of claim did not seek specific damages for oppression but had a heading “Oppressive and Unlawful Conduct of Al-Ali and Super-Pufft Snacks.” Paragraphs 24 to 51 under that heading contain the particulars of this allegedly oppressive and unlawful conduct, including an express plea at paragraph 50 that “Vivian and the Trust plead and rely upon the provisions of section 248 of the Ontario Business Corporations Act (Ontario), R.S.O. 1990 c. B.16 (the “OBCA”).”
[10] Pleadings closed in July 2020, affidavits of documents were exchanged in August and November 2020, and examinations for discovery took place in March and April 2021.
The Proposed Amendments to the Statement of Claim
[11] The remaining defendants object to the proposed amendments to the original statement of claim that now include a claim for compensation pursuant to s. 248 of the OBCA. They also object to the further particulars that have been added to the section of the statement of claim dealing with the alleged oppressive and unlawful conduct. These further particulars include a specific delineation of the reasonable expectations of the plaintiffs said to have been defeated by the conduct of the remaining defendants.
[12] Further particulars are also provided of alleged breaches (or inducing of breaches) of the shareholders agreement and the employment agreement, of alleged misrepresentations made, and an alleged failure to act in good faith in conjunction with those agreements and the guarantees and pledge agreement as against the remaining defendants. There is also a specific allegation about the improper use of a casting vote by Al-Ali under the shareholders agreement, which is said to have caused specific harm to the plaintiff(s).
[13] The proposed amendments that are objected to also include allegations about events that arose after the issuance of the original statement of claim. Some amendments have to do with the bankruptcy of the bankrupt companies and how that was orchestrated.
The Plaintiffs’ Position
[14] This is a pleadings motion. The court must grant leave to a party to amend its pleading under r. 26.01 unless it will result in prejudice to the responding parties that cannot be compensated for by costs or an adjournment. The facts pleaded are taken to be true and provable and the court is to assess the tenability of the claim on that basis. However, an amendment will not be granted if it is scandalous, frivolous, abusive, an abuse of the court’s process, or discloses no reasonable cause of action. Evidence is not required to support the allegations. The plaintiffs cite various authorities for these propositions, which are not disputed by the remaining defendants.
The Remaining Defendants’ Position
[15] The proposed amendments in this case are not objected to on the basis that they have been asserted outside of a limitations period or on any other grounds of potential prejudice to the remaining defendants (although the defendants ask that their right to plead limitations and time based defences, among all other defences, be preserved if leave to amend is granted).
[16] The proposed amendments are objected to, for the most part, on two bases. First, that the pleaded claim for oppression, as now enhanced by the proposed amendments, cannot co-exist in law with the already asserted cause of action for breaches of contracts by Solis. Second, the remaining defendants argue that other aspects of the asserted claims address harm alleged to have been committed against the now bankrupt companies and would only properly be advanced as a derivative claim on behalf of those companies, for which no leave has been sought or granted.
[17] The remaining defendants acknowledge that new causes of action are not alleged by the proposed amendments but argue that the court should not perpetuate the pursuit of claims that are untenable at law by allowing further amendments to them. A subsidiary objection is that the particulars of the oppression claim are insufficient, although it was acknowledged that would not be a basis to deny the amendments since there are other avenues through which further particulars could be obtained.
Summary of Outcome
[18] If it were a fait accompli that the claims intended to be served by the proposed amendments will fail, the court should not permit an amendment that will simply perpetuate an untenable claim. However, that is not the case. It is not a fait accompli that the oppression remedy claim or other pleaded causes of action against the remaining defendants will fail. The proposed amendments are not just in furtherance of existing but entirely untenable claims that can be said at this stage to be doomed to fail. Further, the remaining defendants seek to compartmentalize the various allegations into specific causes of action that they then argue are untenable, but the claims do not exist in silos and the existing and proposed allegations do not serve only one cause of action.
[19] The plaintiffs’ motion to amend their statement of claim is granted, with costs and upon the terms detailed at the end of this endorsement.
Analysis of Objections to the Pleading Amendments
[20] More detailed reasons for why the objections to the proposed amendments did not result in the dismissal of the plaintiffs’ motion to amend the statement of claim are detailed in the remainder of this endorsement. They are focused on the three conceptual areas of objection, rather than the individual paragraphs containing the proposed amendments, consistent with the manner in which this motion was argued.
The Oppression Remedy Claim
[21] I do not agree with the defendants’ assertion that the oppression remedy claim has no chance of success at law.
[22] The main argument that the remaining defendants raise against the proposed amendments is that they are predicated on asserted rights and expectations said to go beyond the strict terms of the contracts entered into between the parties.
[23] It is argued that the oppression remedy is not available in these circumstances: In J.S.M. Corporation (Ontario) Ltd. v. The Brick Furniture Warehouse Ltd., 2008 ONCA 183, 234 O.A.C. 59, at para. 62 (adopted by the Alberta Court of Appeal in Shefsky v. California Gold Mining Inc., 2016 ABCA 103, 616 A.R. 290), the Ontario Court of Appeal held that “[t]he reasonable expectations of parties to commercial agreements negotiated at arms length must be those reasonable expectations that find expression in the agreements negotiated by the parties.” J.S.M. Corporation is an example of a case in which the oppression remedy was pleaded alongside other claims, but the oppression remedy claim did not succeed.
[24] The remaining defendants argue that the plaintiffs are seeking to recast the claims in relation to breaches of the employment agreement into oppression claims against them. They maintain that is improper and that non-parties to the employment agreement cannot be sued for breaches of that agreement (e.g., Solis’ failure to pay the agreed amount for without cause termination). They contend that the oppression remedy does not protect an expectation that a director or officer would cause the company to fulfil (and not breach) its contracts.
[25] The defendants are asking that these claims be kept in the silo of a breach of contract claim and that the rules of privity of contract be applied. However, oppression claims are fact and context specific. The course of conduct and the broader context is the foundation of the oppression claim in this case, not a single breached employment contract. Further, it is not the action of a director failing to cause the company to perform its agreement, but rather an allegation that the director caused the company to breach its agreement, that is part of the foundation for the oppression claim. Although the proposed amendments build upon the alleged (and inducement of) breaches of Vivian’s employment agreement by Solis, the plaintiffs rely on the interrelationship between the employment agreement and the shareholders agreement, and a course of conduct said to have been orchestrated by Al-Ali that is said to have set in motion and perpetuated the alleged oppressive conduct.
[26] The fact that the plaintiffs’ allegations may be in service of more than one cause of action pleaded (e.g. inducing breach of contract and oppression), is not an issue that must be resolved at the pleadings stage. To the contrary, a plaintiff is permitted under r. 25.06(4) to plead alternative, even inconsistent, causes of action and is not required to elect which it will pursue at the pleadings stage.
[27] Furthermore, claims can be advanced by a complainant in different capacities (e.g., in this case the plaintiff Vivian complains as an employee, shareholder and guarantor): see Abbasbayli v. Fiera Foods Company, 2021 ONCA 95, at para. 42.
[28] Likewise, claims can be asserted against a defendant in different capacities: See ADGA Systems International Ltd. v. Valcom Ltd., 1999 CanLII 1527 (ON CA), 1999 CarswellOnt 29, at paras. 38 – 39 (e.g., in this case, against Al-Ali as a director, officer and/or shareholder of both Solis and Super-Pufft).
[29] Directors and officers can be held personally accountable for their actions, independent of the company’s responsibility for them: see Schembri v. Way, 2012 ONCA 620, 112 O.R. (3d) 241, at paras. 27 – 31. Directors can also be found to be personally liable for inducing the company to breach its contract with others (whether it be the employment contract, the shareholders agreement, or another agreement): see Mark v. Westend Development Corp., 2002 CarswellOnt 2231, at paras. 17 – 18; 369413 Alberta Ltd. v. Pocklington, 2000 ABCA 307. While the remaining defendants argue against this, citing Said v. Butt, [1920] All E.R. Rep. 232, adopted by the court in ADGA (at paras. 11 – 12, 18), exceptions are recognized in those cases, such as was found in Mark, for breaches benefiting the personal interests of the individual director/defendant not established to have been in the best interests of the corporation.
[30] There is a spectrum of what type of conduct constitutes oppression. The burden of proof for establishing unfair prejudice or disregard of interests (which are more focused on the result of the conduct on the complainant) is less rigorous than the burden to establish oppression (which is more focused on the state of mind of the “oppressor” and/or the character of the conduct itself, which often arises from an abuse of corporate power). But even oppression, while described as “burdensome, harsh and wrongful,” does not require proof of bad faith: see Waxman v. Waxman, 2002 CanLII 49644 (Ont. S.C,), at paras. 1508 and 1521 – 1522, aff’d 2004 CanLII 39040 (Ont. C.A.); C.I. Covington Fund Inc. v. White, 2000 CanLII 22676 (Ont. S.C.), at para. 21.
[31] The oppression remedy protects reasonable expectations and interests, rather than legal rights, particularly in a closely held corporation: see BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at paras. 61 – 64.
[32] What constitutes reasonable expectations for purposes of the oppression remedy was extensively canvassed by the Supreme Court of Canada in BCE (at paras. 59, 61 – 78).
a. Fundamentally, a stakeholder has a reasonable expectation of fair treatment.
b. Reasonable expectations may not be solely found in written agreements between the parties.
c. A protected expectation must be one that could be said to have been part of the “compact” of the shareholders. This may be determined with regard to general commercial practice, the nature of the corporation, the relationship between the parties, past practice, steps the claimant could have taken to protect itself, representations and agreements.
d. The reasonableness of any particular expectation asserted must be considered and evaluated objectively, with regard to the "facts of the specific case, the relationships at issue, and the entire context, including the fact that there may be conflicting claims and expectations."
e. Reasonable expectations are not static and may evolve over time.
[33] Having regard to these broader concepts that the oppression remedy embodies, it is not appropriate at this stage of this proceeding for the court to foreclose the further enhanced allegations that the plaintiffs wish to assert in support of their existing claim for an oppression remedy, some aspects of which have been further enhanced by the intervening failure of the bankrupt companies.
[34] While the bankruptcy of certain defendants has most likely led the plaintiffs to emphasize the oppression claims against the remaining defendants over the related claims against those bankrupt companies for breaching their contracts with the plaintiffs, that does not necessarily render the oppression claims associated with those breaches untenable. Those alleged breaches are part of a larger picture.
Allegations About Al-Ali’s Use of the Casting Vote
[35] The remaining defendants also object to the assertion of improper use of the casting vote (granted to Al-Ali under the shareholders agreement) to terminate Vivian’s employment under the employment agreement on the basis that the plaintiffs admitted under oath during discovery that this casting vote was exercised in accordance with the terms of the shareholders agreement. The plaintiffs counter that this fails to recognize the totality of their position, which is that it was nonetheless exercised in breach of an implied term that the casting vote would only be used to cause steps to be taken that were in accordance with Vivian’s employment agreement (e.g., termination without cause resulting in the payment of severance in accordance with the contractual formula rather than unfounded assertions of termination for cause with no severance payment).
[36] The improper use of the casting vote is not being raised for the first time in the context of the proposed amendments to the statement of claim. This assertion was made in the original statement of claim and is being amplified or particularized in the proposed amendments.
[37] Even if the specific relief sought from the alleged improper use of the casting vote to terminate Vivian’s employment and not pay him any severance is foreclosed by a discovery admission (which the court need not decide for purposes of this motion), the plaintiffs may still assert at this stage of the proceeding that the use of that casting vote (even if technically in accordance with Al-Ali’s right to do so under the shareholders agreement), was nonetheless part of a pattern of conduct that was oppressive or unfairly prejudicial to, or that unfairly disregarded, the reasonable expectations of the plaintiffs and/or that the company was induced to breach the employment agreement. Oppressive conduct does not necessarily have to be unlawful or illegal or in breach of contractual obligations.
[38] A secondary issue that was raised in connection with the new pleas associated with the use of the casting vote was whether it is proper for the court to consider any evidence (discovery or otherwise) on a pleadings motion. That is not the deciding factor in this case, but the plaintiffs themselves acknowledge that the court should not grant leave for an amendment that is incapable of proof (see Schembri, at para. 33). Thus, while unusual, I would not foreclose the possibility of evidence being considered on a r. 26 motion in the appropriate circumstances. Nor is evidence expressly precluded (or stated to require leave), as is the case under other rules, for example r. 21. However the discovery admission in this case is not determinative given that the use of the casting vote is alleged to be part of a broader course of conduct.
The “Phantom” Derivative Action
[39] The plaintiffs claim to have been harmed not only because of the alleged mismanagement of the now bankrupt companies (which harmed all shareholders and creditors) but because of their unique position as shareholders in a closely held company who were excluded from various activities leading up to the bankruptcy that have increased their exposure under guarantees that they provided for the debt of certain of the bankrupt companies.
[40] The remaining defendants seek to pigeonhole the allegations of mismanagement (by Al-Ali) and failure to pay invoices (by Super-Pufft Snacks Corp.) as a derivative claim that could only be advanced on behalf of Super-Pufft Foods Ltd. (now Solis), one of the bankrupt companies. However, the plaintiffs’ allegations are not restricted in that way.
[41] I do not agree with the remaining defendants’ assertion that these claims can only be asserted by the plaintiffs if they seek and obtain leave to bring a derivative action on behalf of the now bankrupt companies. The remaining defendants also argue that the claims about additional exposure under the guarantees are speculative because the guarantees have not been called upon yet. That is not a reason to deny a pleading amendment. That issue can be adjudicated at trial, at which time if it is still speculative and premature the trial judge may dismiss it.
[42] The plaintiffs cite Rea v. Wildeboer, 2015 ONCA 373, in acknowledgment of the need to differentiate between derivative actions (on behalf of a company) and an oppression remedy claim brought by a complainant personally (to maintain the rigours of the rule in Foss v. Harbottle (1843), 67 E.R. 189, under the statutory regime): see Rea, at paras. 18 – 19, 35).
[43] It is acknowledged by the plaintiffs that a shareholder does not have a personal cause of action for a wrong done to the company for diminution of share value: see Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 2002 CanLII 41710 (ON CA), 61 O.R. (3d) 786 (C.A.), at para. 12 (Ont. C.A.). However, the plaintiffs cite Malata Group (HK) Limited. v. Jung, 2008 ONCA 111, 89 O.R. (3d) 36, at paras. 26, 29 – 40 and Di Silvestro v. Di Silvestro, 2021 ONSC 6341, at paras. 59 – 62 and 64 – 69 for the point that derivative actions and oppression claims can co-exist in the same proceeding and arising out of the same facts; they are not mutually exclusive. In order to sustain a claim of oppression, the impugned conduct must be alleged to have harmed the complainant personally and not just the body corporate (of which the complainant is a shareholder): see Rea, at paras. 33 –35.
[44] If a complainant’s personal and financial interests are alleged to have been unfairly affected or disregarded by the unlawful conduct of the remaining defendants, just because that unlawful conduct might be actionable by the company does not mean that it is plain and obvious that the oppression remedy must fail and that the claim must be pursued solely as a derivative action. A derivative action and an oppression remedy claim are not necessarily mutually exclusive, particularly where the impugned conduct is alleged to have been to the detriment of both the corporation and its shareholders.
[45] The unique (and inequitable) harm alleged to have been suffered by the plaintiffs from the increased exposure under their guarantees is said to have been the result of the (mis)conduct of the remaining defendants in relation to the bankrupt companies.
[46] The remaining defendants assert that even if the claims are not entirely derivative directors of a company do not have an obligation to protect the unique interests of each stakeholder. Rather, their duty, where interests diverge, is to the corporation and that is the only interest that a stakeholder can reasonably expect a director to protect: see Shefsky, at paras. 42, 47 – 48, quoting BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, at paras. 59 and 66. However, oppression claims are highly fact specific. What duties were owed by and to whom, and what reasonable expectations might have flowed from those duties, cannot be determined on a pleadings motion.
[47] The plaintiffs further point out that the allegations that the remaining defendants object to because they are said to constitute a derivative action are also relied upon by them to support their claims for bad faith in the performance of the shareholders agreement and punitive damages (e.g., paragraphs 46(a) to (n) of the proposed amendments). This provides an additional justification for permitting the proposed amendments.
[48] While they might have supported a derivative action if one had been brought, that does not foreclose reliance upon these allegations as part of the course of conduct that supports the assertions of bad faith and/or punitive damages (as well as oppression, as discussed above).
The Onus is High to Resist a Pleading Amendment
[49] Parties opposing a motion for leave to amend a statement of claim have a very high burden of “impossibility” of success, which has not been met in this case. The proposed amendments to the statement of claim, generously read as they must be, are not entirely untenable or doomed to fail. The amendments should be permitted to proceed to an adjudication on their merits.
[50] The burden is even greater in a case such as this where the proposed amendments are simply adding particulars to already pleaded causes of action that have not been struck. The plaintiffs may not ultimately succeed in these claims but that is not a reason to deny leave to amend the statement of claim at this stage. The full factual context will need to first be developed before that determination can be made.
Disposition of Motion to Amend the Statement of Claim
[51] The plaintiffs’ motion to amend their statement of claim is granted, with costs (discussed in more detail below).
[52] The proposed amendments to the statement of claim may not be as focused as the remaining defendants would like and may be repetitive in that they contain recycled allegations in support of different causes of action. However, the court is not going to re-write the pleading for the plaintiffs to improve upon it. The basic elements and foundational material facts in support of the causes of action asserted are pleaded. The amendments are in service of this requirement for all pleadings.
[53] Given the stage of this proceeding (an initial round of discoveries having been completed), this should not be done as a Fresh Amended Statement of Claim. The plaintiffs should show the amendments on the face of the document.
[54] The remaining defendants may deny the newly pleaded facts and deny that they support the causes of action asserted against them, and they will have leave to do so in an amended statement of defence and counterclaim to be delivered within 35 days of this endorsement. The permitted amendments to the statement of claim shall not constitute issue estoppel or otherwise bar any defence that the defendants may wish to raise to such, including without limitation, effluxion of time defences.
[55] The plaintiffs shall have the right to deliver a further amended reply and defence to counterclaim within 20 days of delivery of the amended statement of defence and counterclaim, if so advised.
[56] The remaining defendants also requested that the court permit an additional 7 hours of discovery of the plaintiffs (in the aggregate) arising out of the amendments. This was not objected to by the plaintiffs, although it was suggested that it should await the outcome of another motion that is scheduled for October 4, 2022 before an associate judge to deal with issues arising out of the first round of discoveries. I agree that this deferral of any further discoveries until after that previously scheduled discovery motion has been decided is appropriate. The further discovery rights shall be reciprocal, with both sides having an additional aggregate of 7 hours to examine the other after the discovery motion has been determined and orders made have been complied with.
[57] No specific amount was requested, and no order is made at this time, for the defendants’ costs of the further amendments and discoveries flowing from the now permitted amendments to the statement of claim. The remaining defendants are not foreclosed from asking for those incremental costs for having to respond to the amended statement of claim, if any, at a later date.
Costs and Final Disposition/Terms
[58] Both the plaintiffs and the remaining defendants asked for partial indemnity costs if successful on the motion to amend the statement of claim. That is the appropriate scale of costs. However, the parties disagree about the appropriate quantum of partial indemnity costs.
[59] The plaintiffs claim all-inclusive partial indemnity costs of $17,020.00 for the motion to amend the statement of claim. They consider this motion to be critical to the relief they seek in this action, particularly in light of the intervening bankruptcy of certain of the corporate defendants. The remaining defendants’ partial indemnity costs claimed are only $7,261.38. Even at full indemnity, the defendants’ costs were far less, totalling only $12,102.30, despite the higher hourly rate of counsel for the remaining defendants. Plaintiffs’ counsel maintains that the additional time and hours devoted to this motion was justified given what was at stake for the plaintiffs.
[60] Costs are discretionary under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43. A non-exhaustive list of factors that the court should consider in the exercise of its discretion are set out in r. 57.
[61] No doubt the issues were important to the plaintiffs and were complex. The defendants’ position on this motion required consideration of many cases under the various alleged causes of action, despite the fact that there were no new causes of action being raised.
[62] However, proportionality and the reasonable expectation of the remaining defendants as to what their costs exposure would be if they lost are also relevant considerations under r. 57. The costs outline of the defendants’ lawyer is one benchmark of what they might reasonably have expected to pay.
[63] In the exercise of my discretion under s. 131 of the Courts of Justice Act and having regard to the relevant considerations under r. 57, I fix the partial indemnity costs of the plaintiffs in the all-inclusive amount of $10,000.00.
[64] The pleading amendments were allowed. There was no divided success. Although it was suggested by the defendants that costs should be in the cause rather than payable now, that is not the norm and I see no reason to depart from the norm in this case. The court is required to fix costs for each step in a proceeding and the costs should be ordered payable forthwith (within 30 days) unless there is some demonstrated reason to make a different costs order. The remaining defendants are ordered to pay the plaintiffs partial indemnity costs of $10,000.00 for the motion to amend the statement of claim within 30 days of this endorsement.
[65] No costs were sought, nor are any awarded, for the dismissal of claims against and by the bankrupt companies.
[66] This endorsement and the orders and directions contained in it shall have immediate the effect of an order of this court without the necessity of formal entry. If either side wishes to take out a formal order they may do so by following the procedures set out in r. 59.
Kimmel J.
Date: May 16, 2022