The Applicants applied for Costs following a substantive decision in which they successfully struck two of three Notices to Arbitrate issued by the Respondents (the “Struck Notices”). The Struck Notices were based on arbitration clauses in two separate Unanimous Shareholder Agreements (“USAs”), while the third Notice, tied to an Option Agreement, was upheld.

The Applicants argued that they were successful and sought costs under Column 2 of Schedule C, along with disbursements. The Respondents contended that the outcome was mixed and that each party should bear their own costs.

Justice Mah reviewed Rules 10.31 and 10.33, emphasizing that while costs are discretionary, they should be awarded in accordance with principles of fairness, equity, and proportionality. Justice Mah affirmed the default Rule that the substantially successful party is presumptively entitled to costs and where success is mixed and neither party is substantially successful, the Court may decline to Award Costs.

Mah J. concluded that the Applicants were the substantially successful party. He found that the core issue, whether a majority shareholder’s exercise of a share-purchase option extinguishes a minority shareholder’s right to arbitrate oppression claims under a USA, was resolved entirely in the Applicants’ favour. The proposed arbitrations under the USAs, which the Applicants avoided, were complex, high-stakes, and potentially damaging due to the nature of the allegations.

While the Respondents succeeded on two procedural issues related to the Option Agreement Arbitration, Justice Mah characterized those as “relatively minor” and insufficient to offset the Applicants’ overall success.

Justice Mah rejected the Respondents’ argument that Column 1 Costs were appropriate due to the declaratory nature of the relief sought. Exercising discretion pursuant to Rule 10.33, Mah J. accepted that Column 2 was justified based on the matter’s complexity and significance. The Applicants were awarded Schedule C Column 2 Costs, plus disbursements as set out in their draft Bill of Costs.