The Quebec Court of Appeal has upheld a Superior Court judge’s order for the impleaded parties to pay, solidarily, $50,000 to the respondent as interim costs under s. 242(4) of the Canada Business Corporations Act, 1985 (CBCA).
In Extended Play Media Group Inc. c. Gogallop Studios PTY Ltd., 2026 QCCA 1097, the parties were involved in oppression litigation.
On June 2, 2026, Justice Janet Michelin of the Quebec Superior Court partly granted the respondent’s application and awarded it interim costs.
Under s. 242(4) of the CBCA, the judge determined that the respondent established financial difficulty arising from alleged oppression and a strong prima facie case of oppression, given:
- the applicant’s failure to provide financial information regarding the impleaded parties
- their refusal to offer the respondent a board seat in one of the impleaded parties despite its ownership of shares and intellectual property
- the lack of independent oversight in the applicants’ process to issue invoices and approve significant expenses between the companies, all overseen by the chief financial officer
Based on the financial information submitted, the judge added that the respondent had proven that it could not generate any revenue, that it lacked enough means to bring this case to trial on the merits, and that its financial difficulty was apparently related to the alleged oppressive conduct.
The applicants applied for leave to appeal against the judgment. They argued that reimbursement of the payment of interim costs would be unlikely after a final judgment and that the impleaded parties had limited financial capacities.
Quebec Court of Appeal upholds interim costs
Deferring to the exercise of the judge’s discretion, the Quebec Court of Appeal denied the application for leave to appeal.
The appeal court ruled that the interests of justice weighed against granting such leave. The appeal court saw no legal error in the determination of the existence of an oppression situation at this stage and the parties’ financial capacities.
The appeal court explained that the judgment did not determine part of the dispute or irremediably injure the applicants.
The appeal court noted that the judge exercised her discretion to award $50,000 in interim costs upon considering the parties’ financial situation, including an impleaded party’s limited capacity to pay such costs.
Lastly, the appeal court awarded legal costs to the respondent.
Previous appeal court cases
Here are some other appellate court decisions in Canada.
In an action arising from investments in an oil and gas producing zone (the Sparky K Formation) in east central Alberta since 2004, the Alberta Court of Appeal issued a June 1 decision affirming a chambers judge’s refusal to strike the claim for delay.
Last December, the Ontario Court of Appeal dismissed a seller’s appeal of a trial judge’s interpretation of a share purchase agreement provision, which addressed one of three potential trigger events to accelerate the buyers’ payment of the maximum earn-out.
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