Executive Summary: Key Legal and Evidentiary Issues

• Court of Appeal overturned findings of liability for repayment under a contractual claim.

• Damages for defamation were also reversed, despite no challenge to the underlying liability.

• Trial judge’s mischaracterization of funds as repayable advances was found to be an error.

• Appellants awarded full costs of the appeal in the agreed amount of $50,000.

• Trial costs were reassessed, and James Bay was ordered to pay $400,000 to the appellants.

• Cost rulings emphasized proportionality and reconsidered success in light of the appeal outcome.

Background and parties involved

The case involved a dispute between James Bay Resources Limited, a Canadian resource company, and Mak Mera Nigeria Limited (also known as Mak Mera Limited) along with its representative, Adewale Olorunsola (a.k.a. Wale Sola). James Bay had initially succeeded at trial, with the judge ordering Mak Mera to repay US$405,000, characterizing it as a contractual advance, and awarding $200,000 in damages for defamation against both defendants. The trial judge also awarded significant costs to James Bay, totaling $309,401.91.

Issues on appeal

The defendants appealed the trial decision, particularly the finding related to the US$405,000 repayment and the quantum of defamation damages. They did not dispute the finding of defamation itself. The appellants argued that the trial judge had erred in interpreting the nature of the US$405,000, treating it as an advance repayable under contract when it was not. They also challenged the appropriateness of the $200,000 defamation damages award.

Decision of the Court of Appeal

On June 20, 2025, the Court of Appeal allowed the appeal. It held that the trial judge erred in requiring Mak Mera to repay the US$405,000, as this was not properly supported by the parties' agreement. The court also reversed the award of $200,000 in defamation damages, reducing it to nominal damages despite the appellants having accepted the finding of liability. The Court of Appeal awarded the appellants $50,000 in appeal costs as agreed by the parties.

Reassessment of trial costs

Following the appeal decision, the court invited submissions on the trial costs. The appellants sought either full reimbursement of their own trial costs or a significant cost shift in their favour, arguing that James Bay’s limited success did not justify the original trial cost award. James Bay asked for the original cost award to stand or, alternatively, for a modest offset of $50,000.

After reviewing the submissions, the Court of Appeal reassessed the trial costs, taking into account the appellants’ success on appeal, the significantly reduced damages, and the proportionality principle. The court concluded that the appropriate cost order was for James Bay to pay $400,000 in trial costs to the appellants—substantially reversing the earlier cost award at trial.

Conclusion and outcome

The appeal resulted in a significant reversal of the trial decision. The appellants prevailed on both key legal and financial issues, resulting in the elimination of major liabilities and a shift in cost responsibility. The case highlights the importance of accurate contractual interpretation, the limits of defamation damages when success is limited, and the role of proportionality in cost awards. James Bay was ultimately required to pay both appeal and substantial trial costs to the successful appellants.