Executive Summary: Key Legal and Evidentiary Issues

• The applicants’ interlocutory relief application was dismissed for insufficient evidence and lack of standing.

• Solicitor-client costs of $329,586.32, subject to assessment, were awarded against the applicants.

• The applicants failed to file costs submissions by the deadlines despite multiple opportunities.

• Arguments for special treatment of costs in oppression actions were rejected as unsupported by precedent.

• The chambers judge’s discretion in awarding costs was upheld, with no error in principle found.

• Permission to appeal the costs order was denied, and the applicants were ordered to pay costs of the application.

Background and facts of the case

Just Biofiber Corp. (JBF Corp) and Perkins Property Investments Ltd. (Perkins) are two of three plaintiffs suing Just Biofiber Structural Solutions Corp. (JBFS Solutions) for oppression and other causes of action. In May 2024, the applicants sought relief including an attachment order and a Mareva injunction. On February 24, 2025, the chambers judge dismissed the application in its entirety, finding that Perkins had not proved it was a shareholder of JBFS Solutions and thus lacked standing, JBF Corp had provided no evidence of its reasonable expectations, and neither applicant adduced proof of alleged undervalue transactions or specific harm or prejudice. The judge found no prima facie case for oppression and set deadlines for costs submissions, with the applicants’ deadline being March 21, 2025.

Procedural history and costs order

On March 11, 2025, the applicants’ former counsel filed a notice of withdrawal. The March 21 deadline passed without costs submissions from the applicants. On April 23, 2025, the chambers judge’s assistant contacted the former counsel, who confirmed their withdrawal and stated no submissions would be made. New counsel filed a Notice of Change of Representation on June 2, 2025. The chambers judge’s assistant emailed the applicants on June 10 and June 30, 2025, regarding costs submissions. As of July 2, 2025, no submissions had been filed. In a costs endorsement dated July 3, 2025, the chambers judge noted the lack of submissions and reviewed the applicants’ unsubstantiated allegations of fraud, deceit, and bad faith. He awarded the respondents solicitor-client costs against Just Biofiber in the requested amount of $329,586.32, subject to assessment-officer certification, and found Perkins jointly and severally responsible for the same costs, also subject to assessment-officer certification, with a deadline of July 11, 2025, to request certification.

The same day the costs endorsement was issued, the applicants’ new counsel became aware of the June 30 correspondence and wrote to the Court indicating their intention to make costs submissions. On July 7, 2025, the applicants provided their costs submissions, but the chambers judge denied their request for a fiat permitting the submissions to be filed. The applicants filed a Notice of Appointment for Assessment of Costs on July 23, 2025. The applicants sought permission to appeal the Costs Endorsement only.

Application for permission to appeal

Permission is required to appeal a costs order under Alberta Rules of Court, Alta Reg 124/2010, Rule 14.5(1)(e). The applicant must demonstrate: (i) a good arguable case having sufficient merit to warrant scrutiny by the court; (ii) the issues are of importance both to the parties and in general; (iii) the costs appeal has practical utility; and (iv) no delay in proceedings will be caused by the costs appeal.

The applicants alleged two legal errors in the Costs Endorsement. First, they argued that costs awards in oppression actions require unique consideration because such actions often involve serious allegations that may not be substantiated, and awarding enhanced costs for unsubstantiated allegations would chill oppression litigation. The only authority cited was a paragraph from McGregor v Wawanesa Mutual Insurance Company, 2025 ABKB 352, which the Court found did not establish a legal principle. The Court agreed with the respondents that there is no precedent for applying unique or different factors when considering enhanced costs in oppression actions.

Second, the applicants argued that the chambers judge erred by grounding the award of solicitor-client costs partly on the absence of costs submissions. The Court found it was not evident that the judge awarded enhanced costs solely because no submissions were made; rather, the absence of submissions was part of the procedural history. The Court noted that both interpretations—using the absence of submissions as a factor in awarding enhanced costs or in awarding the amount claimed by the respondents—find parallels in cited precedents.

The applicants also argued that the quantum of costs ordered contributed to the importance of the appeal, citing 1985 Sawridge Trust v Kennedy, 2017 ABCA 368. The respondents countered that the quantum alone is not a reason to grant leave, citing Cold Lake Industrial Park GP Ltd v Abt (Estate), 2022 ABCA 23, and Serfas v Spady, 2024 ABCA 314. The Court agreed with the respondents’ position.

Outcome and ruling

The Court found the applicants had not satisfied the requirements for permission to appeal, as the proposed appeal did not engage arguable issues of merit or public importance. The application for permission was denied. There was no suggestion of improper conduct by the applicants in the Court of Appeal. The applicants were ordered to pay costs of the application on Column 3 of Schedule C of the Alberta Rules of Court. The successful parties were the respondents, and the amount awarded in their favor was $329,586.32, subject to assessment or certification as previously ordered. No exact amount was altered by this decision.