Executive Summary: Key Legal and Evidentiary Issues

• Central dispute involved unpaid invoices for frozen seafood supplied by Toppits Foods Limited to 2141354 Ontario Ltd. and whether the evidence was sufficient to justify summary judgment.
• The adequacy of evidence proving the existence and terms of the underlying contracts, beyond proof of invoices and non-payment, was critical to the outcome of the summary judgment motion.
• Credibility concerns and gaps in the factual record led the court to conclude that a full trial, rather than summary judgment, was required to resolve the contractual issues.
• The appropriate scale of costs (partial vs. substantial indemnity) turned on whether the defendants’ Rule 49 offers to settle represented a meaningful compromise or merely demanded complete capitulation.
• Overlap in work between the defence of the corporate defendant and the dismissal motion for the individual defendant raised issues about double recovery of legal costs.
• The court had to apportion and fix reasonable partial indemnity costs for both motions, taking into account proportionality, duplication of work, and the importance and moderate complexity of the motions.

Facts of the case

Toppits Foods Limited supplied frozen seafood products to 2141354 Ontario Ltd., which operated under the name Heng Sing. The business relationship gave rise to a series of eight invoices issued by Toppits for frozen seafood delivered to 214. Those invoices were sent by Toppits, received by 214, and remained unpaid. BDO Canada Ltd., acting in its capacity as trustee in bankruptcy of the Estate of Toppits Foods Limited, commenced an action to recover those unpaid amounts from 214 and from an individual defendant, Ms. Yan Na Li, who was the principal of 214. The defendants were represented by the same law firm and filed a joint statement of defence.

Procedural background and motions

In the litigation, BDO pursued a motion for summary judgment against the corporate defendant, 214. The summary judgment motion was designed to obtain judgment without a full trial, relying on documentary evidence showing delivery of seafood products, issuance of invoices, receipt of those invoices by 214, and non-payment. In parallel, Ms. Li brought her own motion seeking an order that the action against her personally be dismissed. Although BDO opposed 214’s position on the summary judgment motion, it took a different stance with respect to Ms. Li. Before Ms. Li’s motion record was finalized, BDO’s counsel informed defence counsel that BDO would consent to an order dismissing the action against Ms. Li, leaving only the question of who should bear the legal costs of her dismissal motion.

Decision on the summary judgment motion

The court had previously released written reasons on February 12, 2026, dismissing BDO’s summary judgment motion against 214. In the costs reasons, the judge explained the underlying evidentiary issues that had driven that earlier decision. While there was evidence that invoices were issued, received and remained unpaid, there were gaps in the record concerning how the contracts for the sale of frozen seafood were actually formed, and related credibility issues that could not be reliably resolved on a paper record alone. Because the evidentiary deficiencies and credibility questions went to the core of contract formation and liability, the judge concluded that these issues required determination at a full trial rather than on summary judgment. The court therefore characterized BDO’s summary judgment motion as a legitimate, good-faith attempt to resolve a commercial dispute efficiently, but ultimately one that could not succeed given the moderate complexity of the issues and the need for viva voce evidence at trial.

Costs arguments and Rule 49 offers

Following the dismissal of the summary judgment motion and the pending dismissal of the action against Ms. Li, the parties turned to costs. The defendants, having been successful on both motions, sought their costs from BDO. 214 asked for its costs of the summary judgment motion on a partial indemnity basis up to the date of its offer to settle and on a substantial indemnity basis thereafter. Ms. Li made a similar request regarding her dismissal motion. The foundation of their request for elevated (substantial indemnity) costs was an offer to settle pursuant to Rule 49.10, dated August 13, 2025. That offer proposed that the summary judgment motion be completely dismissed, and included a term that there would be no costs. A similar offer existed for Ms. Li’s position: she offered to consent to dismissal of the action against her without costs. The defendants argued that these offers were more favourable to BDO than the outcome at the hearing and therefore triggered enhanced cost consequences. The judge disagreed with that characterization. In the court’s view, offers that essentially required the plaintiff to capitulate completely on the motion—agreeing to full dismissal in favour of the defendants—did not constitute significant compromise. The addition of a “no costs” term did not transform the offers into genuine concessions. As such, the court held that the defendants’ Rule 49 offers did not justify awarding substantial indemnity costs.

Assessment of costs for the corporate defendant

Turning to quantum, the court accepted that some level of costs should be paid by BDO to 214 as the successful party on the summary judgment motion, but only on the usual partial indemnity scale. The judge noted the importance of the motion to both sides and assessed its complexity as moderate, not minimal. Having reviewed 214’s bill of costs, the court fixed a reasonable amount of fees at $15,000, added HST of $1,950, and allowed disbursements of $979.63. This resulted in a total costs award of $17,929.63 in favour of 214 for the summary judgment motion, payable by BDO within 60 days.

Assessment of costs for the individual defendant

The court then considered costs associated with Ms. Li’s dismissal motion. A key issue was the significant overlap between the work done for Ms. Li and that done for 214. Both defendants were represented by the same law firm; the motions involved the same witnesses and documents, and Ms. Li was produced as the representative of 214 in the action. The only additional element in Ms. Li’s motion was the legal argument that she was not personally liable for any obligations of 214. Since much of the legal work for Ms. Li was essentially the same as for 214’s defence on summary judgment, the court emphasized that the defendants were not entitled to double recovery. The judge accepted that some additional work was needed to prepare the materials and obtain an order dismissing the claim against Ms. Li, particularly given that BDO had signalled consent in advance but formal documentation remained necessary. Nonetheless, the court found that any incremental costs not already captured in 214’s cost award were modest. On a partial indemnity basis, the court assessed Ms. Li’s fees at $1,500, added HST of $195, and included the court filing fee of $339, for a total of $2,034 payable by BDO within 60 days.

Overall outcome and financial consequences

There was no discussion of insurance policy wording or specific policy clauses in this decision; the case centred on unpaid commercial invoices, evidentiary sufficiency on summary judgment, and procedural cost consequences, not on insurance coverage or policy interpretation. In the result, the corporate defendant 214 and the individual defendant Ms. Li were the successful parties on the motions addressed in this costs decision. BDO’s summary judgment motion against 214 was dismissed, and the action against Ms. Li was effectively brought to an end by consent, subject only to the court’s ruling on costs. The court ordered BDO, in its capacity as trustee in bankruptcy of the Estate of Toppits Foods Limited, to pay $17,929.63 in costs to 214 for the summary judgment motion and $2,034 to Ms. Li for her dismissal motion, for a combined total of $19,963.63 in monetary awards in favour of the successful defendants.