Executive Summary: Key Legal and Evidentiary Issues

• Liability for shareholder oppression and breach of corporate governance duties arising from exclusion of a co-owner from management and decision-making in a closely held corporation.
• Proof of civil fraud through concealed facts, sham sale arrangements, and misleading documentation in the transfer of a valuable property.
• Validity and consequences of contract rescission and restoration of corporate title to the property following an impugned real estate transaction.
• Proper use and challenge of a certificate of pending litigation (CPL), including related motions, appeals, and counterclaims over alleged impropriety of the CPL.
• Assessment of “reprehensible, scandalous or outrageous” litigation and pre-litigation conduct justifying elevated (substantial indemnity) costs.
• Allocation and apportionment of substantial indemnity costs among multiple defendants, including joint and several liability and the impact of Rule 49 offers to settle.

Background and parties

This case arises out of a dispute over the ownership and management of a real estate holding corporation, 2425779 Ontario Inc. (“242”), and the sale of its principal property. The plaintiff, Inder Goyal, was a co-owner and stakeholder in 242. The individual defendants, Mirza Chaudhary and Noreen Asghar, were also involved in the company’s affairs and in the events leading to the contested sale. Two further defendants, 2623559 Ontario Inc. (“262”) and its principal, Wagdy Bishay, became involved as the purchaser entity and buyer in the impugned transaction, and a lawyer, Jack Frymer, was connected to the transfer documentation. The litigation ultimately generated a principal liability judgment (Goyal v. Asghar, 2025 ONSC 5195) and a subsequent costs endorsement (Goyal v. Asghar, 2026 ONSC 745).

Facts of the underlying dispute

The core factual dispute concerned how a valuable property owned by 242 came to be sold and how Mr. Goyal was treated in relation to both the corporation and that sale. The court found that Mr. Chaudhary engaged in a pattern of conduct that effectively shut Mr. Goyal out of the management of 242 and denied him his rights to participate in key decisions, including any decision to sell the property. This conduct occurred “deliberately and flagrantly, through concerted effort and over some period of time,” and was described as a visible departure from proper conduct and fair dealing. In parallel, Mr. Chaudhary orchestrated the sale of 242’s property to 262, using Mr. Bishay as the buyer and involving long-time professional associates in the transaction. The court found that Mr. Chaudhary privately arranged for Mr. Bishay to make an unconditional, uninformed offer with a short closing timeline and an artificially low purchase price. He ensured that Mr. Bishay used another long-time contact, Mr. Akram, as counsel, attended the initial meeting with that counsel, and had his own contact, Mr. Frymer, act on the sale. Transfer documents were prepared containing false statements about the consideration paid, and the entire sale was concealed from Mr. Goyal until after it had concluded. These steps led the trial judge to characterize the transaction as a sham sale designed and executed by Mr. Chaudhary, in which Mr. Goyal was intentionally kept in the dark. In addition, Ms. Asghar refused for a sustained period to pay her share of expenses related to the property, notwithstanding a court order requiring such payments. She only complied at the start of trial. The court viewed this as a willful failure to comply with a court order and described it as flagrantly abusive of the court’s process rather than a permissible form of “rough justice” motivated by perceived hardship.

Oppression and fraud findings

On the oppression claim, the court held that Mr. Chaudhary had oppressed Mr. Goyal’s interests in 242. By denying Mr. Goyal the right to participate in corporate management and in decisions regarding the sale of the property, and by concealing and engineering a transaction that undercut the company’s true value, Mr. Chaudhary’s conduct met the standard of oppression under the corporate law framework. The judge specifically labeled his behaviour as deliberate, deceitful, wrongful, and a “wrong of the most serious sort.” The oppression analysis focused on how minority or co-owner expectations of fair participation in a closely held corporation were defeated by unilateral actions that diverted corporate opportunities and value. On the fraud claim, the trial court found that Mr. Chaudhary had concealed important facts from Mr. Goyal, attempted to take advantage of him, and falsely portrayed the property sale as a bona fide, arm’s-length transaction when, in reality, it was a fraud. The trial reasons concluded that his lies and concealment were a marked departure from ordinary standards of decent behaviour. However, those findings of fraud were made against Mr. Chaudhary and Ms. Asghar, not against Mr. Bishay or 262. The court expressly declined to find that Mr. Bishay or 262 were liable in fraud.

Contract rescission and property consequences

From the outset of the proceeding, Mr. Goyal sought rescission of the sale contract and return of the property to 242. 262 initially resisted that relief and simultaneously contested both the propriety and continued registration of the certificate of pending litigation (CPL) against the property. Over time, however, 262’s position shifted. After its attempts to challenge the CPL failed in various motions and an appeal, 262 amended its defence in January 2020 to consent to rescission of the sale and restoration of the property to 242. The judge characterized this change as a capitulation and a clear victory for Mr. Goyal on the key contract issue. Ultimately, the court found that Mr. Goyal had been successful as against 262 on the contract rescission question, even though he did not succeed on his standalone fraud claim against 262 and Mr. Bishay. This meant that while 262 avoided liability for fraud, it could not avoid the implications of having to unwind the impugned sale and live with costs consequences associated with that relief.

Procedural history, motions, and counterclaims

The litigation featured a significant interlocutory history, including an “omnibus motion” argued before Chalmers J., multiple CPL-related motions and an appeal, and a later motion by Mr. Goyal to compel the sale of the property. In the omnibus motion, Mr. Chaudhary had sought an interim winding-up of 242 and a sale of the property. The court declined to grant that relief, both because an interim winding-up was not appropriate and because it was unavailable or unnecessary on the jurisprudence. At the same hearing, Mr. Goyal sought orders that would have removed Ms. Asghar as an officer of 242 and vested exclusive management in him. Although that precise relief was not granted, the court enjoined Mr. Chaudhary from holding himself out as a signing officer or director of 242, and the eventual trial reasons vindicated Mr. Goyal’s allegations about the impropriety of both Mr. Chaudhary’s and Ms. Asghar’s conduct in 242’s affairs. In late 2021, Mr. Goyal brought a separate motion to compel a sale of the property, which resulted in a costs award against him at that time. In the subsequent costs endorsement, he asked the trial judge to reverse or effectively neutralize that earlier costs order by including its amount in his trial costs. The judge refused, explaining that doing so would amount to sitting on appeal of a prior costs ruling and permitting a collateral attack on it. Multiple counterclaims complicated the proceedings. Mr. Chaudhary and Ms. Asghar advanced a counterclaim against Mr. Goyal, and 262 brought a counterclaim asserting that the CPL on the property was improperly granted. All of these counterclaims were ultimately dismissed at trial. The judge noted that 262 repeatedly advanced essentially the same CPL-based grievance in various phases of the litigation, only to see it rejected each time.

Costs principles applied

After the liability and remedies decision, the court turned to costs in the 2026 endorsement. Exercising its discretion under section 131 of the Courts of Justice Act and rule 57.01 of the Rules of Civil Procedure, the court considered the result achieved, the amounts in issue, the complexity and importance of the case, the indemnity principle, and the reasonable expectations of the unsuccessful parties. The judge also relied on the guidance in Apotex Inc. v. Eli Lilly Canada Inc., which stresses that a court must critically assess the specific factors and then “step back” to ensure the overall result is fair and reasonable. Crucially, the court examined whether the conduct of the unsuccessful parties was “reprehensible, scandalous or outrageous,” the threshold for awarding elevated costs (substantial or full indemnity) outside the context of formal Rule 49 offers. The trial judge concluded that Mr. Chaudhary’s and Ms. Asghar’s conduct—both in orchestrating the sham sale and in refusing to comply with a clear court order regarding property expenses—met this standard. By contrast, the judge saw nothing comparable in Mr. Goyal’s conduct that would justify ordering him to pay elevated costs, even though some of his fraud allegations against certain defendants ultimately failed.

Costs as between Mr. Goyal and Chaudhary/Asghar

Because Mr. Goyal was fully successful against Mr. Chaudhary and Ms. Asghar on his oppression and fraud claims, and because their counterclaim failed entirely, he was presumptively entitled to his costs of the action from them. He sought full indemnity costs, contending that their behaviour was exceptionally reprehensible. While the court accepted that their conduct warranted elevated costs, it determined that substantial indemnity, not full indemnity, was appropriate. The judge rejected the notion that merely advancing positions strongly opposed by the plaintiff, or refusing to “concede” points at trial, automatically supports full indemnity. Instead, the court focused on the seriousness of the underlying oppressive and fraudulent conduct, combined with the sustained non-compliance with a court order, as justifying substantial indemnity. On the question of quantum, Mr. Goyal claimed $404,977.25 on a substantial indemnity basis, consisting of $346,522.73 in legal fees, $45,047.96 in HST, and $13,406.56 in disbursements. The defendants argued for a 30% reduction as excessive and outside their reasonable expectations, pointing to the lower costs they had incurred. The judge declined to impose such a discount, noting that Mr. Goyal, as the party prosecuting complex oppression and fraud claims against multiple defendants and leading much of the trial work, could reasonably be expected to incur higher legal costs. However, the court did trim some specific items: it reduced the amount claimed for preparing costs submissions (which it found somewhat high) and disallowed a Westlaw research charge as a recoverable disbursement on the basis that it is ordinarily part of law firm overhead. After these adjustments, the court fixed Mr. Goyal’s substantial indemnity costs at $385,353.72, made up of $330,000 in fees, $42,900 in HST, and $12,453.72 in disbursements. Mr. Chaudhary and Ms. Asghar were ordered, jointly and severally, to pay that full amount. The costs of the omnibus motion before Chalmers J. were included within this figure on a substantial indemnity basis, because the judge found that the overall outcome of that motion and the later trial vindicated Mr. Goyal’s positions.

Costs as between Mr. Goyal and 262/Bishay

The costs relationship between Mr. Goyal and 262/Bishay was more nuanced. Mr. Goyal had failed to establish fraud against 262 and Mr. Bishay, and he also faced their counterclaim alleging that the CPL was improperly registered. On the other hand, he succeeded in having the sale contract rescinded and the property restored to 242, and he successfully defended against 262’s counterclaim on the CPL, which had been rejected repeatedly in various proceedings. The judge concluded that, overall, Mr. Goyal was successful as against 262/Bishay on the central contract rescission issue and in defeating their CPL-based counterclaim, whereas they were not successful on any issue against him. Accordingly, the court determined that some costs should be paid by 262 to Mr. Goyal. 262 and Mr. Bishay attempted to invert the usual costs framework by relying on the fact that they had defeated the fraud claim and by invoking Rule 49 offers to settle. They argued that the unsuccessful fraud allegation should typically trigger substantial indemnity costs in their favour, and that their offers had effectively matched what Mr. Goyal ultimately received, warranting harsh cost consequences against him. The court rejected these submissions. It emphasized that an unsuccessful fraud claim does not invariably demonstrate “reprehensible, scandalous or outrageous” conduct by the claimant, and nothing about Mr. Goyal’s pursuit of that claim rose to that level. On the offers, the court found that while they might have resolved some substantive issues, they offered nothing in the way of costs to Mr. Goyal. Because the trial outcome included an entitlement to some costs in his favour, his result was better than the offers. As a result, the formal Rule 49 cost consequences did not operate against him, and the judge declined to use Rule 49.13 to craft an extraordinary costs regime treating 262/Bishay as if they were successful plaintiffs.

Allocation and apportionment of costs

In light of the mixed but substantially plaintiff-favourable outcome, the judge crafted an allocation that reflected degrees of responsibility. Mr. Goyal was awarded substantial indemnity costs of $385,353.72 for the action. Mr. Chaudhary and Ms. Asghar were held jointly and severally liable for the entire amount. Separately, 262 was ordered to bear 35% of those substantial indemnity costs, quantified at $134,873.80, on a joint and several basis for that portion with Mr. Chaudhary and Ms. Asghar. The court declined Mr. Goyal’s request to “top up” earlier partial indemnity costs awards from the CPL motions so as to bring them to a substantial indemnity level at the trial stage, particularly because those earlier awards had been made against 262/Bishay, not against Mr. Chaudhary and Ms. Asghar, who were not parties to those CPL proceedings. The judge also refused to disturb the previous costs order from the 2021 motion to compel sale. Stepping back, the court concluded that this allocation—substantial indemnity costs reflecting the seriousness of the conduct, tempered by modest reductions and a partial reallocation to 262 but preserving full joint and several liability of Mr. Chaudhary and Ms. Asghar—was fair, reasonable, and consistent with the unsuccessful parties’ reasonable expectations in the circumstances.

Overall outcome and monetary consequences

Taken together, the liability judgment and the subsequent costs endorsement produced a clear substantive and financial victory for the plaintiff, Mr. Goyal. On the merits, he established oppression and fraud against Mr. Chaudhary and Ms. Asghar, defeated all counterclaims, and obtained rescission of the property sale with a return of the real estate to 242. On costs, he secured a substantial indemnity award of $385,353.72 for his legal expenses in the action, with Mr. Chaudhary and Ms. Asghar jointly and severally liable for that full amount and 262 jointly and severally liable for 35% of it ($134,873.80). The precise amount of any separate damages or monetary compensation awarded in the main judgment cannot be determined from the costs endorsement alone, but the total quantified costs award in favour of the successful party, Mr. Goyal, is fixed at $385,353.72, in addition to whatever non-costs monetary or property relief was granted in the underlying 2025 decision.