Executive Summary: Key Legal and Evidentiary Issues

• SHP Capital, LLC applied under Rule 6-2(7) of the Supreme Court Civil Rules to add five individuals as new respondents to a long-dormant oppression petition and to advance new claims against them.
   
• Three of the proposed new respondents, Walter Berukoff, Mark Donahue and Denis Gallagher, opposed the application on the basis that the new claims were stale and insufficiently connected to the original petition.
   
• Timeliness under section 227(4) of the Business Corporations Act was a central issue, since oppression claims must be brought promptly regardless of the applicable limitation period.
   
• Prejudice to the Application Respondents was presumed from the expiry of the limitation period, though no direct evidence of actual litigation prejudice was presented.
   
• Justice Milman found the new claims were not frivolous but concluded the delay in bringing them was lengthy, inordinate, and inadequately explained.
   
• Ultimately, the court held that adding the new respondents would not be just and convenient given the delay, the altered nature of the claim, and the apparent tactical purpose behind it.
   

Facts of the case

SHP Capital, LLC filed a petition on April 5, 2022 against Medipure Holdings Inc., Medipure Pharmaceuticals Inc., and three individual directors, alleging that Medipure's affairs were conducted in a manner oppressive to SHP as a senior secured creditor and putative investor. SHP had entered into stock purchase agreements in July 2021 to buy shares in Medipure for US$8.35 million, paying US$5.1 million to Medipure and US$3.3 million to GCB Capital LLC, but received no shares because a cease trading order was in effect. SHP also extended loans to Medipure, initially US$2 million in October 2021 and later increased to US$11 million by March 2022. After the petition was filed, SHP did not advance it; instead, it pursued bankruptcy and later CCAA proceedings against Medipure, ultimately acquiring most of Medipure's assets in October 2022. Two years later, on December 2, 2024, SHP filed an amended petition dropping its earlier requests for interim relief and derivative action leave, and instead advancing new claims of breach of fiduciary duty and duty of care against five individuals, including Walter Berukoff, Mark Donahue, and Denis Gallagher, none of whom had yet been formally added as parties. SHP filed the application to add them as respondents on June 19, 2025. Three of the proposed respondents, the Application Respondents, opposed the application; two others were served but filed no response.

Policy and legislative provisions at issue

The application turned on Rule 6-2(7) of the Supreme Court Civil Rules, which permits the court to add a party where there may exist a question or issue connected with the relief claimed or the subject matter of the proceeding, and where doing so would be just and convenient. Because the proposed new respondents would be added after the expiry of a limitation period, section 22 of the Limitation Act was also engaged, as it permits new parties to be added to an existing claim despite an expired limitation period where the new claim relates to or connects with the original one. Separately, section 227(4) of the Business Corporations Act requires that oppression claims be brought in a timely manner, a requirement the court noted is distinct from, and assessed differently than, compliance with a limitation period. The court also considered Rule 22-4(4), which requires a party to file a notice of intention to proceed after a period of inactivity in litigation, a requirement SHP had not fulfilled before filing its amended petition.

Reasoning and analysis

Justice Milman applied the two-part test drawn from the authorities, including Smithe Residences Ltd. v. 4 Corners Properties Ltd. and Ridley Island Energy Export Facility Limited Partnership v. Trigon Pacific Terminals Limited. On the first branch, the court found that SHP's new claims were sufficiently connected to the subject matter of the original petition and were not "bogus subordinate claims," despite procedural irregularities such as SHP's failure to file a notice of intention to proceed. The court therefore concluded the claims were real rather than frivolous. On the second branch, however, the analysis shifted against SHP. The court rejected SHP's argument that delay should be measured under the framework in McIntosh v. Nilsson Bros. Inc., reasoning that oppression claims are subject to a stricter timeliness requirement independent of the limitation period. Applying that standard, the court found the delay was lengthy and inadequately explained, since SHP already possessed the relevant knowledge of Medipure's financial irregularities by 2022. While the court gave limited weight to presumed prejudice given the absence of direct evidence, it found that the amended claims had fundamentally changed in character, moving away from governance relief toward a damages claim that now included repayment of loans with interest. Citing the Supreme Court of Canada's guidance in Wilson v. Alharayeri regarding the "scent of tactics" in oppression claims, the court also found the application appeared aimed at reaching new sources of recovery after SHP's earlier remedies proved insufficient.

Ruling and overall outcome

Weighing the delay, the diminished connection between the amended claims and the original petition, and the tactical dimension of the application, Justice Milman concluded that it would not be just and convenient to add the proposed new respondents and refused the application. As the successful parties, Walter Berukoff, Mark Donahue, and Denis Gallagher were awarded their costs, though the judgment does not specify a quantified amount.