Executive Summary: Key Legal and Evidentiary Issues

• Extended Play Media Group Inc. and two individual applicants sought leave to appeal an interim costs order made in the context of oppression proceedings.
   
• Subsection 242(4) of the Canada Business Corporations Act requires a respondent seeking interim costs to demonstrate financial difficulty, a link between that difficulty and the alleged oppression, and a strong prima facie case.
   
• Gogallop Studios Pty Ltd. established that its financial difficulty stemmed from three factors: withheld financial information, denial of a board seat despite equity and intellectual property ownership, and unilateral control over invoicing and expense approvals by the applicants' CFO.
   
• Leave to appeal under articles 242(4) CBCA and 31 C.C.P. requires showing that the judgment determines part of the dispute or causes irremediable injury, and that the appeal serves the interests of justice and proportionality.
   
• Reduction of the claimed interim costs from $285,000 to $50,000 reflected the Superior Court's exercise of discretion after weighing the parties' financial circumstances.
   
• Appellate deference to a first-instance judge's discretionary costs determination proved decisive in dismissing the leave application.
   

Facts of the case

Extended Play Media Group Inc., along with Bruce Edwin McMillan and Ralph Emmanuel Faraggi, applied for leave to appeal a June 2, 2026 judgment of the Superior Court of Quebec (Michelin J.). That judgment had granted in part an application by Gogallop Studios Pty Ltd. and ordered the impleaded parties — Equestriad Studios Inc., Equussports Inc., and the Registrar of the Register of Personal and Movable Real Rights — to pay the respondent $50,000 solidarily as an interim order for costs under subsection 242(4) of the Canada Business Corporations Act. The order arose within ongoing oppression litigation between the parties. The respondent had originally sought interim costs of $285,000.

Policy and legislative provisions at issue

The interim costs order turned on subsection 242(4) CBCA, which the Superior Court applied by requiring the respondent to establish that it was in financial difficulty, that this difficulty arose from the alleged oppression, and that it had a strong prima facie case. The leave application itself was governed by articles 242(4) CBCA and 31 C.C.P., under which an applicant must show that the underlying judgment determines part of the dispute or causes irremediable injury, and that granting leave would serve the interests of justice while respecting the principle of proportionality.

Reasoning and analysis

The Superior Court judge had found that the respondent established a strong prima facie case of oppression based on three factors: the applicants' failure to provide financial information about the impleaded parties, the denial of a board seat to the respondent in one impleaded party despite its ownership of shares and intellectual property, and the absence of independent oversight over invoicing and expense approvals, which the applicants' CFO controlled unilaterally. The judge also concluded, based on the financial information filed, that the respondent could not generate revenue and lacked sufficient means to bring the matter to trial, and that this financial difficulty related to the alleged oppressive conduct.

On appeal, Baudouin J.A. found that the underlying judgment neither determined part of the dispute nor caused irremediable injury to the applicants, even accounting for their argument that interim costs might not be recoverable after a final judgment and that the impleaded parties had limited financial capacity. The Superior Court judge had already addressed this point, noting that even if one impleaded party — referred to in the decision as "JV Corp" — had limited capacity rather than an inability to pay, she exercised her discretion in light of the parties' financial situations to order $50,000 in interim costs. Baudouin J.A. held that deference was owed to that discretionary exercise and identified no error of law in the judge's findings on oppression or on the parties' financial capacities.

Ruling and overall outcome

Baudouin J.A. dismissed the application for leave to appeal, concluding the applicants had not shown that leave should be granted and that the interests of justice weighed against it. Gogallop Studios Pty Ltd. was the successful party, and the Court of Appeal awarded it legal costs on the leave application; the decision does not specify a dollar amount for those costs.