Executive Summary: Key Legal and Evidentiary Issues

• Former employees of Hyper Hippo allegedly breached obligations under their respective employment agreements, which contained non-disclosure and work product ownership provisions (NDOAs), by developing a competing game, Gold and Goblins, using proprietary information and computer code.

• AppQuantum, the game's publisher, is alleged to have known or ought to have known that Redcell was misusing Hyper Hippo's confidential and proprietary information during the development, testing, and publishing of the game.

• Defendants sought security for costs of approximately $760,000, arguing Hyper Hippo lacked exigible assets, but the court found Hyper Hippo had sufficient financial resources including approximately $8.5 million in cash and $15 million in total assets.

• Hyper Hippo's amended notice of civil claim expanded relief sought to include transfer of ownership of Gold and Goblins and voiding of related contracts, with AppQuantum estimating Hyper Hippo's overall damages claim at approximately $140 million.

• Trial adjournment was granted after the court determined the November 2025 amendments constituted material changes requiring additional document discovery, examinations, and expert evidence preparation.

• Ongoing disputes over document production, discovery adequacy, and the plaintiff's evolving pleadings — including the proposed withdrawal of copyright and "visuals" claims — complicated trial readiness for all parties.

The underlying dispute

Hyper Hippo Entertainment Ltd. is an online videogame and software development company known for its successful "AdVenture" games series, including AdVenture Capitalist and AdVenture Communist. Four of its former employees — Andrew Doll, Navjote Sandhu, Mikael Pomerleau, and Stephen Williams — departed the company between July 2020 and February 2021. Hyper Hippo alleges that while still employed, these individuals began planning and establishing a competing videogame and software development business starting in or around December 2019. By July 2020, they registered Redcell Games General Partnership, and by December 2020, Redcell Games Inc. was incorporated, with each personal defendant holding 25% of its shares and serving as a director.

The employment agreements and alleged breaches

Each of the personal defendants had signed employment agreements containing provisions addressing non-disclosure of Hyper Hippo's proprietary and confidential information and providing that ownership of any work product and developments created during employment vested in Hyper Hippo, referred to in the proceedings as NDOAs. Upon departing the company, each individual signed a departure letter agreeing to the continuing effect of certain provisions in the employment agreement / NDOA, and agreeing to return Hyper Hippo property to it. Hyper Hippo alleges the personal defendants breached obligations owed to it under their respective employment agreements and that they breached fiduciary duties by using its computer code and other proprietary information to develop a game called Gold and Goblins: Idle Miner to compete with it.

Gold and Goblins and AppQuantum's involvement

By September 2020, Redcell GP had contacted AppQuantum Publishing Ltd., a company that carries on business publishing and marketing video games, regarding possible collaboration on Gold and Goblins. By January 2021, Redcell contracted with AppQuantum regarding publication and marketing of the game. Gold and Goblins proved commercially successful, earning roughly USD $3 million by March 31, 2021 and approximately USD $7 million by April 20, 2021. Hyper Hippo alleges that AppQuantum knew or ought to have known that Redcell GP and Redcell were misusing its confidential and proprietary information during the development, testing, and publishing of the game, and that by participating with that, AppQuantum became a party to the alleged misuse.

The commencement of litigation and counterclaims

On August 13, 2021, Hyper Hippo filed its notice of civil claim. The defendants denied all allegations and, on November 2, 2021, both Redcell and AppQuantum each filed a counterclaim against Hyper Hippo, seeking damages for unlawful interference with economic relations, injurious falsehood, loss of profits, and alleged violations of section 52 of the Competition Act, R.S.C., 1985, c. C-34. Hyper Hippo denied all allegations in the counterclaims.

The security for costs application (2023 BCSC 1064)

In January 2023, both the Redcell defendants and AppQuantum applied for orders requiring Hyper Hippo to post security for costs totalling approximately $760,000 — with $446,505.95 sought by the Redcell defendants and $316,329.86 sought by AppQuantum. They argued Hyper Hippo was a B.C. company with no real property or exigible assets in BC, that it had experienced a decline in revenue and overall portfolio performance, and that its consolidated financial statements were insufficient to demonstrate which assets were held specifically by the plaintiff. Justice Shergill applied the test from Citizens for Foreign Aid Reform Inc. v. Canadian Jewish Congress, which requires the court to determine whether it appears the company will be unable to pay the defendant's costs if the action fails, and if so, whether it has exigible assets of sufficient value to satisfy an award for costs. The court found that the applicants failed to provide sufficient evidence to support the estimated costs for experts, which comprised the bulk of their bills of costs, and that excluding the expert reports reduced each bill of costs to about $100,000. The court further found that Hyper Hippo's consolidated financial statements demonstrated a growing business with approximately $31.7 million in revenue for the fiscal year ending July 31, 2022, total assets of approximately $15 million (of which $8.5 million was held in cash or equivalents), liabilities of $6.2 million, and an undrawn credit facility with the Royal Bank of Canada worth about $3 million. The uncontroverted evidence was that approximately 90% of Hyper Hippo's assets were held by Hyper Hippo and its 100% owned subsidiary Hyper Hippo Publishing Ltd., both B.C. companies. The court concluded that the defendants failed to establish a prima facie case and that, even if they had, Hyper Hippo demonstrated it had more than enough in exigible assets held or controlled by the plaintiff to satisfy an award for costs. Both applications for security for costs were dismissed. No specific monetary amount was ordered against Hyper Hippo.

The protracted discovery process

Document discovery proved extensive and contentious. Hyper Hippo produced its initial list of documents on June 19, 2023, but refused to produce copies of listed documents until a confidentiality order was in place. A consent confidentiality order was eventually pronounced on February 29, 2024. The Redcell defendants produced their initial list on September 1, 2023, and AppQuantum followed on September 28, 2023. Both sides produced multiple amended lists over subsequent years. Hyper Hippo criticized the Redcell defendants for producing an "underinclusive" list that included snapshots of Slack messages between the personal defendants rather than producing the messages in native format, and for inexplicably delaying production of Gold and Goblins source code even after the confidentiality order had been pronounced, forcing Hyper Hippo to apply for an order compelling production of source code, which was granted June 14, 2024. The Redcell defendants, for their part, complained that Hyper Hippo's representative for discoveries, CEO Mr. Fisher, was not properly prepared or able to answer questions, technical ones in particular, resulting in numerous information requests and making the discovery process inefficient and cumbersome.

The amended notice of civil claim and evolving pleadings

On November 26, 2025, Hyper Hippo filed an amended notice of civil claim that added new factual allegations, including that the defendants had used Hyper Hippo's proprietary information and computer code in the visuals and game design of Gold and Goblins, that the personal defendants solicited Hyper Hippo employees for employment, and that they failed to transfer their interest in Gold and Goblins to Hyper Hippo. The amended claim also expanded the relief sought to include declaratory relief, a request for an order that the Redcell defendants transfer their interest, right, and title in Gold and Goblins to Hyper Hippo, voiding of any contracts made by the Redcell defendants concerning Gold and Goblins, and claims for general damages and loss of opportunity. Then, on January 16, 2026, Hyper Hippo delivered a proposed further amended notice of civil claim that would narrow the scope of its claim by withdrawing its breach of copyright claim and striking "visuals" from the new elements added in the amended notice of civil claim.

The application to adjourn trial (2026 BCSC 333)

On January 20, 2026, AppQuantum applied to adjourn the trial, which was set for June 1, 2026 for 25 days, and asked that it be rescheduled to the earliest mutually convenient date for 35 days. The Redcell defendants supported the application. They argued the case was not ready for trial because the pleadings were not yet settled, document discovery and examinations for discovery were not yet completed, and it was not possible to properly finalize expert evidence within the remaining time. AppQuantum estimated Hyper Hippo may be claiming damages of about $140 million and noted that between 8 and 10 expert reports were expected at trial. Hyper Hippo opposed the adjournment, arguing that the amended pleading did not actually expand the case in the way that the defendants alleged, and that any new trial date would likely be at least 18 months distant for a 35-day trial, causing substantial prejudice while the defendants continued to be able to deal with Gold and Goblins. Associate Judge Bilawich applied the test from Navarro v. Doig River First Nation, 2015 BCSC 2173, balancing the interests of justice, including the reasonableness of the request, the timeliness, potential prejudice, and the right to a fair trial. The court found the grounds for adjournment were reasonable, that the November 2025 amendments to the claim constituted a material change which appeared to justify additional document discovery, examination for discovery, and development of additional expert evidence, and that the prejudice to AppQuantum and the Redcell defendants if the trial was not adjourned exceeded the prejudice to Hyper Hippo if the trial was adjourned. The court also dismissed a preliminary objection by Hyper Hippo regarding the Redcell defendants' application response, finding that while technically the Redcell defendants should have raised their extensive additional factual and legal arguments through a parallel application to adjourn, there was little to be gained by prioritizing form over substance, as all parties had been able to present their arguments and Hyper Hippo had adequate notice of all contrary positions and materials.

The ruling and outcome

The court granted AppQuantum's application and adjourned the June 1, 2026 trial. The parties were directed to schedule the earliest mutually convenient new trial date, and the court declined to order a specific length of trial, noting it was not clear at that time what impact withdrawal of copyright claims would have on trial length. The new trial date was ordered to be peremptory on all parties. Although AppQuantum was successful, in view of the procedurally questionable manner in which it and the Redcell defendants chose to present the application, the court ordered that all parties bear their own costs. No specific monetary award was granted to any party in either decision, as both decisions addressed procedural matters — security for costs and trial adjournment — rather than the merits of the underlying dispute.