Executive Summary: Key Legal and Evidentiary Issues

• Whether special costs were warranted against the petitioners for continuing the claim against Ms. Prevost after she asserted she had been improperly named as a respondent.
• Application of R. 9-1 of the Supreme Court Civil Rules regarding double costs based on Ms. Prevost's October 11, 2024 formal offer to settle.
• Availability of uplift costs under s. 2(5) of Appendix B of the SCCR based on alleged "unusual circumstances."
• Proper scope of the oppression remedy under s. 227 of the Business Corporations Act, S.B.C. 2002, c. 57 and who may properly be named as a respondent in such a proceeding.
• Threshold for "reprehensible conduct" required to justify punitive cost awards as articulated in Smithies Holdings Inc. v. RCV Holdings Ltd., 2017 BCCA 177.
• Whether a bare offer by a responding party to dismiss the claim without costs can give rise to double costs under R. 9-1(5).

Facts of the case

The petitioners, Lorne Stoneman and Teresa Stoneman, live at a property located along Shuswap Lake in the interior of British Columbia. The ownership structure underlying their property is somewhat unique. The respondent, Cinnemousun Beach Properties Ltd. (the "Company"), owns five legal lots, which are notionally divided into 53 "lots" designated for the use and enjoyment of the Company's shareholders, as well as several common areas. Under the Company's articles, owning a share in the Company entitles the shareholder to the use and enjoyment of a specific designated "lot." The petitioners say this is akin to a form of bare land strata. The other respondents are or were members of the board of directors for the Company at the relevant time or are other shareholders.

The petitioners filed the underlying petition seeking an oppression remedy under s. 227 of the Business Corporations Act, S.B.C. 2002, c. 57. They allege the Company has failed or refused to enforce the shareholder's agreement, as well as its applicable articles and rules, and has failed to address their concerns about encroachments on and interference with the access area leading to their property. Among those named as respondents are individuals whose conduct the petitioners allege the Company has failed to address and whose interests could be affected by relief that may be granted.

The respondents Thomas Hartford (also known as Jim Hartford), Alana Hartford (collectively, the "Hartfords"), and Tracey Prevost were of the view they had been improperly named as respondents. The Hartfords and Ms. Prevost each filed applications under R. 9-5(1)(a) and (d) of the Supreme Court Civil Rules to strike the petition as against them. The two strike applications and the petition came on for hearing on February 9, 2026 before Justice K. Wolfe. On the afternoon of February 10, 2026, Justice Wolfe delivered oral reasons for judgment allowing the strike applications. The Court agreed with the applicants that the proper subjects of an oppression claim are the individuals or entities that have some ability to exercise corporate control or to influence corporate decision-making. The petitioners had not pleaded that either the Hartfords or Ms. Prevost exercised any corporate will or influence or that there was any causal link between their asserted conduct and the Company's decision-making. The petitioners had also not sought any specific relief against the three respondents. Justice Wolfe dismissed the petition against the Hartfords and Ms. Prevost under R. 9-5(1)(a) as it did not disclose the type of claim that could be brought by petition against those respondents. Given that conclusion, the Court did not make specific findings on the alternative arguments that the petition was an abuse of process and should also be struck under R. 9-5(1)(d).

After the strike applications were allowed, counsel for the Hartfords and counsel for Ms. Prevost sought leave to make further submissions on costs, including special costs. The Hartfords and the petitioners settled costs as between them and filed a certificate of costs. The petitioners were only required to respond to Ms. Prevost's costs submissions. The decision on costs is based on the written submissions of Ms. Prevost filed February 26, 2026 and the written submissions of the petitioners filed March 6, 2026.

Issues on costs

The parties' written submissions raised three issues: (a) whether Ms. Prevost was entitled to special costs; (b) if not, whether Ms. Prevost was entitled to double costs from October 21, 2024 forward based on her offer to settle; and (c) if not, whether Ms. Prevost was entitled to uplift costs. The petitioners acknowledged that Ms. Prevost was entitled to her costs but said they should only be ordinary costs at Scale B.

Special costs

Justice Wolfe explained that special costs are an extraordinary, discretionary remedy. They are punitive rather than compensatory and are awarded when the Court seeks to disassociate itself from conduct in the course of the litigation that is reprehensible and "deserving of reproof and rebuke," citing Smithies Holdings Inc. v. RCV Holdings Ltd., 2017 BCCA 177 at paras. 56–57. Special costs awards are exceptional and the Court must exercise restraint in making them. There is a high threshold to establish that special costs are warranted, citing Westsea Construction Ltd. v. 0759553 B.C. Ltd., 2013 BCSC 1352 at para. 73, and Morriss v. British Columbia, 2021 BCCA 451 at para. 22.

Ms. Prevost contended the petitioners' conduct warranted rebuke sufficient to attract an award of special costs. She submitted the petitioners were on notice as of her October 11, 2024 formal offer to settle that Ms. Prevost did not consider the petition to advance a cause of action or seek relief against her. She also contended special costs were warranted as she was named for an improper or collateral purpose to obtain her evidence for use against the Company. The petitioners said their conduct did not rise to a level requiring rebuke through special costs and cited Hoem v. Macquarie Energy Canada Ltd., 2025 BCSC 1508 at para. 15. They submitted that the petition was struck on a technical or procedural basis, that the error in naming Ms. Prevost was not for a collateral purpose, and was based on a genuine belief that she should be named because the relief sought might affect her.

Justice Wolfe did not agree this was an appropriate matter for an award of special costs. First, despite both parties suggesting that the Court had struck the petition against Ms. Prevost and the Hartfords as an abuse of process under R. 9-5(1)(d), the basis for the decision to strike was wholly grounded in R. 9-5(1)(a). The Court referenced Vassilaki v. Vassilakakis, 2024 BCCA 15 at paras. 47-49, confirming that special costs awards are not made solely because a party has brought a claim without merit, even when the party ought to have recognized the deficiency. Taking a position, with the benefit of legal advice, even when that position is then proven not to be sound, is not sufficient. The petitioners advanced a basis for having named Ms. Prevost that they considered arguable, and the fact that the Court did not agree did not make their conduct worthy of rebuke through special costs.

Double costs

Rule 9-1(4) permits the Court to consider a settlement offer delivered in accordance with R. 9-1(1) when exercising its costs discretion. The petitioners did not dispute that on October 11, 2024, Ms. Prevost served an offer to settle that complied with R. 9-1(1). Ms. Prevost offered to waive all costs and disbursements in exchange for a dismissal of the petition against her and agreement that she need not file a response to petition. However, the petitioners disagreed it was an offer they ought reasonably to have accepted in the circumstances.

Citing Hartshorne v. Hartshorne, 2011 BCCA 29, the Court explained that double costs should generally be awarded against a party who did not accept a settlement offer that ought reasonably to have been accepted. The question is whether it was unreasonable to refuse the offer based on the circumstances in existence at the time the offer was made, citing Findlay v. George, 2021 BCCA 12 at para. 95, and Bains v. Antle, 2019 BCCA 383 at paras. 34-37. At the time the offer was made, neither Ms. Prevost nor the Hartfords had filed a response to petition. The petitioners had little basis on which to evaluate the offer or to assess the strengths and weaknesses of their claim in relation to Ms. Prevost. Ms. Prevost's response with relevant case authorities and evidence did not come until more than two weeks after the offer had expired. As Justice Morley concluded at para. 34 of Heffel v. Cole, 2023 BCSC 2140, it will be a rare case where a rejected offer by a responding party to dismiss without costs will give rise to double costs. Justice Wolfe did not find it unreasonable for the petitioners not to have accepted the bare offer and dismissed Ms. Prevost's request for double costs.

Uplift costs

Both parties agreed, and the Court accepted, that costs were appropriately fixed at Scale B as a matter of ordinary difficulty. Ms. Prevost sought an "uplift" of 1.5 times the value of each unit claimed under s. 2(5) of Appendix B. She provided a draft bill of costs claiming 49 units at Scale B, amounting to $6,036.80 after taxes, plus $490.20 in disbursements. Ms. Prevost did not specifically articulate why an award of costs at Scale B would be "grossly inadequate or unjust." The petitioners disputed there were "unusual circumstances" warranting an uplift award, noting that Ms. Prevost took limited, non-complex steps and relied to a great degree on the work done by others.

Justice Wolfe agreed with the petitioners. While accepting that Ms. Prevost's actual legal costs likely exceeded the costs to which she would be entitled at Scale B, she did not provide evidence allowing the Court to assess the degree of any such disparity. Section 2(6) of Appendix B specifically provides that the mere fact of such a difference does not make an award of costs on a regular scale grossly inadequate or unjust. The Court found this was not a case like Heffel, as the petitioners did not advance unwarranted allegations of fraud against Ms. Prevost. The prerequisites to an award of uplift costs were not made out.

Conclusion and orders

Justice Wolfe dismissed Ms. Prevost's claims for special costs, double costs, and uplift costs, finding that an award of party-and-party costs at Scale B, with reasonable disbursements, was the appropriate outcome. The Court considered that Ms. Prevost had sought to have her costs assessed before a Registrar, but determined it was not in the interests of either party to incur further expense. Rule 14-1(15) gives the Court authority to fix costs as a lump sum, citing Herbison v. Canada (Attorney General), 2014 BCCA 461 at paras. 30-31, and Inwest Investments Ltd. v. R., 2015 BCSC 2170 at para. 70. The Court found it appropriate to add either 3 or 4 units to the draft bill to account for the written costs submissions under item 23, resulting in a total of $6,896.60 or $7,019.80 respectively. Ms. Prevost was the successful party on her strike application, and on costs the Court ordered the petitioners to pay Ms. Prevost lump sum costs of $7,000, inclusive of disbursements.