What is the test for a creditor to be able to contribute towards a defendant’s legal costs?

Ontario, Canada


The following excerpt is from Livent. Inc. (Special Receiver) v. Deloitte & Touche, 2010 ONSC 2267 (CanLII):

This principle was also recognized by Nordheimer, J. in Design 19 Construction v. Marks [2002] OJ No. 1091. Because the creditors would be the beneficiaries if the bankrupt corporate plaintiff was successful in the litigation, their ability to contribute money to protect the defendant’s right to recover costs if successful at trial, was held to be critical. Nordheimer, J. stated: “If the creditors are prepared to take the benefit of this action, then I fail to see why they should not also have to accept the burden of it”.

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