A P.E.I. company has received permission for its sole shareholder to represent it on appeal, but failed to suspend a $1,215 costs order while it challenges the dismissal of its small-claims lawsuit.
Justice Michele M. Murphy made the two distinct rulings in C3stones Ltd. v Blue Electric Ltd., 2026 PECA 13, decided July 29, 2026, in the Prince Edward Island Court of Appeal.
The judge found that the appeal raised a serious question. She nevertheless refused a stay because C3stones had not shown that paying the costs would cause irreparable harm, and the balance of convenience favoured Blue Electric. The underlying appeal was not decided.
An electrical-services dispute
C3stones sued Blue Electric over electrical services at a Stratford residence, claiming $8,346.35. Blue Electric maintained that it had completed the work and disputed owing any amount. Following a virtual small-claims hearing in May 2026, the claim was dismissed and C3stones was ordered to pay $1,215 in costs.
C3stones appealed, alleging errors in the assessment of evidence and interpretation of a guarantee, among other grounds. It also asked for permission to proceed through its shareholder and director, Lei Cao, rather than a lawyer, and to pause enforcement of the earlier order.
Permission, not an automatic right
Under P.E.I.’s civil procedure rules, a corporation must be represented by a lawyer unless the court grants leave. In considering an exception, courts examine matters such as the proposed representative’s authority, ability to conduct the litigation, potential unfairness to the other side and the company’s ability to retain counsel.
At the court’s request, C3stones supplied corporate records, including a director’s resolution authorizing Cao to act and a certificate confirming the company’s compliance with federal corporate filing requirements.
Murphy was satisfied that Cao had authority to represent the company. She emphasized its single-shareholder character, the efficient and economical purpose of small-claims proceedings, and access to justice. He had also filed the necessary motion documents in satisfactory form.
The absence of detailed evidence showing that C3stones could not afford a lawyer was not fatal to this request, particularly given that it had only one shareholder. The judge granted leave. The ruling does not give corporations a general right to appear without counsel.
Why the stay failed
A stay pending appeal required C3stones to satisfy three parts of a test: a serious question on appeal, irreparable harm without a stay, and a balance of convenience favouring the pause.
The first threshold was met. The allegations of errors in assessing or overlooking evidence were enough to show that the appeal was not frivolous or vexatious. That preliminary conclusion did not establish that the alleged errors had occurred.
The evidentiary problem arose on harm. C3stones argued that paying the costs could prejudice the company and that recovering the money might be difficult if it won the appeal. But it provided no financial information showing an inability to pay or a detrimental impact, and no evidence that Blue Electric would be unable to repay $1,215.
Unlike the separate request to proceed without a lawyer, this request depended on evidence of the threatened harm. Assertions alone did not establish it.
The balance of convenience also favoured Blue Electric. It had a judgment including costs, while C3stones had not shown harm from enforcement of what it acknowledged was a modest amount.
The judge dismissed the stay motion and ordered a further $500 in costs, inclusive of tax and disbursements, payable within 30 days of the July 29 ruling. She declined Blue Electric’s request for costs on an elevated substantial-indemnity basis.
The decision left the merits appeal unresolved. It also required an advance request for any future virtual hearing rather than granting blanket permission.
