Aaron L. Kreaden

A pharmaceutical distributor sued after a retailer terminated a long-term supply agreement based on a dispute over whether contractual negative financial impact compensation and earned term extensions continued beyond the initial term.

The court held that the compensation mechanism applied throughout the defined Term, including extensions, and that the retailer wrongfully terminated the agreement on March 31, 2021.

Applying the minimum performance doctrine, the court held that extensions earned before breach could not be unwound, but post-breach damages had to be assessed on the least burdensome mode of future contractual performance, limiting the term to December 31, 2022.

The plaintiff recovered NFI compensation, lost-profit damages to be calculated, and severance-based reliance damages, while claims for reclassified product margins, warehouse losses, transportation costs, vendor settlements, and enhanced prejudgment interest were denied.

On the counterclaim, the defendants recovered withheld OTC rebates and unused prepayment funds, but their transition-period lost-sales claim failed.

The parties brought competing summary judgment motions regarding an Independent Auditor's report on Earn-Out Payments under a Share Purchase Agreement.

The Purchasers argued the auditor committed manifest errors and failed to follow instructions by deferring the choice of EBITDA calculation to the court.

The Superior Court of Justice found that the auditor materially departed from its mandate by failing to determine the EBITDA for the Second Earn-Out Period and directed the auditor to make that determination.

The court also found manifest errors in the auditor's treatment of Kits sales revenue and the starting point for related party sales adjustments, but dismissed challenges to the auditor's treatment of subcontractor costs.

The auditor's report was deemed not final and binding.

The applicants sought leave to appeal or to set aside three arbitral awards arising from a family business dispute over the separation of the G&L Group.

The respondent brought a cross-application to enforce the awards.

The court dismissed the application for leave to appeal, finding that the alleged errors of law were in fact questions of fact or mixed fact and law, and that the arbitrator's conduct was not procedurally egregious.

The court granted the respondent's application to enforce the arbitral awards and awarded costs on a partial indemnity basis.

The applicant sought a permanent injunction to restrain the respondent from breaching negative covenants in their long-term Royalty Agreement governing a collision repair shop network.

The respondent, which operated 65 shops under the applicant's brand, gave notice of its intention to unilaterally leave the relationship and rebrand its shops, openly acknowledging this would constitute a breach of contract.

The respondent argued damages would be an adequate remedy, invoking the concept of efficient breach.

The court rejected this argument, finding the damages were too complex, multi-layered, and potentially incalculable over the remaining 19-year term to make monetary compensation adequate.

The court granted the permanent injunction enforcing the negative covenants and awarded costs of $185,000 to the applicant.

The plaintiff moved for summary judgment seeking $1,075,000 in fees allegedly owed under a term sheet dated December 9, 2022.

The defendants resisted and brought a counter-motion for "boomerang" summary judgment to dismiss the action.

The court found that the express language of the term sheet did not entitle the plaintiff to the claimed payments.

The origination fee was payable only upon closing of the financing, which never occurred.

The commitment fee was payable only upon issuance of a letter of approval/commitment meeting the term sheet's indicative terms and conditions, which the plaintiff never provided.

The court dismissed the plaintiff's motion and granted the defendants' counter-motion, dismissing the action entirely.

Costs of $30,000 were awarded to the defendants on a partial indemnity scale.

This decision concerns a motion for production of documents in two companion actions involving allegations of auditor negligence and failure to detect fraud at Bondfield Construction Company Ltd. The plaintiffs sought production of the "Bowen Memo" and related documents from PricewaterhouseCoopers LLP (PwC), who claimed solicitor-client and litigation privilege.

The court found that the documents were not privileged, as they were not created for the purpose of seeking legal advice or in contemplation of litigation, and ordered their production without redaction.

The court considered whether documents prepared by PricewaterhouseCoopers LLP (PwC), including the "Bowen Memo" and related materials, were protected by solicitor-client or litigation privilege in the context of a dispute over the transition of audit responsibilities from PwC to Deloitte for Bondfield Construction Company Limited.

The court found that the documents were not privileged and ordered their production, as the dominant purpose of their creation was not for seeking legal advice or in contemplation of litigation, but rather to summarize audit procedures.

This endorsement addresses an urgent case conference regarding the content of a press release to be issued by Converge Technology Solutions Corp. if an Acquisition Proposal is received and deemed a Superior Proposal.

The court considered whether the press release should include the name of the party submitting the Acquisition Proposal and the proposed share price.

The Ontario Securities Commission (OSC) supported disclosure of both, and the court agreed, finding this approach consistent with previous orders and directions.

This endorsement addresses urgent interim relief in a contested plan of arrangement under the Canada Business Corporations Act involving Converge Technology Solutions Corp. and 16728421 Canada Inc. (HIG).

The dispute arose after Converge received an unsolicited proposal from a third party, leading to motions regarding confidentiality, publication bans, and the process for shareholder notification.

The court continued interim sealing and publication ban orders until the facts crystallize, particularly regarding whether a "Superior Proposal" is received and determined by the board.

The decision applies the Supreme Court’s test for discretionary limits on court openness, balancing the need to protect commercially sensitive information with the principle of open courts.

This costs endorsement follows the court’s decision on an application regarding the enforcement of an agreed procedure in a Share Purchase Agreement between CLEAResult Canada Inc. and the respondents.

The court granted the application, allowing the appointed Independent Auditor to proceed with the expert adjudication of the Reverse Earn-Out Calculation.

The parties had agreed that the wholly successful party would be paid $60,000 in costs.

However, due to a lack of clarity in the applicants’ position regarding the auditor’s mandate, the court reduced the costs award to $45,000, to be paid by the respondents.

This endorsement addresses a motion in the context of a proposed arrangement involving Converge Technology Solutions Corp. and 16728421 Canada Inc. (HIG) under section 192 of the Canada Business Corporations Act.

After an unsolicited acquisition proposal and subsequent amendments to the arrangement, the parties resolved the motion on consent, resulting in the dismissal of the motion with prejudice and without costs.

The court also considered and declined a request to continue a sealing order, finding that the justification for confidentiality no longer existed.

The Trustee, KSV Restructuring Inc., sought substantive consolidation of the estates of ProEx Logistics Inc., Guru Logistics Inc., and 1542300 Ontario Inc., as well as authorization to accept claims by Paul Randhawa and to approve the Trustee’s reports.

The court granted substantive consolidation and approved the Trustee’s reports, but declined to authorize the Trustee’s acceptance of Paul’s claims, holding that the Bankruptcy and Insolvency Act provides a comprehensive code for the allowance and disallowance of claims, and that equity owners such as Rana Randhawa have no standing to challenge the Trustee’s decision to accept a claim.

The decision also addresses the effect of outstanding costs awards on standing and the finality of proceedings.

The applicants sought to enforce a Share Purchase Agreement (SPA) provision requiring an Independent Auditor (BDO) to determine a "Reverse Earn-Out Calculation." The respondents argued that other disputes under the SPA needed court adjudication first, claiming BDO lacked necessary information and that the applicants breached earn-out covenants.

The court held that the expert adjudication by BDO should proceed expeditiously as agreed in the SPA, as it is a distinct process from the respondents' claims for breach of covenants, which can be pursued in a separate action for indemnity.

The court clarified BDO's mandate is limited to financial determination, not factual investigation of covenant breaches, and dismissed the respondents' attempt to have the court direct BDO on information use.

This appeal concerned a dispute over the exercise of options to purchase commercial properties.

The purchase price was to be the midpoint of two appraisals, which were widely divergent.

The Tenant (purchaser) tendered only the amount of its own appraisal, holding the disputed balance in trust with its solicitor, which the Landlord (vendor) refused to accept.

The application judge found the tender sufficient and ordered specific performance.

The Court of Appeal reversed this decision, holding that the Tenant's partial tender constituted a material breach of the purchase and sale contract.

The court found that a purchaser cannot unilaterally withhold a portion of the purchase price, even if disputed, and that the "abatement cases" relied upon by the lower court were distinguishable.

The Tenant's cross-appeal regarding the validity of the Landlord's appraisal was dismissed.

The options were declared null and void, and vacant possession was ordered for the Landlord.

The plaintiffs sought costs following the dismissal of the defendants' motion to vacate a Mareva injunction.

The plaintiffs sought costs on a substantial indemnity scale, alleging egregious conduct by the defendants, including a multi-year fraudulent scheme.

The court declined to award substantial indemnity costs as the claims had not been finally adjudicated.

The court awarded costs on a partial indemnity scale, including the costs of the initial motion made without notice, as those materials were necessary for the de novo hearing.

Costs were fixed at $200,000, payable within 30 days.

This is a costs endorsement following an appeal where the Court of Appeal allowed the appeal on a preliminary jurisdictional question raised by the court itself, rather than on the substantive issues.

The court had determined that neither the application judge nor the Court of Appeal had jurisdiction to decide whether a proposed payment would constitute an offence under the Criminal Code.

Given these unique circumstances, where the disposition was based on a threshold jurisdictional question posed by the panel and did not determine the underlying substantive issues, the court ordered that each party bear their own costs below and on appeal.

The Court of Appeal for Ontario set aside a Superior Court declaration that a proposed payment by estate executors to a law firm, in satisfaction of a Dubai judgment, would violate s. 83.03(b) of the Criminal Code due to alleged connections between the judgment creditors and a terrorist group.

The appellate court held that the Superior Court lacked jurisdiction to issue such a declaration, as it improperly interfered with prosecutorial discretion and provided no binding immunity from criminal prosecution.

The court emphasized that Rule 14.05(3) of the Rules of Civil Procedure and s. 60(1) of the Trustee Act are procedural and do not create jurisdiction for declarations on criminal legality, especially when based on disputed facts.

The proposed representative plaintiff in a product liability class action sought a protective order to anonymize their identity and seal sensitive personal information due to a history of sexual violence and PTSD, which led to their cannabis use and subsequent Cannabis Hypermesis Syndrome.

The defendants did not oppose the motion.

The court granted the order, applying the Sherman Estate test, finding that court openness posed a serious risk to the plaintiff's well-being and dignity, no reasonable alternatives existed, and the benefits of protecting the plaintiff and encouraging other trauma survivors to access justice outweighed the minimal impact on court openness.

The applicants, executors of an estate, sought a declaration on whether paying a Dubai judgment against the deceased's former law firm would violate Canadian law.

The judgment creditor was associated with entities that had historically raised funds for the Islamic Revolutionary Guard Corps (IRGC), a listed terrorist entity.

The respondents, former law partners of the deceased, argued that the payment would not benefit a terrorist group and relied on expert evidence regarding anti-money laundering laws in Dubai and the BVI.

The court found that any payment towards the Dubai judgment would be contrary to section 83.03(b) of the Criminal Code, as there was a risk the funds could indirectly benefit a terrorist group.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.