A. Kwok

The court heard three service and pleadings-related motions in a complex fraud action.

The defendant Mark Gross successfully moved to set aside a prior ex parte order validating service on him, arguing the claims against him were intertwined with insolvent corporate defendants and should be addressed in commercial list insolvency proceedings.

Three numbered company defendants successfully moved to set aside their noting in default, as they had not been given notice of the default proceedings while a motion to validate service on them was pending.

The plaintiffs' motion to validate service was granted for the numbered companies and one individual defendant who had actual notice, but dismissed regarding other defendants due to insufficient evidence of notice or efforts to serve.

The plaintiffs commenced an action claiming over $1 million in unpaid loans and an unrecorded security interest in several properties.

They obtained ex parte certificates of pending litigation (CPLs) against five properties that had been sold to the moving defendants.

The moving defendants, claiming to be bona fide purchasers for value without notice, brought a motion to discharge the CPLs.

The court found that while the plaintiffs had a triable claim, the balance of convenience and equities favoured discharging the CPLs, as damages would be a satisfactory remedy and the plaintiffs failed to demonstrate that the moving defendants were knowingly involved in a scheme to defeat their claims.

The motion was granted and the CPLs were discharged.

The plaintiffs brought a motion to compel production of documents, answers to refused questions, and re-attendance for further examinations of several defendants and a non-party witness following cross-examinations on an affidavit and examinations under Rule 39.03.

The examinations were conducted in the context of a pending motion by the defendant Purchaser Corporations to discharge certificates of pending litigation.

The court granted partial relief, ordering the production of share purchase agreements and answers to specific questions regarding corporate control and share transfers, finding them relevant to the bona fides of the property transactions.

The court dismissed the requests for voluminous due diligence documents as overbroad and declined to order re-attendance for further examinations.