Alan B. Merskey

The plaintiff sued the defendant for breach of a software license agreement, a general security agreement, and the duty of honest performance.

The dispute centered on whether the defendant's newly bundled software suite constituted 'Replacement Software' triggering higher royalty payments, and whether the defendant failed to negotiate in good faith regarding pricing changes.

The court dismissed the action, finding that only one module of the bundled suite met the contractual definition of Replacement Software.

Furthermore, the court held that the plaintiff failed to prove any breach of the duty of honest dealing, as there was no evidence of dishonesty or a refusal to negotiate by the defendant.

The plaintiff, Callidus Capital Corporation, moved for summary judgment to enforce a guarantee and mortgage against the defendant, Jeffrey J. McFarlane, for obligations of Xchange Technology Group LLC (XTG).

McFarlane had guaranteed XTG's debt to Callidus, limited to US$3 million, excluding certain facility and forbearance fees.

McFarlane argued that the debt was extinguished by an asset purchase agreement (APA) via a credit bid, and that Callidus had impaired its security.

The court found that the guarantee was a commercial agreement, not subject to the *contra proferentem* rule, and that the $3 million carve-out in the APA was intended to maintain McFarlane's guarantee obligation.

The court also rejected the impairment of security argument, noting a broad release signed by McFarlane.

Summary judgment was granted to Callidus for US$3 million plus interest and costs.

Nortel Networks Corporation and its Canadian debtor affiliates brought a summary judgment motion to dismiss claims by SNMP Research International, Inc. and SNMP Research Inc. for breach of contract, breach of confidence, and copyright infringement.

SNMP's claims arose from Nortel's post-CCAA filing sales of its business segments (LOBs), during which SNMP's proprietary software source code was allegedly transferred to purchasers without authorization.

The court dismissed SNMP's claim for disgorgement of Nortel's profits, finding no evidence that Nortel received revenue derived from the copyright infringement, as purchasers knew they were not acquiring rights to SNMP software and negotiated separate licenses.

However, the court held SNMP's damage claim in abeyance for six months, acknowledging ongoing discovery in a related U.S. proceeding and the possibility of future evidence regarding LOB purchasers' use of unlicensed SNMP software.

The moving defendants brought a motion to strike several paragraphs of the statement of claim alleging conspiracy, misrepresentation, injurious falsehood, and interference with economic relations arising from alleged diversion of employees and business from a technology company.

The court held that the pleading disclosed no reasonable cause of action against one defendant spouse because no material facts supporting any claim were pleaded against her, and struck the relevant paragraph and dismissed the action against her with leave to amend.

The court found that allegations supporting fraudulent misrepresentation, negligent misrepresentation, injurious falsehood, and civil conspiracy were adequately pleaded when the statement of claim was read as a whole.

However, the pleading failed to properly plead the tort of intentional interference with economic relations.

That claim was struck with leave to amend within 30 days.

In CCAA liquidation proceedings, the secured creditor and investment advisor sought a declaration that it was entitled to a contractual additional fee arising from the sale of one of the debtor’s portfolio investments.

The creditor argued that the debtor breached a settlement agreement by failing to repay outstanding advisor debt before the asset sale closed, which would have triggered the fee.

The court held that the agreement required payment only when reasonably practicable based on the debtor’s commercially reasonable estimate of liquidity and expenditures.

Given the uncertainty of the closing and the debtor’s limited cash resources during CCAA proceedings, the decision to wait until proceeds were actually received was commercially reasonable.

The motion for a declaration and payment of the additional fee was dismissed.

The applicants sought a declaration that they were entitled to supplementary pension benefits under the respondent's supplementary pension plan following a partial wind up of the registered pension plan.

The partial wind up triggered statutory 'grow in' benefits under the Pension Benefits Act, allowing the applicants to retire early with unreduced pensions.

The court interpreted the supplementary plan's formula, which explicitly excluded 'grow in' benefits from the calculation of the base pension amount.

The court found that when the 'grow in' benefits were excluded, the applicants' base pension amounts were less than the pension benefits they actually earned, resulting in no supplementary benefits being payable.

The application was dismissed, and the court declined to order costs payable from the pension fund.

The applicants moved for declarations regarding their pension rights under a supplemental pension plan.

The respondent argued the claims were barred by the Limitations Act, 2002, asserting the limitation period began when option statements denying the benefits were issued.

The court held that the claims were not statute-barred, finding that the cause of action for pension benefits does not crystallize until the payments actually fall due and are wrongfully refused, rather than when an anticipatory breach occurs.

The plaintiff moved for leave to amend the statement of claim under Rule 26.01 of the Rules of Civil Procedure.

The court reaffirmed that leave to amend should generally be granted unless non-compensable prejudice would result, but amendments may be refused where they constitute an abuse of process or fail to plead necessary material facts.

Several proposed amendments were denied because they asserted negligence, breach of trust, fiduciary duty, and duty of care without pleading the material facts required under Rule 25.06(2).

One proposed amendment was also rejected as inconsistent with the plaintiff’s own discovery evidence.

Limited amendments were permitted, portions of an affidavit disclosing mediation communications were struck, and the defendants were awarded costs.