Anthony J. O’Brien

The applicant, a secured creditor, applied to appoint a receiver over the assets of the respondent guarantor following a default on commercial loans.

The respondent cross-applied to lift a stay of proceedings to continue a $100 million damages action against the applicant for alleged breach of a forbearance agreement, and sought to have the proceeds from the sale of the primary debtor's assets paid into court.

The court held that the receivership order did not stay the debtor's action, but refused to order the funds paid into court as the respondent had no proprietary claim to the funds that superseded the applicant's first-ranking security.

The court appointed a receiver over the respondent, finding it just and convenient given the unconditional nature of the guarantee.

Following a prior endorsement on costs, the court received further correspondence from counsel seeking clarification regarding the scope of the costs decision.

The court confirmed that the earlier costs ruling applied to all relevant proceedings in the matter.

This included proceedings from an earlier attendance before another judge that had been reserved to the deciding judge.

The endorsement was issued to clarify that those proceedings were encompassed within the original costs determination.

The plaintiff sought clarification of a prior ruling on a motion for leave to commence a statutory cause of action for secondary market misrepresentation under Part XXIII.1 of the Securities Act.

The earlier decision granted leave for some alleged misrepresentations but dismissed others, including allegations relating to revenue recognition in the issuer’s 2008 financial statements.

The parties requested clarification regarding whether the alleged misrepresentation in the issuer’s October 14, 2009 Management’s Discussion and Analysis concerning revenue recognition had been determined.

The court held that although there was likely an internal control deficiency relating to revenue recognition at the time of the MD&A, there was no evidence that the deficiency, standing alone, was material.

Leave was therefore refused and the motion dismissed with respect to that alleged misrepresentation.

A shareholder sought leave under s. 138.8 of the Securities Act to commence a statutory secondary market misrepresentation action under s. 138.3 against a solar energy company and two of its officers.

The alleged misrepresentations concerned financial statements, internal control disclosures, and statements incorporated into a prospectus supplement.

The court held that the plaintiff demonstrated a reasonable possibility of success regarding alleged misrepresentations in the issuer’s original Q4 2009 financial statements and the October 2009 prospectus supplement, including related press releases and conference calls.

However, the plaintiff failed to establish sufficient evidence of misrepresentation in earlier 2009 interim financial statements or the 2008 revenue recognition disclosure.

Leave was granted in part and refused in part.

In a supplementary endorsement following earlier reasons, the court addressed issues arising from submissions on costs in a garnishment proceeding.

The parties disputed whether certain payments constituted “wages” under the Wages Act, which would significantly affect the amount of judgment potentially recoverable through garnishment and the proportionality considerations relevant to costs.

The court directed the parties to address whether the characterization issue could be determined by a Master on reference or should be decided immediately by the judge.

Counsel were instructed to confer and advise whether they could agree on the issues or wished to provide written submissions or argue the matter in open court.

A judgment creditor brought a motion seeking payment from a garnishee under a notice of garnishment relating to funds earned by a judgment debtor through sales activities.

The garnishee argued that the debtor did not work for it but rather for a separate corporate entity operating from the same premises.

The court held that the evidence demonstrated the debtor effectively worked for the garnishee by selling its products using its systems and receiving payment for those sales.

As garnishment is an equitable remedy, the court found that the garnishee could not avoid the creditor’s judgment by structuring the relationship through another entity.

Judgment was granted against the garnishee for payments made during the garnishment period, with an accounting ordered to determine the precise amount owing.

In a class proceeding relating to alleged misconduct involving a public corporation, the court addressed a correction to a prior costs decision.

The earlier reasons contained a factual error regarding the quantum of costs awarded to certain defendants on a motion to amend.

On consent of the parties, the court corrected the error and revised the amount payable.

The corrected award granted the defendants all‑inclusive costs for the amendments motion in a lower amount than originally stated.

Following an earlier decision dismissing a motion by the plaintiffs to amend their statement of claim and rejecting most of their requested changes to a discovery plan in a securities class action, the court addressed costs.

The defendants sought substantial partial indemnity costs for both the amendments motion and the discovery plan motion.

The court held that the amendments motion was a significant and high-stakes procedural dispute in complex class proceedings and that the defendants’ claimed costs were within the reasonable expectations of the losing party.

The court also found that the plaintiffs’ demands regarding the discovery plan were disproportionate and that the defendants were the successful party on that motion.

Costs were awarded to the defendants both for the amendments motion and, in any event of the cause, for the discovery plan motion.

The plaintiff bank sought leave under s. 215 of the Bankruptcy and Insolvency Act to continue an action against a trustee in bankruptcy for damages arising from an unpaid overdraft.

The bank alleged the trustee breached its duty of care by failing to provide notice of the debtor's proposal, sale of assets, and bankruptcy.

The court found that the bank's claim was not frivolous or vexatious and disclosed a factual foundation, particularly regarding the trustee's failure to notify the bank of the bankruptcy when the debtor's accounts held a positive balance.

Leave to continue the action was granted.

The plaintiff alleged breach of contract and bad faith after terminating a lease and selling its dry cleaning business back to the defendant for $35,000.

The plaintiff argued it had been deceived into relinquishing its right of first refusal under the lease because the defendant falsely represented an intention to operate the business personally, but then resold it shortly afterward to a third party for $225,000.

The court held that the plaintiff failed to prove on a balance of probabilities that the defendant misrepresented its intentions or breached a duty of good faith during negotiations.

Evidence from an independent purchaser supported the defendant’s explanation that the subsequent sale arose opportunistically after the lease ended.

Although the court commented that damages could have been approximately $175,000–$190,000 if liability were established, the claim was dismissed.

In a bankruptcy application brought by an unsecured creditor, the respondent debtor moved to compel answers to numerous refusals made during cross‑examination of the applicant’s affiant on the affidavit of verification.

The court considered the permissible scope of cross‑examination in bankruptcy proceedings and held that questions must relate to the statutory requirements under the Bankruptcy and Insolvency Act, the issues in dispute on the bankruptcy application, or the credibility of the affiant.

Many questions sought to revisit issues already determined in an arbitration award and recognition orders, or to explore unrelated receivership proceedings, and were therefore irrelevant.

The court ordered only that the applicant provide evidence of its authorization to commence the application and otherwise dismissed the motion.

The plaintiff brought a motion to compel the defendants to answer questions and produce documents refused during cross-examination on an affidavit filed in response to a certification motion in a proposed securities class proceeding.

The dispute concerned the interpretation of s. 138.8(2) of the Ontario Securities Act, which governs affidavit evidence on a motion for leave to commence a statutory secondary market misrepresentation claim under Part XXIII.1.

The plaintiff argued that because the defendants filed an affidavit addressing certification, they should be required to answer questions relevant to the leave motion.

The court followed the line of authority beginning with Ainslie v. CV Technologies Inc. holding that defendants are only required to file an affidavit if they intend to lead evidence on the leave motion.

As the defendants had intentionally filed no affidavit addressing the leave motion, they could not be compelled to answer questions for that purpose.

The defendants brought motions to adjourn a motion to remove the plaintiff's counsel, to remove the plaintiff's counsel for an alleged conflict of interest, and to amend their Statement of Defence and add a counterclaim.

The court dismissed the adjournment motion, finding the information sought on cross-examination irrelevant.

The court dismissed the removal motion, concluding a reasonably informed member of the public would not find the plaintiff's counsel possessed confidential information about the defendants.

The court also dismissed the motion to amend the pleadings, finding the proposed amendments sought to re-litigate issues already decided by summary judgment, and rejected the proposed counterclaim.

The plaintiffs sought consent certification of a proposed securities class action alleging that the defendant mining company and certain officers misrepresented the scope and impact of water inflow problems at a Quebec gold mine, causing losses to purchasers of the company’s shares.

The court considered the certification requirements under s. 5(1) of the Class Proceedings Act, 1992 and, given the parties’ consent and the evidentiary record, found that the statutory criteria were satisfied.

The plaintiffs also sought leave under Part XXIII.1 of the Securities Act to pursue statutory secondary market misrepresentation claims.

The court held that the action was brought in good faith and that there was a reasonable possibility of success at trial.

Certification and leave were granted.

Following the abandonment of a motion by the bankrupt seeking annulment of her bankruptcy, secured creditors sought substantial indemnity costs against the bankrupt, her husband, and her counsel.

The court held that under Rule 37.09(3) of the Rules of Civil Procedure, responding parties are presumptively entitled to costs where a motion is abandoned unless good cause exists to order otherwise.

No such cause was established, as the evidence showed the motion lacked merit and was withdrawn after cross‑examination revealed the evidence would not support annulment.

However, the court declined to impose costs against the husband or counsel, finding insufficient evidence that they caused unnecessary costs or acted improperly.

Partial indemnity costs were awarded against the bankrupt in amounts the court found fair and proportionate.

In a reference under the Construction Lien Act, multiple contractors sought to enforce their claims for lien against the owner and mortgagees of a townhouse development.

The owner had defaulted, and a subsequent mortgagee posted security under s. 44(1) to vacate the liens and facilitate the sale of the remaining units.

The court determined the timeliness and quantum of the various lien claims.

The court held that because the mortgagee chose to post security under s. 44(1) rather than s. 78(10), the liens ceased to attach to the premises and instead became a charge on the posted security in full, rather than being limited to the holdback deficiency.

Alternatively, the court found the mortgagee had acted as an 'owner' under the Act by taking over the completion and sale of the project.

The applicants, who invested approximately $15 million in the respondent companies, sought the appointment of a receiver following defaults on loans and breaches of a forbearance agreement.

The respondents had agreed to the appointment of a monitor and provided consents to a receivership held in escrow, but subsequently failed to provide the monitor with unfettered access to financial records, delayed adding the monitor as a bank signatory, and made preferential payments to the principal's family members.

The court found that the respondents materially breached the forbearance agreement and side letter, making it just and convenient under section 101 of the Courts of Justice Act to appoint a receiver over all three respondent companies.

The appellant appealed a trial judgment awarding the respondent damages for an assault that occurred during a recreational hockey game.

The trial judge found that the appellant deliberately punched the respondent in the face after the referee had stopped play, causing dental injuries.

The Divisional Court upheld the trial judge's findings that the respondent did not assume the risk of a deliberate, unprovoked attack and that the liability waiver did not bar recovery.

The court also upheld the award of special damages for future dental work, finding the respondent's dentist was qualified to provide opinion evidence.

The appeal was dismissed.

The appellants, previously found to be vexatious litigants, sought leave to bring an application under s. 140(3) of the Courts of Justice Act.

The motion judge dismissed their requests.

The appellants attempted to appeal these dismissals.

The Court of Appeal quashed the appeals, holding that s. 140(4)(e) of the Courts of Justice Act clearly and unambiguously precludes any appeal from a refusal to grant leave under s. 140(3).

The appellant appealed a judgment ordering him to pay $25,000 on a personal guarantee and $42,000 in costs.

He argued he was discharged from the guarantee because the lender failed to obtain confirmed future contracts as required by the loan commitment letter, constituting a material alteration.

The Court of Appeal upheld the trial judge's finding that the requirement was satisfied by the receipt of contracts before the commitment letter was signed.

However, the Court allowed the appeal on costs, reducing the trial costs award from $42,000 to $25,000 as a more reasonable amount for a one-day trial.