Arnold H. Zweig

Following the dismissal of the appellant's appeal from a Small Claims Court judgment regarding unpaid fees, the parties made written submissions on costs.

The respondent sought $7,500 in partial indemnity costs, while the appellant argued for $1,500.

The Divisional Court held that the requested amount was excessive given the lack of complexity, the similarity of issues to the trial, and the expectations of parties in Small Claims Court appeals.

Costs were fixed at $2,000 inclusive of GST and disbursements.

The appellant, an IT contractor, appealed a Small Claims Court decision dismissing its claim for unpaid fees and expenses against the respondent placement agency.

The parties' contract contained a 'pay when paid' clause.

The third-party client terminated the appellant's services and refused to pay outstanding invoices after discovering the appellant's principal had undisclosed U.S. and Ontario securities convictions for insider trading.

The Divisional Court dismissed the appeal, finding the trial judge made no palpable and overriding error in concluding that the respondent had made good faith efforts to collect the unpaid amounts before reasonably abandoning the collection efforts due to the appellant's material non-disclosure of penal offences.

Supplementary reasons regarding costs following two interlocutory motions: the plaintiff's motion for preservation of funds and the defendant's motion for security for costs.

The court found that success was divided on both motions and ordered no costs.

The court also declined the defendant's request to reserve costs to the trial judge, emphasizing the policy objective under Rule 57.03 that costs of contested motions should be determined at the time of the hearing.

The appellants, former lawyers at a firm where the principal misappropriated trust funds, appealed a motion judge's refusal to set aside or vary a garnishment order against the firm's professional liability insurer.

The respondents, who were owed $3.6 million, sought to exhaust the $1 million policy limits.

The appellants argued they needed the policy for defence costs against threatened claims by the respondents.

The Court of Appeal allowed the appeal in part, varying the order to require the respondents to release any claims against the appellants relating to the trust funds as a condition of receiving the garnished insurance proceeds, noting the respondents could not articulate any substantive claim against the appellants.

In a commercial tenancy dispute arising from lease agreements and a rezoning arrangement for property intended to be used as a hotel, the plaintiff moved under Rule 45.02 of the Rules of Civil Procedure for an order preserving funds paid to the defendant.

The defendant brought a cross‑motion seeking security for costs under Rule 56.01(1)(d), arguing the plaintiff corporation lacked assets in Ontario.

The court held that the $200,000 security deposit constituted a specific fund tied to the litigation and ordered it preserved by payment into court, but declined to extend preservation to advance rent or rezoning contributions, which were characterized as damages claims.

The court also granted the defendant’s motion for security for costs, finding the plaintiff had insufficient assets in Ontario and had not shown a good chance of success to avoid such an order.

The quantum of security for costs was fixed at $15,000 through the end of oral discovery.

The plaintiffs agreed to purchase a commercial property from the defendants, intending to use the entire space as a restaurant.

The plaintiffs refused to close the transaction after discovering zoning restrictions limited restaurant use to half the space.

They sued for the return of their deposit and damages, alleging the vendor made oral representations and a collateral agreement guaranteeing the zoning and promising to return the deposit if issues arose.

The vendor counterclaimed for breach of contract.

The court dismissed the plaintiffs' claims, finding they did not reasonably rely on the vendor's representations and that the written agreement expressly excluded collateral agreements.

The vendor's counterclaim was allowed, and damages were awarded based on the property's subsequent sale by the mortgagee.

In a mini-trial of an agreed issue arising from judgment-enforcement litigation, the court held that after the debtor's bankruptcy and discharge, any claim under the Fraudulent Conveyances Act belonged to the bankruptcy estate and could only be pursued by the trustee or a creditor acting under s. 38 of the Bankruptcy and Insolvency Act.

The plaintiff's motion to continue personally against the bankrupt debtor on the theory that the claim survived discharge under s. 178(1)(d) was dismissed.

On the factual issue tried, the court found that a series of real estate transfers and mortgage transactions involving family members and related parties were undertaken with intent to defeat, hinder or delay the plaintiff's collection efforts.

The court made no liability ruling on remaining non-FCA causes of action and reserved costs.

The plaintiff brought a second contempt proceeding against the defendant for breaching the terms of a prior sentencing order arising from an earlier finding of contempt for violating a permanent injunction in a libel action.

The sentencing order required the defendant to remain in Ontario during the currency of a conditional sentence once the stay pending appeal expired.

The defendant remained in Europe beyond the date he was required to return, arguing that he attempted to change flights and believed reasonable efforts to comply were sufficient.

The court held that civil contempt requires knowledge of the order and intentional commission of the prohibited act, regardless of intent to defy the court.

Finding that the defendant knowingly and wilfully failed to return to Ontario despite having reasonable opportunities to do so, the court concluded beyond a reasonable doubt that he was in contempt.

The plaintiffs brought a $10 million solicitor negligence action against their former lawyers arising from legal services provided during a shareholder dispute and mediation leading to a buyout of the plaintiffs’ interest in a shoe business.

They alleged the lawyers forced them into a sale, misrepresented valuation implications, failed to protect a purported 50% ownership interest, and negligently advised bringing an unsuccessful motion to set aside a mediated agreement.

The court rejected the allegations, finding the plaintiff was a sophisticated businessperson who actively participated in negotiations, reviewed drafts, and instructed counsel throughout.

The evidence showed the mediated agreement was knowingly entered into as a binding agreement with a reasonable valuation date and arbitration mechanism.

The court held the defendants met the standard of care of a reasonably competent lawyer and that any strategic decisions fell within a reasonable range of professional judgment.

Following an application seeking a declaration that a franchise agreement was of no force or effect and claiming damages, the court determined that credibility issues prevented resolution on an application record and converted the proceeding into an action.

The respondents sought costs on the basis that they were the successful parties on the application.

The applicant argued that the proceeding resolved no substantive issues and that costs should be determined by the trial judge.

The court held that neither party achieved success on the application and that the merits remained to be determined at trial.

Costs were therefore left to the discretion of the trial judge.

The appellants appealed a trial judge's decision regarding a franchise dispute.

They argued that the trial judge erred in deducting rent and related expenses under s. 6(6)(a) of the applicable Act, and in finding that a letter dated May 2, 2007, constituted a five-year franchise agreement.

The Court of Appeal dismissed the appeal, finding no error in the damages calculation and concluding that the trial judge's finding regarding the letter was reasonable and supported by the evidence.

Costs of $8,000 were awarded to the respondents.

A franchisee sought rescission of a franchise agreement and damages under the Arthur Wishart Act (Franchise Disclosure), alleging inadequate disclosure by the franchisor in connection with the purchase of an existing franchise from a third party.

The franchisor argued that the statutory disclosure obligation did not apply because the grant of the franchise was not effected by or through the franchisor.

The court held that determining whether the statutory exemption applied depended on factual findings and credibility assessments regarding the franchisor’s level of involvement in the resale transaction and the adequacy of disclosure.

Given these disputed material facts, the application procedure was inappropriate.

The court therefore converted the application into an action so that the issues could be resolved at trial.

The plaintiffs sued their investment advisor and his firm for breach of contract, negligence, and breach of fiduciary duty arising from the handling of their investment accounts.

The court found that the advisor failed to comply with the 'know your client' rule, engaged in unsuitable short-term trading, and exercised unauthorized discretion, while the firm failed to properly supervise the accounts.

Although no fiduciary duty was owed to the more knowledgeable husband, fiduciary duties were owed to and breached regarding the wife and son.

The court rejected defenses of ratification and limitation periods (except for a late-added tax claim) due to the plaintiffs' lack of knowledge of the misconduct.

Damages were awarded for capital and opportunity losses, reduced by 30% for the plaintiffs' contributory negligence.

The appellants appealed a Small Claims Court decision ordering them to pay $25,000 for unpaid pet food invoices and dismissing their cross-claim for credit notes and unreturned product.

The Divisional Court upheld the Deputy Judge's findings that the cross-claim for credit notes was statute-barred under the Limitations Act, 2002, as they were demand obligations.

The court also upheld the finding that the respondent's promise to take back unsold product was unenforceable due to a lack of consideration and detrimental reliance.

The appeal was dismissed.

Following a trial in a franchise-related commercial dispute, the successful plaintiffs sought partial indemnity costs prior to a Rule 49 offer and substantial indemnity costs thereafter.

The defendants did not dispute entitlement but challenged the amount claimed as disproportionate and argued for an offset based on their partial success on a counterclaim.

The court applied the factors in Rule 57.01 of the Rules of Civil Procedure and s.131 of the Courts of Justice Act, adjusting hourly rates and reducing the hours claimed as excessive in light of proportionality.

Further reductions were made relating to certain motions and a set‑off was applied for the defendants’ limited success on the counterclaim.

Costs were fixed for the plaintiffs with disbursements, reflecting both proportionality and the consequences of the Rule 49 offer.

The appellants appealed a judgment, arguing only one point regarding fresh evidence.

The Court of Appeal dismissed the appeal, finding that the fresh evidence would not have changed the result.

The amount in the fresh evidence was consistent with the internal allocation of payments found by the motion judge and did not affect the finding that interest was being paid on all three loans, which defeated the limitations defence.

The plaintiffs, a taxi company and one of its shareholders, brought a motion for an interim interlocutory injunction against the defendant, another shareholder.

The plaintiffs sought delivery of the business telephone number and an order restraining the defendant from disposing of corporate assets.

Applying the RJR-MacDonald test, the court found there was a serious issue to be tried but concluded the plaintiffs failed to establish irreparable harm, as damages could be quantified.

The court also found the balance of convenience favoured refusing the injunction.

The motion was dismissed with costs awarded to the defendant.

Franchisees sought rescission and damages under the Arthur Wishart Act after renewing a coffee shop franchise.

The franchisor negotiated a separate lease amendment with the landlord that shortened the lease term but deliberately withheld that information while inducing the franchisees to continue operating and sign a renewal letter.

The court held that the renewal created a new franchise agreement requiring disclosure, and the nondisclosure of the shortened lease term was a material omission tantamount to no disclosure.

The franchisees validly rescinded within the two‑year statutory period and were entitled to repayment of amounts paid to the franchisor and its associate, including rent and related expenses, as well as damages for breach of the duty of fair dealing.

The appellants (tenants) appealed a Small Claims Court judgment ordering them to pay unpaid rent and utility costs to the respondent (landlord).

The appellants argued that an oral agreement existed wherein utilities were included in the rent, and that the trial judge erred in applying the parol evidence rule.

The Divisional Court dismissed the appeal, finding that the written lease clearly and unambiguously required the tenants to pay for propane and electrical charges, and that the trial judge made no palpable and overriding error.

The landlord of a retail shopping mall redesigned the development without notifying the franchisor or the franchisee, who had relied on the original site plan attached to their leases.

The franchisee suffered business losses due to the redesign and construction.

The trial judge found the landlord liable for negligent misrepresentation and the franchisor liable for innocent misrepresentation and breach of the duty of good faith, awarding the franchisee $400,000 in damages.

The Court of Appeal upheld the liability and damages findings, concluding that the site plan constituted a representation of the mall's layout.

However, the Court allowed the landlord's appeal regarding the franchisor's claim for contribution and indemnity, finding the franchisor was estopped by its contradictory litigation conduct.