Benjamin Zarnett

The appellants, an investment management firm and minority shareholder, appealed the dismissal of their oppression application against the respondent corporation and its directors.

The application judge had found that the challenged related-party transactions were within the reasonable expectations of shareholders and protected by the business judgment rule.

The Divisional Court dismissed the appeal on the merits, finding no palpable and overriding error in the application judge's factual findings or application of the law.

The court upheld the award of substantial indemnity costs due to the appellants' unfounded allegations of misconduct and misuse of the court process, but allowed the costs appeal in part to deduct pre-application costs.

The appellant bank transferred funds from a deceased customer's account to her son without verifying the will or notifying the daughter, who held a power of attorney.

The daughter successfully litigated the validity of the will and ownership of the funds in Kuwait courts.

She then sued the bank in Ontario and obtained summary judgment.

The Court of Appeal dismissed the bank's appeal, holding that the bank was a privy in interest to the son and was bound by the Kuwait judgment through issue estoppel, preventing it from relitigating the ownership of the funds.

The parties entered into a joint venture agreement to purchase and develop property.

When a creditor demanded repayment of a note, only one partner was willing to pay.

That partner's company purchased the note and eventually foreclosed on the property when the other partners failed to pay their shares.

The appellants sued for breach of the joint venture agreement and return of their investment.

The Supreme Court of Canada held that the agreement was not terminated and had not been breached.

The Court also dismissed the unjust enrichment claim, finding that the contract and the foreclosure proceedings provided a juristic reason for the deprivation.

The appellants brought a class action for prospectus misrepresentation under s. 130(1) of the Ontario Securities Act.

The respondent company made an initial public offering with a prospectus containing a sales forecast.

Before the offering closed, internal analysis showed sales lagging due to unseasonably warm weather, but this was not disclosed.

The Supreme Court of Canada held that the company had no obligation to disclose the intra-quarterly results because they did not amount to a 'material change' under the Act.

The Court also held that the Business Judgment Rule does not apply to statutory disclosure obligations.

The appeal was dismissed with costs.

The respondent employee sued his former corporate employer and its directing mind for breach of an employment contract, claiming a 50 per cent commission on profits from a real estate project completed after his resignation.

The trial judge found both the corporation and the directing mind liable for the full 50 per cent of the profits, including those earned by third-party investors.

On appeal, the Court of Appeal upheld the finding that the contract entitled the employee to post-termination profits based on an objective interpretation of the agreement.

However, the Court allowed the appeal in part, holding that the employee was not entitled to profits earned by third-party investors, and dismissed the action against the directing mind personally, finding no basis to pierce the corporate veil.

The appellants sought costs of the appeal and trial on a partial indemnity basis following their success.

The respondent argued for no costs, asserting the class proceeding raised a novel point of law and involved a matter of public interest.

The Court of Appeal rejected this argument, finding the litigation was a commercial dispute between sophisticated actors involving established principles.

The court awarded costs of the appeal fixed at $100,000 plus GST to both the individual and corporate appellants, along with disbursements, and ordered trial costs to be assessed on a partial indemnity basis.

The company TCT became insolvent and an interim receiver, KPMG, was appointed.

The order appointing KPMG stated it could not be considered a successor employer and prohibited proceedings against it without leave.

KPMG terminated unionized employees and sold assets to a new company, which hired some employees without union representation.

The union sought leave under s. 215 of the Bankruptcy and Insolvency Act to bring a successor employer application before the Ontario Labour Relations Board.

The Supreme Court held that the bankruptcy court lacks jurisdiction to determine successor employer status, which belongs exclusively to the labour board.

The Court also held that the traditional Mancini test applies to s. 215 leave applications, requiring only a prima facie case, and granted the union leave to proceed.

In supplementary reasons settling the order of a previous appeal, the Court of Appeal fixed the judgment awarded to the respondent franchisee at $208,632.26 and the appellant franchisor's counterclaim at $94,200, along with respective prejudgment interest.

Because the respondent ultimately recovered less than its trial settlement offer, the court varied the trial costs award from a solicitor and client basis to a party and party basis, reaffirming that distributive costs awards should be avoided.

The plaintiff sought leave to appeal an order declining to disqualify the defendants' solicitors.

The solicitors had received documents hacked from the plaintiff's computers by a third party.

The motions judge found that the solicitors disclosed the documents the day after receipt and did not realize they were obtained in breach of privacy until months later.

The Divisional Court denied leave to appeal, finding the motions judge correctly applied the balancing test from MacDonald Estate v. Martin and that there was no conflicting case law.

The appellants appealed an order granting the respondents leave to amend their statement of claim to include a declaration that the deceased's estate was entitled to ownership of a condominium based on a resulting or constructive trust.

The appellants argued the proposed claims were statute-barred under the Limitations Act and that the amendments would cause non-compensable prejudice due to the deaths of key parties.

The Court of Appeal dismissed the appeal, holding that the proposed trust claims fell within the exception in s. 43(2) of the Act for claims to recover trust property retained by a trustee, and thus were not statute-barred.

The Court also found no non-compensable prejudice, as intention could be inferred from documentary and third-party evidence.

The appellants appealed a trial judgment finding them liable for prospectus misrepresentation under s. 130(1) of the Securities Act.

The trial judge had held that the appellants had a continuing obligation to disclose poor intra-quarterly financial results before the closing of their initial public offering, and that their failure to do so rendered an implied representation of objective reasonableness in their financial forecast false.

The Court of Appeal allowed the appeal, holding that the Act distinguishes between material facts and material changes, and imposes no continuing obligation to disclose material facts after a prospectus receipt is issued.

The Court further held that the trial judge erred in implying a representation of objective reasonableness and in failing to apply the business judgment rule to management's assessment of the forecast.

The moving party sought leave to appeal a decision of the Ontario Municipal Board approving official plan and zoning by-law amendments to permit a commercial development, including a Wal-Mart, near a spiritual retreat centre.

The moving party argued the Board erred in its treatment of the retreat centre's freedom of religion claims under s. 2(a) of the Charter, specifically regarding the non-physical, spiritual compatibility of the proposed development with the retreat's practices of quiet contemplation.

The Divisional Court granted leave to appeal, finding that the competing interests and the application of the Charter to such land use compatibility issues raised questions of province-wide public importance.

Credit Suisse First Boston Canada Inc. (CSFB) applied for a hearing and review of a decision by the hearing panel of Market Regulation Services Inc. (RS) that disqualified its counsel, Stikeman Elliott, from acting in an RS proceeding.

RS alleged that Stikeman Elliott was in a conflict of interest because it had previously advised the Toronto Stock Exchange (TSE) on the creation of RS, and was now raising defences on behalf of CSFB that attacked the very regulatory structure it helped create.

The Ontario Securities Commission upheld the disqualification, finding that Stikeman Elliott owed a subsisting duty of loyalty to RS as a former client and possessed relevant confidential information with a risk of misuse.

The Commission concluded that permitting the law firm to repudiate its own prior legal advice would undermine public confidence in the administration of justice.

The appellants appealed a trial judgment dismissing their claims regarding interests in an estate under the doctrine of mutual wills, constructive trust, and as beneficiaries of a family trust.

The trial judge found no agreement to execute mutual wills and upheld the trustee's encroachment on the trust in favour of another beneficiary, finding it was done in good faith to protect family businesses.

The Court of Appeal dismissed the appeal, holding that the trial judge's detailed findings of fact and credibility assessments were well supported by the evidence and no palpable and overriding error was demonstrated.

The Liquidator of the Christian Brothers of Ireland in Canada appealed a motions judge's refusal to approve a $495,495 premium on the legal fees of its counsel, WeirFoulds LLP.

The law firm had acted on a contingency-like basis when the estate became insolvent, successfully recovering $19 million for the estate to compensate victims of child abuse.

The Court of Appeal allowed the appeal, finding that the motions judge erred by failing to consider the significant financial risk assumed by the law firm, the Liquidator's business decision to approve the premium, and the non-opposition of the victims' representative counsel.

The premium was deemed reasonable and approved in full.

The Court of Appeal issued a costs endorsement following an appeal and cross-appeal regarding a summary judgment motion.

The respondents successfully had all their claims proceed to trial, as the appellants failed to obtain the dismissal of any claims.

The court awarded the respondents 100 percent of their costs for the motions, fixed at $43,799.70 per appellant, and fixed the costs of the appeal at $50,000 on a partial indemnity basis.

The appellant corporation issued share certificates as part of a stock roll program, representing them as fully paid when they were not.

A third party pledged one of these certificates to the respondent bank as collateral for a loan.

When the borrower defaulted, the bank sought to realize on the shares, but the appellant refused to acknowledge the bank as the valid owner.

The trial judge found the bank was a good faith purchaser and granted an oppression remedy.

The Court of Appeal dismissed the appeal, holding that the bank was a good faith purchaser, the appellant was estopped from denying the validity of the certificate, and the restriction on transfer did not prevent the transfer to the bank.

The court also dismissed the third-party claim against a credit union for vicarious liability.

The appellants, former auditors and actuaries of the respondent law society, appealed the dismissal of their motions for summary judgment and to strike the statement of claim.

The respondents had sued for professional negligence, alleging the appellants understated deficits in the professional liability insurance plan.

The appellants argued that even if they were negligent, the respondents suffered no damages because the losses were 'passed on' to members through increased levies.

The motion judge dismissed the appellants' motions and struck the 'passing on' defence, proceeding on the basis of assumed facts.

The Court of Appeal allowed the appeal and cross-appeal, holding that the motion judge erred in deciding hypothetical questions of law based on assumed facts when material facts were in dispute.

The Court concluded that it was not plain and obvious that the 'passing on' defence is unavailable in Canadian law, and ordered the entire action to proceed to trial.

The franchisor, Print Three, appealed a trial judgment finding it liable for fundamental breach of a franchise agreement and breach of a duty of good faith.

The franchisee, Shelanu, had entered into a subsequent oral agreement regarding royalty rebates, which Print Three later refused to honour.

The Court of Appeal upheld the enforceability of the oral agreement despite an entire agreement clause, finding the parties had amended their written agreement by conduct.

The Court also affirmed that a duty of good faith exists in franchisor-franchisee relationships.

However, the Court found the trial judge erred in concluding that Print Three's establishment of a new franchise concept breached this duty, and further erred in finding a fundamental breach that excused Shelanu from future performance.

The appeal and cross-appeal were allowed, and damages on the franchisor's counterclaim were reassessed.

Following an appeal, the court received written submissions regarding the quantum of costs.

The court rejected the appellant's argument that the appeal involved a novel issue of law or public interest, but agreed that the respondents' claimed costs were excessive.

Costs were fixed on a partial-indemnity basis at $15,000 payable to each of the two respondent groups.