Benjamin Zarnett

In a foreign judgment recognition and enforcement appeal, the Court held that an enforcing forum need not establish a real and substantial connection between itself and either the dispute or the judgment debtor.

The only jurisdictional prerequisite is that the foreign court issuing the judgment had proper jurisdiction under the real and substantial connection framework or traditional grounds.

The Court also held that traditional presence-based jurisdiction over a corporate defendant is established where the corporation carries on business in the province and is served there.

Questions about ultimate enforceability against related corporate entities were left for later procedural stages.

The plaintiffs sought leave under s. 138.8 of the Securities Act and certification under the Class Proceedings Act for a proposed securities class action.

The plaintiffs alleged that the defendants misrepresented the company's ability to maintain its dividend, causing shareholders and debenture-holders to sustain losses when the dividend was cut.

The court dismissed the leave motion, finding no reasonable possibility that the secondary market misrepresentation claims would succeed at trial, as the defendants' statements were based on a genuine belief in their growth strategy at the time.

The court also dismissed the certification motion, holding that a class proceeding was not the preferable procedure for the remaining common law negligent misrepresentation claims, which require individualized proof of reliance.

Various parties brought motions seeking reconsideration or clarification of a prior joint allocation decision determining the distribution of $7.3 billion in escrow among debtor estates in multinational insolvency proceedings.

The moving parties argued that aspects of the allocation methodology—including treatment of bond guarantee claims, certain asset sale proceeds, intercompany claims, tax claims, and settled claims—required amendment or clarification.

The court reiterated that reconsideration is an exceptional remedy and rejected most requests because the issues either had been addressed at trial or could have been raised earlier.

Limited clarification was granted regarding the treatment of bondholder claims against guarantors and recognition of certain court‑approved settled pre‑filing claims that had been paid.

Other requested clarifications or amendments were denied.

The appellants, representing regional airline pilots, sued Air Canada pilots for unlawful act conspiracy, alleging they unlawfully prevented the implementation of a merged seniority list.

The trial judge dismissed the claims, finding that some defendants committed no unlawful acts due to their right to dissent, and that the unlawful acts of others did not cause the loss of a chance to implement the list because Air Canada would never have agreed to it.

The Court of Appeal upheld the trial judge's findings, concluding that the rank-and-file members did not breach their union contracts and that the chance of implementing the merged list was de minimis.

In a joint cross-border insolvency trial concerning the allocation of approximately $7.3 billion in lockbox funds from the sale of global business lines and residual intellectual property, the court interpreted the Master R&D Agreement as an operating transfer-pricing document that granted limited licence rights but did not govern post-insolvency allocation.

The court rejected both the position that one Canadian debtor owned all sale proceeds by virtue of legal title and the position that the EMEA debtors jointly owned all intellectual property by operation of law.

Applying unjust enrichment principles and the broad remedial jurisdiction available in CCAA proceedings, the court held that a just result required a pro rata allocation among debtor estates based on allowed claims.

The court further directed that duplicate claims be counted only once for allocation purposes, that intercompany claims be included, and that interim distribution proposals be brought forward.

In CCAA proceedings arising from the liquidation of a multinational telecommunications company, bondholders claimed entitlement to post‑filing interest exceeding US$1.6 billion in addition to principal and pre‑filing interest of approximately US$4.092 billion.

The court considered whether the common law "interest stops rule" applies in CCAA proceedings, particularly in a liquidating CCAA context.

Applying insolvency principles of pari passu distribution and relying on Supreme Court guidance emphasizing the integrated nature of the CCAA and BIA regimes, the court held that post‑filing interest does not accrue against the insolvent estate.

The court rejected arguments that contractual entitlement to interest survives the filing or that distributions require a negotiated plan recognizing such interest.

Accordingly, crossover bondholders were limited to principal and pre‑petition interest claims.

In long‑running insolvency proceedings under the Companies' Creditors Arrangement Act, the court was asked to determine whether unsecured bondholders were entitled to claim post‑filing interest on crossover bonds after the debtor companies entered CCAA protection.

The court considered the common law “interest stops” rule, the pari passu principle governing distribution to unsecured creditors, and the relationship between the CCAA and the Bankruptcy and Insolvency Act.

The court held that the interest stops rule applies in CCAA proceedings and prevents unsecured creditors from claiming post‑filing interest absent a negotiated plan providing for such payments.

Allowing interest to accrue for some creditors during the stay period would undermine the status quo and distort equality among creditors.

The court further held it had jurisdiction to determine the issue even without a proposed plan of arrangement.

Shareholders sought an order requiring the appointment of an auditor and the production of audited financial statements for certain fiscal years under the Ontario Business Corporations Act.

The applicants argued that a limitation period had not expired for the claim relating to audited financial statements for the 2011 fiscal year.

The court accepted that the limitation period for the 2011 claim had not expired but held that the application sought the appointment of an auditor rather than merely delivery of statements.

Because shareholders were aware by the statutory annual meeting deadlines that auditors had not been appointed, the limitation period for those claims began running in 2010 and 2011 and expired before the application was commenced in 2014.

The endorsement was revised only to clarify the limitation analysis, and the claims remained barred.

The appellants, selling shareholders in a family business, appealed the dismissal of their action for breach of fiduciary duty and oppression against the non-selling shareholders and the corporation's professional advisors.

The trial judge had utilized a 'hybrid' trial model following a failed summary judgment motion.

The Court of Appeal dismissed the appeal, finding that the appellants were precluded from challenging the hybrid trial model as they had not appealed the initial trial management order.

Furthermore, the Court upheld the trial judge's finding that no fiduciary duty was owed during the share redemption negotiations, as the relationship between the parties was highly adversarial and marked by distrust.

The substantial indemnity costs award of nearly $2.5 million was also upheld.

Following a major appellate decision regarding the tolling of limitation periods in securities class actions, the successful parties in two of the appeals sought their costs.

The opposing parties argued for reduced costs on the basis of public interest, over-lawyering, and the fact that the court had overruled its own prior jurisprudence.

The Court of Appeal rejected these arguments, finding the claimed amounts to be fair and reasonable given the complexity and significance of the proceedings.

Costs of $151,250 and $100,000 were awarded to the respective successful parties on a partial indemnity scale.

In three related securities class action appeals, the court reconsidered whether a statutory secondary-market misrepresentation claim under s. 138.3 of the Securities Act is time-barred unless leave is obtained within the s. 138.14 limitation period.

The court overruled Timminco and held that, for purposes of s. 28 of the Class Proceedings Act, 1992, the statutory claim is asserted when the representative plaintiff pleads the statutory cause of action, the supporting facts, and an intention to seek leave within a timely commenced class proceeding.

The court also upheld the motion judge's interpretation of the s. 138.8 leave standard as screening out hopeless claims, while holding that the Green certification decision erred in failing to consider certifying common negligent misrepresentation issues other than reliance.

The plaintiffs' appeal in Green was allowed in part and the defendants' appeals in Silver and Celestica were dismissed.

On a motion for a stay pending leave applications to the Supreme Court of Canada, the moving parties sought to suspend an order holding that Ontario had jurisdiction over an action to recognize and enforce a foreign judgment of approximately $9.51 billion.

The court applied the RJR-MacDonald test as modified for stays pending leave applications, requiring consideration not only of a serious issue but also of the merit and public importance requirements under s. 40(1) of the Supreme Court Act.

The court found serious questions concerning recognition and enforcement jurisdiction, enforcement against a non-party to the foreign judgment, and the possible role of corporate veil-piercing, all of which met the public importance threshold.

Although irreparable harm was shown only weakly, the balance of convenience and interests of justice favoured a temporary pause pending the Supreme Court of Canada’s leave determinations.

The motions were granted and the parties bore their own costs.

The appellants, indigenous Ecuadorian villagers, obtained a multi-billion dollar judgment in Ecuador against the respondent corporation for environmental pollution.

They brought an action in Ontario to recognize and enforce the judgment against the corporation and its Canadian subsidiary.

The motion judge found that Ontario had jurisdiction but stayed the action on his own initiative, finding the corporation had no assets in Ontario and the corporate veil of the subsidiary could not be pierced.

The Court of Appeal allowed the appeal and set aside the stay, holding that the motion judge erred in granting an unrequested discretionary stay and prematurely deciding the merits of the enforcement action.

The Court dismissed the respondents' cross-appeal, confirming that a real and substantial connection between the subject matter of the litigation and Ontario is not required to establish jurisdiction for an action to enforce a foreign judgment.

The Court of Appeal for Ontario issued a costs endorsement following an appeal.

Costs were awarded to the respondent in the amount of $23,000, inclusive of relevant disbursements and taxes.

Following an appeal from an arbitral award concerning mining concessions and a contractual right of first offer, the court addressed costs of the appeal.

The earlier decision allowed the appeal in part, confirming that the right of first offer was triggered but overturning the arbitrator’s findings regarding partnership, fiduciary duties, and the remedy ordered.

Both parties claimed substantial success and sought partial indemnity costs.

The court held that success on the appeal was divided, as each side prevailed on significant issues.

In the circumstances, the appropriate disposition was for each party to bear its own costs.

The applicants moved to remove Davies Ward Phillips & Vineberg LLP as counsel for a corporation involved in a shareholder dispute.

The court considered whether a unanimous shareholders’ agreement required unanimous director approval for the law firm’s retainer and whether conflicts of interest existed under the Business Corporations Act and common law principles.

The court held that the applicant director was conflicted regarding the company’s defence of litigation he initiated and therefore unanimity was not required for that retainer.

However, the court found the law firm’s concurrent involvement in both litigation against the director and negotiations with a third party supplier created a practical and legal conflict affecting corporate advice.

The retainer relating to the negotiations was therefore improper.

The appellant former directors and officers of Look Communications Inc. sought advance funding for their legal costs to defend an action brought against them by the corporation for breach of fiduciary duty.

The corporation resisted the claims under s. 124(4) of the Canada Business Corporations Act, arguing the appellants had not acted in good faith.

The application judge refused advance funding, finding the corporation had established a strong prima facie case of bad faith regarding equity cancellation payments and legal retainers.

The Court of Appeal dismissed the appeal, confirming that s. 124(4) applies to actions brought by the corporation and that the strong prima facie case standard is the appropriate test for denying advance funding.

Invesco sought leave to appeal orders sanctioning a Plan of Compromise and Reorganization under the CCAA and approving a settlement that released Ernst & Young LLP from claims arising from its auditing of Sino-Forest Corporation.

The Court of Appeal denied leave, finding that the proposed appeals failed to meet the stringent test for leave in CCAA proceedings.

The appeal of the Sanction Order was moot, and the issues regarding the third-party release in the Settlement Order were governed by the court's prior decision in ATB Financial.

The respondent obtained a New York judgment requiring the appellant to deliver a painting pursuant to a contract of sale.

The respondent successfully moved in Ontario to enforce the New York judgment, and was awarded substantial indemnity costs based on the appellant's conduct in the New York litigation.

On appeal, the Court of Appeal upheld the enforcement order, finding that the appellant had attorned to the New York court's jurisdiction by advancing substantive defences on the merits in that forum.

However, the Court allowed the appeal regarding costs, holding that the scale of costs should be determined by the appellant's conduct in the Ontario proceeding, not the foreign litigation, and substituted an award of partial indemnity costs.