Civita M. Gauley

Following a lengthy trial in which the defendants obtained a largely favourable judgment and anticipated a substantial costs award, the defendants brought a motion seeking the appointment of a receiver over the plaintiff corporation pending determination of trial costs.

The plaintiff argued that the motion was barred because it had filed a notice of appeal, triggering the automatic stay of money judgments under Rule 63.01(1) of the Rules of Civil Procedure.

The court held that the requested receivership was not enforcement of a money judgment but a preservative measure intended to protect the corporation’s assets until costs were determined.

Accordingly, the automatic stay did not apply and the court retained jurisdiction to hear a motion for a receiver.

The defendants were permitted to return the motion for a full hearing on whether appointing a receiver would be just or convenient under s. 101 of the Courts of Justice Act.

The plaintiff purchased a hearing clinic from the defendants and later alleged numerous fraudulent misrepresentations relating to patient numbers, referrals, profitability, and other operational matters.

After a lengthy 72‑day trial spanning several years and extensive documentary evidence, the court found the plaintiff’s principal witness unreliable and rejected the majority of alleged misrepresentations.

While the defendants had knowledge that a former employee may have possessed a patient list, the court held that the plaintiff failed to prove reliance or damages arising from that nondisclosure.

Several minor breaches of the asset purchase agreement were established, including issues relating to keys, inventory removal, software discs, QuickBooks data, and Canada Post mail handling, but damages were minimal.

During a civil trial arising from the purchase of a hearing clinic business, the plaintiff sought leave mid‑trial to adduce additional evidence from its first witness concerning alleged improper professional practices and billing irregularities by the defendants.

The defendants ultimately consented to the admission of the evidence on the condition that the trial be briefly adjourned and that they receive substantial indemnity costs.

The court granted the adjournment, finding the plaintiff’s late introduction of extensive new documentary evidence and allegations unjustified and disruptive to the defence.

Although the plaintiff succeeded in obtaining leave to present the additional evidence, the court held that the lateness of the motion constituted litigation misconduct warranting costs on a substantial indemnity basis.