Clarke Tedesco

The court considered an application by Sherif Gerges and related entities for a Mareva injunction, a preservation order, and a production order regarding the proceeds of sale of certain real estate.

The court found that while there was a strong prima facie case, the requirements for a Mareva injunction and a preservation order were not met, as the funds in question had already been disbursed and were not readily identifiable.

The court also declined to order further production of documents at this stage.

Costs were fixed against the applicants.

The Plaintiffs brought a motion for a Mareva injunction and ancillary relief, alleging a significant fraud where over $17,000,000 in investor funds were misappropriated from a litigation financing business and diverted to companies controlled by the Defendants to purchase real estate and other assets, resembling a Ponzi scheme.

The court granted the Mareva injunction, finding a strong prima facie case of fraud, a serious risk of asset dissipation (evidenced by attempts to sell properties and the defendants' lack of forthrightness), and that the balance of convenience favored the plaintiffs.

The court also ordered the net proceeds from the sale of a specific property to be held in trust and granted substituted service for two defendants.

The defendants (Trinity) moved for an order requiring the plaintiff (CSMI) to produce documents relating to a real estate development.

CSMI consented to production, but the National Capital Commission (NCC), a non-party, sought enhanced confidentiality protections for the documents.

The court rejected the NCC's proposed two-tier confidentiality order, finding it overbroad and unsupported by evidence demonstrating that the existing implied undertaking, deemed undertaking rule, and confidentiality protocol were insufficient.

The court granted the motion on the terms proposed by Trinity.

The plaintiff requested clarification regarding the scope of an order compelling production of documents.

The court had previously found a joint retainer existed between the plaintiff and the defendant.

The court clarified that as between joint venture parties, communications with the jointly retained lawyer relating to the subject matter of the joint venture are not privileged, even if the communications involved matters where the parties' interests were adverse or concerned withdrawing from the joint venture.

The defendants (Trinity Development Group Inc., Trinity Albert LP, and John Ruddy) brought a motion to compel Capital Sports Management Inc. (CSMI) and Eugene Melnyk to produce documents related to the work of Gowling WLG LLP for RendezVous LeBreton Group (RLG) and the LeBreton Project.

Trinity argued that Gowlings was jointly retained by CSMI and Trinity in relation to the RLG joint venture, or that common interest privilege applied, or that CSMI had waived privilege.

CSMI contended that Gowlings acted solely for CSMI.

The court found that a joint retainer existed between Gowlings, CSMI, and Trinity for the RLG and LeBreton Project from July 23, 2015, to November 23, 2018, based on objective evidence including Gowlings' representation of RLG to third parties, shared instructions, and shared payment of fees.

The court also noted that CSMI's pleading of a fiduciary relationship with Trinity was inconsistent with its claim of privilege.

The motion to compel production was granted, requiring CSMI to produce the requested documents in unredacted form.

The plaintiff sought partial indemnity costs of $290,704 following a successful bifurcated certification motion in a class action against the defendant.

The defendant argued the costs should be reduced by 50% because the plaintiff was successful in certifying the common law negligence claim but unsuccessful in certifying the statutory misrepresentation claim.

The court rejected the defendant's argument, finding that the plaintiff was the successful party in a complex, hard-fought motion and that divided success on specific claims does not necessarily warrant a reduction in costs.

The plaintiff was awarded the full amount claimed.

The applicants, former directors of PACE Savings & Credit Union, sought a declaration that CUMIS General Insurance Company had a duty to defend them in an action brought by the Financial Services Regulatory Authority (FSRA) as administrator of PACE.

CUMIS denied coverage based on the 'Insured vs. Insured' exclusion in the Directors' and Officers' Liability Policy.

The court held that while the exclusion applied, the 'derivative action' exception restored coverage because the FSRA, acting as a 'person', brought the claim on behalf of the corporation.

The court also ruled that applicants facing fraud claims were entitled to independent counsel due to a conflict of interest, while those facing only negligence claims were not.

The plaintiff brought a motion to certify a class action against the manager of an exchange-traded fund (ETF) that suffered catastrophic losses following a spike in market volatility.

The plaintiff advanced claims in common law negligence and statutory misrepresentation under s. 130 of the Securities Act.

The court certified the common law negligence claim, finding it met all certification criteria.

However, the court refused to certify the s. 130 claim because the plaintiff could not satisfy the identifiable class criterion, as it was impossible to prove which investors purchased 'Creation Units' directly from the manager versus units on the secondary market.

The moving defendants brought a motion for security for costs against the corporate plaintiff in an action arising from a failed joint venture to develop LeBreton Flats.

The court found there was good reason to believe the plaintiff had insufficient assets to satisfy a costs award, as its liabilities exceeded its assets.

The plaintiff failed to demonstrate sufficient exigible assets, relying instead on future revenue streams which the court found inadequate.

The court concluded it was just to order security for costs, noting the moving defendants were minor players facing significant expenses and the plaintiff's controlling shareholder would otherwise be shielded from costs liability.

The plaintiff was ordered to post security in instalments.

The defendants brought a motion to strike the plaintiffs' claims for constructive dismissal, wrongful dismissal, discrimination, and bad faith, arguing they were new claims advanced after the limitation period expired.

The plaintiff had originally issued a Notice of Action including these claims, but the subsequent Statement of Claim focused on an independent contractor relationship.

The court found that the original Statement of Claim contained the essential facts giving rise to the cause of action, and the Fresh as Amended Statement of Claim simply asserted different legal conclusions from those facts.

The motion to strike was dismissed.

The applicants sought an order requiring the respondent credit union to return approximately $5,000,000 that had been held in their accounts.

The credit union, under administration by the regulator, had unilaterally collapsed the applicants' term deposits and appropriated the funds, claiming a right of set-off under the Credit Unions and Caisses Populaires Act, 1994 for unliquidated damages related to alleged fraud and breach of fiduciary duty.

The court held that the statutory right of set-off does not permit a financial institution to unilaterally appropriate funds for unliquidated and disputed claims without judicial determination.

The court ordered the credit union to restore the accounts to their previous state and compensate the applicants for lost interest.

Torstar Corporation sought court approval for a plan of arrangement to sell all its shares to NordStar Capital LP for $0.74 per share.

The arrangement was overwhelmingly approved by shareholders.

Competing bidder CMMH and dissenting shareholder Patrick Collins objected, alleging inadequate disclosure and a flawed bidding process due to hard lock-up agreements.

The court found the arrangement had a valid business purpose, the process was conducted in good faith with professional advice, and the objections were resolved fairly.

The court emphasized the weight given to the shareholder vote and the Board's business judgment, particularly in uncertain times, and approved the arrangement.

This is an appeal from a certification judge's order refusing to certify an investor class action and dismissing the action on the basis that the pleadings did not disclose a reasonable cause of action.

The proposed class action arose from the dramatic collapse of a derivatives-based exchange-traded fund (ETF) managed by the respondent, Horizons ETFS Management (Canada) Inc., which lost almost 90% of its value overnight.

The appellant, Graham Wright, alleged negligence and misrepresentations in the prospectus under s. 130 of the Securities Act.

The certification judge dismissed both claims.

The Court of Appeal allowed the appeal in part, finding that the negligence claim did disclose a reasonable cause of action.

For the s. 130 Securities Act claim, the Court found it did not disclose a reasonable cause of action as pleaded but granted leave to amend the statement of claim to assert the purchase of 'Creation Units', remitting the matter to the certification judge for further determination of certification criteria.

The plaintiff sought to certify a class action against the manager of a complex, passively managed exchange-traded fund (ETF) after the fund's value collapsed, causing significant losses to retail investors.

The plaintiff alleged common law negligence for designing and selling a risky product and failing to actively manage it, as well as a statutory claim under s. 130 of the Securities Act for misrepresentations.

The court dismissed the certification motion and the action, finding it plain and obvious that the pleadings disclosed no reasonable cause of action.

The court held that the negligence claim was an unprecedented attempt to recover pure economic loss for a 'shoddy' financial product, and that the statutory claim for ETF trading properly falls under the secondary market liability provisions of Part XXIII.1 (s. 138.3), not the primary market provisions of s. 130.

The applicants sought to vary a previous judgment regarding the valuation of BitRush shares for cancellation due to misappropriation and to obtain additional relief including a buyout of the respondents' shares or cancellation of shares for unpaid costs.

The court allowed the amendment to the share valuation, reducing it from $0.09/share to $0.005/share for the purpose of compensating BitRush for misappropriated funds, thereby increasing the number of shares to be cancelled.

The court dismissed the requests for a buyout of the respondents' remaining shares and for the cancellation of shares to satisfy the costs order, but ordered that the respondents could not vote their remaining shares until costs were paid.

The applicants sought relief under the oppression remedy provisions of the Business Corporations Act, alleging that the respondent Werner Boehm, as CEO and directing mind of MezzaCap Investments Ltd., engaged in oppressive conduct.

This included failing to secure technology rights for BitRush, misappropriating company assets (AdBit subsidiary and funds), and refusing to certify financial statements, leading to a cease trade order.

The court found Boehm's conduct oppressive, unfairly prejudicial, and in breach of fiduciary duty.

Remedies granted included declarations of oppression, orders for specific share transfers from MezzaCap Investments to Dr. Kalcher and HSRC Investments Pte.

Ltd. to rectify unfulfilled agreements, and cancellation of MezzaCap Investments' shares equivalent to misappropriated funds.

Other requested relief, such as cancellation of all remaining shares based on pre-RTO misrepresentations, was dismissed.

The plaintiff shareholder brought a motion to appoint an interim receiver-manager for the defendant corporation, alleging oppressive conduct by management and the board of directors.

The defendants brought a cross-motion for summary judgment to dismiss the oppression action.

The court dismissed the plaintiff's motion, finding he failed to establish a strong prima facie case of oppression, irreparable harm, or that the balance of convenience favoured the appointment.

The court also dismissed the defendants' cross-motion for summary judgment, concluding that the plaintiff raised serious issues requiring a trial and that the claims were not clearly statute-barred.

The plaintiffs and defendants brought cross-motions for summary judgment in an action concerning advances totalling $792,154 made by the plaintiffs to the defendants.

The plaintiffs argued the advances were personal loans, while the defendants argued they were payments made on behalf of a corporation as interim bridge financing.

The court found that the conflicting evidence, particularly regarding credibility and the characterization of the advances, created a genuine issue requiring a trial.

Both motions for summary judgment were dismissed, and the motion judge remained seized of the action for trial.

The respondents moved to stay or dismiss the applicants' oppression remedy application under the Business Corporations Act, challenging the Ontario court's jurisdiction and arguing *forum non conveniens*.

They also sought to set aside service and argued the application was frivolous or vexatious.

The court found Ontario had jurisdiction due to the corporation's domicile and the exclusive jurisdiction of s. 248 of the OBCA.

The *forum non conveniens* argument was rejected as no alternate forum could hear the OBCA claims.

Service was deemed proper, and the frivolous/vexatious argument was dismissed.

The appellant appealed from a trial judgment awarding the respondent US$192,000 in compensatory damages plus pre-judgment interest, $25,000 in punitive damages, and $85,000 in costs in a civil fraud case.

The trial judge found that the appellant fraudulently obtained US$200,000 from the respondent, a vulnerable widow, by misrepresenting that the funds would not be traded and then investing them in call options through his personal accounts, resulting in total loss.

The Court of Appeal dismissed the appeal, finding the trial judge's reasons were sufficient, the credibility findings were supported by the record, and the punitive damages award was appropriate given the appellant's highly reprehensible conduct.