David A. Seed

The Canadian Imperial Bank of Commerce (CIBC) initiated receivership proceedings against 1340182 Ontario Limited and Kazembe & Associates Professional Corporation.

The court-appointed Receiver, MNP Ltd., sought approval of its second report, fees, and authorization to assign 1340182 Ontario Limited into bankruptcy, and to distribute proceeds from the sale of a property.

A key dispute arose regarding the priority of mortgages on the property, specifically between Arthur Bryan, 923944 Ontario Ltd., and CIBC.

Bryan claimed his earlier mortgage was fraudulently discharged and sought declaratory relief to restore its first-ranking priority.

The court dismissed Bryan's cross-motion, finding that even if the discharge was fraudulent, the subsequent mortgages of 923944 Ontario Ltd. and CIBC were valid and enforceable under the Land Titles Act, as they were not fraudulent instruments and the mortgagees had no actual or imputed knowledge of fraud.

The court approved the Receiver's report and authorized distribution according to the registered priorities (923944 Ontario Ltd. first, CIBC second).

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

The appellant, Assignment Credit Corp., was ordered to pay costs to several respondents (MCAP Financial Corporation, Dorr Capital Corporation, and Cherniak Law Professional Corporation).

The court rejected the appellant's argument that prior costs agreements should stand, as they were made before the appellant's non-disclosure of a material fact (that the Mesbur Judgment was obtained on consent) was revealed.

This non-disclosure, which impacted the second issue of the appeal, justified an elevated costs award on a solicitor-client basis for the affected respondents.

The 167 respondents were denied costs due to their own failure to disclose the consent judgment and their underlying financial obligations.

This appeal concerned the priority of various creditors in a garnishment hearing involving payments owed by the City of St. Catharines and Region of Niagara to 1671379 Ontario Inc. under a Brownfield Tax Increment Based Incentive Grant Program Agreement (BTIG).

The primary dispute was between MCAP Financial Corporation, holding a perfected General Security Agreement (GSA), and Assignment Credit Corp. (ACC), asserting priority based on an assigned consent judgment (Mesbur Judgment).

The Court of Appeal affirmed the motion judge's finding that MCAP's perfected GSA had priority for its shortfall judgment over ACC's claim, finding no inconsistency in MCAP's position.

However, the court remitted the issue of priorities among ACC and other unsecured judgment creditors to the motion judge, as it was revealed post-hearing that the Mesbur Judgment was a consent judgment, a fact not disclosed to the motion judge or other creditors, raising new legal arguments regarding the Personal Property Security Act and the Assignments and Preferences Act.

The applicant brought a motion for leave to appeal an order dated October 3, 2022.

The Divisional Court dismissed the motion for leave to appeal and ordered costs payable to the respondent in the all-inclusive amount of $2,000.

Various creditors of 1671379 Ontario Inc. and Manuel Elkind brought motions to determine priority status for garnishment payments owed by the City of St. Catharines and Region of Niagara under a Brownfield Tax Increment Based Incentive Grant Program Agreement (BTIG).

The primary dispute was between MCAP Financial Corporation, which held a registered and perfected security interest under the Personal Property Security Act (PPSA), and Assignment Credit Corp. (ACC), which claimed priority based on an assignment of a prior judgment.

The court found that MCAP's security interest, including the proceeds of the BTIG, maintained its priority status despite being reduced to a shortfall judgment.

The court dismissed ACC's claim for priority, finding that its assigned interest was subject to MCAP's prior perfected security and that ACC's claim should be limited to $400,000 as per a "Side Deal" in a previous endorsement.

This is a costs endorsement following two separate motions in a combined family law and oppression remedy proceeding.

The respondent was successful on a motion to stay the corporate claims in favour of arbitration, while the applicant was successful on a motion for financial disclosure.

The court found both parties engaged in some unreasonable conduct and made no formal offers to settle that met the rules.

The court awarded the respondent $9,151.32 for the stay motion and the applicant $12,774.65 for the disclosure motion, resulting in a net payment of $3,623.33 to the applicant.

The applicant brought a family law and oppression application against her former spouse, his business partner, and their jointly owned corporation.

The business partner brought a motion to stay the corporate claims against him in favour of arbitration pursuant to a shareholder's agreement.

The applicant brought a cross-motion for financial disclosure and interim costs to fund her oppression claim.

The court granted the stay of the corporate claims, finding they fell within the mandatory arbitration clause.

However, the court also ordered the respondents to provide the requested financial disclosure to assist the arbitration and family law proceedings, and ordered the corporation to pay $53,995 in interim costs to the applicant under s. 249(4) of the OBCA to fund her forensic accounting and legal fees.

The defendant, Nima Priyeshakbari, brought a motion to strike portions of the plaintiff's claim, which asserted allegations of fraud, conspiracy, fraudulent conveyance, and insufficient particularity regarding an interest in land and documents/conversations.

The plaintiff alleged that the defendants conspired to unlawfully convert a property in which she had invested, selling it below market value to deprive her of her investment.

The court applied the "plain and obvious" test for striking pleadings, accepting the plaintiff's alleged facts as true unless patently ridiculous.

The court found that the plaintiff's claim met the necessary particularity requirements for fraud and conspiracy, noting that knowledge can be alleged as a fact without pleading circumstances.

The court also clarified that the Land Titles Act does not ban trusts but rather defines how third parties deal with registered owners.

The motion to strike was dismissed.

The plaintiff mortgagor defaulted on a development loan, leading the defendant mortgagee to sell the subject property under a power of sale.

The plaintiff brought an action alleging the sale was improvident and that the property was sold at a grossly undervalued price to a pre-selected purchaser.

The court reviewed the marketing efforts, which included obtaining multiple independent appraisals and hiring a specialized commercial real estate broker.

The court found that the defendant took reasonable precautions to obtain the true market value of the property and that the plaintiff failed to prove a higher price could have been obtained.

The action was dismissed with costs fixed at $330,000.

The plaintiff manufacturer brought a summary judgment motion for $222,339.57 in unpaid invoices against the defendant, a former authorized dealer.

The defendant brought a cross-motion to compel the plaintiff to accept the return of inventory purchased in the six months prior to the termination of their relationship.

The court found that the plaintiff had effectively terminated the distributorship arrangement without notice.

To give business efficacy to the parties' arrangement, the court implied a term allowing the defendant to return untouched inventory purchased after May 1, 2018, for full credit against the outstanding invoices.

The plaintiffs obtained an ex parte Mareva injunction freezing the assets of the defendant, a former senior manager who allegedly misappropriated funds and started a competing business.

On the return of the motion, the court reviewed the evidence de novo.

The court found that the plaintiffs failed to establish a strong prima facie case of fraud, as the defendant provided reasonable explanations for the impugned credit card charges and tax defaults.

Furthermore, the defendant's decision to sell his home was made prior to being served with the claim and was for the purpose of downsizing, not dissipating assets.

The Mareva injunction was set aside.

This application concerned the passing of accounts and seeking compensation by Linda and Ted Austin, who served as Powers of Attorney for Property and Personal Care for Isabel and Wayne Daniel.

The Daniels, an elderly couple with no next of kin, received extensive care and financial management from the Austins for over 20 years.

Following Wayne Daniel's passing and Isabel Daniel's move to assisted care, Isabel suggested the Austins seek compensation.

The court approved compensation for administering Wayne Daniel's estate, statutory compensation as Powers of Attorney for Property, and compensation for personal care services, totaling $757,659.87, along with legal fees.

Following a successful application by a condominium corporation to enforce its declaration against an offending unit owner and its tenants, the court determined the appropriate scale and quantum of costs.

The court awarded the applicant full indemnity costs of $24,771.93, noting that section 134(5) of the Condominium Act and the condominium's declaration contemplate full recovery of enforcement costs to protect innocent unit owners.

A supporting respondent, who gathered evidence of the breach to protect his exclusive use rights, was awarded partial indemnity costs of $15,000 against the offending respondents.

The respondents were successful on an appeal regarding a real estate transaction and sought costs on a full indemnity basis.

The appellant argued for a significantly lower amount, citing an offer to settle and access to justice concerns.

The court rejected the appellant's arguments, finding the appeal had no merit and the appellant's actions in pursuing the litigation were abusive.

The court awarded the respondents their full requested costs of $22,441.23.

The appellant buyer appealed a Small Claims Court judgment dismissing his claim for the return of a $10,000 deposit and awarding the deposit to the respondent sellers as damages for anticipatory breach.

The buyer had repudiated the agreement of purchase and sale after a pre-closing visit, alleging undisclosed prior water damage to the basement.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the trial judge's factual conclusion that the buyer failed to prove the existence of prior water damage or misrepresentation by the sellers.

This endorsement addresses the costs of a motion where default judgment obtained by the plaintiff, Western Steel and Tube Ltd., against the defendants, including Canadian Tire Corporation, Limited, was set aside.

The court found the plaintiff primarily responsible for the need for Canadian Tire's motion due to procedural misconduct, including failure to provide notice of the default trial and to make full disclosure of material facts.

Despite the plaintiff's arguments regarding the default of Jiangsu Sainty Sumex Tools Corp. Ltd., the court ordered the plaintiff to pay Canadian Tire $75,000 in all-inclusive costs, emphasizing the plaintiff's inappropriate conduct and refusal to accept reasonable settlement offers.

No costs were awarded for or against Jiangsu Sainty Sumex Tools Corp. Ltd.

The defendants, Jiangsu Sainty Sumex Tools Corp. Ltd. and Canadian Tire Corporation, Limited, moved to set aside a default judgment granted against Jiangsu Sainty Sumex and its prior noting in default.

Canadian Tire also sought to set aside or vary the judgment, particularly its in rem declarations concerning intellectual property rights, arguing they were non-binding on Canadian Tire.

The default judgment was obtained by the plaintiff without notice to counsel for either defendant and without full disclosure of material facts to the court, including a Trademark Opposition Board decision against the plaintiff's claimed trademark, an expired patent, and ongoing discussions with the defaulting defendant's counsel.

The court found the plaintiff's conduct inappropriate and set aside the default judgment due to lack of notice and non-disclosure.

The noting in default for Jiangsu Sainty Sumex was also set aside, conditional on the defendant posting security for damages and costs, providing an affidavit of documents, and producing a witness for discovery, to ensure the matter proceeds to a full trial on the merits.

The Applicant sought interim custody, child and spousal support, release of matrimonial home proceeds, and disclosure.

The Respondent sought temporary sole or shared custody, primary residence in Florida, supervised access for the Applicant, and a s. 30 assessment.

The court granted the Applicant temporary sole custody, established a parenting schedule allowing the child to travel to Florida one week per month, ordered the Respondent to pay $75,000 monthly in temporary child and spousal support, and released the net proceeds of the matrimonial home to the Applicant.

The Respondent's motion for a s. 30 assessment was dismissed without prejudice, and his request for a sealing order was adjourned for further submissions.

The court also ordered the Respondent to provide comprehensive financial disclosure.

The appellant appealed a Small Claims Court decision awarding the respondent $10,047.96 for defective hardwood flooring installation.

The appellant argued the trial judge misapprehended evidence and erred by finding negligence without expert evidence.

The Divisional Court dismissed the appeal, finding no palpable and overriding errors in the trial judge's factual findings or credibility assessments.

The court also held that expert evidence was not required to establish the standard of care for non-technical matters such as squeaky floors.

The applicant, Julia Michelle Bolland, brought a motion seeking a declaration that Ontario has jurisdiction over her family law proceeding, including divorce, custody, access, child support, spousal support, and equalization of net family property.

The respondent, David Drew Bolland, opposed this and brought a cross-motion to dismiss Julia's application, arguing she did not meet the 12-month residency requirement for divorce in Ontario and that Florida was the appropriate forum.

The court found that Julia was ordinarily resident in Ontario, that the child Lincoln's habitual residence was Ontario, and that Ontario had a real and substantial connection to the support and property claims.

The respondent failed to demonstrate that Florida was a more appropriate forum under forum non conveniens principles.

The applicant's motion was granted, and the respondent's motion was dismissed.