David E. Lederman

Following a five-week trial where the plaintiffs succeeded in claims for breach of fiduciary duty and conspiracy, the court determined the appropriate scale and quantum of costs.

The plaintiffs sought over $6.2 million on a substantial indemnity basis.

The court rejected substantial indemnity costs, finding the defendants' litigation conduct did not warrant such a sanction and the pre-litigation conduct was already addressed through punitive damages and disgorgement.

The court awarded partial indemnity costs of $2,200,000 for the action and $20,000 for the counterclaim, apportioning liability among the defendants based on the claims.

The plaintiffs, founders of a venture capital fund, brought an action against their co-founders and a third-party purchaser for breach of fiduciary duty, breach of contract, and conspiracy.

The court found that the co-founders secretly established a competing fund and conspired with the purchaser to acquire a portfolio company at a discounted price while concealing a valuable asset (the Tinder app).

The court awarded compensatory damages, disgorgement of profits, and punitive damages against the defendants.

The plaintiffs sought a Mareva injunction freezing assets of an individual defendant alleged to have received fraudulent transfers from a corporate defendant.

The court accepted that the plaintiffs had established a strong prima facie case that certain transfers constituted fraudulent conveyances and that judgment in related U.S. proceedings was likely.

However, the evidence failed to demonstrate the existence of assets in Ontario or a current risk of dissipation within the jurisdiction.

The court concluded that a Mareva injunction cannot be used as a tool to investigate whether assets exist.

Because the applicants could not satisfy the jurisdictional asset and dissipation requirements, the motion was dismissed.

Following a prior finding of civil contempt for breaching an injunction prohibiting dissemination of confidential business information, the court considered the appropriate sanction.

The defendant knowingly and deliberately violated a court order by distributing a press release containing confidential information and refusing to provide disclosure of recipients, showing persistent defiance and no remorse.

The court emphasized the importance of deterrence and the integrity of court orders in the administration of justice.

Finding that a fine would be ineffective due to the defendant’s financial circumstances and continuing defiance, the court imposed a custodial sanction.

A 20‑day jail sentence to be served intermittently over five weekends was ordered, with the sentence stayed for 30 days to permit the defendant to seek a stay pending appeal.

The plaintiffs brought a motion under Rule 60.11(1) of the Rules of Civil Procedure seeking a contempt finding against a former subcontractor who published a press release disclosing confidential business information after being served with an interim injunction prohibiting publication.

The court reviewed the legal test for civil contempt, requiring proof beyond a reasonable doubt that the order was clear, that the alleged contemnor had knowledge of the order, and that the breach was deliberate and wilful.

Evidence showed the respondent had actual knowledge of the injunction yet failed to take reasonable steps to prevent publication of the press release and refused to disclose the recipients of confidential information as required by the order.

The court rejected the respondent’s arguments that the order did not require post-order disclosure or that publication could not be stopped.

The court concluded that the respondent knowingly and wilfully breached the order in both letter and spirit.

The plaintiffs sought a Mareva injunction against the assets of the defendants, specifically a biodiesel plant owned by Great Lakes Biodiesel Inc., alleging that funds were fraudulently conveyed by Verdeo Inc. to the defendants to fund the plant's construction.

In the alternative, the plaintiffs sought interim relief under the oppression provisions of the Business Corporations Act or a certificate of pending litigation.

The court dismissed the motions, finding that the plaintiffs failed to establish a strong prima facie case of a fraudulent conveyance from the intermediary corporations to Great Lakes Biodiesel Inc., and that the balance of convenience did not favour a certificate of pending litigation.

The moving defendants sought to lift restrictions imposed by an earlier order preventing them from disposing of or encumbering property and related equipment pending a motion for a Mareva injunction.

The court characterized the prior order as a consent order reflecting an agreement between the parties, with undertakings that had expired but were subject to extension pending further order.

Applying the RJR‑MacDonald test for injunctive relief, the court found that the plaintiffs had established a serious issue to be tried regarding alleged fraudulent conveyances under the Fraudulent Conveyances Act.

The court also found a real possibility of irreparable harm if the property were encumbered to secure existing liabilities.

The balance of convenience favoured maintaining the restrictions, subject to a limited exception permitting encumbrances for bona fide new financing used in the ordinary course of business.

The applicant, a limited partner, brought an application for the production of financial records and forecasts from the respondent limited partnership.

The respondents refused, relying on a confidentiality clause in the limited partnership agreement.

The Superior Court of Justice granted the application, finding that while partners can contract out of the right to information provisions in the Limited Partnerships Act, the specific confidentiality clause did not apply to the broader financial documents sought.

The court also held that a limited partner is not required to provide a reason for seeking information to which they are statutorily entitled.