David M. Brown

A creditor brought a motion under s. 38 of the Bankruptcy and Insolvency Act seeking authorization to continue foreign enforcement proceedings after the trustee refused to proceed.

The proceedings in Taiwan sought recognition and enforcement of Ontario contempt costs orders against property owned by a defendant abroad.

The trustee opposed the motion, arguing the claims lacked merit, raised potential set‑off issues, and conflicted with settlements and releases.

The court held the creditor met the threshold under s. 38 because the costs orders remained outstanding and the proposed claim was not spurious.

Leave was granted permitting the creditor to continue the Taiwan proceeding at its own expense with assignment of the trustee’s interest for that limited purpose.

In a complex fraud action under case management, the parties sought different variations to a previously ordered litigation timetable.

The defendants proposed proceeding with limited examinations for discovery while postponing key examinations until resolution of an appeal concerning access to funds for legal defence.

The plaintiff argued that all discoveries should be delayed to avoid duplicative preparation and increased costs.

The court held that further discovery scheduling was impractical while a pending Divisional Court appeal would determine whether certain defendants could fund their defence.

The judge declined to impose additional discovery deadlines and directed the parties to return for a further case conference within three weeks after the appeal decision, at which point a peremptory trial date might be set.

In a commercial dispute concerning an inventory liquidation contract, the court issued case management directions after the plaintiff failed to file its pre-trial conference memorandum in time to permit a productive conference.

The court scheduled a further pre-trial conference and expressed concern that the parties’ estimate of an eight to ten day trial was disproportionate given that less than $500,000 was at stake.

The judge suggested that the parties consider a hybrid trial format and ordered the plaintiff to deliver answers to outstanding undertakings within 30 days.

With respect to refusals arising from examinations for discovery, the court offered the defendants two options: either refrain from bringing a refusals motion with the understanding that issues could be addressed at trial, or bring a motion in writing subject to potential per‑refusal cost consequences.

The directions were intended to streamline the proceeding and encourage proportional litigation conduct.

At a Commercial List case conference involving two related corporate disputes, the court addressed extensive procedural delays, voluminous filings, and lack of cooperation between counsel.

The proceedings involved claims relating to loan agreements, alleged rights to corporate shares, fiduciary duty breaches, and conspiracy allegations arising from financing arrangements and subsequent litigation.

The court declined to permit consolidation or bifurcation but ordered that both actions be heard together or sequentially.

Emphasizing proportionality under Rule 1.04 of the Rules of Civil Procedure, the court directed the parties to disclose damages calculations, draft opening statements, and detailed historical and projected litigation costs.

The directions aimed to enable meaningful case management and ensure efficient use of judicial resources.

The court-appointed receiver brought a motion to approve a private agreement of purchase and sale for a residential property and to halt a previously court-approved auction scheduled to take place in four days.

The second mortgagee opposed the motion, arguing the auction should proceed.

The court dismissed the motion, applying the Soundair principles and finding that accepting a pre-emptive offer and halting the auction at this late stage would damage the integrity of the sales process.

The applicant, a secured creditor owed approximately $36 million, applied for the appointment of a receiver over the debtors' four retirement residences and for the approval of a pre-packaged credit bid sale.

After a prolonged but unsuccessful marketing process, the applicant proposed to acquire the assets for an amount equivalent to the indebtedness.

The court found the appointment of a receiver necessary to maintain the residences as going concerns and approved the sale, finding the credit bid reasonable based on independent appraisals.

The defendant bank moved to dismiss an action alleging fraudulent and negligent misrepresentation on the basis that the plaintiff breached the deemed undertaking rule under Rule 30.1 of the Rules of Civil Procedure by using documentary productions obtained in related litigation to commence a separate claim.

The court held that the plaintiff had indeed used documents obtained through discovery in the earlier proceeding to inform and support its decision to initiate the new action, thereby breaching the deemed undertaking rule.

However, considering the substantial overlap in parties, issues, and factual matrix between the two proceedings, and the minimal prejudice to the producing party, the court granted retroactive relief from the rule.

The court dismissed the bank’s motion to dismiss or stay the action but allowed the plaintiff limited permission to use the discovery materials in the new action.

Costs were awarded against the plaintiff due to its failure to seek leave before using the materials and its lack of candour in case management proceedings.

The Attorney General of Canada moved to vary a Mareva injunction obtained by victims of terrorism seeking to enforce a U.S. judgment against Iran.

The motion concerned whether Iranian diplomatic property in Canada could remain subject to the injunction.

The court held that the plaintiffs had failed to make full and frank disclosure when obtaining the original ex parte orders, including failing to disclose unsuccessful attempts to attach similar Iranian diplomatic property in the United States and mischaracterizing relevant Canadian authority concerning the Vienna Convention and Crown prerogative.

Given the material nondisclosure and the principles of diplomatic immunity under the State Immunity Act and Foreign Missions and International Organizations Act, the court varied the Mareva order to exclude assets certified by the Minister of Foreign Affairs as diplomatic property.

Following a motion to strike the corporate defendants’ statement of defence for failure to retain counsel, the defendants retained counsel shortly before the hearing and the motion was not argued.

The plaintiff sought costs thrown away for preparation of the motion.

The court held that bringing the motion was reasonable in complex fraud litigation where corporate defendants had delayed appointing counsel despite ample time.

Applying Rule 57 factors and the principles governing reasonable costs, the court awarded partial indemnity costs for fees and reduced disbursements.

Payment of the costs award was staggered due to the circumstances of the corporate defendants.

The trustee in bankruptcy for several related real estate development companies brought applications to determine the priority of claims against the proceeds of a sold property and to set aside various payments and security granted to an investor, Dr. Goldfinger, as transfers at undervalue, fraudulent conveyances, or unjust preferences.

The court allowed some of the proofs of claim while disallowing others or requiring further evidence.

The court dismissed the trustee's claim to set aside a $2.5 million settlement payment to Goldfinger, finding it was made at arm's length and without intent to defraud creditors.

However, the court set aside a $471,000 payment to Goldfinger as a fraudulent conveyance, finding it was made with the intent to defeat another secured creditor, and ordered Goldfinger to repay the amount to the bankrupt estate.

The trustee in bankruptcy brought motions under s. 164 of the Bankruptcy and Insolvency Act seeking orders compelling examinations and document production from individuals believed to possess information regarding the affairs of the bankrupt corporations.

The court found that certain individuals had failed to attend examinations or comply with undertakings and ordered them to attend examinations, produce documents, and pay modest costs for non‑attendance.

The court also granted disclosure orders against telecommunications and technology companies to obtain subscriber information linked to specified IP addresses, telephone numbers, and email accounts believed to contain relevant records.

In addition, the trustee sought approval of its solicitor’s accounts in the bankruptcies.

The court reviewed the accounts, found them reasonable in the circumstances, and approved the fees.

In a shareholders’ dispute involving a corporation operating casinos abroad, the applicant sought interim injunctive relief against a trustee holding shares as bare trustee for the applicant and another beneficial owner.

The trustee refused to transfer the shares, asserting the beneficial owners were defaulting shareholders under a shareholders’ agreement and therefore could not exercise shareholder rights.

Applying the test in RJR-MacDonald Inc. v. Canada (A.G.), the court found a serious issue to be tried regarding whether the trustee breached fiduciary duties by asserting personal shareholder rights in conflict with his obligations as trustee.

The court also found risk of irreparable harm if the trustee continued acting as though the beneficial owners had no rights.

Interim orders were granted restraining the trustee from exercising rights attached to the trust shares and directing cooperation among the shareholders to maintain ordinary course operations pending the hearing of the application.

Following a prior decision partially granting amendments to a statement of defence while dismissing other relief, the court determined the appropriate costs award.

The plaintiff sought substantial indemnity costs or, alternatively, higher partial indemnity costs, arguing it was largely successful on the motion.

The court applied the factors in Rule 57 of the Rules of Civil Procedure, including proportionality under Rule 1.04(1), and the Court of Appeal guidance that costs should be fair and reasonable rather than mirror actual expenses incurred.

Finding that the plaintiff achieved substantially greater success but that the motion was relatively straightforward, the court declined to award substantial indemnity costs.

Partial indemnity costs of $6,899 inclusive of disbursements and HST were awarded.

Following reasons on a motion concerning the removal of counsel for corporate and individual respondents, the court determined the appropriate costs award.

Success on the underlying motion was divided: counsel was removed for the corporate respondents but permitted to continue acting for the individual respondents.

Applying the principles under Rule 57 of the Rules of Civil Procedure, including proportionality and the guidance from appellate authority on fixing fair and reasonable costs, the court concluded neither side achieved complete success.

The applicants’ prior settlement offer was not considered because it addressed issues beyond the motion.

Partial indemnity costs of $4,000 were fixed, payable in the cause of the application.

Following a five‑day hybrid trial concerning governance disputes within a religious corporation, the court had previously set aside the admission of new members, the election of directors, and the appointment of officers, and imposed conditions for a court‑ordered members’ meeting under s. 297 of the Corporations Act.

The parties subsequently made competing claims for costs.

Applying Rule 57 of the Rules of Civil Procedure and the principles from appellate authorities on proportionality and fairness, the court assessed the degree of success and the parties’ conduct.

The judge found that both factions contributed to the corporate dysfunction that generated the litigation and unnecessarily prolonged the trial.

Concluding that neither side could properly be regarded as successful, the court declined to award costs.

A court-appointed receiver sought approval of an auction sale process for a high-value unfinished residential property after several years of unsuccessful marketing through traditional listings.

A second mortgagee opposed the proposed reserve price, arguing it was too low and risked insufficient proceeds to reduce the debt under the second mortgage.

The court reviewed confidential appraisal evidence and the property’s extended failed marketing history.

It concluded that the receiver’s valuation and proposed reserve price were more realistic than the objecting mortgagee’s optimistic assumptions.

The court approved the auction process, the receiver’s activities and fees, and granted a sealing order to protect commercially sensitive valuation and auction information.

Competing applications were brought concerning whether a contractual dispute arising from the termination of an agreement to design and build a diabetes registry should proceed by arbitration or litigation.

One party sought appointment of an arbitrator pursuant to the dispute resolution clause in the agreement, while the other sought to have the dispute determined through litigation in the Superior Court and consolidated with related defamation proceedings.

Before hearing the applications, the court proposed procedural options, and the parties agreed to proceed with litigation in the Superior Court under case management with an expedited trial schedule.

The applications were adjourned to a case conference to establish a litigation plan, and related defamation actions were transferred to the Commercial List for coordinated management.

A motion sought to transfer a proceeding involving equity derivative transactions between two financial institutions to the Toronto Region Commercial List under the “basket clause” of the Commercial List Practice Direction.

The dispute concerned the interpretation and adjustment of settlement mechanisms under ISDA confirmations following a corporate restructuring affecting securities in the derivative basket.

The court reviewed the principles governing transfer to the Commercial List, including whether the matter is in essence commercial, its complexity, the number of parties, and considerations of efficient case management.

The court held that disputes involving the interpretation or performance of complex derivative transactions fall within the type of commercial matters commonly heard on the Commercial List.

The motion to transfer was granted and the parties were directed to attend a subsequent appointment to schedule the proceeding.

In a bankruptcy application brought by an unsecured creditor, the respondent debtor moved to compel answers to numerous refusals made during cross‑examination of the applicant’s affiant on the affidavit of verification.

The court considered the permissible scope of cross‑examination in bankruptcy proceedings and held that questions must relate to the statutory requirements under the Bankruptcy and Insolvency Act, the issues in dispute on the bankruptcy application, or the credibility of the affiant.

Many questions sought to revisit issues already determined in an arbitration award and recognition orders, or to explore unrelated receivership proceedings, and were therefore irrelevant.

The court ordered only that the applicant provide evidence of its authorization to commence the application and otherwise dismissed the motion.

In a Commercial List case conference concerning potential refusals motions, the court addressed whether interlocutory motions to compel answers to refused discovery questions should be scheduled.

The case management judge emphasized the court’s inherent jurisdiction and the proportionality principles in the Rules of Civil Procedure to control litigation and allocate scarce judicial resources.

The court held that a Commercial List case management judge may decline to schedule refusals motions and instead direct that, if a refusal later proves improper at trial, an adverse inference may be drawn against the refusing party.

Such directions may bind the parties at trial unless the trial judge determines otherwise to prevent injustice.