Deborah E. Palter

The plaintiff appealed an order removing its law firm as solicitors of record due to a conflict of interest.

The firm had previously provided employment advice to a former employee of the defendants, who was originally named as a defendant in the action but later discontinued.

The motions judge found a risk that confidential information provided by the former employee could be misused.

The Divisional Court allowed the appeal, holding that because the former client had settled his issues and dropped his objection to the firm acting, there was no longer a basis to remove the firm to protect his confidential information.

A dissenting judge would have dismissed the appeal on the basis of maintaining public confidence in the administration of justice.

The applicants sought costs following a motion for the production of documents.

Both parties claimed success on the motion.

The court found that the applicants were substantially more successful, as the respondent's principal position was that no disclosure should be ordered, forcing the applicants to bring the motion.

The court awarded the applicants costs fixed at $11,500 on an all-inclusive basis, reflecting a reduction for their lack of success on an alternative argument.

In bankruptcy proceedings arising from non-payment under a promissory note tied to the sale of a New York condominium, the court interpreted the note's limited recourse clause as capping recovery at one-third of sale proceeds rather than restricting recourse solely to identifiable sale proceeds in specie.

On that interpretation, the creditor remained an unsecured creditor after the debtor received the sale proceeds and therefore had standing to pursue a bankruptcy order.

The creditor's motion for a Rule 39.03 examination was dismissed because no further factual inquiry was necessary to answer the debtor's legal motion.

The debtor's motion to dismiss or strike the bankruptcy application was also dismissed, and the application was adjourned by agreement pending further materials and cross-examinations.

The plaintiff sought leave to appeal a motion judge's decision disqualifying its counsel of record due to an alleged conflict of interest.

The motion judge had disqualified the firm because it had previously represented a former employee of the defendants and obtained confidential information, despite acknowledging the defendants were not clients of the firm.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the motion judge's order since the defendants had not disclosed the information to the firm and were not clients, raising serious debate about the basis for disqualification.

The applicants brought a motion for the production of documents subject to solicitor-client privilege relating to the negotiation of a tax indemnification provision in an agreement.

The applicants sought rectification of the agreement, arguing the parties had a common understanding that was mistakenly omitted.

The respondent relied on affidavits from its principal and its former legal counsel to assert its intention regarding the provision.

The court held that by relying on these affidavits, which implicitly put the respondent's state of mind and legal advice in issue, the respondent had waived solicitor-client privilege.

The court ordered reciprocal disclosure of all solicitor-client communications relating to the negotiation of the agreement.

The plaintiffs, former employees of the defendant, sought a determination of their entitlement to monies under a carried interest plan related to a private equity fund.

They argued that their entitlements should be calculated based on their points at the time of each distribution and that the award of additional points after their departure was unduly dilutive and contravened the plan.

The court found that the plan's terms, including subsequent letters agreed to by the plaintiffs, contemplated calculating entitlements based on total points at the end of the plan.

The court also held that the defendant had broad discretion to award points and did not contravene the plan by awarding points after the plaintiffs' departure to reward other participants for their contributions.

The Registrar and customers of a bankrupt motor vehicle leasing company appealed the dismissal of their motion to vary a vesting order and for leave to sue the trustee in bankruptcy.

The vesting order had transferred the bankrupt's lease portfolio to assignees free and clear of customer claims for security deposits.

The Court of Appeal dismissed the appeal, finding that the appellants' proprietary or economic rights were not directly affected by the order, as the contractual obligation to refund deposits remained with the bankrupt.

The court also held that a motion to vary under s. 187(5) of the BIA or Rule 37.14 cannot be used to substantively change an order or as a substitute for an appeal.

The appellants appealed a trial judgment finding them liable under a guarantee.

The Court of Appeal dismissed the appeal, agreeing with the trial judge that compliance with financial ratios was a condition for the bank's benefit alone, not the guarantors.

Furthermore, a forbearance agreement signed by the appellant removed any challenge to liability under the guarantee.

The appellant landlord appealed an order permitting a receiver to take over the tenant's position under a commercial lease.

The landlord argued the motion judges exercised their discretion in an unprincipled way and that there was material non-disclosure on a without notice motion.

The Court of Appeal dismissed the appeal, finding the receivership order justly balanced the interests of the employees and the landlord, as the landlord was receiving rent and had not shown prejudice.

The court also found no palpable and overriding error in the finding of no material non-disclosure.