D. M. Brown

The defendants in a section 38 Bankruptcy and Insolvency Act fraudulent conveyance action brought a motion for leave to amend their Statement of Defence, issue a third party claim, and discharge certificates of pending litigation.

The court granted leave to amend the Statement of Defence in part, allowing unopposed amendments and certain 'state of mind' amendments subject to strict discovery conditions.

The court refused leave for amendments related to limitations and solicitor negligence, finding them irrelevant or already decided.

The motion to issue a third party claim was dismissed as the proposed claims lacked a factual nexus to the main action.

The request to discharge the certificates of pending litigation was also dismissed because the certificates were reinstated by a Court of Appeal order, which the Superior Court lacked jurisdiction to vary.

In a Companies’ Creditors Arrangement Act restructuring, the applicants sought court approval of a sale transaction to BlackRock Kelso Capital Corporation, authorization to assign certain store leases and designated contracts, and related relief.

A former employee also moved to be appointed as representative of terminated employees and to appoint representative counsel funded from transaction proceeds to assist with potential Wage Earner Protection Program Act claims.

The court approved the sale transaction and the assignment of leases and contracts under ss. 36 and 11.3 of the CCAA, finding the sale process reasonable and the transaction maximized value while preserving employment and ongoing operations.

The court declined to appoint representative counsel for terminated employees, holding the proceeding lacked the complexity seen in cases such as Nortel and Canwest, and that WEPPA claims could be addressed in the anticipated bankruptcy process by the trustee.

Funding representative counsel from the purchaser’s transaction funds was also found inappropriate.

During a contested bankruptcy discharge hearing under the Bankruptcy and Insolvency Act, an issue arose regarding whether information held by the bankrupt’s former matrimonial lawyer about the bankrupt’s pre‑bankruptcy assets was protected by solicitor‑client privilege.

An opposing creditor sought production of the lawyer’s file to determine whether the bankrupt had disclosed the existence of a family trust or other assets prior to bankruptcy.

The court reviewed the scope of solicitor‑client privilege in bankruptcy proceedings and the duty of a bankrupt to disclose property under the Act.

It held that while communications seeking legal advice remain privileged, factual information regarding the existence and location of the bankrupt’s property is not protected.

The former solicitor could therefore be compelled to disclose such information and access her file to refresh her memory.

A court-appointed receiver sought approval of an interim settlement with the judgment debtor and related parties concerning disputed ownership and realization of a cottage property during receivership proceedings.

The moving party, a judgment creditor, opposed the settlement, arguing that stronger litigation prospects justified pursuing a declaration that the debtor solely owned the property.

The court applied the principle that courts generally defer to a receiver’s commercially reasonable business judgment where the receiver has fully analyzed the circumstances and considered stakeholder interests.

Considering litigation risk, potential appeals, mounting receivership costs, lack of estate funding, and the need for timely recovery for creditors, the court found the settlement commercially reasonable.

The settlement was therefore approved.

At a commercial list case conference in complex multi-party litigation involving disputed financial transactions, the court addressed case management issues relating to discovery planning.

The parties agreed to a joint litigation and discovery plan aimed at identifying disputed transactions and clarifying the parties’ positions.

The court ordered that all undertakings arising from examinations for discovery be answered within 60 days and expressed reluctance to schedule refusals motions, noting they often add little value and that adverse inferences may be drawn at trial where proper questions are refused.

The matter was scheduled for a further case conference to assess the potential for mediation and estimate trial length.

The defendants moved to set aside default judgments entered against them in a construction-related debt collection and breach of trust action.

While the plaintiffs consented to setting aside portions of the judgments against certain defendants and specific claims, they opposed setting aside the remaining portions against the corporate defendants.

The court found that the defendants’ evidence of a defence on the merits was weak and inadequately supported, relying on an affidavit from corporate counsel lacking personal knowledge and providing minimal particulars.

However, considering the timing of service during the holiday period, inconsistent positions taken by the plaintiffs, and potential prejudice, the court exercised its discretion to set aside the remaining default judgment provisions on condition that the corporate defendants pay $300,000 into court as security.

The action was also ordered transferred from the Commercial List to the Toronto Region Civil List.

The applicant corporation sought an order under s. 133(3) of the Canada Business Corporations Act to extend the time for calling its annual shareholders’ meeting.

The application was brought on an ex parte basis because the meeting was scheduled for the following day and the corporation intended to postpone it while issuing an amended management information circular after regulatory comments.

The court declined to proceed ex parte, finding that shareholders and the Director under the CBCA were persons affected by the requested order and should receive notice.

The court also held that the applicant had failed to disclose a material fact, namely the existence of ongoing plan of arrangement proceedings that would be considered at the same shareholder meeting.

Directions were issued requiring notice to shareholders and the Director and adjourning the application.

The applicants sought directions regarding the marketing and sale process for several commercial properties previously ordered to be sold following a family dispute.

Disagreements among the parties had stalled execution of the earlier order, including disputes over listing price, bidding procedures, participation of bidding owners, and selection of an environmental assessment firm.

The court approved a two‑stage bidding process, confirmed that bidding owners could not attend the opening of first‑stage bids, and approved the proposed environmental firm.

Finding that persistent family conflict had frustrated the earlier order and would likely continue to delay the sale, the court determined that an independent receiver should be appointed to supervise the marketing and sale of the properties with the assistance of a brokerage firm.

The parties were directed to return with proposals for the appointment of a receiver and the bidding process was ordered to be completed by a specified deadline.

The moving defendants sought an order striking portions of the plaintiffs’ responses to a demand for particulars and requiring further particulars of negligence allegations pleaded in the statement of claim.

The court held that the original pleading of negligence was bald and inadequate, but the plaintiffs’ subsequent responses to the demand for particulars provided sufficient detail to allow the defendants to plead and proceed to discovery.

While the responses used open-ended language that could potentially permit additional allegations, the court found that this risk could be managed through discovery and case management directions.

The court declined to strike the pleading or require further particulars, emphasizing the need to move the long-standing action forward.

In a Commercial List proceeding involving allegations of fraudulent client statements and failure to supervise a securities representative, the court addressed repeated failures by the parties to comply with procedural timetables and case management orders.

The action had been scheduled twice for summary judgment but the parties failed to complete materials and examinations.

The court previously directed the matter to proceed as a hybrid trial with affidavit evidence-in-chief and cross‑examination at trial, but a self‑represented defendant failed to comply with orders to deliver evidence and served a deficient statement of defence consisting of a blanket denial.

At a further case management attendance, the court declined to make additional procedural orders and instead required the parties to choose between continuing under the hybrid trial timetable on the Commercial List or pursuing conventional discovery under the Rules of Civil Procedure, in which case the matter would be transferred to the Civil List.

Following dismissal of two applications involving a dispute between dental professional corporations and issues arising from arbitration decisions and lease forfeiture, the court determined costs.

The applicant had sought leave to appeal arbitral decisions and relief from forfeiture of a lease but was unsuccessful.

The court applied Rule 57 and proportionality principles in fixing fair and reasonable costs rather than simply awarding actual costs incurred.

Partial indemnity costs were awarded to the respondent corporation for both applications, while the landlord respondent received substantial indemnity costs due to contractual indemnification provisions and the applicant’s conduct in unnecessarily involving the landlord.

Costs were fixed with reductions to claimed hours where the court found the time excessive.

Following a prior decision staying the action on terms, the court determined the issue of costs arising from interlocutory motions on the Commercial List concerning enforcement of a foreign judgment and jurisdiction over the defendants.

The moving party defendants sought substantial partial indemnity costs after obtaining a stay.

The court reviewed the principles governing costs under Rule 57 of the Rules of Civil Procedure and the proportionality principle, as well as appellate guidance that costs should be fair and reasonable rather than a full indemnity of actual expenses.

Although the defendants obtained a stay, the court held that the substantive success on the motion was mixed, as the plaintiffs succeeded on the jurisdiction issue while failing on the asset‑exigibility argument.

Given the mixed success and the novelty of the jurisdiction and service ex juris issues, the court ordered that no costs be payable by any party.

Following the dismissal of the plaintiffs' action, the court assessed the costs payable to the successful defendants on a substantial indemnity basis.

The plaintiffs had settled costs with the Accountant Defendants for $550,000.

The court reviewed the bills of costs submitted by the Lawyer Defendants, the Katz Defendants, and the Leikin Group Inc. The court made several reductions to the amounts claimed, noting issues with top-heavy staffing, excessive time spent on documentary discovery, and duplication of effort.

The court ultimately awarded substantial indemnity costs totaling $2,340,485.75 across the three remaining sets of defendants.

The plaintiff condominium corporation sought leave to discontinue its action against a former employee defendant without costs, or alternatively with modest costs, following settlement of related litigation arising from a large fraud scheme.

The responding defendant sought costs exceeding $50,000.

The court applied Rule 23.05 of the Rules of Civil Procedure and the 'justified action test' governing costs on discontinuance.

While the plaintiff had a bona fide basis to commence the action because the defendant’s name appeared on loan documents, the defendant incurred some legal expenses in defending the claim.

The court rejected the majority of the claimed costs due to questionable docketing practices and excessive billing, and awarded partial indemnity costs of $5,000 as a condition of discontinuance.

Following a civil jury trial dismissing a medical malpractice claim, the successful defendant sought partial indemnity costs exceeding $74,000.

The court assessed costs under Rule 57 of the Rules of Civil Procedure and the principles of fairness, reasonableness, and proportionality articulated by the Court of Appeal.

While the court accepted the reasonableness of senior counsel’s rates and most claimed hours, it reduced mediation costs and limited recovery for junior counsel’s trial preparation and attendance where the work resembled tasks that could have been performed by a law clerk.

The court emphasized that training junior counsel should not be funded by the opposing party through costs awards.

Total costs were fixed at $55,437.84 inclusive of fees, HST, and disbursements.

Members of a Sikh temple incorporated under the Ontario Corporations Act brought an action challenging the admission of 23 new members and the election of directors following a disputed board meeting and special members’ meeting.

The court found that the board meeting at which the new members were admitted had been convened using misleading notice and that opposing directors had been led to believe the meeting would not occur due to mediation efforts.

The admission of the new members was therefore conducted in bad faith and declared null and void.

Because those members participated in a subsequent members’ meeting, quorum was lacking and the election of directors and subsequent board appointments were also invalid.

The court issued extensive declaratory relief restoring the prior membership and board composition and ordered governance reforms, including a monitor, audits, training, and conditions before a court‑ordered members’ meeting could be held.

In receivership proceedings brought in aid of execution against a judgment debtor, the court considered a motion by the court-appointed receiver for directions regarding enforcement steps and the disposition of certain assets.

The receiver sought approval to sell the debtor’s interest in a jointly owned matrimonial home under the Partition Act, clarification regarding ownership of a cottage property, compliance with outstanding information requests, and approval of the receiver’s reports.

The court held that the spouse opposing sale failed to demonstrate circumstances of oppression, malice, or vexatious intent that would justify refusing the statutory right to partition or sale.

The court ordered the sale of the debtor’s interest in the matrimonial home, directed the parties to provide requested information to the receiver, scheduled a hearing regarding ownership of the cottage and related indebtedness issues, and approved the receiver’s reports.

The trustee in bankruptcy sought an order under s. 164 of the Bankruptcy and Insolvency Act compelling a telecommunications provider to produce email and cellphone records allegedly connected to a third party who may have had knowledge of a fraudulent financial statement used to obtain bank financing.

The court held that while stored emails and phone records can constitute “documents” within s. 164, the trustee must demonstrate a sufficient connection between the requested records and the bankrupt’s dealings or property.

The evidence did not establish a sufficient link between the requested email account and the relevant individual, and the request for phone records was overly broad.

Limited relief was granted requiring disclosure of subscriber information for a specific phone number referenced in a fraudulent email, and the provider was ordered to preserve relevant records pending further order.

Following the abandonment of a motion by the bankrupt seeking annulment of her bankruptcy, secured creditors sought substantial indemnity costs against the bankrupt, her husband, and her counsel.

The court held that under Rule 37.09(3) of the Rules of Civil Procedure, responding parties are presumptively entitled to costs where a motion is abandoned unless good cause exists to order otherwise.

No such cause was established, as the evidence showed the motion lacked merit and was withdrawn after cross‑examination revealed the evidence would not support annulment.

However, the court declined to impose costs against the husband or counsel, finding insufficient evidence that they caused unnecessary costs or acted improperly.

Partial indemnity costs were awarded against the bankrupt in amounts the court found fair and proportionate.

In a Commercial List case conference, the court addressed procedural issues arising during case management of complex banking litigation.

A related action commenced by another party against the plaintiff bank had not been disclosed at an earlier case conference, prompting the court to require an explanation and direct counsel to attend a further appointment to address potential motions and case coordination.

The court also addressed discovery disputes, including requests to examine additional representatives and disagreements about whether discovery rights had been exhausted.

Timetables were set for written motion materials regarding discovery disputes, interrogatories, expert reports, and a forensic accounting report.

The court emphasized the importance of transparency in case management and minimizing interlocutory motions in complex litigation.