Doug McLeod

The Court of Appeal for Ontario dismissed motions to reconsider its earlier refusal to grant leave to appeal two decisions related to an arbitral award and its enforcement.

Dr. Bokhari argued that the panel may have been unaware that a key precedent (Aroma) was under reserve at the time of the refusal.

The court held that the relevant rules did not permit reconsideration based on subsequent jurisprudence, only on new facts, and that the interests of justice did not favour reconsideration.

The motions were dismissed.

The Court of Appeal for Ontario dismissed motions to reconsider its earlier refusal to grant leave to appeal two decisions related to an arbitral award and its enforcement.

Dr. Bokhari argued that the panel may have been unaware that a key precedent (Aroma) was under reserve at the time of the refusal.

The court held that the relevant rules did not permit reconsideration based on subsequent jurisprudence, only on new facts, and that the interests of justice did not favour reconsideration.

The motions were dismissed.

This application concerned a dispute over an earn-out calculation following a share purchase agreement.

The applicant sought an order compelling the respondents to refer the dispute to KPMG, as stipulated in the agreement.

The respondents argued the applicant's notice of objection was untimely and lacked particularity, and that the objections raised were contractual, not accounting, issues.

The court found the applicant's notice was timely, given the need for additional financial information, and that the objections, properly interpreted, fell within the scope of the expedited dispute resolution process.

The application was allowed, and the dispute was ordered to be submitted to KPMG.

Costs were not awarded to the successful applicant due to her role in protracting the process.

The plaintiff sought approval of a $7 million settlement and class counsel fees in a class proceeding against an insurance company regarding the performance of an investment fund.

The action, which spanned 20 years, involved claims of breach of contract and negligent misrepresentation.

The court found the settlement to be fair, reasonable, and in the best interests of the class, given the significant litigation risks.

The court also approved class counsel's 30% contingency fee, noting the high risks undertaken and the good result achieved for the class.

This appeal concerns the interpretation of primary and excess directors' liability insurance policies, specifically regarding the availability and premium calculation of an Optional Extension Period (OEP) coverage.

The appellant, Assicurazioni Generali S.p.A. (excess insurer), argued that its Excess Policy did not include an OEP option or, alternatively, that the premium should be US$1.5 million.

The respondent, Cronos Group Inc. (insured), contended the OEP was incorporated via a "follow form" clause and the premium should be twice the basic premium of the Excess Policy, consistent with the primary policy's ratio.

The Court of Appeal dismissed the appeal, affirming the application judge's finding that the Excess Policy included the OEP option and that its premium was twice the basic premium, based on a holistic interpretation of the policies and commercial reasonableness.

FSD Pharma Inc. applied to validate the cancellation of Class B shares issued to its former CEO, Raza Bokhari, arguing they were issued for future consideration contrary to s. 23 of the Ontario Business Corporations Act.

Bokhari contended the shares were valid or that the issue should be pursued under s. 130 OBCA, and that FSD was estopped from raising the issue.

The court found that shares issued for future consideration are not a nullity but their status depends on circumstances.

Applying a flexible approach, the court allowed Bokhari to retain shares proportionate to his actual employment days in 2021 (208/365ths) and permitted FSD to cancel the remainder.

The court also rejected the cause of action estoppel argument, noting the prior hearing was limited in scope.

Costs were not awarded to either party due to divided success and tactical efforts by the respondent.

In the context of a shareholder proxy fight, the applicants sought an order declaring the dissident shareholders' proxy circulars materially misleading and invalidating their proxies.

The dissident shareholders brought a motion seeking to hold the upcoming shareholders meeting virtually and to appoint an independent chair.

The court dismissed the application, finding the circulars were not materially misleading.

The court allowed the motion in part, refusing to mandate a purely virtual meeting but appointing the dissidents' proposed independent chair after finding the applicants deliberately breached a prior court order by unilaterally appointing their own chair.

The applicant, Cronos Group Inc., sought a declaration that it had a contractual right to exercise an Optional Extension Period (OEP) under its Excess Directors’ and Officers’ Liability Policy issued by the respondent, Assicurazioni Generali S.P.A., and that it successfully exercised this right.

The respondent denied coverage, arguing the OEP was not incorporated into the Excess Policy and the premium paid was insufficient.

The court found that the OEP was incorporated into the Excess Policy by reference to the Primary Policy, as it was not explicitly excluded.

The court also determined that the applicant's calculation and payment of the OEP premium, based on twice the original policy premium, was commercially reasonable and consistent with prior representations.

The application was granted, declaring the OEP right enforceable and the premium calculation valid.

The plaintiffs, investors in mutual funds managed by Crystal Wealth, lost their life savings due to fraud by the fund's management.

They sought to certify a class action in negligence against BDO Canada LLP, the fund's auditor, alleging that BDO's failure to conduct proper audits delayed the discovery of the fraud.

The court dismissed the certification motion, finding it plain and obvious that the plaintiffs' pleading did not disclose a legally viable cause of action.

Applying established jurisprudence, the court held that BDO did not owe a proximate duty of care to the individual investors for their pure economic losses.

An appeal of a wrongful dismissal action where the trial judge found just cause for termination based on three incidents of misconduct by a Senior Vice-President and Chief Financial Officer.

The incidents involved: (1) failure to disclose a land flip transaction where the controlling shareholder's group profited $6.5 million; (2) failure to disclose warrant redemption profits to independent directors; and (3) involvement in a tax scheme to mislead the Canada Revenue Agency.

The appellant argued the trial judge erred in applying the McKinley test, misinterpreted Advanced Realty and Hodgkinson, and failed to consider condonation.

The Court of Appeal upheld the trial judge's findings, confirming that fiduciaries owe a duty to disclose conflicts of interest and misappropriation of corporate opportunities.

Two former employees of MD Physician Services Inc. and MD Management Limited appealed a trial judgment finding that they breached non-solicitation agreements with their former employer.

The employees left MD in 2013 to join RBC Dominion Securities Inc., a competitor, and immediately began contacting MD's clients from memory to solicit their business.

The appellants argued the non-solicitation clause was ambiguous and unenforceable.

The Court of Appeal upheld the trial judge's decision, finding the clause was clear and reasonable, and that the employees' conduct constituted a breach of the non-solicitation agreement.

Following a successful defence in a wrongful dismissal trial, the defendant sought costs of approximately $750,000.

The plaintiff argued for $500,000.

The court considered the factors under Rule 57.01, noting that while the electronic trial was efficient, both sides engaged in overkill and over-representation.

The court reduced the defendant's claimed fees slightly and awarded costs of $725,651.30 on a partial indemnity basis.

The plaintiffs, MD Physician Services Inc. and MD Management Limited, sued former employees Duane Wisniewski and Joy Sleeth, and their new employer RBC Dominion Securities Inc., for breach of non-solicitation agreements and confidentiality obligations.

The court found the non-solicitation agreements enforceable, rejecting arguments of lack of consideration, non est factum, ambiguity, vagueness, and unreasonableness.

The court also found that Wisniewski and Sleeth breached these agreements by actively soliciting former clients, despite their claims of merely informing them of their new employment.

RBC Dominion Securities Inc. was found vicariously liable for these breaches.

While a technical breach of confidentiality occurred, it was deemed de minimis and not to attract damages.

The trial was limited to liability, with damages to be addressed later.

The plaintiff, a former Senior Vice-President and Chief Financial Officer of Royal Group, Inc., sued for wrongful dismissal, claiming approximately $6.6 million in damages.

The defendant employer argued cause for dismissal based on the plaintiff's involvement in two instances of serious misconduct: the "Vaughan West land flip" and the misappropriation of a "Premdor warrant." Both involved the plaintiff's participation in schemes where senior officers, including himself, made secret profits at the corporation's expense and failed to disclose these conflicts of interest to the independent board of directors.

The court found that the plaintiff, as a fiduciary and senior employee, breached his duties of loyalty, honesty, candour, and fidelity by facilitating the usurpation of corporate opportunities, taking corporate funds without proper authority, and actively participating in deceptive practices, including back-dating documents for tax purposes.

The court dismissed the plaintiff's action, concluding that his conduct constituted just cause for summary dismissal, emphasizing the strictness of fiduciary duties in public corporations.

The moving party sought leave to appeal a decision dismissing its motion for summary judgment.

The underlying motion judge had found a triable issue regarding whether fraudulent concealment prevented the moving party from relying on the limitations period in the Trustee Act.

The court dismissed the motion for leave to appeal, finding that the moving party failed to establish conflicting case law or an issue of public importance that went beyond the interests of the immediate parties.

The defendant First Associates Investments Inc. moved for summary judgment to dismiss an action brought by the estate trustee of Nancy Wagg, arguing the claim was statute-barred by the two-year limitation period under section 38(3) of the Trustee Act.

The action alleged breach of contract, negligence, and breach of fiduciary duty related to unsuitable investments made by Nancy Wagg's son-in-law, Todd Monaghan, an investment advisor and officer of First Associates.

The court dismissed the motion, finding that while section 38(1) of the Trustee Act applies to claims for pure economic loss, there was a genuine issue requiring a trial regarding the application of the fraudulent concealment doctrine.

Specifically, triable issues existed concerning whether Monaghan's conduct was unconscionable, First Associates' vicarious liability, and whether critical information about the investments was concealed from Nancy Wagg or her subsequent estate trustees.

The plaintiffs sought leave to amend their statement of claim to incorporate findings from a Mutual Fund Dealers Association (MFDA) disciplinary panel concerning a salesperson, David Karas, whose conduct was central to the plaintiffs' indemnity claim against the defendant.

The defendant opposed the amendments, arguing irrelevance, improper pleading of similar fact evidence, and inadmissibility of the panel's findings.

The Master found the proposed amendments relevant and determined they did not improperly plead similar fact evidence.

The Master allowed most of the amendments, permitting the pleading of the MFDA panel's conclusions regarding specific rule breaches and the imposed penalty, but disallowed the pleading of the panel's "reasons" or characterizations of Karas's conduct.

The decision clarified that the admissibility and weight of such regulatory findings in the civil action would be determined by the trial judge.

Following dismissal of an employee’s action alleging multiple breaches of an employment agreement, the employer sought costs of the action.

The employer relied on earlier offers to settle and argued it should receive substantial indemnity costs after the first refused offer.

The court held that elevated costs outside Rule 49.10 require reprehensible or egregious conduct by the opposing party.

Finding no such conduct and noting the action was hard fought but not frivolous, the court declined substantial indemnity costs and instead awarded a reduced amount under Rule 57.01.

The plaintiff, a successful retail stockbroker, sued his former employer for breach of contract, alleging he was owed a 10% finder's fee on several large corporate finance transactions under an April 11, 2006 agreement.

The court found that the agreement was exclusively a retail document and did not apply to transactions involving the employer's Capital Markets group.

The court also dismissed the plaintiff's claims for negligent overpayment of his assistant, unjust enrichment, bad faith, and entitlement to unvested deferred stock units.

The action was dismissed in its entirety.

The defendants brought a motion for summary judgment seeking dismissal of a claim alleging wrongful dismissal, breach of contract, unpaid commissions, discrimination, and various aggravated damages arising from the termination of a financial services associate relationship.

The central issue was whether the plaintiff was an employee or an independent contractor and whether the termination was valid under the governing agreement.

Applying the legal test for employment relationships and considering the contractual terms and surrounding evidence, the court concluded that the plaintiff operated as an independent contractor.

The court further held that the agreement permitted termination where minimum commission levels were not maintained and that the evidentiary record showed the plaintiff earned insufficient commissions.

Claims for unpaid commissions and other damages, including emotional distress and discrimination, were unsupported by evidence.