Eliot N. Kolers

The appellant purchased land from the respondent, agreeing to develop it for retail use.

The agreement included an indemnity clause for community cost-sharing agreements.

The appellant later obtained a zoning amendment for residential development, triggering a $2.8 million fee for school lands, and sought indemnity from the respondent.

The application judge dismissed the claim, finding the appellant breached its obligation to develop the land for retail use and could not profit from its own breach.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the application judge's interpretation of the contract.

The appellant objected to their civil appeal proceeding in writing, arguing the Court of Appeal lacked jurisdiction to order a written hearing over a party's objection, contrary to the *Courts of Justice Act* and *Rules of Civil Procedure*.

The court, through a Case Management Judge, dismissed the objection, affirming its broad implicit jurisdiction to manage its own process and ensure the just and efficient administration of justice, especially during the COVID-19 pandemic.

The court held that neither the Act nor the Rules mandate an absolute right to an oral hearing and found the appeal suitable for a written disposition.

The appellant appealed an order of the Superior Court of Justice dismissing his action against the respondent under Rule 2.1.

The Court of Appeal found that the statement of claim disclosed no cause of action against the respondent and was plainly frivolous and an abuse of process on its face.

The court upheld the dismissal, finding no error in the Superior Court justice's decision to dismiss the claim without inviting written submissions from the appellant.

The court noted that even if written submissions had been provided, based on the appellant's factum and oral argument, there would be no prospect of a different outcome.

This application concerned whether 4352238 Canada Inc. ("435") validly exercised its right of first refusal ("ROFR") over SNC-Lavalin's proposed sale of shares in 407 International Inc. ("407") to OMERS.

The core issue was whether OMERS qualified as a "Competitor" under a 2002 waiver (the "Cintra Waiver"), which excluded pension funds acting "solely as a financial investor." The court found that the Cintra Waiver did not distinguish between passive and active financial investors, and that OMERS, as a pension fund, was intended to be excluded from the ROFR as a financial investor, regardless of its active investment strategy.

Consequently, 435's application was dismissed. interesting_citations_summary: > The decision provides a detailed analysis of contractual interpretation principles, particularly concerning the meaning of "financial investor" in a right of first refusal clause within a shareholders' agreement.

It clarifies that the parties' intent at the time of contract formation, considering the factual matrix, governs interpretation, and that a pension fund's active investment strategy does not necessarily negate its status as a "financial investor" if its primary motivation remains financial return rather than day-to-day operational control.

The court emphasized that it would not "re-write" the agreement to introduce distinctions not present in the original wording. final_judgement: > The application by 4352238 Canada Inc. is dismissed, as it was found to have waived its Right of First Refusal with respect to OMERS' proposed purchase of SNC-Lavalin's shares in 407 International Inc. under the terms of the Cintra Waiver. winning_degree_applicant: 5 winning_degree_respondent: 1 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2019 decision_number: 4423 file_number: "CV-19-620222-00CL" source: "https://www.canlii.org/en/on/onsc/doc/2019/2019onsc4423/2019onsc4423.html" cited_cases: legislation: [] case_law: [] keywords: - Right of First Refusal - Contractual Interpretation - Financial Investor - Pension Fund - Shareholders' Agreement - Commercial Law - Infrastructure Investment areas_of_law: - Commercial Law - Contract Law --- # Court File and Parties **COURT FILE NO.:** CV-19-620222-00CL **DATE:** 20190802 **SUPERIOR COURT OF JUSTICE – ONTARIO** **- COMMERCIAL LIST** **RE:** 4352238 CANADA INC.

Applicant **AND:** SNC-LAVALIN GROUP INC., SNC-LAVALIN INC.

SNC-LAVALIN HIGHWAY HOLDINGS INC., 7577702 CANADA INC. and MICI INC.

Respondents **BEFORE:** HAINEY J. **COUNSEL:** Mark A. Gelowitz, Allan D. Coleman, and Lia Bruschetta for the Applicant Linda Fuerst and Fahad Siddiqui, for SNC-Lavalin Group Inc., SNC-Lavalin Inc., and SNC-Lavalin Highway Holdings Inc. (“SNC”) Eliot N. Kolers and Alexander Rose, for 7577702 Canada Inc. and MICI Inc. (“CPPIB Respondents”) **HEARD:** June 21, 2019 --- # Endorsement ## Background [1] This is an application for a declaration that 4352238 Canada Inc. (“435”) has validly exercised its right of first refusal (“ROFR”) over the proposed sale by SNC of 10.1% of shares of 407 International Inc. (“407”) to OMERS and is therefore entitled to acquire 40,300,000 shares of 407 from SNC, on the same terms and conditions as in the proposed sale to OMERS. ## Facts [2] In 1998, the Province of Ontario privatized Highway 407 ETR through the sale of the corporation it had established to oversee the highway’s design, construction, operation, maintenance and financing. [3] 407 was incorporated for the purpose of bidding to acquire the 407 Highway ETR from the Province.

It was ultimately the successful bidder and acquired the highway for a payment to the Province of $3.113 billion. [4] At the time of the acquisition, 407’s ownership structure was as follows: * Grupa Ferrovial S.A. (“Grupa Ferrovial”) and Cintra Concesiones De Infrastructuras De Transporte, S.A. (“Cintra” and, together with Grupa Ferrovial, “Cintra Parties”) held 61.29% of the equity in 407; * SNC held 22.58% of the equity in 407; and * The Caisse de Dépot et placement du Quebec (“CDPQ”) held 16% of the equity in 407. [5] In April 1999, the Cintra Parties, SNC, CDPQ and 407 entered into a unanimous shareholders’ agreement (“407 USA”).

Under the terms of the 407 USA the parties were granted various rights, including a ROFR with respect to any offers by third parties to purchase shares of 407 from the existing shareholders. [6] In 2002 SNC agreed to sell a portion of its interest in 407 to the Cintra Parties for $178 million.

Part of the consideration for the sale was a waiver of rights by the Cintra Parties with respect to the ROFR in the 407 USA.

Specifically, the Cintra Parties agreed to waive the ROFR provided the sale of shares by SNC was not made to a competitor of the Cintra Parties (“Cintra Waiver”). [7] In April 2019, SNC gave notice to 435 pursuant to the 407 USA that SNC had reached an agreement to sell 40,300,000 of its common shares in 407 to Somerset Acquisition LP (“Somerset”), a special purpose vehicle of OMERS (“Third Party Offer”). [8] In the notice of the Third Party Offer SNC took the position that 435’s ROFR under the 407 USA had been waived with respect to the Third Party Offer because of the Cintra Waiver.

SNC asserted that neither Somerset nor OMERS was a “Competitor” within the meaning of the Cintra Waiver. [9] In May 2019, 435 delivered its notice to SNC under the 407 USA notifying SNC that 435 was exercising its ROFR with respect to the Third Party Offer to acquire the 40,300,000 common shares of 407. [10] In May 2019, SNC and the CPPIB Respondents advised 435 that they intended to proceed with the sale to OMERS and not to recognize 435’s ROFR. ## Issue [11] The sole issue on this application is whether 435 validly exercised its ROFR under the 407 USA with respect to the Third Party Offer.

The determination of this issue requires me to decide whether OMERS is a “Competitor” of the Cintra Parties as defined in the Cintra Waiver. ## Positions of the Parties [12] 435 submits that the respondents have the onus of establishing that OMERS is not a “Competitor” within the meaning of the Cintra Waiver.

It argues that although OMERS is a pension fund, it is not a pension fund that holds its competing interests “solely as a financial investor” which the Cintra Waiver requires for OMERS to be excluded from the definition of “Competitor”.

As a result, 435 submits that it validly exercised its ROFR in the 407 USA with respect to the Third Party Offer and it is therefore entitled to acquire the 40,300,000 common shares of 407 on the same terms as the Third Party Offer. [13] The respondents submit that 435’s ROFR has been waived by it in respect of the Third Party Offer because OMERS does not have competing interests with 435.

Further, even if OMERS has competing interests with 435, it is a pension fund, and it is therefore excluded from the ROFR because it is solely a “financial investor” in 407.

The fact that OMERS is an active investor does not mean that it is not a “financial investor” within the meaning of the Cintra Waiver. ## Analysis [14] The Cintra Waiver provides as follows: > 27.

Waiver > (a) Each of the Purchasers and 407 Toronto, for itself and on behalf of its Permitted Transferees, agree that if, after the completion of the sale of the Interest to the Purchasers, SNC-Lavalin Inc., or any wholly owned subsidiary, (“SNC”) proposes to sell, transfer or assign, directly or indirectly, (whether a legal or beneficial interest) any of its remaining shares of 407 International to a Third Party, as defined in the 407 International Shareholders’ Agreement and such Third Party, or any person which controls such Third Party, does not have competing interests with Cintra, Grupo Ferrovial, or any of their subsidiaries, in relation to construction, operations, asset management of, and investment in, road or airport infrastructure projects other than solely as a financial investor such as a pension or superannuation fund (a “ Competitor ”), and that such Third Party, or any person which controls such Third Party, is not a Governmental Entity, other than solely as a financial investor such as a pension or superannuation fund, then neither the Purchasers nor 407 Toronto will exercise any of their respective pre-emptive rights, rights of first refusal, priority rights or piggy-back rights under the 407 International Shareholders’ Agreement (the “ Rights ”), and the Purchasers and 407 Toronto will cause their Permitted Transferees not to exercise any such Rights, in respect of such shares of 407 International that SNC proposes to sell to such Third Party. [15] The parties agree that the overriding objective of the court when tasked with interpreting a contract is to determine “the intent of the parties and the scope of their understanding”, guided by the following fundamental principles of contractual interpretation: > (a) The court should determine the intention of the parties in accordance with the language they have used in the written document, based upon the “cardinal presumption” that they have intended what they have said; > (b) The court should read the text of the written agreement as a whole, giving the words used their ordinary and grammatical meaning, in a manner that gives meaning to all of its terms and avoids an interpretation that would render one or more of its terms ineffective; > (c) The court should read the contract in the context of the surrounding circumstances known to the parties at the time of its formation.

The surrounding circumstances, or “factual matrix”, include facts that were known or reasonably capable of being known by the parties when they entered into the contract, such as facts concerning its genesis, its purpose, and the commercial context in which it was made; and > (d) Finally, the court should read the text in a fashion that accords with sound commercial principles and good business sense, avoiding a commercially absurd result, objectively assessed. [16] On a plain reading of the Cintra Waiver the definition of “Competitor” has the following two component parts, both of which must be present for the waiver not to apply to the Third Party Offer: > (a) The proposed purchaser or the person who controls the proposed purchaser must have “competing interests with any of the Cintra Parties (including their subsidiaries) in relation to construction, operations, asset management of, and investment in, road or airport infrastructure projects”; and > (b) Any competing interests must be held “other than solely as a financial investor such as a pension or superannuation fund”. [17] The parties disagree as to whether the competing interests referred to in the Cintra Waiver must be in relation to all of “construction”, “operations”, “asset management of” and “investment in” road or airport infrastructure projects. [18] The respondents submit that the competing interests must be in relation to all of these activities. 435 submits that a proper interpretation of the Cintra Waiver demonstrates that the parties’ intention was to include within the definition of “Competitor” any party that had competing interests in any one of the “construction of”, or “operations of”, and “asset management of” – and an “investment in” – airport and road projects, other than solely as a financial investor. [19] Irrespective of the determination of what constitutes competing interests under the terms of the Cintra Waiver, the fundamental question that I must determine on this application is whether OMERS would hold its interest in 407 “solely as a financial investor” if it acquires the shares from SNC pursuant to the Third Party Offer. [20] It is for this reason that I will first consider and determine this issue. [21] It is clear from a plain reading of the Cintra Waiver that the parties intended that a pension fund would constitute a third party purchaser with a competing interest held solely as a financial investor which would exclude it from 435’s ROFR. [22] Further, there is no dispute that OMERS is a pension fund.

My reading of the Cintra Waiver makes it clear to me that a pension fund is a prima facie example of an entity that the parties agree would hold its interest in 407 solely as a financial investor and would not trigger 435’s ROFR. [23] However, 435 submits that merely establishing that a third party purchaser is a pension fund is not the end of the inquiry because of the following: > (a) If a pension fund holds its competing interests solely as a financial investor, then it is not a Competitor; > (b) If a pension fund holds any competing interests other than solely as a financial investor, then it is a Competitor. [24] 435 submits that I must interpret the Cintra Waiver in a manner that implements the objective contractual intent of the parties at the time they signed the agreement in 2002. [25] At paras 54 and 55 of its factum 435 makes the following submissions about the changes in the investing strategies of Canadian pension funds since 2002: > 54.

In 2002, Canadian pension funds were predominantly passive, or purely financial, investors.

This is still true for smaller pension or superannuation funds in Canada and worldwide.

However, beginning in the mid to late 2000s and evolving to the present, large Canadian pension funds moved away from their traditional approach as solely passive investors, to being active owners-managers, particularly in the emerging private market for infrastructure assets.

This is, in fact, now a defining feature of the investment strategy of large Canadian pension plans. > 55.

Today, the portfolios of most large Canadian pension funds include direct investments in real estate, private equity and infrastructure, where they take meaningful ownership positions in the assets they invest in – anything from a minority stake with the right to board representation, to 100% ownership and control of a company. [26] According to 435 this shift in the Canadian pension fund landscape has been particularly prevalent in the infrastructure sector because few other entities have the scale, cashflow, internal talent and long-term focus of large Canadian pension funds, like OMERS, to viably invest in and manage major privatized infrastructure projects. [27] 435 submits that while in 2002, a pension fund was a “useful example” of an entity that may act “solely as a financial investor”, today large Canadian pension funds, like OMERS, are “some of the world’s most successful and prolific active investors and managers in airport and road infrastructure investments-in direct competition with the interests of Cintra”. [28] According to 435, the following are examples of competitive interests held by OMERS other than as a financial investor: > (a) OMERS owns a 65.1% interest in the corporation that manages and operates the Confederation Bridge toll road.

As a result, OMERS has de jure control over the Confederation Bridge toll road; > (b) OMERS is one of three Canadian pensions funds that owns and operates the Chicago Skyway concessionaire without the intervention of any third party individual operator.

In OMERS’ bid for this project it stated as follows: > > [OMERS] expressed its excitement at ‘the prospect of owning and operating’ the Chicago Skyway toll road, and confirms that Borealis Infrastructure (now OMERS Infrastructure) has ‘significant experience investing in and managing transportation assets, including the Detroit River Tunnel …and the Confederation Bridge’ and ‘a team of 80+ investment professionals that source and execute transactions and manage assets’; and > > (c) OMERS has participated in several consortia to bid on road infrastructure projects, including, the 407 East Extension Phase 1 in Ontario, the Sea to Sky Highway in British Columbia, the Indiana Toll Road in the United States and the Queensland Motorway and Westconnex toll road in Australia.

According to 435, OMERS has competed directly with Cintra in adverse consortia in relation to these bids. [29] OMERS’ former president and CEO, Michael Nobrega, described how OMERS has changed since 1998 as follows: > At the time, OMERS was essentially a passive investor.

We were basically a small Canadian pension fund operating in the province of Ontario and relying on external manager[s] to provide our investments.

Today [March 2014], we are a fully integrated professional organization, both in terms of investments and pension administration. [30] According to 435, since 2004 OMERS has “touted” its progressive transition from a traditional passive investor to an owner-oriented active investor.

In its 2004 Annual Report OMERS explained this transition as follows: > First, we are making the transition to a new asset mix strategy that relies less on more volatile public markets and more on alternative assets such as infrastructure investments (like bridges and energy companies), private equity and real estate… > > Second, we will take a more owner-oriented approach to our investments rather than the passive investor approach that we and many other institutional investors have taken in the past.

This approach has led to the in-house and hands-on business model we now have in place, with management of real estate infrastructure and private equity under OMERS control. > > And third, as a result of the first two changes, it is imperative that we have executives and senior managers with extensive business and investment experience.

That new team is now in place. [31] According to 435, OMERS’ current strategy of owning and managing road and airport infrastructure projects includes influence over governance through representation on the projects’ boards of directors as well as participating in setting strategy and direct control with management teams. [32] For all of these reasons, 435 submits that “while OMERS is a pension fund, it does not hold its competing interests in road and airport projects solely as a financial investor”. [33] 435 argues that OMERS is an active owner and asset manager in the road and airport infrastructure market and competes directly with Cintra in these markets. [34] According to 435, a plain reading of the Cintra Waiver makes it clear that the parties did not intend that the ROFR would be waived simply because the proposed purchaser is a “pension fund” without further examination of whether the pension fund in question holds interests “other than as a financial investor” and is therefore a “Competitor”.

According to 435 the phase “solely as a financial investor” is the determinative phrase in deciding whether a party is a “Competitor” within the meaning of the Cintra Waiver. [35] Because OMERS actively and directly invests in road and airport infrastructure projects and participates in the management and operation of those projects, 435 submits that it “long ago stepped out of the shoes of being solely a financial investor.

It is a “Competitor”. [36] The respondents submit that the parties expressly excluded “pension funds” from the definition of “Competitor” as a specific example of the larger category of excluded “financial investors”.

As a pension fund, the respondents submit that OMERS is, by definition, not a “Competitor”.

They point out that there is no evidence that OMERS “is anything other than a pension fund”. [37] Further, the respondents submit that 435’s position that the Cintra Waiver only excludes pension funds that follow a passive investment strategy would require the court to “re-write” the agreement.

At para 58 of the respondents’ joint factum they make the following submission with respect to 435’s position: > 58.

This approach is directly contrary to the principles of contractual interpretation.

Essentially, the Applicant asks the Court to re-write the exclusion from the definition of “Competitor” to read “other than solely as a passive financial investor such [as] a pension or superannuation fund following a passive investment strategy .” As noted above, as a matter of law, there is no basis on which this Court could re-write the contract in that manner.

Had the parties intended to limit the exclusion only to entities following passive investment strategies, they could have said so in section 27.

They did not. [38] I agree with the respondents’ submissions.

The Cintra Waiver does not distinguish between passive and active financial investors.

There is no reason why the factual matrix with respect to the Cintra Waiver should be limited to the activities of Canadian pension funds as 435’s expert, Professor Ambachtsheer, did in arriving at his expert opinion supporting 435’s position.

Further, Professor Ambachtsheer was not provided with the 407 USA or any understanding of CDPQ’s investment in 407 before preparing his initial expert report.

As a result, his characterization of CDPQ’s investment in 407 in 1999 as “passive” was made without the knowledge that CDPQ had the right to nominate directors and approve 407’s auditors and budget.

Under cross-examination he agreed that CDPQ’s investment in 407 was an example of an “active” investment by a pension fund. [39] The Cintra Parties are Spanish entities and they and SNC are engaged in infrastructure business on a worldwide basis.

Further, the Cintra Waiver refers to pension funds generally.

There is, therefore, no basis for limiting the factual matrix relating to the Cintra Waiver to the activities of Canadian pension funds as Professor Ambachtsheer has done in his expert report. [40] Further, the evidence establishes that a number of Canadian pension funds were engaged in active investing in infrastructure projects when the parties entered into the Cintra Waiver in 2002.

These active investments include the following: > (a) Before 2002 the Ontario Teachers Pension Plan (“OTTP”) had adopted an active investor model and was engaged in high profile private market transactions such as the acquisition of an interest in Maple Leaf Sports and Entertainment and the privatization of Cadillac Fairview Corporation Limited; > (b) OMERS, through its subsidiary Borealis, engaged in direct, active investments in the Detroit Tunnel in 2001 and in long-term care facilities in 2000; and > (c) CDPQ, a pension fund manager, was a direct participant in 407 in 1999 with investor rights that allowed it to influence the strategic direction and management of the company. [41] In light of this evidence, 435’s position cannot be supported that based upon the factual matrix in 2002, when the parties excluded “pension funds” from the definition of “Competitor” they meant only to exclude pension funds following a passive investment strategy. [42] I accept the expert evidence of Mark Weisdorf, who has extensive infrastructure investment experience, that the term “financial investor” has had the same recognized meaning within the infrastructure investment industry for over 30 years. [43] According to Mr. Weisdorf at page 4 of his expert report, > …The term “financial investor” is used to refer to an investor that is motivated to realize a financial return on its investment – such as a pension fund or superannuation fund, insurance company, sovereign wealth fund, endowment, foundation, or private equity fund – and seeks a certain minimum level of return based on a given risk profile. > > While a financial investor may use ownership rights as an investor to protect or promote its financial interest, a financial investor does not typically “run the businesses” in which it invests or provide the suite of services required to run the investee company’s day-to-day operations.

Instead, financial investors use their skills to maximize risk-adjusted returns by sourcing, selecting, investing, overseeing and disposing of their investments at what they consider to be the optimal time. > > In the infrastructure context, a financial investor is a capital provider that does not provide design, architectural, engineering construction, operations and/or maintenance services to the infrastructure project. [44] At page 5 of his expert report Mr. Weisdorf compares the size of the workforce and market capitalization of Cintra and SNC to that of OMERS.

It is significant to note that Cintra has approximately 95,000 employees and a market capitalization of approximately EUR $16.2 billion and SNC has approximately 52,000 employees and a market capitalization of approximately CAD $4.2 billion.

By way of comparison, OMERS has approximately 3,000 employees for approximately CAD $97 billion in net assets under management.

I agree with Mr. Weisdorf’s conclusion that “these statistics reflect the fact that pension funds are not typically in a position to engage in the construction of infrastructure projects or provide the day-to-day operations of a completed infrastructure project”. [45] I also accept Mr. Weisdorf’s conclusion at pp. 6-7 of his expert report that a financial investor’s active management of its investment, by way of shareholder voting rights and nomination of representatives to a board of directors does not mean that it “ceases to be considered a ‘financial investor’”. [46] At page 7 of Mr. Weisdorf’s expert report he concludes as follows: > The definition of a ‘financial investor’ in the infrastructure context is not based on whether the investor manages its investments directly or retains a competent third-party investment manager, or how actively its investments are managed.

Nor is the definition based on how much of an infrastructure project it owns or controls.

Instead, an investor that is solely a financial investor can be identified by the fact that it is motivated to realize a financial return on its investment; it does not construct and/or operate the infrastructure project or provide day-to-day operational services.

As noted above, its expertise is in the sourcing, selecting, investing, overseeing and disposing of its investments. [47] The respondents also adduced expert opinion evidence from Mr. Hugh O’Reilly, a pension expert.

At para 61 of his expert report, Mr. O’Reilly concludes that the development of a more active and direct approach to investing does not change the fact that funds like OMERS are, and have been for the last twenty years, pension funds “engaged solely in investment activity and are not in the business of operating the companies in which they invest”. [48] At para 62 of his expert report Mr. O’Reilly concludes as follows: > 62.

The defining features of pension funds have not fundamentally changed over the last twenty years.

The purpose of these funds is to invest in various asset classes as opposed to operating a particular business or type of business.

In the case of infrastructure projects, pension funds bring the money to a consortium.

That money is provided with certain ownership and oversight rights.

However, the objective of pension funds remains the maximization of financial returns for the benefit of their beneficiaries.

Their business is not to conduct the day-to-day operations of the infrastructure company.

That was true in 2002 and it remains true today. [49] In light of the evidence of Mr. Weisdorf and Mr. O’Reilly, I have concluded that when the parties referred to a pension fund as an example of an entity that would purchase shares in 407 “solely as a financial investor”, they did not distinguish between pension funds engaged in either a passive or an active investing strategy.

I find on the evidentiary record before me that it was well known to the parties in 2002, when the Cintra Waiver was executed, that pension funds that invested in infrastructure projects actively managed their investments either directly or indirectly by a third party manager.

This would include OMERS both in 2002 and today. [50] I have applied the fundamental principle of contractual interpretation determining the intent of the parties and the scope of their understanding by reading the language that they used in the document based upon the “cardinal presumption” that they intended what they said in the context of the surrounding circumstances known to them at the time.

In doing so, I have concluded that the parties to the Cintra Waiver intended that a pension fund, such as OMERS is today, should be excluded from the ROFR because OMERS’ proposed purchase of SNC’s shares is “solely as a financial investor”. [51] 435’s submissions with respect to the “Macquarie Waiver” do not assist me in interpreting the Cintra Waiver because I must focus upon the language contained in that document not the language used in a separate contract between the parties. [52] Further, it is not necessary for me to decide whether OMERS’ competing interests must be in relation to all of the activities referred to in the Cintra Waiver as the respondents submit or any one of them as 435 submits because OMERS is excluded from the ROFR because it is solely a financial investor. ## Conclusion [53] For all of these reasons 435’s application is dismissed because it waived its ROFR with respect to OMERS’ proposed purchase of SNC’s shares in the Cintra Waiver. ## Costs [54] If the parties cannot settle the costs of the application, which I urge them to do, they may schedule a 9:30 a.m. attendance with me to deal with costs. [55] I thank counsel for their very helpful submissions. --- HAINEY J. Date: August 2, 2019

The defendants, an architectural firm and a project manager, brought a motion for summary judgment to dismiss the plaintiff's claim, arguing it was statute-barred under the Limitations Act.

The plaintiff's claim stemmed from condensation and ice issues in his luxury home, which he attributed to faulty windows and ventilation designed and installed by the defendants.

The court dismissed the defendants' motion, finding that the plaintiff's claim was not discovered more than two years before the action was issued.

The court emphasized the plaintiff's reasonable reliance on the defendants' superior expertise and their ongoing efforts to resolve the problem, concluding that he lacked sufficient information to believe he had an actionable claim until July 2016.

The court considered a request from Hudson's Bay Company (HBC) to reconsider a previous costs order, seeking $36,711.83 in costs payable forthwith, arguing that despite divided success on earlier motions, it was entirely successful in having the plaintiff's action struck as statute-barred.

Nygård International Partnership (Nygård) opposed, arguing the court was functus officio and that the original "costs in the cause" order was appropriate.

The court found it was not functus officio but maintained its original discretion, affirming that "costs in the cause" was fair and appropriate given the intertwined motions and divided success, allowing the trial judge to determine costs based on the whole proceedings.

The Ontario Securities Commission approved a settlement agreement between Staff and Omega Securities Inc. (OSI) regarding OSI's failure to comply with transparency requirements under National Instrument 21-101.

OSI operated two Alternative Trading Systems and disseminated inaccurate information regarding broker identities, order receipt times, and trade execution times across its data feeds.

The settlement included an administrative penalty of $500,000 and the imposition of terms and conditions on OSI's registration to ensure ongoing compliance, including the retention of an independent systems reviewer.

The plaintiff, Nygård, moved to amend its Statement of Claim, and the defendant, HBC, brought a cross-motion for summary judgment dismissing the action as statute-barred.

The dispute arose from consignment agreements where HBC allegedly applied unauthorized markdowns to the selling price.

The court found that Nygård discovered the initial setoffs in 2012, making those claims statute-barred.

However, the ongoing deductions constituted periodic breaches of contract.

The court held that claims arising before February 2, 2016 (two years prior to the motion to amend) were statute-barred, while claims arising after that date could proceed.

The plaintiffs sought judicial approval of two settlement agreements in class actions alleging price-fixing in the automotive parts industry.

The first settlement with T.Rad was for $1,167,452, and the second with S-Y Systems was for $50,000.

The court found both settlements to be fair, reasonable, and in the best interests of the class, noting they fell within a zone of reasonableness.

The settlements and requested legal fees were approved.

The appellants, defendants in a mortgage guarantee action, commenced third party claims against their former lawyer for contribution and indemnity, alleging he failed to obtain releases of their personal guarantees as instructed.

The motion judge granted summary judgment dismissing the claims as statute-barred under section 18 of the Limitations Act, 2002, finding an absolute two-year limitation period.

The Court of Appeal allowed the appeal, holding that section 18 does not establish an absolute limitation period but rather works with sections 4 and 5 of the Limitations Act to create a presumed start date subject to discoverability principles.

The court also found the motion judge erred in principle by not fully appreciating the complexity of the discoverability issue when deciding to proceed by summary judgment.

This is a costs endorsement on appeal from a Superior Court judgment.

The unsuccessful appellants (Essar entities and GIP entities) were ordered to pay costs to the successful respondents (the Monitor and Algoma Steel).

The parties agreed on the quantum of costs but disagreed on whether liability should be several or joint and several.

The court awarded costs on a several basis, allocating 25% to GIP and 75% to Essar, finding that GIP had a more limited role with different issues and less oral argument time than Essar.

A CCAA monitor brought an oppression action under the Canada Business Corporations Act against the parent company (Essar Global) and related entities, alleging that a port transaction transferring critical assets to an Essar-controlled entity was oppressive to Algoma's stakeholders (trade creditors, employees, pensioners, and retirees).

The trial judge found the monitor had standing as a complainant, the action was properly brought as an oppression remedy rather than a derivative action, and the port transaction and its change of control provision were oppressive.

The court granted a remedy modifying the transaction to remove the change of control veto and provide Algoma with termination rights after GIP's loan was repaid.

The appellants appealed on multiple grounds, including standing, characterization of the claim, reasonable expectations analysis, and the appropriateness of the remedy.

The Court of Appeal upheld the trial judgment in all respects.

Staff of the Ontario Securities Commission applied for a temporary order to suspend the registration of Omega Securities Inc. (OSI) and require it to cease trading, alleging breaches of Ontario securities law related to inaccurate time stamps and data feed discrepancies.

The Commission found that while the allegations were serious and supported by prima facie evidence, a complete suspension and cease trade order was not in the public interest due to the likelihood of irreparable harm to OSI and the steps OSI was taking to rectify the issues.

Instead, the Commission imposed terms and conditions on OSI's registration to ensure compliance and protect the capital markets.

The defendants were successful on a motion for security for costs against the foreign corporate plaintiff and sought partial indemnity costs of approximately $18,000.

The plaintiff argued for a reduced amount of $10,000, claiming divided success and excessive time spent.

The court rejected the plaintiff's arguments, finding the defendants were entirely successful and the delegation of work between junior and senior counsel was appropriate for the complex motion.

Applying the factors under Rule 57.01, the court fixed the defendants' costs at $15,000 all-inclusive.

This is a costs endorsement following a Rule 21 motion brought by Cams Atlas, LLC ("Cams") to dismiss counterclaims by Water Exchange, Inc. ("Water") and Tech Sonic International, Inc. ("Tech").

Cams' motion against Water was granted after Water conceded the point, but only after Cams had fully prepared.

Cams' motion against Tech was dismissed, as Tech's counterclaim was closely related to its defense.

The court found Tech entitled to costs for successfully defending the contentious part of the motion, while Cams was entitled to some costs against Water for the late concession.

The judge fixed costs, ordering Cams to pay Tech $16,000, inclusive of fees, disbursements, and HST, after considering the complexity, importance of issues, and reasonable expectations of the parties.

The plaintiff brought a motion for partial summary judgment to dismiss the defendants' counterclaims as an abuse of process, arguing they attempted to relitigate issues already decided in a New York judgment against one of the defendants.

The court granted the motion to dismiss the undefended counterclaim of the defendant subject to the New York judgment, as it was res judicata.

However, the court dismissed the motion regarding the counterclaim by the affiliated corporate defendant, finding that granting partial summary judgment risked inconsistent findings at trial, as the issues in the counterclaim were intertwined with the main action against that defendant.

The defendants brought a motion for security for costs against the non-resident plaintiff, CAMS Atlas, LLC.

The plaintiff had obtained a New York default judgment against one of the defendants, Water Exchange, Inc., which was recognized in Ontario.

The plaintiff argued it would be unjust to order security for costs, alleging a complex web of interrelationships among the defendants that should make them all liable for the judgment.

The court declined to pierce the corporate veil at this preliminary stage, finding it would be premature and wrong in law.

The plaintiff was ordered to post $75,000 as security for costs.

The plaintiffs in a class action alleging a price-fixing conspiracy in the foreign exchange market moved for approval of six settlements totaling $51.5 million.

The court reviewed the settlements in light of the estimated range of total damages, the litigation risks, and the value of the settling defendants' cooperation.

Finding the settlements to be fair, reasonable, and in the best interests of the class, the court approved the settlements.

Following an oppression action within CCAA proceedings, the court determined costs claims by Algoma and GIP.

The Essar Defendants agreed to pay $1.7 million in costs to the Monitor.

Algoma sought partial indemnity costs against the Essar Defendants, largely for extensive e-discovery disbursements.

The court rejected the argument that Algoma should be denied costs because it was aligned with the Monitor, finding Algoma's participation and document production were critical to the case.

The court awarded Algoma $1,138,809.19 in costs.

GIP's claim for costs against the Monitor was dismissed with no order as to costs, as the court found success between the Monitor and GIP was divided.

The applicants (Algoma) sought two declarations: (i) that amounts owing under a promissory note from Portco to Algoma had been set off against amounts Algoma owed to Portco under a Cargo Handling Agreement; and (ii) that Algoma's right to terminate related Port Agreements was not subject to Portco's payment of the GIP Loan, which was tied to the set-off amounts.

The court granted the first declaration, finding that equitable set-off applied given the close connection between the parties and transactions, and the manifest inequity of requiring Algoma to pay Portco while the parent company (EGFL) failed to pay the promissory note.

However, the court denied the second declaration, holding that it would contradict a prior oppression judgment and an assignment agreement which explicitly required the GIP Loan to be paid in full in cash before Algoma could terminate the Port Agreements.