Eric Sherkin

This costs endorsement addresses the aftermath of an application brought by Mehrzad Zarei against the Association of Families of Flight PS752 Victims.

The court dismissed Zarei’s application and considered the appropriate costs order, ultimately awarding the Association $50,000 in substantial indemnity costs for the period after a Rule 49 offer to settle, $5,000 on a partial indemnity basis for the period before the offer, and $4,862.62 in disbursements.

The court balanced the Association’s entitlement to costs with Zarei’s financial and emotional circumstances, staying enforcement of the order until Zarei collects any money from the government of Iran.

The court considered an application under the Unconscionable Transactions Relief Act to set aside litigation loan agreements entered into by Chadwick Randy Kelly (by his litigation guardian and attorney for property) with BridgePoint Financial Services Limited Partnership I. The loans, used to purchase and retrofit a home after a catastrophic injury, had grown to over $1.1 million due to compounding interest.

The applicants argued the loans were excessive, harsh, and unconscionable.

The court found that, given the risk profile, the lack of alternative financing, and the terms of the agreements, the loans were not excessive or unconscionable under the Act.

The application was dismissed and costs awarded to the respondent.

The applicant, a family member of a Flight PS752 victim, brought an application for an oppression remedy against the Association of Families of Flight PS752 Victims, alleging the Association failed to provide financial support, engaged in partisan activities, and withheld corporate documents.

The court dismissed the application, finding that the Association's board acted within its reasonable business judgment in interpreting its mandate and managing its affairs.

The court also noted the applicant failed to utilize available democratic processes within the Association to address his concerns, and that the evidence did not establish a violation of any reasonable expectation or oppressive conduct.

The applicants sought leave to appeal decisions of the Assessment Review Board that applied issue estoppel to dismiss their property tax assessment appeals.

The applicants attempted to re-open the 2016 valuation of their land based on the impact of the COVID-19 pandemic on their profitability.

The Divisional Court dismissed the motions for leave to appeal, holding that subsequent market changes to business results do not constitute a change in the 'state and condition' of the land and are not a valid basis to re-open an assessment.

The applicant, Mehrzad Zarei, sought leave to withdraw his abandonment of an application against the Association of Families of Flight PS752 Victims.

Zarei had initially withdrawn the application but sought to reinstate it after receiving a substantial costs demand from the Association.

The court considered whether an abandoned application requires leave to proceed, particularly when no limitation period has expired.

Exercising its discretion, the court granted leave for the application to proceed, citing the absence of an expired limitation period, the applicant's post-traumatic stress disorder, the public importance of the matter concerning a not-for-profit corporation's operations, and the disproportionate nature of the initial costs demand.

The court reserved the issue of costs related to the abandonment for the final hearing on the merits and imposed a strict timetable for the proceeding.

The appellant appealed a decision of the Assessment Review Board which held it was estopped from raising the issue of the current value of its office building for the 2021 and 2022 taxation years.

The parties had previously signed minutes of settlement agreeing to the current value assessment as of January 1, 2016, for the 2016-2020 cycle.

Due to the COVID-19 pandemic, the provincial government extended the 2016 valuation date to apply to subsequent taxation years.

The Divisional Court upheld the Board's decision, finding that the issue of the 2016 current value had been finally determined by the settlement and that the Board correctly applied the doctrine of issue estoppel.

The appeal was dismissed.

The applicant, Heather Miller, sought to enforce an undertaking given by the respondents, Telemaco Matrundola and 1000125576 Ontario Inc., concerning the applicability of Harmonized Sales Tax (HST) to the sale of real property.

The parties had agreed that the purchase price would be readjusted based on a tax ruling from the Canada Revenue Agency (CRA).

The applicant obtained a CRA ruling confirming the transaction was HST exempt, but the respondents refused to comply, alleging the ruling request contained inaccurate or incomplete information regarding commercial activity on the property and the applicant's HST registration status.

The court found that the applicant had complied with the undertaking and that the information provided to CRA was accurate and complete for the purpose of the ruling.

The court emphasized its limited jurisdiction in tax matters, which fall under the Tax Court of Canada.

The application was granted, ordering the respondents to pay the withheld portion of the purchase price to the applicant with interest.

Manulife sought leave to appeal a decision of the Assessment Review Board that held it was estopped from appealing its 2021 and 2022 property tax assessments due to a prior settlement for the 2017-2020 taxation years.

Manulife also brought a motion to admit fresh evidence.

The Divisional Court dismissed the motion to admit fresh evidence, finding it did not meet the Palmer test.

However, the Court granted leave to appeal, finding good reason to doubt the correctness of the Board's application of issue estoppel because the prior settlement explicitly applied only to the years under appeal and there had been no hearing on the merits regarding equitable adjustments.

The plaintiffs brought a motion for production orders and examination of the defendants in aid of an existing Mareva injunction and Anton Piller order.

The only contentious issue was a request to order a non-party exchange to provide information regarding the defendants' assets.

The court granted the order, finding it necessary in aid of execution of the Mareva injunction, and rejected the defendants' argument that the request was an improper attempt to gather evidence for a contempt motion.

The appellants, pre-construction purchasers of townhouses and condominiums, appealed the dismissal of their motion for a certificate of pending litigation (CPL).

The original developer transferred the lands to a lender, Grand Grace, after defaulting on loans.

Grand Grace took title free of the unregistered agreements of purchase and sale and resold the properties.

The Superior Court of Justice dismissed the appeal, finding no palpable and overriding error in the Associate Justice's conclusion that the properties were not unique, damages were an adequate remedy, and the non-registration clauses in the agreements weighed against granting a CPL.

This costs endorsement addresses the allocation of costs following two applications concerning the valuation of shares in 438056 Ontario Limited and the sale of a property under the Partition Act.

The court found divided success on the share valuation issues, leading to no costs award for that portion.

However, the Estate of Silvio Marsili was successful in its discrete claim for relief under the Partition Act, entitling it to costs for that specific aspect of the application.

Two applications were brought to determine the fair market value of shares held by the late Silvio Marsili in 438506 Ontario Limited, pursuant to a buy-sell agreement triggered by his death.

The parties' expert business valuators disagreed on valuation methodology, EBITDA normalizations, contingent liabilities, and the minority discount.

The court resolved the specific valuation disputes, preferring the respondent's expert on methodology but the applicant's expert on several normalizations and contingent liabilities.

The court directed the experts to prepare revised valuation opinions incorporating its findings.

The court also granted the applicant's request for an order for the sale of a jointly owned property under the Partition Act.

The plaintiffs, purchasers of pre-construction condominium and freehold units, brought motions for certificates of pending litigation (CPLs) against the development property after the original developer became insolvent and transferred the property to a new developer.

The purchase agreements contained non-registration clauses prohibiting the registration of CPLs.

The court found that while there was a triable issue regarding an interest in land based on constructive trust, the non-registration clauses and the equitable factors from Dhunna—including the lack of uniqueness of the property, the adequacy of damages, and the prejudice to new innocent purchasers—weighed heavily against granting the CPLs.

The motions were dismissed.

The defendant brought a motion to remove the plaintiff's law firm as lawyers of record, arguing he was a former and current near-client of the firm and had provided confidential information.

The court found the defendant was a current near-client due to his close association with the firm's existing corporate clients.

The court also found the firm failed to rebut the presumption that it received relevant confidential information and failed to implement a timely ethical screen.

The motion was granted and the law firm was disqualified.

Several property owners and tenants applied for property tax relief under s. 357(1)(d)(ii) of the Municipal Act, arguing that COVID-19 pandemic restrictions 'damaged' their income-producing properties by rendering them substantially unusable.

The Assessment Review Board held a motion to determine the preliminary legal interpretation of the provision.

The Board found that the word 'damage' in the statute requires physical damage to a building, applying the ejusdem generis maxim to restrict the phrase 'or otherwise' to physical causes like the listed 'fire' and 'demolition'.

The Board concluded that 'damage' does not include 'legislative damage' caused by government restrictions on business operations.

The applicant, Hybrid Financial Ltd., sought a declaration that the buyout formula in a Royalty Agreement with the respondent, Flow Capital Corp., violated the criminal rate of interest provisions under s. 347 of the Criminal Code.

The court analyzed the Royalty Agreement and determined it was a hybrid financial transaction more akin to an equity investment than a traditional debt or credit facility.

Because the transaction did not constitute a 'credit advanced' and the payments were not 'interest', s. 347 did not apply.

The application was dismissed, and the applicant was ordered to comply with the buyout valuation process and resume its contractual obligations.

The plaintiffs brought a motion to set aside a Registrar's order dismissing their action for delay, which arose from a 2011 property flood.

The court applied the four-factor test from Reid v. Dow Corning Corp., assessing the explanation for delay, inadvertence in missing the deadline, promptness of the motion, and prejudice to the defendants.

The court found significant unexplained delays by both plaintiffs and their counsel, that the missed deadline was not mere inadvertence, and that the motion to set aside was not promptly brought.

Crucially, the defendants suffered actual prejudice due to the death of a key plaintiff (James Freure) and the dementia of another (Fae Freure), which prevented full discoveries and expert examinations, and resulted in the loss of relevant medical records.

The court dismissed the motion to set aside the dismissal, emphasizing the need for finality in litigation.

A separate motion to appoint Catherine Chapman as litigation guardian for Fae Freure was granted.

The plaintiff lender brought a motion for summary judgment against a lawyer who failed to honour an irrevocable direction to pay settlement funds to repay a litigation loan.

The lawyer had acknowledged the direction but mistakenly paid the settlement funds directly to his client.

The court found the lawyer personally liable for breaching his covenant, treating it akin to a solicitor's undertaking.

The plaintiff was awarded the principal amount plus contractual interest up to the date of the breach, and statutory prejudgment interest thereafter.

The claim against the lawyer's LLP was dismissed, and no costs were awarded.

The applicant sought leave to appeal an interlocutory decision of the Assessment Review Board that denied its request to withdraw its property tax appeals.

After the applicant appealed its 2017 and 2018 assessments, it sold the property for significantly more than the assessed value.

The respondents subsequently gave notice of their intention to seek a higher assessment.

The Divisional Court dismissed the motion for leave to appeal, finding no reason to doubt the correctness of the Board's decision that the applicant could not withdraw its appeal as of right once notice of a higher assessment was provided.

The defendant 2613497 Ontario Inc. moved under Rule 37.14 to set aside a Mareva injunction and discharge Certificates of Pending Litigation, arguing the original order was obtained without notice and without full and fair disclosure.

The court found that the defendant's lawyers of record had participated in case conferences and filed responding materials for the original motion, establishing that the defendant had notice.

As the motion was not made without notice, Rule 37.14 did not apply, and the court dismissed the motion, awarding costs to the plaintiffs.