Frank J.C. Newbould

This endorsement addresses the costs arising from a prior motion where Fishman Flanz Meland Paquin LLP (FFMP) was successful against FCA Canada Inc. (Chrysler).

FFMP claimed costs of $138,923.68, while Chrysler argued for no more than $50,000.

The court considered the complexity of the motion, the importance of the matter to FFMP, and Chrysler's unreasonable position.

The court assessed FFMP's fees at $85,000 and disbursements at $2,698.47, plus applicable taxes, to be paid by Chrysler within thirty days.

Rytec Corporation sought an order declaring that the automatic stay of proceedings under s. 69(1)(a) of the Bankruptcy and Insolvency Act (BIA) did not apply to a motion it intended to bring for injunctive relief against Emergency Door Service Inc. (EDS) to prevent post-filing conduct.

EDS had filed a notice of intention to make a proposal under the BIA.

The court dismissed Rytec's motion, holding that the term "remedy" in s. 69(1)(a) of the BIA includes injunctive proceedings to prevent post-filing conduct of a debtor who has filed a notice of intention to make a proposal.

The court emphasized a purposive interpretation of the BIA, aiming to provide breathing room for debtors to restructure, and found no material prejudice to Rytec that would warrant lifting the stay.

The plaintiff, Catalyst Capital Group Inc., brought an action against Brandon Moyse and West Face Capital Inc. for alleged misuse of confidential information regarding WIND Mobile Inc. and spoliation of documents.

Catalyst claimed Moyse, a former analyst, provided confidential information to West Face, which West Face then used to acquire an interest in WIND.

The court assessed the evidence, including witness credibility, and found no direct evidence of information transfer.

The court also examined the elements of breach of confidence and spoliation.

The action was dismissed in its entirety, with the defendants entitled to costs.

Portco sought orders for immediate and future payments under a Cargo Handling Agreement, and a US$5 million charge on Algoma's assets, arguing the payments were required post-filing in a CCAA proceeding.

The CCAA Applicants (Algoma) and DIP lenders opposed, citing the DIP Agreement's budget approval requirement and an arguable right to equitable set-off against a promissory note owed by Portco's parent company (EGFL) to Algoma.

The court found that the DIP Agreement and Initial Order did not mandate payments without DIP lender approval and that an arguable case for equitable set-off existed.

The motion was dismissed as premature, pending determination of the set-off issue and other concerns raised by the Monitor regarding the Portco transaction and recapitalization.

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.

Fishman Flanz Meland Paquin LLP (FFMP), counsel to the Creditors' Committee in a CCAA proceeding, brought a motion to compel FCA Canada Inc. (Chrysler) to sign an indemnity against potential tax liabilities arising from the distribution of Cost Award Funds from prior Quebec litigation.

FFMP also sought payment of Chrysler's share of tax advice costs and FFMP's motion expenses.

Chrysler opposed, arguing FFMP breached an undertaking to pay without conditions and had no right to deduct costs.

The court found FFMP's requests for indemnity and cost deductions reasonable and consistent with the Plan's intent and the court's broad discretion under section 11 of the CCAA.

The court allowed FFMP's motion and dismissed Chrysler's cross-motion, ordering Chrysler to comply with FFMP's demands before receiving its pro rata share of the Cost Award Funds.

The applicant sought a declaration that its perfected security interest in amounts payable by the City of Toronto to Selectore Ltd. had priority over a garnishment notice served by the respondent Globealive Wireless Management Corp. Globealive argued that the applicant's loan was not in default when the receivable became due, thus precluding the applicant's right to the funds.

The court, relying on section 20(1)(a)(ii) of the Personal Property Security Act, held that a perfected security interest takes priority over a later notice of garnishment, irrespective of whether the secured loan was in default at the time the receivable became due.

The applicant's motion was granted, affirming its priority, and Globealive was ordered to pay costs to both the applicant and the City of Toronto.

The plaintiff, Callidus Capital Corporation, moved for summary judgment to enforce a guarantee and mortgage against the defendant, Jeffrey J. McFarlane, for obligations of Xchange Technology Group LLC (XTG).

McFarlane had guaranteed XTG's debt to Callidus, limited to US$3 million, excluding certain facility and forbearance fees.

McFarlane argued that the debt was extinguished by an asset purchase agreement (APA) via a credit bid, and that Callidus had impaired its security.

The court found that the guarantee was a commercial agreement, not subject to the *contra proferentem* rule, and that the $3 million carve-out in the APA was intended to maintain McFarlane's guarantee obligation.

The court also rejected the impairment of security argument, noting a broad release signed by McFarlane.

Summary judgment was granted to Callidus for US$3 million plus interest and costs.

The plaintiffs sued the Bank of Montreal for $211,999.62 arising from unauthorized debits from a corporate account and moved for summary judgment.

The Bank of Montreal also moved for summary judgment, seeking dismissal of the claims based on a limitations period and an account verification agreement.

The court found genuine issues requiring a trial regarding the start date of the limitation period due to conflicting evidence on when the plaintiff discovered the loss and when BMO provided account documentation.

The court also identified an ambiguity in the account verification clause regarding written versus oral notice, suggesting the `contra proferentem` rule might apply.

Both motions for summary judgment were dismissed, and no costs were awarded due to divided success.

The United Steelworkers Local Union 2251, supported by USW Local 2724 and Essar Algoma retirees, brought a motion to qualify a "Subject Bidder" as a Phase II Bidder in a Companies' Creditors Arrangement Act (CCAA) proceeding.

The Subject Bidder had been disqualified by Essar Algoma, its Chief Restructuring Advisor, Financial Advisor, and the Monitor for failing to provide satisfactory evidence of financial capability to consummate a transaction.

The union argued it was not properly consulted in the disqualification decision and that it should have been allowed to meet with the Subject Bidder.

The court dismissed the motion, finding that the union's consultation rights under the Sale and Solicitation Process (SISP) did not extend to decisions on a bidder's financial capability, and that the court should not second-guess the business judgment of the CCAA applicants and their professionals.

The applicants, International Steel Services Inc. (ISSI), sought an interim injunction to restrain the respondent, Dynatec Madagascar S.A. (Dynatec), from interfering with ISSI's contractual rights under a Sulphuric Acid Plant Operation and Maintenance Agreement.

The dispute centered on whether the agreement was extended to September 27, 2018, as ISSI contended, or if it terminated on May 1, 2016, as Dynatec argued.

The court applied the RJR-MacDonald test for injunctions, finding a serious issue to be tried regarding the agreement's extension and Dynatec's termination notice.

It determined that ISSI faced a meaningful risk of irreparable harm to its business reputation and employee relations if Dynatec proceeded with its takeover plans.

The court also found the balance of convenience favoured ISSI, noting Dynatec's "hardball tactics" and delay in facilitating arbitration.

The interim protective order was granted to ISSI, prohibiting Dynatec from interfering with ISSI's contractual rights and operation of the Acid Plant pending an arbitral decision.

Nortel Networks Corporation and its Canadian debtor affiliates brought a summary judgment motion to dismiss claims by SNMP Research International, Inc. and SNMP Research Inc. for breach of contract, breach of confidence, and copyright infringement.

SNMP's claims arose from Nortel's post-CCAA filing sales of its business segments (LOBs), during which SNMP's proprietary software source code was allegedly transferred to purchasers without authorization.

The court dismissed SNMP's claim for disgorgement of Nortel's profits, finding no evidence that Nortel received revenue derived from the copyright infringement, as purchasers knew they were not acquiring rights to SNMP software and negotiated separate licenses.

However, the court held SNMP's damage claim in abeyance for six months, acknowledging ongoing discovery in a related U.S. proceeding and the possibility of future evidence regarding LOB purchasers' use of unlicensed SNMP software.

Following an earlier decision requiring certain respondents to purchase the applicant’s shares in a corporation for $4.25 million, the court determined the appropriate costs award.

The applicant had served a Rule 49 offer to settle that was lower than the judgment amount and sought substantial indemnity costs from the date of the offer.

The court considered the extensive litigation history, overlapping issues involving two related corporate interests, and the respondents’ conduct that complicated document production and valuation.

Applying the Rule 57.01 factors and recognizing the respondents’ obstructive conduct, the court fixed substantial indemnity costs for fees and taxes and allowed claimed disbursements and expert valuation expenses in full.

In a costs endorsement following earlier proceedings under the Construction Lien Act, the self-represented party filed an amended bill of costs seeking compensation for legal work performed by a solicitor and renewed a request for compensation for his own time spent on the matter.

The court allowed the additional solicitor’s fee of $600 plus HST as a recoverable disbursement, conditional on payment to the solicitor once received.

The court rejected the renewed request for compensation for the self-represented party’s own time, noting that the issue had already been decided and that such compensation would not be awarded.

In CCAA restructuring proceedings, the applicants sought approval of a key employee retention plan (KERP) for 23 management employees and a related charge securing payment obligations.

Unions opposed the motion, arguing insufficient disclosure, excessive compensation, and lack of consultation.

The court held that s. 11 of the Companies’ Creditors Arrangement Act provides jurisdiction to approve a KERP and applied established factors including the importance of management continuity, support from the monitor and secured creditors, and the business judgment of the board.

Finding the participants critical to the restructuring and the process for establishing the KERP robust, the court approved the plan and associated charge.

The court also granted a sealing order over confidential information identifying participants and compensation amounts.

In CCAA liquidation proceedings, the secured creditor and investment advisor sought a declaration that it was entitled to a contractual additional fee arising from the sale of one of the debtor’s portfolio investments.

The creditor argued that the debtor breached a settlement agreement by failing to repay outstanding advisor debt before the asset sale closed, which would have triggered the fee.

The court held that the agreement required payment only when reasonably practicable based on the debtor’s commercially reasonable estimate of liquidity and expenditures.

Given the uncertainty of the closing and the debtor’s limited cash resources during CCAA proceedings, the decision to wait until proceeds were actually received was commercially reasonable.

The motion for a declaration and payment of the additional fee was dismissed.

Following dismissal of a trustee’s motion seeking directions to terminate certain condominium purchase agreements, the court addressed costs.

The purchasers sought costs against the trustee or alternatively against mortgagees who supported the trustee’s position.

The court held that although the mortgagees were not formal parties to the motion, they actively participated and had a direct financial interest in the outcome, making it appropriate to hold them responsible for costs.

The court also considered principles governing costs for self-represented litigants and limited recovery to proven disbursements where no foregone remunerative activity was demonstrated.

Costs were awarded to the purchasers and made payable jointly and severally by the mortgagees.

Following the dismissal of motions brought by a corporate director in receivership proceedings, the court determined the appropriate quantum of costs payable to the secured creditor and the court‑appointed receiver.

The director argued the creditor’s bill of costs reflected over‑lawyering and that legal research should not be compensable.

The court rejected that submission, emphasizing that legal research is an ordinary and necessary component of litigation and is properly recoverable.

Applying Rule 57.01 of the Rules of Civil Procedure and reasonable expectations of the losing party, the court fixed costs at $6,000 plus HST for the receiver and $27,500 inclusive for the creditor.

The court also refused to order that the costs be paid by a company in receivership rather than personally by the director.

Following dismissal of a motion seeking production of documents in insolvency proceedings under the Companies’ Creditors Arrangement Act, the court determined the quantum of costs payable to the successful parties.

Applying the reasonableness principle and the factors in Rule 57.01 of the Rules of Civil Procedure, the court assessed costs claimed by the monitor, the creditors’ committee, and the applicants.

The court rejected arguments that certain participants should receive reduced or no costs and instead fixed reasonable amounts reflecting their participation in the motion.

Costs were awarded to each successful party and ordered payable within 30 days.

Following two trials in a commercial dispute, the successful party sought costs on a substantial indemnity basis.

The court held that allegations by the opposing party that a shareholders’ agreement was a fraudulent forgery were unsupported and justified elevated costs to the end of the first trial.

Costs thereafter were awarded on a partial indemnity basis because the second trial concerned only the quantum payable.

The court reviewed objections to time entries and disbursements and rejected most reductions, finding the work and rates generally reasonable.

A global adjustment was made to account for limited overlap between successive counsel.