Gerald L.R. Ranking

In the context of CCAA proceedings, the Monitor sought directions on the interpretation of a litigation funding agreement and the approved Plan of Arrangement regarding the distribution of funds released from security for costs.

The successful defendants in related litigation argued the funds should be paid to them to satisfy outstanding costs awards.

The court rejected this interpretation, finding the plain wording of the agreements required the funds to be treated as Subsequent Cash on Hand for the benefit of Secured Noteholders.

The court also declined to approve the Monitor's historical activities, noting the expiry of limitation periods rendered such approval unnecessary, but granted the Monitor's discharge.

The Cash Store Financial Services Inc. operated a payday loan business from 2002 until it sought CCAA protection in April 2014.

The company's estate sued its auditor KPMG LLP and counsel Cassels Brock & Blackwell LLP, alleging negligence and breach of fiduciary duty.

The plaintiff claimed that the defendants knew or ought to have known that Cash Store was misrepresenting its business as a broker when it was actually a direct lender bearing credit risk, and that this misrepresentation caused a deepening of insolvency from late 2011 until the CCAA filing in 2014.

The plaintiff sought damages ranging from $119 million to $177 million, plus disgorgement of legal fees.

The court dismissed all claims against both defendants, finding that Cash Store was properly characterized as a broker during the relevant period, that the defendants met applicable professional standards, and that the plaintiff failed to prove causation and damages.

The court also found the claims were statute-barred.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.

The applicant, a former audit partner, sought judicial review of a decision by the Appeal Committee of the Chartered Professional Accountants of Ontario, which upheld a finding of professional misconduct against him.

The misconduct related to his failure to obtain sufficient and appropriate audit evidence regarding assets held by a service organization involved in the Madoff fraud.

The Divisional Court dismissed the application, finding that the disciplinary committees reasonably applied the codified auditing standards (U.S. GAAS) and did not reverse the onus of proof or apply an incorrect standard of practice.

The applicant sought leave to appeal or set aside two arbitral awards issued in favour of the respondent regarding a commercial dispute over the manufacture of blow moulding machines.

The court dismissed the application, finding that the applicant had waived its right to object to the arbitrator's jurisdiction by failing to raise the issue until closing arguments.

Furthermore, the court held that the 'final and binding' language in the parties' arbitration agreement precluded any right of appeal under s. 45 of the Arbitration Act.

The court also rejected arguments that the arbitrator failed to consider evidence, acted unfairly, or demonstrated a reasonable apprehension of bias, concluding that the arbitrator's findings were reasonable and well-founded.

This appeal concerns an auditor's liability action arising from the Bernard Madoff Ponzi scheme.

The appellants, three Fairfield feeder funds incorporated in the British Virgin Islands, invested in Madoff's company and suffered losses when the fraud was revealed in December 2008.

The funds sued PricewaterhouseCoopers for breach of contract and negligence in auditing their financial statements for 2006 and 2007, claiming damages of approximately $2.5 billion.

The motion judge granted summary judgment dismissing the action on the basis that no damages were suffered, applying the Livent damages methodology.

The appellants appealed on five grounds, all involving findings of fact or mixed fact and law regarding the calculation of damages.

The Court of Appeal dismissed the appeal, finding no palpable and overriding errors in the motion judge's analysis.

The moving parties (respondents in the main application) brought a motion to vary a prior order that required them to indemnify the responding party for the costs of a court-appointed Monitor.

The Monitor's final report vindicated the moving parties from allegations of ongoing defalcation, which had been the primary basis for expanding the Monitor's powers and imposing the indemnity.

The court applied Rule 59.06(2)(a) to vary the order based on these newly discovered facts, finding it unfair for the moving parties to bear the entire cost of the enhanced monitoring.

The court also declined to enforce the underlying arbitral award pending the moving parties' appeal.

The moving parties (the Donato Parties) sought an order enforcing an arbitrator's confidentiality decision and sealing the arbitral award so it would not form part of the public record in the appeal proceedings.

The court applied the Sierra Club test for confidentiality orders and found that the moving parties failed to establish a serious risk to an important commercial interest that required protection.

The court held that the general public interest in encouraging private arbitration does not automatically justify a sealing order when an arbitral award is appealed to the court.

The motion was dismissed.

The applicant appealed an arbitrator's decision granting a confidentiality order and permanent injunction against the applicant and its counsel for publishing a press release linking to an arbitral award.

The court determined the standard of review was reasonableness.

The court found the arbitrator did not err in interpreting the arbitration agreement's confidentiality provisions, in excluding certain extrinsic evidence, in finding a breach of confidentiality, or in granting a permanent injunction.

The appeal was dismissed.

The defendants, an auditing firm, brought a motion for summary judgment to dismiss a $5 billion negligence claim arising from their audits of feeder funds that invested in the Bernard Madoff Ponzi scheme.

The plaintiffs alleged that the auditors failed to discover the fraud, causing the funds to remain invested and suffer massive losses.

The court granted summary judgment, finding that the plaintiffs failed to prove any damages.

Applying the plaintiffs' own damages formula, the court concluded that the funds actually benefited from the delayed discovery of the fraud due to net withdrawals and the exclusion of fictitious profits and unasserted liabilities.

The plaintiff, a shell company representing substantial commercial creditors, conceded it lacked sufficient assets to cover the defendants' costs if unsuccessful in three complex commercial actions seeking over $150 million in damages.

The plaintiff also failed to demonstrate impecuniosity.

The defendants sought over $10 million in security for costs.

The court, finding the merits of the underlying claims neutral for the purpose of the motion, determined it was fair and just for the plaintiff to post security.

An initial aggregate sum of $1.6 million was ordered to be paid into court, staged across the three actions, with further amounts to be determined later.

This appeal concerns whether a partial stay of proceedings should be granted in favour of arbitration in a class action involving both consumer and non-consumer claims against TELUS Mobility for alleged undisclosed billing practices (rounding up calls to the next minute).

The appellants argued that the motions judge erred in refusing to stay the non-consumer claims pursuant to section 7(5) of the Arbitration Act, 1991.

The appellants contended that the Court of Appeal's decision in Griffin v. Dell Canada Inc. had been overtaken by the Supreme Court's decision in Seidel v. TELUS Communications Inc. The Court of Appeal dismissed the appeal, holding that Griffin remains binding authority in Ontario and has not been overtaken by Seidel, as the two cases were decided in materially different legislative contexts.

The defendant, KPMG LLP, moved for an order relieving former directors of the plaintiff, Cash Store, from a contractual obligation not to cooperate with KPMG in the ongoing litigation.

This obligation was contained in an undisclosed side letter agreement that formed part of a global settlement under the CCAA.

The court found that because the side letter was not disclosed to creditors, KPMG, or the court during the CCAA plan approval process, Cash Store lacked the authority to enter into the impugned term.

Consequently, the court held that the prohibition against communicating with KPMG was not binding on the former directors, and the motion was granted.

The defendants moved for security for costs in a $5 billion auditor negligence action arising from audits connected to investments with Bernard L. Madoff Investment Securities.

The plaintiffs, investment funds in liquidation, did not dispute entitlement to security but contested the amount sought.

The court considered estimates for pleadings, discovery planning, document review, examinations for discovery, and disbursements, including expert evidence.

Applying Rule 56.01 and assessing reasonable partial indemnity rates, the court found the plaintiffs’ proposed figures unrealistic given the complexity and scale of the litigation.

Substantial security for costs was ordered to cover work through the first stage of examinations for discovery.

This was a costs decision following a successful motion staying a proposed franchise class action in favour of arbitration.

The court held the successful defendants were entitled to partial indemnity costs for the stay motion and related motions, subject to a set-off in favour of the plaintiffs for their earlier success on a pleadings motion.

The court rejected the plaintiffs' argument that costs should be denied or significantly reduced under s. 31 of the Class Proceedings Act, 1992 because of novelty or public interest.

After set-off, the court awarded one defendant $8,000 and the other successful defendants $85,000, all inclusive.

Franchisee plaintiffs commenced a proposed class proceeding alleging that the franchisor breached disclosure obligations and interfered with franchisees’ statutory right to associate under the Arthur Wishart Act (Franchise Disclosure), 2000 after converting exclusive territories to non‑exclusive territories.

The franchisor moved to stay the action based on arbitration clauses contained in the franchise agreements.

The plaintiffs argued the statutory right to associate under the Arthur Wishart Act encompassed the right to pursue a class action and therefore invalidated the arbitration clause.

The court held that the Act does not manifest legislative intent to override arbitration agreements and that s. 7 of the Arbitration Act, 1991 requires enforcement of such clauses absent explicit statutory intervention.

Applying Seidel v. TELUS Communications Inc., the court concluded the disputes must proceed by arbitration and stayed the proposed class proceeding.

The appellant brought motions to review two orders of a single judge: one directing his motion to remove respondents' counsel to be heard immediately, and another dismissing that removal motion with costs.

The respondents brought a motion to review a third order to impose a deadline for the payment of those costs.

The Court of Appeal dismissed the appellant's motions, finding the scheduling order practical and the proposed fresh evidence irrelevant.

The Court granted the respondents' motion, ordering the appellant to pay the previously awarded costs and the costs of these motions by a specified date, failing which his appeal would be dismissed.

The appellant brought a motion to remove counsel for two respondents based on allegations of misconduct in the underlying contempt proceedings.

The respondents brought a cross-motion for security for costs of the appeal.

The Court of Appeal dismissed the removal motion, finding no basis for the allegations and awarding full indemnity costs against the appellant.

The Court also dismissed the motion for security for costs, finding that the appeal raised a non-frivolous legal issue regarding the appellant's ability to purge his contempt after the underlying action had been settled, which involved the liberty of the subject.

In a proposed class proceeding brought by franchisees against a franchisor and alleged franchisor’s associates, the defendants moved under Rules 21.01(b), 25.06, and 25.11 to strike portions of the amended statement of claim.

The claims alleged failures to provide proper disclosure documents under franchise legislation, breaches of the statutory duty of fair dealing, unlawful conversion of exclusive territories to non‑exclusive territories, interference with franchisees’ right to associate, and entitlement to injunctive relief and rescission.

The court held that although the pleading was lengthy and complex, it adequately disclosed material facts and gave sufficient notice of the case the defendants had to meet.

Many of the defendants’ objections were found to raise substantive defences or merits issues better addressed in a statement of defence, summary judgment motion, or at trial rather than on a pleadings motion.

The court concluded that the defendants had not established a basis to strike the impugned paragraphs.

SCI Group Inc. brought a motion to add an estoppel issue to the pending hearing regarding the Superintendent's refusal to consent to a pension asset transfer from the BCE Plan to the Progistix Plan.

SCI also sought additional documentary production from BCE related to the estoppel issue.

BCE opposed the motion, arguing the Tribunal lacked jurisdiction to consider estoppel and that there was no factual basis for the claim.

The Tribunal held it had jurisdiction to consider estoppel under the Pension Benefits Act and found it premature to dismiss the issue on its factual merits.

The Tribunal granted the motion to add the estoppel issue and ordered limited production of documents relevant to the alleged representations.