Gordon W. Vance

The defendants brought a motion for leave to appeal an order of Steele J. The Divisional Court granted leave to appeal to determine whether it is legally possible for some limited partners to bring a common law derivative action on behalf of a limited partnership against a general partner.

Costs of the motion were fixed at $5,000, payable in the discretion of the panel hearing the appeal.

The plaintiffs brought a motion for an interlocutory injunction to prevent the sale of a commercial property, or alternatively, to hold 50% of the net proceeds of any sale in trust.

The plaintiffs claimed that a 1997 transfer of their 50% interest in the corporation owning the property was subject to an unwritten trust agreement.

The court dismissed the motion, finding that while there was a serious issue to be tried, the plaintiffs failed to demonstrate irreparable harm as they were ultimately seeking monetary compensation.

Furthermore, the balance of convenience favoured the defendants due to the plaintiffs' significant delay in prosecuting the action.

The moving parties, six limited partners holding 54.5% of the shares in a family limited partnership, sought leave to commence a derivative action on behalf of the limited partnership and related corporate entities against the general partner, its sole director, and other parties.

The court held that while there is no statutory right for limited partners to bring a derivative action under the Limited Partnerships Act, the common law fraud exception to the rule in Foss v. Harbottle permits such an action where the general partner is the alleged wrongdoer.

Leave was granted to bring the derivative action on behalf of the limited partnership against the general partner and its director, but denied against third parties and on behalf of the underlying corporate entities.

The Sahebdivani defendants were successful on a motion for security for costs and sought full or substantial indemnity costs, arguing the plaintiff's conduct was disorganized and protracted the proceedings.

The court found that while the plaintiff's situation was somewhat disorganized, its conduct did not rise to the level of reprehensible, scandalous, or outrageous behaviour required for an elevated costs award.

The court awarded partial indemnity costs fixed at $12,500 inclusive of fees, disbursements, and HST.

The Sahebdivani defendants brought a motion for security for costs against the corporate plaintiff under Rule 56.01(1)(d).

The defendants established good reason to believe the plaintiff had insufficient assets in Ontario, citing evidence that the plaintiff was inoperative, its sole director was an undischarged bankrupt, and it faced significant environmental remediation orders.

The plaintiff failed to meet its onus to demonstrate sufficient exigible assets, providing inadequate financial disclosure.

The court granted the motion and ordered the plaintiff to post $75,000 in security for costs in installments.

The defendants brought a motion for summary judgment to dismiss the plaintiff's action.

The plaintiff claimed a 50% equitable interest in a real estate property based on an oral joint venture agreement, while the defendants argued the relationship was strictly that of borrower and lender secured by promissory notes and a mortgage.

The court dismissed the motion, finding that the conflicting evidence regarding the nature of the parties' relationship raised significant credibility issues that constituted a genuine issue requiring a full trial.