James P. E. Hardy

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.

In a professional discipline proceeding arising from four annual audits of a large construction group, the Panel found extensive failures to comply with auditing standards in client acceptance, audit planning, fraud risk assessment, professional skepticism, materiality, related-party procedures, internal controls, contract testing, marketable securities testing, covenant analysis, and reporting.

One respondent was also found to have failed to exercise due care when accepting the engagement despite serious warnings from the predecessor auditor concerning suspected fraud and scope limitations.

Applying the balance of probabilities standard, the Panel held that the evidence of the applicant’s expert established professional misconduct under Rules 202.1 and 206.1, except for one narrowly worded allegation concerning signatures on a management representation letter.

The Panel then applied the Anthony-Cook public interest test and, although expressing significant reservations, accepted joint submissions imposing fines, publication, compliance consequences, and substantial costs.

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 appellant, 1461043 Ontario Limited c.o.b. as Nuvo Iron, appealed the dismissal of its motion to vary a default judgment to add declarations of intentional breach of trust and that the judgment survived the respondents’ discharge from bankruptcy under s. 178(1)(d) of the Bankruptcy and Insolvency Act.

The Court of Appeal upheld the motion judge’s decision, finding no basis in the record for the declarations sought and confirming that a mere breach of trust, even if negligent or incompetent, is insufficient to support a such an order.

The appeal was dismissed with costs to the respondents.

This decision concerns motions by the Receiver for Bridging Finance Inc. and by BlackRock Funds to lift the stay of proceedings against Gary Man Kin Ng, a bankrupt, and to validate service of a Statement of Claim.

The court granted both motions, finding that the actions for fraud and fraudulent misrepresentation against Ng would not be discharged in bankruptcy, involved sufficient complexity, and required Ng as a necessary party.

The court also validated service of the Statement of Claim on Ng and the Ng Entities, as Ng had actual notice.

The decision reviews the legal test for lifting a bankruptcy stay and the requirements for validating service.

The Monitor of the Applicants in a Companies’ Creditors Arrangement Act (CCAA) proceeding brought a motion to extend the Stay Period to allow Remaining Estate Actions to proceed and to continue administering the Plan.

The court reviewed the Monitor's Thirty-Fourth Report and submissions, finding that the Applicants continued to operate in good faith and with due diligence.

The motion was granted, extending the Stay Period until September 29, 2025, to allow for the determination of the Remaining Estate Actions.

The Bank of Nevis International Limited (BONIL) appealed the dismissal of its action against Mark Kucher and BNI Holdcorp Ltd. The motion judge had dismissed BONIL's action, determining that Nevis, not Ontario, was the proper forum based on an exclusive jurisdiction clause and, alternatively, forum non conveniens.

The Court of Appeal dismissed BONIL's appeal, upholding the motion judge's findings that the forum selection clause applied to Mr. Kucher despite him not being a direct party to the agreement, and that Nevis was the more appropriate forum.

The Monitor of The Cash Store Financial Services Inc. and related entities brought a motion seeking an extension of a stay of proceedings to October 25, 2024, under the Companies’ Creditors Arrangement Act.

The Monitor's Thirty-Third Report detailed the status of remaining estate actions and confirmed sufficient liquidity to fund activities.

The motion was unopposed and granted, with the court satisfied that the parties were acting in good faith and with due diligence.

The respondents in an appeal moved for security for costs against the appellant, a Nevisian bank with no assets in Ontario.

The underlying action, dismissed on jurisdictional grounds, was initiated by the appellant against the respondents for defamation and breach of confidentiality.

The Court of Appeal granted the motion for security for costs, finding good reason to believe the appeal was frivolous and vexatious, and noting the appellant's lack of connection to Ontario and the context of criminal charges against its beneficial owner.

The appellants sought to set aside a 2009 default judgment, arguing that a subsequent 2019 release, related to other actions, also released the default judgment.

The motion judge rejected this interpretation, finding the release unambiguously did not refer to the 2009 default judgment.

The Court of Appeal upheld the motion judge's decision, agreeing that the release was not ambiguous and the contra proferentem principle did not apply.

The appeal was dismissed, and costs were awarded to the respondent.

The plaintiff, an international bank headquartered in Nevis, sued the defendants in Ontario for defamation and breach of a confidentiality agreement.

The defendants, who had been noted in default, moved to set aside the default and dismiss the action on jurisdictional grounds.

The court set aside the noting in default, finding a reasonable explanation for the delay.

The court then dismissed the action, enforcing a forum selection clause in the parties' investment agreement that designated St. Kitts and Nevis as the exclusive jurisdiction.

Alternatively, the court found that Nevis was clearly the more appropriate forum under the doctrine of forum non conveniens.

The moving party brought motions to strike an affidavit, for a sealing order, and for leave to appeal a costs order.

The Divisional Court dismissed all motions, permitting the responding party to redact its materials to remove allegedly privileged information.

Costs of $5,000 were awarded to the responding party for the motion for leave to appeal.

The defendants, Keysar Nasr and Amal Nasr, moved to set aside a 2009 default judgment obtained by HSBC Bank Canada, arguing that a release executed in 2019 in the context of other litigation (the 2012 and 2014 actions) extinguished the judgment debt.

The court dismissed the motion, finding that the release, when interpreted objectively and considering the factual matrix, was not intended to cover the pre-existing 2009 default judgment.

The moving parties brought a motion for leave to appeal an order of Justice Myers.

The Divisional Court denied the motion for leave to appeal and awarded costs to the respondent fixed at $2,500 all inclusive.

The Monitor brought an unopposed motion for an order extending the Stay Period under the Companies' Creditors Arrangement Act to November 18, 2023.

The court found that the parties were working in good faith and with due diligence, and that the applicants had sufficient liquidity.

To ensure supervision over ongoing litigation regarding documentary production, the court granted the stay extension to April 3, 2023, rather than the requested date.

The applicant brought an application to interpret two promissory notes representing a $900,000 loan from the respondent for a real estate development project.

The parties disputed whether interest should be compounded, whether an interest escalation clause was triggered, and whether the second promissory note contained a mistake requiring rectification.

The court held that there was no agreement for compound interest and that the interest escalation clause was not triggered because the project was not fully constructed.

The court also rectified the second promissory note to remove the interest escalation clause while maintaining the 20% base interest rate.

The applicant was ordered to pay the remaining $99,778 owed under the notes, and was awarded $25,000 in partial indemnity costs due to divided but primarily successful outcomes.

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 defendants, a lawyer and his law firm, brought a summary judgment motion seeking the dismissal of a professional negligence action.

They argued the action was statute-barred, lacked expert evidence on negligence, and lacked evidence on damages.

The court dismissed the motion, finding genuine issues for trial regarding the existence and nature of the solicitor-client relationship, whether a duty of care was breached by failing to disclose environmental and archaeological reports, and the discoverability of the claim for limitation purposes.

The court also addressed the evidentiary burden on summary judgment motions, particularly concerning expert evidence in professional negligence cases, and reconciled conflicting Court of Appeal decisions.

The appellants appealed the dismissal of their application to annul the bankruptcy of Katherine Anne Fast under section 181(1) of the Bankruptcy and Insolvency Act.

The respondents were neighbours who obtained a Small Claims Court judgment against the appellants for water damage.

Mrs. Fast filed for voluntary bankruptcy shortly after the appellants attempted to enforce the judgment.

The application judge dismissed the annulment application, finding that despite the appellants' evidence that Mrs. Fast's property was worth significantly more than disclosed and that her assets exceeded her liabilities, she had a monthly income-expense deficit.

The Court of Appeal reversed, finding that Mrs. Fast was not an insolvent person as defined by the BIA because her substantial assets were available to satisfy all her liabilities and there was no evidence she could not meet her obligations as they came due.

The plaintiff, Yaqiong Wang, sought to terminate an agreement to purchase a new-build house from the defendant, Tribute (Grandview) Ltd., after the housing market dropped.

Wang sued for the return of her deposit, while Tribute counterclaimed for specific performance, later amending to seek damages for breach of contract.

Tribute brought a motion for summary judgment.

The court found the agreement valid, rejected Wang's claims of a subsequent settlement, and determined that Tribute had not failed to mitigate damages.

Summary judgment was granted in favour of Tribute, ordering Wang to pay damages for the difference between the original purchase price and the current listing price, less the deposit already paid.