Jamie M. Sanderson

Shareholders of two successive corporate ventures to develop oil and gas fields in Russia sued defendants for fraudulent misrepresentation, deceit, and conspiracy.

The defendants had induced the plaintiffs to invest US$50 million in a sham public company (Magellan) by falsely representing that another investor (BDW) had committed to investing US$70 million.

When the fraud was discovered, the parties reorganized under a new company (Koll), but the defendants continued to deceive the plaintiffs about asset values and IPO prospects to induce further investment.

The trial judge awarded full compensatory damages to the plaintiffs.

On appeal, the court upheld liability for pre-June 2006 conduct but set aside liability for post-June 2006 conduct based on unpleaded fraudulent misrepresentation claims regarding IPO-related statements, while maintaining liability for wrongful garnishment of remaining Magellan funds.

The applicant, Altus Group Limited, sought to set aside an arbitration award in favor of the respondent, 3GS Incorporated, on the grounds of fraud.

Altus alleged that a key witness for 3GS, Lisa Robbins, lied under oath about her criminal convictions during the arbitration.

The court found that Ms. Robbins did indeed give dishonest testimony regarding her criminal record.

However, the court ultimately dismissed the application, concluding that Ms. Robbins' fraudulent evidence was not material to the outcome of the arbitration, as the arbitrator's decision was primarily based on Altus's own knowledge and concealment of its breach, and the credible testimony of 3GS's principals, Alan and Ann Gordon, which was untainted by Ms. Robbins' dishonesty.

Following a trial to determine the Gross Rentable Area of a leased premises, both parties claimed success and sought partial indemnity costs.

The court found the defendant to be the successful party, as the determined area was significantly higher than the plaintiff's position, resulting in substantial additional rent over the lease term.

The court awarded the defendant costs but reduced the claimed amount due to excessive photocopying disbursements and time spent on an unsuccessful argument regarding BOMA standards.

Following a successful wrongful dismissal trial, the court determined the appropriate costs award.

The plaintiff sought substantial indemnity costs relying on settlement offers, including a global offer combining arbitration and the civil action.

The court held that the global offer did not constitute a valid Rule 49 offer because it combined two separate proceedings and did not allow the defendants to evaluate liability separately.

Costs were therefore fixed on a partial indemnity basis in the amount of $225,000 plus HST and disbursements.

The court also declined to award costs to a discontinued individual defendant after drawing a negative inference from the refusal to disclose whether those costs were indemnified under the Ontario Business Corporations Act or insurance.

A municipal councillor brought a defamation action against the mayor and several councillors arising from a public council statement and related legal opinion criticizing the councillor’s blog posts about senior municipal staff.

The court held the statements were not defamatory and were substantially true in substance, as the plaintiff’s blogs contained disparaging criticism of staff contrary to the municipal code of conduct.

Even if defamatory, the publications were protected by qualified privilege because they were a measured response to the plaintiff’s public letter to the editor and were made to correct the public record.

The court found no evidence of malice and noted the defendants relied in good faith on legal advice before publishing the statement.

The action was dismissed.

The plaintiff brought an action for wrongful dismissal after being terminated for alleged cause from a senior executive position following the sale of his company’s assets to the defendant.

The employer alleged misconduct including abusive language, conflict of interest, and dishonesty regarding the employment of an individual facing fraud charges.

The court found these allegations were exaggerated or unsupported and that the employer had failed to follow progressive discipline contemplated in its employee handbook.

The dismissal was found to be without cause and motivated in part by a dispute over financial adjustments under an asset purchase agreement.

Damages were awarded pursuant to the employment contract together with punitive damages for the employer’s bad faith conduct, and the employer’s counterclaim for fiduciary breaches was dismissed.

In a commercial lease dispute concerning a hospital building developed through a public-private partnership, the court determined the gross rentable area used to calculate annual basic rent.

The lease projected a gross rentable area of 135,000 square feet but failed to properly define that term, and the landlord's architect never issued the certificate contemplated by the lease.

Applying modern contractual interpretation principles and limiting surrounding-circumstances evidence to objective facts known at the time of contracting, the court held that the parties intended gross rentable area to correspond to the architect's gross floor area concept rather than the entire building area urged by the defendant.

The court fixed the gross rentable area at 142,907.5 square feet and left the parties to calculate rent payable from October 1, 2013 onward.

The plaintiffs moved to amend their statement of claim to include allegations regarding the defendants' instructions to their counsel in a related proceeding.

The court dismissed the motion, finding the proposed amendments irrelevant and immaterial to the issues pleaded.

The court also addressed the defendants' motion to compel answers to undertakings, finding the plaintiffs liable for the costs reasonably attributable to securing the undertakings.

During a jury trial in a defamation action arising from statements published by municipal officials, the plaintiff sought a jury instruction permitting an adverse inference from the defendants’ failure to call two municipal officials as witnesses.

The court reviewed the principles governing adverse inference where a party fails to call a witness, including the requirement that the witness be under the exclusive control of the party and that the evidence not be otherwise available.

The court found the witnesses were equally available to both parties and were not under the defendants’ exclusive control.

As a result, the circumstances did not justify the rare step of instructing the jury that an adverse inference could be drawn.

During a civil jury trial, the court addressed a dispute between counsel regarding the form of jury questions on damages.

The plaintiff argued that the jury should only be asked about general, aggravated, and punitive damages, while the defendants submitted that the questions should reflect the damages discussed in the charge, including general, nominal, and contemptuous damages.

The court held that there was no prejudice to the plaintiff in directing the jury to consider the specific types of damages addressed in the charge.

The jury questions would therefore separately reference general, nominal, and contemptuous damages to align with the jury instructions.

During a defamation trial involving a municipal councillor and the mayor along with other councillors, the plaintiff sought to introduce a report by the municipal Integrity Commissioner into evidence.

The defendants objected to its admissibility.

The court ruled the report inadmissible, finding that it did not meet the necessity and reliability criteria for the principled exception to hearsay.

The court noted that under the Municipal Act, the Integrity Commissioner is not a compellable witness, meaning the defendants would be unable to cross-examine him.

The court concluded that admitting the report would be highly prejudicial and could lead the jury to afford the untested opinion undue weight.

In a defamation action brought by a municipal councillor concerning a statement published by town council and later republished by a newspaper, the plaintiff sought to introduce similar fact evidence relating to a separate defamation action previously commenced and later discontinued by one of the defendants.

The plaintiff argued that the earlier litigation had been characterized as SLAPP litigation and was relevant to establish malice.

The court held that the prior action had minimal probative value in determining whether the impugned statement was defamatory or whether available defences applied.

The court further concluded that admitting the evidence risked sidetracking the jury trial into collateral issues unrelated to the pleadings.

The motion to admit the similar fact evidence was therefore dismissed.

The applicant landlord sought a determination that the tenant was required to contribute to construction cost overruns under two offers to lease for commercial space in a shopping centre.

The agreements provided that the tenant would pay excess hard construction costs above a specified amount per square foot if such costs were approved in advance by the tenant or incurred under approved contracts.

The court held that the tenant’s prior approval of construction contracts or excess costs was a clear condition precedent to any obligation to pay cost overruns.

Because the landlord failed to obtain such approval before construction was completed, the tenant was not liable for any excess costs.

The court also held, obiter, that if liability had arisen, the cost of constructing the underground garage would have been included as part of the hard construction costs.