Janet E. Mills

The plaintiff brought a motion to remove Shawna Sosnovich and Devry Smith Frank LLP as counsel for the defendant Anna Chen, alleging a conflict of interest.

The conflict arose because a partner at the firm, Lorne Shapiro, was likely to be a material witness at trial, having provided an affidavit that contradicted the plaintiff's evidence regarding key events leading to the litigation.

The court granted the motion, finding that the proper administration of justice required the removal of counsel due to the inherent conflict between a lawyer's duty of objectivity to the court and the obligation to present evidence favorably to a client, a conflict that cannot be waived.

The plaintiff, Surinder Singh Manchanda, sought leave under Rule 1.08(5) to give evidence and participate in the trial by videoconference from Thailand, due to repeated refusals of his Temporary Resident Visa applications.

The defendants opposed the request.

The court denied the motion, finding that the plaintiff had not demonstrated all reasonable efforts to secure personal attendance, citing his failure to truthfully answer visa application questions and not pursuing judicial review.

Leave was granted to bring the motion again before the trial judge.

Both the plaintiff and defendant brought motions for security for costs.

The plaintiff, Crossover Health Care Fund, LLC, sought security for costs against the defendant's counterclaim, arguing the defendant, Pivotal Therapeutics Inc., had insufficient assets and that significant aspects of the counterclaim were statute-barred.

The defendant, Pivotal Therapeutics Inc., sought security for costs against the plaintiff's main action, arguing the plaintiff was not ordinarily resident in Ontario.

The court granted both motions, ordering the defendant to post $80,000 in security for costs for its counterclaim and the plaintiff to post $45,000 in security for costs for its defence to the main action.

The court found the defendant's valuation of its assets, particularly intellectual property not owned by it, was insufficient to demonstrate solvency for a costs order.

The court also found that many aspects of the counterclaim appeared to be statute-barred under the Limitations Act, 2002, and did not have a real possibility of success.

This motion concerns the taxation of three bankrupt estates following negative comments from the Office of the Superintendent of Bankruptcy (OSB).

The OSB challenged the trustee's practice of obtaining "GST Refund Assignment" agreements from bankrupts to retain Goods and Services Tax (GST) refunds for estate administration costs or conditional orders.

The trustee argued these agreements, if properly worded and understood by the bankrupt, could waive the exempt status of GST refunds, citing *Re McIntyre*.

The court disagreed, finding such agreements unenforceable as GST refunds are Crown debts not assignable under the *Financial Administration Act* and are expressly excluded from divisible property under the *Bankruptcy and Insolvency Act* (BIA) and its Rules when a dividend is available to creditors.

The court held that statutory law cannot be circumvented by contractual agreements, requiring the trustee to return the GST refunds to the bankrupts and restate the estate accounts.

The plaintiffs moved to set aside a Registrar's dismissal, and the defendant cross-moved to dismiss the action for delay.

The court applied the Reid Factors, finding the plaintiffs provided an adequate explanation for delay, demonstrated inadvertence by counsel, and brought the motion promptly.

Crucially, the defendant failed to establish real prejudice.

The court emphasized the policy of resolving disputes on their merits, especially when delay is due to counsel's inadvertence.

The court also declined to enforce a consent order's dismissal clause under Rule 60.12, deeming dismissal an extreme remedy not warranted by the plaintiffs' conduct.

The defendant Casboro Industries Limited brought a motion for security for costs against the plaintiff AAD Investments Inc. under Rule 56.01(1)(d).

The court applied a two-step test, finding that the defendant met its initial onus by demonstrating the plaintiff was a corporation with insufficient assets in Ontario to cover an adverse cost order.

The plaintiff failed to rebut this, as its affidavit evidence regarding assets was found to be materially misleading and false, and it did not establish impecuniosity or a high chance of success.

The court granted the motion, ordering the plaintiff to post $150,000 in security for costs in instalments and pay $23,000 in costs for the motion.

The creditor sought to lift a stay of proceedings under s. 69.4 of the Bankruptcy and Insolvency Act to allow a civil action for loans and punitive damages to proceed to judgment.

The creditor argued material prejudice and that the debt should survive discharge under s. 178(1)(e) due to fraudulent misrepresentation.

The court found no causal connection between the alleged misrepresentations and the creation of the debt, and that the pleadings lacked particularity for fraud.

The court also determined that the prejudice was subjective, not objective, and that lifting the stay would imperil the approved consumer proposal, which was more favourable to creditors than bankruptcy.

The motion was denied.