Jason Michael Berall

A vacant land condominium corporation sought damages and disgorgement of profits against its former directors and various defendants, alleging breach of fiduciary duty in connection with the release of easements burdening adjacent land.

The plaintiff claimed the directors received secret benefits in exchange for facilitating the release of easements valued at approximately $31.5 million.

The court found that the corporation was contractually obligated to release the easements pursuant to easement release provisions in registered agreements, and that the plaintiff failed to prove the directors received secret benefits or breached their fiduciary duties.

The court dismissed the plaintiff's claim and the counterclaim.

The court considered whether a dispute over the calculation of an earn-out under a Purchase and Sale Agreement (PSA) should be referred to an independent accountant, as provided in the PSA, or determined by the court.

The applicants argued that the dispute, which concerned whether certain partnership units received by the respondents should be included in the earn-out calculation, fell within the accountant’s jurisdiction.

The respondents argued the issue was a legal one for the court.

The court held that the PSA’s language and commercial context indicated the parties intended all unresolved disputed items regarding the earn-out to be determined by an independent accountant, not just calculation disputes.

The court directed the parties to submit their dispute to an independent chartered accountant in accordance with the PSA.

The plaintiffs sought an interlocutory injunction against the defendants for passing off their sports hydration products (Cwench) as the plaintiffs' (BioSteel).

The plaintiffs alleged that Cwench's products, flavors, and packaging ("get-ups") were confusingly similar to BioSteel's.

The court dismissed the injunction request, finding that the plaintiffs failed to establish a strong prima facie case or a serious issue to be tried regarding goodwill in their product's get-ups, misrepresentation causing confusion, or actual/potential damages.

The court determined the injunction was mandatory, requiring a higher "strong prima facie case" standard, and found that similarities were common industry features or functional choices, and evidence of consumer confusion was insufficient.

The Monitor of BioSteel Sports Nutrition Inc. (under CCAA protection) sought an order declaring ColdHaus Direct Inc. liable for $3.97 million and directing payment, along with an extension of the stay of proceedings and approval of fees.

ColdHaus brought a cross-motion to lift the stay to allow set-off of post-filing obligations against pre-filing amounts, specifically a $1.05 million buy-back claim.

The court allowed the Monitor's payment motion in part, permitting ColdHaus to set off pre-filing billbacks for warehousing ($89,273.14) and distribution rebates ($74,546.05).

However, the court dismissed ColdHaus's motion to set off the buy-back amount, finding the obligation did not arise pre-filing and that ColdHaus had artificially created indebtedness by failing to pay invoices.

The Monitor's request for a stay extension and fee approval was granted.

The plaintiffs purchased the defendant's software business for $1.25 million.

As part of the transaction, the defendant agreed to a three-year non-competition covenant.

The defendant subsequently incorporated a new company and launched a competing software product while still employed by the plaintiffs.

The plaintiffs moved for an interlocutory injunction to enforce the non-competition clause.

The court granted the injunction, finding that the plaintiffs established a strong prima facie case of breach, irreparable harm, and that the balance of convenience favoured the plaintiffs.

The plaintiff, Suntower Developments Limited, brought a motion for a certificate of pending litigation (CPL) over property owned by the defendants, Studios of America Corporation and Studios of America Limited Partnership.

Suntower claimed a constructive trust based on unjust enrichment and alleged wrongful conduct, stemming from an agreement where Suntower was to receive a share of cash flow for its development work, not a proprietary interest.

The defendants opposed, arguing the contract was a juristic reason precluding unjust enrichment and that monetary damages were an adequate remedy.

The court dismissed the motion, finding no triable issue for a constructive trust claim, as the contract was a juristic reason for any enrichment, and the plaintiff had no reasonable expectation of a proprietary interest.

The court also found no triable issue for a constructive trust based on wrongful conduct, as the defendants' ownership of the property did not result from any breach of obligation.

The equities also favored dismissing the CPL.

The moving parties sought leave to appeal an order of McEwen J. dated January 5, 2023.

The Divisional Court dismissed the motion for leave to appeal.

The court declined to award costs to the successful responding parties because they failed to file a Costs Outline.

The defendants brought a motion to strike portions of the plaintiff's fresh as amended claim, specifically allegations against individual board members, for inducing breach of contract, unjust enrichment, breach of trust, knowing receipt of trust funds, and knowing assistance of breach of trust.

The court found no discernible conduct by the directors separate from their corporate roles to ground personal liability.

The allegations lacked sufficient particulars and offended the indirect benefit prohibition for unjust enrichment.

The court granted the motion, striking all claims against the individual directors without leave to amend, citing the lack of a tenable cause of action and public policy considerations against litigation by intimidation.

The Proposal Trustee sought directions from the court regarding the procedure for determining a complex proof of claim filed by Maria Athanasoulis, comprising a wrongful dismissal claim and a significant profit share claim, within the context of a court-approved proposal under the Bankruptcy and Insolvency Act.

The motion addressed disagreements among stakeholders (Athanasoulis, Sponsor, and Limited Partners) on how to proceed with the claim's determination and subsequent appeal, particularly concerning the scope of evidence, the nature of the appeal (true appeal vs. de novo), and the standing of the Limited Partners.

The court provided detailed directions to ensure procedural fairness and efficiency, deferring the valuation of future-oriented damages until after the provability of the profit share claim is determined on appeal, and limiting the Limited Partners' standing to specific issues.

The Proposal Trustee brought a motion to compel the Proposal Sponsor to fund the Trustee's continuing work to resolve outstanding proofs of claim, specifically the Athanasoulis Claim, via a two-phase arbitration.

The Sponsor objected to funding phase 2 of the arbitration, arguing it was an improper delegation of the Trustee's duties under s. 135 of the BIA.

The court agreed with the Sponsor, finding that while phase 1 (fact-finding) was acceptable, phase 2 (final adjudication of damages) improperly delegated the Trustee's statutory responsibility to determine and value the claim.

The Sponsor was not ordered to fund phase 2 of the arbitration but remains obligated to fund the Trustee's reasonable expenses to determine the claim through an alternative process.

The plaintiff brought a motion to compel the defendants to answer undertakings and refusals given during examinations in aid of execution, and to produce documents.

The court found that the plaintiff had established a sufficient connection between the individual defendants and various corporate entities and properties to justify the questions asked.

The court ordered the defendants to answer the outstanding questions, produce the requested documents, reattend examinations within 30 days, and pay costs for both the examinations and the motion.

The applicants (Sellers) and respondents (Purchasers) disputed the process for valuing shares under a shareholders agreement following the termination of the Sellers' employment.

The Sellers applied to appoint their preferred arbitrator and argued for a full arbitration under the Arbitration Act, 1991.

The Purchasers cross-applied to appoint their preferred arbitrator, seeking a streamlined valuation process and a court declaration on the valuation date.

The court held that the agreement contemplated a formal arbitration under the Act, not merely a valuation.

The court declined to determine the valuation date, leaving it to the arbitrator under the competence-competence principle, and ordered the parties to select a neutral third-party arbitrator.

The plaintiff in a wrongful dismissal action brought a motion to compel answers to questions refused at an examination for discovery.

The refused questions sought production of an external law firm's unredacted fee accounts, investigation file, and unredacted board meeting minutes.

The defendants claimed solicitor-client privilege over the documents.

The court found that the law firm was retained to provide legal advice, making the investigation file privileged.

The court also held that the defendants did not waive privilege by producing the investigation report or by referring to the investigation in the plaintiff's termination letter.

The motion was dismissed.

Wilks Brothers, LLC applied for a review of a decision by TSX Inc. granting exemptive relief to Calfrac Well Services Ltd. The relief allowed Calfrac to retroactively correct a shareholder vote related to its recapitalization, in which votes from an ineligible shareholder (AIMCo) were inadvertently included.

The Commission found that Wilks had standing to bring the application as it was directly affected by the TSX decision.

However, the Commission dismissed the application on the merits, finding that the TSX did not consider irrelevant grounds, did not impose an illegal condition, did not overlook material evidence, and appropriately considered the public interest.

The Commission concluded that the agreement to rescind AIMCo's subscription was not an issuer bid under NI 62-104.

The appellants appealed a summary judgment holding them liable as guarantors for unpaid principal and interest under promissory notes.

The principal debtor was restricted from making payments by an inter-creditor agreement.

The appellants argued that because the principal debtor was not in default due to the inter-creditor agreement, the guarantees were not triggered.

The Court of Appeal dismissed the appeal, upholding the motion judge's finding that the guarantees were triggered by the failure to pay, regardless of the inter-creditor agreement's restrictions on the principal debtor.

Following a trial where the defendants successfully defended against the plaintiff's claim regarding a restrictive covenant, the defendants sought costs of $163,328.87.

The plaintiff argued for a reduced partial indemnity award of $53,191.82, citing an unproven fraud allegation by the defendants.

The court declined to award substantial indemnity costs but noted the importance of the indemnity principle given the employment-like relationship.

Costs were fixed at $110,000 inclusive of fees, disbursements, and HST.

The plaintiff, an IT service provider, sued the defendant independent contractors for breach of a non-competition clause after they declined to renew their sub-contracts and instead provided services to the RCMP through a competitor.

The court found that one defendant was not bound by the clause because it was inserted into an electronic renewal without notice, while the other defendant was bound but the clause itself was unreasonably broad and unenforceable.

The court held that the plaintiff had no proprietary interest in the identity of the client (the RCMP) and the restriction was an unjustified restraint of trade.

The action was dismissed.

Following a summary judgment, the court determined the post-judgment interest rate and confirmed an agreed-upon costs award.

The plaintiff sought the contractual rate of 6% per annum on outstanding principal and unpaid interest.

The court ruled that the contractual rate of 6% applies to the outstanding principal, citing the Courts of Justice Act and Supreme Court precedent.

However, for unpaid interest, the court applied the lower CJA rate, as the promissory notes did not provide for compound interest.

Costs were settled by agreement at $60,000.00.

The plaintiff brought a motion for summary judgment to enforce promissory notes and personal guarantees arising from a share purchase transaction.

The defendants argued that an Inter-Creditor Agreement with a senior lender prevented the corporate debtor from making payments, and therefore the guarantors were also shielded from liability.

The court found that while the Inter-Creditor Agreement restricted the corporate debtor from repaying the principal amounts, it did not restrict the payment of monthly interest.

Furthermore, the court held that the guarantees operated independently of the Inter-Creditor Agreement, making the guarantors jointly and severally liable for the principal amounts and unpaid interest.

The plaintiff's claim for punitive damages was dismissed.

Following the dismissal of the defendants' motion on the basis of forum non conveniens, the Litigation Trust and the Class sought costs.

The court awarded the Class $6,000 on a partial indemnity basis for maintaining a watching brief.

The court awarded the Litigation Trust full indemnity costs of $208,590.73, finding that the defendants' motion was captured by the Standstill Agreement between the parties, which provided for full indemnity costs in the event of a breach.