Javad Heydary

Purchasers of hotel condominium units sought appointment of an inspector or production of financial documents relating to a hotel reservation program after refusing to close their purchase transactions.

The court also considered a Rule 21 motion by the condominium corporation seeking to strike the claims against it.

The court held that the corporation could not be liable for alleged misrepresentations or conspiracy because it did not exist at the time of the alleged conduct.

The purchasers lacked standing to pursue oppression or winding‑up remedies under the Condominium Act and could not rely on the OBCA because condominium corporations are corporations without share capital.

The plaintiffs’ motion for inspection or disclosure was dismissed and the claims against the condominium corporation were struck.

Following a partially successful Rule 21 motion to strike pleadings, the moving defendants sought costs on a substantial indemnity basis.

The responding plaintiffs argued costs should be in the cause due to mixed success and that the amount sought was excessive.

The court applied the discretionary principles governing costs under the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure.

Although success was mixed, the defendants achieved significant success by striking entire causes of action.

The court awarded reduced partial indemnity costs reflecting that the defendants were not entirely successful.

The applicants sought removal of an arbitrator in an ongoing franchise dispute arbitration on the basis of reasonable apprehension of bias.

The concern arose because the arbitrator, acting as counsel in another similar franchise case, had retained the same accounting expert whose report was filed by the respondents in the arbitration.

The court held that an objective and informed person could reasonably apprehend bias where the arbitrator had previously relied on the same expert in similar litigation and would be required to assess that expert’s credibility and qualifications in the arbitration.

Although no actual bias was proven, the professional relationship and prior reliance on the expert were sufficient to raise a reasonable apprehension of bias.

The court therefore exercised its authority under the Arbitration Act, 1991 to remove the arbitrator and directed the parties to attempt to agree on a replacement.

The defendants sought security for costs against non-resident plaintiffs in two related civil fraud actions involving failed investment schemes.

Following an appeal, the matter was remitted to reconsider whether the plaintiffs had a “good chance of success” on the merits, which could weigh against ordering security for costs.

The court reviewed extensive evidentiary allegations concerning the role of a law firm and its partner in facilitating investment transfers connected to the alleged fraud.

The court held that while the record raised genuine issues for trial, the plaintiffs failed to demonstrate a “good chance of success,” particularly regarding whether the defendants owed a duty of care to non-client investors or participated in the alleged fraud.

Security for costs was therefore ordered on the same terms previously imposed.

The plaintiffs appealed an order of a case management master requiring them to post additional security for costs in complex civil litigation.

The plaintiffs were non-residents of Ontario and did not claim impecuniosity, but argued that the strength of their claims justified denying security for costs.

The court held that the master applied the wrong legal standard by requiring the plaintiffs to show an "overwhelming likelihood of success" rather than the correct standard of a "good chance of success" when assessing the merits under Rule 56.01 of the Rules of Civil Procedure.

Because this constituted an error of law, the appeal was allowed in part and the matter was remitted to the case management master for reconsideration using the proper standard.

The moving party sought substantial indemnity costs after succeeding on a motion, arguing the opposing party had been warned that their statutory rescission claim lacked merit.

The responding party argued substantial indemnity was inappropriate because the issues concerning the statutory rescission remedy under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000 were novel and of public importance, and because leave to amend pleadings had been granted.

The court held that substantial indemnity costs are reserved for rare and exceptional cases involving reprehensible litigation conduct and found the responding party’s conduct did not meet that threshold.

Given the novelty and public importance of the issues, the court awarded costs on a partial indemnity basis.

Costs of $12,000 were ordered payable by the responding parties.