Jayne Cooke

This decision concerns the sanction for contempt and the allocation of costs following findings that the defendants failed to comply with a court order (the "Turnover Order") in a complex commercial dispute.

The court awards full indemnity costs to the plaintiffs for the contempt motion, reduced by 25% due to Charter breaches, and substantial indemnity costs to the defendants for a successful Charter-based stay motion.

The court also addresses the principles of set-off and mutuality of debt in the context of competing costs awards.

The court-appointed Receiver sought approval for the sale of a property owned by the Debtor, 253 Queen Street Inc., and an Administration Order.

The sale was supported by secured creditors Homedale-Eagle Corporation and Sky Mortgage Corporation but opposed by the Debtor and its equity holders.

The opposing parties argued the purchase price was too low, the environmental indemnity was not assumed by the purchaser, and their beneficial interest in the property was not recognized.

The court applied the Soundair principles for approving sales in receivership, finding the Receiver acted providently and fairly.

The court rejected the claims of beneficial ownership based on trust law and the Land Titles Act, affirming the priority of registered mortgages over unregistered beneficial interests.

The Receiver's motion for approval of the sale and the Administration Order was granted.

The appellants appealed a trial judgment that granted declaratory relief to the respondents and dismissed the appellants' counterclaim for fees.

The appeal focused on whether management agreements were unauthorized and if the respondents were estopped from arguing their invalidity.

The Court of Appeal found no palpable and overriding error in the trial judge's interpretation of the agreements or her finding on estoppel.

The appeal was dismissed, and leave to appeal the costs order was also dismissed.

This endorsement addresses a contempt motion brought by the plaintiffs against the defendants for non-compliance with a prior trial decision, and a cross-motion by the defendants to stay the contempt motion due to alleged Charter breaches by the plaintiffs.

The court found the defendants in contempt for several failures to comply with the original order, including withholding records and refusing to execute necessary assignments.

However, the court also found that the plaintiffs committed Charter breaches (failure of timely disclosure and case splitting) in their prosecution of the contempt motion, which curtailed the evidence that could be relied upon.

The stay motion was dismissed, but the scope of contempt findings was limited due to the excluded evidence.

The court ordered the defendants to comply with outstanding obligations within 30 days.

This endorsement addresses the costs of an eight-day trial where the plaintiffs were entirely successful in their claims and in dismissing the defendants' counterclaim.

The plaintiffs sought substantial indemnity costs, arguing the defendants' conduct, including unsubstantiated fraud allegations and disclosure failures, warranted an elevated scale.

The defendants opposed the quantum and scale, and the plaintiffs also sought costs against the defendants' principal, Mr. Tajbakhsh, and an unidentified third-party funder.

The court awarded the plaintiffs $1 million in substantial indemnity costs, finding the defendants' conduct, while not amounting to fraud on the court, justified the elevated scale.

However, the court declined to award costs against Mr. Tajbakhsh personally or the third-party funder, as the high threshold for non-party costs (abuse of process or fraud) was not met.

The court also explicitly prohibited the defendants from using Limited Partnership funds to satisfy the costs award.

Q4 Inc. brought an application under section 182 of the Business Corporations Act for final court approval of a plan of arrangement involving SEP Forge BidCo Inc. The arrangement, which involved the acquisition of Q4 shares for cash, had previously received an interim order and was approved by the requisite majorities of shareholders.

The court granted the final approval order, finding that all statutory procedures and court-ordered requirements were met, the application was put forward in good faith, and the arrangement was fair and reasonable.

The decision noted the overwhelming shareholder support and the absence of exercised dissent rights, despite public opposition from a competitor shareholder.

The plaintiffs, limited partners in three real estate development limited partnerships, sought declarations validating their special resolutions to remove and replace the original general partners.

The dispute arose after the original general partners issued capital calls to pay management fees to an affiliated company, which the plaintiffs argued were unauthorized.

The court found the capital calls were invalid as the management agreements were not approved by special resolution and the general partners failed to seek external financing first.

The court upheld the plaintiffs' special resolutions removing the original general partners due to multiple unremedied defaults, including failure to provide access to financial records, co-mingling of funds, and unauthorized related-party transactions.

The defendants' counterclaims were dismissed.

Porter Airlines and Nieuport Aviation disputed the calculation of terminal fees at Billy Bishop Airport under a Licence Agreement.

Porter argued it could pay fees based on a variable daily slot allocation and claimed force majeure due to the COVID-19 pandemic to excuse non-payment.

Nieuport argued fees were based on a fixed, recurring number of daily slots and counterclaimed for unpaid fees.

The court held that the Licence Agreement required payment based on a fixed number of recurring daily slots.

The court also found that the COVID-19 pandemic did not trigger the force majeure clause to excuse Porter's payment obligations.

Porter was ordered to pay over $131 million in damages for unpaid terminal fees, while Nieuport's recourse under a guarantee was limited to specified aircraft.