John E. Callaghan

The appellants, representative plaintiffs in a class action alleging auditor negligence, appealed the dismissal of their motion under Rule 30.10(1) for production of investigation documents from the Institute of Chartered Accountants of Ontario, a non-party.

The Court of Appeal upheld the motion judge's finding that it would not be unfair for the appellants to proceed to trial without the documents.

Although the Court found the motion judge erred in concluding the documents were protected by case-by-case privilege under the Wigmore criteria, the appeal was dismissed because the appellants failed to establish the unfairness requirement of Rule 30.10(1).

In a billion‑dollar negligence class action against auditors arising from allegedly defective audit reports relied upon by lenders, the plaintiffs brought a motion under Rule 30.10 of the Rules of Civil Procedure seeking production of investigative materials held by the Institute of Chartered Accountants of Ontario relating to disciplinary proceedings against two audit partners.

The court held that production from a non‑party requires proof that the documents are relevant and that it would be unfair to require the moving party to proceed without them.

The plaintiffs failed to demonstrate unfairness because they already possessed the underlying documentary record and extensive discovery evidence, and the investigator’s report was not necessary for the pending partial summary judgment motion or the pleaded issue estoppel.

The court further held that the materials were protected by a case‑by‑case privilege under the Wigmore criteria arising from confidential communications between the professional regulator and its members during disciplinary investigations.

The plaintiff, a senior investment banker, alleged he was constructively dismissed when his employer failed to promote him to a promised Team Leader position by a fixed date.

The court found that the employer had not breached the employment contract, as it was taking reasonable steps to implement the promotion within a reasonable timeframe and had paid the plaintiff significant increased compensation.

The court concluded the plaintiff voluntarily resigned to join a competitor start-up.

The constructive dismissal claim was dismissed, but the plaintiff was awarded minor amounts for unpaid cash incentive pay and a declared dividend.

The appellants challenged a motion decision holding that s. 61 of the Chartered Accountants Act, 2010 barred use in civil litigation of materials from professional discipline proceedings conducted under the predecessor Chartered Accountants Act, 1956.

The Court of Appeal held that, while s. 61 is an evidentiary rule with immediate application to ongoing civil proceedings, its text plainly applies only to records of proceedings under the 2010 Act.

The court rejected reliance on statutory purpose, transitional references to the predecessor legislation, and the alleged unusual procedural history to expand the section beyond its wording.

The appeal was allowed, the order below was set aside, and leave to amend the pleading was granted.

The plaintiffs brought a motion for directions to determine whether a judge of the Ontario Superior Court of Justice could sit outside Ontario to hear a motion concerning a pan-Canadian class action settlement.

The Attorney General of Ontario objected, arguing the court lacked jurisdiction to hold a hearing outside its territorial boundaries.

The court held that where it has subject-matter and personal jurisdiction, it possesses the inherent jurisdiction to control its own process, which includes the discretion to sit outside the province.

The court found that holding a joint hearing with supervisory judges from British Columbia and Quebec in Alberta was in the interests of justice to promote judicial economy and avoid inconsistent orders.

The applicant, a unitholder in an income fund, sought an order requiring the fund's trustees to call a special meeting of unitholders to vote on a proposed transaction involving the restructuring of preference shares and secured notes.

The court found that the proposed transaction was objectively 'materially adverse' to the unitholders because it postponed payments on the secured notes.

Consequently, under the Declaration of Trust, the trustees lacked the authority to vote the fund's common shares in favour of the transaction without unitholder approval.

The court ordered the special meeting of the company to be adjourned pending a unitholder vote.

The appellant appealed a trial judgment that dismissed the majority of its contractual claims against the respondent regarding a magazine publishing agreement.

The Court of Appeal allowed the appeal and ordered a new trial, finding that the trial judge failed to consider material evidence regarding the factual matrix of the contract, ignored evidence of the respondent's lack of good faith in negotiating a renewal, and failed to provide adequate reasons for rejecting the credibility of the appellant's key witness.

The appellants appealed an order dismissing their motion for certification of a class proceeding and striking certain paragraphs of their statement of claim.

The proposed class action alleged negligence and negligent/reckless misrepresentation by the respondent auditors in connection with financial statements relied upon by lenders who advanced over US$1 billion.

The Divisional Court allowed the appeal in part, finding that the motions judge erred in striking the claim for reckless misrepresentation and in concluding that a class proceeding was not the preferable procedure.

The court upheld the striking of claims by assignor lenders and claims against individual partners and employees.

The matter was referred back to a class proceedings judge.

The appellants appealed an order refusing to enjoin the respondents from pursuing a motion in the United States to access testimony and documents obtained through the US discovery process.

The Court of Appeal dismissed the appeal, finding no comity concerns or overriding policy issues that would warrant an injunction.

The Court held that the respondents were legitimately attempting to gather evidence in a foreign jurisdiction according to its rules, and that the US judge was in the best position to determine whether and how to vary the protective order.

In an addendum on costs following an appeal, the Court of Appeal for Ontario awarded costs on a partial indemnity scale.

Finding the hours sought by the successful party to be excessive, the court fixed costs at $12,500, payable without delay.

The appellant, a franchisor, obtained foreign default judgments against the respondent franchisees after terminating their franchise agreements and seizing their assets without accounting for the value of the seized inventory.

The appellant then filed petitions in bankruptcy in Ontario based on the foreign judgments.

The trial judge dismissed the petitions under s. 43(7) of the Bankruptcy and Insolvency Act, finding that the appellant's attempt to obtain double recovery by failing to account for the seized assets constituted 'sufficient cause' to deny the petitions.

The Court of Appeal upheld the decision, confirming that the trial judge properly exercised his discretion to dismiss the petitions due to the appellant's unconscionable conduct.

The appellant father appealed an order dispensing with his consent to allow the respondent mother to travel to Israel with their two young children.

The mother had been diagnosed with a terminal illness and wished to visit her family.

The Court of Appeal found that the mother's terminal illness constituted a material change in circumstances under s. 17(5) of the Divorce Act.

The court upheld the decision that the trip was in the children's best interests but varied the order to include strict conditions regarding travel safety, medical insurance, and a 21-day limit due to the unstable situation in Israel.

The appellant appealed the dismissal of a fraudulent conveyance action.

The central issue was whether the trial judge erred in applying the law relating to the burden of explanation.

The Court of Appeal held that the trial judge correctly concluded the threshold necessary to shift the burden of explanation to the defendant had not been reached, noting the absence of evidence regarding other creditors or the defendant's inability to meet debts at the time of the conveyance.

The appeal was dismissed.

The appellant appealed the dismissal of a fraudulent conveyance action.

The Court of Appeal upheld the trial judge's finding that the threshold necessary to shift the burden of explanation to the defendant, as set out in Koop v. Smith, had not been reached due to a lack of evidence regarding other creditors or inability to meet debts.

The appeal was dismissed with costs.

The appellant appealed an order refusing to set aside a default judgment signed by the Registrar.

The Court of Appeal found that the Registrar lacked jurisdiction to sign the default judgment under Rule 19.04 because the claim for 'approximately $450,000' in damages for conversion and fraud was not a liquidated demand.

The default judgment was set aside with leave for the respondent to proceed before a judge under Rule 19.05.

However, the court refused to set aside the noting of pleadings closed due to the appellant's intentional refusal to defend.