John Philpott

The defendants moved for a stay of an interlocutory injunction order pending the determination of their motion for leave to appeal.

The injunction restrained the defendants from competing against the plaintiff corporation and from using confidential information or soliciting clients.

The court applied the three-part test for a stay and found that the motion for leave to appeal was unlikely to succeed, the defendants would not suffer irreparable harm that could not be compensated in damages, and the balance of convenience favoured the plaintiffs.

The motion for a stay was dismissed.

The appellants appealed a decision of the Electrical Safety Authority Review Panel suspending their Master Electrician and Electrical Contractor licences for 90 days.

The Review Panel found the appellants breached several rules of the Electrical Safety Code, including failing to obtain inspection permits, failing to obtain authorization to reconnect power, installing incorrect equipment, and charging grossly excessive fees.

The Divisional Court dismissed the appeal, finding that the Review Panel's interpretation of the Code was reasonable, the appellants had sufficient notice of the allegations against them, and the remaining issues were questions of fact over which the court had no jurisdiction.

The plaintiffs sought an interim injunction to restrain the defendants, including a former shareholder and several former employees, from competing against the plaintiff company and soliciting its clients and employees.

The court found that the former shareholder breached the restrictive covenants in the unanimous shareholder agreement and his fiduciary duties by orchestrating a plan to use confidential information to divert business to a newly formed competitor.

The court applied the strong prima facie case standard for the first branch of the RJR-MacDonald test and found that the plaintiffs established a strong case, would suffer irreparable harm, and that the balance of convenience favoured granting the injunction.

The court granted the injunction against the former shareholder and the former employees, enjoining them from using confidential information and competing in association with the former shareholder.

The defendant by counterclaim, ONEnergy Inc., sought leave to appeal an order dismissing its motion to strike the claims asserted against it by the plaintiff by counterclaim.

The underlying claim alleged oppressive conduct and sought a constructive trust over assets transferred to ONEnergy.

The Divisional Court denied leave to appeal, finding no conflicting decisions under Rule 62.02(4)(a) and no reason to doubt the correctness of the order or matters of general importance under Rule 62.02(4)(b).

The defendants brought a motion for leave to appeal a decision refusing to set aside or strike out a Mareva injunction order on the basis of fraud.

The motion judge had found fraud but refused to strike the order because the fraud was not material to the original decision.

The Divisional Court dismissed the motion for leave to appeal, finding no reason to doubt the correctness of the motion judge's order and that the proposed appeal did not involve matters of general or public importance.

The moving party sought to set aside prior Mareva injunction orders under Rule 59.06(2)(a) of the Rules of Civil Procedure on the basis that the orders were obtained through fraudulent misrepresentations.

The alleged fraud concerned a business partner’s denial of authorship of an email offering the moving party a profit-sharing interest, which later emerged during related criminal proceedings as authentic.

The court found that the denial of the email constituted fraudulent testimony.

However, the court held that the email was not material to the motions judge’s earlier decision granting and maintaining the Mareva injunctions, which rested on separate findings regarding unauthorized diversion of company assets.

As the alleged fraud did not form part of the foundation of the earlier orders, the motion to set them aside was dismissed.

The Court dismissed an appeal from a civil contempt finding against a lawyer who returned trust funds to his client despite a Mareva injunction.

The Court held that civil contempt requires proof beyond a reasonable doubt of an intentional act that breaches a clear order with notice, and does not require contumacious intent.

The Court also held the motions judge erred by reopening and setting aside the initial contempt finding on evidence that should have been filed at the liability stage.

This action and amalgamated application arose from a series of informal secured and unsecured loans, mortgages, promissory notes, and related investment dealings between the plaintiff and the responding parties.

The court found that $200,000 in fire insurance proceeds received by the mortgagees as loss payees had to be treated as satisfying the secured mortgage debt to that extent, and could not be redirected to unsecured debts while the mortgagees still asserted the full secured claims.

The court held that the accounting provided by the responding parties was materially inaccurate, declared both power of sale proceedings invalid, and discharged the NUTOK mortgage.

Most unsecured promissory note claims were statute barred, but the KUL mortgage balance, the Xtra Gold debt and share proceeds, and two 2009 promissory notes remained owing.

The applicant sought to set aside an arbitration award requiring payment of finder’s fees arising from investments made by a third-party investor introduced through the respondent.

The applicant argued the arbitrator committed unreasonable errors of law, improperly relied on a prior agreement, misinterpreted a non‑circumvention clause, and exceeded jurisdiction by determining issues relating to securities law registration requirements.

The court held that even if reasonableness review were available, the arbitrator’s interpretation of the finder’s fee agreement was reasonable and grounded in the contractual language and factual matrix.

The court further held that securities law compliance issues were capable of arbitration and that the applicant had waived jurisdictional objections by raising the issue before the arbitrator.

The application to set aside the award was dismissed and the cross‑application to enforce the arbitration award was granted.

The appellant partnership appealed a trial judgment dismissing its action and awarding the respondent former partner damages on his counterclaim.

The Court of Appeal dismissed the appeal, finding no error in the trial judge's calculation of goodwill attributable to the respondent's capital account, his conclusion regarding the equity of subsidiaries, or his calculation of goodwill for retained clients.

Following an appeal and cross-appeal, the court determined the quantum of trial costs payable to the cross-appellant, a lawyer who represented himself at trial.

The cross-appellant sought substantial indemnity costs of approximately $49,600, while the respondent suggested $1,000.

Applying the principle that self-represented lawyers are entitled to costs for work ordinarily done by retained counsel that results in an opportunity cost, the court fixed the cross-appellant's trial costs at $15,000 inclusive of HST and disbursements.

A dispute arose from the administration and eventual sale of a rental property held in trust where one party held legal title as trustee for himself and another beneficiary.

The trustees failed to maintain financial records over a 13‑year period, leading both sides to rely on competing accounting experts to reconstruct profits.

The trial judge accepted the respondent’s expert report and awarded damages for breach of trust, aggravated damages, and substantial indemnity costs.

On appeal, the Court of Appeal held that the trial judge erred in relying on the respondent’s expert because the assumptions about rental income were inconsistent with the evidence.

The court reassessed damages directly on the record, reducing the award and costs, while upholding aggravated damages and allowing the cross‑appeal of the solicitor on the basis that no duty of care or fiduciary duty was owed to the beneficiary.

The defendants brought a motion seeking to enforce the plaintiff’s undertaking as to damages given in support of an ex parte Mareva injunction that froze their assets for nine days.

They argued that the injunction caused them to lose a commercial transaction and sought an inquiry to determine damages.

The court considered jurisprudence emphasizing the strong presumption that a party giving an undertaking as to damages should ordinarily be held to it unless special circumstances exist.

The court concluded that special circumstances were present, including the defendants’ conduct in the underlying litigation and the absence of persuasive evidence that the injunction caused compensable losses.

The motion to enforce the undertaking and order an inquiry into damages was dismissed.

A dispute arose following the termination of a partner’s membership in a law firm regarding amounts owing under a partnership agreement.

The issues concerned the proper calculation of the departing partner’s capital accounts, including goodwill and subsidiary equity, and the value of work in progress and accounts receivable assigned to the departing partner.

The court interpreted the partnership agreement to determine capital entitlements and the deductions applicable to assigned WIP and A/R. After calculating both parties’ entitlements and obligations and applying a limitation period concession, the court concluded that only half of the net amount owing to the departing partner was recoverable.

Judgment was granted for the defendant for the recoverable portion.

The plaintiffs moved under Rule 21.01(1)(b) to strike portions of a counterclaim alleging defamation arising from a draft statement of claim and covering letter sent by their former solicitor to the defendant’s employer before litigation commenced, arguing the communications were protected by absolute privilege.

The court held that the pleadings did not support a finding that the communications were made to achieve the objects of the litigation and therefore absolute privilege did not apply at the pleadings stage.

However, the court accepted that defending the counterclaim would likely require disclosure of solicitor‑client communications and could prejudice the plaintiffs in the main action.

The court therefore refused to strike the counterclaim but ordered it severed from the main action and directed that it proceed, if pursued, as a separate claim.

Following a successful civil trial involving breaches of fiduciary duty and breach of trust relating to trust property, the court determined the appropriate costs award.

The successful party sought substantial indemnity costs based on the defendants’ conduct throughout the litigation, including dishonesty, destruction or concealment of key financial records, and failure to comply with interlocutory cost orders.

The court applied the principles of fairness, reasonableness, and proportionality and considered offers to settle and litigation conduct.

Finding the defendants’ behaviour reprehensible and a clear breach of fiduciary obligations, the court awarded substantial indemnity costs.

Liability for costs was apportioned so that two defendants were jointly and severally responsible for four‑fifths of the award, with the remaining defendant responsible for one‑fifth.