Jonathan Dushyendra Kulathungam

The appellant entered into an Agreement of Purchase and Sale with a court-appointed receiver to purchase real estate.

The receiver brought a motion for approval and vesting.

However, late-breaking offers emerged, including one 37% higher than the appellant's offer.

The motion judge declined to approve the sale and instead ordered a six-day extension of the bidding process.

The appellant appealed, arguing the motion judge misapplied the principles from Royal Bank of Canada v. Soundair Corp. The Court of Appeal dismissed the appeal, finding the motion judge properly exercised discretion in reopening the auction process given the magnitude of the late offer and the receiver's alternative recommendation.

The Receiver sought an order for discharge and release, approval of its Third Report, statement of receipts and disbursements, and fees.

The Court declined to grant the discharge, citing CBJ’s unauthorized commencement of actions in Ontario and Alberta in breach of the Receivership Order.

The Court found CBJ’s disregard for court orders troubling and noted the lack of contrition or proper procedure to regularize its actions.

The motion for discharge was adjourned to allow for a more complete record and for the Receiver to advise on the value of the Ontario and Alberta actions to the estate.

The decision addresses a motion by Duaa Hadweh to vary a Mareva injunction imposed on her assets in a civil fraud action.

Ms. Hadweh sought to refinance her home to pay legal fees, access frozen accounts for living expenses, and open a new bank account for future employment income.

The court reviewed the evidence of asset dissipation, alternate sources of funds, and compliance with the injunction.

The court found that Ms. Hadweh had not demonstrated a lack of other available assets and had breached the Mareva order.

The court permitted her to open a new account for future income and allowed for some funds to be drawn from home equity for legal fees, subject to further evidence.

The applicant, Mehdi Zarrin-Mehr, brought a motion seeking the appointment of a professional estate trustee during litigation (ETDL) for the estate of Sadollah Zarrinmehr, alleging hostility, lack of transparency, and disregard for his interests by the current estate trustee, Soraya Shokrai.

The court dismissed the motion, finding that the applicant's allegations were not sufficiently substantiated and that the estate was straightforward, making the additional costs of a professional ETDL unnecessary and detrimental to the beneficiaries.

The court emphasized that the existing Restated No Dealings Order adequately protected the estate assets.

The Debtors (corporate and individual) sought leave to appeal two orders made in a receivership proceeding: an Approval and Vesting Order (AVO) for the sale of two residential properties and a Sale Procedure Order (SPO) for vacant development lands.

The Court of Appeal considered whether leave to appeal was required under s. 193 of the Bankruptcy and Insolvency Act and, if so, whether it should be granted.

The court concluded that leave was required under s. 193(e) as the orders did not fall under categories allowing appeal as of right (ss. 193(a)-(d)), primarily because they concerned present rights and methods of asset realization rather than affecting future rights or the value of property in a way that would trigger an automatic right of appeal.

The court further determined that leave should not be granted, finding the proposed appeal was not prima facie meritorious, as the lower court's discretionary decisions were entitled to deference, and the appeal did not raise issues of general importance.

Granting leave would also unduly hinder the insolvency proceeding.

The defendants moved for an interim stay of the plaintiff's mortgage enforcement actions, arguing that the plaintiff acted in bad faith and fraudulently, and that they could secure refinancing within four weeks.

The plaintiff opposed the motion.

The court dismissed the defendants' motion, finding no credible evidence of bad faith or fraud by the plaintiff.

Applying the principles for restraining a mortgagee's rights and the RJR-MacDonald test for a stay, the court concluded there was no serious issue to be tried, no irreparable harm to the defendants, and that the balance of convenience overwhelmingly favoured the plaintiff.

This endorsement addresses a motion brought by the respondent, Soraya Shokrai, seeking to dismiss the applicant, Mehdi Zarrin-Mehr's, challenge to the validity of a 1999 will.

The applicant, the deceased's son from a previous marriage, alleged suspicious circumstances surrounding the will's execution, including missing pages, inconsistent numbering, and a discrepancy in the stated number of pages.

The court dismissed the respondent's motion, finding that the applicant had met the minimal evidentiary threshold required to call the will's validity into question.

The court emphasized its inquisitorial role in probate matters and the need for formal proof of the will given the anomalies and the subscribing witnesses' evidence.

The decision allows the applicant to proceed with discovery, including seeking production from lawyers involved in the estate.

This motion addressed the allocation of costs incurred by the Liquidator (KPMG) in a corporate liquidation proceeding.

The Applicants sought to have specific categories of costs (trial and trial preparation, accounting/bookkeeping/tax, and the Sources and Uses Report) fully borne by the Respondents, arguing these were necessitated by the Respondents' prior misconduct and poor record-keeping.

The court found that these disputed costs were directly attributable to the Respondents' self-dealing and failure to maintain proper financial records, as established in previous judgments.

Consequently, the court ordered the Respondents to bear full responsibility for these specific costs, while general administration costs were to be shared proportionally among shareholders.

This is a costs endorsement following an application where the applicants sought a declaration that a s. 244 BIA Notice was void due to the respondent taking an enforcement step (sending Notices of Sale under the Mortgages Act) contemporaneously.

The court previously found that the respondent's action contravened s. 244 BIA, but declined to void the notice due to a lack of demonstrated prejudice to the applicants.

In this costs decision, both parties sought costs.

The applicants claimed partial success, while the respondent claimed full success.

The court, exercising its discretion under s. 131 of the Courts of Justice Act and Rule 57, determined that neither party should be awarded costs, considering the respondent's contravention of the BIA and the applicants' failure to provide evidence of prejudice.

This appeal concerned a limitation period defence in an unjust enrichment claim.

The respondent, a hotel, had overpaid hydro costs to the appellant, a condominium, for years due to a flawed utility-sharing formula.

The errors were not discovered until 2017, and the action was commenced in 2018.

The trial judge rejected the limitation defence, finding the errors were not apparent and the respondent exercised reasonable due diligence.

On appeal, the appellant argued errors in the trial judge's discoverability and due diligence analysis, and conflation of actual and constructive knowledge.

The Court of Appeal dismissed the appeal, finding no palpable and overriding errors in the trial judge's findings of fact or legal conclusions, affirming that the errors were not reasonably discoverable and due diligence was exercised.

The Court also rejected arguments regarding juristic reason and equitable set-off.

The applicants sought a declaration that the respondent's Notice of Intention to Enforce Security under s. 244 of the Bankruptcy and Insolvency Act (BIA) was void because the respondent concurrently issued Notices of Sale under the Mortgages Act.

The applicants argued that the Notices of Sale constituted an enforcement step taken within the BIA's ten-day notice period, which is prohibited.

The court found that the issuance of the Notices of Sale was indeed an enforcement step taken in contravention of s. 244(2) of the BIA.

However, the court declined to declare the s. 244 BIA Notice void, as there is no statutory prescription for such an outcome and no evidence of actual prejudice to the borrowers was demonstrated.

The court emphasized that the best practice is to issue notices of sale only after the BIA's ten-day notice period expires.

The plaintiffs brought a motion for leave to issue a Certificate of Pending Litigation (CPL) concerning an agreement to purchase over 800 acres of land from the defendant.

The dispute arose from an alleged misrepresentation regarding the exact acreage of the land and issues related to a historic ship located on the property.

The court found that there was a triable issue regarding the plaintiffs' claim to an interest in the land, which is the first threshold for granting a CPL.

However, after balancing the equities, the court exercised its discretion to deny the CPL.

The denial was primarily based on the plaintiffs' significant delay in bringing the motion (almost three months after the scheduled closing date and awareness of a third-party purchaser), the existence of a third-party agreement for the sale of the land, and the greater harm and inconvenience that granting the CPL would cause to the defendant, effectively acting as an injunction and impeding the sale of a distressed asset.

The court fixed costs following a nine-day construction lien trial where success was mixed.

Northridge Homes Ltd. and sub-trade plaintiffs (CAAJ Construction Inc., 2225043 Ontario Inc., and 2142043 Ontario Inc.) sought substantial costs, while the defendants argued for no costs or significantly reduced amounts due to divided success and proportionality.

The court found that all parties shared blame for the protracted trial and applied the principle of proportionality, noting that costs should be fair and reasonable, not merely a mechanical calculation of hours.

The court awarded Northridge Homes Ltd. $60,000 in total costs and the sub-trade plaintiffs $11,150 in total costs, significantly less than requested.

The Applicants were awarded costs on a substantial indemnity scale following the dismissal of the Respondents' motion to vary or set aside an earlier order appointing an auditor.

The Respondents had alleged fraud or mistake by the Applicants' affiant, Mr. Singh, regarding undisclosed liabilities and an audit waiver.

The court found Mr. Singh's liabilities immaterial and the undisclosed facts would not have changed the outcome of the audit order.

The Respondents' conduct, including unsubstantiated fraud allegations and deliberate delaying tactics, justified the substantial indemnity costs.

These supplementary reasons address the costs arising from two motions where Neda Afshar and Arman Sabet successfully sought to remove Brian Sherman as lawyer of record for Mehdi Moradi, and Ms. Afshar also obtained leave to amend her statement of claim.

The court awarded partial indemnity costs to Ms. Afshar ($24,000.00) and Mr. Sabet ($6,000.00), payable by Mr. Moradi.

The court declined to award elevated costs or costs against Mr. Sherman personally, finding no reprehensible conduct by Mr. Moradi or Mr. Sherman in opposing the motions.

This case involved two consolidated actions concerning construction and renovation work.

Northridge Homes Ltd. sued Manjit and Harjinder Sandhu for payment and a construction lien.

Separately, subcontractors CAAJ Construction Inc., 225043 Ontario Inc., and 2142043 Ontario Inc. sued the Sandhus and Northridge for payment and liens.

The court found a valid contract between Northridge and the Sandhus, and that Northridge's lien was timely and valid.

Most of the Sandhus' claims for set-off due to deficiencies were rejected due to lack of proof and failure to plead them.

The court awarded Northridge $32,401.84 and the subcontractors their full claimed amounts, declaring valid liens against the Sandhus' property.

This case involved two consolidated actions concerning construction and renovation work.

Northridge Homes Ltd. sued Manjit and Harjinder Sandhu for payment and a construction lien.

Separately, subcontractors CAAJ Construction Inc., 225043 Ontario Inc., and 2142043 Ontario Inc. sued the Sandhus and Northridge for payment and liens.

The court found a valid contract between Northridge and the Sandhus, and that Northridge's lien was timely and valid.

Most of the Sandhus' claims for set-off due to deficiencies were rejected due to lack of proof and failure to plead them.

The court awarded Northridge $32,401.84 and the subcontractors their full claimed amounts, declaring valid liens against the Sandhus' property.

Neda Afshar and Arman Sabet brought motions to remove Brian Sherman as lawyer of record for Mehdi Moradi due to conflict of interest and breach of duty of loyalty, stemming from a joint retainer in a real estate action.

Ms. Afshar also sought leave to amend her statement of claim and be added as a defendant.

Mr. Sabet sought production of his file.

The court found that Mr. Sherman had received confidential information and was acting against former clients in the same matter, violating the duty of loyalty.

The motions to remove counsel and grant leave to amend the statement of claim were granted.

The request for file production was dismissed as the material had largely been produced.

The applicants brought a contempt motion against the respondents for failing to produce financial records as ordered by a prior court order.

Although the records were eventually produced, leading to no formal finding of contempt, the court found that the respondents' lengthy delay and non-compliance necessitated the motion.

The court awarded substantial indemnity costs to the applicants, finding the respondents' conduct in delaying disclosure and forcing the contempt motion to be reprehensible and to constitute special circumstances justifying a higher scale of costs.

The respondents (corporate moving parties) sought to vary or set aside an August 9, 2016 order appointing an auditor, pursuant to Rule 59.06(a) and (b), alleging fraud or mistake due to undisclosed facts by the original applicants (now respondents to this motion).

The undisclosed facts included audit waivers signed by a principal of the original applicants, his criminal conviction, and consumer proposal.

The court dismissed the motion, finding that the original applicants were not obliged to disclose these facts as the motion was on notice, the respondents could have discovered them with reasonable diligence, and the facts would not have altered the outcome as the audit was ordered in the interests of justice, not based on an automatic statutory right.

The court affirmed a shareholder's right to audited financial statements as a fundamental check on financial mismanagement.