Jonathan Dushyendra Kulathungam

Following the release of the Court's decision on the appeal, submissions were received regarding the apportionment of costs.

The Court fixed costs of the appeal payable to the Receiver, the respondent 100 Ontario Inc., and the respondent Issam A. Saad, each in the amount of $15,000.

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 moving party brought motions to strike an affidavit, for a sealing order, and for leave to appeal a costs order.

The Divisional Court dismissed all motions, permitting the responding party to redact its materials to remove allegedly privileged information.

Costs of $5,000 were awarded to the responding party for the motion for leave to appeal.

The plaintiff hotel owner sued the defendant condominium corporation for historical overpayments of shared electricity costs spanning 2006 to 2015.

The overpayments resulted from a conversion error in an Excel spreadsheet used to calculate the plaintiff's share.

The court found the defendant was unjustly enriched and ordered repayment of $730,058.99.

The court rejected the defendant's limitation period defence, finding the error was not reasonably discoverable until a consultant identified it in 2017.

The court also dismissed the defendant's claim for equitable set-off regarding alleged underpayments in other areas.

The applicants and respondents were shareholders in a corporation that acquired a hotel and redevelopment project.

Following a finding of oppression against the respondent, the corporation was ordered to be liquidated.

In this trial to resolve disputes over the distribution of liquidation proceeds, the respondent claimed entitlement to development fees, hotel management fees, reimbursement of expenses, and repayment of shareholder loans including advances made to a subsidiary.

The court dismissed the claims for development and management fees, finding no written agreement and a failure to comply with the disclosure requirements for self-interested contracts under s. 132 of the Business Corporations Act.

The court allowed certain business expenses while characterizing others as loan repayments, and held that it was just and equitable to include advances made to the subsidiary in the calculation of the respondent's shareholder loan.

The appellant franchisors appealed a decision allowing the respondent franchisees to rescind their franchise agreement due to a materially deficient franchise disclosure document (FDD).

The appellants argued the application judge erred by applying an objective test rather than requiring subjective evidence that the deficiencies impaired the franchisees' ability to make an informed decision.

The Court of Appeal dismissed the appeal, affirming that the test for rescission under s. 6(2) of the Arthur Wishart Act is objective.

The court upheld the findings that the failure to include financial statement notes, head lease details, and the fact that this was the first non-mall location constituted material non-disclosure.

The applicants sought to appoint a receiver over a commercial property due to an alleged default on a third mortgage.

The respondents brought a counter-application arguing the mortgage was void or unenforceable due to material alterations, lack of independent legal advice, and unconscionability.

The court found the mortgage valid and enforceable, rejecting the respondents' arguments.

However, the court disallowed several fees claimed by the applicants, determining the actual amount secured by the mortgage.

Finding sufficient equity in the property to satisfy the debt, the court dismissed the application to appoint a receiver, without prejudice to future applications if the debt remains unpaid.

The plaintiff purchaser brought a motion for leave to issue a certificate of pending litigation (CPL) against a commercial property after an aborted real estate transaction.

The defendants argued the plaintiff failed to close on the agreed-upon date and did not secure the required mortgage assumption.

The court found triable issues existed regarding whether time remained of the essence following multiple extensions and whether the mortgage assumption would have been approved.

Balancing the equities, the court granted the CPL, noting the property's uniqueness to the plaintiff's development plan and that damages would not be a satisfactory remedy.

The applicant landlord sought a declaration regarding its rights under a commercial condominium declaration after its tenant, a dentist, purchased an adjacent unit and purported to transfer the exclusive use designation for a dental clinic to the new unit.

The court applied the nemo dat principle, holding that the tenant could only consent to the transfer of the exclusive use for the remaining duration of his lease, protecting the landlord's premium-paid exclusivity.

The franchisee applied to rescind a franchise agreement under s. 6(2) of the Arthur Wishart Act, alleging material deficiencies in the franchisor's disclosure document.

The court found that the franchisor failed to disclose complete financial statements, the absence of a head lease, a negotiated agreement to lease, and the fact that the location was the franchise's first non-mall setting.

These omissions effectively deprived the franchisee of the opportunity to make an informed investment decision, amounting to a failure to provide a disclosure document.

The application was allowed, the rescission was declared valid, and the franchisor and its associate were ordered to pay $306,581 in statutory compensation, with the franchisee's loss of income claim referred to a master.