Jordan Potasky

The Ontario Court of Appeal dismissed the appeal by Neural Systems Inc., JiangJian Wang, and George Tarazi from a summary judgment granted in favour of the Business Development Bank of Canada.

The court found the appeal to be meritless and brought solely to delay judgment, noting that the debt remained unpaid and there was no genuine issue for trial.

The appellants' arguments regarding repayment efforts were rejected, and the appeal was dismissed with costs of $5,000 awarded to the respondent.

This motion concerned the defendants' application to set aside a Certificate of Pending Litigation (CPL) previously granted ex parte against their property.

The defendants argued material non-disclosure by the plaintiff, lack of plaintiff's assets to cover potential damages, and improper use of the CPL as pre-judgment execution.

The court found that the plaintiff failed to make full and fair disclosure of material facts in the ex parte motion, including the true nature of his claim, his financial capacity to meet damages, the unsigned nature of the underlying agreement, and the absence of key contractual terms (deadlines, subcontractor prohibitions).

Consequently, the court vacated the CPL due to this material non-disclosure, emphasizing the strict duty of candour required in ex parte proceedings.

The court also briefly considered the test for CPLs in fraudulent conveyance actions without a prior judgment, finding that even on that test, the CPL should be discharged.

The appellant purchaser appealed a summary judgment dismissing his action for the return of a $100,000 deposit on a real estate transaction.

The property's depth was significantly less than described in the Agreement of Purchase and Sale.

The respondent vendor had manually added 'To be verified' next to the depth dimension.

The motion judge found this proviso shifted the risk of inaccuracy to the purchaser.

The Court of Appeal allowed the appeal, holding that the proviso did not impose a pre-contractual obligation on the purchaser to verify dimensions, nor did it transfer the risk or negate the 'more or less' clause.

The deposit was ordered returned to the appellant.

The defendants brought a motion for security for costs against the plaintiff, Marvello Construction Ltd., under Rule 56.01(1)(d) and (e).

The plaintiff claimed impecuniosity but failed to provide sufficient financial disclosure for itself or its principals, as required for corporate plaintiffs.

The court found the plaintiff's claim was not frivolous or vexatious and that the action, while referencing the Ontario Business Corporations Act, was fundamentally a claim for unpaid invoices, thus not immune from a security for costs order.

The motion was granted, and the plaintiff was ordered to post security for costs in tranches.

The defendant moved to stay or dismiss an Ontario action seeking recognition and enforcement of a U.S. judgment, arguing that Ontario lacked jurisdiction because there was no real and substantial connection between the defendant and Ontario.

The plaintiff brought a cross‑motion to amend its statement of claim to add grounds for service ex juris.

The court held that in recognition and enforcement proceedings the applicable test is that set out in Beals v. Saldanha, requiring a real and substantial connection between the foreign court and the underlying dispute, not between the defendant and Ontario.

The court found the Beals criteria were satisfied, including a final foreign judgment for a fixed sum and no applicable defences.

The defendant’s motion was dismissed and the plaintiff’s amendment was allowed in part to clarify service outside Ontario.

A judgment creditor brought a motion under Rule 60.08(16) seeking judgment against a garnishee who was the sole shareholder and director of the corporate judgment debtor.

After extensive post‑judgment proceedings, the court determined that the garnishee had withdrawn approximately $118,000 from the corporation for personal expenses and rejected an accounting “adjusting entry” that purported to offset the debt.

The court held that the entry lacked any legitimate business basis and was intended to conceal the garnishee’s liability to the corporation.

Although the creditor also argued that dividends paid while the corporation was insolvent should be repaid under the Business Corporations Act, the court found the evidence insufficient to establish insolvency at the relevant time.

Garnishment judgment was granted for the amount owed to the creditor and payment was ordered directly to the judgment creditor.