Joseph Jamil

The Bank of Montreal sought a declaration that its mortgage on a property in Oshawa was entitled to first priority over a competing mortgage registered by 10655252 Canada Corporation, relying on the doctrine of equitable subrogation.

The court found that BMO’s funds were used to pay out the prior first mortgage (CIBC), and that all parties intended BMO to have first priority.

Due to the solicitor’s negligence, the BMO mortgage was not registered first, but the court exercised its discretion to grant equitable subrogation, giving BMO first priority to the extent of the CIBC mortgage.

The appellant, 2557904 Ontario Inc. (the stalking horse bidder), appealed a motion judge's order that dismissed the receiver's motion for an approval and vesting order (AVO) and instead approved the debtor's (1000093910 Ontario Inc.) motion to redeem a first mortgage.

The Court of Appeal found the motion judge erred by not ensuring 255 received compensation for costs thrown away and by granting provisional enforcement of the order after an appeal notice was filed.

The appeal was allowed in part, varying the order to require the debtor to pay $300,000 in compensation to 255 and setting aside the provisional execution.

The court also ordered that if the refinancing transaction does not close, the AVO for 255 will be granted.

The plaintiffs brought a motion for default judgment against three defendants involved in a mortgage fraud scheme.

The plaintiffs had provided a private mortgage loan to an individual impersonating the true property owner, and the funds were dissipated by the borrower's lawyer in breach of his undertaking.

The defendants failed to file statements of defence and were noted in default.

The court granted default judgment, finding the lawyer liable for negligence and breach of undertaking, and the other defendants liable for fraud, while awarding partial indemnity costs to the plaintiffs.

The defendant 2603553 Ontario Inc. ('260') brought a motion for summary judgment to dismiss a fraudulent conveyance claim by the plaintiff, Vestacon Limited.

Vestacon cross-moved for a certificate of pending litigation.

The court granted 260's motion, finding no genuine issue requiring a trial regarding 260's knowledge of any fraudulent intent on the part of Huszti Investments.

The court concluded that the sale of the units by Huszti Investments to 260 was commercially reasonable and the proceeds were used to pay secured creditors.

Consequently, Vestacon's action against 260 was dismissed, and its cross-motion for a certificate of pending litigation was also dismissed.

The court awarded substantial indemnity costs of $85,000 to 260.

A law firm (Robins Appleby LLP) obtained a fee judgment against its former client (Todd Family Holdings Inc.) for unpaid legal fees after successfully prosecuting a lawsuit that resulted in a $2.2 million judgment and approximately $1 million in costs.

The client subsequently retained new counsel (GMS Law Professional Corporation) on a contingency fee basis to pursue an appeal of the original judgment.

When the new counsel obtained a costs award, Robins issued garnishment notices to intercept the funds.

The client and new counsel sought a charging order and priority over Robins' charging order, and sought to vacate the garnishment notices.

The motion judge denied all relief.

On appeal, the Court of Appeal for Ontario upheld the motion judge's decision, finding that the client failed to establish the prerequisite for a charging order (inability or unwillingness to pay fees) and that absent exceptional circumstances, a former lawyer may enforce a fee judgment without violating the duty of loyalty owed to a former client.

The defendant brought a motion for an order requiring the plaintiff to post security for costs under Rule 56.01(1).

The plaintiff conceded the initial onus but argued it had a good chance of success at trial regarding its claim for wrongful termination of a distributorship agreement.

The court found that the plaintiff demonstrated a good chance of success on the issues of payment terms and alleged breach of a mutual exclusivity provision.

The motion for security for costs was dismissed, and costs were awarded to the plaintiff.