Justin Gregory Necpal

Following a trial in which the plaintiff succeeded on oppression and unjust enrichment claims against two of nine defendants and was awarded $1,313,495.13 — less than sought — the court fixed costs on a partial indemnity scale.

The court considered the divided success, the moderate complexity of the litigation, and the principle of proportionality under s. 131 of the Courts of Justice Act and Rule 57.

The court declined to treat the trial conduct of either party as a cost factor, but reduced the disbursement for the expert report given its partial admissibility.

Partial indemnity fees of $400,000 plus HST and disbursements of $120,000 including HST were ordered against the successful defendants.

The trustee in bankruptcy moved for a phase-one determination that profit payments made by Douglas Grozelle to net winners in a fraudulent Ponzi scheme were void as against creditors and recoverable for the estate.

The court found the hallmarks of a Ponzi scheme, held insolvency and fraudulent intent could be inferred globally, and concluded the payments were void under the Fraudulent Conveyances Act and not saved by good-faith or good-consideration defences.

The court approved a two-stage insolvency process: common liability issues resolved summarily now, with individualized quantum determinations in phase two.

The winners’ cross-motion for broad directions attacking the trustee’s process and authority was dismissed.

The appellant, an unsecured creditor, appealed a motion judge's order authorizing a pooled distribution of assets under a receivership, which included both individual and corporate debtors.

The appellant objected to sharing corporate assets with creditors of only the individual debtors.

The Court of Appeal upheld the motion judge's decision, finding no error in piercing the corporate veil to pool assets, as the corporate assets were derived from fraudulent transfers by the individual debtors to defeat creditors.

The court also found no procedural unfairness in determining the issue on a motion for directions and upheld the disallowance of certain interest charges claimed by the appellant.

The Receiver sought directions regarding the distribution of remaining receivership proceeds amidst a creditor dispute.

One group of unsecured creditors sought pro rata distribution by pooling the assets of the individual and corporate debtors, while another unsecured creditor sought a separate, ring-fenced distribution based on its direct claim against the corporate debtors.

The Receiver proposed pooling via reverse piercing of the corporate veil or substantive consolidation.

The court granted the Receiver's motion, approving the pooled distribution scenario, disallowing the opposing creditor's claim for retroactive and post-receivership interest, and approving the Receiver's fees.

The court found that both reverse piercing of the corporate veil and substantive consolidation were appropriate remedies given the fraudulent schemes used to funnel funds into the corporate entities, and that any prejudice to the opposing creditor was diminished by the fraud's origin.

The appellant, a U.S. law firm, appealed an order declaring mortgages it held over six Ontario properties, granted by its clients (the Hutchens) to secure legal fees, void ab initio as fraudulent conveyances under the Fraudulent Conveyances Act.

The Court of Appeal dismissed the appeal, affirming the motion judge's findings that the judgment creditors had standing, were "creditors or others" under the Act, and that the mortgages were not granted in good faith, thus not falling under the statutory exceptions.

The court also rejected arguments of res judicata or abuse of process.

The Applicants, judgment creditors of the Respondents (Hutchens), brought a motion seeking a declaration that $2M mortgages registered by Adroit Advocates LLC against the Hutchens' Ontario properties were void ab initio.

The mortgages were registered shortly after a significant US judgment was rendered against the Hutchens for mortgage financing fraud.

The Applicants argued that the mortgages were intended to defeat creditors and were given for insufficient consideration.

Adroit, the responding non-party, challenged the Applicants' standing and asserted the mortgages were granted in good faith for good consideration.

The court found the Applicants had standing and, applying the Fraudulent Conveyances Act and the Assignments and Preferences Act, determined that the mortgages were intended to give Adroit an unjust preference over other creditors and were given for inadequate consideration, primarily consisting of future, unbilled legal fees.

The motion was granted, declaring the mortgages void and directing their discharge.

This is a costs endorsement following an appeal where the appellants (defendants) successfully challenged the sanction (judgment in the action) imposed by the motion judge for contempt, due to procedural flaws.

The Court of Appeal upheld the initial costs award for the contempt finding, but set aside the costs for the sanctions hearing and the action, and ordered no costs for the appeal, acknowledging the appellants' underlying contemptuous conduct as the root cause of the proceedings.

The appellants, found in contempt for multiple failures to disclose assets and account for misappropriated investment funds, appealed the motion judge's decision to grant judgment against them for approximately $9 million as a sanction for contempt.

The Court of Appeal held that while striking a defence or barring participation can be a sanction for contempt, final judgment is not directly available as a punishment for contempt under Ontario's Rules of Civil Procedure.

The Court found that the motion judge erred by relying on the merits of the action to grant judgment while simultaneously barring the appellants from addressing those merits.

The judgment was set aside, and the matter remitted to a different judge for a new sentencing hearing.

The appellants, having been found in contempt of a Mareva injunction and ordered to pay approximately $9 million to the respondents, appealed the judgment.

In this endorsement, the Court of Appeal addressed two motions: the respondents' motion for security for costs of the appeal and the proceeding, and the appellants' cross-motion for a stay of a judgment debtor examination order.

The court granted the respondents' motion for security for costs in part, finding the appellants' contempt a compelling reason under Rule 61.06(1)(c).

The court dismissed the appellants' motion for a stay, determining that the examination order was not automatically stayed and that compliance would not cause irreparable harm given the appellants' existing obligations to disclose assets.

The plaintiffs sought interim orders to compel the sale of a property and non-party document disclosure, alleging oppression and fraud by the defendants.

The court applied the strong prima facie case test for the mandatory interlocutory injunction.

It found a strong prima facie case of oppression due to the defendants' breach of shareholder agreements, diversion of funds, and lack of credibility, evidenced by their non-compliance with previous court orders.

The court approved the plaintiffs' proposed sale of the property for $12 million over the defendants' $15 million offer, citing the plaintiffs' offer's certainty and the defendants' unreliability.

The court also granted the non-party production order.

This is a supplementary decision to the Court of Appeal's judgment allowing the appeal in part.

Following the release of the main decision, the respondent requested that funds paid into court by the appellants as security for costs be paid out to the respondent.

The appellants did not oppose this request.

The court ordered that the funds held by the Accountant of the Superior Court of Justice be paid out to the respondent.

On appeal from a trial judgment dismissing the appellants' action for breach of contract and repudiation.

The appellants, who operated methadone treatment clinics, hired the respondent physician under a contract requiring her to remit 45% of OHIP billings and containing a non-competition clause.

Following the dissolution of the appellants' joint venture with another clinic operator, the respondent continued working at the jointly-operated clinics.

The trial judge found the contract frustrated by intervening events and that the non-competition provision was not breached.

The appellants appealed, arguing errors in the frustration analysis and interpretation of the non-competition clause.

The Court of Appeal upheld the trial judge's findings on frustration and contractual interpretation but allowed the appeal in part, awarding the appellants $8,194.59 for underpayment during the period prior to the alleged repudiation.

Following earlier reasons on a motion, the court addressed the issue of costs under s. 131 of the Courts of Justice Act and Rule 57 of the Rules of Civil Procedure.

The applicant sought partial indemnity costs based on a bill totalling over $15,000.

The court reviewed the parties’ submissions, deleted certain claimed items not directly related to the motion, and considered the principle that costs should be fair and reasonably expected by the unsuccessful party rather than strictly reflecting actual expenditures.

After comparing both parties’ proposed bills of costs and exercising its discretion, the court fixed a reduced amount.

Partial indemnity costs were awarded to the moving party in the sum of $10,000 inclusive of fees, disbursements, and HST.

The applicant sought an order compelling the respondent to answer questions during an Ontario examination conducted pursuant to a Letter of Request issued by a California court in a civil securities fraud action.

The respondent refused to answer numerous questions, invoking the Fifth Amendment to the United States Constitution due to concerns that her answers could be used in a potential U.S. criminal investigation.

The court held that evidentiary procedures under a Letter of Request are governed by Canadian law, not foreign constitutional protections.

Concerns regarding the potential use of compelled testimony in U.S. criminal proceedings were matters for the American courts to determine.

The respondent was therefore required to answer the questions notwithstanding the asserted Fifth Amendment privilege.

In a certified class proceeding alleging a price-fixing conspiracy in the market for DRAM (dynamic random access memory) devices contrary to Part IV of the Competition Act and related torts, the representative plaintiffs sought court approval of a negotiated settlement with one defendant.

The settlement required the settling defendant to pay $5.75 million for the benefit of class members in Ontario, British Columbia, and Québec and to provide extensive cooperation in the ongoing litigation against non-settling defendants.

The agreement also included a bar order preventing contribution and indemnity claims against the settling defendant while permitting discovery cooperation and proportional liability determinations at trial.

Applying established class action settlement approval principles, the court concluded the settlement was fair, reasonable, and in the best interests of the class.

The settlement approval order was granted.