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 plaintiff, Amos Tayts, and the defendant Maxim Zavet, a lawyer, pursued a medical cannabis venture together.

Mr. Tayts contributed significant 'sweat equity' to the venture, which eventually became successful.

However, when founder's shares were allocated, Mr. Tayts was excluded and offered only a nominal amount.

Mr. Tayts sued for breach of contract, oppression, unjust enrichment, and breach of fiduciary duty.

The Superior Court of Justice found that while there was no binding contract for a specific percentage of shares, Mr. Tayts had a reasonable expectation of receiving founder's shares.

The court held that Mr. Zavet and the corporate defendants engaged in oppressive conduct by unfairly disregarding Mr. Tayts' interests.

The court also found Mr. Zavet and his holding company liable for unjust enrichment.

The court awarded Mr. Tayts $1,313,495.13 in damages.

The claim for breach of fiduciary duty was dismissed as the court found no solicitor-client relationship existed for the venture.

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 plaintiff brought a motion seeking payment of funds misappropriated by the defendants, who had previously been subject to a Mareva injunction and held in contempt of court.

The defendants' counsel of record requested an adjournment, arguing he was not formally served, though he acknowledged having no instructions from his clients who had absconded.

The court denied the adjournment, finding the defendants had actual notice and were using procedural technicalities to delay.

The court granted the plaintiff's motion, ordering the release of funds paid into court, transfer of specific accounts, payment of misappropriated amounts, and a tracing order.

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 plaintiffs brought a motion to determine the appropriate sanction for the Developer Defendants' continuing contempt of a Mareva and Disclosure Order, following a Court of Appeal decision remitting the matter for re-sentencing.

The court found that the defendants had still not purged their contempt, having failed to properly account for the plaintiffs' $9 million investment.

The court sentenced the individual defendants to 30 days of intermittent incarceration, struck the statement of defence, and deemed the defendants noted in default, with leave to apply to file a defence only if they fully purge their contempt.

The plaintiffs obtained a Mareva injunction against their former employee, the defendant, who diverted funds from the plaintiffs' bank accounts.

The plaintiffs brought a motion to release $50,000 of the frozen funds held in escrow to pay their legal fees.

The court found that the plaintiffs established a proprietary right to the funds and authorized the release of $50,000.

The court also ordered the defendant to pay $39,000 into court from her personal Alipay account and to produce a further and better affidavit of documents that complies with Rule 30.03(2).

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.

The applicants, judgment creditors from US proceedings involving fraudulent lending schemes, brought a motion to declare certain trusts established by the respondents as invalid shams.

The receiver's investigation traced funds from the fraudulent schemes to the trust properties and identified numerous 'badges of fraud'.

The respondents failed to produce evidence refuting the receiver's findings.

The court applied the McGoey factors, found the trusts were a sham, and ordered the trust assets to be part of the receivership estate available to creditors.

The plaintiffs, minority shareholders of two companies that owned marinas, sought leave to bring a derivative action against the companies' solicitor regarding the distribution of proceeds from the sale of the marinas.

The plaintiffs alleged the solicitor improperly distributed the funds to the majority shareholder or companies controlled by him.

The court dismissed the motion, finding that while the plaintiffs met the first three parts of the test for a derivative action, they failed to demonstrate that the proposed action was in the best interests of the companies, as there was no evidence the companies suffered a loss and the plaintiffs' true claim was personal.

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 applicants, judgment creditors of the respondents for over $26 million USD arising from a fraudulent lending scheme, moved to discontinue the payment of living expenses and legal fees to the respondents and their related trusts from the receivership estate.

The trusts brought a cross-motion to strike the Receiver's Eleventh Report, arguing the Receiver exceeded its mandate by tracing funds and making observations about badges of a sham trust.

The court dismissed the motion to strike, finding the Receiver acted within its court-ordered investigatory powers and did not usurp the court's role.

The court granted the applicants' motion to terminate funding, holding that the respondents had exhausted their appeals, were now judgment debtors, and failed to meet the test for funding from frozen assets, as they had not provided full disclosure and the funds belonged to their creditors.

The plaintiffs sought penalties against the defendants for their continued contempt of court orders requiring them to provide an accounting of $9,000,000 in allegedly defrauded funds, information about luxury automobiles, contact information, and disclosure.

The court found that the defendants had not purged their contempt and provided implausible explanations for their non-compliance.

As a penalty, the court granted judgment against the defendants, striking their ability to defend the action, and awarded substantial indemnity costs to the plaintiffs.

The appellant lawyer appealed a decision of the Law Society Tribunal Appeal Division, which upheld a hearing panel's order that she pay $150,000 in costs for a discipline proceeding.

The lawyer had entered into a settlement agreement where the Law Society agreed to forgo costs in exchange for her not contesting deemed admissions of professional misconduct.

However, the lawyer subsequently attempted to rescind the agreement and moved to withdraw her admissions.

The Divisional Court dismissed the appeal, finding that the lawyer's actions constituted a repudiation of the settlement agreement, which deprived the Law Society of the substantial benefit of its bargain and relieved it of its obligation to forgo costs.

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.

Following the dismissal of the plaintiffs' motion for a Mareva injunction in a complex commercial fraud action, the court determined the costs payable to the successful defendants.

The court awarded partial indemnity costs to one group of defendants, finding that while a strong prima facie case of fraud was established against them, the injunction was denied on other grounds.

The court awarded substantial indemnity costs to two other groups of defendants against whom the plaintiffs failed to establish a strong prima facie case of fraud.

The court also addressed costs related to advance funding applications under the Canadian Business Corporations Act.