Justin R. Fogarty

The plaintiff bank brought a motion for summary judgment to enforce personal guarantees signed by the defendants for loans made to a now-bankrupt corporate borrower.

Three of the defendants brought competing summary judgment motions seeking to discharge their guarantees, arguing they lacked independent legal advice and that the bank acted in a commercially unreasonable manner.

The court granted the plaintiff's motion and dismissed the defendants' motions, finding the guarantees valid and enforceable.

The court held that the lack of independent legal advice did not invalidate the guarantees absent unconscionability or misrepresentation, and the express terms of the guarantees precluded the commercially unreasonable realization defence.

The defendants' counterclaims were also dismissed.

In the context of a receivership, representative counsel for the investors of Redstone Capital Corporation brought a motion for leave to deliver a new affidavit in an ongoing substantive consolidation hearing.

The hearing had already commenced and was adjourned pending this motion.

The court applied the test under Rule 39.02(2) of the Rules of Civil Procedure and found that the proposed evidence, which detailed an individual investor's motivation for investing, was not relevant to the test for substantive consolidation.

The motion for leave was dismissed.

Following the dismissal of the Estate's appeal of the Receiver's disallowance of its proof of claim, the successful parties sought costs.

The court awarded costs to the Receiver on a substantial indemnity scale and to the Applicants on a partial indemnity scale.

The court also held the trustee of the Estate personally liable for the costs award, jointly and severally with the Estate, as the trustee initiated the unsuccessful appeal and there was no evidence of estate assets to satisfy the award.

The applicants sought the appointment of an Inspector to investigate several corporations, including a not-for-profit foundation, under the OBCA and CNPCA.

The respondents moved to strike the appointment regarding the foundation, arguing the applicants lacked standing.

The court found the foundation was an affiliate of the OBCA corporations and that the applicants were debt obligation holders under the CNPCA, dismissing the motion to strike.

The media sought to lift a publication ban on the proceedings and the Inspector's reports.

The court lifted the ban on the proceedings but ordered the Inspector to edit its reports to remove conclusions of wrongdoing before they could be published.

Investors and shareholders brought an ex parte application seeking the appointment of an inspector under s. 161 of the Ontario Business Corporations Act and s. 229 of the Canada Business Corporations Act to investigate the affairs of several corporations controlled by the principal respondent.

The applicants alleged that funds invested in real estate developments and investment pools were diverted among affiliated corporations and used for unrelated purposes, including renovations of a Florida property.

The court declined to grant an Anton Piller or preservation order due to insufficient evidence that documents would be destroyed or concealed.

However, the court found a prima facie case that corporate funds had been diverted and that the affairs of certain corporations may have been conducted in a manner oppressive or unfairly prejudicial to security holders.

An interim order was granted appointing an inspector to investigate specific corporations pending the return of the application.