Kris Borg-Olivier

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.

The applicants, former officers of the respondent corporation, brought applications for advance funding of their legal fees to defend an action alleging complex commercial fraud.

The applications were brought pursuant to the corporation's Unanimous Shareholders Agreement and section 124 of the Canada Business Corporations Act.

The court applied the strong prima facie case test to determine if advance funding should be denied due to bad faith.

The court dismissed the application of the former CEO, finding a strong prima facie case of fraud had been established against him in a related Mareva injunction motion.

The court granted the application of the former COO, as the evidence did not establish a strong prima facie case of fraud against him.

The plaintiffs brought a motion for a Mareva injunction (asset freezing order) against several defendants, alleging a complex commercial fraud involving misappropriated funds, illicit acquisition fees, and kickbacks across multiple real estate development projects.

While the court found a strong prima facie case of fraud against the defendant Lee regarding his receipt of concealed acquisition fees, it found no such case against the other responding defendants.

Ultimately, the court dismissed the motion against all defendants because the plaintiffs failed to establish a real risk of asset dissipation, irreparable harm, or that the balance of convenience favoured granting the extraordinary remedy.

The plaintiff, Westmount-Keele Limited, purchased a hotel from the defendants, Royal Host Hotels and Resorts Real Estate Investment Trust and North York (Keele St.) Purchaseco Inc., with an agreement to reimburse Royal Host for up to $2 million in hotel closure costs.

Westmount's obligation was secured by a mortgage, later replaced by $2.2 million paid into court.

The central issue was to determine Royal Host's entitlement from these funds.

The court found Royal Host's initial claim of over $2.1 million in closing costs to be largely unsubstantiated, particularly a fictitious franchise termination fee.

The court determined that Royal Host was entitled to $638,201 plus prejudgment interest at a blended rate of 1.72%, significantly less than claimed, and Westmount was entitled to the return of the remaining funds.

The court also found Royal Host's conduct contributed to the delay in proceedings.

The appellant appealed a summary judgment decision dismissing its claim for economic damages.

The appellant argued that the respondents breached their obligation to properly quantify post-closing costs, which impeded the appellant's ability to obtain financing for phase II of a development.

The Court of Appeal found that the motion judge properly addressed the appellant's submissions and dismissed the appeal with costs.

Bombardier Transportation Canada Inc. (BTC) sought an interlocutory injunction to prevent Metrolinx (MTX) from terminating a $770 million contract for light rail vehicles (LRVs) due to alleged material default, pending the completion of a mandatory dispute resolution process.

BTC also sought to remove the Engineer, Jeffrey Rankin, for alleged partiality.

The court found that the contract's dispute resolution process applied to MTX's right to terminate for material default.

Applying the RJR-MacDonald test, the court determined there was a serious issue to be tried, BTC would suffer irreparable harm (loss of reputation, future business, supply chain disruption, and employee expertise), and the balance of convenience favored maintaining the status quo.

The court granted the interlocutory injunction, prohibiting MTX from terminating the contract until the Dispute Review Board (DRB) ruled on the default, and ordered the injunction to be nunc pro tunc to stay cure periods.

The issue of the Engineer's impartiality was referred to the DRB.

The court issued a costs endorsement following the dismissal of the main action.

West Face Capital Inc. was awarded substantial indemnity costs of $1,239,965 due to the plaintiff's unfounded allegations of soliciting and misusing confidential information, which impugned West Face's integrity and honesty.

Brandon Moyse was awarded partial indemnity costs of $339,500.18, despite also facing integrity-damaging allegations, because he had destroyed evidence at the outset of the litigation, albeit without intent to destroy relevant evidence.

The court found the plaintiff's allegations against West Face and Moyse to be serious and unsubstantiated, justifying higher costs for West Face, while Moyse's conduct warranted a reduction to partial indemnity.

The plaintiff, Catalyst Capital Group Inc., brought an action against Brandon Moyse and West Face Capital Inc. for alleged misuse of confidential information regarding WIND Mobile Inc. and spoliation of documents.

Catalyst claimed Moyse, a former analyst, provided confidential information to West Face, which West Face then used to acquire an interest in WIND.

The court assessed the evidence, including witness credibility, and found no direct evidence of information transfer.

The court also examined the elements of breach of confidence and spoliation.

The action was dismissed in its entirety, with the defendants entitled to costs.

This costs endorsement follows a judgment declaring Nuspor Investments Partnership as the owner of Toronto Maple Leafs season tickets held by the Estate of Chaim Neuberger.

Nuspor sought substantial indemnity costs, citing settlement offers.

The court awarded partial indemnity costs, finding that the Estate was entitled to have the ownership issue determined and the Estate Trustee acted reasonably in not accepting the offers.

The court further ruled that costs should be paid by the Estate, not personally by one of the Estate Trustees, as the underlying issue was attributable to the testator's lack of clarity regarding asset ownership.

The applicant partnership sought a declaration that two Toronto Maple Leafs season tickets, registered in the name of a deceased partner, were held in trust for the partnership.

The court found that the tickets were originally offered to the partners and placed in the deceased's name because they could not be registered to the partnership.

The partnership paid for the tickets and claimed them as a business expense.

The court concluded that the evidence established the essential elements of both a bare trust and a purchase money resulting trust, and ordered the estate to transfer the tickets to the partnership.

The plaintiff sought an adjournment of a motion brought by non-parties to vary an interim Mareva injunction.

The adjournment was requested to allow the plaintiff to compel answers to undertakings and refusals from an affiant whose affidavit supported the motion to vary.

The court granted the adjournment, applying established principles for judicial discretion in granting adjournments, emphasizing the overall objective of a just determination on the merits and the need for the plaintiff to adequately prepare its opposition.

The applicants (Representative Counsel for non-unionized employees and retirees, USW Locals 1005 and 8782, and the City of Hamilton) sought "for counsel's eyes only" disclosure of a confidential settlement agreement between United States Steel Corporation (USS), U.S. Steel Canada Inc. (USSC), and the Government of Canada.

The motion was brought in the context of CCAA proceedings, with applicants arguing procedural fairness and a minor exemption from settlement privilege.

The court dismissed the motion, finding that the applicants failed to demonstrate how they would be prejudiced without access to the specific details of the undertakings in the agreement, or how the information was material to their claims or negotiations.

The court emphasized that there is no exemption from settlement privilege for the purpose of reviewing a document to determine if a public interest exists that would displace the privilege.

In the CCAA proceedings of U.S. Steel Canada Inc., its parent company, United States Steel Corporation, sought approval of several proofs of claim totaling over $2 billion.

Various stakeholders objected, arguing that the intercompany loans should be re-characterized as 'equity claims' under the CCAA and that the security granted for certain advances was void as a fraudulent preference or unenforceable for lack of consideration.

The court rejected the objections, finding that the parent company had a reasonable expectation of repayment when the advances were made, and that the security was validly granted for fresh consideration and did not constitute a fraudulent preference.

The claims were confirmed as debt claims.

Following a successful motion by non-parties to set aside an ex parte Anton Piller order, the court addressed the issue of costs.

The successful non-parties sought substantial indemnity costs, arguing that the order should never have been obtained and that their legal expenses were reasonable given the urgency and intrusiveness of the order.

The applicants opposed substantial indemnity costs and argued that the matter had been overworked and that no misconduct justified enhanced costs.

The court held that although the Anton Piller order had been set aside, there was no intentional or improper conduct in obtaining the ex parte order that would justify substantial indemnity costs.

Costs were therefore awarded on a partial indemnity basis.

Non‑party individuals brought a motion to set aside an Anton Piller order obtained ex parte in a dispute over an alleged breach of a referral agreement between law firms.

The court reviewed the stringent requirements for Anton Piller orders and Norwich orders.

Although there was some evidence suggesting a possible breach of contract by the respondents to the underlying agreement, the evidence did not establish the extremely strong prima facie case, serious damage, or real risk of destruction of evidence required for such extraordinary relief.

The court also found insufficient grounds for a Norwich order against the non‑party individuals.

The Anton Piller order was therefore set aside in its entirety and seized materials were ordered returned.

The appellant appealed a decision denying certification of a class proceeding.

The appellant sought to proceed with the appeal based on a proposed Amended Statement of Claim that was not before the motions judge.

The Divisional Court held that it could only review the decision based on the original record and was not the proper forum for a first-instance decision on certification based on new pleadings.

Given the appellant's intention to seek an amendment regardless of the appeal's outcome, the appeal was deemed moot and stayed, with directions for the appellant to bring a motion to amend and certify in the court below.

The applicants, three chartered accountants, sought judicial review of decisions by the Discipline Committee and Appeal Committee of the Institute of Chartered Accountants of Ontario finding them guilty of professional misconduct in relation to the 1997 audit of Livent Inc. The Divisional Court granted the applications in part.

The Court quashed the convictions on charges 1(i) and 1(iii) due to a breach of procedural fairness, as the applicants were convicted based on their treatment of a 'Put' agreement which was not part of the charges or the case they had to meet.

The Court also quashed the convictions on charges 1(iv) and 2(viii) as unreasonable.

However, the Court upheld the convictions on charges 2(ii), (iii), (iv), and (v), finding it was reasonable for the committees to conclude the auditors failed to exercise appropriate professional scepticism.

Finally, the Court quashed the costs award, holding that the Discipline Committee lacked jurisdiction to order costs because its by-law conflicted with the requirements of the Statutory Powers Procedure Act.