David D. Conklin

The applicant sought a declaration regarding the interpretation of a unanimous shareholders agreement for a family-owned steel distribution business.

The applicant argued the agreement required the board of directors to consist of the registered holders of voting shares, while the respondent argued the board was to be elected by a resolution of those shareholders.

Applying the principles of contractual interpretation, the court found the ordinary and grammatical meaning of the provision, read in context with the surrounding circumstances, supported the respondent's interpretation.

The application was dismissed.

The defendants moved to amend their statement of defence to plead issue estoppel and abuse of process based on a prior US arbitration award, and to dismiss the plaintiff's action on those grounds.

The plaintiff cross-moved to add the defendants' parent company as a party.

The court granted the defendants' motion to amend and dismissed the plaintiff's breach of contract and negligence claims, finding they were barred by issue estoppel as the arbitrator had already decided the core factual issues against the plaintiff.

However, the court refused to dismiss the plaintiff's breach of fiduciary duty claims, finding those issues were not determined in the arbitration.

The plaintiff's motion to add the parent company was dismissed as premature and legally untenable.

The appellants appealed a trial judgment awarding the respondents damages for oppression.

The trial judge found that the parties had entered into an oral agreement and a shareholders' agreement for the respondents to receive a 20 percent equity share in a new car dealership, which the appellants breached by excluding the respondents and obtaining the dealership through a different corporate entity.

The Divisional Court dismissed the appeal, finding no palpable and overriding error or extricable error of law in the trial judge's conclusions regarding the existence of the agreements, the breach, the respondents' standing as complainants under the Business Corporations Act, and the finding of oppression.

The plaintiffs brought a class action against mutual fund managers for allowing certain investors to engage in frequent short-term trading (market timing/time zone arbitrage), which allegedly diluted the returns of long-term unitholders.

The court found that the defendants owed a duty of care to the funds and breached the standard of care by failing to prevent, and actively facilitating, frequent short-term trading contrary to their prospectuses.

However, the court dismissed the claim for breach of fiduciary duty, finding no bad faith or dishonesty.

The matter was directed to proceed to a damages trial.

The applicant, Centerra Gold Inc., sought a permanent injunction against its former director, Tengiz Bolturuk, for breaching his fiduciary duties and duty of confidentiality.

Bolturuk, nominated by the Kyrgyz Republic's state-owned corporation, was found to have secretly orchestrated the takeover of Centerra's Kumtor gold mine by the Kyrgyz Republic while still a director, disclosing confidential information and subsequently becoming the External Manager of the seized mine.

The court found that Bolturuk's actions constituted a clear usurpation of corporate opportunity and a flagrant breach of his duties, rejecting his justifications.

The court affirmed its jurisdiction over a former director for breaches stemming from their position and found damages to be an inadequate remedy.

Bolturuk's cross-motion to set aside an interim injunction was dismissed.

The permanent injunction was granted, and substantial indemnity costs were awarded against Bolturuk.

The plaintiffs brought a motion to approve a $125 million settlement in a class action against a major bank for secondary market misrepresentation related to subprime mortgage investments.

The plaintiffs also sought approval of class counsel fees of $37.5 million, representing a 30% contingency fee.

The court found the settlement to be fair and reasonable, noting the significant litigation risks the plaintiffs faced, including a due diligence defence and challenges to damages calculations.

The court also approved the requested counsel fees, emphasizing the substantial risk undertaken by class counsel over 14 years of litigation and the excellent result achieved for the class.

The plaintiffs in a class action against Kew Media Group Inc. and several individual defendants sought consent orders to streamline the litigation.

The corporate defendant was in insolvency proceedings with a stay in place.

The plaintiffs agreed to discontinue the action against five individual defendants, hold the case in abeyance against two others, and toll applicable limitation periods.

The court granted the consent orders for discontinuance, leave to proceed under the Securities Act, and certification under the Class Proceedings Act against the remaining individual defendants, finding the agreements made the case more efficient without adversely affecting class members.

The court issued a file direction/order in a long-standing class action concerning alleged market timing by mutual funds.

The order set a peremptory trial date for January 10, 2022, for a maximum 40-day trial, conditional on the parties approving a detailed Trial Agenda by September 30, 2021.

The judge emphasized the need for the action to be genuinely ready for trial and for the Trial Agenda to be strictly adhered to, subject to judicial leave for variations.

The plaintiffs in a proposed securities class action brought a motion for approval of a third-party Adverse Costs Indemnity and Funding Agreement with Camac Partners LLC.

The agreement provided up to $800,000 in adverse costs indemnity and $125,000 in disbursement funding in exchange for 10% of the net recovery, capped at $4 million.

The defendants did not oppose the motion.

The court approved the agreement, finding its terms fair, reasonable, and necessary to provide access to justice for the plaintiffs and the proposed class.

This action arose from a dispute between two individuals, Bateni and Jamali, concerning the acquisition and ownership of a Chrysler Canada car dealership.

Bateni claimed damages for breach of contract, breach of fiduciary duty, diversion of corporate opportunities, oppression under the Business Corporations Act, and wrongful dismissal.

The court found that an oral agreement existed between Bateni and Jamali for Bateni to acquire a 20% ownership interest in a new dealership (Caledon Hills) through "sweat equity" and serve as general manager.

Jamali breached this agreement by causing the initial dealership application (Caledon Hills LOI) to be rescinded due to an ownership dispute with a third partner (Totonchian), and then unilaterally applying for the dealership under a new entity (Caledon Chrysler) without Bateni.

The court also found Jamali's actions to be oppressive and unfairly prejudicial to Bateni's interests.

Furthermore, Bateni was found to have been wrongfully dismissed from Caledon Chrysler.

The applicants sought a declaration that the respondent's proposed mandatory conversion of outstanding convertible preferred shares would contravene its Articles of Continuance.

The central issue was the interpretation of the "Liquidity Condition" within the Mandatory Conversion Provision, specifically whether the average daily trading volume should be restricted to the Toronto Stock Exchange (TSX) alone or include all trading reported in the TSX Composite index (which aggregates trading from TSX and alternative trading platforms).

The court, applying principles of statutory and contractual interpretation, found that the Liquidity Condition should include all transactions reported in the TSX Composite, thereby dismissing the applicants' request for a declaration and their related oppression claim.

The Court addressed three securities class action appeals on whether limitation periods for statutory secondary-market misrepresentation claims are suspended before leave is granted, and on related nunc pro tunc, special circumstances, leave-threshold, and certification issues.

The CIBC and IMAX appeals were dismissed, while the Celestica appeal was allowed.

The plaintiffs sought leave under s. 138.8 of the Securities Act and certification under the Class Proceedings Act for a proposed securities class action.

The plaintiffs alleged that the defendants misrepresented the company's ability to maintain its dividend, causing shareholders and debenture-holders to sustain losses when the dividend was cut.

The court dismissed the leave motion, finding no reasonable possibility that the secondary market misrepresentation claims would succeed at trial, as the defendants' statements were based on a genuine belief in their growth strategy at the time.

The court also dismissed the certification motion, holding that a class proceeding was not the preferable procedure for the remaining common law negligent misrepresentation claims, which require individualized proof of reliance.

Apotex's generic version of a patented drug was kept out of the market for two years by Eli Lilly using the Patented Medicines (Notice of Compliance) Regulations.

After the patent was invalidated, Apotex sued for unjust enrichment, seeking disgorgement of Eli Lilly's monopolistic profits.

The Court of Appeal upheld the Divisional Court's decision to strike the claim, finding that Apotex suffered no corresponding deprivation of the monopolistic profits because it would never have earned them.

Following a major appellate decision regarding the tolling of limitation periods in securities class actions, the successful parties in two of the appeals sought their costs.

The opposing parties argued for reduced costs on the basis of public interest, over-lawyering, and the fact that the court had overruled its own prior jurisprudence.

The Court of Appeal rejected these arguments, finding the claimed amounts to be fair and reasonable given the complexity and significance of the proceedings.

Costs of $151,250 and $100,000 were awarded to the respective successful parties on a partial indemnity scale.

In three related securities class action appeals, the court reconsidered whether a statutory secondary-market misrepresentation claim under s. 138.3 of the Securities Act is time-barred unless leave is obtained within the s. 138.14 limitation period.

The court overruled Timminco and held that, for purposes of s. 28 of the Class Proceedings Act, 1992, the statutory claim is asserted when the representative plaintiff pleads the statutory cause of action, the supporting facts, and an intention to seek leave within a timely commenced class proceeding.

The court also upheld the motion judge's interpretation of the s. 138.8 leave standard as screening out hopeless claims, while holding that the Green certification decision erred in failing to consider certifying common negligent misrepresentation issues other than reliance.

The plaintiffs' appeal in Green was allowed in part and the defendants' appeals in Silver and Celestica were dismissed.

The appellants appealed a decision dismissing their motion to strike a portion of the respondent's amended claim seeking disgorgement of profits based on unjust enrichment.

The respondent, a generic drug manufacturer, argued it had an independent cause of action outside the Patented Medicines (Notice of Compliance) Regulations due to the invalidity of the appellants' patent and alleged false representations.

The Divisional Court allowed the appeal, holding that the Patent Regulations constitute a complete code and leave no room for stand-alone equitable remedies like unjust enrichment in these circumstances.

The claim was struck for disclosing no reasonable cause of action.

The appellant appealed a partial summary judgment dismissing its unjust enrichment claim for disgorgement of the respondents' profits.

The appellant argued that if a settlement agreement between the parties was found unenforceable under section 8 of the Patented Medicines (Notice of Compliance) Regulations, it should be entitled to disgorgement.

The Court of Appeal dismissed the appeal, finding that the appellant's deprivation could not exceed damages calculated under section 8, which do not include disgorgement.

Furthermore, the regulatory scheme provided a valid juristic reason for the respondents' profits, precluding the unjust enrichment claim.

Following earlier reasons dismissing most applicants’ requests for interim advancement of legal expenses from a corporation, the court addressed the costs of the applications.

The respondent corporation sought substantial indemnity costs exceeding $559,000 or alternatively partial indemnity costs, while the applicants argued that costs should remain in the cause of the underlying indemnity issue.

The court held that although the respondent was largely successful, payment of costs should be contingent on the outcome of the trial determining entitlement to indemnity.

The court fixed partial indemnity costs of $25,000 for a related motion and $165,000 for the applications, subject to specific allocations among applicants and exceptions for one successful applicant and another who withdrew participation.

The appellant former directors and officers of Look Communications Inc. sought advance funding for their legal costs to defend an action brought against them by the corporation for breach of fiduciary duty.

The corporation resisted the claims under s. 124(4) of the Canada Business Corporations Act, arguing the appellants had not acted in good faith.

The application judge refused advance funding, finding the corporation had established a strong prima facie case of bad faith regarding equity cancellation payments and legal retainers.

The Court of Appeal dismissed the appeal, confirming that s. 124(4) applies to actions brought by the corporation and that the strong prima facie case standard is the appropriate test for denying advance funding.