Leslie Dizgun

This is a costs endorsement following a motion by Zurich Insurance Company Ltd. for the production of a Crown Disclosure Brief from the defendants Vasos Georgiou and John Aquino.

The original motion was adjourned sine die after the Attorney General provided key undertakings.

The parties agreed on the quantum of costs ($20,000) but not on entitlement.

The court, exercising its discretion under the Courts of Justice Act and Rule 57, decided that no costs should be awarded to any party.

The decision considered the novelty of the issues, the timing of the Attorney General's undertakings, and the fact that the outcome was not primarily based on the arguments presented by the defendants seeking costs.

The plaintiff in a civil rescission action sought an order compelling the defendants to produce the Crown disclosure brief they received in related criminal proceedings concerning the same alleged fraud in a hospital procurement process.

The Attorney General opposed immediate production, arguing it could taint witnesses before they testified in the criminal trial.

The court balanced the interests under the Wagg framework and adjourned the motion sine die, accepting the Attorney General's undertaking to conduct a Wagg review and produce the documents within eight weeks after a verdict in the criminal proceedings.

This appeal addressed the standard of proof for establishing the existence of an arbitration agreement when seeking a stay of court proceedings under the International Commercial Arbitration Act, 2017.

The appellant argued for a balance of probabilities standard, while the motion judge applied an "arguable case" standard.

The Court of Appeal affirmed that, consistent with the Supreme Court of Canada's decision in Peace River Hydro Partners v. Petrowest Corp., the "arguable case" standard applies to the technical prerequisites for a mandatory stay, including the existence of an arbitration agreement.

The Court found no palpable and overriding error in the motion judge's conclusion that an arbitration agreement was arguably in existence based on the evidence.

The appeal was dismissed, and the stay of proceedings in favour of arbitration was upheld.

This endorsement addresses the issue of costs following a trial where Arctic Spas Oakville Inc. (ASOI) was awarded damages against Blue Falls Manufacturing Ltd. The court awarded ASOI partial indemnity costs of $450,000, all inclusive, from Blue Falls.

The court denied ASOI's claim for substantial indemnity costs, finding the defendants' conduct, while lengthening the proceeding, did not meet the "reprehensible" standard.

The court also rejected Blue Falls' argument that Rule 49.10(2) (offer to settle) applied to limit ASOI's costs, determining that ASOI's recovery at trial, including pre-judgment interest and reasonable costs up to the offer date, exceeded the defendants' all-inclusive offer.

Costs were not awarded between the other plaintiffs and defendants due to evenly divided success.

In a business divorce arising from the termination of a decade-long hot tub dealership arrangement, the court rejected claims of civil conspiracy, fraudulent misrepresentation, franchise liability, bad faith, and breach of restrictive covenant arising from a shareholder buyout and subsequent supply termination.

The court held that the governing relationship was an indefinite-term dealer agreement carrying an implied obligation of termination on reasonable notice, and that the dealer was not contractually bound to sell the manufacturer’s products exclusively.

Allegations that the dealer fundamentally breached the agreement by selling competing products and filing false warranty claims were not proven.

Applying distributorship reasonable notice principles, the court found that six months’ notice was required and awarded the dealer damages of $565,365 plus pre- and post-judgment interest.

All remaining claims and the counterclaim were dismissed.

During a trial regarding allegedly false warranty claims, the court made two evidentiary rulings.

First, the court found the plaintiffs breached the rule in Browne v. Dunn by failing to cross-examine a defence witness on evidence later adduced from customer witnesses to impeach him.

The court admitted the evidence but reserved the right to draw an adverse inference or adjust its weight.

Second, the court granted the defendants leave under Rule 53.08 to use an undisclosed document to cross-examine a plaintiff's witness, on the condition that the defendants recall their own witness to be cross-examined on the document.

During a trial, the defendants sought an order under Rule 53.02 of the Rules of Civil Procedure to tender the evidence of a software company representative by affidavit.

The plaintiffs objected, arguing the evidence was contentious and required cross-examination.

The court dismissed the request, finding the defendants failed to establish the evidence was uncontentious and noting the witness was available to testify virtually.

During a trial, the plaintiffs sought to admit an Industry Canada document into evidence under the public documents exception to the hearsay rule.

The defendants objected, arguing the document did not fit the statutory or common law categories of public documents.

The court dismissed the objection and admitted the document, finding it satisfied the four-part test for the public documents exception as it was prepared by a public official discharging a public duty, intended as a permanent record, and available for public inspection.

This endorsement addresses the costs of a successful appeal and an original motion.

The plaintiff sought costs on a partial indemnity basis for the appeal and a substantial indemnity basis for the motion.

The defendants argued for costs to be reserved to the trial judge or payable in the cause, citing impecuniosity.

The court awarded the plaintiff costs for both the appeal ($12,500 on a partial indemnity basis) and the original motion ($17,500 on a partial indemnity basis), but ordered them payable after the trial has concluded, in any event of the cause.

The court declined to award substantial indemnity costs for the motion, finding the defendants' allegedly irrelevant evidence did not warrant a higher scale.

A court-appointed receiver sought directions regarding the distribution of proceeds from the sale of a property.

The Applicants, who held a second mortgage, claimed priority over the alleged first mortgagee, Pillar Capital Corporation, arguing that the first mortgage had been paid in full and therefore the subsequent assignment to Pillar Capital was a nullity.

The court found that the first mortgage was indeed paid in full on August 15, 2014, and there was no contemporaneous agreement to assign it.

Consequently, the May 5, 2015, assignment of charge to Pillar Capital was deemed a nullity.

The Applicants' claim for priority was upheld, and the Receiver was directed to pay the remaining amount due on the second mortgage from the sale proceeds.

Claims by Pillar Capital for property management fees, maintenance fees, and certain legal fees were rejected due to lack of proof and contractual basis.

The plaintiff, a law firm, moved for leave to amend its statement of claim to add a defendant and claims for a certificate of pending litigation (CPL) regarding a property.

The CPL was sought on the basis that a second mortgage granted by the defendant to her brother-in-law was a fraudulent conveyance or an unjust preference.

The court granted leave to amend the claim but denied the motion for a CPL, finding that the plaintiff failed to demonstrate a "high probability" of fraudulent intent or unjust preference, as required when judgment has not yet been obtained.

The court found sufficient consideration for the mortgage and no clear evidence of insolvency or intent to defraud.

Following the release of the appeal decision, the parties disagreed on the settlement of the formal order regarding whether it should specify the date of termination of the commercial lease.

The Court of Appeal held that the omission of the termination date could be rectified under Rule 59.06 and determined by the remaining justices under s. 123(3) of the Courts of Justice Act.

The Court declared the lease was effectively terminated on November 19, 2001, noting this does not inhibit the trial judge's discretion on relief from forfeiture.

The landlord appealed the dismissal of its application for a declaration that a commercial lease was terminated because the tenant sublet the premises without consent.

The Court of Appeal allowed the appeal, finding that the landlord's prior consents to subleases did not authorize the new sublease.

The Court held that section 20(7) of the Commercial Tenancies Act does not preclude resort to the court's equitable jurisdiction to grant relief from forfeiture under section 98 of the Courts of Justice Act.

The issue of whether the tenant was entitled to relief from forfeiture was referred for trial.