Norman J. Emblem

In a CCAA proceeding, the Applicants (Hollinger Inc. et al.) sought approval of settlement agreements with their former auditors (KPMG) and lawyers (Torys).

The Non-Settling Defendants, including Conrad Black and David Radler, opposed the settlements, arguing the court lacked jurisdiction and that the included third-party releases and bar orders would deprive them of procedural rights to discovery.

The court held it had jurisdiction under the CCAA to manage litigation as a corporate asset.

The court approved the Pierringer-style settlements, finding that the procedural rights of the Non-Settling Defendants could be adequately protected through active case management and the application of the principle of proportionality in discovery.

The appellants appealed a sealing order that redacted the amounts to be paid under two proposed settlement agreements in a CCAA proceeding.

The appellants argued the sealing order unjustifiably infringed the open court principle.

The Court of Appeal dismissed the appeal, finding that litigation settlement privilege applied to the settlement agreements until approved by the court.

The court held that the sealing order was a minimal intrusion on the open court principle, the requirement to sign a confidentiality agreement did not impose an undue burden, and the respondents did not waive privilege by complying with the court order.

The Special Committee of Financial Models Company Inc. applied for orders under sections 104(1) and 127(1) of the Securities Act to cease-trade a take-over bid by a significant shareholder, Katotakis.

The Special Committee alleged the bid did not comply with Part XX of the Act and was contrary to the public interest because it relied on locked-up shares to meet minority approval thresholds for a follow-on transaction and improperly relied on a valuation exemption.

The Ontario Securities Commission dismissed the application, finding no technical breach of Rule 61-501 and no abuse of the capital markets, as the transaction was not artificial and did not defeat the reasonable expectations of shareholders given the prior disclosure of the shareholder agreement.

The Ontario Securities Commission (OSC) investigated Philip Services Corporation for inadequate financial disclosures.

During the investigation, the OSC compelled documents and testimony from Deloitte & Touche LLP, Philip's auditors.

The OSC subsequently commenced proceedings against Philip and its officers and ordered the disclosure of the compelled material from Deloitte to Philip, finding it in the public interest to do so.

Deloitte appealed the disclosure order.

The Supreme Court of Canada dismissed the appeal, holding that the OSC's decision to order disclosure was reasonable.

The OSC properly applied the Stinchcombe relevance standard and balanced Deloitte's privacy interests against the respondents' right to make full answer and defence.

The appeal arose from a trial judgment rescinding an agreement of purchase and sale for vacant land marketed as a residential building lot when the vendors knew that obtaining a building permit was uncertain at best.

The Court of Appeal upheld the trial judge's findings that the purchasers reasonably relied on misrepresentations that the property was a building lot and that obtaining a permit would not be a problem.

The court rejected the argument that the statements concerned only a future event, holding that the representation related to an existing fact about the nature of the property.

Leave to appeal costs was granted on the cross-appeal, but the costs appeal was dismissed and the trial costs award on a party-and-party basis was left undisturbed.

The appellant appealed the dismissal of its motion seeking to strike an action brought by a debenture trustee and assignee arising from an alleged failure to perform duties undertaken during a corporate restructuring and bankruptcy context.

The court held it had not been demonstrated that the respondent could not succeed at trial on the issue of capacity, accepting that the floating charge over the debtor's assets, including choses in action, could crystallize on bankruptcy and support the trustee's standing.

Assuming without deciding that leave was required to sue the appellant in its role as monitor, the absence of leave was treated as an irregularity and leave was granted nunc pro tunc because there was a proper basis for the claim and no demonstrated prejudice.

The argument that individual debentureholders had to be added as parties was also rejected, and the appeal was dismissed with costs.