Michael E. Barrack

The moving parties brought motions to quash appeals from an order authorizing a court-appointed Sales Officer to enter into agreements to separate joint venture interests in real estate projects as part of a corporate wind-up.

The Court of Appeal granted the motions to quash, finding that the order was interlocutory because it was a step in implementing the wind-up and sale process, not a final determination of substantive rights.

Furthermore, the Court held that the order was made pursuant to the Business Corporations Act, meaning any appeal lies to the Divisional Court.

The plaintiff in a complex family trust dispute brought motions on the eve of trial for further documentary production, further examinations for discovery, and leave to amend her Statement of Claim.

The motions sought to introduce new allegations that the defendants covered up and settled claims of sexual misconduct against the family patriarch, Frank Stronach.

The court dismissed both motions, finding no evidence that the requested documents existed, that the new allegations were irrelevant to the pleaded claims of corporate mismanagement, and that amending the pleadings three weeks before a scheduled seven-week trial would cause non-compensable prejudice and delay.

The court addressed two pretrial motions: one seeking to stay a counterclaim based on abuse of process due to delayed disclosure of a cooperation agreement, and another seeking leave for third-party discovery.

The motion to stay was dismissed, as the immediate disclosure rule for settlement agreements was found not to apply to agreements with non-parties.

The motion for third-party discovery was granted, with the court finding the non-party's evidence critical and that the cooperation agreement constituted a constructive refusal to provide information, making a pretrial examination necessary for trial fairness.

The applicant sought judicial review to declare provisions of O. Reg 282/98 under the Assessment Act invalid.

The applicant argued that the regulation's formula for valuing pipelines resulted in an assessed value greater than current value, which it claimed was inconsistent with the purpose of the Assessment Act.

The Divisional Court dismissed the application, finding that the purpose of the Assessment Act is to provide for the assessment and taxation of property, not strictly to assess based on current value.

Furthermore, the Court held that the Act expressly authorizes the Minister to make regulations providing an alternate method for valuing pipelines.

The applicant sought to overturn an arbitrator's decision assuming jurisdiction over a business dispute between co-tenants of a real estate development project.

The parties were deadlocked on whether the project should include a hotel component.

The arbitrator found he had jurisdiction under a broad arbitration clause.

The Superior Court of Justice held that the dispute was a non-legal business decision that did not arise under the agreement, as the agreement required unanimous decision-making and did not provide a standard of review for this type of dispute.

The court set aside the arbitrator's decision, finding he lacked jurisdiction.

The defendants in two related actions sought orders to compel the plaintiffs, Andrew Stronach and Selena Stronach, to undergo medical examinations to assess their mental capacities for the purpose of determining if litigation guardians were required.

The court dismissed the motion against Selena Stronach, finding insufficient evidence to rebut the presumption of capacity.

The motion against Andrew Stronach was dismissed without prejudice, as the court found it premature and suggested other discovery avenues should be pursued first.

The court also declined to order production of video recordings of Andrew's examination for discovery.

The appellants appealed a motion judge's decision striking out portions of their statements of defence.

The impugned pleadings referred to documents and communications from a judicial mediation, which the motion judge found were prima facie protected by settlement privilege.

The Divisional Court dismissed the appeal, holding that the motion judge correctly applied Rule 25.11 of the Rules of Civil Procedure.

The court affirmed that the respondents had not waived settlement privilege and that the justice of the case did not require an exception to allow the appellants to plead the privileged information to defend against breach of fiduciary duty claims.

The moving parties sought leave to appeal from the decision of Cavanagh J. dated August 26, 2021.

The Divisional Court granted the motions for leave to appeal and awarded costs in the agreed amount of $20,000 payable by the responding parties.

A case management teleconference was scheduled to settle a schedule for the exchange of appeal materials and to schedule an expedited appeal date.

The plaintiffs, Andrew and Selena Stronach, brought motions to strike out portions of the defendants' Fresh as Amended Statements of Defence under Rule 25.11 of the Rules of Civil Procedure.

The plaintiffs argued that the impugned pleadings improperly referenced documents and communications that were subject to settlement privilege arising from a confidential judicial mediation.

The defendants argued that the plaintiffs had waived privilege or that an exception applied based on the justice of the case.

The court found that the mediation was subject to settlement privilege, the plaintiffs had not waived the privilege, and no exception applied.

The court granted the motions to strike the pleadings relating to the mediation.

The court also struck out portions of one defendant's pleading as scandalous, but dismissed a motion to require another defendant to reinstate a withdrawn admission.

The plaintiffs, Andrew and Selena Stronach, sought leave to amend their respective statements of claim in two related actions concerning the management of the Stronach family business and trusts.

The defendants, including Belinda Stronach, opposed the amendments on several grounds, primarily arguing that references to a May 2020 Agreement were barred by settlement privilege.

The court found that the defendants failed to prove the May 2020 Agreement was intended to be kept confidential, and alternatively, that any privilege had been waived or an exception applied.

The court also rejected arguments that the amendments improperly withdrew admissions or were scandalous and vexatious.

Leave to amend the pleadings was granted.

An appeal from a costs order against Legal Aid Ontario (LAO) as a non-party funder in a family law dispute.

The application judge found that LAO engaged in an abuse of process by failing to adequately monitor and assess the merits of the defence it was funding in a case involving a vulnerable individual.

The Court of Appeal allowed the appeal and set aside the costs award, holding that LAO's role as a statutory funder does not expose it to non-party costs awards absent evidence of bad faith or improper purpose, and that requiring LAO to monitor litigation would impermissibly invade solicitor-client privilege and frustrate the statutory legal aid scheme.

Mangrove Partners applied for a joint hearing before the Alberta Securities Commission (ASC) and the Ontario Securities Commission (OSC) regarding a proposed transaction between TransAlta Corporation and Brookfield.

TransAlta brought a motion arguing the OSC should decline to hear the application due to an insufficient nexus with Ontario.

The OSC found that while it had jurisdiction, there were no compelling circumstances to warrant exercising it concurrently with the ASC, which was the principal regulator and had stronger connections to the dispute.

The OSC declined to exercise its jurisdiction to hear the application.

Catalyst Capital Group Inc. attempted to acquire VimpelCom Ltd.'s interest in Wind Mobile Corp. but negotiations failed.

During negotiations, a junior analyst employed by Catalyst left to work for West Face Capital Inc., a member of a consortium that subsequently acquired Wind.

Catalyst sued the former employee and West Face for breach of confidence and other claims (the Moyse Action).

The trial judge dismissed the action, finding that no confidential information was communicated and that Catalyst suffered no detriment because its own refusal to agree to a break fee and its insistence on regulatory concessions made the deal impossible.

Catalyst then commenced a second action against the consortium members and others alleging breach of confidence, conspiracy, and inducing breach of contract.

The motion judge dismissed the second action as barred by issue estoppel, cause of action estoppel, and as an abuse of process.

The Court of Appeal upheld the dismissal, finding that Catalyst was attempting to relitigate factual findings from the first action and that it could have advanced all claims in the first proceeding.

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 Monitor in the CCAA proceedings of Nortel Networks Corporation brought a motion to pass its accounts and those of its legal counsel for the period from January 2009 to May 2016.

The fees sought totaled over $250 million CAD and USD combined.

The court applied the Belyea factors to assess the fairness and reasonableness of the fees.

Despite the unprecedented size of the fees, the court found them justified given the massive scale, complexity, and duration of the cross-border insolvency, the extraordinary powers granted to the Monitor, and the highly successful results achieved for the Canadian estate.

The accounts were approved in full.

The Court of Appeal for Ontario issued a costs endorsement following an appeal and motion for leave to appeal under the Companies' Creditors Arrangement Act.

The court fixed the costs of the appeal and the motion for leave to appeal at $25,000, inclusive of disbursements and taxes, payable by the appellant union to the respondent.

The appellant union appealed a decision finding that the CCAA judge had no jurisdiction to apply the American doctrine of equitable subordination to subordinate the claims of the respondent parent company.

The Court of Appeal dismissed the appeal, holding that the CCAA does not provide express or implied authority to apply equitable subordination, and that the doctrine does not fall within the scheme of the statute, which focuses on the implementation of a plan of arrangement or compromise rather than legislating a scheme of priorities.

In a Companies' Creditors Arrangement Act (CCAA) proceeding, the applicant, U.S. Steel Canada Inc., sought an extension of the stay of proceedings, authorization and approval of a second amending and extension agreement for DIP financing, and approval of a second key employee retention plan (KERP).

United States Steel Corporation (USS) sought a shorter stay period.

The court granted the applicant's motion to extend the stay of proceedings to November 30, 2016, finding the applicant acted in good faith and with due diligence, and that a shorter, court-imposed deadline was not necessary or useful at that time.

The court also authorized and approved the Second Extension Agreement for DIP financing, noting its importance as a cash buffer and for maintaining business stability.

Motions regarding post-employment benefit plans and KERP were adjourned or granted separately.

The applicant, U.S. Steel Canada Inc. (USSC), brought a motion seeking approval of a claims process for the identification and determination of intellectual property claims asserted by United States Steel Corporation (USS) against USSC within ongoing CCAA proceedings.

USSC argued the process was necessary to provide clarity for potential purchasers in its Sales and Investment Process (SISP) and facilitate a going concern bid.

USS opposed, arguing the process was impractical and burdensome.

The court granted the motion, subject to certain excisions from the claim form, finding the process beneficial for the restructuring and for maximizing recoveries for stakeholders, and that it had the authority under section 11 of the CCAA to do so.

The applicant, U.S. Steel Canada Inc., sought an extension of the stay of proceedings under the Companies’ Creditors Arrangement Act (CCAA) to July 28, 2016.

United States Steel Corporation (USS) opposed, seeking a shorter extension and the imposition of conditions for disclosure of Phase II bids and an updated liquidation analysis.

The court granted the extension as requested by the applicant, finding that the applicant acted in good faith and with due diligence, and that a longer stay furthered the prospect of a successful restructuring.

The court denied USS's requests for a shorter extension and conditions, deeming them premature and potentially detrimental to the restructuring process, and found insufficient evidence of value destruction.