Michael R. Kestenberg

This endorsement addresses the determination of full indemnity costs following contempt proceedings.

The plaintiff, Sycor, claimed $280,530.83, while the defendants proposed $216,843.46.

The court reiterated that full indemnity costs cover all reasonably incurred fees and disbursements, not extra services.

The defendants challenged the hourly rates of the plaintiff's counsel and discrepancies in billed hours.

The court found the plaintiff's counsel's rates reasonable for Toronto's Commercial List, dismissing the argument that lower defence counsel rates should be determinative.

The court also rejected the use of outdated Civil Rules Committee cost guidelines for full indemnity costs.

A deduction of $22,000 was made for discrepancies in billed hours for the liability phase, but time spent on a preceding judicial settlement conference was deemed reasonably incurred.

Ultimately, the defendants were ordered to pay Sycor costs of $258,530.83 on a joint and several basis.

In the penalty phase of a civil contempt motion, the plaintiff sought to strike the defendants' pleadings, punitive damages, fines, and costs after the defendants were found to have intentionally failed to produce sales invoices and emails, and swore a false affidavit of documents.

The court declined to strike the pleadings or award punitive damages, noting the documents were eventually produced.

Instead, the court ordered the defendants to pay fines of $7,500 and $5,000 to the plaintiff, costs thrown away of approximately $20,000, and the costs of the contempt motion on a full indemnity basis.

The appellant employer and respondent employee settled two actions for $1,500,000.

The minutes of settlement required a $250,000 payment to the respondent's solicitors in trust 'with no deductions'.

The appellant, on accounting advice, withheld and remitted taxes to the CRA on the full settlement amount, applying the withholding for the trust payment against another payment made directly to the respondent.

The application judge found the appellant breached the minutes.

The Court of Appeal allowed the appeal, finding the minutes ambiguous and concluding the appellant acted reasonably.

Furthermore, the respondent suffered no loss as the remitted funds stood to his credit with the CRA.

The appellant agreed to purchase a commercial property from the respondent for $9 million, subject to a vendor take-back mortgage.

The transaction failed to close after the parties could not agree on the terms of a secondary financing agreement.

The motion judge granted summary judgment to the respondent, allowing it to retain $1.2 million in deposits.

On appeal, the appellant argued the motion judge erred in interpreting the agreement's secondary financing and escrow deed provisions.

The Court of Appeal dismissed the appeal, finding the motion judge's interpretation of the strict terms for secondary financing was commercially reasonable and supported by the record.

Following a successful motion for partial summary judgment, the plaintiff sought costs on a substantial indemnity basis.

The court found that the defendants' conduct, which included oppressive actions, breach of fiduciary duty, and failure to cooperate with the court-appointed investigator, warranted an elevated costs award.

The court fixed costs at $170,000, inclusive of disbursements and taxes, payable by the defendants.

The defendants raised an issue regarding the Master's previous reasons for a costs award on the plaintiff's abandoned motion for a certificate of pending litigation.

The Master acknowledged overlooking that the defendants had filed separate costs outlines for the abandoned motion and a security for costs motion.

After reviewing the separate costs outline, the Master found the $22,015.37 sought by the defendants to be excessive, noting the motion did not proceed beyond the filing of materials and involved overlapping work.

The Master amended the previous endorsement, awarding the defendants costs of $12,500 on a substantial indemnity basis.

The plaintiff, a minority shareholder, previously obtained a judgment setting aside a transfer agreement and declaring a constructive trust over her one-third interest in corporate assets diverted by the defendants.

Following the appointment of an expert to trace the diverted assets, the plaintiff brought a motion for an interim payment under section 248 of the OBCA and Rule 20.

The court found that the defendants had improperly used corporate funds to pay their legal fees and the expert's costs, and had diverted several real estate properties and sale proceeds.

The court ordered the defendants to pay the plaintiff $6,098,427 as an interim payment representing her undisputed one-third interest in the diverted assets and improperly paid expenses.

The plaintiff sued his investment advisors, actuaries, and lawyers for professional negligence and breach of fiduciary duty, alleging they misled him into commuting his teacher's pension to establish an Individual Pension Plan (IPP) that risked revocation by the Canada Revenue Agency.

The actuaries and lawyers brought motions for summary judgment arguing the claims were statute-barred and the plaintiff suffered no damages, while the plaintiff brought a cross-motion for summary judgment on liability.

After the plaintiff discontinued the action against all defendants except the lawyers, the court dismissed both the plaintiff's summary judgment motion and the damages branch of the lawyers' motion, finding genuine issues for trial that were not appropriate for summary determination.

The plaintiff abandoned its motion for a certificate of pending litigation (CPL) after the defendants served responding materials.

The defendants sought substantial indemnity costs for the abandoned motion and brought a cross-motion for security for costs.

The court awarded the defendants substantial indemnity costs for the CPL motion, finding the plaintiff had an ulterior motive to thwart the sale of the property.

However, the court dismissed the defendants' motion for security for costs, finding that the plaintiff's $100,000 deposit currently held by the defendants constituted sufficient assets in Ontario to satisfy a costs award, and that the action was not frivolous or vexatious.

The appellant appealed a summary judgment dismissing her claims for negligence and negligent misrepresentation against her former solicitor.

The Court of Appeal upheld the motion judge's decision, agreeing that the 'but for' test for causation applied and that the conduct of the solicitor retained after the respondent effectively broke the chain of causation.

The appeal was dismissed with costs.

The plaintiff purchaser moved for summary judgment seeking return of $1.2 million in deposits paid under an aborted real estate transaction, while the defendant vendor cross‑moved for summary judgment declaring its entitlement to retain the deposits.

The dispute centred on whether the vendor improperly refused to accept a proposed subordination and standstill agreement relating to secondary financing and thereby prevented closing.

The court held that the agreement of purchase and sale permitted secondary financing only if the secondary lender subordinated its rights to the vendor’s vendor‑take‑back mortgage and related security provisions, including an escrow deed provision and an escalator clause.

The purchaser’s proposed financing arrangements would have impaired those security rights and therefore did not comply with the contract.

The court concluded the purchaser failed to close and the vendor was entitled to retain the deposits.

The applicant employer sought a determination that it was entitled to deduct withholding tax and employer statutory contributions from a settlement payment resolving an employment dispute.

The respondent employee brought a motion for summary judgment to enforce the minutes of settlement, arguing that legal costs payable to counsel were expressly to be paid without deductions.

The court held that the minutes clearly distinguished between legal costs payable directly to counsel and employment income payments subject to withholding tax.

The employer was not entitled to deduct withholding tax from the legal fee payment or subtract CPP, EI, and Employer Health Tax contributions from the settlement amount.

However, the court declined to enforce the default penalty clause because the deductions resulted from a mistaken interpretation of tax obligations rather than deliberate default.

The moving parties (the Caribbean defendants) sought an order under Rule 57.07 directing that the costs of the action, previously awarded in their favour in the amount of $84,000, be made payable personally by the plaintiff's former lawyer on a joint and several basis with the plaintiff.

The underlying action had been dismissed as an abuse of process and a collateral attack on prior rulings.

The court found that the lawyer's conduct in drafting and advancing a vexatious claim with scandalous and unsupported allegations caused costs to be incurred unnecessarily.

The court granted the motion, ordering the lawyer to pay the $84,000 costs jointly and severally with the plaintiff.

The plaintiff bank brought a motion for summary judgment against the defendants for fraudulent misrepresentation.

The defendants had applied for a line of credit on behalf of their company and signed a personal financial statement indicating they owned their home, which supported their personal guarantee.

After the company went bankrupt, the defendants claimed they held the home in a bare trust for their children and transferred it to their son.

The court found that oral evidence was not required to decide the motion and held that the defendants knowingly or recklessly made a false representation about their beneficial ownership of the home, which induced the bank to grant the line of credit.

Summary judgment was granted in favour of the bank.

The appellant sued its former lawyer for negligence after he failed to appeal a bankruptcy trustee's disallowance of its secured claim.

The motion judge granted summary judgment dismissing the action, finding the bankrupt had no rights in the disputed funds, meaning the appellant's security interest never attached and it suffered no damages.

On appeal, the appellant argued the motion judge erred and raised a new 'loss of chance' argument.

The Court of Appeal dismissed the appeal, upholding the motion judge's findings on attachment and refusing to entertain the new loss of chance argument due to unfairness and lack of evidentiary foundation.

The defendants, a lawyer and his firm, brought a motion for summary judgment to dismiss the plaintiff's solicitor negligence action.

The plaintiff alleged the defendants were negligent in their representation of her in a boundary dispute, which was ultimately dismissed for delay after she retained new counsel.

The court found that the defendants had warned the plaintiff in writing about the risk of the action being dismissed for delay when they transferred the file to her new counsel.

Applying the test for summary judgment, the court concluded there was no genuine issue for trial, as the defendants met the standard of care and the delay occurred after their retainer ended.

The motion was granted and the action was dismissed.

The appellants appealed a summary judgment dismissing their legal malpractice action against the respondent lawyers.

The action alleged the respondents delayed applying for catastrophic impairment benefits and failed to advance Family Law Act claims for the injured party's brothers.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the appellants failed to put their best foot forward by providing evidence of damages not compensated by the underlying $1.4 million settlement.

The self-represented plaintiff brought an action against his former employer, several management employees, his union, a union representative, and the lawyers who acted for the employer and the union during a grievance arbitration.

The grievance had been settled on the day of the arbitration in June 2012.

All defendants brought motions to strike the statement of claim.

The court granted the motions and dismissed the action against all defendants.

The claims against the lawyers were struck as disclosing no reasonable cause of action, as opposing counsel owes no duty of care to an opposing party, and the claims against the union lawyer fell within the exclusive jurisdiction of the Ontario Labour Relations Board.

Furthermore, the court found that all claims against all defendants were statute-barred under the Limitations Act, 2002, as the action was commenced more than two years after the claims were discovered.

The appellant franchisee appealed a trial decision dismissing its action against the respondent franchisor for alleged breaches of disclosure obligations under the Arthur Wishart Act.

The trial judge found no material change in the franchisor's business operations between the original 1996 agreement and the 2001 renewal, and concluded the appellant failed to mitigate damages by abandoning the franchise.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the trial judge's factual findings or assessment of damages.

Following an earlier finding that a defendant knowingly assisted in a cover-up of the truth by failing to ensure production of sales invoices required by court order, the court determined whether that conduct constituted contempt.

The court held that aiding and abetting a breach of a court order can ground contempt and applied the aiding and abetting framework to the defendant's omissions and knowledge.

Unsworn submissions about counsel conflict, lack of intent, and apology did not displace the prior factual findings.

The defendant was held in contempt, with a further hearing directed on the appropriate relief.