Corporate/Commercial Law - ODC

The appellants appealed an interlocutory order requiring $4,000,000 from the proceeds of the sale of their property to be paid into court as security for the respondents' damages claim.

The Divisional Court granted the appeal and set aside the order, finding that the motion judge erred in law by applying the general test for an interlocutory injunction rather than the stringent test for a Mareva injunction.

The court held that there was no evidence of a real risk of asset dissipation, no undertaking as to damages was provided, and the alternative argument under Rule 45.02 failed because the respondents sought damages rather than an interest in a specific fund.

The appellant appealed a Small Claims Court decision awarding $10,000 in punitive damages to the respondent consumer.

The consumer had signed what she believed was a purchase agreement for HVAC equipment at 0% interest, but the pre-printed form was a 10-year rental agreement.

The trial judge found the consumer was the victim of a fraud in her home.

On appeal, the Divisional Court upheld the punitive damages award, finding that the appellant's agent made unconscionable representations and the appellant unreasonably insisted on enforcing the fraudulently obtained rental agreement despite obvious inconsistencies on the face of the contract.

The appellant, a debt purchaser, appealed a Small Claims Court decision dismissing its claims for unpaid debts.

The Deputy Judge had ruled the appellant was an unregistered collection agency and failed to prove an absolute assignment of the debts because it did not produce the underlying Account Purchase Agreement.

The Divisional Court allowed the appeal, holding that a debt purchaser that outsources collection to registered agencies is not a 'collection agency' under the Collection and Debt Settlement Services Act.

The court also found the standalone Assignment Agreement was sufficient evidence of an absolute assignment, and the underlying purchase agreement was not required.

The appellants appealed a motions judge's decision ordering the liquidation of a closely-held corporation as a remedy for oppression and breach of fiduciary duty.

The appellants argued that the remedies of disgorgement and constructive trust were sufficient and that liquidation was punitive.

The Divisional Court dismissed the appeal, finding that the motions judge properly exercised his discretion to order liquidation because the trust underpinning the shareholders' agreement had been destroyed, the appellants had committed grave breaches, and the business was no longer operating as originally intended.

The court also upheld the brief two-week election period granted to the appellants to purchase the respondent's shares.

The appellant, Econo Petroleum Inc., appealed a Small Claims Court decision ordering it to pay unpaid commissions to 2081430 Ontario Inc. and to return a security deposit to Vladimir Gorbatchevski.

The Divisional Court dismissed the appeal, finding that the trial judge made no palpable and overriding errors in concluding that an informal agreement existed for the payment of commissions, that no set-off damages were owed for lack of notice of termination, and that Econo was responsible for returning the security deposit.

Costs were awarded to the respondents.

The appellant distributor appealed a Tribunal decision finding it had improperly terminated a dealership agreement with the respondent dealer.

The Tribunal had awarded damages and costs to the dealer.

The Divisional Court held that the Tribunal correctly found that Regulation 123/06 under the Farm Implements Act applied retrospectively to the agreement.

The majority held that the Tribunal's findings regarding the interpretation of the agreement and the unreasonableness of the distributor's refusal to renew were questions of mixed fact and law, and therefore not subject to appeal.

However, the Court unanimously set aside the Tribunal's award of damages for obsolete assets as an error of law, and quashed the costs award, remitting it to the Tribunal for reconsideration.

The appellant appealed the dismissal of her claim for unpaid commissions.

The trial judge had dismissed the claim, finding the contract was with the appellant's numbered company and the limitation period had expired.

The Divisional Court found the trial judge erred in making these findings without hearing evidence.

However, the appeal was dismissed because the appellant had previously initiated the same claim through her company more than two years before issuing the current claim, meaning the action was clearly statute-barred.

The appellant tour operator appealed a Small Claims Court judgment awarding damages to the respondents for a ruined vacation at a Cuban resort.

The Divisional Court allowed the appeal, finding the Deputy Judge erred in law by imposing a duty on the tour operator to supervise its third-party suppliers.

The court held that a tour operator's duty is limited to exercising due care in selecting competent suppliers.

Furthermore, the Deputy Judge erred in applying contra proferentem to invalidate an unambiguous exclusionary clause limiting the tour operator's liability for the acts of third parties.

The appellant law firm appealed a trial judgment finding it liable for unpaid forensic accounting services rendered by the respondent consulting firm.

The services were requested by a partner of the law firm who subsequently died.

The appellant argued that under s. 13 of the Evidence Act, the respondent's evidence regarding the retainer required corroboration because the partner was deceased.

The Divisional Court dismissed the appeal, holding that the statutory protection of s. 13 applies only to heirs, next of kin, executors, administrators, or assigns, and cannot be extended to a law firm partnership.

The appellant payday lender appealed a Small Claims Court judgment assessing damages after the respondent defaulted on a $450 loan.

The trial judge found the annualized interest rate of 1,303% violated the Criminal Code, rejected a $500 claim for liquidated damages as a penalty, and reduced the 59% post-default interest rate to 18% under the Unconscionable Transactions Relief Act.

The Divisional Court dismissed the appeal, confirming the payday loan exemption to the Criminal Code was not yet in force at the time of the agreement, the lender failed to prove the $500 fee was a genuine pre-estimate of loss, and the transaction was harsh and unconscionable.

The moving parties sought leave to appeal an interlocutory injunction that prevented them from directly soliciting the responding party's customers after their business relationship deteriorated over allegations of contaminated products.

The Divisional Court dismissed the motion for leave to appeal, finding no reason to doubt the correctness of the motions judge's application of the RJR Macdonald test for an injunction, including the findings of a serious issue to be tried, irreparable harm to the responding party's business relationships, and the balance of convenience favouring the responding party.

The appellant appealed a judgment granting an oppression remedy to the respondent, a former tenant whose lease was wrongfully terminated.

Before the respondent's damages were quantified, the appellant sold the corporation's sole asset and paid the net proceeds to herself, leaving the corporation judgment-proof.

The Divisional Court dismissed the appeal, holding that a party with a judgment for unquantified damages is a 'creditor' under the OBCA and that the appellant's asset-stripping conduct was oppressive.

The appellant defendants appealed an order dismissing their motion to compel the corporate plaintiffs to post security for costs.

The motion judge had dismissed the motion on the basis that the defendants had filed a counterclaim closely related to the main action.

The Divisional Court allowed the appeal, holding that while a counterclaim may be relevant when seeking security for costs against a plaintiff by counterclaim, it does not insulate an initiating plaintiff in the main action from posting security for costs.

The corporate plaintiffs were ordered to post $20,000 in security for costs.

The appellant appealed an order striking his Amended Statement of Claim against a law firm without leave to amend.

The appellant, a minority shareholder, alleged that the directors committed oppression by diverting corporate funds to pay the law firm's legal fees, and sought an order for the law firm to refund the fees.

The Divisional Court dismissed the appeal, finding that the motion to strike was not barred by issue estoppel and that the amended pleading did not disclose a tenable cause of action against the law firm for knowing receipt of a benefit from oppression.

The appellant appealed the dismissal of a motion to certify a class proceeding against the respondent bank.

The proposed class action alleged that the respondent received interest on cash advances at a criminal rate, in violation of s. 347(1)(b) of the Criminal Code, and sought restitutionary, declaratory, and injunctive relief.

The Divisional Court dismissed the appeal, upholding the motions judge's findings that the restitutionary claims did not raise common issues and that a class proceeding was not the preferable procedure for resolving the claims for declaratory and injunctive relief.

The respondent brought a motion before a single judge of the Divisional Court to quash the applicant's appeal on the grounds of mootness and estoppel.

The underlying appeal concerned the applicant's standing to challenge the respondent's election to satisfy debenture obligations by issuing shares.

The single judge concluded that the issues raised on the motion to quash were intertwined with the merits of the appeal and potential prejudice to the parties.

Pursuant to section 21(4) of the Courts of Justice Act and Rule 61.16(2.1), the judge adjourned the motion to be heard by the full panel of the Divisional Court hearing the appeal.

The appellants appealed a Case Management Master's decision granting summary judgment for $80,000 owing on a promissory note related to the purchase of a business.

The appellants argued that the individual signatories received no consideration and claimed a right of set-off due to a separate action for breach of a non-competition agreement.

The Divisional Court dismissed the appeal, holding that the Master correctly found the individual defendants liable as guarantors and that equitable set-off is not available against a promissory note.

The appellants appealed a judgment granting oppression remedies to the respondents, arguing there was no factual basis for the finding of oppression.

The Divisional Court upheld the findings of oppression, which included refusing to provide audited financial statements, calling shareholder meetings on short notice, and withholding monies for snowmobiles.

However, the court varied the judgment to remove the individual appellant's joint and several liability for the snowmobile payment, as no such relief was sought against him personally.

The appeal was otherwise dismissed, including challenges to the 12% interest rate and the costs award.

The appellants, minority shareholders in Colio Wines of Canada Ltd., appealed the dismissal of their application for an oppression remedy and the appointment of an inspector under the Ontario Business Corporations Act.

The appellants alleged that a 1992 amalgamation unfairly valued their shares at one cent each.

The Divisional Court upheld the application judge's finding that the appellants failed to provide cogent evidence that oppressive conduct appeared to have occurred, as required by s. 161(2) of the Act.

The court confirmed that mere suspicion or a report suggesting oppression 'may have been' present is insufficient to warrant the appointment of an inspector.

The appeal was dismissed.

The minority shareholder applicant brought an oppression application under the Business Corporations Act after being dismissed from the respondent corporation.

The shareholders' agreement contained a mandatory arbitration clause and a specific mechanism for valuing and redeeming the shares of a departing employee.

The motions judge allowed the applicant's motion to have the dispute heard in court rather than by arbitration, relying on the Weber principle to avoid a potential deprivation of ultimate remedy.

On appeal, the Divisional Court reversed the decision, holding that the Weber principle does not generally apply to voluntary private arbitration agreements and that the parties must be held to their freely chosen dispute resolution mechanism.