Corporate/Commercial Law - ONCA

The appellants, life insurance companies, appealed a trial judgment finding that transactions involving their participating accounts to finance a corporate acquisition breached the Insurance Companies Act.

The Court of Appeal upheld the trial judge's findings that the transactions breached the Act by failing to comply with generally accepted accounting principles, improperly allocating expenses, and constituting prohibited transfers.

However, the Court allowed the appeal in part regarding the remedy, finding that the trial judge's order to return $390 million to the participating accounts via litigation trusts was overly broad and akin to an oppression remedy not available under the Act.

Instead, the Court ordered the transactions unwound as of the present, with adjustments for expense savings already received.

The appellant appealed a motion judge's decision granting a partial award for storage and demurrage charges in an arbitrary amount and directing the balance to trial.

Both parties agreed the motion judge erred in this regard.

The appellant sought to have the entire matter sent to trial, while the respondent cross-appealed for summary judgment for the full amount claimed.

The Court of Appeal allowed the cross-appeal, finding that the appellant failed to put its best foot forward on the summary judgment motion to dispute the quantum or the invoices once the respondent's entitlement to a lien was established.

The respondent was granted judgment for the full amount claimed.

The appellant financed insurance premiums for the respondent, taking an assignment of the right to receive any unearned premiums as security.

After the respondent defaulted and obtained CCAA protection, the appellant sought to enforce its security.

The motion judge held that the appellant's security interest was not perfected because it was not registered under the PPSA.

The Court of Appeal allowed the appeal, holding that the assignment of unearned premiums is a transfer of an interest in or under a policy of insurance, which is exempt from PPSA registration under s. 4(1)(c) of the PPSA and s. 138 of the Insurance Act.

The applicants sought a stay of the Court of Appeal's order, which had reversed a supervising judge's decision to remove two directors from the board of a company undergoing CCAA restructuring, pending their application for leave to appeal to the Supreme Court of Canada.

The Court of Appeal first determined it had jurisdiction under s. 65.1(1) of the Supreme Court Act to consider the stay application.

Applying the RJR-MacDonald test, the court found that while there was a serious issue to be tried, the balance of convenience and the interests of justice favoured denying the stay, as granting it would effectively implement the supervising judge's order that the court had already found was made without jurisdiction.

The appellants appealed a trial judgment finding them liable for breach of contract.

The Court of Appeal dismissed the appeal, holding that the trial judge properly relied on business records admitted without objection to find a contract, breach, and damages.

The Court also upheld the judgment against both corporate defendants, noting their pleadings made no distinction between them, and found no error in the trial judge's refusal to grant an adjournment.

The appellants appealed a judgment regarding the repossession of a vehicle by the respondent.

The appellants argued the repossession violated the Personal Property Security Act and the Consumer Protection Act, and that a clause in the retail instalment contract was void.

The Court of Appeal dismissed the appeal, finding the repossession was lawfully based on the respondent's good faith belief that the vehicle was in jeopardy, rather than a default in payment, rendering the statutory provisions inapplicable.

The plaintiffs initially sued for repayment of loans and on a guarantee.

At trial, the plaintiffs argued breach of contract for the purchase of shares.

The trial judge granted judgment to the plaintiffs based entirely on provisions of the Ontario Business Corporations Act (OBCA) relating to share transfers, despite the plaintiffs expressly disavowing any remedy under the OBCA.

The Court of Appeal allowed the appeal, finding it was a breach of natural justice to grant judgment on a basis not pleaded or argued.

A new trial was ordered because the Court of Appeal could not make the necessary findings of fact regarding the contract terms or damages.

The appellants appealed a trial judgment declaring that the appellant Foo was not the beneficial owner of shares in the respondent corporation.

The appellants argued the trial judge improperly relied on extrinsic parol evidence and ignored an entire agreement clause in the initial share exchange agreement.

The Court of Appeal dismissed the appeal, holding that the trial judge correctly considered extrinsic evidence given the problematic nature of the transactions, which included backdated documents, inconsistencies, and unfulfilled underlying purposes.

The court noted that even if the appellants' arguments regarding the initial agreement were accepted, a subsequent acknowledgement would have reversed the transfer anyway.

The appellant registered a construction lien and commenced an action while it was a dissolved corporation.

It was later revived.

The motion judge vacated the lien but allowed the contract claim to continue.

The Divisional Court dismissed the lien appeal and dismissed the contract action.

The Court of Appeal held that the appellant could not rely on the corporate revival provisions of the Business Corporations Act to revive its lien action because the strict time limits under the Construction Lien Act had expired during dissolution, vesting 'rights' in the defendant.

However, the Court allowed the breach of contract claim to proceed, as the limitation period had not yet expired, permitting the appellant to amend its pleadings to correct the corporate misnomer.

The appellants appealed an order of the Superior Court of Justice regarding their right to recovery under a bond.

The Court of Appeal held that naming the appellants on the bond did not give them an independent right to recovery under their lending agreements.

The court declined to interfere with the motion judge's interpretation of the inter-lender agreement and dismissed the appeals with costs.

The respondents leased buses to a company that obtained a comprehensive business insurance policy from the appellant insurer.

The policy covered the respondents as an additional named insured.

After one of the leased buses was damaged, the insurer paid the repair costs but deducted unpaid premiums owed by the lessee.

The respondents successfully applied for an order that the insurer could not rely on s. 134(2) of the Insurance Act to withhold the unpaid premiums from the loss payment.

The Court of Appeal dismissed the insurer's appeal, holding that s. 134(2) restricts recovery by deduction to amounts payable to the party responsible for payment of the premiums, not a third party.

The appellants appealed a summary judgment enforcing a guarantee in favour of the respondent bank.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the defence of misrepresentation was defeated by the strict terms of the guarantee.

The Court also rejected the appellants' other defences, including an alleged promise not to sue, failure to fully advance a loan, misapplication of funds, and improper approval of the sale of business assets.

The tenant appealed a judgment interpreting a commercial lease.

A purchaser agreed to buy all of the tenant's shares, constituting a change in control and a 'transfer' requiring the landlord's consent.

The landlord consented while reserving its rights, and argued that under clause 11.03(b) it was entitled to an amended lease with increased rent.

The tenant argued the landlord's only option was to terminate the lease.

The Court of Appeal upheld the applications judge's finding that the change in control triggered clause 11, obliging the tenant to sign a new lease with increased rental payments, as the tenant's interpretation would render much of the clause ineffective.

The appellant appealed a decision finding that an enforceable settlement agreement had been concluded between the parties.

The Court of Appeal dismissed the appeal, holding that the motions judge was justified in finding an agreement was reached and that the terms, including a cash payment for shares, were clear and undisputed by the appellant at the time.

The appellant tenant breached a commercial lease by abandoning the premises.

The respondent landlord subsequently leased the property to a new tenant, with a 10-month overlap of the original lease term.

The tenant appealed the trial judge's calculation of damages, arguing the landlord received a benefit from avoiding a lengthy vacancy period.

The landlord cross-appealed regarding the deduction of tax consultant fees and the apportionment of rent-free periods and improvements.

The Court of Appeal dismissed the main appeal, finding the tenant's mitigation argument was not pleaded and relied on speculation.

The cross-appeal was allowed in part, permitting the landlord to deduct the 50% contingency fee paid to a tax consultant to obtain a property tax rebate.

The appellant appealed a judgment determining the scope of a guarantee and resulting damages on an application under Rule 14.

The Court of Appeal allowed the appeal, finding a factual dispute regarding the guarantee's scope and an insufficient factual basis to determine damages.

The court set aside the judgment and directed the trial of an issue on the alleged breach of the guarantee and resulting damages.

The plaintiff invested $145,000 in a non-existent company based on fraudulent representations by the defendant stock promoter.

The plaintiff obtained summary judgment against the promoter, his wife, and his corporation for fraud and unpaid loans.

On appeal, the Court of Appeal upheld the summary judgment for fraud against the promoter and the corporation, finding the promoter's self-serving affidavits and failure to produce supporting documents did not raise a genuine issue for trial.

However, the Court set aside the summary judgment against the promoter's wife due to insufficient evidence of her involvement, and against the promoter for the loans due to conflicting evidence.

The respondent resigned as a partner from the appellant law firm and commenced an action asserting financial claims, a claim regarding the transfer of client files, and a dispute over a non-competition clause.

The appellant moved to stay the claims on the basis that they were subject to mandatory arbitration under the partnership agreement.

The motion judge declined to order a stay.

On appeal, the Court of Appeal held that the arbitration clause, which covered any dispute 'in connection with' the agreement, was broad enough to encompass all of the respondent's claims.

The court allowed the appeal and ordered that the action be stayed.

The appellant sought to certify a class proceeding against a life insurance company, alleging negligent misrepresentation in the marketing of whole life policies with a 'vanishing premium' or premium offset feature.

The motion judge and Divisional Court refused certification.

The Court of Appeal dismissed the appeal, finding that the claims relied heavily on individual representations made by agents and individual reliance, meaning the action would ultimately break down into individual proceedings.

The common issues and preferable procedure requirements under section 5 of the Class Proceedings Act were not met.

The parties entered into a joint venture agreement (JVA) to market CFC-free refrigerants.

The relationship deteriorated, leading to multiple lawsuits involving claims of breach of contract, misrepresentation, and conversion.

The trial judge found that the Lam Group breached the JVA but that the Gu Group had waived its right to damages by its subsequent conduct in negotiating a new agreement.

The trial judge also denied the Gu Group an inquiry into damages on the Lam Group's interlocutory injunction undertaking because the Gu Group had flagrantly violated the injunction.

The Lam Group's cross-appeal regarding pre-contractual misrepresentations and oppression was dismissed.

The trial judge's award of $50,000 in punitive damages against the Lam Group for the conversion of a laptop computer was upheld.

The Court of Appeal dismissed all appeals and the cross-appeal.