Corporate/Commercial Law - ONCA

In a CCAA restructuring of Stelco Inc., the appellants, representing subordinated debenture holders, sought to be classified as a separate class of creditors for voting purposes on the proposed plan.

They argued their interests conflicted with senior debt holders due to a turnover payment provision requiring them to remit distributions to senior debt holders until the senior debt was paid in full.

The supervising judge dismissed the motion, finding no material distinction in their legal rights vis-à-vis the debtor company.

The Court of Appeal granted leave but dismissed the appeal, affirming that creditor classification under the CCAA is determined by the creditors' legal rights in relation to the debtor company, not their rights as creditors in relation to each other.

The appellant appealed a trial decision regarding his entitlement to commission on a life insurance policy.

The trial judge found that the second policy was a new policy, not a replacement policy, and that the appellant was not responsible for its creation.

The trial judge also found no bad faith on the part of the respondents.

The Court of Appeal upheld the trial judge's findings, noting that the 25 percent commission received by the appellant was a realistic compromise.

The appeal was dismissed with costs.

In a CCAA proceeding regarding Stelco Inc., the Informal Independent Converts' Committee appealed an order denying them a separate class of creditors.

The Court of Appeal granted leave but dismissed the appeal, finding no legal error or error in principle in the motion judge's conclusion that the appellants lacked a different legal or practical interest from other unsecured creditors vis-à-vis the debtor.

The appellant appealed a trial judgment regarding the interpretation of a commercial agreement and alleged misrepresentations about a liquor licence.

The Court of Appeal upheld the trial judge's finding that the terms of the liquor licence were generally known to the public and could be learned through due diligence.

The court also upheld the finding of fact that no misrepresentation was made and found no basis for granting relief from forfeiture.

The appeal was dismissed with costs.

The moving party brought a motion to quash an appeal of an order directing it to pay principal and accrued interest to the respondents and to pay further sums into court.

The moving party argued the order was interlocutory and that the respondents were estopped from appealing because they had derived a benefit from the order.

The Court of Appeal dismissed the motion to quash, finding that the order was final in respect of the respondents' secured priority position.

The Court also held that the respondents were not estopped from appealing, as they had complied with the order and immediately notified the moving party of their intention to appeal.

The appellant appealed a trial judgment awarding the respondent over $4 million in damages for the lost opportunity to develop a shopping plaza after the appellant repudiated an oral agreement to be the anchor tenant.

The appellant argued the trial judge erred in finding an independent oral agreement, assessing damages, and failing to consider post-agreement conduct.

The respondent cross-appealed the trial judge's 50% reduction of its disbursements.

The Court of Appeal dismissed both the appeal and cross-appeal, finding no palpable or overriding errors in the trial judge's factual findings or exercise of discretion.

The appellant appealed a decision upholding a non-competition covenant.

The appellant argued the covenant was too broad in subject matter, duration, and geographic reach, and contrary to public policy.

The majority of the Court of Appeal dismissed the appeal, finding the application judge correctly applied the law and reasonably concluded the covenant was enforceable between knowledgeable commercial parties of equal bargaining power.

A dissenting judge would have allowed the appeal, finding the covenant's geographic reach and duration excessive and vague.

The appellant landlord appealed a trial judgment awarding the respondent tenant damages for rent paid and the return of a mistaken payment.

The tenant had agreed to terminate its commercial lease early but continued paying rent until the termination date.

Before that date, the landlord leased the premises to a new tenant.

The trial judge found this constituted an eviction, entitling the tenant to the return of rent paid for the overlapping period.

The trial judge also ordered the return of a mistaken payment, rejecting the landlord's claim for set-off as the alleged tax liabilities had not crystallized.

The Court of Appeal agreed with the trial judge on both issues and dismissed the appeal.

The plaintiffs sued a tour operator and a cruise provider after allegedly contracting an airborne virus on a Caribbean cruise.

The cruise provider appealed a motion judge's decision that Ontario law applied to the action, arguing that the contract specified the law of England, which would bar the claim under the two-year limitation period in the Athens Convention.

The Court of Appeal allowed the appeal, holding that the expiration of a limitation period does not constitute an injustice sufficient to override the contractual choice of law or the lex loci delicti rule.

The law of England was declared to apply to the issues between the plaintiffs and the cruise provider.

The appellants appealed a trial judgment that found the parties entered into a contract containing a performance guarantee, which the respondents breached, but limited damages to $1.00.

The appellants argued the trial judge erred by finding a performance guarantee existed despite it not being explicitly pleaded as a term, and by failing to find it unconscionable.

The respondents cross-appealed the trial judge's decision to order the parties to bear their own costs despite a Rule 49.10 offer.

The Court of Appeal dismissed both the appeal and the cross-appeal, finding the trial judge's conclusions on the contract terms were supported by the pleadings and evidence, and her discretion on costs was properly exercised.

The appellant appealed a trial judgment that denied her compound interest and refused to enforce NSF, late payment, and collection letter charges on three promissory notes.

The Court of Appeal upheld the trial judge's findings that the interest calculation method was ambiguous and that the additional charges, combined with a 25% interest rate, constituted an unconscionable penalty.

The appeal was dismissed.

The appellant breached a franchise agreement by granting a territory to a third party.

The respondent elected to continue the agreement but sued for damages.

The trial judge awarded damages for lost profits, return of royalties, wasted advertising expenses, return of the licensing fee, and punitive damages.

On appeal, the Court of Appeal set aside the awards for lost profits, royalties, licensing fee, and punitive damages due to lack of proof and misapprehension of evidence.

The award for wasted advertising expenses was reduced to $36,000.

The appellant appealed a trial judge's finding that he breached his fiduciary duty to his former employer by accepting a project from a client.

The respondent cross-appealed the calculation of damages.

The Court of Appeal dismissed both the appeal and cross-appeal, finding ample evidence that the appellant used knowledge acquired through his position to successfully bid for the work, and that the damages calculation was fact-driven and entitled to deference.

The appellants appealed a trial judgment regarding a forbearance agreement.

At the opening of the appeal, the appellants abandoned a motion alleging reasonable apprehension of bias by the trial judge.

The Court of Appeal dismissed the appeal, finding that the trial judge's findings of fact on misrepresentation, parol evidence, and reasonable notice were supported by the evidence.

The court also rejected a new argument based on the forbearance agreement, as it contemplated future terms rather than past representations.

The appellant appealed a trial judgment awarding it $1.7 million in damages for the respondent's breach of an amalgamation agreement involving a reverse take-over.

The appellant argued damages should have been assessed at a later date using a share value approach or by applying a multiplier to the respondent's asset value, which would have yielded over $8 million.

The respondent cross-appealed the 10% contingency discount and the 10% pre-judgment interest rate.

The Court of Appeal dismissed both the appeal and cross-appeal, finding the trial judge correctly assessed damages at the date of breach using the best available evidence (an asset valuation) because no market existed for the shares at that time, and properly exercised his discretion regarding contingencies and interest.

The appellants appealed an order granting judgment on the respondent's claim for payment.

The Court of Appeal allowed the appeal, finding that the respondent's claim and the appellants' claim for set off were so interrelated that judgment should not have been granted on the former if the latter was to proceed.

The court directed a trial for both claims and ordered the funds held in trust to remain as security pending further court order.

The appellants sold their shares in a trailer park to the respondents, taking back a promissory note bearing 10 percent interest annually until maturity.

The note did not specify a post-maturity interest rate.

After the respondents defaulted, the trial judge held that the post-maturity interest rate was 5 percent pursuant to section 3 of the Interest Act.

The Court of Appeal allowed the appeal, holding that the prejudgment interest provisions of the Courts of Justice Act ousted section 3 of the Interest Act.

The Court exercised its discretion to fix the post-maturity interest rate at 10 percent, matching the pre-maturity rate, to reflect commercial reality and prevent the respondents from benefiting from their default.

The tenant of a commercial building operated a bar and sought to exercise an option to renew its lease.

The landlord refused to renew, alleging the tenant was in default due to continuous over-serving of alcohol, which resulted in intoxicated patrons causing disturbances, vomiting, and urinating around the building.

The application judge granted the tenant's application for a declaration that it had validly renewed the lease.

The Court of Appeal allowed the landlord's appeal, finding that the tenant was in subsisting breach of the lease covenants at the operative date for renewal.

The Court held that the landlord was not required to give notice of default to refuse renewal, and that the landlord's acceptance of rent waives forfeiture of the existing term but does not bar it from refusing the renewal.

The appellant jewellery store was robbed, but its video surveillance system failed to record the event due to an employee's error in operating the VCR.

The respondent insurer denied coverage, relying on a warranties endorsement requiring the system to be operational at all times insofar as it was within the Named Insured's control.

The trial judge dismissed the action, finding the employer responsible for the employee's failure.

The Court of Appeal allowed the appeal, holding that the endorsement distinguished between the 'Named Insured' and its employees, and that the insured had satisfied its obligation by instituting a reasonably fail-safe procedure.

The appellants, members of a dairy cooperative, appealed a decision declaring that the cooperative was not required to include milk sold via export contracts when calculating patronage returns under s. 55(5) of the Co-operative Corporations Act.

The Court of Appeal applied a contextual approach to statutory interpretation, finding that the term 'deliver' in s. 55(5) requires a transfer of title.

Because export contracts allow producers to direct milk to entities other than the cooperative without transferring title to the marketing board, the statutory presumption of a direct business link does not apply.

The appeal was dismissed.