Corporate/Commercial Law - ONCA

The appellants appealed a trial judgment interpreting a contractual provision that reduced payments to a departing shareholder who took business from the respondent.

The Court of Appeal upheld the trial judge's interpretation, finding it gave commercial efficacy to the provision.

However, the Court varied the trial judge's costs order, finding that the minutes of partial settlement precluded the respondent from recovering costs for most claims prior to the settlement date.

The respondent's cross-appeal regarding several liability was dismissed.

No costs were awarded for the appeal.

The interveners appealed a trial judgment concerning a dispute over the assets of The Holy Virgin Church.

The Court of Appeal upheld the trial judge's finding that proposed by-law amendments were governed by the approval requirements in the Normal Parish By-laws, noting that the dispute was fundamentally religious and outside the court's purview.

However, the Court allowed the appeal in part, finding that the trial judge improperly exercised his discretion under s. 106 of the Canada Corporations Act to order a meeting, as the power struggle between factions did not constitute extraordinary circumstances making a meeting impracticable.

The appellant landlord appealed a decision interpreting a Lease Extension and Amending Agreement.

The application judge held that the agreement extended a restrictive covenant in favour of the tenant for the full term of the agreement.

The Court of Appeal found no error, noting that the agreement confirmed the restrictive covenant remained unchanged except as modified, and the only relevant modification was the definition of the term, extending it to 16 years and 7 months.

The appeal was dismissed with costs.

The appellant, Meditrust Healthcare Inc., operated a national mail-order pharmacy business through subsidiaries to comply with provincial regulations.

Meditrust sued the respondents for various economic torts, alleging a conspiracy to destroy its business.

The motions judge granted partial summary judgment dismissing most claims, holding that under the rule in Foss v. Harbottle, Meditrust could not sue for damages that were derivative of those suffered by its subsidiaries.

On appeal, the Court of Appeal upheld the motions judge's decision on all grounds except for Meditrust's claim for loss of goodwill, finding that damage to reputation could constitute a direct, personal loss to the shareholder.

The appellant bank financed the respondents' shopping centres with security instruments including a debenture and an assignment of leases and rents.

After the loan defaulted, but before the bank enforced its security, the respondents diverted $394,100 in rental receipts to a new corporate account.

The application judge held the respondents were free to use the rents until the bank enforced its security.

The Court of Appeal reversed, finding that under the assignment of rents, the borrower's freedom from accountability ended upon default.

The court ordered judgment in favour of the bank for the diverted funds.

The appellant was retained by the respondents to negotiate scientific research tax credits on a commission basis.

The respondents breached the contract by terminating the appellant without notice.

The trial judge awarded $45,000 in damages based on the lost chance of success, which the appellant appealed.

The Court of Appeal dismissed the appeal on damages, finding the trial judge's quantification reasonable.

However, the Court granted the respondents' cross-appeal on costs, holding that the trial judge erred by leaving the determination of a Rule 49 offer to the assessment officer, and awarded costs to the respondents from the date of the offer.

The appellant appealed a trial judgment awarding the respondent $83,500 in damages for breach of contract and conversion, and $50,000 in punitive damages for breach of fiduciary duty arising from an agreement to promote and sell the respondent's paintings.

The Court of Appeal dismissed the appeal regarding bias, commission credits, and the quantum of punitive damages, finding the trial judge's conclusions well-supported by the evidence.

The Court allowed the appeal only to set aside pre-judgment interest on the punitive damages and to clarify that the respondent's priority to fire insurance proceeds applied only to those directly related to the destroyed paintings.

The appellant, a sales representative, breached its fiduciary duty to the respondent manufacturer by failing to disclose an equity interest in a customer.

The respondent terminated the agreement upon discovering the breach two years later.

The trial judge declared that the respondent owed no further commissions to the appellant, finding that the respondent would have terminated the agreement earlier had it known of the breach.

The Court of Appeal upheld this equitable remedy, preventing the appellant from profiting from its non-disclosure.

However, the Court allowed the appeal regarding costs, finding that the appellant's conduct, while a serious breach, was not reprehensible enough to justify costs on a solicitor and client scale.

The respondent real estate agent obtained an offer to purchase a property, which triggered a right of first refusal by the vendor's minority shareholders.

The minority shareholders purchased the property, and the appellant brokerage received the commission.

The trial judge found that under the Independent Contractor Agreement and the custom of the trade, the respondent was entitled to 50% of the commission.

The Court of Appeal upheld this finding, dismissed the appellants' argument regarding unjust enrichment against another agent, and upheld the trial judge's costs order.

The appeal was dismissed.

The respondent insurance company sued the appellant insurance broker to enforce an indemnity provision in their agreement, under which the broker agreed to cover losses on insurance programs it sold.

The broker argued the provision was an illegal and unenforceable contract of reinsurance because the broker was not licensed under the Insurance Act.

The trial judge found the agreement was not for insurance and enforced it.

The Court of Appeal dismissed the appeal, holding that even if the agreement violated the Insurance Act, it remained enforceable.

The licensing requirements exist to protect the public, not to allow sophisticated industry participants to avoid their contractual obligations.

The respondent, a partner in an accounting firm, accepted a directorship with a corporate client of the firm.

While he disclosed the directorship and remitted his director's fees to the partnership, he failed to disclose his entitlement to shares and stock options under the client's key employee stock plan.

After the partnership dissolved, the appellants sought an accounting of these benefits.

The Court of Appeal held that the respondent breached his fiduciary duty and his statutory duty of disclosure under the Partnerships Act.

The court found that the shares and options were compensatory benefits derived from a transaction concerning the partnership and from the use of a partnership business connection.

The respondent was ordered to account to his former partners for their proportionate share of the benefits realized.

The appellant Bank appealed a decision granting priority to the respondent Charter's purchase-money security interest.

The debtor company had amalgamated, and there was confusion over its correct corporate name.

Charter registered its interest against the pre-amalgamation name, while the Bank later registered against the new name.

The Court of Appeal dismissed the appeal, finding that the pre-amalgamation name continued to have legal existence based on the amalgamation agreement, making Charter's registration valid.

Furthermore, the Bank suffered no material prejudice as a search would have revealed Charter's interest.

The respondents sued the appellants for fraud, misappropriation of funds, conversion, and breach of fiduciary duty, alleging the appellants stole $1.6 million from the respondents' company.

The appellants pleaded the defence of ex turpi causa, alleging the respondents skimmed cash from a related company to defraud revenue authorities.

The motions judge struck out these paragraphs of the statement of defence.

On appeal, the Court of Appeal upheld the decision, finding that the Supreme Court of Canada's decision in Hall v. Herbert does not allow the defence where the plaintiff's alleged illegal activity is separate and unrelated to the claim against the defendant.

The appellants, a privately appointed receiver and his company, appealed a trial judgment ordering an accounting and denying receiver's fees due to egregious breaches of fiduciary duty and self-dealing in the receivership of a horse farming operation.

The respondents cross-appealed, seeking the equitable remedy of tracing regarding a specific farm property improperly acquired by the receiver's nephew.

The Court of Appeal dismissed the appeal, finding overwhelming evidence of the receiver's complete failure to appreciate his duties, including acting in conflict of interest.

The Court allowed the cross-appeal in part, granting the respondents the right to trace the proceeds realized from the farm property and ordering the receiver to disgorge any profits.

The appellants appealed a motions judge's decision finding them liable for computer-generated cheques.

The Court of Appeal dismissed the appeal, agreeing with the motions judge that the conclusion was dictated by the Supreme Court of Canada's decision in Boma Manufacturing Ltd. v. C.I.B.C. The Court rejected the argument that a distinction should be drawn because the cheques were entirely produced by computer.

The respondents originally brought an oppression application, and the appellants brought a cross-application.

The motion judge struck the cross-application on the basis that it sought relief that was or could have been sought in an earlier action commenced by the appellants, which had been dismissed on consent.

On appeal, the appellants sought to resurrect claims for an accounting and compensation for oppression.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the claims were barred by res judicata.

The appellant wrongfully terminated a 36-month agency contract with the respondent after 15 months.

The contract contained a clause allowing the appellant to terminate on three months' notice after the 18th month.

The trial judge awarded damages based on the full 36-month term discounted by 25 percent for the likelihood of early termination.

The Court of Appeal allowed the appeal, holding that the early termination clause defined the upper limit of the appellant's liability for damages, and reduced the damages to reflect a 22-month period.

The appellants, a bank and its assignee, appealed a trial judgment finding they improperly used the respondent developer's confidential business information during the assignment of a defaulted loan, causing a lost opportunity.

The Court of Appeal allowed the appeal, holding that the bank had an unqualified right to assign the debt.

Furthermore, the Court found that the trial judge erred in awarding damages based on a 'lost opportunity' theory that was neither pleaded nor supported by the evidence.

The cross-appeal by the respondent was dismissed, and the action against the appellants was dismissed in its entirety.

The appellants appealed a motions judge's finding that the respondent was forced to withdraw from their partnership, constituting a de facto expulsion.

The Court of Appeal upheld the motions judge's interpretation of the partnership agreement, finding that Articles 3.5 and 8.1 required payment of the Schedule 'A' price to the departing partner upon involuntary withdrawal or expulsion.

The appeal was dismissed with costs awarded to the respondent.

The Vernon companies hired Headline, an auctioneering firm, to sell assets.

Headline breached the agreement by failing to deposit over $100,000 into a joint account and breached its fiduciary duty by attempting to secretly sell assets to its own companies.

The Vernon companies subsequently refused to allow Headline to sell the remaining assets.

The Court of Appeal held that Headline's substantial breach of contract and fiduciary duty excused the Vernon companies from further performance.

The Court restored the trial judge's award of $5,000 in punitive damages against Headline for its high-handed and arbitrary conduct.