Corporate/Commercial Law - ONCA

The moving party brought a motion for leave to appeal.

The Court of Appeal for Ontario dismissed the motion and fixed costs at $1,000.

The respondent moved to quash an appeal and a motion for leave to appeal from an order granting interim relief in an oppression action under the Canada Business Corporations Act.

The Court of Appeal held that the order was interlocutory, meaning leave to appeal was required.

The Court further held that under s. 249 of the CBCA, appeals from interlocutory orders lie to the Court of Appeal, not the Divisional Court.

The motion to quash the appeal was granted, but the motion to quash the motion for leave to appeal was dismissed.

The appellants appealed a trial judgment finding that their solicitor was not negligent for failing to warn of the risks of proceeding as a minority shareholder without a unanimous shareholders agreement.

The Court of Appeal dismissed the appeal, finding that even if the solicitor breached his duty, the appellants failed to prove causation and damages.

The appellant had already received the fair value of his shares and his shareholder's loan in separate oppression proceedings, and there was no evidence he would have obtained a better result had a warning been given.

The appellants appealed an order striking out their claim of economic duress and effectively dismissing their entire action against the respondent banks.

The motion judge had found that past dealings between the parties could not constitute economic duress to vitiate a restructuring agreement and release.

The Court of Appeal allowed the appeal, holding that the motion judge erred by failing to apply the 'plain and obvious' test for striking pleadings under Rule 21.

The Court found it was not plain and obvious that a claim of economic duress based on past dealings would inevitably fail, and ordered the appellants to file a new, focused statement of claim.

The moving party, CAFO Inc., sought leave to appeal in the Stelco Inc. proceedings.

The Court of Appeal for Ontario granted leave to appeal with respect to the questions in paragraphs 23-28 of the moving party's factum, but denied leave for question 29.

Costs of the motion were reserved to the panel hearing the appeal.

The appellants, former senior executives of the respondent corporation, appealed a trial judgment finding that no 'change in control' had occurred to trigger generous compensation provisions in their employment contracts.

During a period of financial difficulty, a shareholder group accumulated proxies for over 35 percent of the voting shares to requisition a special meeting to replace the board of directors.

A settlement was reached before the meeting, and the executives subsequently claimed payouts from a trust fund established for change of control scenarios.

The Court of Appeal affirmed the trial judge's conclusion that the mere accumulation of proxies did not confer the right to control or direct the voting power of the corporation, and thus did not constitute a change in control under the agreements.

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 appellants appealed a trial judgment holding them liable for losses in a short sale margin account.

The primary debtor opened the account and the co-appellant guaranteed it.

The appellants argued the investment dealer owed a fiduciary duty to the guarantor and breached a duty of full disclosure by failing to disclose that the primary debtor had not posted the required margin security.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings that there was no fiduciary relationship and that the non-disclosure was not material, as the guarantor knew the account was in a loss position and that he was securing that loss.

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 mortgagee appealed the dismissal of its action against a guarantor on summary judgment.

The motions judge had found that the guarantor was discharged due to a change in the principal contract.

The Court of Appeal allowed the appeal, holding that the sale of shares of the principal debtor corporation to third parties did not vary the contract between the principal debtor and the mortgagee, nor did it breach the guarantee contract.

The appellant was granted summary judgment on the guarantee in the amount of $869,091.18.

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 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 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 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 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 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.