Corporate/Commercial Law - ODC

The moving parties (defendants) sought leave to appeal to the Divisional Court from an order dismissing their motion for summary judgment.

The underlying dispute involved the interpretation of an indemnity clause in an agreement of purchase and sale regarding environmental contamination discovered after closing.

The court found there was good reason to doubt the correctness of the motion judge's interpretation, satisfying the first branch of the test for leave to appeal under Rule 62.02(4)(b).

However, the court held that the interpretation of a specific agreement between specific parties did not raise issues of broad public importance.

As the second branch of the test was not met, the motion for leave to appeal was dismissed.

The corporation sought an order approving a proposed arrangement to collapse its dual-class share structure by purchasing for cancellation all outstanding Class B shares for consideration comprising 9 million newly issued Class A shares and US$300 million in cash.

The application judge approved the arrangement.

The opposing shareholders appealed, arguing the application judge erred in finding the arrangement fair and reasonable.

The Divisional Court dismissed the appeal, holding that the application judge correctly applied the BCE test.

The corporation was not required to demonstrate with certainty that the benefits of the arrangement would offset the costs, but only a reasonable prospect of clearly identified benefits.

The affirmative vote of the Class A shareholders was important evidence supporting the fairness of the arrangement.

The plaintiff sought leave to appeal a motion judge's order certifying a class proceeding in part.

The motion judge had declined to certify claims for fraudulent misrepresentation, negligent misrepresentation, and civil conspiracy, and had restricted the class to Canadian purchasers.

The Divisional Court granted leave to appeal solely on the issue of the civil conspiracy claim, finding conflicting decisions and good reason to doubt the correctness of requiring the plaintiff to plead special damages at the certification stage.

Leave to appeal was denied for the misrepresentation claims and the class definition.

The appellant appealed an order setting aside an Anton Piller order that had been granted ex parte.

The motion judge had set aside the order on the grounds that the appellant failed to demonstrate a threat of serious damage and failed to make full, frank, and fair disclosure of material facts, including alternative means of preserving evidence and the true reasons for a lost client contract.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the motion judge's conclusions that the appellant failed to satisfy the strict conditions for an Anton Piller order and breached its duty of disclosure.

The appellant appealed a trial judgment ordering it to pay $25,000 to the respondent for breach of a software development contract.

The appellant argued there was no contract because the trial judge found no consensus ad idem on the project's scope, and that rescission was improperly ordered.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the trial judge's conclusion that an enforceable contract existed for the product the appellant intended to deliver, which the appellant repudiated.

The court upheld the order for restitution due to a total failure of consideration.

The appellants appealed a trial judgment granting the respondent real estate broker an oppression remedy under s. 248 of the Ontario Business Corporations Act.

The trial judge had found that a corporate reorganization by the appellants was designed to defeat the respondent's claim for real estate commissions.

The Divisional Court allowed the appeal, holding that the respondent was not a 'creditor' at the time of the reorganization because no commissions were yet payable under the listing agreement.

Furthermore, the reorganization did not constitute oppression as the successor entities had provided indemnification, ensuring the original corporation was not judgment-proof.

The action was dismissed.

The appellants appealed a trial judge's finding that they owed the respondent commission under an oral contract for the sale of stone.

The appellants argued the trial judge ignored evidence that not all the stone had been sold, which was the triggering term for the commission.

The Divisional Court dismissed the appeal, finding no palpable and overriding error.

The trial judge's conclusion was supported by the respondent's evidence, which she found credible, and an admission by the appellants that commission was owed.

The appellant appealed the dismissal of its motion under Rule 45.02 for an order preserving a sum of money held as cash collateral.

The appellant argued that its obligations under a Letter of Credit Agreement were discharged because the respondent entered into a forbearance agreement with the principal borrower, materially altering the guaranteed loan.

The Divisional Court dismissed the appeal, finding that the agreement was for a standby letter of credit, not a guarantee, and thus the law of guarantees did not apply.

Furthermore, the cash collateral was not a specific fund to which the appellant had a proprietary claim, and the appellant had implicitly ratified the forbearance agreement by participating in the borrower's insolvency proceedings without objection.

The appellants appealed a trial judgment that determined the equalization payment required to separate a family business under a consent order.

The Divisional Court upheld the trial judge's findings on the valuation of the businesses, the tax treatment of parked debt under the Income Tax Act, and the scope of the issues tried.

However, the court allowed the appeal in part, finding the trial judge misapprehended evidence regarding an agreement to pay interest on unequal shareholder loans, resulting in a $108,500 credit to the appellants.

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 defendants moved for leave to appeal a decision dismissing their motion to strike the plaintiff's statement of claim.

The plaintiff alleged inducing breach of contract and intentional interference with economic relations regarding an exclusive distribution agreement.

The Divisional Court found no reason to doubt the correctness of the motions judge's decision that the pleadings, read generously, disclosed a reasonable cause of action.

The motion for leave to appeal was dismissed.

The individual defendants, who were architects and a contractor, sought leave to appeal a motions judge's decision refusing to grant summary judgment dismissing the claims against them personally.

The plaintiffs had sued the individuals despite the relevant contracts being with their respective corporations.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the motions judge's application of the summary judgment test.

The court noted that the motions judge allowed the claims to proceed based on 'just barely some factual basis' rather than requiring a genuine issue for trial, and that the scope of personal liability for corporate directors and employees is a matter of public importance.

The applicant appealed a decision dismissing his claim against the respondent bank for seizing a GIC and funds from his savings account to satisfy overdue credit card charges.

The applicant argued his signature on the security pledge agreements was forged.

The Divisional Court found no palpable and overriding error in the trial judge's factual finding that the applicant signed the agreements.

Furthermore, the court upheld the finding that the bank was entitled to exercise its common law right of set off.

The appeal was dismissed.

The appellant sought leave to appeal a decision dismissing its motion for an interim preservation order regarding a $3.5 million cash collateral drawn from a standby letter of credit.

The motions judge had found that the appellant had no proprietary interest in the funds and that the law of guarantee did not apply.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the decision and noting that the application of guarantee law to a standby letter of credit in the context of an underlying agreement is an issue of broader significance.

A stay of the order directing payment of the funds was also granted pending the appeal.

The appellant credit card issuer appealed a trial decision dismissing its claim against the respondent employer for unauthorized cigarette purchases made by an employee using a company credit card.

The trial judge found the cards were issued for fuel purchases only.

On appeal, the Divisional Court held that while the trial judge erred in requiring specific acknowledgment of the cardholder agreement's liability clauses, the appellant breached its contractual obligation to use reasonable commercial efforts to enforce the fuel-only restriction.

The court also rejected the appellant's arguments regarding contributory negligence and vicarious liability, finding the employer did not enhance the risk of the employee's wrongful act.

The appeal was dismissed.

The plaintiffs sought leave to appeal an interlocutory order of a motions judge who declined to order the defendants to answer certain questions refused on discovery and cross-examination.

The underlying action involved a dispute over a shotgun buy/sell agreement between two brothers and subsequent property transfers.

The Divisional Court dismissed the motion for leave to appeal, finding no good reason to doubt the correctness of the motions judge's decision on relevance, and concluding that the issues did not transcend the interests of the parties to warrant appellate consideration.

The appellant, a Swiss manufacturing company, appealed a Master's order dismissing its motion to stay a breach of contract action on the basis of forum non conveniens.

The Master had found that Ontario had a real and substantial connection to the action and that Switzerland was not clearly a more appropriate forum.

The Divisional Court dismissed the appeal, finding no palpable and overriding error or error in principle in the Master's application of the jurisdiction and forum non conveniens tests.

The appeal of the $44,000 costs award was also dismissed.

The moving party sought a stay of an order compelling the sale of two properties pending an appeal.

The underlying application was brought under the Business Corporations Act to wind up a numbered corporation and compel the sale of the properties.

The court applied the three-part test for a stay pending appeal.

While finding there was a serious issue to be tried, the court concluded the moving party would not suffer irreparable harm and the balance of convenience did not favour granting the stay.

The motion for a stay was dismissed with costs.

The appellant supplier appealed the dismissal of its breach of trust claim against the individual directors and an employee of a defunct contractor under s. 8 of the Construction Lien Act.

The trial judge had dismissed the claim, relying on a previous decision to hold that the supplier must intend the materials to be used for a known and identified improvement.

The Divisional Court allowed the appeal, distinguishing the previous decision and holding that the plain language of the Act does not require such intent.

The Court found the directors and the employee who had effective control of accounting jointly and severally liable for the breach of trust.

Toronto Hydro-Electric System Ltd. appealed a decision of the Ontario Energy Board that required any dividend paid by the utility to its parent company be approved by a majority of its independent directors.

The Divisional Court allowed the appeal, finding that the Board lacked both express and implied jurisdiction under the Ontario Energy Board Act, 1998 to impose restrictions on the corporate process for declaring dividends.

The condition was found to be an unwarranted intrusion into corporate governance and contrary to established corporate law principles.