Paul D. Stern

The applicant, founder of a carpentry business, sought an oppression remedy against the respondent, the younger active manager and 49% shareholder.

The parties had entered into a unanimous shareholders' agreement to transition the business to the respondent while completing existing projects.

The respondent breached the agreement and his fiduciary duties by usurping the company's employees for his new competing business, failing to maintain proper financial records, and causing the original company to fail.

The court found the respondent liable for oppression and ordered him and his new company to jointly and severally disgorge $2,248,328 in profits.

The moving party brought a motion under s. 21(5) of the Courts of Justice Act to set aside a decision of a single judge of the Divisional Court.

The single judge had quashed the moving party's appeal from a pre-hearing decision of the Capital Markets Tribunal on the basis that the Tribunal's decision was interlocutory, not final.

The Divisional Court panel dismissed the motion, finding that the motion judge applied the correct law and made no error in concluding that the Tribunal's decision regarding the use of criminal disclosure was not a final decision.

The appellants appealed a decision dismissing their appeal of a solicitor's account assessment.

They argued the appeal judge denied them procedural fairness by refusing an adjournment, muting one of the appellants during a virtual hearing, and proceeding without full transcripts.

The Divisional Court dismissed the appeal, finding the judge properly exercised his discretion to refuse the adjournment and to control the court's process by muting a disruptive litigant.

The court also upheld the assessment officer's findings and the award of substantial indemnity costs against the appellants.

Staff of the Ontario Securities Commission brought a motion to summarily dismiss the respondent's motion to stay the enforcement proceeding for abuse of process.

The respondent alleged that Staff failed to adequately protect privileged documents obtained during a related criminal investigation.

The Tribunal held that the applicable standard for summary dismissal of a stay motion is the 'tenable case' standard, and that the Supreme Court's decision in Haevischer does not apply outside the criminal context.

The Tribunal found that Staff failed to establish that the respondent's motion had no reasonable prospect of success, as the alleged breach of privilege could potentially undermine the integrity of the justice system even if it did not compromise the fairness of the hearing.

Staff's motion was dismissed.

The Ontario Securities Commission brought a motion to quash the appellant's appeal of a Capital Markets Tribunal decision on the basis of prematurity.

The Tribunal had previously ruled that the Wagg process did not apply to documents the OSC obtained through its own investigation and intended to use in a merits hearing.

The Divisional Court granted the motion to quash, finding that the Tribunal's evidentiary ruling was an interlocutory decision, not a final decision, and therefore no appeal was permitted under s. 10(1) of the Securities Act.

The respondent brought a motion to restrict Staff's use of documents that were also used in a parallel criminal proceeding against the respondent and his company.

The respondent argued that the documents should be subject to the screening process established in D.P. v Wagg.

The Tribunal dismissed the motion, finding that the Wagg process did not apply because Staff obtained the documents through its own investigation, rather than receiving them as Crown disclosure.

The Tribunal noted that applying Wagg would improperly impose unnecessary constraints on Staff.

Alice Zhou brought a motion seeking intervenor status in an enforcement proceeding against Xiao Hua (Edward) Gong for alleged securities fraud and unregistered trading.

Zhou claimed to represent investors in China and raised concerns about Gong's identity and potential forged documents.

The Capital Markets Tribunal dismissed the motion, finding that Zhou was not directly affected by the proceeding, would not likely make a unique and useful contribution, and had other avenues to communicate her concerns, such as contacting Staff.

The appellant requested corrections to a previous endorsement, arguing it inaccurately stated he had been charged with criminal fraud and that the insurer alleged he assisted his mother's impropriety.

The court amended the endorsement to clarify that only his mother was criminally charged, as consented to by the respondent.

However, the court declined to amend the statement regarding the civil allegations, finding that the original endorsement actually understated the severity of the insurer's fraud and conspiracy allegations against the appellant.

The appellants appealed an assessment officer's decision ordering them to pay $41,541.79 in legal fees to their former lawyers.

The appellants, who were self-represented, argued that the lawyers did not justify their fees and raised various procedural and ethical complaints.

The Superior Court of Justice dismissed the appeal, finding no error in principle, misapprehension of evidence, or palpable and overriding error in the assessment officer's decision, and noted the appellants' inconsistent arguments and disruptive behaviour during the proceedings.

The court determined the scale and quantum of costs following the dismissal of the plaintiff's claims in two consolidated actions.

The defendants sought substantial indemnity costs, alleging abuse of process, unsubstantiated allegations, and undue complication of litigation.

The court declined to award substantial indemnity costs, finding the plaintiff's conduct, while meritless and complicating, did not rise to the level of maliciousness or sanctionable abuse of process.

Partial indemnity costs were awarded to the Grohotolski Defendants ($136,677.24), Ms. Steele and Ms. Wolfe ($78,316.92), and Motion Endeavours, Tim Quocksister, and Silver Arrow ($16,000.00).

The court also set out a process for the remaining counterclaims by Mr. Quocksister and Silver Arrow, requiring personal service of summary judgment motion materials on the plaintiff.

The Crown brought an application to unseal documents held by an accounting firm (PWC) that were subject to a production order in a fraud investigation.

The respondent claimed blanket solicitor-client and litigation privilege over the entire PWC file, arguing the accountants were retained by his law firm to assist with a CRA voluntary disclosure application.

The court rejected the blanket privilege claim, finding that the accountants were primarily performing independent accounting functions (preparing tax returns) rather than acting solely as a conduit for legal advice.

The court ordered a document-by-document review by appointed referees to identify any specific privileged communications.

The plaintiff brought actions claiming ownership of a 1973 Dino Ferrari and interests in his parents' motel business, alleging improper conversion of assets by his mother's attorneys for property.

The defendants moved for summary judgment.

The court found that the motel was a partnership between the parents, the plaintiff was merely an employee, and the Ferrari was an asset of the motel business despite being registered in the plaintiff's name.

The court dismissed the plaintiff's claims for unjust enrichment, oppression under the Business Corporations Act, and conversion of personal property, granting summary judgment in favour of the defendants.

Following the dismissal of the applicant's motion for a capacity assessment of his mother, the successful respondents sought substantial indemnity costs of approximately $115,000 based on Rule 49 offers to settle.

The court held that Rule 49.10 does not apply to award substantial indemnity costs when a plaintiff's claim fails entirely.

Applying the factors under Rule 57.01, the court found the time spent by the respondents' counsel was excessive and not proportional to the straightforward nature of the issues.

Costs were fixed at $25,000 for the respondent mother and $10,000 for the respondent attorneys.

The defendants moved to set aside a noting of default and default judgment, which had been granted after years of "bad litigation behaviour" and failure to comply with court orders, including payment of costs.

The original claim involved the defendant Rose Venneri Donatelli misrepresenting herself as a qualified psychologist with a Ph.D. The court applied the Healey factors for setting aside default judgments, finding the default intentional, the motion untimely (2.5 years after judgment), and no arguable defense on the merits.

The court emphasized that allowing the defendants to continue would be an affront to the integrity of the administration of justice, given their repeated non-compliance and the fact that the underlying judgment had been upheld through multiple appeals.

The motion was denied.

The appellant, Matthew Woodham, appealed his conviction for assault causing bodily harm.

The appeal court found that the trial judge erred in assessing identification evidence, misstated and misapplied the test from R. v. W.(D.), and made palpable and overriding errors in assessing witness credibility by misapprehending evidence, engaging in speculation, and drawing unsupported inferences.

These errors were fundamental to the rejection of the defence's testimony and played a significant role in the conviction.

The appeal was allowed, the conviction quashed, and a new trial ordered.

An employee of the Ontario Psychological Association appealed a motion judge's decision striking out paragraphs of her counterclaim that sought contribution and indemnity against six named defendants who were officers and/or directors of the Association.

The Court of Appeal upheld the motion judge's decision, finding that the six individuals owed no duty of care to the employee.

The court rejected the appellant's arguments that the individuals failed to supervise her properly and that they owed a duty to the Association that, if breached, would result in liability for the appellant's conversion of the Association's money.

Leave to amend was denied.

The Crown alleged that the defendant, a long-serving office administrator of the Ontario Psychological Association, embezzled a significant amount of money between 2003 and 2013 through various methods including cheques payable to herself, cash withdrawals, debit card purchases, and electronic transfers.

The defendant contended that the organization operated as a family-run business with intermingled personal and business expenses that were accounted for and approved by executive directors and auditors.

The court found that while the volume of undocumented cash transfers appeared suspicious, the investigation was conducted unprofessionally and incompletely, and the defendant's evidence, combined with the inadequate investigation, raised a reasonable doubt.

The defendant was acquitted.

The Ontario Psychological Association (OPA) sued its former employee, Charlotte Mardonet, for misappropriating over $1.6 million.

Mardonet counterclaimed against the OPA and its individual officers and directors, seeking contribution and indemnity based on their alleged failure to supervise her.

The individual officers and directors moved to strike these paragraphs of the counterclaim, arguing they disclosed no reasonable cause of action.

The court granted the motion, finding it plain and obvious that officers and directors owe no duty of care or fiduciary duty to an employee to protect them from their own wrongdoing.

The defendant applied for production of third-party records held by the Ontario Psychological Association, specifically emails and accounting records (AccPac) for the period January 10, 2003 to June 13, 2013.

The defendant was charged with theft and fraud related to alleged diversion of organizational funds over a 10.5-year period.

The court applied the O'Connor test for third-party record production and determined that the requested documents were likely relevant to the proceedings.

The court found that emails and accounting records could assist in establishing the chronology and narrative of events central to the allegations.

The court ordered the third party to review the records for privilege before production to the court.

The appellants appealed a motion judge's order quashing notices of examination served on the responding defendants in relation to a Mareva injunction motion.

The responding defendants moved to quash the appeal, arguing the order was interlocutory.

The Court of Appeal granted the motion to quash, finding that the order was interlocutory because it did not terminate the underlying action or resolve a substantive claim or defence.

The appeal lies to the Divisional Court.