Pavle Masic

The appellants appealed a summary judgment order requiring them to pay $285,000 in damages to the respondents for breach of contract and unjust enrichment arising from a failed real estate transaction.

The parties had entered into an agreement for the respondents to purchase a parcel of land, conditional on the appellants obtaining municipal approval for a condominium conversion within two years.

When approval was not obtained, the respondents sued.

The Court of Appeal allowed the appeal, finding the motion judge made palpable and overriding errors in concluding the appellants breached their duty of good faith.

The Court also held the motion judge erred in applying unjust enrichment where a contract governed the relationship, and failed to provide sufficient reasons for dismissing the appellants' counterclaim.

A new trial was ordered.

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

This case involved two applications concerning a family business dispute.

Arif Al-Ali (father) sought declarations that Anwar Al-Ali (son) breached his duties under a Continuing Power of Attorney for Property (POA) and committed corporate oppression by wrongfully transferring shares and removing the father from corporate positions in Poppa Corn Corporation.

Anwar Al-Ali (son) brought a cross-application seeking specific performance or damages related to an agreement for 50% of Poppa Corn shares in exchange for work in Romania.

The court found that the son breached his fiduciary duties under the POA and that his actions constituted corporate oppression.

The court also determined that the son was not entitled to the shares as he had already been compensated in cash for his work in Romania, and his cross-application was statute-barred.

The father's alleged oppression of the son was dismissed.

The plaintiff condominium corporation sought the appointment of an interim receiver over one of the defendant corporations (2502511 Ontario Corp.) and the continuation of a Mareva injunction, alleging fraudulent depletion of its reserve account.

The defendants opposed the receiver appointment and sought the lifting of the Mareva injunction.

The court found a strong prima facie case of fraud and noted the defendants' non-compliance with disclosure obligations and previous court orders.

Given the significant risk of asset dissipation and the defendants' failure to operate transparently, the court granted the plaintiff's motion for a limited interim receiver over 2502511 Ontario Corp. and extended the Mareva injunction, while authorizing a reduced monthly living expense for one defendant.

The plaintiff condominium corporation brought an ex parte motion for a Mareva injunction and a Norwich order against its former property manager and associated individuals and corporations.

The plaintiff discovered that the defendants had depleted its reserve account by over $900,000 through forged cheques and counterfeit bank statements.

The court found a strong prima facie case of fraud and a real risk of asset dissipation, granting the Mareva injunction.

The court also granted a Norwich order to compel disclosure from the banks involved to trace the misappropriated funds.

SureFire Dividend Capture LP (SDC) sought indemnification from Berkshire Hathaway Specialty Insurance under a fidelity bond for losses incurred due to a Ponzi scheme perpetrated by Brenda Smith, manager of Broad Reach Capital, LP (BRC), in which SDC had invested.

SDC claimed coverage under three insuring agreements (A)(1), (A)(4), and (B)(1)(b) of the Bond.

The court found that SDC failed to establish that its loss fell within the initial grant of coverage under any of the agreements, primarily because the stolen funds belonged to BRC, not SDC or its investors, and Brenda Smith was not an "Employee" of SDC as defined by the Bond for the purposes of SDC's direct claim.

The court also noted that SDC failed to disclose a material "in-kind" transfer of interests from other funds to SDC, which would have excluded coverage for that portion of the loss.

SDC's claim for punitive damages for bad faith was also dismissed.

The appellant, a professional accountant and second-time bankrupt, appealed a conditional discharge order requiring him to pay $325,000 to the Trustee.

The application judge found the appellant untruthful, evasive, and in breach of disclosure obligations under the Bankruptcy and Insolvency Act, including failing to disclose businesses, records, property, vehicle sales, and loans/inheritance from his mother.

The Court of Appeal dismissed the appeal, affirming the conditional discharge was based on the appellant's conduct and disclosure breaches, not surplus income under s. 68.

The court also addressed improper ex parte communications by the Trustee, finding no miscarriage of justice.

The appellants appealed the dismissal of their breach of contract claim, which was dismissed under Rule 60.12(b) for their persistent failure to comply with interlocutory orders requiring them to permit the respondents to inspect disputed limestone.

The Court of Appeal found no merit in the appellants' position, noting their history of non-compliance and attempts to avoid the inspection order.

The court upheld the motion judge's decision to dismiss the claim, finding it amply justified, and denied leave to introduce fresh evidence blaming former counsel, stating such complaints are for a negligence action.

This endorsement addresses a dispute over document production costs in Ontario, arising from letters of request issued by a Florida court to compel the respondent, Mr. Smith, to produce documents and attend examination in aid of US litigation.

The applicants (Perlmutters and Mr. Peerenboom) sought to avoid or shift the costs of Mr. Smith's counsel reviewing documents for relevancy and privilege, arguing Mr. Smith was an interested party and not impecunious.

The court affirmed its prior ruling that Mr. Smith's counsel must conduct the review and that the applicants are liable for these costs on a full indemnity basis, ordering them to pre-pay $200,000 for continued document production.

The parties attended a case conference to address the implementation of a prior order enforcing Letters of Request from a Florida court.

The court clarified that the prior order only applies to examinations conducted in Ontario, not to depositions held in Florida.

The court also ruled that the respondent's Ontario counsel is entitled to review documents generated by keyword searches for relevancy prior to production, provided they produce a log of all hits indicating their relevancy determinations.

This endorsement addresses the issue of costs following an application to enforce two Letters of Request from a Florida court, directed at David Smith.

The underlying dispute involved allegations of a hate mail campaign orchestrated by Isaac Perlmutter against Harold Peerenboom, with David Smith allegedly involved.

All parties (Isaac and Laura Perlmutter, Harold Peerenboom, and David Smith) sought costs for the Canadian application.

The court found it impossible to meaningfully decide the issue of costs without knowing the ultimate results of the two related Florida actions, as the success or failure of the allegations would significantly impact the entitlement to costs.

Given the ongoing litigation and the direct interest of all parties in the outcome, the court ruled that each party should bear its own costs.

The plaintiffs sued the defendants for supplying inferior limestone, alleging breach of contract.

The key issue in the lawsuit was the nature of the limestone, requiring an inspection by the defendants' expert.

Despite multiple court orders from a Master and a Superior Court judge, and the dismissal of frivolous appeals, the plaintiffs repeatedly obstructed the defendants' attempts to conduct the necessary inspection and failed to pay costs orders.

The defendants brought a motion to dismiss the action due to the plaintiffs' persistent non-compliance with interlocutory orders and abuse of process.

The court granted the motion, dismissing the action under Rule 60.12(b), finding that the plaintiffs had no intention of permitting the essential inspection and were abusing the court's process.

The Royal Bank of Canada (RBC) was successful in its motion for summary judgment to enforce guarantees against the defendants.

This endorsement addresses RBC's request for costs of both the motion and the action on a substantial indemnity basis, as provided for in the guarantees.

The defendants argued for partial indemnity costs due to alleged unfair conduct by RBC.

The court found no reason to depart from the contractual provision for substantial indemnity costs, as the defendants' allegations of inequitable conduct were not substantiated.

The court also found the requested amount of $84,490.38, inclusive of fees, disbursements, and HST, to be fair and reasonable.

The plaintiff bank brought a motion for summary judgment to enforce personal guarantees signed by the defendants for loans made to a now-bankrupt corporate borrower.

Three of the defendants brought competing summary judgment motions seeking to discharge their guarantees, arguing they lacked independent legal advice and that the bank acted in a commercially unreasonable manner.

The court granted the plaintiff's motion and dismissed the defendants' motions, finding the guarantees valid and enforceable.

The court held that the lack of independent legal advice did not invalidate the guarantees absent unconscionability or misrepresentation, and the express terms of the guarantees precluded the commercially unreasonable realization defence.

The defendants' counterclaims were also dismissed.

The plaintiffs brought two motions.

The first sought further document production and answers to undertakings/refusals regarding limestone supplied to their property.

The second sought to vary a previous order (February 13, 2019) allowing the defendants to take stone samples, alleging fraud and new evidence.

The court found that the defendants had largely complied with undertakings and dismissed the non-undertakings aspect of the first motion.

For the second motion, the court determined that the plaintiffs failed to prove fraud on a balance of probabilities, that the alleged fraud was not material, and that the plaintiffs did not exercise due diligence, as the information was largely available to them previously.

Both motions brought by the plaintiffs were dismissed, and the previous inspection order was amended to allow a different qualified stonemason to attend due to delay.

Costs were awarded to the defendants.

The court-appointed receiver, Grant Thornton Limited, brought a motion to disallow approximately $105.5 million in claims made by companies owned or controlled by Enzo Mizzi (the "Claimants") against the Silverfern Secured Mortgage Fund and GTA Private Capital Income Fund (the "Mortgage Investment Funds").

The Claimants alleged damages for loss of profit due to the Mortgage Investment Funds' failure to advance loan amounts and for costs of development services.

The court determined that the motion should proceed summarily, with the onus on the Claimants to prove the Receiver made an error of law or palpable and overriding error of fact.

The court found no evidence that the Mortgage Investment Funds were parties to the loan agreements or had an obligation to advance funds, nor any agreement to pay for development costs.

Consequently, all disputed claims were disallowed.

The plaintiffs brought a motion for leave to amend their statement of claim to allege a breach of minutes of settlement by the defendants.

The defendants opposed the motion, arguing the proposed amendments were barred by the Limitations Act, 2002, as the plaintiffs ought to have discovered the alleged defects in the replacement materials upon delivery.

The court granted leave to amend, finding it was not clear that the claim was statute-barred, as the plaintiffs may have reasonably relied on the defendants' good faith in fulfilling the settlement.

The court also granted the plaintiffs' request to transfer the action to the ordinary procedure due to an increase in claimed damages.

The appellant appealed the dismissal of its motion to stay the respondents' counterclaim on grounds of lack of jurisdiction, forum non conveniens, and an arbitration clause.

The motion judge found two presumptive connecting factors establishing Ontario's jurisdiction: the tort of fraudulent misrepresentation was committed in Ontario, and the contract was made in Ontario.

The motion judge also determined that the arbitration clause in a draft agreement was never agreed upon by the parties and therefore did not oust Ontario's jurisdiction.

The Court of Appeal upheld the motion judge's decision, finding no error in the factual findings or legal conclusions.

The defendants brought a motion to set aside a noting of default and default judgment obtained by the plaintiffs for unpaid accounting fees.

The court found the defendants did not provide a plausible explanation for the default and did not bring the motion promptly.

However, the court found the defendants had an arguable defence regarding joint and several liability and a potential limitation period defence for some invoices.

The court varied the default judgment to reflect the defendants' limited personal liability and set aside the noting in default to allow them to defend the remaining claims.

The Receiver brought a motion seeking a determination on whether the estates of Redstone Investment Corporation (RIC), Redstone Capital Corporation (RCC), and 1710814 Ontario Inc. o/a Redstone Management Services (RMS) should be substantively consolidated.

RIC and RMS Investors argued for consolidation, while RCC Investors opposed it, citing a General Security Agreement (GSA) granting RCC priority over RIC's assets.

The court found the founder's (Mr. So) evidence unreliable and dismissed subjective investor state of mind as irrelevant to the consolidation analysis.

Applying the Northland factors, the court determined that the elements of consolidation were not present, as assets were segregable, financial statements were separate, and significant prejudice would result to RCC Investors if consolidation were ordered.

The motion for substantive consolidation was denied.