Peter B. Kolla

Self-represented long-term disability beneficiaries sought leave to appeal a sanction order from the Superior Court of Justice in the Nortel Networks CCAA proceedings.

The applicants challenged their binding status under the 2009 Representation Order for Disabled Employees and the 2010 Employee Settlement Agreement.

The Court of Appeal dismissed the motion for leave to appeal, finding that the stringent test for leave in CCAA proceedings was not met.

The proposed appeal lacked merit, the applicants were bound by the settlement agreement, and further delays in the protracted litigation were to be avoided.

The court also rejected a late-filed notice of constitutional question challenging sections 6(1) and 11 of the CCAA.

The plaintiffs moved to add Chevron Canada Capital Company (CCCC) as a party defendant to their action seeking to enforce an Ecuadorian judgment against Chevron Corporation.

The court dismissed the motion, finding that the proposed amendment was not legally tenable and disclosed no cause of action against CCCC, as the court had previously ruled that Chevron Canada's corporate veil could not be pierced.

Furthermore, the court found no basis for jurisdiction over CCCC, a Nova Scotia company with no assets or operations in Ontario, and noted that Rule 17.02(o) regarding necessary parties had been repealed.

The plaintiffs sought to enforce a US$9.5 billion Ecuadorian judgment against Chevron Corporation and its seventh-level indirect subsidiary, Chevron Canada Limited.

The defendants moved for summary judgment to dismiss the claim against Chevron Canada, arguing it was a separate legal entity not liable for the judgment.

The plaintiffs argued Chevron Canada's assets were exigible under the Execution Act or that the corporate veil should be pierced.

The court granted summary judgment dismissing the claim against Chevron Canada, finding the Execution Act does not override corporate separateness and there was no basis to pierce the corporate veil absent allegations of wrongdoing by the subsidiary.

The plaintiffs also moved to strike Chevron's statement of defence.

The court struck defences relating to retroactive legislation and international law, but permitted defences alleging the Ecuadorian judgment was procured by fraud, bribery, and a denial of natural justice to proceed to trial.

The parties, who were partners in a land development project, disputed the interpretation of their Limited Partnership Agreement (LPA) and a subsequent 2005 document regarding the allocation of building lots.

The application judge declared the 2005 document enforceable and held that actions against a defaulting partner under Article 8.2 of the LPA required unanimous consent.

On appeal, the Court of Appeal upheld the enforceability of the 2005 document, finding it clarified an unclear term and was supported by functional consideration.

However, the Court allowed the appeal regarding Article 8.2, concluding that interpreting it to require unanimous consent would render other provisions meaningless and lead to commercially absurd results.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

In a foreign judgment recognition and enforcement appeal, the Court held that an enforcing forum need not establish a real and substantial connection between itself and either the dispute or the judgment debtor.

The only jurisdictional prerequisite is that the foreign court issuing the judgment had proper jurisdiction under the real and substantial connection framework or traditional grounds.

The Court also held that traditional presence-based jurisdiction over a corporate defendant is established where the corporation carries on business in the province and is served there.

Questions about ultimate enforceability against related corporate entities were left for later procedural stages.

Various parties brought motions seeking reconsideration or clarification of a prior joint allocation decision determining the distribution of $7.3 billion in escrow among debtor estates in multinational insolvency proceedings.

The moving parties argued that aspects of the allocation methodology—including treatment of bond guarantee claims, certain asset sale proceeds, intercompany claims, tax claims, and settled claims—required amendment or clarification.

The court reiterated that reconsideration is an exceptional remedy and rejected most requests because the issues either had been addressed at trial or could have been raised earlier.

Limited clarification was granted regarding the treatment of bondholder claims against guarantors and recognition of certain court‑approved settled pre‑filing claims that had been paid.

Other requested clarifications or amendments were denied.

On a motion for a stay pending leave applications to the Supreme Court of Canada, the moving parties sought to suspend an order holding that Ontario had jurisdiction over an action to recognize and enforce a foreign judgment of approximately $9.51 billion.

The court applied the RJR-MacDonald test as modified for stays pending leave applications, requiring consideration not only of a serious issue but also of the merit and public importance requirements under s. 40(1) of the Supreme Court Act.

The court found serious questions concerning recognition and enforcement jurisdiction, enforcement against a non-party to the foreign judgment, and the possible role of corporate veil-piercing, all of which met the public importance threshold.

Although irreparable harm was shown only weakly, the balance of convenience and interests of justice favoured a temporary pause pending the Supreme Court of Canada’s leave determinations.

The motions were granted and the parties bore their own costs.

The appellants, indigenous Ecuadorian villagers, obtained a multi-billion dollar judgment in Ecuador against the respondent corporation for environmental pollution.

They brought an action in Ontario to recognize and enforce the judgment against the corporation and its Canadian subsidiary.

The motion judge found that Ontario had jurisdiction but stayed the action on his own initiative, finding the corporation had no assets in Ontario and the corporate veil of the subsidiary could not be pierced.

The Court of Appeal allowed the appeal and set aside the stay, holding that the motion judge erred in granting an unrequested discretionary stay and prematurely deciding the merits of the enforcement action.

The Court dismissed the respondents' cross-appeal, confirming that a real and substantial connection between the subject matter of the litigation and Ontario is not required to establish jurisdiction for an action to enforce a foreign judgment.

Following earlier reasons dismissing most applicants’ requests for interim advancement of legal expenses from a corporation, the court addressed the costs of the applications.

The respondent corporation sought substantial indemnity costs exceeding $559,000 or alternatively partial indemnity costs, while the applicants argued that costs should remain in the cause of the underlying indemnity issue.

The court held that although the respondent was largely successful, payment of costs should be contingent on the outcome of the trial determining entitlement to indemnity.

The court fixed partial indemnity costs of $25,000 for a related motion and $165,000 for the applications, subject to specific allocations among applicants and exceptions for one successful applicant and another who withdrew participation.

The appellant former directors and officers of Look Communications Inc. sought advance funding for their legal costs to defend an action brought against them by the corporation for breach of fiduciary duty.

The corporation resisted the claims under s. 124(4) of the Canada Business Corporations Act, arguing the appellants had not acted in good faith.

The application judge refused advance funding, finding the corporation had established a strong prima facie case of bad faith regarding equity cancellation payments and legal retainers.

The Court of Appeal dismissed the appeal, confirming that s. 124(4) applies to actions brought by the corporation and that the strong prima facie case standard is the appropriate test for denying advance funding.

The EMEA Debtors sought leave to appeal an order approving an Allocation Protocol that provided for a joint trial by the Ontario Superior Court of Justice and the US Bankruptcy Court for the District of Delaware to allocate over US$7 billion in proceeds from the sale of Nortel assets.

The moving parties argued the joint trial violated the Ontario court's independence and that the parties had previously agreed to binding arbitration.

The Court of Appeal dismissed the motion for leave to appeal, finding the proposed appeal lacked prima facie merit as the joint trial did not infringe judicial independence and the relevant agreement did not mandate arbitration.

The applicant sought to quash a municipal by-law repealing a heritage designation affecting its hotel property and sought related relief concerning heritage property tax rebates.

The municipality had approved demolition of the original designated heritage building in 1996 but did not repeal the designation by-law until 2012, when it enacted a repealing by-law retroactive to the demolition approval date pursuant to the Ontario Heritage Act.

The applicant alleged illegality and bad faith, arguing that the municipality failed to provide prior notice and enacted the repeal retroactively to defeat its tax rebate claims.

The court held that prior notice was not required where the Act mandated repeal following approval of demolition, and that the retroactive repeal was a reasonable step to comply belatedly with statutory requirements.

The applicant failed to establish bad faith or illegality, and further failed to meet additional eligibility criteria for the heritage tax rebate program.

The appellants appealed from the Court of Appeal's reversal of the CCAA court's decision regarding the priority of pension plan wind-up deficiency claims over court-ordered DIP financing charges.

The majority held that wind-up deficiencies under s. 75(1)(b) of the Pension Benefits Act were subject to a statutory deemed trust under s. 57(4), but that the deemed trust was superseded by the DIP charge by virtue of the doctrine of federal paramountcy.

The majority further held that while the employer-administrator breached its fiduciary duty by failing to ensure the pension plan beneficiaries had adequate notice and representation in the CCAA proceedings, a constructive trust was not an appropriate remedy because the breach did not result in an identifiable asset that it would be unjust for the wrongdoer to retain.

Former directors, officers, and consultants of Look Communications Inc. sought interim advancement of their legal fees to defend against an action brought by Look alleging breach of fiduciary duty regarding bonus and equity cancellation payments.

The court held that s. 124(4) of the CBCA applies to actions brought directly by the corporation, requiring court approval for advancement.

The court found Look established a strong prima facie case of mala fides against the directors and officers, rebutting the presumption of good faith.

Advancement was denied for all applicants except one employee, Dolgonos, whose entitlement arose under an indemnity agreement not subject to s. 124(4).

The appellants, residents of Ecuador, brought negligence actions against Copper Mesa Mining Corporation, its directors, and the TSX defendants for alleged human rights abuses committed by security forces in connection with a mining project in Ecuador.

The appellants claimed the TSX defendants owed a duty of care not to list Copper Mesa's shares, and the directors owed a duty to avoid acts contributing to the abuses.

The Court of Appeal upheld the motions judge's decision to strike the claims under Rule 21.01(1)(b), finding that the pleadings failed to establish the requisite foreseeability and proximity under the Cooper-Anns test to ground a novel duty of care.

The appellant appealed a judgment of the Superior Court of Justice, renewing two arguments made at trial.

The Court of Appeal agreed with the trial judge's reasons and conclusion, dismissing the appeal and awarding agreed costs of $10,000 to the respondent.

The plaintiffs sought leave to appeal an interlocutory order transferring three related actions to the Commercial List.

The plaintiffs argued that the actions, which alleged negligence against the defendants for their involvement in mining operations in Ecuador, were not commercial in nature.

The Divisional Court dismissed the motion, finding no good reason to doubt the correctness of the motion judge's discretionary decision to transfer the actions, as the pleadings relied on commercial statutes and raised issues of corporate governance.

The court also found that the proposed appeal did not involve matters of general public importance.