Peter J. Osborne

The Attorney General of Canada sought to reconsider a mid-trial ruling on solicitor-client privilege, requesting leave to file a new affidavit to support their claim.

The plaintiffs opposed this request.

The court declined to exercise its discretion to revisit the ruling, emphasizing the importance of finality in trial proceedings and noting that the issue had been fully argued previously.

The Attorney General was directed to forthwith produce the unredacted documents as per the original ruling.

During a complex commercial trial, an evidentiary dispute arose regarding the reading in of examination for discovery transcripts under Rule 31.11.

The defendant sought to introduce additional excerpts from its own witnesses' discoveries to qualify the plaintiffs' read-ins, and also sought to read in discovery evidence of the plaintiffs' witnesses who had already testified.

The court allowed some of the qualifying read-ins that directly explained the original answers but excluded others.

The court largely dismissed the defendant's request to read in the plaintiffs' discovery evidence, finding that doing so after the witnesses had testified without putting the evidence to them in cross-examination violated the rule in Browne v. Dunn and caused trial unfairness.

The Monitor in a CCAA proceeding sought court approval for a complex transaction involving a reverse vesting order (RVO) structure for the sale of electricity generation facilities of the Validus Entities to Macquarie and Far North Power Corp. The motion also requested the addition of a new entity (Residualco) as a debtor, approval of the Monitor's reports and fees, and an extension of the stay period.

The court granted all requested relief, finding the transaction commercially reasonable and in the best interests of stakeholders, particularly due to the highly regulated nature of the business which made an RVO necessary to preserve numerous permits and licenses.

The court also confirmed the appropriateness of the releases granted to various parties involved in the restructuring.

The defendants sought a third adjournment of two scheduled motions, including their cross-motion to dismiss the action or set aside default judgment, and the plaintiffs' motion to lift a stay on a writ of seizure and sale.

The defendants argued for the adjournment to file a new expert report after their initial expert's cross-examination raised concerns about the adequacy of the opinion.

The plaintiffs opposed, citing repeated delays and the defendants' attempt to "patch up" their case with new evidence.

The court denied the adjournment, emphasizing the need for finality, the waste of judicial resources, and the impropriety of introducing new evidence after cross-examination to address perceived weaknesses, aligning with the principles against case-splitting.

During a complex commercial trial involving the auction of wireless spectrum licences, the plaintiffs challenged the defendant's assertion of solicitor-client privilege over redacted portions of nine documents.

The defendant argued the challenge required leave under Rule 48.04 as the action had been set down for trial.

The court held that a trial judge has broad discretion to order production of non-privileged documents at any time under Rule 30.04(5) without leave, but would have granted leave in the interests of justice regardless.

After inspecting the unredacted documents, the court found that while some redactions properly protected legal advice, others merely reflected policy discussions or operational decisions that referenced legal risks, which do not attract privilege.

The defendant was ordered to produce the improperly redacted portions.

The Monitor in a CCAA proceeding sought an order to reject an amended claim filed by Wellesley Residences (2014) Corp., KJ Equity Inc., and Yonge-Abell Partnership.

The court applied the Blue Range test for accepting late or amended claims, which considers inadvertence, good faith, and prejudice.

The court found that the claimants failed to demonstrate inadvertence or good faith, noting that the amended claim was a new claim, not a particularization of the original placeholder, and that the claimants' principals were involved in the transactions triggering the claim but failed to disclose them for years.

The court also found relevant prejudice due to the delay impacting negotiated interim distributions.

The motion was granted, and the amended claim was rejected.

The appellant creditor appealed an order from the Registrar in Bankruptcy that significantly reduced his proof of claim against the bankrupt.

The claim, initially for $5.99 million and accepted by the Trustee at $2.58 million, was reduced to $85,000 by the Registrar.

The core of the dispute was a $3.5 million promissory note, which the bankrupt argued was contingent on a surplus from hotel sales that never materialized, and was part of a "Governing Agreement" made to influence the creditor's criminal sentencing in the US.

The court dismissed the appeal, upholding the Registrar's decision, finding that the Registrar properly considered extrinsic evidence (the factual matrix) in determining the note's contingency, and that the appellant's repeated attempts to re-introduce previously struck evidence constituted an abuse of process.

The applicants, trustees of two family trusts, sought rectification of sections of their trust deeds nunc pro tunc to correct a drafting error.

The error inadvertently prohibited the distribution of dividends from a family operating company (Signature Realty Inc.) to a corporate beneficiary (2267134 Ontario Inc. or "Holdco"), contrary to the parties' original intention for tax-efficient asset reduction.

The Canada Revenue Agency (CRA) had reassessed the trusts based on this prohibition.

The court applied the four-part Fairmont test for rectification, finding that a clear prior agreement existed, the instrument failed to accurately record it, the agreement was still effective, and rectification would carry out the agreement.

The court distinguished this case from situations involving retroactive tax planning, as the parties sought to correct a document that did not reflect their unchanged agreement, rather than to amend the agreement itself to avoid tax consequences.

The Attorney General of Canada did not oppose the application.

The defendants moved to set aside an ex parte order that extended the deadline for service of the Statement of Claim, alleging the plaintiff failed to make full and fair disclosure of material facts and caused prejudice.

The plaintiff cross-moved to validate service.

The court found that the plaintiff's affidavit on the ex parte motion was inadequate, failing to disclose that defendants' counsel had offered to accept service and that the MFDA was also investigating the defendants for the same conduct.

The court determined that the defendants suffered prejudice because they entered into a settlement agreement with the MFDA, making admissions that would impair their defence in this action, under the belief that the litigation was not proceeding.

The defendants' motion was granted, and the ex parte order was set aside.

The plaintiff's cross-motion was dismissed.

KSV Restructuring Inc., as court-appointed Monitor and Receiver for the Validus Entities (a group of power generation companies), brought motions seeking approval of a Sales and Investment Solicitation Process (SISP), authorization to implement it, approval of a Stalking Horse Bid by Macquarie Equipment Finance Ltd. and Far North Power Corp., approval of bid protections (break fee and expense reimbursement), approval of an Unknown Contract Bar Process, approval of Monitor's reports, and an extension of the stay of proceedings.

Additionally, the Receiver sought to increase its borrowing limit.

The Validus Entities opposed certain terms of the SISP and the Stalking Horse Offer, arguing the quantum owed to Macquarie was overstated, unconscionable, violated the anti-deprivation rule, and raised concerns about HST treatment.

The court granted all relief sought by the Monitor/Receiver, finding the SISP fair and transparent, the quantum owed to Macquarie correctly calculated under the sale-leaseback agreements, the anti-deprivation rule not engaged as the default was contractual, and the HST issues appropriately deferred to a transaction approval motion.

The court emphasized the need for stability and timely action to maximize recovery.

The DIP Agent sought the appointment of a non-possessory Receiver and approval of a Sale Solicitation Process (SSP) for iSpan Systems LP, which had filed a Notice of Intention to Make a Proposal and subsequently defaulted on its Amended Proposal payments.

The motion also sought to suspend the Claims Adjudication Process and Mediation.

The court found the appointment of a receiver appropriate to maximize value for stakeholders, as bankruptcy would destroy much of the business's value.

The proposed SSP was approved, with the court deferring to the Receiver's recommendations on timeline and deposit amount, despite objections from two unsecured creditors regarding these terms.

The Claims Adjudication Process was also suspended.

The plaintiff, a Paraguayan pension fund, brought a motion seeking a declaration of contempt against the defendants for failing to comply with a previous fraud judgment and non-dissipation order, and various ancillary orders compelling accounting, asset transfers, and examinations in aid of execution.

The court declined to find the defendants in contempt due to the high evidentiary threshold but granted most of the other relief sought, ordering the defendants to provide a full accounting of defrauded funds, sell a property in Guatemala and transfer the proceeds, provide tax returns, cease defamatory statements, pay outstanding costs, and re-attend examinations.

The request to examine the defendants' daughter was denied without prejudice.

PricewaterhouseCoopers (PwC), as the court-appointed Liquidator for the winding-up of Silicon Valley Bank's Canadian business, brought a motion seeking approval for a Claims Procedure, the appointment of Employee Representative Counsel, and authorization for interim distributions to the United States Federal Deposit Insurance Corporation (FDIC).

The motion was unopposed and supported by the FDIC and proposed Employee Representative Counsel.

The court approved all requested relief, finding the proposed procedures fair, efficient, and appropriate for the Winding-up and Restructuring Act (WURA) proceedings.

Terra Firma Capital Corporation sought court approval for a plan of arrangement under section 182 of the Business Corporations Act (Ontario), which would result in GM Capital Corp. acquiring all outstanding common shares of Terra Firma it did not already own.

The arrangement was overwhelmingly approved by both shareholders and minority shareholders.

The court applied the three-part test for approving arrangements, confirming that statutory procedures were met, the application was made in good faith, and the arrangement was fair and reasonable, supported by strong shareholder approval, board recommendations, and fairness opinions.

The final approval order was granted.

The applicant, Romspen Investment Corporation, sought the appointment of a receiver over the respondents' property and approval of an agreement of purchase and sale (the "Times Transaction").

A fifth-ranking mortgagee, Sow Capital Ontario Limited, brought a competing motion to approve its own power of sale transaction (the "281 Transaction") and sought to suspend the receiver's powers.

The respondents opposed both sale transactions, arguing for a receiver-conducted auction.

The court appointed Ernst & Young Inc. as receiver, approved the Times Transaction, and granted a sealing order, finding that the Times Transaction offered the best outcome for all stakeholders and that a further sales process was unnecessary.

The court dismissed Sow's motion to suspend receivership powers and the respondents' request for an auction or a reservation of rights to claim improvident sale.

The applicants, senior secured lenders, sought the appointment of a receiver over the assets of "The One" mixed-use construction project due to financial and covenant defaults by the borrower.

The project, significantly delayed and over budget, had outstanding debt of approximately $1.235 billion.

The appointment of Alvarez & Marsal Canada Inc. as receiver was unopposed by any key stakeholder.

The court granted the application, appointed the receiver, approved a super-priority receivership funding credit agreement of up to $315 million, and issued a stay of proceedings, finding it just and convenient to stabilize the situation and maximize recovery for all stakeholders.

The applicants, acting as Foreign Representative, sought a recognition order from the Ontario Superior Court of Justice for various orders issued by the United States Bankruptcy Court for the Southern District of Texas under the Companies’ Creditors Arrangement Act (CCAA).

The requested relief included approval of a sale of substantially all Chapter 11 Debtors’ assets, vesting orders for Canadian assets, and recognition of claims, assumption/rejection procedures, and key employee incentive plan orders.

The motion was unopposed and supported by the Information Officer.

The court found the transactions beneficial to stakeholders, the sale process fair and reasonable, and the U.S. orders consistent with CCAA principles, granting the requested recognition and approvals.

The moving party sought an order appointing Representative Counsel and a Non-Union Employee Representative for non-unionized employees terminated by the debtor following its Notice of Intention to Make a Proposal under the BIA.

The motion was unopposed and supported by the debtor and the Proposal Trustee.

Applying the CanWest factors, the court found the non-union employees to be a vulnerable group requiring representation to advance their claims.

The court granted the order, finding it would benefit all stakeholders by streamlining the claims process and avoiding a multiplicity of legal retainers.

The applicants brought a motion to declare Ronald Hitti a vexatious litigant under section 140 of the Courts of Justice Act and, alternatively, to prohibit him from making further motions without leave under Rule 37.16.

The court reviewed Hitti's persistent and acrimonious conduct, including repeated unsuccessful motions, failure to pay multiple costs awards, and abusive correspondence.

The court found that Hitti's conduct met the criteria for vexatious litigation, granted the relief sought, declared him a vexatious litigant, and prohibited him from bringing further motions without leave.

Costs were awarded against Hitti.

The Plaintiffs, Anson Advisors Inc. and Moez Kassam, brought a motion for default judgment against Andrew Rudensky for defamation, seeking $500,000 in general damages and a permanent injunction.

Rudensky, who had been noted in default and had largely ignored the proceedings, appeared at the last minute to request an adjournment, which was denied.

The court found that the facts pleaded in the Amended Claim, deemed admitted by Rudensky's default, established the tort of defamation.

Considering the extensive and malicious nature of the online publications, the plaintiffs' professional standing, and the defendant's persistent and evasive conduct, the court awarded $450,000 in general damages and granted a permanent injunction to prevent further defamatory publications.

Costs were also awarded to the plaintiffs.