Peter-Paul E. Du Vernet

Following a merits decision finding that the Respondents breached the registration and prospectus requirements of the Securities Act, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission first ruled that transcripts from the merits hearing were admissible to provide evidence on sanctioning factors.

The Commission then imposed permanent cease trade orders on the corporate respondent and 10-year cease trade and director/officer bans on the individual respondents.

Administrative penalties totaling $580,000 were ordered against the individual respondents.

The Commission declined to order disgorgement due to uncertainty in calculating the amounts obtained from the illegal conduct.

Costs of $126,216.04 were awarded to Staff, discounted for unproven allegations and unaccepted evidence.

A renovation contractor brought an action to recover unpaid amounts for residential renovation work and to enforce a construction lien.

The homeowners alleged the project was subject to a $100,000 budget cap and a mid‑January completion deadline and advanced a substantial counterclaim alleging defective workmanship and misrepresentation by the contractor and an associated interior designer.

The court rejected the homeowners’ evidence as lacking credibility and accepted the contractor’s evidence that the parties agreed to a revised renovation budget with additional extras requested during construction.

The court found the total contract price, including extras, exceeded the amount paid and that the homeowners owed the contractor outstanding amounts.

After accounting for certain deficiencies and repair issues, the court reduced the amount recoverable and dismissed the claims against the interior designer and her company.

The appellant client appealed an order varying an Assessment Officer's report.

The motion judge found that the Assessment Officer exceeded his jurisdiction by determining that the appellant was not a client of the respondent solicitor, which constituted a dispute over the retainer.

The Divisional Court dismissed the appeal, agreeing that the Assessment Officer improperly determined a retainer issue.

The court also upheld the motion judge's order imposing joint and several liability, noting the parties had previously consented to proceed by assessment on that basis.

The appellants/applicants sought to appeal and judicially review an interlocutory decision of the Ontario Securities Commission regarding the composition of a panel for a sanctions hearing.

The Divisional Court dismissed the appeal for lack of jurisdiction under s. 9(1) of the Securities Act, which only permits appeals from final decisions.

The application for judicial review was quashed as premature, as the procedural fairness and jurisdictional issues could be raised after the final decision.

Two appeals were brought from the decision of a Claims Officer in insolvency proceedings under the Companies’ Creditors Arrangement Act concerning disputed landlord claims arising from leases originally entered in 1979.

One appellant challenged the Claims Officer’s jurisdiction to permit an amendment to a proof of claim and argued that the landlord failed to provide clear and timely notice of an intention to seek prospective damages following lease repudiation.

The other appellant argued that its claim was wrongly disallowed on the basis that notice of its intention to claim damages was untimely and prejudicial to the assignor tenant.

The court held that the Claims Officer had jurisdiction under the claims order to permit amendments and determine procedural matters and that the notice given by one landlord was sufficient.

The court also held that the second landlord’s delayed notice, after entering into a new lease in mitigation, prejudiced the assignor and justified disallowance of its claim.

Both appeals were dismissed.

The court determined the costs consequences following multiple contested discovery and procedural motions in a commercial dispute.

The defendants sought costs after successfully opposing aspects of the plaintiff’s motion to vary a discovery timetable and after succeeding on their own motion requiring the plaintiff to amend pleadings, deliver a proper affidavit of documents, and answer undertakings.

The court found the defendants substantially successful and ordered the plaintiff to pay costs.

Although the defendants requested substantial indemnity costs based on alleged misconduct, the court held that the plaintiff’s positions were not egregious and awarded costs only on a partial indemnity scale.

Costs were fixed at $15,000 for one group of defendants and $20,000 for another, inclusive of taxes and disbursements.

The respondents brought a motion challenging the jurisdiction of a newly constituted panel to hear and decide the issues of sanctions and costs, arguing that the panel that heard the merits must also hear the sanctions.

The Commission dismissed the motion, finding that the Secretary has the authority to assign a new panel for the sanctions hearing, which is a separate hearing within the proceeding.

The Commission also found that proceeding before a new panel would not result in procedural unfairness, as the new panel would have access to the merits decision and transcripts, and the sanctions hearing involves forward-looking issues distinct from the retrospective merits hearing.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and an illegal distribution of MRS Sciences Inc. shares, relying improperly on the accredited investor exemption.

The Commission found that the respondents failed to exercise reasonable diligence to ensure investors qualified as accredited investors, and in some cases knew they did not.

The Commission concluded that the respondents breached the registration and prospectus requirements of the Securities Act.

Allegations of prohibited undertakings regarding future value, prohibited representations regarding future listing, and manipulative trading were dismissed due to insufficient evidence.

The individual respondents, as directors or de facto directors, were deemed to have authorized, permitted, or acquiesced in the corporate breaches.

The appellant appealed a bankruptcy order granted under s. 42(1)(j) of the Bankruptcy and Insolvency Act.

The respondent, a diamond merchant, brought the petition after the appellant failed to pay for diamonds.

The appellant argued the bankruptcy judge erred in finding it had debts with other creditors.

The Court of Appeal dismissed the appeal, finding the evidence supported the conclusion that the appellant had outstanding liabilities to other suppliers.

Following an appeal, the Court of Appeal issued a supplementary costs endorsement regarding the costs of the underlying summary judgment motion.

The Court directed that the costs of the motion be fixed by the motion judge in light of the appeal's result, unfettered by the terms of the original judgment.

The appellant appealed a summary judgment dismissing its action against the respondents for damages related to cracked heat recovery steam generators at a power plant.

The motion judge had ruled the claims were barred by the 12-month limitation period under the Professional Engineers Act.

The Court of Appeal upheld the dismissal of claims based on engineering design deficiencies but allowed the appeal regarding the proposed amended claims for breach of a product durability warranty, finding a genuine issue for trial as to whether those claims fell outside the scope of professional engineering services and were subject to a six-year limitation period.

The moving party sought leave to appeal a decision of the Ontario Municipal Board.

The Board had ruled it lacked jurisdiction to impose conditions on a private developer's subdivision approval for the benefit of an adjacent private landowner's future development.

The Divisional Court dismissed the application for leave, finding no reason to doubt the correctness of the Board's decision on jurisdiction and rejecting the argument that procedural defects could bestow jurisdiction.

The appellant appealed a trial judgment that declined to grant specific performance of a shareholders' agreement regarding his shares.

The Court of Appeal dismissed the appeal, noting that post-judgment events had largely overtaken the appeal and that the trial judge was not asked to address the applicability of the agreement to the appellant's personal shares separately.

The Court also declined to interpret the term 'voluntary retirement' in the agreement, leaving it open for any subsequent litigation regarding share valuation.

The appellant appealed a summary judgment granted in favour of the respondent bank.

The Court of Appeal set aside the summary judgment, finding that it would be unjust to decide the issues on a motion for summary judgment in the circumstances of the case.

The appellant was permitted to discover what happened to the monies and why they were not repaid to him.

The appellant appealed a trial judgment awarding the respondent $25,000 in damages for breach of contract and denying the appellant pre-judgment interest.

The Court of Appeal upheld the damage award as reasonable but found no basis for the respondent to retain three consignment watches without compensating the appellant.

The Court also held that the appellant was presumptively entitled to pre-judgment interest under the Courts of Justice Act.

The appeal was allowed in part.

The appellants appealed a judgment finding that three corporate entities were essentially one, that a disclosure document was not provided to the respondents, and that the respondents did not damage or steal equipment from the premises.

The Court of Appeal dismissed the appeal, finding that the motion judge did not err in deciding the matter on the merits rather than ordering a trial, and that her factual conclusions were amply supported by the record.

The appellant was the original tenant of commercial leases which it assigned to a subsidiary.

The assignee later became insolvent and repudiated the leases under s. 65.2 of the Bankruptcy and Insolvency Act.

The landlords sued the appellant for outstanding rent under the assignment clause.

The Supreme Court of Canada held that the repudiation of a lease by an insolvent assignee under s. 65.2 benefits only the insolvent and does not relieve the original tenant or assignor of its contractual obligations to the landlord.

The court-appointed interim receiver brought a motion to lift a stay pending appeal of an order approving the sale of the bankrupt companies' assets.

The appellants opposed the sale.

The Court of Appeal found that the appeal had questionable merit and that delaying the sale of the business as a going concern would cause manifest prejudice.

The motion was allowed, the stay was lifted, and the receiver was authorized to complete the sale.

The appellant landlords leased commercial space to the respondent, who subsequently assigned the leases.

The assignee became insolvent and repudiated the leases pursuant to s. 65.2 of the Bankruptcy and Insolvency Act.

The landlords sued the original tenant for rent arrears.

The motion judge dismissed the actions, finding the repudiation terminated the leases for all purposes.

The Court of Appeal allowed the appeal, holding that a repudiation under s. 65.2 only affects the obligations of the insolvent assignee and does not terminate the lease or release the original tenant from its primary liability to the landlord.

The appellant, a lawyer and undischarged bankrupt, pleaded guilty to fraud and breach of trust for misappropriating client funds.

The sentencing judge ordered him to pay compensation to the Law Society, which had partially reimbursed the victims, and to one victim for the balance of his loss.

The appellant appealed, arguing that the compensation order required the prior consent of the bankruptcy court.

The Supreme Court of Canada dismissed the appeal, holding that a compensation order under the Criminal Code is a personal order that does not require bankruptcy court consent to be made, though consent is required before it can be enforced against the bankrupt's property.

The Court also affirmed that the Law Society is a 'person aggrieved' through subrogation.