Peter W. G. Carey

The appellants appealed a judgment granting a permanent injunction restraining the appellant wife from selling her shares in her personal holding company without the consent of her former husband, and dismissing her motion for corporate governance relief.

The Court of Appeal upheld the motion judge's finding that an implied term restricting the sale of shares was necessary to give business efficacy to the parties' separation agreement.

However, the Court allowed the appeal in part, finding that under s. 148 of the Business Corporations Act, the appellant's holding company was entitled to receive audited financial statements from the specific corporation in which it held shares.

The moving defendant sought to vary a Mareva injunction to release funds for restitution in an unrelated criminal matter, criminal defence legal fees, and additional civil legal fees.

Applying the four-part test for variation of a Mareva order set out in Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, the court held that the moving party failed to provide full and frank disclosure of his current assets and liabilities and did not establish that no other assets were available to pay the requested expenses.

The examination of the moving party revealed significant gaps, refusals to answer questions, and unexplained financial transactions, preventing the court from properly applying the governing test.

The court also noted that the proposed restitution payment and criminal defence fees were not clearly within the categories of living or legal expenses typically permitted under a Mareva order.

The motion was largely dismissed, with a limited variance permitting potential release of $25,000 for civil legal fees subject to strict proof of prior payments.

The moving defendants sought to set aside a Mareva injunction freezing their assets in a civil fraud action involving alleged fraudulent factoring transactions worth approximately $6.5 million.

The court considered whether the plaintiff continued to demonstrate a strong prima facie case of fraud and a real risk of asset dissipation.

Evidence showed that the moving defendants’ companies received substantial funds from entities involved in the fraud, that explanations for the transactions were unsupported by documentation, and that the alleged sale of a business appeared suspicious.

The court also noted conduct inconsistent with the injunction, including the use of undisclosed bank accounts.

The court held that the plaintiff continued to meet the requirements for a Mareva injunction.

The plaintiffs sought repayment of a $1 million non-refundable amount paid under a mining share and debt purchase and lock-up agreement after they failed to complete a proposed takeover bid.

They alleged breach of contract arising from the defendants’ handling of a third-party financing proposal, non-delivery of share certificates, and exercise of a repurchase option, and argued the option was an unenforceable penalty or should be relieved against in equity.

The court held there was no contractual obligation to shut down the third-party transaction, no fundamental breach in relation to share certificates or the $1.00 repurchase payment, and no damages were proven on those allegations.

Applying the relief from forfeiture jurisprudence, the court found the clause was a forfeiture provision, not penal, and in any event not unconscionable in a heavily negotiated agreement between sophisticated parties.

The action was dismissed.

Following a merits hearing where the respondents were found to have engaged in unregistered trading and illegal distribution of securities in relation to a Ponzi scheme (Gold-Quest), the Commission held a sanctions and costs hearing.

The Commission found that the respondents were duped by the scheme's promoters and believed they were operating under a 'friends and family' exemption, which mitigated their culpability.

The Commission ordered five-year market bans, full disgorgement of commissions earned, administrative penalties of $15,000 for each individual respondent, and costs against one represented respondent.

The defendants moved to remove the plaintiffs' solicitors of record, Hodder Barristers.

The defendants alleged that the plaintiffs' counsel had previously acted for a different plaintiff in related litigation against the current plaintiff, and that counsel would be required to give evidence at trial regarding alleged collusion and abuse of process.

The court found that while the administration of justice would not be brought into disrepute merely by counsel acting for the plaintiffs, there was a real likelihood that counsel would be called as a witness regarding discussions he had with the plaintiff during the related litigation.

The motion to remove the solicitors of record was granted.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading and illegal distribution of securities in relation to Gold-Quest International.

The respondents promoted Gold-Quest, which offered investment contracts promising 87.5% annual returns from forex trading.

The Commission found that the Gold-Quest membership agreements were investment contracts and therefore securities.

The respondents' promotional activities, including hosting presentations and facilitating investments, constituted acts in furtherance of trades.

As none of the respondents were registered and no prospectus was filed, the Commission concluded they breached sections 25 and 53 of the Securities Act.

The corporate directors were also found liable under section 129.2 for authorizing or acquiescing in the breaches.

The applicants brought a motion under s. 21(5) of the Courts of Justice Act to set aside an order quashing their application for judicial review of ongoing regulatory disciplinary proceedings.

The Divisional Court dismissed the motion, agreeing with the motion judge that the application for judicial review was premature because the issues should be determined at first instance by the regulatory hearing panel.

Costs of $15,000 were awarded to the respondent on consent.

The applicant, as Note Trustee of the Maple Trust, brought a motion for an order approving a marketing and sale process for the trust's assets following an Event of Default.

The motion was contested by a party who argued that any sale must obtain prior court approval.

The court approved the sale process but ordered that it include a provision requiring prior court approval for any transaction, applying the Soundair principles, to ensure the best possible price is obtained without unnecessary delay.

The respondent, IIROC, brought a motion to quash an application for judicial review commenced by the applicants, an investment dealer and its CEO.

The applicants sought to quash a notice of hearing and other disciplinary steps taken by IIROC.

The Divisional Court granted the motion to quash, finding it plain and obvious that the application could not succeed.

The court held that it lacked jurisdiction under section 2(1) of the Judicial Review Procedure Act because IIROC's disciplinary powers arise from contract, not statute or public authority.

Furthermore, the application was premature as the issues should be determined at first instance by the IIROC Hearing Panel.

The applicant brought a motion to adduce fresh evidence, consisting of 11 publications, to be added to its application for leave to appeal.

The underlying case involved the failure to immediately disclose a Mary Carter-type settlement agreement.

The Supreme Court of Canada dismissed the motion, holding that affidavit evidence is generally not helpful in determining whether a legal issue is of public importance under section 43 of the Supreme Court Act.

The Court found that the proposed materials merely illustrated the straightforward nature of the legal issues and provided no additional assistance to the leave panel.

The appellants appealed a partial summary judgment awarding the respondent a financing fee of $249,547.49 under a contract.

The appellants argued the contract was ambiguous as to whether the fee was payable upon securing financing or only upon the closing of an acquisition.

The Court of Appeal dismissed the appeal, finding the contractual language clear that fees were payable at two different points in time, including immediately upon raising capital, regardless of whether the transaction closed.

The plaintiff and defendant in a construction dispute entered into an agreement capping the plaintiff's damages to whatever the defendant could recover from the third party.

The fourth party appellant discovered the agreement months later and moved to dismiss the third and fourth party claims as an abuse of process.

The Court of Appeal held that while the agreement was not champertous, the failure to immediately disclose it to the other parties and the court constituted an abuse of process.

The appeal was allowed and the third and fourth party proceedings were stayed.

The appellants appealed an order requiring them to execute a specific release and indemnity in favour of the respondent bare trustees before the trustees would convey certain lands.

The Court of Appeal found that the release requested by the respondents was broader in scope than the release provided for in the underlying trust agreement.

The appeal was allowed, and the order was varied to require the appellants to execute a release only in the terms set out in the trust agreement.