R. Birken

The defendants in a shareholder oppression action brought a motion for partial summary judgment seeking declarations that they validly exercised an option to purchase the plaintiff minority shareholder's shares and had fully compensated him for admitted misappropriations of corporate assets.

The plaintiff cross-moved for a declaration that the option was not validly exercised.

The court dismissed both the motion and cross-motion, finding that the issues were intertwined with the broader oppression claims, the evidence was highly contested, and partial summary judgment would risk duplicative proceedings and inconsistent findings.

The matter was ordered to proceed to trial.

The applicant sought a declaration that a personal guarantee was void and unenforceable after the creditor postponed a mortgage securing the underlying debt without the guarantor’s knowledge or consent.

The applicant argued that a guarantor is discharged when a creditor materially alters the contract governing the debt.

The court held that guarantors may contract out of common law protections and that the wording of the guarantee expressly permitted the creditor to vary or modify security without releasing the guarantor.

Interpreting the guarantee’s broad language, the court found the parties intended the guarantor’s liability to remain despite alterations to the security arrangements.

The application to void the guarantee and set aside the prior judgment was dismissed.

Following an earlier ruling converting an application into an action due to material factual disputes and an incomplete evidentiary record, the court addressed costs.

The successful responding party sought substantial or full indemnity costs exceeding $37,000, arguing the proceeding had been unnecessary.

The court applied the factors under Rule 57.01 of the Rules of Civil Procedure and found the claimed costs excessive in light of the relatively straightforward issues and inflated hourly charges and time entries by junior counsel.

While the successful party was entitled to costs, the court reduced the requested amount significantly and declined to award any costs to the unsuccessful party.

Costs were fixed at a reduced sum payable by the unsuccessful party.

The respondent brought a motion seeking to convert an application into an action under Rule 14.02 of the Rules of Civil Procedure.

The underlying application sought enforcement of a loan agreement and registration of a second mortgage against property.

The moving party argued that material facts were in dispute regarding the validity of the loan agreement, alleged misrepresentations, authority of corporate signatories, and the amount of indebtedness.

The court held that the evidentiary record contained significant conflicts and was incomplete, including missing evidence from key signatories and allegations that required viva voce evidence.

Because the issues could not be properly determined on the application record alone, the court ordered the application converted into an action.

The moving parties sought an order discharging a collateral mortgage registered against a residential property, arguing the mortgage secured only an excess condominium deposit insurance facility that had been satisfied and that sufficient funds were held in trust to cover any remaining liability.

The court held that the collateral mortgage secured the entire amended financing facility, which combined Tarion warranty bonding obligations and deposit insurance obligations.

The documentation clearly indicated the security applied to all liabilities arising under the amended facility and its amendments.

The court further found that funds held in trust were not guaranteed to satisfy the insurer’s potential claims and that a court-ordered expungement of a mortgage from title through vesting orders was not equivalent to a registered discharge.

Accordingly, the moving parties were not entitled to have the collateral mortgage discharged.