Sarah Stothart

In an ongoing insolvency proceeding, a creditor whose $25 million profit share claim was valued at zero by the proposal trustee brought a motion seeking production of pre-report communications between the trustee and the experts hired by the trustee to appraise the claim.

The moving party argued that the communications were relevant to assess whether the trustee improperly influenced the experts or if unstated communications influenced the trustee's valuation.

The court distinguished the request from a demand for the trustee's working file under s. 26 of the BIA, applying civil procedure principles of relevance to order production of the requested communications, subject to redactions for strategy or tactics.

An appeal from a Superior Court decision regarding the provability of a former employee's profit-sharing claim in the bankruptcy of a real estate development company.

The trustee disallowed the claim on the grounds that it was an equity claim and too contingent and remote.

The appeal judge allowed the appeal, finding the profit-sharing claim was a claim for unliquidated damages for breach of contract, not an equity claim, and was therefore provable.

The Court of Appeal dismissed the appeal, upholding the lower court's decision and confirming that the profit-sharing claim is a provable claim that takes priority over the limited partners' equity claims.

The court dismissed the appeal by RatesDotCa Group Ltd. (formerly Kanetix Ltd.) from a decision denying leave to further amend its statement of claim to plead that Trader Corporation breached its duty of good faith and honest performance in contractual dealings.

The court found that the proposed amendments raised a new cause of action and a new remedy, both of which were statute-barred under the Limitations Act, 2002.

The court also found no error in the associate judge’s application of the law regarding discoverability and the limitation period.

The appeal was dismissed with costs.

The Matter Corporation ("Matter Corp.") sought an interlocutory injunction against Southside Construction Management Limited ("Southside"), Vito Frijia, and Wonderland Power Centre Inc. ("Trustee Corporation") regarding a joint venture.

Matter Corp., a 50% beneficial owner, alleged Southside, the managing co-owner, failed to provide disclosure, consult, and seek approval for new development, working capital commitments, and future borrowing after the death of Matter Corp.'s principal.

The court applied the "strong prima facie case" standard for mandatory injunctions.

The court granted the Production Order for existing information and records and the New Development Order requiring Southside's consultation and consent for future development of new commercial and residential space on the Joint Venture Properties.

However, the court dismissed the Production Order for documents that do not exist, the New Development Order for working capital commitments related to existing commercial space, and the Borrowing Order, finding Matter Corp. did not meet the high merits standard for these aspects.

The court found irreparable harm for new development due to irreversible commitments and that the balance of convenience favored Matter Corp. for new development, but Southside for existing space leasing and borrowing.

The plaintiff brought a motion for leave to amend its statement of claim to increase general damages, add a claim for punitive damages, and allege a breach of the duty of good faith and honest performance.

The defendant consented to the damages increase but opposed the other amendments.

The court found that the proposed amendments regarding good faith and honest performance relied on new material facts and constituted a new cause of action.

Because the plaintiff provided no evidence to rebut the presumption of discoverability under the Limitations Act, 2002, the new claims were statute-barred.

The motion was granted only to increase the general damages claimed.

The appellants, Limited Partners of a debtor in a bankruptcy proposal, appealed an order for directions regarding the process for an appeal of a proof of claim.

The Court of Appeal dismissed the appeal as premature, finding that the motion judge had not made any final orders regarding the appellants' standing in the anticipated claim appeal, but rather had made directions "subject to the discretion of the judge hearing the appeal." The court held that the possibility of influence or an incorrect underlying conclusion on discretionary standing was not a basis for appeal.

The plaintiff, a generic drug manufacturer, brought an action for damages against the defendants under s. 8 of the Patented Medicines (Notice of Compliance) Regulations for delayed market entry of its generic drug.

The plaintiff argued it was entitled to damages because the defendants' prohibition proceeding was dismissed for mootness after the underlying patent was invalidated in a separate proceeding.

The court dismissed the claim, finding that the plaintiff's allegations in the prohibition proceeding had failed on the merits, and s. 8 does not provide redress where the innovator prevailed on the merits but the patent was later invalidated by a third party.

The court also found that, even if liability existed, the plaintiff would not have entered the market any sooner in the hypothetical world due to its risk-averse nature.

The Proposal Trustee sought directions from the court regarding the procedure for determining a complex proof of claim filed by Maria Athanasoulis, comprising a wrongful dismissal claim and a significant profit share claim, within the context of a court-approved proposal under the Bankruptcy and Insolvency Act.

The motion addressed disagreements among stakeholders (Athanasoulis, Sponsor, and Limited Partners) on how to proceed with the claim's determination and subsequent appeal, particularly concerning the scope of evidence, the nature of the appeal (true appeal vs. de novo), and the standing of the Limited Partners.

The court provided detailed directions to ensure procedural fairness and efficiency, deferring the valuation of future-oriented damages until after the provability of the profit share claim is determined on appeal, and limiting the Limited Partners' standing to specific issues.

The Proposal Trustee brought a motion to compel the Proposal Sponsor to fund the Trustee's continuing work to resolve outstanding proofs of claim, specifically the Athanasoulis Claim, via a two-phase arbitration.

The Sponsor objected to funding phase 2 of the arbitration, arguing it was an improper delegation of the Trustee's duties under s. 135 of the BIA.

The court agreed with the Sponsor, finding that while phase 1 (fact-finding) was acceptable, phase 2 (final adjudication of damages) improperly delegated the Trustee's statutory responsibility to determine and value the claim.

The Sponsor was not ordered to fund phase 2 of the arbitration but remains obligated to fund the Trustee's reasonable expenses to determine the claim through an alternative process.

The appellants, including a provincially constituted lottery authority, sought to strike a class action claim brought by respondents who alleged that video lottery terminals were inherently dangerous and deceptive, and sought a gain‑based award quantified by the authority's profits.

The majority held that none of the three pleaded causes of action — waiver of tort as an independent cause of action, breach of contract, and unjust enrichment — disclosed a reasonable cause of action.

The majority definitively rejected "waiver of tort" as an independent cause of action for disgorgement in Canadian law, holding that disgorgement is a remedy for established wrongful conduct and not a freestanding cause of action.

The majority further found that the breach of contract claim could not support disgorgement or punitive damages on the pleadings as framed, and that a valid contract between the parties constituted a juristic reason defeating the unjust enrichment claim.

In partial dissent, four justices would have allowed the breach of contract claim to proceed to certification on the common issues of breach of contract, punitive damages, and the appropriateness of disgorgement as a remedy.

The moving parties (defendants) brought a Rule 21 motion to strike the plaintiffs' Amended Statement of Claim against the defendant David Rosenkrantz, arguing it disclosed no reasonable cause of action.

The plaintiffs alleged negligent misrepresentation and breach of contract against Rosenkrantz in his capacity as an officer and director of the Patica Companies, relating to a tax deferral arrangement.

The court found the pleadings lacked the necessary material facts to pierce the corporate veil or establish personal liability, negligent misrepresentation, or an agency relationship.

The court struck the claim and the related crossclaim against Rosenkrantz, but granted leave to amend.