SCJ 2012

A creditor sought relief under s. 248 of the Ontario Business Corporations Act after obtaining default judgment against a debtor corporation that ceased operations and whose business activities were effectively continued through a newly incorporated company.

The court found that the debtor corporation’s director and spouse transferred business operations, assets, employees, and goodwill to the new entity immediately after garnishment proceedings in order to avoid satisfying the judgment.

Applying the oppression remedy framework articulated in BCE Inc. v. 1976 Debentureholders, the court held that a creditor has a reasonable expectation that a debtor corporation will not take steps to hinder satisfaction of a judgment.

The conduct of transferring the business to a new corporation controlled by the same individuals was found to be oppressive and unfairly prejudicial.

The individuals and the new corporation were held jointly and severally liable for the outstanding judgment.

The appellant appealed a conviction for operating a motor vehicle with a blood alcohol concentration exceeding 80 mg under s. 253(1)(b) of the Criminal Code.

The appeal challenged both the grounds for the breath demand and the adequacy of the right to counsel advice under s. 10(b) of the Charter.

While the court found sufficient grounds existed for the breath demand based on the officer’s observations and circumstances of the collision, it concluded that the informational component of the right to counsel was not satisfied after the accused twice indicated he did not understand his rights.

The officer failed to make reasonable efforts to ensure comprehension before proceeding.

The resulting Charter breach required exclusion of the breath sample evidence under s. 24(2).

Following a family law motion concerning preservation of equalization and support claims due to the applicant husband's serious illness, the court determined costs arising from several urgent motion attendances.

The respondent wife had obtained all substantive relief sought, including orders preserving assets and securing child and spousal support claims.

The court found the applicant's conduct amounted to bad faith, including concealing his medical condition and taking steps to place assets beyond the respondent’s reach.

Applying Rule 24 of the Family Law Rules and the discretionary authority under the Courts of Justice Act, the court held that full recovery costs were justified.

After adjustments for reasonableness, the court fixed total costs payable immediately to the respondent.

The moving party sought to vary a spousal support order made by the Alberta Court of Queen’s Bench requiring payment of $2,000 per month.

The motion was commenced in Ontario under the Family Law Act rather than the Interjurisdictional Support Orders Act, 2002.

The court held that Rule 5(1)(a) of the Family Law Rules is procedural and does not confer jurisdiction to vary a foreign support order.

Applying the real and substantial connection test and the factors articulated in Muscutt, the court found insufficient connection between Ontario, the parties, and the subject matter, and was not satisfied that proper service ex juris had occurred.

The motion was dismissed, without prejudice to bringing a proper application under the Interjurisdictional Support Orders Act, 2002.

Following the dismissal of an alleged emergency motion in a family proceeding, the responding party sought costs.

The court considered written submissions from both parties regarding entitlement and quantum.

Finding that the responding party was required to prepare materials and attend court to respond to the unsuccessful motion, the court held that costs were warranted.

Costs were fixed in a lump sum inclusive of HST and disbursements.

The realtor defendants brought a motion to dismiss or stay the action as an abuse of process, arguing that all parties had operated under the mistaken belief that the claim against them had been struck following a consent order requiring delivery of an affidavit of documents.

In fact, no formal order dismissing the action had ever been obtained.

The moving parties argued that principles of finality and fairness required that the action be treated as if it had been dismissed and that the delay in pursuing the claim against them justified termination of the proceeding.

The court held that the finality principle applies only where a final order exists and that prejudice cannot be presumed where the action remains valid and subsisting.

Balancing fairness and the absence of demonstrated prejudice, the court permitted the action to continue against the realtor defendants.

At a status hearing under Rule 48.14 of the Rules of Civil Procedure, the plaintiff was required to show cause why his oppression remedy action under the Ontario Business Corporations Act should not be dismissed for delay.

The court applied the established two-part test requiring an acceptable explanation for delay and absence of non-compensable prejudice to the defendants.

The evidence demonstrated that the plaintiff had taken multiple steps to advance the litigation, including motions, mediation, documentary disclosure, and the addition of a new defendant.

The defendants provided no evidence of prejudice.

The court held the plaintiff met the onus to show cause and permitted the action to proceed with a detailed litigation timetable.

In a murder prosecution, the Crown brought a motion seeking permission to introduce several lawfully intercepted private telephone communications under a Part VI authorization.

The defence argued that the intercepts were prejudicial, lacked probative value, and included privileged discussions regarding legal advice.

The court held that most of the intercepts were relevant to issues such as motive, animus, identity, consciousness of guilt, and the narrative of the relationship between the accused and the deceased, and that their probative value outweighed any prejudicial effect.

Certain intercepts relating to potential propensity evidence were deferred pending whether the accused placed character in issue or advanced a third‑party suspect theory.

One intercept was ruled inadmissible because the Crown sought to use it for a purpose linked to a statement previously ruled inadmissible.

The respondent brought a motion to enforce a settlement arising from family and related civil proceedings concerning the parties’ jointly owned business.

The moving party had accepted an offer to settle shortly after a major customer issued a notice terminating its business relationship, which allegedly significantly reduced the value of the company.

The responding party argued that the offer was no longer capable of acceptance or that enforcement would be unfair and unconscionable due to the business’s diminished value and alleged bad faith.

The court held that the responding party affirmed the settlement through post‑acceptance conduct, including excluding the other party from the business and proceeding as if the agreement existed.

The settlement was therefore enforceable and not unjust or unconscionable in the circumstances.

In Companies’ Creditors Arrangement Act proceedings, the applicant sought an extension of the stay period, an increase to debtor-in-possession financing, authorization to honour pre-filing prepayments made by merchant customers for loyalty program points, and a variation of the initial order to defer statutory notice to certain creditors.

The court granted the stay extension and approved the increased DIP facility, finding the debtor had acted in good faith and required additional financing to continue operations during the sale and investor solicitation process.

The court also authorized the debtor to honour prepayments for loyalty points where doing so would preserve customer relationships and enhance prospects for a going‑concern sale, applying a cost‑benefit approach consistent with earlier CCAA jurisprudence permitting payment of certain pre‑filing obligations.

However, the court refused to vary the statutory notice requirements under s. 23 of the CCAA, emphasizing that transparency and creditor notification are foundational principles of CCAA proceedings.

Following a five‑day family law trial, the court addressed costs after the parties were unable to agree.

The applicant had been largely successful at trial and sought costs exceeding $67,000, while the respondent sought comparable costs or alternatively an order that each party bear their own costs.

The court applied the presumption in Rule 24(1) of the Family Law Rules that a successful party is entitled to costs, while considering discretion under s. 131 of the Courts of Justice Act and the parties’ financial circumstances.

Particular weight was given to the fact that the children primarily resided with the respondent and the potential financial impact of a costs award on the custodial parent.

The court ordered the respondent to pay reduced costs of $37,000 inclusive of disbursements and taxes, payable from her share of the matrimonial home proceeds or through set‑off against spousal support if necessary.

Following a trial involving a dispute over a claimed leasehold interest and alleged obligations to improve leased premises, the plaintiffs’ claim was dismissed and the defendants succeeded on a counterclaim for rent arrears in the amount of $120,000 plus prejudgment interest.

The successful defendants sought recovery of legal costs on a partial indemnity basis.

Applying the factors under Rule 57.01(1) of the Rules of Civil Procedure, the court assessed the reasonableness of the claimed fees and disbursements.

The court reduced amounts relating to certain research, an unsuccessful motion for possession, and certain disbursements.

Costs were fixed at $33,900 in fees plus $2,681.43 in disbursements inclusive of tax.

In a protracted family law proceeding involving disputes over alleged oral and written agreements made before and during the marriage, the applicant brought a motion seeking to revisit a prior ruling on the scope of questioning and pre‑trial disclosure.

The respondent alleged that agreements relating to renovation funding and a promissory note were invalid due to breach of fiduciary duty, bad faith, and misrepresentation arising from the applicant’s failure to disclose an extramarital relationship.

The court held that limited additional questioning concerning the applicant’s extramarital relationships was appropriate and ordered the applicant to re‑attend for up to one hour to answer previously refused questions.

The court also confirmed the respondent’s entitlement to detailed accounting supporting the applicant’s financial claim and permitted inquiries relating to the value of an alleged 3% interest in a company involving the added party.

The Crown appealed an acquittal on a charge of breach of probation following the trial judge’s granting of a directed verdict motion at the close of the Crown’s case.

The trial judge held that the Crown was required to adduce evidence negating a potential Family Court order permitting contact, treating that exception as an essential element of the offence.

The appeal court held this was an error in law, finding that such exceptions operate as potential defences that must only be negatived by the Crown once raised to the level of an air of reality.

Because the Crown had nonetheless pleaded the exception and led evidence addressing it, the directed verdict should have been denied as there was a prima facie case.

The acquittal was set aside and the matter ordered to resume before the trial judge at the point where the directed verdict had been granted.

The plaintiff brought a civil action seeking damages for negligent police investigation and malicious prosecution following his arrest for criminal harassment and breach of probation.

Although he had been acquitted of the criminal charges, he alleged that police officers lacked reasonable and probable grounds and that family members knowingly provided false information leading to the charges.

The court held that the police investigation met the applicable standard of care and that the officers had reasonable and probable grounds to arrest and charge the plaintiff.

The evidence did not establish malice by the police or that the family members initiated or continued the prosecution through false information.

The plaintiff also failed to prove damages through medical or other evidence.

Following a lengthy family law trial primarily concerning parenting arrangements for two children, the respondent sought substantial indemnity costs.

The court found the trial result to be mixed but concluded that the respondent was the successful party because her offer to settle closely approximated the ultimate judgment.

The court held that an amendment to a compliant offer to settle may remain valid for costs purposes even if the amendment does not strictly comply with the formal requirements of Rule 18(4), provided it is clear and unambiguous.

However, both parties engaged in conduct that unnecessarily prolonged the trial, and the respondent advanced a litigation position inconsistent with her willingness to accept joint custody.

Costs were therefore awarded on a partial indemnity basis and reduced by 50 percent.

The plaintiffs brought a motion for default judgment against the defendant mortgagee, seeking a refund of overpayments and punitive damages.

The defendant had previously obtained a default judgment for $46,950.19 but later demanded $82,238.28 to discharge the mortgage when the plaintiffs sold their home.

The court found that the registrar had unlawfully signed the initial default judgment for unliquidated claims.

Furthermore, the court held that the defendant's demand for accelerated interest and excessive fees violated section 8 of the Interest Act and the Unconscionable Transactions Relief Act.

The court ordered the defendant to refund $40,223.85 and awarded $30,000 in punitive damages for its high-handed and unconscionable conduct.

Following a family law motion involving an emergency without-notice request for a restraining order and supervised access, the court addressed the issue of costs.

The initial emergency order had been set aside after the court determined there was no urgency under Rule 14(4.2) of the Family Law Rules and restored the prior shared parenting arrangement.

The father, who was wholly successful on the motion, sought full recovery of his legal costs and alleged bad faith by the mother.

The court declined to find bad faith but concluded the mother acted unreasonably by bringing a without-notice motion in circumstances lacking urgency.

Balancing indemnification, deterrence of unreasonable litigation conduct, and the potential impact on the children, the court awarded partial indemnity costs.

The defendant employer brought a motion to strike portions of an amended statement of claim in a wrongful dismissal action under Rules 21.01(1)(b) and 25.11(b) of the Rules of Civil Procedure.

The impugned pleadings related to claims for aggravated damages ("Keays damages") and punitive damages based on alleged bad faith in the manner of dismissal and alleged reprisals for whistleblowing concerning marketing practices.

The court held that it was not plain and obvious that the allegations failed to disclose a reasonable cause of action, emphasizing that damages for mental distress and punitive damages may arise from bad faith conduct in dismissal even where termination is without cause.

However, several paragraphs were struck for being unclear and unintelligible, with leave granted to replead them in plain language.

The Crown sought to admit a confession made by the accused to undercover police officers during a 'Mr. Big' operation.

The accused applied to exclude the evidence, arguing that the surreptitious recording authorizations were invalid, that his right to silence under s. 7 of the Charter was violated, and that the confession should be excluded under common law principles of abuse of process and prejudicial effect.

The court dismissed the application, finding that the accused was not in the functional control of the state, the police conduct was not abusive, the confession was highly reliable, and the wiretap authorizations were validly issued.