SCJ 2012

A creditor in a bankruptcy proceeding sought a declaration permitting set-off of a substantial costs award owed to the bankrupt against the creditor’s proven unsecured claim in the bankruptcy estate.

The court considered whether the claim satisfied the requirements for legal or equitable set-off under the Bankruptcy and Insolvency Act.

It held that legal set-off was unavailable because the costs debt arose after the bankruptcy and lacked the necessary mutuality with the creditor’s claim against the estate.

Equitable set-off was also unavailable because the adverse costs award related to a discrete tort claim and was not sufficiently connected to the contractual debt forming the creditor’s proven claim.

The motion for set-off was dismissed, and the court granted the bankrupt’s counsel a charging order over the costs award pursuant to the Solicitors Act, giving the solicitor priority as a secured creditor.

During a lengthy civil trial concerning federal relocation service contracts, the plaintiffs brought a motion to vary an earlier production order that had refused disclosure of a competitor’s administration fees.

After hearing extensive trial evidence, the court concluded that the administration fees were relevant to both liability and damages, particularly in understanding the effect of a zero‑percent bid for property management services.

Newly discovered facts showed that the defendant’s expert had requested and used the fees in internal analyses despite earlier representations suggesting otherwise.

Applying Rule 59.06(2)(a) of the Rules of Civil Procedure, the court held that orders may be varied where new facts arise or are discovered that would have materially affected the earlier decision.

The court therefore ordered limited disclosure of the administration fees and related reconciliation documents.

The Children's Aid Society brought a motion for a temporary care and custody order for two children, while the mother brought a cross-motion for their immediate return.

The mother had a history of mental health issues and was recently arrested for breaching a probation order.

She had recently entered into a Community Treatment Order.

The court found that the mother's mental health needed to stabilize before the children could be returned.

The Society's motion was granted, placing the children in interim care for three months, and the mother's motion was dismissed.

The moving party brought a motion under Rule 54.09 of the Rules of Civil Procedure to oppose confirmation of a report and certificate of assessment that awarded legal fees to a solicitor for representation before the Ontario Review Board.

The dispute centred on whether the assessment officer had jurisdiction to assess the solicitor’s accounts where the existence of a retainer and responsibility for payment—between Legal Aid Ontario and the Attorney General—were contested.

The court held that a bona fide dispute regarding the retainer deprived the assessment officer of jurisdiction under the Solicitors Act to proceed with the assessment.

As the retainer issue had not been resolved through civil litigation, the assessment process was improper.

The report and certificate of assessment were therefore set aside.

Costs determination following several pre‑trial motions in a civil action arising from a professional hockey incident.

The court considered competing motions concerning disclosure of a settlement agreement, neuropsychological examinations, production of expert materials, and procedural timelines.

The plaintiffs were largely successful, particularly in compelling disclosure of the settlement agreement and obtaining related procedural relief.

While elevated costs were awarded for part of the motion due to the defendants’ failure to disclose the agreement and the resulting prejudice, most costs were fixed on a partial indemnity basis after considering Rule 57.01 factors and the overall mixed results on some minor issues.

An automobile insurer sought to intervene in a tort action as an added defendant under Rule 13.01 of the Rules of Civil Procedure in order to allege that the accident was staged and to assert a crossclaim against its insured.

The court held that it was not an appropriate use of Rule 13.01 for a tort insurer to add itself as a party defendant where statutory third party status under s. 258 of the Insurance Act was available.

As a statutory third party, the insurer could still defend the claim on the basis that the accident did not occur or was staged and could obtain discovery of its insured where adversity existed.

Issues between insurer and insured, including indemnity claims, were more properly addressed in separate proceedings.

The request to intervene as a defendant was refused, but the insurer was granted alternate relief to be added as a statutory third party.

A mining corporation sought an interlocutory injunction preventing major shareholders from voting their shares or soliciting proxies in an upcoming shareholder meeting, alleging breach of a confidentiality agreement and misuse of confidential information obtained during a site visit.

The dissident shareholders also sought declaratory and injunctive relief relating to the conduct of the shareholder meeting under the Business Corporations Act.

The court applied the RJR‑MacDonald test and held that while the corporation established a strong prima facie case that confidential information had been received, it demonstrated only a weak case that the information had been misused.

The balance of convenience favoured allowing the proxy contest to proceed.

The court also declined to interfere in advance with the conduct of the shareholders’ meeting, emphasizing corporate autonomy absent demonstrated impropriety.

Following a decision of the Court of Appeal remitting the matter, the Superior Court was required to determine the reasonableness of a contingency fee agreement under s. 24 of the Solicitors' Act and s. 5(1) of O. Reg. 195/04.

The litigation involved a person under disability whose interests were represented by the Office of the Public Guardian and Trustee as litigation guardian.

The court recognized a potential conflict arising from the Public Guardian and Trustee’s involvement in drafting the contingency fee agreement while also acting in the individual’s best interests.

Invoking the court’s parens patriae jurisdiction, the judge directed the Public Guardian and Trustee to retain independent counsel to review the materials and provide submissions regarding the reasonableness of the agreement on behalf of the person under disability.

The court indicated that it would determine whether oral submissions were necessary after reviewing the filed materials.

The applicant father and respondent mother separated after an 11-year relationship.

The father, a business owner, sought joint custody, a determination of support, and enforcement of a marriage contract.

The mother sought custody, support, and equalization, challenging the marriage contract's validity.

The court found the marriage contract unenforceable due to lack of financial disclosure.

The court conditionally maintained joint custody, ordering the father to relocate closer to the child's school or face a reduction in parenting time.

The court imputed the father's income at $338,000, adding back corporate expenses and income split with his new wife, and ordered him to pay $8,000 per month in spousal support and $2,316 per month in child support.

The offender was sentenced following a jury conviction for sexual assault causing bodily harm, forcible confinement, uttering threats, and assault with a weapon arising from a prolonged violent assault against the complainant in the offender’s apartment.

The evidence included physical injuries, corroborating forensic evidence, a recording captured by the complainant during the assault, and a whispered 911 call made after the offender fell asleep.

The court considered aggravating factors including the prolonged and violent nature of the sexual assaults, use of a weapon, psychological harm to the complainant, and evidence of a prior incident involving aggression toward a woman.

Applying sentencing principles under s. 718 of the Criminal Code and reviewing comparable authorities, the court concluded that denunciation and deterrence were paramount.

A global custodial sentence of five years was imposed, less credit for pre‑sentence custody, together with ancillary orders.

In CCAA proceedings, the applicant sought approval of a sale transaction involving substantially all of its pulp mill assets pursuant to s. 36 of the Companies’ Creditors Arrangement Act.

Certain creditors opposed the transaction and urged the court to consider a late competing offer that proposed a higher purchase price.

The court held that the sales process had been extensively marketed internationally, complied with the court‑approved process, and was conducted with the oversight of the monitor and consultation with key stakeholders including the Province.

Applying the Soundair principles and s. 36(3) of the CCAA, the court found that the monitor had acted prudently, the process maintained integrity and fairness, and the later competing offer did not demonstrate that the accepted transaction was improvident.

The court approved the transaction and granted the requested vesting order.

The defendant brought a motion seeking further and better disclosure from the plaintiff, directions regarding a prior production order, and leave to amend its defence and counterclaim to include a defamation claim against the plaintiff and an additional party.

The plaintiff brought a competing motion seeking to strike the defence for non-compliance with a previous order, additional production including distribution agreements and accounting authorizations, and summary judgment dismissing the counterclaim.

The court ordered additional disclosure from the plaintiff subject to confidentiality but declined to require certain disproportionate productions, including telephone and email purchase requests.

Requests by the plaintiff for distribution agreements and direct communication with the defendant’s accountants were dismissed as unnecessary or premature.

Leave to amend the defence and counterclaim was granted and the plaintiff’s summary judgment motion was dismissed without prejudice pending completion of disclosure and discoveries.

Following a successful application declaring a right of way over the respondent’s property and directing rectification of the land register, the court addressed costs after the parties failed to agree.

The applicants sought partial indemnity costs of $13,766.20.

The responding parties argued no costs should be awarded or, alternatively, that the amount claimed was excessive given the limited complexity of the matter.

Applying Rule 57.01 of the Rules of Civil Procedure and the principle that costs must be fair and reasonable for the unsuccessful party to pay, the court reduced the amount claimed due to excessive time entries and costs unrelated to the opposing respondents.

Partial indemnity costs were fixed at $9,000 inclusive of disbursements and HST.

The applicant sought an order referring her former solicitor’s account for assessment following settlement of a personal injury action arising from a motor vehicle accident.

The solicitor had acted under a retainer providing for payment of up to 30% of any recovery and deducted his fee from settlement funds received in trust.

The court held that the retainer constituted a contingency fee agreement within the meaning of the Solicitors Act and failed to comply with statutory and regulatory requirements, including provisions governing contingency fee agreements and the need for court approval where a minor was represented by a litigation guardian.

Although the account had already been paid, the court found special circumstances justifying an assessment, including statutory non‑compliance, lack of required court approval, concerns about the work performed relative to the fee charged, and the involuntary nature of the payment.

The solicitor’s account was therefore referred for assessment.

The applicants sought to set aside a vesting order that removed a trust company and a deceased partner from title to an island property and vested title solely in the respondent.

They argued the order was made without notice and that the Statute of Frauds barred reliance on an alleged oral agreement transferring the property.

The court held that once a vesting order is registered on title, its attributes as a court order are spent and it cannot be set aside under Rule 38.11.

Treating the application as one for rectification of title under the Land Titles Act, the court found sufficient evidence of part performance supporting an oral agreement transferring the deceased partner’s interest.

The evidence did not establish that the applicants were entitled to rectification of the register.

The responding parent was alleged to be in contempt of a final custody and access order providing for shared parenting on an alternating weekly basis.

The moving parent claimed the child was withheld during scheduled parenting time over the Christmas holiday.

The court held that civil contempt requires proof beyond a reasonable doubt that a clear order was deliberately and wilfully disobeyed.

While a child’s refusal may complicate compliance, a parent must take reasonable steps to ensure the child follows the order.

The court found contempt established for a single incident where the responding parent failed to take reasonable steps to facilitate the child’s attendance with the other parent, but not for subsequent periods because the moving parent made no further attempts to exercise access.

The moving party sought summary judgment requiring a pension plan administrator to pay her a pre‑retirement death benefit under a federally regulated pension plan following the death of her former spouse.

The claim relied on a separation agreement stating that she would receive survivor benefits from the pension.

The court considered whether s. 25(4) of the Pension Benefits Standards Act permitted assignment of a pre‑retirement death benefit to a former spouse and whether the language of the parties’ separation agreement and related documents constituted an effective assignment.

Although the court held that the statute permits assignment of such benefits, it concluded the wording of the separation agreement and related direction did not clearly and unambiguously effect an assignment.

The statutory priority of the surviving spouse therefore prevailed and the death benefit was payable to the deceased member’s later spouse.

The applicant alleged that the respondent distributed a brochure containing false and misleading statements about the applicant’s water heater rental services.

The court considered whether the brochure breached s. 7(a), s. 22, and s. 53.2 of the Trade-Marks Act and s. 52 of the Competition Act by discrediting a competitor and depreciating the value of goodwill attached to registered trade-marks.

The court found the brochure contained inaccurate and misleading representations and improperly reproduced the applicant’s trade-mark and logo.

The court concluded the respondent’s conduct breached the Trade-Marks Act and the Competition Act.

A declaration of breach was issued, a permanent injunction granted restraining further distribution of the brochure, and a reference ordered to determine damages.

A non-profit housing co-operative applied under the Co-operative Corporations Act to terminate a member’s membership and occupancy rights, obtain a writ of possession, and recover rent arrears.

The respondent did not appear at the hearing despite proper service and prior notice.

The court reviewed the co‑op board’s decision on a reasonableness standard and considered whether the member received procedural fairness in the termination process.

Finding the board had provided multiple opportunities to respond, complied with principles of natural justice, and had a reasonable basis for termination based on rent arrears and ongoing disruptive conduct, the court upheld the decision.

The application was granted, membership terminated, and costs awarded.

Following summary judgment in favour of a mortgagee on a first mortgage, the court determined costs arising from the motion and the broader action.

The mortgagee sought substantial costs against the mortgagors and guarantor, while the defendants sought costs against a second mortgagee whose summary judgment motion dismissing their third party claims failed.

The court held that the mortgagee was entitled to costs but found the amounts claimed excessive and reduced them, allocating portions jointly and severally among the defendants.

The court also found the second mortgagee acted unreasonably in bringing a summary judgment motion involving credibility issues and ordered substantial indemnity costs in favour of the guarantor.

Requests to stay enforcement of the summary judgment and costs orders pending related insurance litigation were denied.