Boal v. International Capital Management Inc., 2018 ONSC 2275

COURT FILE NO.: CV-17-570254CP DATE: 20180412

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Rebecca Lee Boal Plaintiff

– and –

International Capital Management Inc., John Sanchez a.k.a. Paul Sanchez, Javier Janchez a.k.a. Javier Andreas Sanchez, Invoice Payment Systems Corp., 1361655 Ontario Inc., 1634792 Ontario Inc., 1876692 Ontario Inc., 2029984 Ontario Ltd., and 2029986 Ontario Ltd. Defendants

Caroline Garrod and David Milosevic for the Plaintiff

Sanj Sood and Patrick Copeland for 1361655 Ontario Inc., John Sanchez, and Javier Sanchez

Proceeding under the Class Proceedings Act, 1992

HEARD: March 19, 2018

PERELL, J.

REASONS FOR DECISION

A. Introduction and Overview

[1] Pursuant to the Class Proceedings Act, 1992[^1], Rebecca Lee Boal brings a proposed class action on behalf of 170 investors holding unsecured promissory notes. The notes, which are worth $24 million, were granted by the Defendant Invoice Payment Systems Corp. (“IPS”). The promissory notes were marketed by the Defendant International Capital Management Inc. (“ICM”), a mutual fund investment dealer and financial advisor.

[2] On March 30, 2017, without notice, Ms. Boal obtained a Norwich Order (requiring financial disclosure from third parties about the Defendants’ assets), a Mareva Injunction (freezing the Defendants’ disposition of their assets), and a certificate of pending litigation over a property municipally known as 940 The East Mall.

[3] Approximately a year later, three of the Defendants, i.e., John Sanchez, Javier Sanchez, and 1361655 Ontario Inc., (“Sanchez Corp. # 1), now move for an Order discharging the certificate of pending litigation and for damages for the registration of the certificate of pending litigation.

[4] On the return of the motion to discharge the certificate of pending litigation, on March 19, 2018, I reserved judgment, but I made an interim Order lifting the certificate of pending litigation on terms. My endorsement was as follows:

This is a motion to vary or discharge a Mareva injunction and to vacate a certificate of pending litigation and for damages pursuant to the undertaking as to damages. I am reserving judgment but making an interim Order pending a sale of the 940 The East Mall property, which is scheduled to close on April 18, 2018. The interim Order is as follows:

(1) the certificate of pending litigation shall be immediately vacated on the following terms:

(a) if the transaction does not close, the certificate is to be re-registered subject to further Order of this court in its reserved decision;

(b) if the transaction closes, the sum of the balance in cash due on closing less real estate commissions and legal fees are to be held in trust by Aird & Berlis, LLP pending further Order of this court.

[5] For the reasons that follow, I vacate the certificate of pending litigation and I defer to the trial of this action, the issue of whether Sanchez Corp. # 1 has suffered any damages from the registration of the certificate of pending litigation. By way of a summary of the more detailed reasons to follow, the Norwich Order /Mareva Injunction, including the granting of a certificate of pending litigation, was properly made, save for being for a 30-day duration, which was perhaps a mistake. No motion to extend the Order was brought and certain aspects of the Order expired, but the expiry of the March 30, 2017 Order did not affect the certificate of pending litigation.

[6] When the March 30, 2017 Order was not extended, the injunctive portions of the Norwich Order /Mareva Injunction, including the disclosure and cross-examination requirements, came to an end, but Ms. Boal was correct in thinking that the expiry of the Order/Injunction would not affect the certificate of pending litigation, pending further Order of the court.

[7] The issue on the motion now before the court then becomes whether the certificate of pending litigation should now be vacated. The answer to that issue is yes, because in the exercise of the court’s discretion, it is appropriate to vacate the certificate and to leave Ms. Boal and the putative Class Members their remedy of a claim to damages.

[8] At this juncture of the proceeding where the merits have not been decided, it is premature to decide whether Sanchez Corp. # 1 has suffered damages from the issuance of the certificate of pending litigation.

B. Facts

1. The Parties

[9] International Capital Management Inc. (“ICM”) is a mutual fund dealer registered in the provinces of Ontario and Alberta. John Sanchez is the President, a Director, and the Chief Compliance Officer. Javier Sanchez, John’s brother, is the Vice-President and Alternate Chief Compliance Officer. John and Javier are the co-owners of ICM.

[10] 1361655 Ontario Inc., (“Sanchez Corp. # 1), 1634792 Ontario Inc. (“Sanchez Corp. # 2), 2029984 Ontario Ltd. (“Sanchez Corp. # 3), 2029986 Ontario Ltd. (“Sanchez Corp. # 4), and The Savel Corporation are holding companies owned by John, Javier, and members of their families.

[11] Sanchez Corp. # 1 owns a building at 940 The East Mall, Toronto,[^2] where ICM’s offices are located in leased premises. It originally purchased the property in 1999.

[12] Invoice Payment Systems Corp. (“IPS”) is a factoring company; i.e., it finances accounts receivable by purchasing assignments of receivables at a discount. IPS is located in Mississauga, Ontario. IPS is owned by: Sanchez Corp. #3 (25%), Sanchez Corp. # 4 (25%), The Savel Corporation (25%), and German Suarez, its President (25%). John Sanchez is a director of IPS. IPS is a non-arm’s length corporation controlled and substantially owned by John and Javier Sanchez and their family members.

2. The IPS Promissory Note Investment

[13] Since 2001, Ms. Boal has made investments through ICM. By 2017, it was managing her portfolio of approximately $1.1 million in investments.

[14] In 2014, John Sanchez presented Ms. Boal with an opportunity to invest in a promissory note from IPS.

[15] The fact sheet for the investment represented that: (a) the funds would be used only to finance current account receivables pre-approved by IPS’s underwriting team; (b) the notes are not RSP or TFSA eligible and are only available to accredited investors; (c) the first 7% of revenue generated is reserved and paid to investors; (d) IPS has a reserve account as an allowance for doubtful invoice receivables; (e) IPS has a 10-year history and has executed over $650 million in accounts receivable financing with a total default ratio of less than 0.23%; (f) IPS executed $120 million in accounts receivable financing in its last fiscal year; and (g) IPS has offered promissory notes for over 10 years to private investors without a single default in payment.

[16] On May 20, 2014, Ms. Boal purchased a promissory note from IPS for $101,224.26. Pursuant to the terms of the promissory note, the principal sum would earn interest at a rate of 7% per annum, calculated and payable annually not in advance, both before and after demand, maturity, default and judgment until paid. The promissory note lists its due date as May 20, 2015, but the terms of the note state that it shall be due and payable as follows: “the entire principal sum, and all interest owed thereon shall be reinvested on May 20, 2015”.

[17] Ms. Boal knew that John and Javier Sanchez received a referral fee from IPS that was not funded from the loan.

[18] The referral fee equalled 2% of the profits generated by the factoring activities of IPS.

[19] The audited financial statements of IPS indicate that the Sanchezs received $204,533 in commissions in 2010, $235,707 in 2011, $276,789 in 2012, $327,954 in 2013, and $206,412 in 2014 for a total of commissions of $1,251,395 in commissions in connection with the sale notes between 2010 and 2014. The amount of commission payments received between 2004 and 2010, if any, and the amount of commissions received since 2014, if any, is unknown.

[20] John and Javier Sanchez deposited their referral fees into Sanchez Corp. # 1’s general bank account. John Sanchez says that the moneys were not used to operate Sanchez Corp. # 1.

[21] Although she knew that there were referral fees, unknown to Ms. Boal at the time when she made her investment was the fact that between 2010 and 2014, IPS had paid Sanchez Corp. # 1 approximately $1.25 million.

3. The Mutual Fund Dealers Association (“MFDA”) Application

[22] On December 14, 2016, years after she already advanced funds for the promissory note, Ms. Boal had a meeting with John Sanchez. During this meeting, she signed an acknowledgment letter as set out below:

Acknowledgement Letter

Loan details: Company: Invoice Payment System (IPS)

Term: 1 Year.

Interest Rate: 7%

Loan Type: Promissory Note

Please acknowledge the following important information:

(a) There are no costs to you associated with the loan. However, a 2% finder’s fee is paid by IPS to your Financial Advisor upon the issuance of a note.

(b) This loan is considered high risk, but upon maturity you have the option of redeeming or renewing the note.

(c) Invoice Payment System is a related entity of International Capital 0Management Inc. Financial advisors that are shareholders of Invoice Payment System, including myself, may stand to benefit from the inflow of client money into IPS. Being a shareholder, however, provides advisors like me with input to the management of IPS. This ownership provides a means of supervision and control over how you are treated and how your money is managed.

Invoice Payment System (IPS) - Client Acknowledgement Letter

I/we have been very pleased with our IPS promissory note. We have received our interest on time each year along with renewal notifications. Furthermore, the promissory note is not correlated to the market and has provided stable income. I/we confirm this is a short-term loan (1 Year) that I have provided to IPS.

[23] In late December 2016, Ms. Boal received a letter from ICM, indicating that ICM was being investigated by the MFDA. She made an internet search, and she reviewed the MFDA Application, which had been posted on the MFDA website.

[24] In its Application, pursuant to its by-laws, the MFDA sought various Orders against John Sanchez, Javier Sanchez, and ICM. The Application indicated that the MFDA was seeking the following relief:

THE APPLICATION IS FOR AN ORDER pursuant to s. 24.3.3 of MFDA By-law No. 1 providing that, effective immediately:

Restrictions on Business Activities

1. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1, commencing on Friday, December 16, 2016, ICM and its Approved Persons (including the Respondents John Sanchez and Javier Sanchez) shall cease to engage in any form of Member business including but not limited to any securities related business other than advising and trading with respect to prospectus qualified mutual funds and Guaranteed Investment Certificates guaranteed by the Canada Deposit Insurance Corporation (“GICs”), and in particular, they shall not directly or indirectly sell or facilitate investments in or loans to:

(a) ICM;

(b) Invoice Payment Systems Corporation (“IPS”) or any affiliated entity;

(c) Energentium Inc. (“Energentium”) or any affiliated entity;

(d) any entity that is related to or affiliated with ICM, IPS or Energentium;

(e) any Approved Person or former Approved Person of ICM (including John Sanchez and Javier Sanchez), German Suarez, Mark Sanchez, Maria Conchita Sanchez or Maria Sanchez-Keane (the “Principals”);

(f) a spouse or former spouse, parent, child, grandchild, sibling, niece or nephew of any of the Principals (“Related Individuals”);

3. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1, commencing on Friday, December 16, 2016, John Sanchez and Javier Sanchez are prohibited from engaging in any outside business activities or referral arrangements except with respect to insurance products sold pursuant to a valid insurance license and in particular, John Sanchez and Javier Sanchez are prohibited from soliciting, selling, referring, or otherwise facilitating investments in or loans to any Financially Related Entities or otherwise facilitating investments that are not prospectus qualified investments.

4. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1 and subject to any further Order of a Hearing Panel, commencing on Friday, December 16, 2016, ICM and its Approved Persons (including the Respondents John Sanchez and Javier Sanchez) shall cease to accept new money from clients in connection with any member business.

Trust Account

7. Within 5 business days, ICM shall cease to operate a trust account and shall only be eligible to operate as a Level 2 dealer unless otherwise Ordered by a Hearing Panel of the MFDA.

Notification to Clients of ICM

10. Within 5 business days, ICM shall send a letter to all clients of ICM attaching a copy of the Order of the Hearing Panel and informing clients that subject to any future Order of a Hearing Panel of the MFDA:

(a) ICM and its Approved Persons are not permitted to engage in advising or trading with respect to any investments that are not prospectus qualified mutual funds or GICs;

(b) ICM is not permitted to accept new money for investment; and

(c) ICM is not permitted to operate a trust account and consequently the proceeds of all redemptions will be paid by fund companies directly to clients.

[25] The MFDA Application set out the following grounds for the Orders sought:

THE GROUNDS FOR THE APPLICATION ARE:

1. As particularized in more detail below, the Respondents have:

(a) failed to comply with the By-laws and Rules of the MFDA, by engaging in:

(i) securities related business that was not carried on for the account of ICM, through the facilities of ICM or recorded on the books and records of ICM, contrary to MFDA Rule 1.1.1;

(ii) undisclosed outside business activities, contrary to MFDA Rule 1.3 [and formerly MFDA Rule 1.2.1(c) and before that MFDA Rule 1.2.1(d)];

(iii) personal financial dealings or other conduct that gave rise to a conflict of interest and failing to address the conflict by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4 and 2.1.1;

(iv) contraventions of the standard of conduct by failing to deal fairly, honestly and in good faith with clients, by failing to observe high standards of ethics and conduct in the transaction of business, and by engaging in business conduct or practices that are detrimental to the public interest, contrary to MFDA Rule 2.1.1;

(v) securities related business without using due diligence to ensure that they learned the essential facts relative to each product that they recommended and relative to each client and to each Order accepted and without ensuring that each Order accepted and recommendation made were suitable for the clients, and without disclosing all risks associated with the recommendations that they made to clients, contrary to MFDA Rules 2.2.1 and 2.1.1; and

(vi) referral arrangements that were not compliant with MFDA Rule 2.4.2; and

(b) disregarded and failed to comply with the terms of an Agreement and Undertaking entered into with Staff in October 2006; and (c) failed to cooperate with examinations and investigations conducted by Staff pursuant to s. 21 of MFDA By-law No. 1 by providing false and/or misleading answers to questions and requests for information from Staff and by deliberately concealing or destroying records relevant to matters under investigation.

Referral Arrangements

27. John Sanchez and Javier Sanchez received referral fees equal to 2% of the total amount invested by clients of ICM in IPS and Energentium.

28. The referral agreement between IPS and John and Javier Sanchez and the referral agreement between Energentium and John and Javier Sanchez was not documented in writing and the referral fees received by John Sanchez and by Javier Sanchez from IPS and from Energentium were not recorded on the books and records of ICM and were not reported to the MFDA, contrary to MFDA Rule 2.4.2(b), 2.4.1(a), 1.1.1(b).

29. In response to direct questioning from Staff, the Respondents falsely denied that they received compensation from IPS in connection with the solicitation of investments in IPS, contrary to Rule 2.1.1 (b) and (c) and s. 22.1 of MFDA By-law No. 1.

30. Neither the distribution of the promissory notes from IPS and Energentium nor the payment of the referral fees to John and Javier Sanchez were carried on for the account of ICM, conducted through the facilities of ICM or recorded on the books and records of ICM.

31. No written disclosure was provided to clients of ICM or to any other investors in IPS or Energentium about:

(a) the risks of investing in IPS or Energentium;

(b) the financial position and operations of IPS or Energentium (including the total number of note holders and the amounts owed to them);

(c) John Sanchez’s role as an officer, director and/or shareholder in the companies and the ownership interests of Javier Sanchez and other family members in the companies; or

(d) fees received by John and Javier Sanchez for soliciting investments in the companies or for referring investors to the companies; contrary to MFDA Rules 2.1.1, 2.4.2 and 1.3.2(e) [formerly 1.2.1(c)(vi) / 1.2.1(d)(vi)].

Suitability

32. Prior to soliciting money from clients of ICM for investment in IPS and Energentium, John Sanchez, Javier Sanchez and ICM failed to use adequate due diligence to learn and document the essential facts necessary to know the products that they offered to clients and to ensure that the products were distributed in compliance with applicable securities legislation including whether the products could be distributed pursuant to exemptions from prospectus requirements and if so, the conditions for investors to qualify as eligible to rely on such exemptions.

33. The investments in IPS and Energentium were not distributed pursuant to any securities law exemptions and were not offered exclusively to investors who were eligible to invest in exempt products.

34. When they solicited investments in IPS and Energentium by clients of ICM and distributed promissory notes issued by those companies to investors, the Respondents failed to:

(a) ensure that they had learned and accurately recorded the essential facts relative to each client and to each Order accepted;

(b) ensure that each Order accepted or recommendation made to clients was suitable for the clients and consistent with the investment objectives of the clients;

(c) document what exemptions they intended to rely upon to distribute IPS and Energentium securities or the basis upon which each client who purchased investments in those companies was eligible to do so; and

(d) fully and accurately disclose the risks of the investments in IPS and Energentium that they recommended.

[26] Ms. Boal was disturbed to read the MFDA’s allegations, and she decided to retain a lawyer. She eventually gave instruction to commence a proposed class action. In the meantime, she wrote ICM, and insincerely, she advised that she was considering calling the loan because of concerns about the effect of Donald Trump’s presidency on the marketplace. It rather appears that she was considering commencing an action against ICM.

4. The Sale of Promisory Notes, the Proposed Class Action, and the Norwich Order/Mareva Injunction

[27] On January 25, 2017, Sanchez Corp. # 1 signed an Agreement of Purchase and Sale (Commercial) with 2421772 Ontario Limited. Under the Agreement, Sanchez Corp. # 1 agrees to convey free from encumbrances: (a) 940 The East Mall (appraised value, approximately $3.4 million); (b) 900 The East Mall (estimated value $2 million); and (c) its one-third interest in the adjoining parking lot lands. The purchase price is $18 million, and thus it appears that 2421772 Ontario Limited, which is an arm’s-length purchaser, is paying a premium of about $12.6 million for the properties. The sale transaction is scheduled to close on April 18, 2018.

[28] The purchase price is to be paid as follows: (a) an initial deposit of $50,000 held by the real estate agent pending completion or termination of the Agreement; (b) a further deposit of $250,000, payable 10 business days after the waiver of the conditions to be held in trust by the real estate agent; (c) a vendor take back mortgage in the amount of $12 million, having a term of five years, and bearing interest at 2.5% in the first year, 3.5% in the second year, 5% in the third year and 6% for the remainder of the term, calculated semi-annually, not in advance, repayable in semi-annual interest payments only; and (d) the balance, being about $5.4 million after commission, subject to adjustments, to be paid on the closing of the transaction.

[29] There are encumbrances against the property and once they are paid, approximately $1.875 million will remain from the sale proceeds.

[30] On February 23, 2017, Ms. Boal commenced a proposed class action. Her claim is for $30 million in damages for fraud, conspiracy, conversion, negligence, negligent misrepresentation, fraudulent misrepresentation, breach of contract, breach of trust and breach of fiduciary duty. She claims, among other things, a constructive trust and a tracing Order from the loan funds into 940 The East Mall. The theory of the tracing Order is that the funds paid to John and Javier Sanchez were used to maintain the series of mortgages that encumbered 940 The East Mall.

[31] The Defendants dispute this theory and submit that Sanchez Corp. # 1 self-funded the mortgage payments.

[32] Despite having commenced an action against ICM and others, Ms. Boal did not immediately stop doing business with ICM and John Sanchez.

[33] As noted above, at the time in which the action was commenced, Sanchez Corp. # 1 had already entered into a conditional agreement to sell 940 The East Mall to 2421772 Ontario Limited, a developer. The agreement was conditional on the developer assembling adjoining lands. The conditions have been satisfied, and, as already noted, the sale is scheduled to close on April 18, 2018.

[34] In her pending proposed class action, Ms. Boal moved without notice for a Norwich Order, a Mareva Injunction, and a certificate of pending litigation with respect to the 940 The East Mall property. In support of her motion, Ms. Boal swore an affidavit dated March 21, 2017.

[35] The motion came on before me on March 19, 2018 and based on Ms. Boal’s affidavit, I granted a Norwich Order and a Mareva Injunction. I also granted leave for Ms. Boal to have a certificate of pending litigation issued for 940 The East Mall. The Norwich Order/Mareva Injunction: (a) required certain banks to freeze the assets of the Defendants; (b) enjoined the Defendants from dealing with their assets; and (c) required John and Javier Sanchez to deliver an affidavit disclosing their assets and to be cross-examined.

[36] Improperly, because Rule 40 provides that an injunction granted without notice should expire in 10 days unless extended, the Norwich Order /Mareva Injunction had a 30-day expiry date.

5. The Aftermath of the Norwich Order/Mareva Injunction

[37] The Norwich Order /Mareva Injunction was served on the parties. On March 30, 2017, the TD Bank, the mortgagee of 940 The East Mall, was given notice of the Norwich Order/Mareva Injunction.

[38] After the Norwich Order/Mareva Injunction was made, by letter dated April 4, 2017, Doug Levitt, IPS’ lawyer, sent Ms. Boal’s lawyer a cheque in the amount of $122,899.88, being the amount owed to her to redeem the promissory note. Ms. Boal did not deposit the cheque, and after the cheque became stale-dated, she refused to accept a replacement cheque.

[39] After the issuance of the Norwich Order/Mareva Injunction, there was negotiations between the parties about releasing various accounts from the freezing Order so that the Defendants could carry on business and service their clients.

[40] On April 5, 2017, Caroline Garrod, one of Ms. Boal’s lawyers, wrote Mr. Levitt and Janice Wright of Wright Temelini LLP, which was then acting for other Defendants, indicating that Ms. Boal did not require compliance with the Mareva injunction and Ms. Boal would give notice if compliance was required.

[41] On or about April 5, 2017, TD Bank demanded repayment of the mortgage on 940 The East Mall that was security for its loans to Sanchez Corp. # 1.

[42] On April 6, 2017, Ms. Garrod wrote to Jonathan Odumeru, in-house counsel at TD Bank, and inquired whether the Bank’s demand was prompted by the Norwich Order/Mareva Injunction. Mr. Odumeru responded that the demand was not connected to the court Order.

[43] On April 19, 2017, the certificate of pending litigation was registered.

[44] On April 26, 2017, David Milosevic, another of Ms. Boal’s lawyers, wrote to Mr. Levitt and Ms. Wright to advise that Ms. Boal was willing to put off seeking an extension of the Norwich Order/Mareva Injunction. The reason for this willingness was that the registration of the certificate of pending litigation was adequate protection and because IPS had undertaken not to transfer funds to John and Javier Sanchez and Sanchez Corp. # 1.

[45] Mr. Milosevic indicated that John and Javier Sanchez should still deliver disclosure affidavits and make themselves available for cross-examination. It was Ms. Boal’s position that the tracing, asset disclosure and certificate of pending litigation portions of the Norwich Order/Mareva Injunction did not require an extension Order.

[46] Ms. Boal did not bring a motion to extend the Norwich Order/Mareva Injunction, and it terminated pursuant to its terms on May 2, 2017.

[47] On June 9, 2017, Ms. Boal delivered a Fresh as Amended Statement of Claim and Mr. Milosevic wrote Mr. Levitt and Ms. Wright indicating an intention to require John and Javier Sanchez to deliver disclosure affidavits and to be cross-examined.

[48] On August 28, 2017, Ms. Boal terminated ICM’s management of her investment portfolio.

[49] On October 30, 2017, John and Javier Sanchez and Sanchez Corp. # 1 brought a motion to discharge the certificate of pending litigation for the purpose of obtaining replacement financing for the then-current mortgage from TD Bank. Ms. Boal did not oppose this motion. The certificate was discharged and then re-registered against title to the property.

[50] On November 20, 2017, Ms. Boal delivered a Second Fresh as Amended Statement of Claim.

[51] On December 14, 2017, Ms. Garrod wrote Ms. Wright and Greg Temelini, who is Ms. Wright’s law partner, asking for delivery of the disclosure affidavits by mid-January.

[52] On December 29, 2017, Mr. Temelini responded that it was John and Javier Sanchezs’ position that the Norwich Order/Mareva Injunction was no longer in effect.

[53] On March 19, 2018, John and Javier Sanchez and Sanchez Corp. # 1 brought a motion to vacate the certificate of pending litigation and for damages for it having been registered.

[54] Ms. Boal does not oppose the vacating of the certificate or pending litigation on terms that the sale proceeds from 940 The East Mall be paid into court.

C. Law

1. Mareva Injunctions

[55] Section 101 of the Courts of Justice Act[^3] provides the court with the jurisdiction to grant interlocutory injunctions including Norwich Orders and Mareva injunctions. Section 101 states:

Injunctions and receivers

101 (1) In the Superior Court of Justice, an interlocutory injunction or mandatory Order may be granted or a receiver or receiver and manager may be appointed by an interlocutory Order, where it appears to a judge of the court to be just or convenient to do so.

Terms

(2) An Order under subsection (1) may include such terms as are considered just.

[56] For a Mareva injunction, the plaintiff must establish: (1) a strong prima facie case; (2) irreparable harm if the remedy for the defendant’s misconduct were left to be granted at trial; (3) the balance of convenience favours granting an interlocutory injunction; (4) the defendant has assets in the jurisdiction; and (5) that there is a serious risk that the defendant will remove property or dissipate assets before judgment.[^4]

2. Mareva Injunctions without Notice

[57] Rule 40 of the Rules of Civil Procedure,[^5] provides that an injunction may be obtained on motion, and rule 40.02 (1) provides that an interlocutory injunction may be granted on motion without notice for a period not exceeding ten days. Rule 40 states:

RULE 40 INTERLOCUTORY INJUNCTION OR MANDATORY ORDER HOW OBTAINED

40.01 An interlocutory injunction or mandatory Order under section 101 or 102 of the Courts of Justice Act may be obtained on motion to a judge by a party to a pending or intended proceeding.

WHERE MOTION MADE WITHOUT NOTICE

Maximum Duration

40.02 (1) An interlocutory injunction or mandatory Order may be granted on motion without notice for a period not exceeding ten days.

[58] Rule 39.01(1) provides that evidence on a motion may be given by affidavit, and rule 39.01(6) provides that there must be full and fair disclosure on a motion made without notice. Rule 39.01(6) states:

Full and fair disclosure on motion or application without notice

39.01(6) Where a notice or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any Order obtained on the motion or application.

[59] On a motion for an interlocutory injunction made without notice, there must be full and fair disclosure of all material facts.[^6] The moving party is under high obligations of candour and disclosure on a motion without notice.[^7] The moving party on a motion must inform the court of any points of fact or law known to it that favour the other side.[^8] A party moving for an interlocutory injunction without notice must fully set out in the material all relevant facts both favourable and unfavourable to its position, and it is not sufficient to simply attach relevant documentary evidence as an exhibit to the applicant’s supporting affidavit without revealing or highlighting the material facts.[^9] A material fact is one that the judge may need to know in coming to his or her decision and that if not disclosed may affect the outcome of the decision.[^10] What is a material fact is determined objectively and it is not based on the subjective understanding of the moving party as to what is known or material.[^11]

[60] If the plaintiff or applicant has not disclosed all the facts in his or her knowledge material to the case, the court may vacate the injunction or refuse to extend it.[^12] The injunction may be set aside, notwithstanding that had full disclosure been made, the injunction would have been granted in the first instance.[^13] Forgetfulness of facts or even misapprehension of the importance of the facts not disclosed is no excuse for the party who has proceeded without notice to his or her opponent.[^14]

[61] However, the duty of full and frank disclosure is not enforced in a mechanical manner because motions without notice are usually brought urgently with little time for preparation and because a plaintiff should not be deprived of a remedy because there are imperfections in the affidavit or because inconsequential facts have not been disclosed; the challenged defects must be relevant and material to the discretion to be exercised by the court.[^15]

[62] The court has some discretion and may continue the interlocutory injunction if the undisclosed facts were not material or the non-disclosure was not intentional. In exercising its discretion to continue the injunction in circumstances of non-disclosure, the court should consider: (a) the practical realities that there is often urgency or an emergency that explains why the motion is made without notice; (b) whether facts were intentionally suppressed or whether simple carelessness or ignorance was the cause of the non-disclosure; (c) the pervasiveness of the non-disclosure; (d) the difficulty of determining what is a material or an immaterial non-disclosure; and (e) the significance to the outcome of the motion of the matters that were not disclosed to the court.[^16]

3. The Criteria for Obtaining a Certificate of Pending Litigation

[63] Section 103 of the Courts of Justice Act empowers the court to issue a certificate of pending litigation and provides a statutory cause of action for damages against a party who registers a certificate without a reasonable claim to an interest in the land. Section 103 states:

Certificate of pending litigation

103. (1) The commencement of a proceeding in which an interest in land is in question is not notice of the proceeding to a person who is not a party until a certificate of pending litigation is issued by the court and the certificate is registered in the proper land registry office under subsection (2).

Liability where no reasonable claim

(4) A party who registers a certificate under subsection (2) without a reasonable claim to an interest in the land is liable for any damages sustained by any person as a result of its registration.

Recovery of damages

(5) The liability for damages under subsection (4) and the amount thereof may be determined in the proceeding in respect of which the certificate was registered or in a separate proceeding.

Order discharging certificate

(6) The court may make an Order discharging a certificate,

(a) where the party at whose instance it was issued,

(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other ground that is considered just,

and the court may, in making the Order, impose such terms as to the giving of security or otherwise as the court considers just.

Effect

(7) Where a certificate is discharged, any person may deal with the land as fully as if the certificate had not been registered.

[64] For the plaintiff to obtain a certificate of pending litigation, the proceeding must be one in which an interest in land is in question. The onus is on the party opposing the certificate of pending litigation to show that there is no triable issue about whether the party seeking the certificate has a reasonable claim to an interest in land.[^17] On a motion to discharge the certificate, the court should examine the evidence and without deciding disputed issues of fact and credibility, determine whether the plaintiff’s case makes a reasonable claim to an interest in land.[^18]

[65] A constructive trust arising from a breach of fiduciary duty[^19] or a constructive trust associated with a claim for unjust enrichment[^20] will support a claim for a certificate of pending litigation.

4. The Claim for a Constructive Trust

[66] A constructive trust is a proprietary remedy that may be available in two general circumstances of restitutionary claims: first, a constructive trust may be available in cases in which the defendant has been unjustly enriched at the expense of the plaintiff; and, second, a constructive trust may be available in circumstances where the defendant has committed a breach of a duty in equity and in good conscience he or she should not keep any ill-gotten gain.[^21]

[67] If a plaintiff successfully establishes a restitutionary claim, often but not always, the court may, in the exercise of discretion, grant a constructive trust over specified property if the court concludes that a monetary award does not properly address the plaintiff's legitimate remedial needs in the particular circumstances.[^22] To justify the remedy of a proprietary remedy such as a constructive trust, there must be a close connection between the property over which the constructive trust is sought and the improper benefit bestowed on or wrongfully acquired by the defendant.[^23]

[68] Property acquired in breach of a fiduciary duty may be held in a constructive trust for the benefit of the beneficiary.[^24] A fiduciary has a duty to disclose all facts material to the fiduciary relationship.[^25] The leading case about liability for a fiduciary’s failure to disclose material information is Nocton v. Lord Ashburton,[^26] where Nocton, a lawyer, and his client Lord Ashburton both had mortgage securities on real property. In breach of his fiduciary duty, Nocton did not disclose to Lord Ashburton, who was being persuaded to release part of his security, that the release would advance the priority of Nocton’s mortgage. Lord Dunedin stated: “[The] fiduciary position imposes on him the duty of making a full and not misleading disclosure of facts known to him when advising his client. He fails to do so. Equity will give a remedy to the client.”[^27]

[69] Taking a secret profit or commission is a breach of fiduciary duty.[^28] In Hitchcock v. Sykes,[^29] Sykes and Webster purchased a mining property from Hitchcock, and Sykes breached his fiduciary duty to Webster by not disclosing that he was Hitchcock’s agent and by receiving a secret commission from Hitchcock. In Hodgkinson v. Simms,[^30] an investment advisor was liable for breach of fiduciary duty when he failed to disclose that he was receiving fees from the developer of the investment vehicle being purchased by the plaintiff. In Laskin v. Bache & Co. Inc.,[^31] a stockbroker breached its fiduciary duty by not disclosing to its customer that it had made her stock purchases in a way that delayed the delivery of the certificates she needed to reduce her losses on having purchased the stock. In Maghun v. Richardson Securities of Canada Ltd.,[^32] a stockbroker breached his fiduciary duty by not properly advising his unsophisticated clients, who were trading in commodities, and by failing to take the appropriate steps to protect them from their financial misfortunes. In Capannelli v. Muroff,[^33] a joint venturer in a construction project breached his fiduciary duty by not disclosing his personal interest in the lenders providing financing for the project. In Hayward v. Bank of Nova Scotia,[^34] there was a fiduciary relationship between a manager of a branch of the defendant bank and the plaintiff, who was a customer of the bank applying for a loan to invest in an unusual business. The bank manager was held to have breached a fiduciary duty by not fully disclosing information about what he knew about the risks of the plaintiff’s plans.

[70] The elements of a claim for knowing assistance are: (1) the plaintiff is the beneficiary of a trust or fiduciary relationship; (2) the trustee or fiduciary fraudulently or dishonestly breaches his or her equitable duty; (3) the defendant has actual knowledge of the misconduct; and, (4) the defendant assists in the fraudulent or dishonest design.[^35]

[71] The elements of a claim of knowing receipt are: (1) the plaintiff is the beneficiary of a trust or fiduciary relationship; (2) the defendant receives property from the trust or fiduciary in his or her personal capacity; and (3) the defendant has actual or constructive knowledge that the property was transferred to him or her in breach of trust or fiduciary duty.[^36]

5. Discharging a Certificate of Pending Litigation

[72] The court has a broad discretion to discharge a certificate of pending litigation.[^37] The onus is on the party seeking to discharge the certificate to persuade the court that its discretion ought to be exercised in favour of the discharge.[^38]

[73] The court may discharge a certificate of pending litigation where the plaintiff on a motion without notice fails to make full disclosure and the court receives an incomplete and inaccurate picture of the relationship between the parties and the nature of their dealings.[^39]

[74] In 572383 Ontario Inc. v. Dhunna,[^40] the court provided a non-exhaustive list of factors to consider in determining whether it would be just to discharge a certificate of pending litigation; namely: (a) whether the plaintiff is, or is not, a shell corporation; (b) whether the land is, or is not, unique; (c) the intent of the parties in acquiring the land; (d) whether there is an alternative claim for damages; (e) the ease or difficulty of calculating damages; (f) whether damages would be a satisfactory remedy; (g) the presence or absence of another willing purchaser; and (h) the harm done to the defendant if the certificate is allowed to remain, or to the plaintiff if the certificate is removed, with or without the requirements of alternative security.[^41] The factors are not a code, and whether a certificate of pending litigation should be vacated is an exercise of the court’s discretion having regard to the factors that are relevant in the circumstances of the particular case.[^42]

6. Damages from the Registration of a Certificate of Pending Litigation

[75] In order to succeed in a claim for damages under ss. 103(4) and (5) of the Courts of Justice Act, the party whose land was encumbered by the certificate of pending litigation must establish that the party who registered the certificate did so without a reasonable claim to an interest in the land.[^43]

D. Discussion

1. Analysis

[76] The matter of the extension of the Norwich Order/Mareva Injunction is now moot, but the brunt of the argument of the motion now before the court to discharge the certificate of pending litigation focused on whether the Order/Injunction would have been extended had the extension motion actually been argued.

[77] John and Javier Sanchezs’ and Sanchez Corp. # 1’s essential argument was that because of Ms. Boal’s alleged misrepresentations by omission and commission, the Norwich Order/Mareva Injunction would have been set aside, and, therefore, if the Order was set aside, then so should the certificate of pending litigation be vacated. They submitted that in a variety of ways, Ms. Boal had failed to make proper disclosure on a motion without notice. The Defendants submitted that on this ground alone, the certificate of pending litigation should now be set aside.

[78] For her part, Ms. Boal denied any material misrepresentations, and she argued that, in any event, the certificate of pending litigation and the Sanchezs’ obligation to provide disclosure affidavits and subject themselves to cross-examination survived the expiry of the Norwich Order/Mareva Injunction.

[79] John and Javier Sanchez and Sanchez Corp. # 1 also argued that in addition to the misrepresentation arguments, there were other reasons to discharge the certificate of pending litigation.

[80] My own analysis is that the arguments of both sides are incorrect, but what emerges from the competing arguments is that the proper Order is to vacate the certificate of pending litigation and to reserve until the trial whether the Defendants have a counterclaim under s. 103 of the Courts of Justice Act.

[81] John and Javier Sanchez and Sanchez Corp. # 1 are incorrect in their submission that had the Norwich Order/Mareva Injunction not expired, it would not have been extended because of the alleged misrepresentations of Ms. Boal.

[82] Albeit after the fact, practically speaking, the motion to extend has now been argued, and while I would not have extended the Norwich Order/Mareva Injunction, my reason for terminating the Norwich Order/Mareva Injunction would have been that - as a contested motion, with both sides arguing their own cases - the circumstances do not justify granting the extraordinary remedy of a Mareva injunction.

[83] Thus, having heard argument on the merits of extending the court’s Order, I would not have extended the interim injunction; however, standing alone, the allegations of misrepresentations by Ms. Boal would not have justified terminating the injunction. In yet other words, removing the matter of whether or not Ms. Boal made proper disclosure on a motion without notice and treating the matter as a motion on notice for a Mareva injunction and for a certificate of pending litigation, Ms. Boal’s motion fails.

[84] To be clear, however, because the point was fully argued, I would not have discharged the injunction and I do not vacate the certificate of pending litigation because of misrepresentations by omission or commission. Objectively speaking, I believe that the interim injunctive Order and the initial granting of the certificate of pending litigation was sound based on the material presented to the court. The “you had me at hello” moment was Ms. Boal’s disclosure of the MFDA proceedings, which provided objective evidence that would justify an interim injunctive Order that should have lasted for 10 days, but mistakenly was made to last for 30 days.

[85] Perhaps the mistake about the duration of the interim Order should have been caught by me when I signed the Order, or perhaps Rule 2.01 (effect of non-compliance) or Rule 2.03 (court may dispense with compliance) absolves the court or Ms. Boal from the mistake, but I need not decide that point. The mistake in the duration of the interim Order, in my opinion, is ultimately not significant. What is significant is that while there were infelicities and alarmist overstatements by Ms. Boal, objectively speaking, there was a sound basis for granting the interim injunctive Order and in granting a certificate of pending litigation. In all the circumstances, the infelicities and alarmist overstatements by Ms. Boal did not rise to the level that she should be disentitled to a Mareva injunction. Rather, she would have been disentitled to a Mareva injunction because on a contested motion, she failed to satisfy the test for a Mareva injunction.

[86] Although the Sanchezs and Sanchez Corp. # 1 have good reason to object to some of the material proffered on the motion by Ms. Boal because some of it was irrelevant, some of it was inadmissible hearsay, and some of it was speculative, they overstate what is required of a moving party on a motion without notice in informing the court about points of fact or law known to favour the other side. In the immediate case, the court did not suffer from being ill-informed about the applicable law and Ms. Boal was under no obligation to anticipate how she might be cross-examined about contestable facts or contestable interpretations of what inferences might be drawn from the facts.

[87] An interlocutory motion made without notice remains within the context of an adversary system, and while a party moving without notice cannot take unfair advantage of the absence of his or her adversary in arguing the facts and the law, and it goes without saying that the moving party cannot intentionally deceive or mislead the court, he or she is not obliged to argue against his or her own case or to argue both sides of the case; rather, he or she is obliged to fairly present his or her case and to fairly present the material facts that may favour the opponent. In assessing the quality of disclosure, it is significant to note that the moving party exposes himself to cross-examination and early disclosure of his or her case and that any order is temporary and may be set aside.

[88] Using the immediate case as an illustration of the problems associated with motions without notice and of deciding whether or not Ms. Boal met the standard of disclosure of material facts, the Defendants submitted that Ms. Boal did not disclose enough about the fact that she knew that John and Javier Sanchez received a referral fee from IPS, and they pointed out that she had signed an acknowledgement that she knew about the referral fee. The problem, however, with this submission is that it simply moves the motion to a host of issues that are better resolved at the trial, including whether ICM had made misrepresentations, whether the Sanchezs made adequate disclosure of the details of the referral fees, whether ICM made adequate disclosure of the interrelationship between the Defendants, whether ICM or its principals had a conflict of interest, or whether ICM or its principals had breached fiduciary duties to Ms. Boal because her participation in the investment was not fully or properly informed. These are not issues to be resolved on a motion for an interim and temporary motion.

[89] In any event, in the immediate case, the interim Order of March 30, 2017 expired on its own terms. The termination of the Order ended the Sanchezs’ obligations to provide a disclosure affidavit and to be cross-examined. Disclosure will now occur in the normal course of an action in a proposed class action. Ms. Boal, however, is seriously mistaken in thinking that the disclosure aspects of the injunctive Order were matters under her control to waive and enforce as she saw fit. It was wrong and presumptuous of her to think that the disclosure and cross-examination obligations of John and Javier Sanchez continued at her will. Ms. Boal was as bound by the Order as were the Defendants, and she does not get to say whether and when the Defendants are required to comply with the court’s disclosure Order.

[90] Ms. Boal was correct in thinking that the expiry of the injunctive Order did not affect the granting of the already registered certificate of pending litigation. Whether the certificate should be vacated required a motion at the initiative of the Defendants, and it is that motion that is now before the court.

[91] Addressing the merits of the motion to vacate the certificate of pending litigation, I disagree with John and Javier Sanchez and Sanchez Corp. # 1’s argument that there was material non-disclosure that would justify discharging the certificate of pending litigation. Ms. Boal disclosed a potential case for a constructive trust based on the allegations of unjust enrichment or breach of fiduciary duty against ICM and John Sanchez and that disclosed case would also support claims for knowing assistance or knowing receipt against the other Defendants. There was a basis for an interest in the property known as 940 The East Mall.

[92] The problem for Ms. Boal is that while her potential claim for a constructive trust and an interest in land was sufficient for obtaining a certificate of pending litigation on a motion without notice; on a motion with notice to discharge the certificate, there is good reason to discharge the certificate.

[93] As noted above, if a plaintiff successfully establishes a restitutionary claim (which remains to be determined in the immediate case), often but not always, the court may, in the exercise of discretion, grant a constructive trust over specified property if the court concludes that a monetary award does not properly address the plaintiff's legitimate remedial needs in the particular circumstances.

[94] In the immediate case, it would appear that Ms. Boal’s claim is essentially a monetary claim arising from her having purchased an unsecured promissory note and there is no close connection between 940 The East Mall and the improper benefits allegedly bestowed on or wrongfully acquired by the Sanchezs.

[95] In the immediate case, the Defendants are still in business. None of the Defendants are leaving the jurisdiction. There is no evidence of defaults in payment of the promissory notes of any putative Class Member. (I parenthetically note that having commenced a potential class action, Ms. Boal was correct in refusing to accept the offer to pay her promissory note.) ICM and the Sanchezs may be successful in defending the proceedings brought by the MFDA. The balance of convenience does favour granting an extraordinary remedy. In the immediate case, the granting of a certificate of pending litigation more closely resembles a prejudgment execution in circumstances where the extraordinary remedy of a Mareva injunction would not be available when the motion is argued on its merits.

[96] In these circumstances, it is appropriate for the court in the exercise of its discretion to make an Order discharging the certificate of pending litigation. It is premature to determine whether Sanchez Corp. # 1 has a claim under s. 103 of the Courts of Justice Act for the period when the title of the 940 The East Mall property was subject to a registered certificate of pending litigation.

E. Conclusion

[97] For the above reasons, I discharge the certificate of pending litigation.

[98] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of John Sanchez, Javier Sanchez, and Sanchez Corp. # 1 within 20 days of the release of these Reasons for Decision followed by Ms. Boal’s submissions within a further 20 days. I alert the parties that my present inclination is to order costs in the cause.

Perell, J.

Released: April 12, 2018

[^1]: S.O. 1992, c.6.

[^2]: The property is legally described as PT LT 16 CON 2 ETH Etobicoke 1 & 2, 64Rl 1897; SIT & TIW CA610898; Toronto (Etobicoke); City of Toronto.

[^3]: R.S.O. 1990, c. 43.

[^4]: Chitel v. Rothbart (1982), 1982 1956 (ON CA), 39 O.R. (2d) 513 (C.A.); United States of America v. Yemec (2005), 2005 8709 (ON SCDC), 75 O.R. (3d) 52 (C.A.).

[^5]: R.R.O. 1990, Reg. 194.

[^6]: Chitel v. Rothbart (1982), 1982 1956 (ON CA), 39 O.R. (2d) 513 (C.A.); United States v. Friedland, [1996] O.J. No. 4399 (Gen. Div.); Prodigy Graphics Group Inc. v. Fitz-Andrews, [2000] O.J. No. 1203 (S.C.J.).

[^7]: Akagi v. Synergy Group (2000) Inc., 2015 ONCA 368 at para. 95; Bank of Montreal v. Dimitri's Service Center Inc., [2008] O.J. No. 3689 (Div. Ct.).

[^8]: United States v. Friedland, [1996] O.J. No. 4399 (Gen. Div.); United States of America v. Yemec (2005), 2005 8709 (ON SCDC), 75 O.R. (3d) 52 (Div. Ct.).

[^9]: L’Unita Development Corp. v. 505369 Ontario Ltd., [2001] O.J. No. 3581 (S.C.J.); 830356 Ontario Inc. v. 156170 Canada Ltd., [1995] O.J. No. 687 (Gen. Div.); Cimaroli v. Pugliese, [1987] O.J. No. 2464 (H.C.J.).

[^10]: Pazner v. Ontario (1990), 1990 6649 (ON SC), 74 O.R. (2d) 130 (H.C.J.); An v. Ko, [2005] O.J. No. 2000 (Ont. S.C.J.).

[^11]: United States v. Friedland, [1996] O.J. No. 4399 at para. 36 (Gen. Div.); Euro United Corp. (Interim Receiver of) v. Rehani, [2003] O.J. No. 2426 at para. 11 (Master); Estate of Marla Bennett v. Islamic Republic of Iran, 2013 ONSC 6832 at paras. 16-18

[^12]: United States of America v. Yemec (2003), 2003 23436 (ON SC), 67 O.R. (3d) 394 (S.C.J.); Jiaxing Economic Co-operation Co. v. 2438866 Ontario Inc., 2017 ONSC 3214.

[^13]: Forestwood Co-operative Homes Inc. v. Pritz, [2002] O.J. No. 550 (Div. Ct.).

[^14]: R. v. Kensington Income Tax Commissioners, [1917] 1 K.B. 486.

[^15]: United States v. Friedland, [1996] O.J. No. 4399 at para. 31 (Gen. Div.).

[^16]: Ontario Realty Corp. v. P. Gabriele & Sons Ltd., [2000] O.J. No. 4341 (S.C.J.); Bell ExpressVu Limited Partnership v. Rodgers, [2007] O.J. No. 4569 (S.C.J.); Robert Half Canada Inc. v. Jeewan (2004), 2004 1532 (ON SC), 71 O.R. (3d) 650 (S.C.J.).

[^17]: G.P.I. Greenfield Pioneer Inc. v. Moore (2002), 2002 6832 (ON CA), 58 O.R. (3d) 87 (C.A.); Jiaxing Economic Co-operation Co. v. 2438866 Ontario Inc., 2017 ONSC 3214.

[^18]: Carttera Management Inc. v. Palm Holdings Canada Inc., 2011 ONSC 4573; Waxman v. Waxman, [1991] O.J. No. 89 (Gen. Div.).

[^19]: Davidson v. Hyundai Auto Canada Inc. (1987), 1987 4270 (ON SC), 59 O.R. (2d) 789 (Master).

[^20]: Avan v. Benarroch, 2017 ONSC 4729 (Master); Golden Bull Estates v. Generex Biotechnology Corp., 2012 ONSC 4975; Roseglen Village for Seniors Inc. v. Doble, 2010 ONSC 3239 (Master), aff’d 2010 ONSC 4680; First Leaside Wealth Management Inc. v. Phillips, 2012 ONSC 5443; HarbourEdge Mortgage Investment Corp. v. Community Trust Co., 2016 ONSC 448, leave to appeal to Div. Ct. ref’d 2016 ONSC 2507 (Div. Ct.); Robertson v. Fieldstone Homes Ltd., [2009] O.J. No. 5352 (Master); Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Gen. Div.).

[^21]: (1997), 1997 346 (SCC), 146 D.L.R. (4th) 214 (S.C.C.).

[^22]: 306440 Ontario Ltd. v. 782127 Ontario Ltd. (c.o.b. Alrange Container Services), 2014 ONCA 548; Peter v. Beblow, 1993 126 (SCC), [1993] 1 S.C.R. 980 at pp. 987-88, 997.

[^23]: 306440 Ontario Ltd. v. 782127 Ontario Ltd. (c.o.b. Alrange Container Services), 2014 ONCA 548; Kerr v. Baranow, 2011 SCC 10; Michelin Tires (Canada) Ltd. v. R., 2001 FCA 145; leave to appeal to S.C.C. ref’d, [2001] S.C.C.A. No. 367.

[^24]: Soulos v. Korkontzilas, [1997] S.C.R. 217; Boardman v. Phipps, [1967] 2 A.C. 46 (H.L.).

[^25]: Hodgkinson v. Simms, 1994 70 (SCC), [1994] 3 S.C.R. 377; Rochwerg v. Truster (2002), 2002 41715 (ON CA), 58 O.R. (3d) 687 (C.A.); Ocean City Realty Ltd. v. A. & M. Holdings Ltd. (1987), 1987 2872 (BC CA), 44 R.P.R. 312 (B.C.C.A.); Korz v. St. Pierre (1987), 1987 4109 (ON CA), 61 O.R. (2d) 609 (C.A.); Wakeford v. Yada Thompkins Huntingford & Humphries (1986), 1986 1111 (BC CA), 28 D.L.R. (4th) 481 (B.C.C.A.); Hogar Estates Ltd. in trust v. Shebron Holdings Ltd. (1979), 1979 1880 (ON SC), 25 O.R. (2d) 543 (H.C.J.); Grosch v. Loveridge (1929), 1929 405 (ON CA), 64 O.L.R. 465 (C.A.).

[^26]: [1914] A.C. 932 (H.L.).

[^27]: [1914] A.C. 932 at pp. 964-5 (H.L.).

[^28]: Verma v. Zinner (1994), 1994 ABCA 341, 24 Alta. L.R. (3d) 240 (C.A.); G.L. Black Holdings Ltd. v. Peddle (1998), 1998 18149 (AB KB), 67 Alta. L.R. (3d) 372 (Q.B.), aff’d (1999), 1999 ABCA 264, 73 Alta. L.R. 389 (C.A.).

[^29]: (1914), 1914 5 (SCC), 49 S.C.R. 403.

[^30]: 1994 70 (SCC), [1994] 3 S.C.R. 377.

[^31]: 1971 598 (ON CA), [1972] 1 O.R. 465 (C.A.).

[^32]: (1987), 1986 2720 (ON CA), 58 O.R. (2d) 1 (C.A.).

[^33]: (2003), 8 R.P.R. (4th) 83 (Ont. S.C.J.).

[^34]: (1984), 1984 2103 (ON SC), 45 O.R. (2d) 542 (H.C.J.), aff’d (1985), 1985 1933 (ON CA), 51 O.R. (2d) 193 (C.A.).

[^35]: Gold v. Rosenberg, [1997] S.C.R. 767; Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 334 (SCC), [1997] 3 S.C.R. 805; Air Canada v. M & L Travel Ltd., 1993 33 (SCC), [1993] 3 S.C.R. 787.

[^36]: Citadel General Assurance Co. v. Lloyds Bank of Canada, 1997 334 (SCC), [1997] 3 S.C.R. 805; Canadian Pacific Airlines Ltd. v. Canadian Imperial Bank of Commerce (1987), 1987 4146 (ON SC), 61 O.R. (2d) 233 (H.C.J.), aff’d (1990), 1990 149 (SCC), 71 O.R. (2d) 63n (C.A.).

[^37]: G.P.I. Greenfield Pioneer Inc. v. Moore (2002) 2002 6832 (ON CA), 58 O.R. (3d) 87 (C.A.); Clock Investments Ltd. v. Hardwood Estates Ltd. (1977), 1977 1414 (ON SC), 16 O.R. (2d) 671 (Div. Ct.); Belajac v. Belajac, [2008] O.J. No. 1058 (S.C.J.); 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073 (S.C.J., Master).

[^38]: JDM Developments Inc. v. J. Stollar Construction Ltd., [2004] O.J. No. 4572 (S.C.J.); 931473 Ontario Ltd. v. Coldwell Banker Canada Inc., [1991] O.J. No. 1150 (Gen. Div.); McGrath v. B.G. Schickedanz Homes Inc., [2000] O.J. No. 4161 (S.C.J.).

[^39]: Cini v. 2030315 Ontario Ltd., [2007] O.J. No. 2065 (S.C.J.); Jiaxing Economic Co-operation Co. v. 2438866 Ontario Inc., 2017 ONSC 3214.

[^40]: 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073 (S.C.J., Master); Mohammed v. Karigar, [2006] O.J. No. 2946 (S.C.J., Master); Correct Group Inc. v. Barrie (City), 2013 ONSC 4477.

[^41]: Interrent International Properties Inc. v. 1167750 Ontario Inc., 2013 ONSC 4746 (Master); Starwood Acquisitions Inc. v. 267 O’Connor Ltd., 2014 ONSC 4400 (Master); Regalcraft Homes Inc. v. Salvadori, 2014 ONSC 6990; Smith v. Vankoughnet and Rasmussen, 2017 ONSC 4293.

[^42]: Carttera Management Inc. v. Palm Holdings Canada Inc., 2011 ONSC 4573.

[^43]: Captain Developments Ltd. v. Nu-West Group Ltd. (1984), 1983 1886 (ON CA), 45 O.R. (2d) 213 (C.A.); Charleston Partners. L.P. v. Dickenson, [1996] O.J. No. 4268 (C.A.); Bluestone v. Dagarsho Holdings Ltd., 2004 11271 (ON SC), [2004] O.J. No. 2654 (S.C.J.), aff'd [2005] O.J. No. 4526 (C.A.); Neighborhoods of Cornell Inc. v. 1440106 Ontario Inc., [2006] O.J. No. 4424 (S.C.J, Master.).