Corporate/Commercial Law - SCJ

The representative plaintiff, Fanshawe College, sought to amend the class definition in a certified class proceeding alleging price-fixing of LCD panels.

Two amendments were proposed: a broad "all purchasers' amendment" to include all direct and indirect purchasers, and an "alternative amendment" to expand the list of named OEMs and distributors.

The court denied the "all purchasers' amendment" finding it an abuse of process as it attempted to re-litigate an issue previously abandoned and decided by the certification judge.

However, the court granted the "alternative amendment" as it was specifically contemplated by the certification judge and the claims were not found to be time-barred.

This endorsement arises from a case management conference convened to coordinate an action and four related applications stemming from the breakup of a law firm.

The court made several procedural orders, including vacating and rescheduling hearing dates for various motions, converting a motion to written submissions, and setting timelines for affidavits and submissions.

The endorsement also addresses the interpretation of a previous order regarding cross-examinations and outlines the process for scheduling further motions, including one to compel attendance at cross-examinations and another to remove counsel of record.

Following an earlier decision requiring certain respondents to purchase the applicant’s shares in a corporation for $4.25 million, the court determined the appropriate costs award.

The applicant had served a Rule 49 offer to settle that was lower than the judgment amount and sought substantial indemnity costs from the date of the offer.

The court considered the extensive litigation history, overlapping issues involving two related corporate interests, and the respondents’ conduct that complicated document production and valuation.

Applying the Rule 57.01 factors and recognizing the respondents’ obstructive conduct, the court fixed substantial indemnity costs for fees and taxes and allowed claimed disbursements and expert valuation expenses in full.

A trucking company sought repayment of customer payments retained by a factoring company after the parties terminated their factoring agreement.

The defendant alleged the funds were applied to a $50,000 oral consulting agreement and outstanding contractual fees.

The court rejected that evidence as inconsistent with the documentary record and drew adverse inferences from missing accounting records.

Finding no juristic reason for the defendant to retain the funds, the court held the retention constituted unjust enrichment and ordered repayment.

The defendant brought a motion to set aside two default judgments arising from a breach of contract action involving a technology services agreement.

The court applied the established test for setting aside default judgments, considering delay, explanation for the default, and the existence of a triable defence.

The court held that the motion to set aside the first partial default judgment for the liquidated portion of the claim was brought with undue delay and lacked a reasonable explanation or evidence of a meritorious defence.

However, the court accepted a limited explanation regarding the second judgment for the unliquidated portion of damages and found that issues relating to quantum and equitable remedies warranted adjudication on the merits.

The second judgment was set aside on conditions, including payment of the first judgment and costs.

The moving defendants sought summary dismissal of an action to enforce personal guarantees associated with a corporate loan secured by pledged shares.

The lender had seized and retained the pledged shares following default and asserted rights as shareholder rather than selling the collateral.

The court found that the lender elected to retain the shares “in satisfaction of the debt,” thereby extinguishing the underlying obligation and releasing the guarantors.

In the alternative, the lender’s conduct in refusing a reasonable purchase offer, delaying enforcement, and materially altering the risk without notice discharged the guarantors.

Although the limitation defence failed because the guarantee was a demand obligation and the limitation period began only upon demand, the action against the guarantors was dismissed on the other grounds.

The plaintiff supplier brought a motion for summary judgment seeking payment of outstanding invoices for wholesale jewelry sold to the corporate defendant and enforcement of alleged personal guarantees by the individual defendants.

The defendants argued that returned merchandise and diamonds supplied to the plaintiff eliminated the debt and that factual disputes required a trial.

Applying the summary judgment framework under Rule 20 and the guidance in Combined Air Mechanical Services Inc. v. Flesch, the court weighed the evidence and made credibility findings on the paper record.

The court rejected the principal defendant's evidence, found the return inventory had been properly credited at original sale prices, accepted a limited credit for diamonds, and held that the corporate defendant remained indebted.

The court also found an enforceable oral personal guarantee by one individual defendant but not by the others.

A proposed representative plaintiff sought certification of a class proceeding relating to the distribution of surplus funds from a defined benefit pension plan following partial and full wind‑ups.

The action alleged that amendments to the plan and trust agreement improperly reserved surplus to the employer contrary to the original plan documents and the Pension Benefits Act.

The parties reached a mediated settlement providing for distribution of pension surplus to plan members and payment of a settlement amount to address legal costs and related expenses.

The motion sought certification solely for settlement purposes and approval of the notice plan.

The court held that the action satisfied the certification requirements under the Class Proceedings Act, 1992 and granted certification for settlement purposes.

The plaintiffs brought a motion to certify two actions as class proceedings for settlement purposes under the Class Proceedings Act, 1992 in relation to alleged price-fixing of DRAM (dynamic random access memory) devices.

The actions alleged breach of Part IV of the Competition Act, civil conspiracy, and tortious interference with economic interests against numerous international semiconductor manufacturers.

Following earlier settlement with one defendant, additional settlements were reached with several defendants totaling substantial monetary payments and cooperation commitments.

The court held that the criteria for certification under s. 5(1) of the Class Proceedings Act, 1992 were satisfied and approved certification for settlement purposes.

The court further determined that no additional opt‑out period was required because class members had already been provided a valid opportunity to opt out during the earlier settlement process.

Two appeals were brought from the decision of a Claims Officer in insolvency proceedings under the Companies’ Creditors Arrangement Act concerning disputed landlord claims arising from leases originally entered in 1979.

One appellant challenged the Claims Officer’s jurisdiction to permit an amendment to a proof of claim and argued that the landlord failed to provide clear and timely notice of an intention to seek prospective damages following lease repudiation.

The other appellant argued that its claim was wrongly disallowed on the basis that notice of its intention to claim damages was untimely and prejudicial to the assignor tenant.

The court held that the Claims Officer had jurisdiction under the claims order to permit amendments and determine procedural matters and that the notice given by one landlord was sufficient.

The court also held that the second landlord’s delayed notice, after entering into a new lease in mitigation, prejudiced the assignor and justified disallowance of its claim.

Both appeals were dismissed.

Within Companies’ Creditors Arrangement Act proceedings, a dispute arose regarding the proper form of an order issued following earlier reasons approving certain settlements.

Counsel for certain defendants argued that the issued order should have included a “comeback” clause allowing parties to return to court for directions regarding ongoing case management.

The supervising judge concluded that the order had been signed on the mistaken assumption that counsel had agreed on the form of order.

Given the anticipated ongoing disputes over discovery and production in the underlying action, the court held that continuing judicial supervision was necessary in the CCAA context.

The order was therefore amended to include a comeback clause permitting affected parties to seek directions from the court.

Institutional investors sought an adjournment of a motion to sanction a restructuring plan under the Companies’ Creditors Arrangement Act, arguing that provisions in the proposed plan concerning settlements and releases for third party defendants could improperly affect their ability to pursue claims in related securities class actions.

The court reviewed the plan and concluded that approval of any specific settlement, including a proposed auditor settlement, was not before the court on the sanction motion and would require further court orders and satisfaction of multiple conditions precedent.

The court held that any potential impact on investors’ claims could be addressed in future proceedings where the specific settlements and releases would be considered.

As the objections were premature and the debtor faced time and funding constraints, the request for an adjournment was denied.

Following a judgment in favour of the applicant in a commercial lease dispute involving approximately $19,000, the court determined the appropriate costs award.

The applicant sought $14,424.02 in partial indemnity costs based on 39.8 hours of legal work.

Although the court accepted the time spent and hourly rate as reasonable, it considered the proportionality of costs relative to the modest amount in dispute under Rule 57.01 of the Rules of Civil Procedure.

Taking into account the applicant’s settlement efforts and the absence of settlement offers or cost submissions from the respondents, the court exercised discretion to reduce the amount claimed and fixed costs at $12,000 inclusive of fees, disbursements, and HST.

The defendants brought a motion under Rule 56.01(1) of the Rules of Civil Procedure seeking security for costs against a corporate plaintiff in an action arising from a liquidation agreement and alleged shortfall in auction proceeds.

The defendants argued the plaintiff corporation lacked sufficient assets in Ontario to satisfy a potential costs award.

The court held that defendants who voluntarily initiated a summary judgment motion should not obtain security for the costs of that motion from the opposing party.

The court also found it unjust to rely on the plaintiff’s alleged lack of assets where that circumstance arguably arose from the defendants’ failure to remit sale proceeds owed to the plaintiff.

Applying proportionality principles under Rule 1.04(1.1), the court dismissed the motion without prejudice to seeking security after the pending summary judgment motion is decided.

Investor plaintiffs alleged fraud, knowing receipt, and unjust enrichment against the principal of an investment company and related parties following the company’s bankruptcy.

They brought a motion seeking ex parte Mareva injunctions and, alternatively, Norwich orders against financial institutions holding accounts of the defendants.

The court held that ex parte relief requires strict full and frank disclosure and evidence of extraordinary urgency.

Because the motion record contained inaccuracies regarding the state of the pleadings and omitted a filed statement of defence, and because the defendants had long been aware of the litigation and potential asset-freezing relief, the plaintiffs failed to justify proceeding without notice.

The court therefore declined to hear the motion ex parte and required that notice be given to the responding parties.

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.

The plaintiff bank brought a motion for summary judgment to enforce a personal guarantee executed by a shareholder of a corporate borrower for an operating line of credit.

The defendant guarantor argued that the claim should be dismissed for delay and that his liability ended after he sold his shares, the borrower declared bankruptcy, and a co‑shareholder agreed to indemnify him.

The court held that the wording of the continuing guarantee preserved liability despite changes in ownership, bankruptcy of the borrower, or insolvency of an indemnifier.

The court also found that the action’s delay did not justify dismissal because the case was document‑driven and no actual prejudice was established.

Summary judgment was granted to the bank for the guaranteed amount.

The plaintiff sought a declaration that two life insurance policies had a cash surrender value exceeding $18 million and claimed damages for breach of contract and bad faith refusal to pay.

The insurer denied liability and counterclaimed, alleging the plaintiff participated in a fraudulent scheme with a senior company actuary to inflate policy values and withdraw funds far exceeding deposits.

After reviewing extensive accounting evidence and testimony, the court found the plaintiff’s evidence unreliable and accepted that the actuary had falsified documents and inflated values in exchange for bribes from the plaintiff.

The court concluded the plaintiff knowingly assisted a breach of fiduciary duty and committed civil fraud.

The policies were declared overdrawn and terminated, and the insurer was awarded damages equal to the misappropriated funds plus punitive damages.

The defendant municipality brought a summary judgment motion seeking dismissal of an action alleging bad faith in cancelling a request for proposals for municipal garbage collection services.

The plaintiff bidder alleged that the municipality improperly relied on a privilege clause after negotiations with another bidder and after treating the plaintiff’s bid as the lowest based on a clarified unit price.

The court held that the municipality was contractually entitled to cancel the RFP pursuant to the privilege clause provided it acted in good faith and for legitimate municipal purposes.

Evidence showed the cancellation arose from legal concerns about the bidding process, bid compliance issues, and evolving municipal policy favouring waste diversion and recycling.

The court concluded there was no evidence capable of establishing bad faith and granted summary judgment dismissing the action.

Following dismissal of stay and forum non conveniens motions in an application to recognize and enforce a foreign arbitral award, the court determined the appropriate costs award.

The successful applicant sought $65,000 in partial indemnity costs apportioned between the responding corporation and a non‑party that had actively participated in the motion.

The court applied Rule 57 of the Rules of Civil Procedure and the principles of proportionality and fairness articulated by the Court of Appeal, finding the requested amount reasonable given the complexity of the issues and extensive materials filed.

It held that a non‑party that voluntarily participates in litigation to protect its own interests may be liable for costs under s. 131(1) of the Courts of Justice Act.

Costs were fixed at $65,000 and apportioned 75% to the corporate respondent and 25% to the participating non‑party.