Stephen M. Turk

This decision addresses a motion for security for costs arising from an aborted real estate transaction involving a gasoline station.

The plaintiff (899) had initiated an action for a Certificate of Pending Litigation (CPL) after the vendor (465) re-sold the property to another defendant (929), who obtained an indemnity.

The court found it premature to determine the ultimate disposition of the plaintiff's $100,000 deposit for the main action.

However, it allocated portions of the deposit ($40,000 for 929 and $25,000 for 465) as security for costs related to the pending CPL motion and other stages already encountered.

The plaintiff was deemed the more successful party on this security for costs motion and was awarded partial indemnity costs.

The plaintiff brought a motion for summary judgment seeking repayment of US$720,000 lent to the defendant at an interest rate of 10% per month.

The defendant, a lawyer, claimed he acted merely as a conduit for the plaintiff's investments in gold with a third-party broker.

The court found a valid oral loan agreement, rejecting the defendant's conduit defense due to inconsistencies in his evidence and lack of corroboration.

The court also addressed the legality of the interest rate under section 347 of the Criminal Code, reading it down to the maximum legal rate of 60% per annum.

The plaintiff's motion for summary judgment was granted.

The plaintiff, Lidia Kuleshnyk, brought a motion seeking an order to preserve future vendor take-back mortgage payments from the sale of property owned by the defendant, Herta Kuleshnyk, by having them paid into court.

The motion was brought pursuant to Rules 45.01 and 45.02 of the Rules of Civil Procedure.

The court applied the three-part test from Sadie Moranis Realty Corp. v. 1667038 Ontario Inc., finding that the plaintiff established a claim to a specific identifiable fund (future mortgage payments) and a serious issue to be tried regarding her entitlement under a 2009 agreement.

While there was no direct evidence of dissipation, the court found a real concern given the defendant's prior actions (reverse mortgage without knowledge).

The court ordered the final mortgage payment of approximately $1,581,000 due on April 8, 2019, to be paid into court, allowing the defendant to retain earlier payments and funds held in trust to manage tax obligations.

No costs were awarded as the result was divided.

The Ferawana family sought specific performance of an Agreement of Purchase and Sale for a residential property from the Uracs, or the return of their deposit.

The Uracs maintained that Ferawana failed to close and sought forfeiture of the deposit.

The court found that the purchaser, Ferawana, did not comply with his contractual obligations, including a waived financing condition, and that the vendors, the Uracs, did not breach any duty of good faith or honest performance.

The court dismissed Ferawana's application and granted the Uracs' request for the deposit, finding no basis for relief from forfeiture.

The plaintiff initiated an action alleging fraud, deceit, and misrepresentation against the defendants concerning a property transaction and mortgage.

Despite early settlement offers from the defendants, the plaintiff did not accept them.

The action was ultimately dismissed on consent immediately prior to a scheduled summary judgment motion.

The court, in this costs ruling, awarded the defendants full indemnity costs, determining that the plaintiff's allegations were ill-founded and significantly detrimental to the defendants' professional reputations, thereby justifying a higher scale of costs.

The appellants appealed a decision finding they were in default of a vendor take back promissory note, which triggered an acceleration clause.

The application judge found that the appellants failed to make full quarterly payments and that proper written notice of default was provided.

The Court of Appeal dismissed the appeal, holding that the application judge's interpretation of the promissory note and conclusion that notice was properly given were reasonable.

The appellants appealed an order removing their lawyers of record, which was made during a motion to consolidate and extend time.

The Divisional Court found the motions judge clearly erred by proceeding without proper notice, without supporting evidence, without allowing responding evidence, and on a motion brought by a respondent who lacked standing.

The appeal was allowed, the order was set aside, and costs were awarded against the respondent personally.

The plaintiffs sought leave to appeal an order removing their counsel of record.

The motion judge had removed the plaintiffs' counsel based on an unsworn, un-noticed motion by an individual defendant alleging a conflict of interest, and subsequently refused to consent to the release of the hearing transcript.

The Divisional Court granted leave to appeal, finding reason to doubt the correctness of the order due to the lack of notice, evidence, and opportunity to be heard, and noting that the issues of right to counsel, natural justice, and access to court transcripts are of fundamental importance to the administration of justice.

The applicant sought payment of the outstanding balance under a promissory note after the respondents failed to make required quarterly instalment payments.

The proceeding was brought under Rule 14.05 of the Rules of Civil Procedure for determination of rights dependent on the interpretation of a contract.

The court held that the note required payment of the full $100,000 instalment on the first day of each quarter and rejected the respondents’ argument that payment could be completed anytime within the quarter.

The court further held that written notice of default had been provided and that the respondents failed to cure the default within the 30‑day notice period required to avoid the acceleration clause.

The entire outstanding balance therefore became immediately due and payable.

The appellant appealed a Small Claims Court judgment awarding the respondent contractor $10,000 following termination of a construction management contract during the pre-construction phase.

The appellant argued that he was not personally liable because he acted as an agent for the property owner and that the contractual termination payment constituted an unenforceable penalty clause.

The court held that the appellant signed the agreement as “owner” without written designation of agency and failed to prove he acted solely as an agent without personal liability.

The court further held that the termination payment was not unconscionable or extravagant and did not constitute an unenforceable penalty clause in light of modern jurisprudence favouring freedom of contract.

The appeal was dismissed.

The plaintiff sought return of a commercial lease deposit after an agreement to lease premises for a spa/fitness centre failed because the proposed use, which included massage services, was not permitted under existing zoning.

The lease contained a condition requiring the tenant to obtain the necessary licence within four months.

The court held that the intended use included massage services and therefore required a holistic centre licence, which could not be obtained because zoning did not permit that use at the relevant time.

The landlord had warranted zoning compliance and was therefore in breach when the agreement was executed.

The court rejected arguments that the tenant misrepresented the intended use, waived the condition, or was estopped from relying on it, and ordered return of the deposit.

Following a three-day trial determining the shareholders of a corporation, the successful respondent sought costs on a substantial indemnity basis.

The applicants argued costs should be in the cause or limited due to a settlement offer and alleged excessive time claimed by counsel.

The court held that substantial indemnity costs were not justified because the applicants’ conduct was not reprehensible and the settlement offer did not comply with Rule 49.10 nor yield a result as favourable as the offer.

Applying the reasonableness factors under Rule 57(1), the court reduced the claimed hours and fixed partial indemnity costs at $30,000 inclusive of disbursements and taxes.

The plaintiff moved for summary judgment against the defendant for $150,000 USD based on a promissory note, and sought dismissal of the defendant's counterclaim.

The defendant argued the funds were an investment in a joint venture, not a simple loan, and counterclaimed for damages related to the joint venture.

The court found genuine issues requiring a trial, including conflicting evidence about the nature of the agreement, the purpose of the funds, and the involvement of other parties.

The motion for summary judgment was dismissed.

The applicants sought a determination of the shareholders of 7538715 Canada Ltd. and whether the respondent Mohammad Petgar was an authorized director.

The applicants claimed they owned 100% of the shares and provided all the investment money.

The respondent claimed he and his estranged wife, the primary applicant, each owned 50% of the shares.

The court reviewed documentary evidence, including a shareholders agreement and bank guarantees, and found that the respondent and his estranged wife were each 50% shareholders.

The court also found that the respondent was an authorized director of the company.

In a dispute over the share ownership of a corporation holding a 25% interest in a real estate development entity, the responding party sought production of opposing counsel’s file relating to pre-litigation letters that described the ownership structure.

The requesting party argued that the responding party waived solicitor‑client privilege by later asserting that statements in those letters were a mistake.

The court held that waiver did not arise because the impugned statements were made in correspondence prior to the commencement of the application and did not represent a withdrawal of a position taken in pleadings.

As a result, the responding party was using privilege as a shield rather than a sword, and solicitor‑client privilege remained intact.

A costs endorsement following an appeal in which the respondents were successful.

The successful parties sought costs on a substantial indemnity scale, while the appellant argued that a lower all-inclusive amount was appropriate.

After reviewing the written submissions of both parties, the court declined to award substantial indemnity costs.

Costs were instead fixed on a partial indemnity scale in the amount of $10,301.71, payable within 30 days.

The appellant appealed a master's order requiring payment of outstanding costs as a condition of avoiding the striking of defences.

The appellant argued that a settlement payment by a co-defendant satisfied joint and several costs awards previously ordered against multiple defendants.

The court held the appeal was properly characterized as relating to costs and therefore required leave under the Courts of Justice Act.

Leave was refused, and the court agreed with the master's reasoning that settlement funds paid before a later costs award could not satisfy that subsequent order.

The appeal was dismissed.

The appellant appealed a trial judgment ordering the repayment of a shareholder's loan.

The trial judge found that the loan, which had no fixed term, was payable within a reasonable period of time after a demand for payment was made.

The Court of Appeal dismissed the appeal, holding that the trial judge's conclusion was a finding of fact supported by the evidence, including the directors' intentions, financial statements, and the hybrid character of the loan.

A cross-appeal regarding the date from which pre-judgment interest runs was also dismissed.

The appellants appealed an order regarding a claim by Investors Group Trust Co. Ltd. The Court of Appeal dismissed the appeal, agreeing with the motion judge that the respondent's claim was a personal tort action for damages against the appellants and did not assert a claim against an asset of the bankrupt.

The Trustee would only have an interest if a specific asset belonging to the bankrupt was identified.

The appellants appealed a finding that their conduct regarding the composition of a condominium corporation's board of directors was oppressive.

The Court of Appeal dismissed the appeal, agreeing with the application judge's reasons.

The respondents cross-appealed a portion of the order enforcing a by-law that both parties agreed violated the Condominium Act.

The Court allowed the cross-appeal and amended the by-law to provide for a five-member board consisting of two residential unit owners, two commercial unit owners, and a fifth member elected under the current by-law.

The appeal was dismissed and the cross-appeal was allowed.