Tom A. Friedland

Terra Firma Capital Corporation sought court approval for a plan of arrangement under section 182 of the Business Corporations Act (Ontario), which would result in GM Capital Corp. acquiring all outstanding common shares of Terra Firma it did not already own.

The arrangement was overwhelmingly approved by both shareholders and minority shareholders.

The court applied the three-part test for approving arrangements, confirming that statutory procedures were met, the application was made in good faith, and the arrangement was fair and reasonable, supported by strong shareholder approval, board recommendations, and fairness opinions.

The final approval order was granted.

This endorsement addresses the costs of a motion brought by Hilco Industrial Acquisition Canada ULC ("Hilco") to enforce interim minutes of settlement against Engreen Maitland Inc. ("Engreen"), which Hilco had won.

The court found that Engreen and its principal acted in bad faith by repudiating the settlement.

Hilco sought full indemnity costs, while Engreen argued for partial indemnity.

Applying Rule 57 of the Rules of Civil Procedure, the court considered factors such as success, the amount involved, complexity, importance, and Engreen's unreasonable conduct.

Despite finding that Engreen's conduct warranted chastisement, the court deemed Hilco's requested costs disproportionate and excessive, even on a partial indemnity basis.

The court fixed costs at $20,000 plus HST and disbursements, emphasizing the principle of proportionality and the amount the unsuccessful party would reasonably expect to pay.

The moving defendants sought an extension of time to deliver their statements of defence in a complex commercial action alleging conspiracy and misappropriation of corporate assets relating to an international family business enterprise.

The plaintiffs opposed the request and argued the defendants should immediately challenge the pleadings or deliver defences.

The court exercised its discretion under the Rules of Civil Procedure to extend the time, finding that jurisdiction and service motions involving foreign defendants could significantly affect the structure of the litigation.

Requiring the defendants to attack the pleadings or file defences before those issues were resolved would create inefficiency, risk inconsistent rulings, and provide little practical progress in the litigation.

The extension was granted until the final determination of service and jurisdiction motions involving the foreign defendants.